SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

of the Securities Exchange Act of 1934



For the Fiscal Year Ended February ~~2, 2013~~1, 2014		Commission File Number: 1-13536



Document	Parts Into Which Incorporated
Proxy Statement for the Annual Meeting of Stockholders to be held May ~~17, 2013~~16, 2014 (Proxy Statement)	Part III

Forward-Looking Statements

This report and other reports, statements and information previously or subsequently filed by the Company with the Securities and Exchange Commission (the “SEC”) contain or may contain forward-looking statements. Such statements are based upon the beliefs and assumptions of, and on information available to, the management of the Company at the time such statements are made. The following are or may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995: (i) statements preceded by, followed by or that include the words “may,” “will,” “could,” “should,” “believe,” “expect,” “future,” “potential,” “anticipate,” “intend,” “plan,” “think,” “estimate” or “continue” or the negative or other variations thereof, and (ii) statements regarding matters that are not historical facts. Such forward-looking statements are subject to various risks and uncertainties, including risks and uncertainties relating to:

In addition to any risks and uncertainties specifically identified in the text surrounding such forward-looking statements, the statements in the immediately preceding sentence and the statements under captions such as “Risk Factors” and “Special Considerations” in reports, statements and information filed by the Company with the SEC from time to time constitute cautionary statements identifying important factors that could cause actual amounts, results, events and circumstances to differ materially from those expressed in or implied by such forward-looking statements.

The Company is a corporation organized under the laws of the State of Delaware in 1985. The Company and its predecessors have been operating department stores since 1830. As of February ~~2, 2013~~1, 2014, the operations of the Company included approximately 840 stores in 45 states, the District of Columbia, Guam and Puerto Rico under the names “Macy’s” and “Bloomingdale’s” as well as macys.com and bloomingdales.com. The Company operates ~~twelve~~thirteen Bloomingdale’s Outlet stores. Bloomingdale's in Dubai, United Arab Emirates is operated under a license agreement with Al Tayer Insignia, a company of Al Tayer Group, LLC.

In ~~2012~~2013, the Company’s subsidiaries provided various support functions to the Company’s retail operations on an integrated, company-wide basis.

The principal private label brands currently offered by the Company include Alfani, American Rag, Aqua, Bar III, ~~Belgique,~~ Charter Club, Club Room, Epic Threads, ~~55 Broome,~~ first impressions, Giani Bernini, greendog, Greg Norman for Tasso Elba, ~~Holiday Lane,~~ Home Design, Hotel Collection, Hudson Park, Ideology, I-N-C, jenni by jennifer moore, JM Collection, John Ashford, Karen Scott, Maison Jules, Martha Stewart Collection, Material Girl, Morgan Taylor, ~~Oake, Pop Knits,~~ so jenni by jennifer moore, ~~Sky,~~ Studio Silver, Style & Co., Style & Co. Sport, Sutton Studio, Tasso Elba, the cellar, Tools of the Trade, ~~Tools of the Trade Basics,~~ and Via Europa.

The trademarks associated with all of the foregoing brands, other than American Rag, Greg Norman for Tasso Elba, Martha Stewart Collection, and Material Girl are owned by the Company. The American Rag, Greg Norman, ~~for Tasso Elba,~~ Martha Stewart Collection, and Material Girl brands are owned by third parties, which license the trademarks associated with such brands to Macy’s pursuant to agreements which have renewal rights that extend through 2050, 2020, 2027, and 2030, respectively.

As of February ~~2, 2013~~1, 2014, the Company had approximately ~~175,700~~172,500 regular full-time and part-time employees. Because of the seasonal nature of the retail business, the number of employees peaks in the holiday season. Approximately 10% of the Company’s employees as of February ~~2, 2013~~1, 2014 were represented by unions. Management considers its relations with its employees to be satisfactory.

The retail business is seasonal in nature with a high proportion of sales and operating income generated in the months of November and December. Working capital requirements fluctuate during the year, increasing in mid-summer in anticipation of the fall merchandising season and increasing substantially prior to the holiday season when the Company must carry significantly higher inventory levels.

The Company purchases merchandise from many suppliers, no one of which accounted for more than 5% of the Company’s net purchases during ~~2012~~2013. The Company has no material long-term purchase commitments with any of its suppliers, and believes that it is not dependent on any one supplier. The Company considers its relations with its suppliers to be satisfactory.

The retailing industry is intensely competitive. The Company’s operations compete with many retailing formats, including department stores, specialty stores, general merchandise stores, off-price and discount stores, manufacturers’ outlets, ~~the Internet,~~online retailers, mail order catalogs and television shopping, among others. The retailers with which the Company competes include Amazon, Bed Bath & Beyond, Belk, Bon Ton, Burlington Coat Factory, Dillard’s, Gap, J.C. Penney, Kohl’s, ~~Limited,~~L Brands, Lord & Taylor, Neiman Marcus, Nordstrom, Ross Stores, Saks, Sears, Target, TJ Maxx and Wal-Mart. The Company seeks to attract customers by offering superior selections, obvious value, and distinctive marketing in stores that are located in premier locations, and by providing an exciting shopping environment and superior service through an omnichannel experience. Other retailers may compete for customers on some or all of these bases, or on other bases, and may be perceived by some potential customers as being better aligned with their particular preferences.

Available Information

The Company makes its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act available free of charge through its internet website at http://www.macysinc.com as soon as reasonably practicable after it electronically files such material with, or furnishes it to, the SEC. The public also may read and copy any of these filings at the SEC’s Public Reference Room, 100 F Street, NE, Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-732-0330. The SEC also maintains an Internet site that contains the Company’s filings; the address of that site is http://www.sec.gov. In addition, the Company has made the following available free of charge through its website at http://www.macysinc.com:

Executive Officers of the Registrant

The following table sets forth certain information as of March ~~25, 2013~~21, 2014 regarding the executive officers of the Company:

Terry J. Lundgren has been Chairman of the Board since January 2004 and President and Chief Executive Officer of the Company since February 2003. On March 31, 2014, the Company announced that Jeffrey Gennette had been elected by the Board of Directors as the Company's President, effective immediately, whereupon Mr. Lundgren ceased to serve as the Company's President. Mr. Lundgren continues to hold the titles of Chairman and Chief Executive Officer.

Martine Reardon has been Chief Marketing Officer since February 2012; prior thereto she served as Executive Vice President for Marketing from February 2009 to February 2012 and as Executive Vice President, national marketing strategy, events and public relations for Macy's Corporate Marketing from 2007 to February 2009.2012.

In evaluating the Company, the risks described below and the matters described in “Forward-Looking Statements” should be considered carefully. Such risks and matters are numerous and diverse, may be experienced continuously or intermittently, and may vary in intensity and effect. Any of such risks and matters, individually or in combination, could have a material adverse effect on the Company's business, prospects, financial condition, results of operations and cash flows, as well as on the attractiveness and value of an investment in the Company's securities.

The Company faces significant competition in the retail industry.

The Company conducts its retail merchandising business under highly competitive conditions. Although the Company is one of the nation’s largest retailers, it has numerous and varied competitors at the national and local levels, including conventional and specialty department stores, other specialty stores, category killers, mass merchants, value retailers, discounters, and Internet and mail-order retailers. Competition may intensify as the Company’s competitors enter into business combinations or alliances. Competition is characterized by many factors, including assortment, advertising, price, quality, service, location, reputation and credit availability. Any failure by the Company to compete effectively could negatively affect the Company's business and results of operations.

The Company’s sales and operating results depend on consumer preferences and consumer spending.

The fashion and retail industries are subject to sudden shifts in consumer trends and consumer spending. The Company’s sales and operating results depend in part on its ability to predict or respond to changes in fashion trends and consumer preferences in a timely manner. The Company develops new retail concepts and continuously adjusts its industry position in certain major and private-label brands and product categories in an effort to satisfy customers. Any sustained failure to anticipate, identify and respond to emerging trends in lifestyle and consumer preferences could negatively affect the Company’s business and results of operations. The Company’s sales are significantly affected by discretionary spending by consumers. Consumer spending may be affected by many factors outside of the Company’s control, including general economic conditions, consumer disposable income levels, consumer confidence levels, the availability, cost and level of consumer debt and consumer behaviors towards incurring and paying debt, the costs of basic necessities and other goods and the effects of the weather or natural disasters. Any decline in discretionary spending by consumers could negatively affect the Company's business and results of operations.

The Company’s business is subject to unfavorable economic and political conditions and other developments and risks.

Unfavorable global, domestic or regional economic or political conditions and other developments and risks could negatively affect the Company’s business and results of operations. For example, unfavorable changes related to interest rates, rates of economic growth, fiscal and monetary policies of governments, inflation, deflation, consumer credit availability, consumer debt levels, consumer debt payment behaviors, tax rates and policy, unemployment trends, energy prices, and other matters that influence the availability and cost of merchandise, consumer confidence, spending and tourism could negatively affect the Company’s business and results of operations. In addition, unstable political conditions, civil unrest, terrorist activities and armed conflicts may disrupt commerce and could negatively affect the Company’s business and results of operations.

The Company’s revenues and cash requirements are affected by the seasonal nature of its business.

The Company’s business is seasonal, with a high proportion of revenues and operating cash flows generated during the second half of the fiscal year, which includes the fall and holiday selling seasons. A disproportionate amount of the Company's revenues fall in the fourth fiscal quarter, which coincides with the holiday season. In addition, the Company incurs significant additional expenses in the period leading up to the months of November and December in anticipation of higher sales volume in those periods, including for additional inventory, advertising and employees.

The Company’s business could be affected by extreme weather conditions, regional or global health pandemics or natural disasters.

Extreme weather conditions in the areas in which the Company’s stores are located could negatively affect the Company’s business and results of operations. For example, frequent or unusually heavy snowfall, ice storms, rainstorms or other extreme weather conditions over a prolonged period could make it difficult for the Company’s customers to travel to its stores and thereby reduce the Company’s sales and profitability. The Company’s business is also susceptible to unseasonable weather conditions. For example, extended periods of unseasonably warm temperatures during the winter season or cool weather during the summer season could reduce demand for a portion of the Company’s inventory and thereby reduce the Company's sales and profitability.

~~Table~~ In addition, extreme weather conditions could result in disruption or delay of ~~Contents~~
production and delivery of materials and products in the Company's supply chain and cause staffing shortages in the Company's stores.

The Company's business and results of operations could also be negatively affected if a regional or global health pandemic were to occur, depending upon its location, duration and severity. To halt or delay the spread of disease, local, regional or national governments might limit or ban public gatherings or customers might avoid public places, such as the Company's stores. A regional or global health pandemic might also result in disruption or delay of production and delivery of materials and products in the Company's supply chain and cause staffing shortages in the Company's stores.

The Company’s pension funding could increase at a higher than anticipated rate.

Significant changes in interest rates, decreases in the fair value of plan assets and investment losses on plan assets could affect the funded status of the Company’s plans and could increase future funding requirements of the pension plans. A significant increase in future funding requirements could have a negative impact on the Company’s cash flows, financial condition or results of operations.

Increases in the cost of employee benefits could impact the Company’s financial results and cash flow.

The Company’s expenses relating to employee health benefits are significant. Unfavorable changes in the cost of such benefits could negatively affect the Company’s financial results and cash flow. Healthcare costs have risen significantly in recent years, and recent legislative and private sector initiatives regarding healthcare reform could result in significant changes to the U.S. healthcare system. Due to the breadth and complexity of the healthcare reform legislation, the lack of implementing regulations and interpretive guidance and the phased-in nature of the implementation of the legislation, the Company is not able at this time to fully determine the impact that healthcare reform will have on the Company-sponsored medical plans.

Inability to access capital markets could adversely affect the Company’s business or financial condition.

Changes in the credit and capital markets, including market disruptions, limited liquidity and interest rate fluctuations, may increase the cost of financing or restrict the Company’s access to this potential source of future liquidity. A decrease in the ratings that rating agencies assign to the Company’s short and long-term debt may negatively impact the Company’s access to the debt capital markets and increase the Company’s cost of borrowing. In addition, the Company’s bank credit agreements require the Company to maintain specified interest coverage and leverage ratios. The Company’s ability to comply with the ratios may be affected by events beyond its control, including prevailing economic, financial and industry conditions. If the Company’s results of operations or operating ratios deteriorate to a point where the Company is not in compliance with its debt covenants, and the Company is unable to obtain a waiver, much of the Company’s debt would be in default and could become due and payable immediately. The Company’s assets may not be sufficient to repay in full this indebtedness, resulting in a need for an alternate source of funding. The Company cannot make any assurances that it would be able to obtain such an alternate source of funding on satisfactory terms, if at all, and its inability to do so could cause the holders of its securities to experience a partial or total loss of their investments in the Company.

The Company periodically reviews the carrying value of its goodwill for possible impairment; if future circumstances indicate that goodwill is impaired, the Company could be required to write down amounts of goodwill and record impairment charges.

In the fourth quarter of fiscal 2008, the Company reduced the carrying value of its goodwill from $9,125 million to $3,743 million and recorded a related non-cash impairment charge of $5,382 million. The Company continues to monitor relevant circumstances, including consumer spending levels, general economic conditions and the market prices for the Company’s common stock, and the potential impact that such circumstances might have on the valuation of the Company’s goodwill. It is possible that changes in such circumstances, or in the numerous variables associated with the judgments, assumptions and estimates made by the Company in assessing the appropriate valuation of its goodwill, could in the future require the Company to further reduce its goodwill and record related non-cash impairment charges. If the Company were required to further reduce its goodwill and record related non-cash impairment charges, the Company’s financial position and results of operations would be adversely affected.

The Company depends on its ability to attract and retain quality employees.

The Company’s business is dependent upon attracting and retaining quality employees. The Company has a large number of employees, many of whom are in entry level or part-time positions with historically high rates of turnover. The Company’s ability to meet its labor needs while controlling the costs associated with hiring and training new employees is subject to external factors such as unemployment levels, prevailing wage rates, minimum wage legislation and changing demographics. In addition, as a large and complex enterprise operating in a highly competitive and challenging business environment, the Company is highly dependent upon management personnel to develop and effectively execute successful business strategies and tactics. Any circumstances that adversely impact the Company’s ability to attract, train, develop and retain quality employees throughout the organization could negatively affect the Company’s business and results of operations.

The Company depends upon designers, vendors and other sources of merchandise, goods and services. The Company's business could be affected by disruptions in, or other legal, regulatory, political or economic issues associated with, our supply network.

The Company’s relationships with established and emerging designers have been a significant contributor to the Company’s past success. The Company’s ability to find qualified vendors and access products in a timely and efficient manner is often challenging, particularly with respect to goods sourced outside the United States. The Company’s procurement of goods and services from outside the United States is subject to risks associated with political or financial instability, trade restrictions, tariffs, currency exchange rates, transport capacity and costs and other factors relating to foreign trade, including costs and uncertainties associated with efforts to identify and disclose sources of "conflict minerals" used in products that the Company causes to be manufactured and potential sell-through difficulties and reputational damage that may be associated with the inability of the Company to determine that such products are "DRC conflict-free." In addition, the Company’s procurement of all its goods and services is subject to the effects of price increases which the Company may or may not be able to pass through to its customers. All of these factors may affect the Company’s ability to access suitable merchandise on acceptable terms, are beyond the Company’s control and could negatively affect the Company’s business and results of operations.

The Company's sales and operating results could be adversely affected by product safety concerns.

If the Company's merchandise offerings do not meet applicable safety standards or our consumers' expectations regarding safety, the Company could experience decreased sales, experience increased costs and/or be exposed to legal and reputational risk. Events that give rise to actual, potential or perceived product safety concerns could expose the Company to government enforcement action and/or private litigation. Reputational damage caused by real or perceived product safety concerns could negatively affect the Company's business and results of operations.

The Company depends upon the success of its advertising and marketing programs.

The Company’s advertising and promotional costs, net of cooperative advertising allowances, amounted to $~~1,181~~1,166 million for ~~2012~~2013. The Company’s business depends on effective marketing and high customer traffic. The Company has many initiatives in this area, and often changes its advertising and marketing programs. There can be no assurance as to the Company’s continued ability to effectively execute its advertising and marketing programs, and any failure to do so could negatively affect the Company’s business and results of operations.

Parties with whom the Company does business may be subject to insolvency risks or may otherwise become unable or unwilling to perform their obligations to the Company.

The Company is a party to contracts, transactions and business relationships with various third parties, including vendors, suppliers, service providers, lenders and participants in joint ventures, strategic alliances and other joint commercial relationships, pursuant to which such third parties have performance, payment and other obligations to the Company. In some cases, the Company depends upon such third parties to provide essential leaseholds, products, services or other benefits, including with respect to store and distribution center locations, merchandise, advertising, software development and support, logistics, other agreements for goods and services in order to operate the Company’s business in the ordinary course, extensions of credit, credit card accounts and related receivables, and other vital matters. Current economic, industry and market conditions could result in increased risks to the Company associated with the potential financial distress or insolvency of such third parties. If any of these third parties were to become subject to bankruptcy, receivership or similar proceedings, the rights and benefits of the Company in relation to its contracts, transactions and business relationships with such third parties could be terminated, modified in a manner adverse to the Company, or otherwise impaired. The Company cannot make any assurances that it would be able to arrange for alternate or replacement contracts, transactions or business relationships on terms as favorable as the Company’s existing contracts, transactions or business relationships, if at all. Any inability on the part of the Company to do so could negatively affect the Company’s cash flows, financial condition and results of operations.

A material disruption in the Company’s computer systems could adversely affect the Company’s business or results of operations.

The Company relies extensively on its computer systems to process transactions, summarize results and manage its business. The Company’s computer systems are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, cyber-attack or other security breaches, catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes, acts of war or terrorism, and usage errors by the Company’s employees. If the Company’s computer systems are damaged or cease to function properly, the Company may have to make a significant investment to fix or replace them, and the Company may suffer loss of critical data and interruptions or delays in its operations. Any material interruption in the Company’s computer systems could negatively affect its business and results of operations.

A privacy breach could result in negative publicity and adversely affect the Company’s business or results of operations.

The protection of customer, employee, and company data is critical to the Company. The regulatory environment surrounding information security and privacy is increasingly demanding, with the frequent imposition of new and constantly changing requirements across business units. In addition, customers have a high expectation that the Company will adequately protect their personal information from cyber-attack or other security breaches. A significant breach of customer, employee, or company data could attract a substantial amount of media attention, damage the Company’s customer relationships and reputation and result in lost sales, fines, or lawsuits.

Litigation, legislation or regulatory developments could adversely affect the Company’s business and results of operations.

The Company is subject to various federal, state and local laws, rules, regulations, inquiries and initiatives in connection with both its core business operations and its credit card and other ancillary operations (including the Credit Card Act of 2009 and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”)). Recent and future developments relating to such matters could increase the Company's compliance costs and adversely affect the profitability of its credit card and other operations. The Company is also subject to anti-bribery, customs, child labor, truth-in-advertising and other laws, including consumer protection regulations and zoning and occupancy ordinances that regulate retailers generally and/or govern the importation, promotion and sale of merchandise and the operation of retail stores and warehouse facilities. Although the Company undertakes to monitor changes in these laws, if these laws change without the Company's knowledge, or are violated by importers, designers, manufacturers, distributors or ~~distributors,~~agents, the Company could experience delays in shipments and receipt of goods or be subject to fines or other penalties under the controlling regulations, any of which could negatively affect the Company's business and results of operations. In addition, the Company is regularly involved in various litigation matters that arise in the ordinary course of its business. Adverse outcomes in current or future litigation could negatively affect the Company’s financial condition, results of operations and cash flows.

Factors beyond the Company’s control could affect the Company’s stock price.

The Company’s stock price, like that of other retail companies, is subject to significant volatility because of many factors, including factors beyond the control of the Company. These factors may include:

The properties of the Company consist primarily of stores and related facilities, including a logistics network. The Company also owns or leases other properties, including corporate office space in Cincinnati and New York and other facilities at which centralized operational support functions are conducted. As of February ~~2, 2013~~1, 2014, the operations of the Company included ~~841~~840 stores in 45 states, the District of Columbia, Puerto Rico and Guam, comprising a total of approximately ~~150,600,000~~150,100,000 square feet. Of such stores, ~~462~~460 were owned, 269 were leased and ~~110~~111 stores were operated under arrangements where the Company owned the building and leased the land. Substantially all owned properties are held free and clear of mortgages. Pursuant to various shopping center agreements, the Company is obligated to operate certain stores for periods of up to 20 years. Some of these agreements require that the stores be operated under a particular name. Most leases require the Company to pay real estate taxes, maintenance and other costs; some also require additional payments based on percentages of sales and some contain purchase options. Certain of the Company’s real estate leases have terms that extend for a significant number of years and provide for rental rates that increase or decrease over time.

The ~~eight~~seven geographic regions detailed in the foregoing table are based on the Company’s Macy’s-branded operational structure. The Company’s retail stores are located at urban or suburban sites, principally in densely populated areas across the United States. ~~Store count activity was as follows:~~

Store count activity was as follows:

Additional information about the Company’s logistics network as of February ~~2, 2013~~1, 2014 is as follows:



Location	Primary Function	Owned or Leased	Square Footage (thousands)
Cheshire, CT	Direct to customer	Owned	565
Chicago, IL	Stores	Owned	861
Denver, CO	Stores	Leased	20
Goodyear, AZ	Direct to customer	Owned	600
Hayward, CA	Stores	Owned	386
Houston, TX	Stores	Owned	~~1,453~~1,124
Joppa, MD	Stores	Owned	850
Kapolei, HI	Stores	Owned	260
Los Angeles, CA	Stores	Owned	1,178
Martinsburg, WV	Direct to customer	Owned	1,300
Miami, FL	Stores	Leased	535
Portland, TN	Direct to customer	Owned	950
Raritan, NJ	Stores	Owned	560
Sacramento, CA	Direct to customer	Leased	96
Secaucus, NJ	Stores	Leased	675
South Windsor, CT	Stores	Owned	668
St. Louis, MO	Stores	Owned	661
Stone Mountain, GA	Stores	Owned	1,000
Tampa, FL	Stores	Owned	670
Tukwila, WA	Stores	Leased	500
Youngstown, OH	Stores	Owned	851

The Company and its subsidiaries are ~~also~~ involved in various proceedings that are incidental to the normal course of their businesses. As of the date of this report, the Company does not expect that any of such proceedings will have a material adverse effect on the Company’s financial position or results of operations.

The Common Stock is listed on the NYSE under the trading symbol “M.” As of February ~~2, 2013~~1, 2014, the Company had approximately ~~20,000~~19,000 stockholders of record. The following table sets forth for each fiscal quarter during ~~2012~~2013 and ~~2011~~2012 the high and low sales prices per share of Common Stock as reported on the NYSE Composite Tape and the dividend declared with respect to each fiscal quarter on each share of Common Stock.

The declaration and payment of future dividends will be at the discretion of the Company’s Board of Directors, are subject to restrictions under the Company’s credit facility and may be affected by various other factors, including the Company’s earnings, financial condition and legal or contractual restrictions.

Commencing in January 2000, the Company’s Board of Directors has from time to time approved authorizations to purchase, in the aggregate, up to $~~12,000~~13,500 million of Common Stock. All authorizations are cumulative and do not have an expiration date. As of February ~~2, 2013~~1, 2014, $~~1,502~~1,432 million of authorization remained unused. The Company may continue, discontinue or resume purchases of Common Stock under these or possible future authorizations in the open market, in privately negotiated transactions or otherwise at any time and from time to time without prior notice.

The following graph compares the cumulative total stockholder return on the Common Stock with the Standard & Poor’s 500 Composite Index and the Standard & Poor’s Retail Department Store Index for the period from ~~February 2, 2008~~January 31, 2009 through February ~~2, 2013,~~1, 2014, assuming an initial investment of $100 and the reinvestment of all dividends, if any.

The companies included in the S&P Retail Department Store Index are Macy’s, J.C. Penney, Kohl’s and Nordstrom.

The selected financial data set forth below should be read in conjunction with the Consolidated Financial Statements and the notes thereto and the other information contained elsewhere in this report.

The discussion in this Item 7 should be read in conjunction with our Consolidated Financial Statements and the related notes included elsewhere in this report. The discussion in this Item 7 contains forward-looking statements that reflect the Company's plans, estimates and beliefs. The Company's actual results could materially differ from those discussed in these forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those discussed below and elsewhere in this report, particularly in “Risk Factors” and “Forward-Looking Statements.”

The Company is an omnichannel retail organization operating stores and websites under two brands (Macy's and Bloomingdale's) that sell a wide range of merchandise, including apparel and accessories (men's, women's and children's), cosmetics, home furnishings and other consumer goods in 45 states, the District of Columbia, Guam and Puerto Rico. As of February ~~2, 2013~~1, 2014, the Company's operations were conducted through Macy's, macys.com, Bloomingdale's, bloomingdales.com and Bloomingdale's Outlet which are aggregated into one reporting segment in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280, “Segment Reporting.”

The Company is focused on three key strategies for continued growth in sales, earnings and cash flow in the years ahead: (i) maximizing the My Macy's localization initiative; (ii) driving the omnichannel business; and (iii) embracing customer centricity, including engaging customers on the selling floor through the ~~MAGIC~~Magic Selling program.

Through the My Macy's localization initiative, the Company has invested in talent, technology and marketing which ensures that core customers surrounding each Macy's store find merchandise assortments, size ranges, marketing programs and shopping experiences that are custom-tailored to their needs. My Macy's has provided for more local decision-making in every Macy's community, and involves tailoring merchandise assortments, space allocations, service levels, visual merchandising, marketing and special events on a store-by-store basis.

The Company's omnichannel strategy allows customers to shop seamlessly in stores and online, ~~and~~ via computers or mobile devices. A pivotal part of the omnichannel strategy is the Company's ability to allow associates in any store to sell a product that may be unavailable locally by selecting merchandise from other stores or online fulfillment centers for shipment to the customer's door. Likewise, the Company's online fulfillment centers can draw on store inventories nationwide to fill orders that originate ~~on the Internet~~online, via computers or ~~via~~ mobile devices. As of February ~~2, 2013~~1, 2014, ~~292~~500 Macy's stores were fulfilling orders from other stores and/or ~~from the Internet and mobile devices,~~online, as compared to 23292 Macy's stores as of ~~January 28, 2012~~February 2, 2013.~~By the end of~~ During fiscal ~~2013, approximately 500~~2014, nearly all Macy's stores are expected to be fulfilling orders from other stores and/or ~~from the Internet and mobile devices.~~online. Also in 2014, nearly all stores are expected to be fulfilling orders for pick-up related to online purchases.

Macy's ~~MAGIC~~Magic Selling program is an approach to customer engagement that helps Macy's to better understand the needs of customers, as well as to provide options and advice. This comprehensive ongoing training and coaching program is designed to improve the in-store shopping ~~experience.~~experience and all other customer interactions.

In fiscal 2010, the Company piloted a new Bloomingdale's Outlet store concept. Bloomingdale's Outlet stores are each approximately 25,000 square feet and offer a range of apparel and accessories, including women's ready-to-wear, men's, children's, women's shoes, fashion accessories, jewelry, handbags and intimate apparel.

Additionally, in February 2010, Bloomingdale's opened in Dubai, United Arab Emirates under a license agreement with Al Tayer Insignia, a company of Al Tayer Group, LLC, under which the Company is entitled to a license fee in accordance with the terms of the underlying agreement, generally based upon the greater of the contractually earned or guaranteed minimum amounts.

During ~~2011, the Company opened three new Bloomingdale's Outlet stores and re-opened one Macy's store that had been closed in 2010 due to flood damage. During~~ 2012, the Company opened two new Macy's stores in Salt Lake City, UT; and Greendale, WI; and five new Bloomingdale's Outlet stores in Livermore, ~~CA,~~CA; Merrimack, NH; Garden City, NY; Grand Prairie, TX; and Dallas, TX. Also during 2012 the Company opened its new 1.3 million square foot fulfillment center in Martinsburg, WV. During 2013, the Company opened three new Macy's stores in Victorville, CA; Gurnee, IL; and Las Vegas, NV; a Macy's replacement store in Bay Shore, NY; a new Bloomingdale's store in Glendale, CA; and a new Bloomingdale's Outlet store in Rosemont, IL. The Company has announced that in ~~2013~~2014 it intends to open three new Macy's ~~stores; a~~stores and one Bloomingdale's replacement store. Additionally, the Company has announced that in 2015 it intends to open one new Macy's ~~replacement store; a~~store and one new Bloomingdale's ~~store;~~store, and ~~a Bloomingdale's Outlet store. In addition, 2014 will include three~~in 2016 it intends to open one new Macy's ~~stores;~~store and aone new Bloomingdale's ~~replacement~~ store.

The Company's operations are impacted by competitive pressures from department stores, specialty stores, mass merchandisers, ~~Internet websites~~online retailers and all other retail channels. The Company's operations are also impacted by general consumer spending levels, including the impact of general economic conditions, consumer disposable income levels, consumer confidence levels, the availability, cost and level of consumer debt, the costs of basic necessities and other goods and the effects of weather or natural disasters and other factors over which the Company has little or no control.

In recent years, consumer spending levels have been affected to varying degrees by a number of factors, including modest economic growth, a slowly improving housing market, a rising stock market, uncertainty regarding governmental spending and tax policies, high unemployment levels and tightened consumer credit. These factors have affected to varying degrees the amount of funds that consumers are willing and able to spend for discretionary purchases, including purchases of some of the merchandise offered by the Company.

The effects of economic conditions have been, and may continue to be, experienced differently, or at different times, in the various geographic regions in which the Company operates, in relation to the different types of merchandise that the Company offers for sale, or in relation to the Company's Macy's-branded and Bloomingdale's-branded operations. All economic conditions, however, ultimately affect the Company's overall operations.

~~2012~~2013 Highlights

The Company had its ~~fourth~~fifth consecutive year of improved financial performance in ~~2012~~2013 despite the continued challenging macroeconomic ~~environment and high level of unemployment.~~environment. These improvements have been driven by successful implementation of the Company's key strategies.

Selected highlights of ~~2012~~2013 include:

Comparable sales increased ~~3.7%~~1.9%, which represents the ~~third~~fourth consecutive year of comparable sales growth. Comparable sales growth including the impact of growth in ~~excess~~comparable sales of ~~3.5%~~departments licensed to third parties increased 2.8%. See pages 16 to 19 for a reconciliation of this non-GAAP financial measure to the most comparable GAAP financial measure and other important information.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, ~~excluding premium on early retirement of debt and~~ impairments, store closing ~~costs~~ and ~~gain on sale of leases)~~other costs) as a percent to net sales reached ~~13.4%~~13.6% in ~~2012,~~2013, reflecting steady improvement toward the Company's goal of a 14% Adjusted EBITDA rate. See pages 16 to 1819 for a reconciliation of this non-GAAP financial measure to the most comparable GAAP financial measure and other important information.

Return on invested capital ("ROIC"), a key measure of operating productivity, reached ~~21.2%~~21.5%, continuing an improvement trend over the past ~~four~~five years. See pages 16 to 1819 for a reconciliation of this non-GAAP financial measure to the most comparable GAAP financial measure and other important information.

The Company repurchased ~~35.6~~33.6 million shares of its common stock for $~~1,350~~1,570 million in ~~2012,~~2013, and ~~doubled~~increased its annualized dividend rate to ~~80 cents~~$1.00 per share.

Important Information Regarding Non-GAAP Financial Measures

The Company reports its financial results in accordance with generally accepted accounting principles ("GAAP"). However, management believes that certain non-GAAP financial measures provide users of the Company's financial information with additional useful information in evaluating operating performance. ~~In particular, management~~Management believes that providing comparable sales growth including the impact of growth in comparable sales of departments licensed to third parties supplementally to its results of operations calculated in accordance with GAAP assists in evaluating the Company's ability to generate sales growth, whether through owned businesses or departments licensed to third parties, on a comparable basis, and in evaluating the impact of changes in the manner in which certain departments are operated (e.g., the conversion in 2013 of most of the Company's previously owned athletic footwear business to licensed Finish Line shops). Management believes that excluding certain items that may vary substantially in frequency and magnitude from diluted earnings per share and from operating income and EBITDA as percentages to sales are useful supplemental measures that assist in evaluating the Company's ability to generate earnings and leverage sales, respectively, and to more readily compare these metrics between past and future periods. Management also believes that EBITDA and ~~adjusted~~Adjusted EBITDA are frequently used by investors and securities analysts in their evaluations of companies, and that such supplemental measures facilitate comparisons between companies that have different capital and financing structures and/or tax rates. In addition, management believes that ROIC is a useful supplemental measure in evaluating how efficiently the Company employs its capital. The Company uses ~~Adjusted EBITDA as a percent to net sales (with sales excluding certain items for this purpose) and ROIC~~some of these non-GAAP financial measures as performance measures for ~~certain~~ components of executive compensation.

Non-GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, the Company's financial results prepared in accordance with GAAP. Certain of the items that may be excluded or included in non-GAAP financial measures may be significant items that could impact the Company's financial position, results of operations and cash flows and should therefore be considered in assessing the Company's actual financial condition and performance. Additionally, the amounts received by the Company on account of sales licensed to third parties are limited to commissions

Comparable Sales Growth Including the Impact of Growth in Comparable Sales of Departments Licensed to Third Parties

The following is a tabular reconciliation of the non-GAAP financial measure comparable sales growth including the impact of growth in comparable sales of departments licensed to third parties, to GAAP comparable sales, which the Company believes to be the most directly comparable GAAP financial measure.



	2013	2012	2011	2010
Increase in comparable sales (note 1)	1.9%	3.7%	5.3%	4.6%
Impact of growth in comparable sales of departments licensed to third parties (note 2)	0.9%	0.3%	0.4%	(0.2)%
Comparable sales growth including the impact of growth in comparable sales of departments licensed to third parties	2.8%	4.0%	5.7%	4.4%

Operating Income, Excluding Certain Items, as a Percent to Net Sales

Diluted Earnings Per Share, Excluding Certain Items

Adjusted EBITDA as a Percent to Net Sales

The following is a tabular reconciliation of the non-GAAP financial measure earnings before interest, taxes, depreciation and amortization ("EBITDA"), as adjusted to exclude premium on early retirement of debt, ~~and~~ impairments, store closing and other costs, ~~and~~ gain on sales of leases and division consolidation costs ("Adjusted EBITDA"), as a percent to net sales to GAAP net income as a percent to net sales, which the Company believes to be the most directly comparable GAAP financial measure.

Results of Operations

Comparison of ~~2012~~2013 and ~~2011~~2012

Net income for ~~2012~~2013 increased compared to ~~2011~~2012, reflecting the benefits of the key strategies at Macy's, the continued strong performance at Bloomingdale's and good expense management, including higher income from credit operations, lower depreciation and amortization expense, and gains on the ~~53rd week~~sale of certain office buildings and surplus properties, partially offset by greater investments in ~~2012.~~the Company's omnichannel operations.

Net sales for ~~2012~~2013, which had one fewer week than 2012, increased $~~1,281~~245 million or ~~4.9%~~0.9% compared to ~~2011.~~2012. On a comparable basis, net sales for ~~2012~~2013 were up ~~3.7%~~1.9% compared to ~~2011~~2012. ~~Sales from the Company's Internet businesses in~~Together with sales of departments licensed to third parties, ~~2012~~2013 ~~increased 41.0%~~sales on a comparable basis to ~~2011~~ ~~and positively affected~~were up 2.8%. (See page 16 for information regarding the Company's ~~2012~~calculation of comparable sales, ~~by 2.2%~~a reconciliation of the non-GAAP measure which takes into account sales of departments licensed to third parties to the most comparable GAAP measure and other important information). The Company continues to benefit from the successful execution of the My Macy's localization, Omnichannel and ~~MAGIC~~Magic Selling strategies. Geographically, sales in ~~2012~~2013 were strongest in the southern ~~regions as well as some markets in other parts of the country such as Western New York, Oregon and Colorado.~~regions. By family of business, sales in ~~2012~~2013 were strongest in ~~watches,~~active apparel, handbags, ~~cosmetics,~~ textiles, luggage, furniture and mattresses. Sales in 2013 were less strong in juniors. Sales of the Company's private label brands continued to be strong ~~with particular growth coming from millennial, classic apparel~~ and ~~home textile brands. Sales of the Company's private label brands~~ represented approximately 20% of net sales in the Macy's-branded stores in ~~2012~~2013. ~~Sales in~~ ~~2012~~ ~~were less strong in juniors. The Company calculates comparable sales as sales from stores in operation throughout~~ ~~2011~~ ~~and~~ ~~2012~~ and all net Internet sales, adjusting for the 53rd week in 2012. Stores undergoing remodeling, expansion or relocation remain in the comparable sales calculation unless the store is closed for a significant period of time. Definitions and calculations of comparable sales differ among companies in the retail industry.

Cost of sales for ~~2012~~2013 increased $~~800~~187 million from ~~2011.~~2012. The cost of sales rate as a percent to net sales of 59.9% was 20 basis points higher in 2013, as compared to 59.7% in 2012, ~~as compared to~~ ~~2011~~, primarily due to continued growth of the omnichannel businesses and the resulting impact of free shipping. The application of the last-in, first-out (LIFO) retail inventory method did not result in the recognition of any LIFO charges or credits affecting cost of sales in either period.

Selling, General and Administrative Expenses

Selling, general and administrative (“SG&A”) expenses for ~~2012~~2013 ~~increased~~decreased $~~201~~42 million from ~~2011.~~2012. The SG&A rate as a percent to net sales of 30.2% was 7050 basis points lower in ~~2012~~2013, as compared to ~~2011~~2012, reflecting the decrease in SG&A expenses and increased net sales. SG&A expenses in ~~2012~~2013 ~~were impacted~~benefited from higher income from credit operations, lower depreciation and amortization expense, and gains on the sale of certain office buildings and surplus properties, partially offset by ~~higher selling costs as a result of stronger sales, higher retirement expenses (including Pension Plan, SERP and 401(k) expenses), and~~ greater investments in the Company's omnichannel ~~operations, partially offset by higher income~~operations. Income from credit operations ~~and lower depreciation and amortization expense. Retirement expenses were $232~~was $731 million in ~~2012~~2013 as compared to ~~$160~~$663 million in ~~2011, primarily due~~2012. Depreciation and amortization expense was $1,020 million for 2013, compared to $1,049 million for 2012. 2013 included gains on the ~~lower discount rate.~~sales of office buildings and surplus properties of $79 million. Advertising expense, net of cooperative advertising allowances, was ~~$1,181~~$1,166 million for ~~2012~~2013 compared to ~~$1,136~~$1,123 million for ~~2011~~.2012. Advertising expense, net of cooperative advertising allowances, as a percent to net sales was ~~4.3%~~4.2% for ~~both~~ ~~2012~~ ~~and~~ ~~2011. Income from credit operations was~~ ~~$663 million~~ in ~~2012~~ as2013 compared to ~~$582 million~~ in ~~2011. Depreciation and amortization expense was~~ ~~$1,049 million~~4.1% for ~~2012, compared to~~ ~~$1,085 million~~ ~~for~~ ~~2011~~.2012.

Impairments, Store Closing and Other Costs and Gain on Sale of Leases

Impairments, store closing and other costs and gain on sale of leases for 2013 includes costs and expenses primarily associated with cost-reduction initiatives and store closings announced in January 2014. During 2013, these costs and expenses included $43 million of severance and other human resource-related costs, asset impairment charges of $39 million and $6 million of other related costs and expenses. Impairments, store closing and other costs and gain on sale of leases for 2012 ~~includes~~included $4 million of asset impairment charges primarily related to the store closings announced in January ~~2013 and $1 million of other costs and expenses primarily related to the announced store closings. Impairments, store closing costs and gain on sale of leases for~~ ~~2011~~ included a $54 million gain from the sale of store leases related to the 2006 divestiture of Lord & Taylor, partially offset by $22 million of asset impairment charges primarily related to the store closings announced in January 2012 and $7 million of other costs and expenses primarily related to the announced store closings.2013.

Net Interest Expense

Net interest expense for ~~2012~~2013 decreased $2134 million from ~~2011.~~2012. Net interest expense for ~~2012~~2013 benefited from ~~lower levels of borrowings and~~ lower rates on outstanding borrowings as compared to ~~2011~~2012.

Premium on Early Retirement of Debt

The Company's effective tax rate of 35.1% for 2013 and 36.5% for 2012 ~~and~~ ~~36.2%~~ ~~for~~ ~~2011~~ differ from the federal income tax statutory rate of 35%, and on a comparative basis, principally because of the effect of state and local income taxes, including the settlement of various tax issues and tax examinations. Additionally, income tax expense for 2013 benefited from historic rehabilitation tax credits and a reduction in the valuation allowance related primarily to state net operating loss carryforwards.

Comparison of ~~2011~~2012 and ~~2010~~2011

Net income for ~~2011~~2012 increased compared to ~~net income for~~ ~~2010~~2011, reflecting the benefits of the key strategies at Macy's, the continued strong performance at Bloomingdale's, ~~and~~ higher income from credit ~~operations.~~operations, and the 53rd week in 2012.

Net sales for ~~2011~~2012, which had one additional week compared to 2011, increased $~~1,402~~1,281 million or ~~5.6%~~4.9% compared to ~~2010.~~2011. On a comparable basis, net sales for ~~2011~~2012 were up ~~5.3%~~3.7% compared to ~~2010~~2011. ~~Sales from~~Together with sales of departments licensed to third parties, 2012 sales on a comparable basis were up 4.0%. (See page 16 for information regarding the Company's ~~Internet businesses in~~ ~~2011~~ ~~increased 39.6% compared to~~ ~~2010~~ ~~and positively affected the Company's~~ ~~2011~~calculation of comparable sales, ~~by 1.5%~~a reconciliation of the non-GAAP measure which takes into account sales of departments licensed to third parties to the most comparable GAAP measure and other important information). The Company continued to benefit from the successful execution of the My Macy's localization, Omnichannel and ~~MAGIC~~Magic Selling strategies. Geographically, sales in ~~2011~~2012 were strongest in the southern ~~regions.~~regions as well as some markets in other parts of the country such as Western New York, Oregon and Colorado. By family of business, sales in ~~2011~~2012 were strongest in watches, handbags, cosmetics, textiles, furniture and ~~fragrances, handbags, watches, men's, home textiles and furniture.~~mattresses. Sales in 2012 were less strong in juniors. Sales of the Company's private label brands continued to be strong with particular growth coming from millennial, classic apparel and home textile brands. Sales of the Company's private label brands represented approximately 20% of net sales in the Macy's-branded stores in ~~2011~~2012. ~~Sales in~~ ~~2011~~ ~~were less strong in women's traditional casual apparel, juniors and cold weather merchandise. The Company calculates comparable sales as sales from stores in operation throughout~~ ~~2010~~ ~~and~~ ~~2011~~ and all net Internet sales. Stores undergoing remodeling, expansion or relocation remain in the comparable sales calculation unless the store is closed for a significant period of time. Definitions and calculations of comparable sales differ among companies in the retail industry.

Cost of sales for ~~2011~~2012 increased $~~914~~800 million ~~compared to 2010.~~from 2011. The cost of sales rate as a percent to net sales of 59.7% was 10 basis points higher in ~~2011~~2012, as compared to 59.6% in ~~2010~~2011, primarily due to the ~~expansion~~growth of the omnichannel businesses and the resulting impact of free ~~shipping on macys.com and in stores since the fourth quarter of~~ ~~2010~~.shipping. The application of the last-in, first-out (LIFO) retail inventory method did not result in the recognition of any LIFO charges or credits affecting cost of sales in either period.

SG&A expenses for ~~2011~~2012 increased $21201 million ~~compared to 2010.~~from 2011. The SG&A rate as a percent to net sales of 30.7% was ~~160~~70 basis points lower in ~~2011~~2012, as compared to ~~2010~~2011, reflecting increased net sales. SG&A expenses in ~~2011~~2012 were impacted by higher selling costs as a result of stronger sales, higher ~~advertising expense,~~retirement expenses (including Pension Plan, SERP and 401(k) expenses), and greater investments in the Company's omnichannel operations, partially offset by higher income from credit operations and lower depreciation and amortization expense. Retirement expenses were $232 million in 2012 as compared to $160 million in 2011, primarily due to the lower discount rate. Advertising expense, net of cooperative advertising allowances, was $~~1,136~~1,123 million for ~~2011~~2012 compared to $~~1,072~~1,060 million for ~~2010~~2011. Advertising expense, net of cooperative advertising allowances, as a percent to net sales was 4.3% for both ~~2011~~2012 and ~~2010~~2011. Income from credit operations was $663 million in 2012 as compared to $582 million in 2011 ~~as compared to $332 million in~~ ~~2010~~. Depreciation and amortization expense was $1,049 million for 2012, compared to $1,085 million for 2011~~, compared to~~ ~~$1,150 million~~ ~~for~~ ~~2010~~.

Impairments, Store Closing and Other Costs and Gain on Sale of Leases

Impairments, store closing and other costs and gain on sale of leases for 2012 included $4 million of asset impairment charges primarily related to the store closings announced in January 2013. Impairments and store closing and other costs and gain on sale of leases for 2011 included a $54 million gain from the sale of store leases related to the 2006 divestiture of Lord & Taylor, partially offset by $22 million of asset impairment charges primarily related to the store closings announced in January 2012 and $7 million of other costs and expenses primarily related to the announced store closings. ~~Impairments and store closing costs for~~ ~~2010~~ amounted to $25 million and included $18 million of asset impairment charges primarily related to the store closings announced in January 2011 and $7 million of other costs and expenses primarily related to the announced store closings.

Net Interest Expense

Net interest expense for ~~2011~~2012 decreased $6521 million ~~compared to 2010.~~from 2011. Net interest expense for ~~2011~~2012 benefited from lower levels of borrowings and lower rates on outstanding borrowings as compared to ~~2010~~2011~~, resulting from both the early retirement of outstanding debt during fiscal~~ ~~2010~~ ~~and the repayment of debt at maturity.~~.

Premium on Early Retirement of Debt

~~Premium~~On November 28, 2012, the Company repurchased $700 million aggregate principal amount of its outstanding senior unsecured notes, which had a net book value of $706 million. The repurchased senior unsecured notes had stated interest rates ranging from 5.9% to 7.875% and maturities in 2015 and 2016. The Company recorded the redemption premium and other costs related to these repurchases as additional interest expense of $133 million in 2012. On March 29, 2012, the Company redeemed the $173 million of 8.0% senior debentures due July 15, 2012, as allowed under the terms of the indenture. The price for the redemption was calculated pursuant to the indenture and resulted in the recognition of additional interest expense of $4 million in 2012. The additional interest expense resulting from these transactions is presented as premium on early retirement of debt in ~~2010~~ ~~included $66 million~~on the Consolidated Statements of ~~expenses associated with the repurchase of $1,000 million indebtedness prior to maturity.~~Income.

The Company's effective tax rate of 36.5% for 2012 and 36.2% for 2011 ~~and~~ ~~35.8%~~ ~~for~~ ~~2010~~ differ from the federal income tax statutory rate of 35%, and on a comparative basis, principally because of the effect of state and local income taxes, including the settlement of various tax issues and tax examinations.

Based on its assessment of current and anticipated market conditions and its recent performance, the Company's ~~2013~~2014 assumptions include:

The Company's budgeted capital expenditures are primarily related to store remodels, maintenance, the continued renovation of Macy's Herald Square, technology and omnichannel investments, and distribution network ~~improvements.~~improvements, including a new direct to customer fulfillment center in Tulsa County, OK. The Company has announced that in ~~2013~~2014 it intends to open new Macy's stores in ~~Victorville, CA, Gurnee, IL, and~~the Bronx, NY; Sarasota, FL; Las Vegas, NV, a Macy's replacement store in Bay Shore, NY, a new Bloomingdale's store in Glendale, CA, and a Bloomingdale's Outlet store in Rosemont, IL. In addition, 2014 will include new Macy's stores in the Bronx, NY, Sarasota, FL, Las Vegas, NV,NV; and a Bloomingdale's replacement store in Palo Alto, CA. Additionally, the Company has announced that in 2015 it intends to open a new Macy's store in Ponce, Puerto Rico and a new Bloomingdale's store in Honolulu, HI, and in 2016 it intends to open a new Macy's store and a new Bloomingdale's store in Miami, FL. Management presently anticipates funding such expenditures with cash on hand and cash from operations.

Liquidity and Capital Resources

The Company's principal sources of liquidity are cash from operations, cash on hand and the credit facility described below.

Operating Activities

Net cash provided by operating activities was $~~2,261~~2,549 million in ~~2012~~2013 compared to $~~2,093~~2,179 million in ~~2011~~2012, reflecting higher net income and ~~a lower~~no pension funding contribution in ~~2012~~2013. During 2012,, the Company made a pension funding contribution totaling $150 ~~million, compared to pension funding contributions made during~~ million.~~2011~~

Table of ~~$375 million.~~Contents

~~The Company is currently planning to make a pension funding contribution of approximately $150 million in~~ ~~2013~~.

Investing Activities

Net cash used by investing activities for ~~2012~~2013 was $~~863~~788 million, compared to net cash used by investing activities of $~~617~~781 million for ~~2011~~2012. Investing activities for ~~2012~~2013 includes purchases of property and equipment totaling $607 million and capitalized software of $256 million, compared to purchases of property and equipment totaling $698 million and capitalized software of $244 million~~, compared to purchases of property and equipment totaling~~ ~~$555 million~~ ~~and capitalized software of~~ ~~$209 million~~ for ~~2011~~2012. Purchases of property and equipment during 2012 includes the purchase of two parcels of the Macy's flagship Union Square location in San Francisco and the first year of the planned four year renovation of Macy's Herald Square. Cash flows from investing activities included $66132 million and $~~114~~66 million from the disposition of property and equipment for ~~2012~~2013 and ~~2011~~2012, respectively. At February 1, 2014, the Company had approximately $50 million of cash in a qualified escrow account, included in prepaid expenses and other current assets, to be utilized for potential tax deferred like-kind exchange transactions.

During 2013, the Company opened three new Macy's stores, one Macy's replacement store, one new Bloomingdale's store and one new Bloomingdale's Outlet store. During 2012, the Company opened two new Macy's stores and five new Bloomingdale's Outlet stores. Also during 2012 the Company opened its new 1.3 million square foot fulfillment center in Martinsburg, WV. ~~During 2011,~~

Financing Activities

Net cash used by the Company ~~opened three new Bloomingdale's Outlet stores~~for financing activities was $1,324 million for 2013, including the acquisition of the Company's common stock under its share repurchase program at an approximate cost of $1,570 million, the repayment of $124 million of debt and ~~re-opened one Macy's store that had been closed~~the payment of $359 million of cash dividends, partially offset by the issuance of $400 million of debt, the issuance of $315 million of common stock, primarily related to the exercise of stock options, and an increase in ~~2010~~outstanding checks of $24 million. $400 million of 4.375% senior notes due ~~to flood damage.~~

~~Financing Activities~~2023 were issued in 2013 and the debt repaid during 2013 included $109 million of 7.625% senior debentures due August 15, 2013 paid at maturity.

Net cash used by the Company for financing activities was $2,389 million for 2012~~, including~~ and included the acquisition of the Company's common stock under its share repurchase program at an approximate cost of $1,350 million, the repayment of $1,803 million of debt, the payment of $324 million of cash dividends and a decrease in outstanding checks of $88 million, partially offset by the issuance of $1,000 million of debt and the issuance of $234 million of common stock, primarily related to the exercise of stock options.

On November 28, 2012, the Company repurchased $700 million aggregate principal amount of its outstanding senior unsecured notes, which had a net book value of $706 million. The repurchased senior unsecured notes had stated interest rates ranging from 5.9% to 7.875% and maturities in 2015 and 2016. The Company recorded the redemption premium and other costs related to these repurchases as additional interest expense of $133 million in 2012. On March 29, 2012, the Company redeemed the ~~$173~~$173 million of 8.0% senior debentures due July 15, 2012, as allowed under the terms of the indenture. The price for the redemption was calculated pursuant to the indenture and resulted in the recognition of additional interest expense of $4 million in 2012. On November 20, 2012, the Company issued $750 million aggregate principal amount of 2.875% senior unsecured notes due 2023 and $250 million aggregate principal amount of 4.3% senior unsecured notes due 2043. This debt was used to pay for the notes repurchased on November 28, 2012 described above, and to retire $298 million of 5.875% senior unsecured notes that matured in January 2013. The debt repaid in 2012 also ~~includes~~included $616 million of 5.35% senior notes at maturity. Through these transactions, the Company ~~has~~ improved its debt maturity profile, decreased its ongoing interest expense by taking advantage of the current low interest rate environment and reduced its refinancing and interest rate ~~risk over the next few years. The favorable impact of these transactions on the Company's annual interest expense is approximately~~ ~~$30 million~~ ~~on a full year basis.~~risk.

~~Net cash used by the Company for financing activities was~~ ~~$113 million~~ ~~for~~ ~~2011~~ ~~and included the acquisition of the Company's common stock under its share repurchase program at an approximate cost of $500 million, the repayment of~~ ~~$454 million~~ ~~of debt and the payment of~~ ~~$148 million~~ ~~of cash dividends, partially offset by the issuance of~~ ~~$800 million~~ ~~of debt, the issuance of~~ ~~$162 million~~ ~~of common stock, primarily related to the exercise of stock options, and an increase in outstanding checks of~~ ~~$49 million. The debt issued during~~ ~~2011~~ included $550 million of 3.875% senior notes due 2022 and $250 million of 5.125% senior notes due 2042, the proceeds of which were used to retire indebtedness maturing during the first half of 2012. The debt repaid during 2011 included $330 million of 6.625% senior notes due April 1, 2011 and $109 million of 7.45% senior debentures due September 15, 2011.

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The Company isentered into a ~~party to a~~new credit agreement with certain financial institutions on May 10, 2013 providing for revolving credit borrowings and letters of credit in an aggregate amount not to exceed $1,500 million (which ~~amount~~ may be increased to $1,750 million at the option of the Company, subject to the willingness of existing or new lenders to provide commitments for such additional financing) outstanding at any particular time. The agreement is set to expire May 10, 2018 and replaced the prior agreement which was set to expire June 20, 2015. As of February ~~2, 2013~~1, 2014 and throughout all of ~~2012~~2013, the Company had no borrowings outstanding under its then existing credit ~~agreement.~~agreements.

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The credit agreement requires the Company to maintain a specified interest coverage ratio for the latest four quarters of no less than 3.25 and a specified leverage ratio as of and for the latest four quarters of no more than 3.75. The Company's interest coverage ratio for ~~2012~~2013 was ~~8.41~~9.40 and its leverage ratio at February ~~2, 2013~~1, 2014 was ~~1.81~~1.85, in each case as calculated in accordance with the credit agreement. The interest coverage ratio is defined as EBITDA over net interest expense and the leverage ratio is defined as debt over EBITDA. For purposes of these calculations EBITDA is calculated as net income plus interest expense, taxes, depreciation, amortization, non-cash impairment of goodwill, intangibles and real estate, non-recurring cash charges not to exceed in the aggregate $400 million and extraordinary losses less interest income and non-recurring or extraordinary gains. Debt is adjusted to exclude the premium on acquired debt and net interest is adjusted to exclude the amortization of premium on acquired debt and premium on early retirement of debt.

A breach of a restrictive covenant in the Company's credit agreement or the inability of the Company to maintain the financial ratios described above could result in an event of default under the credit agreement. In addition, an event of default would occur under the credit agreement if any indebtedness of the Company in excess of an aggregate principal amount of $150 million becomes due prior to its stated maturity or the holders of such indebtedness become able to cause it to become due prior to its stated maturity. Upon the occurrence of an event of default, the lenders could, subject to the terms and conditions of the credit agreement, elect to declare the outstanding principal, together with accrued interest, to be immediately due and payable.

Moreover, most of the Company's senior notes and debentures contain cross-default provisions based on the non-payment at maturity, or other default after an applicable grace period, of any other debt, the unpaid principal amount of which is not less than $100 million, that could be triggered by an event of default under the credit agreement. In such an event, the Company's senior notes and debentures that contain cross-default provisions would also be subject to acceleration.

At February ~~2, 2013~~1, 2014, no notes or debentures contain provisions requiring acceleration of payment upon a debt rating downgrade. However, the terms of approximately ~~$3,300~~$3,700 million in aggregate principal amount of the Company's senior notes outstanding at that date require the Company to offer to purchase such notes at a price equal to 101% of their principal amount plus accrued and unpaid interest in specified circumstances involving both a change of control (as defined in the applicable indenture) of the Company and the rating of the notes by specified rating agencies at a level below investment grade.

~~As a result of upgrades of the notes by specified rating agencies, the~~The rate of interest payable in respect of $407 million in aggregate principal amount of the Company's 7.875% senior notes outstanding at February ~~2, 2013~~ decreased by .25 percent per annum to 8.125% effective in May 2011 and decreased by .25 percent per annum to 7.875%, its stated interest rate, effective in January 2012. The rate of interest payable in respect of these senior notes outstanding at ~~February 2, 2013~~1, 2014 could increase by up to 2.0 percent per annum from its current level in the event of ~~one~~two or more downgrades of the notes by specified rating agencies.

The Company's board of directors approved an additional ~~authorizations~~authorization to purchase Common Stock of ~~$1,000~~$1,500 million on ~~January 5, 2012 and~~ ~~$1,500 million~~ ~~on December 7, 2012.~~May 15, 2013. During ~~2012~~2013, the Company repurchased approximately ~~35.6~~33.6 million shares of its common stock for a total of $~~1,350~~1,570 million. As of February ~~2, 2013~~1, 2014, the Company had $~~1,502~~1,432 million of authorization remaining under its share repurchase program. The Company may continue or, from time to time, suspend repurchases of shares under its share repurchase program, depending on prevailing market conditions, alternate uses of capital and other factors.

On February ~~22, 2013,~~28, 2014, the Company's board of directors declared a quarterly dividend of 2025 cents per share on its common stock, payable April 1, ~~2013~~2014 to Macy's shareholders of record at the close of business on March ~~15, 2013.~~14, 2014.

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Contractual Obligations and Commitments

At February ~~2, 2013~~1, 2014, the Company had contractual obligations (within the scope of Item 303(a)(5) of Regulation S-K) as follows:


	Obligations Due, by Period										Obligations Due, by Period
	Total		Less than 1 Year		1 – 3 Years		3 – 5 Years		More than 5 Years		Total		Less than 1 Year		1 – 3 Years		3 – 5 Years		More than 5 Years
	(millions)
Short-term debt	$	121	$	121	$	—	$	—	$	—	$	461	$	461	$	—	$	—	$	—
Long-term debt	6,583		—		942		948		4,693		6,522		—		1,123		312		5,087
Interest on debt	5,127		394		729		606		3,398		4,909		398		712		581		3,218
Capital lease obligations	67		5		7		6		49		62		4		6		6		46
Operating leases	2,714		257		460		348		1,649		2,920		282		477		386		1,775
Letters of credit	34		34		—		—		—		34		34		—		—		—
Other obligations	3,942		2,342		493		339		768		4,548		3,047		475		292		734
	$	18,588	$	3,153	$	2,631	$	2,247	$	10,557	$	19,456	$	4,226	$	2,793	$	1,577	$	10,860

“Other obligations” in the foregoing table includes post employment and postretirement benefits, self-insurance reserves, group medical/dental/life insurance programs, merchandise purchase obligations and obligations under outsourcing arrangements, construction contracts, energy and other supply agreements identified by the Company and liabilities for unrecognized tax benefits that the Company expects to settle in cash in the next year. The Company's merchandise purchase obligations fluctuate on a seasonal basis, typically being higher in the summer and early fall and being lower in the late winter and early spring. The Company purchases a substantial portion of its merchandise inventories and other goods and services otherwise than through binding contracts. Consequently, the amounts shown as “Other obligations” in the foregoing table do not reflect the total amounts that the Company would need to spend on goods and services in order to operate its businesses in the ordinary course.

The Company has not included in the contractual obligations table $~~127~~147 million of long-term liabilities for unrecognized tax benefits for various tax positions taken or $2751 million of related accrued federal, state and local interest and penalties. These liabilities may increase or decrease over time as a result of tax examinations, and given the status of examinations, the Company cannot reliably estimate the period of any cash settlement with the respective taxing authorities. The Company has included in the contractual obligations table $2031 million of liabilities for unrecognized tax benefits that the Company expects to settle in cash in the next year. ~~The Company has not included in the contractual obligation table the~~ ~~$168 million~~ Pension Plan liability. The Company's funding policy is to contribute amounts necessary to satisfy pension funding requirements, including requirements of the Pension Protection Act of 2006, plus such additional amounts from time to time as are determined to be appropriate to improve the Pension Plan's funded status. The Pension Plan's funded status is affected by many factors including discount rates and the performance of Pension Plan assets. The Company is currently planning to make a pension funding contribution of approximately $150 million in 2013.

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Liquidity and Capital Resources Outlook

Management believes that, with respect to the Company's current operations, cash on hand and funds from operations, together with its credit facility and other capital resources, will be sufficient to cover the Company's reasonably foreseeable working capital, capital expenditure and debt service requirements and other cash requirements in both the near term and over the longer term. The Company's ability to generate funds from operations may be affected by numerous factors, including general economic conditions and levels of consumer confidence and demand; however, the Company expects to be able to manage its working capital levels and capital expenditure amounts so as to maintain sufficient levels of liquidity. To the extent that the Company's cash balances from time to time exceed amounts that are needed to fund its immediate liquidity requirements, the Company will consider alternative uses of some or all of such excess cash. Such alternative uses may include, among others, the redemption or repurchase of debt, equity or other securities through open market purchases, privately negotiated transactions or otherwise, and the funding of pension related obligations. Depending upon its actual and anticipated sources and uses of liquidity, conditions in the capital markets and other factors, the Company will from time to time consider the issuance of debt or other securities, or other possible capital markets transactions, for the purpose of raising capital which could be used to refinance current indebtedness or for other corporate purposes including the redemption or repurchase of debt, equity or other securities through open market purchases, privately negotiated transactions or otherwise, and the funding of pension related obligations.

The Company intends from time to time to consider additional acquisitions of, and investments in, retail businesses and other complementary assets and companies. Acquisition transactions, if any, are expected to be financed from one or more of the following sources: cash on hand, cash from operations, borrowings under existing or new credit facilities and the issuance of long-term debt or other securities, including common stock.

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Critical Accounting Policies

Merchandise Inventories

Merchandise inventories are valued at the lower of cost or market using the last-in, first-out (LIFO) retail inventory method. Under the retail inventory method, inventory is segregated into departments of merchandise having similar characteristics, and is stated at its current retail selling value. Inventory retail values are converted to a cost basis by applying specific average cost factors for each merchandise department. Cost factors represent the average cost-to-retail ratio for each merchandise department based on beginning inventory and the fiscal year purchase activity. At February ~~2, 2013~~1, 2014 and ~~January 28, 2012~~February 2, 2013, merchandise inventories valued at LIFO, including adjustments as necessary to record inventory at the lower of cost or market, approximated the cost of such inventories using the first-in, first-out (FIFO) retail inventory method. The application of the LIFO retail inventory method did not result in the recognition of any LIFO charges or credits affecting cost of sales for ~~2012~~2013, ~~2011~~2012 or ~~2010~~2011. The retail inventory method inherently requires management judgments and estimates, such as the amount and timing of permanent markdowns to clear unproductive or slow-moving inventory, which may impact the ending inventory valuation as well as gross margins.

Permanent markdowns designated for clearance activity are recorded when the utility of the inventory has diminished. Factors considered in the determination of permanent markdowns include current and anticipated demand, customer preferences, age of the merchandise and fashion trends. When a decision is made to permanently mark down merchandise, the resulting gross profit reduction is recognized in the period the markdown is recorded.

Physical inventories are generally taken within each merchandise department annually, and inventory records are adjusted accordingly, resulting in the recording of actual shrinkage. ~~While it is not possible to quantify the impact from each cause of shrinkage, the Company has loss prevention programs and policies that are intended to minimize shrinkage.~~ Physical inventories are taken at all store locations for substantially all merchandise categories approximately three weeks before the end of the fiscal year. Shrinkage is estimated as a percentage of sales at interim periods and for this approximate three-week period, based on historical shrinkage rates. While it is not possible to quantify the impact from each cause of shrinkage, the Company has loss prevention programs and policies that are intended to minimize shrinkage, including the use of radio frequency devices and interim inventories to keep the Company's merchandise files accurate.

The Company receives certain allowances as reimbursement for markdowns taken and/or to support the gross margins earned in connection with the sales of merchandise. These allowances are generally credited to cost of sales at the time the merchandise is sold in accordance with ASC Subtopic 605-50, “Customer Payments and Incentives.” The Company also receives advertising allowances from approximately 1,000 of its merchandise vendors pursuant to cooperative advertising programs, with some vendors participating in multiple programs. These allowances represent reimbursements by vendors of costs incurred by the Company to promote the vendors' merchandise and are netted against advertising and promotional costs when the related costs are incurred in accordance with ASC Subtopic 605-50. Advertising allowances in excess of costs incurred are recorded as a reduction of merchandise costs. The arrangements pursuant to which the Company's vendors provide allowances, while binding, are generally informal in nature and one year or less in duration. The terms and conditions of these arrangements vary significantly from vendor to vendor and are influenced by, among other things, the type of merchandise to

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be supported. Although it is highly unlikely that there will be any significant reduction in historical levels of vendor support, if such a reduction were to occur, the Company could experience higher costs of sales and higher advertising expense, or reduce the amount of advertising that it uses, depending on the specific vendors involved and market conditions existing at the time.

Long-Lived Asset Impairment and Restructuring Charges

The carrying values of long-lived assets are periodically reviewed by the Company whenever events or changes in circumstances indicate that the carrying value may not be recoverable, such as historical operating losses or plans to close stores before the end of their previously estimated useful lives. Additionally, on an annual basis, the recoverability of the carrying values of individual stores are evaluated. A potential impairment has occurred if projected future undiscounted cash flows are less than the carrying value of the assets. The estimate of cash flows includes management's assumptions of cash inflows and outflows directly resulting from the use of those assets in operations. When a potential impairment has occurred, an impairment write-down is recorded if the carrying value of the long-lived asset exceeds its fair value. The Company believes its estimated cash flows are sufficient to support the carrying value of its long-lived assets. If estimated cash flows significantly differ in the future, the Company may be required to record asset impairment write-downs.

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If the Company commits to a plan to dispose of a long-lived asset before the end of its previously estimated useful life, estimated cash flows are revised accordingly, and the Company may be required to record an asset impairment write-down. Additionally, related liabilities arise such as severance, contractual obligations and other accruals associated with store closings from decisions to dispose of assets. The Company estimates these liabilities based on the facts and circumstances in existence for each restructuring decision. The amounts the Company will ultimately realize or disburse could differ from the amounts assumed in arriving at the asset impairment and restructuring charge recorded.

The Company classifies certain long-lived assets as held for disposal by sale and ceases depreciation when the particular criteria for such classification are met, including the probable sale within one year. For long-lived assets to be disposed of by sale, an impairment charge is recorded if the carrying amount of the asset exceeds its fair value less costs to sell. Such valuations include estimations of fair values and incremental direct costs to transact a sale.

Income Taxes

Income taxes are estimated based on the tax statutes, regulations and case law of the various jurisdictions in which the Company operates. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and net operating loss and tax credit carryforwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred income tax assets are evaluated for recoverability based on all available evidence, including past operating results, estimates of future taxable income, and the feasibility of tax planning strategies. Deferred income tax assets are reduced by a valuation allowance when it is more likely than not that some portion of the deferred income tax assets will not be realized.

Uncertain tax positions are recognized if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained on examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Uncertain tax positions meeting the more-likely-than-not recognition threshold are then measured to determine the amount of benefit eligible for recognition in the financial statements. Each uncertain tax position is measured at the largest amount of benefit that is more likely than not to be realized upon ultimate settlement. Uncertain tax positions are evaluated and adjusted as appropriate, while taking into account the progress of audits of various taxing jurisdictions. The Company does not anticipate that resolution of these matters will have a material impact on the Company's consolidated financial position, results of operations or cash flows.

Significant judgment is required in evaluating the Company's uncertain tax positions, provision for income taxes, and any valuation allowance recorded against deferred tax assets. Although the Company believes that its judgments are reasonable, no assurance can be given that the final tax outcome of these matters will not be different from that which is reflected in the Company's historical income provisions and accruals.

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Self-Insurance Reserves

The Company, through its insurance subsidiary, is self-insured for workers' compensation and general liability claims up to certain maximum liability amounts. Although the amounts accrued are actuarially determined by third parties based on analysis of historical trends of losses, settlements, litigation costs and other factors, the amounts the Company will ultimately disburse could differ from such accrued amounts.

Pension and Supplementary Retirement Plans

The Company has a funded defined benefit pension plan (the “Pension Plan”) and an unfunded defined benefit supplementary retirement plan (the “SERP”). The Company accounts for these plans in accordance with ASC Topic 715, “Compensation - Retirement Benefits.” Under ASC Topic 715, an employer recognizes the funded status of a defined benefit postretirement plan as an asset or liability on the balance sheet and recognizes changes in that funded status in the year in which the changes occur through comprehensive income. Additionally, pension expense is generally recognized on an accrual basis over employees' approximate service periods. The pension expense calculation is generally independent of funding decisions or requirements.

In February 2013, the Company announced changes to the Pension Plan and SERP whereby eligible employees ~~will~~ no longer earn future pension service credits after December 31, 2013, with limited exceptions. All retirement benefits attributable to service in subsequent periods will be provided through defined contribution plans. As a result of these changes, the Company recognized reductions in the projected benefit obligations of the Pension Plan of ~~$254~~$254 million and the SERP of ~~$42~~$42 million as of February 2, 2013.

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The Pension Protection Act of 2006 provides the funding requirements for the Pension Plan which are different from the employer's accounting for the plan as outlined in ASC Topic 715. ~~During~~ ~~2012~~,No funding contributions were required, and the Company made ano funding ~~contribution~~contributions to the Pension Plan ~~totaling $150 million. The~~in 2013. As of the date of this report, the Company ~~is currently planning~~does not anticipate making funding contributions to ~~make a pension funding contribution of approximately $150 million~~the Pension Plan in ~~2013~~.2014. Management believes that, with respect to the Company's current operations, cash on hand and funds from operations, together with available borrowing under its credit facility and other capital resources, will be sufficient to cover the Company's Pension Plan cash requirements in both the near term and also over the longer term.

At February ~~2, 2013~~1, 2014, the Company had unrecognized actuarial losses of $~~1,326~~931 million for the Pension Plan and $~~212~~176 million for the SERP. The unrecognized losses for the Pension Plan and the SERP will be recognized as a component of pension expense in future years in accordance with ASC Topic 715, and is expected to impact ~~2013~~2014 Pension and SERP ~~expense~~income by approximately ~~$160~~$31 million. The Company generally amortizes unrecognized gains and losses on a straight-line basis over the average remaining lifetime of participants using the corridor approach.

The calculation of pension expense and pension liabilities requires the use of a number of assumptions. Changes in these assumptions can result in different expense and liability amounts, and future actual experience may differ significantly from current expectations. The Company believes that the most critical assumptions relate to the long-term rate of return on plan assets (in the case of the Pension Plan), the discount rate used to determine the present value of projected benefit obligations and the weighted average rate of increase of future compensation levels.

As of February 2, 2013, the Company lowered the assumed annual long-term rate of return for the Pension Plan's assets from 8.00% to 7.50% based on expected future returns on the portfolio. The Company develops its expected long-term rate of return assumption by evaluating input from several professional advisors taking into account the asset allocation of the portfolio and long-term asset class return expectations, as well as long-term inflation assumptions. Pension expense increases or decreases as the expected rate of return on the assets of the Pension Plan decreases or increases, respectively. Lowering or raising the expected long-term rate of return on the Pension Plan's assets by 0.25% would increase or decrease the estimated ~~2013~~2014 pension expense by approximately $8 million.

The Company discounted its future pension obligations using a rate of 4.50% at February 1, 2014, compared to 4.15% at February 2, 2013~~, compared to 4.65% at~~ ~~January 28, 2012~~. The discount rate used to determine the present value of the Company's Pension Plan and SERP obligations is based on a yield curve constructed from a portfolio of high quality corporate debt securities with various maturities. Each year's expected future benefit payments are discounted to their present value at the appropriate yield curve rate, thereby generating the overall discount rate for Pension Plan and SERP obligations. ~~Pension liability and future pension expense both increase or decrease as~~As the discount rate is reduced or increased, pension liability would increase or decrease, respectively, and future pension expense would decrease or increase, respectively. Lowering the discount rate by 0.25% (from ~~4.15%~~4.50% to ~~3.90%~~4.25%) would increase the projected benefit obligation at February ~~2, 2013~~1, 2014 by approximately ~~$110~~$99 million and would ~~increase~~decrease estimated ~~2013~~2014 pension expense by approximately ~~$11~~$2 million. Increasing the discount rate by 0.25% (from ~~4.15%~~4.50% to ~~4.40%~~4.75%) would decrease the projected benefit obligation at February ~~2, 2013~~1, 2014 by approximately ~~$103~~$92 million and would ~~decrease~~increase estimated ~~2013~~2014 pension expense by approximately ~~$10~~$2 million.

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The assumed weighted average ~~age-graded~~ rate of increase in future compensation levels was 4.1% at February 1, 2014 and 4.5% at February 2, 2013 ~~and~~ ~~January 28, 2012~~ for the Pension Plan, and 4.9% at February 2, 2013 ~~and~~ ~~January 28, 2012~~for the SERP. The Company develops its rate of compensation increase assumption ~~on an age-graded basis~~ based on recent experience and reflects an estimate of future compensation levels taking into account general increase levels, seniority, promotions and other factors. Pension liabilities and future pension expense both increase or decrease as the weighted average rate of increase of future compensation levels is increased or decreased, respectively. Increasing or decreasing the assumed weighted average rate of increase of future compensation levels by 0.25% would increase or decrease the projected benefit obligation at February ~~2, 2013~~1, 2014 by approximately $2$1 million and the change to estimated ~~2013~~2014 pension expense ~~by approximately~~would be less than $1 million.

New Pronouncements

The Company does not anticipate that the adoption of recent accounting pronouncements will have ana material impact on the Company's consolidated financial position, results of operations or cash flows.

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Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.

The Company is exposed to market risk from changes in interest rates that may adversely affect its financial position, results of operations and cash flows. In seeking to minimize the risks from interest rate fluctuations, the Company manages exposures through its regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. The Company does not use financial instruments for trading or other speculative purposes and is not a party to any leveraged financial instruments.

The Company is exposed to interest rate risk through its borrowing activities, which are described in Note 6 to the Consolidated Financial Statements. All of the Company’s borrowings are under fixed rate instruments. However, the Company, from time to time, may use interest rate swap and interest rate cap agreements to help manage its exposure to interest rate movements and reduce borrowing costs. At February ~~2, 2013~~1, 2014, the Company was not a party to any derivative financial instruments and based on the Company’s lack of market risk sensitive instruments outstanding at February ~~2, 2013~~1, 2014, the Company has determined that there was no material market risk exposure to the Company’s consolidated financial position, results of operations or cash flows as of such date.


Item 8.	Consolidated Financial Statements and Supplementary Data.

Information called for by this item is set forth in the Company’s Consolidated Financial Statements and supplementary data contained in this report and is incorporated herein by this reference. Specific financial statements and supplementary data can be found at the pages listed in the following index:

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INDEX



	Page
Report of Management	F-2
Report of Independent Registered Public Accounting Firm	F-3
Consolidated Statements of Income for the fiscal years ended February 1, 2014, February 2, 2013 and January 28, 2012 ~~and January 29, 2011~~	F-4
Consolidated Statements of Comprehensive Income for the fiscal years ended February 1, 2014, February 2, 2013 and January 28, 2012 ~~and January 29, 2011~~	F-5
Consolidated Balance Sheets at February 1, 2014 and February 2, 2013 ~~and January 28, 2012~~	F-6
Consolidated Statements of Changes in Shareholders’ Equity for the fiscal years ended February 1, 2014, February 2, 2013 and January 28, 2012 ~~and January 29, 2011~~	F-7
Consolidated Statements of Cash Flows for the fiscal years ended February 1, 2014, February 2, 2013 and January 28, 2012 ~~and January 29, 2011~~	F-8
Notes to Consolidated Financial Statements	F-9

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Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.


Item 9A.	Controls and Procedures.

a. Disclosure Controls and Procedures

The Company’s Chief Executive Officer and Chief Financial Officer have carried out, as of February ~~2, 2013~~1, 2014, with the participation of the Company’s management, an evaluation of the effectiveness of the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) under the Exchange Act. Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by the Company in reports the Company files under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC rules and forms, and that information required to be disclosed by the Company in the reports the Company files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

b. Management’s Report on Internal Control over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f). The Company’s management conducted an assessment of the Company’s internal control over financial reporting based on the framework established by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework. Based on this assessment, the Company’s management has concluded that, as of February ~~2, 2013~~1, 2014, the Company’s internal control over financial reporting is effective.

The Company’s independent registered public accounting firm, KPMG LLP, has audited the effectiveness of the Company’s internal control over financial reporting as of February ~~2, 2013~~1, 2014 and has issued an attestation report expressing an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting, as stated in their report located on page F-3.

c. Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal controls over financial reporting that occurred during the Company’s most recently completed fiscal quarter that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

d. Certifications

The certifications of the Company’s Chief Executive Officer and Chief Financial Officer required under Section 302 of the Sarbanes-Oxley Act are filed as Exhibits 31.1 and 31.2 to this report. Additionally, in ~~2012~~2013 the Company’s Chief Executive Officer certified to the NYSE that he was not aware of any violation by the Company of the NYSE corporate governance listing standards.

PART III


Item 10.	Directors, Executive Officers and Corporate Governance.

Information called for by this item is set forth under “Item 1 – Election of Directors” and “Further Information Concerning the Board of Directors – Committees of the Board” and “Section 16(a) Beneficial Ownership Reporting Compliance” in the Proxy Statement to be delivered to stockholders in connection with our ~~2013~~2014 Annual Meeting of Shareholders (the “Proxy Statement”), and “Item 1. Business – Executive Officers of the Registrant” in this report and incorporated herein by reference.


Item 11.	Executive Compensation.

Information called for by this item is set forth under “Compensation Discussion & Analysis,” “Compensation of the Named Executives for ~~2012~~2013,” “Compensation Committee Report” and “Compensation Committee Interlocks and Insider Participation” in the Proxy Statement and incorporated herein by reference.

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Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Information called for by this item is set forth under “Stock Ownership – Certain Beneficial Owners” and “Stock Ownership – Stock Ownership of Directors and Executive Officers” in the Proxy Statement and incorporated herein by reference.


Item 13.	Certain Relationships and Related Transactions, and Director Independence.

Information called for by this item is set forth under “Further Information Concerning the Board of Directors – Director Independence” and “Policy on Related Person Transactions” in the Proxy Statement and incorporated herein by reference.


Item 14.	Principal Accountant Fees and Services.

Information called for by this item is set forth under “Item 2 – Appointment of Independent Registered Public Accounting Firm” in the Proxy Statement and incorporated herein by reference.

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PART IV


Item 15.	Exhibits and Financial Statement Schedules.

(a) The following documents are filed as part of this report:

1. Financial Statements:

The list of financial statements required by this item is set forth in Item 8 “Consolidated Financial Statements and Supplementary Data” and is incorporated herein by reference.

2. Financial Statement Schedules:

All schedules are omitted because they are inapplicable, not required, or the information is included elsewhere in the Consolidated Financial Statements or the notes thereto.

3. Exhibits:



Exhibit Number	Description	Document if Incorporated by Reference
3.1	Amended and Restated Certificate of Incorporation	Exhibit 3.1 to the ~~Company’s~~Company's Current Report on Form 8-K ~~dated~~filed on May 18, 2010 ~~(the “May 18, 2010 Form 8-K”)~~

3.1.1	Certificate of Designations of Series A Junior Participating Preferred Stock	Exhibit 3.1.1 to the ~~Company’s~~Company's Annual Report on Form 10-K (File No. 1-13536) for the fiscal year ended January 28, 1995

3.1.2	Article Seventh of the Amended and Restated Certificate of Incorporation	Exhibit 3.1 to the Company's Current Report on Form 8-K ~~dated~~filed on May 24, 2011 (the “May 24, 2011 Form 8-K”)

3.2	Amended and Restated By-Laws	Exhibit 3.2 to the May 24, 2011 Form 8-K

4.1	Amended and Restated Certificate of Incorporation	See Exhibits 3.1, 3.1.1 and 3.1.2

4.2	Amended and Restated By-Laws	See Exhibit 3.2

4.3	Indenture, dated as of January 15, 1991, among the Company (as successor to The May Department Stores Company (“May Delaware”)), ~~Macy’s~~Macy's Retail Holdings, Inc. (“~~Macy’s~~Macy's Retail”) (f/k/a The May Department Stores Company (NY) or “May New York”) and The Bank of New York Mellon Trust Company, N.A. (“BNY Mellon”, successor to J.P. Morgan Trust Company and as successor to The First National Bank of Chicago), as Trustee (the “1991 Indenture”)	Exhibit 4(2) to May New York’s Current Report on Form 8-K filed on January 15, 1991

4.3.1	Guarantee of Securities, dated as of August 30, 2005, by the Company relating to the 1991 Indenture	Exhibit 10.13 to the ~~Company’s~~Company's Current Report on Form 8-K filed on August 30, 2005 (the “August 30, 2005 Form 8-K”)

4.4	Indenture, dated as of December 15, 1994, between the Company and U.S. Bank National Association (successor to State Street Bank and Trust Company and The First National Bank of Boston), as Trustee (the “1994 Indenture”)	Exhibit 4.1 to the ~~Company’s~~Company's Registration Statement on Form S-3 (Registration No. 33-88328) filed on January 9, 1995

4.4.1	Eighth Supplemental Indenture to the 1994 Indenture, dated as of July 14, 1997, between the Company and U.S. Bank National Association (successor to State Street Bank and Trust Company and The First National Bank of Boston), as Trustee	Exhibit 2 to the ~~Company’s~~Company's Current Report on Form 8-K filed on July 15, 1997 (the “July 15, 1997 Form 8-K”)

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Exhibit Number	Description	Document if Incorporated by Reference
4.4.2	Ninth Supplemental Indenture to the 1994 Indenture, dated as of July 14, 1997, between the Company and U.S. Bank National Association (successor to State Street Bank and Trust Company and The First National Bank of Boston), as Trustee	Exhibit 3 to the July 15, 1997 Form 8-K

4.4.3	Tenth Supplemental Indenture to the 1994 Indenture, dated as of August 30, 2005, among the Company, ~~Macy’s~~Macy's Retail and U.S. Bank National Association (as successor to State Street Bank and Trust Company and as successor to The First National Bank of Boston), as Trustee	Exhibit 10.14 to the August 30, 2005 Form 8-K

4.4.4	Guarantee of Securities, dated as of August 30, 2005, by the Company relating to the 1994 Indenture	Exhibit 10.16 to the August 30, 2005 Form 8-K

4.5	Indenture, dated as of September 10, 1997, between the Company and U.S. Bank National Association (successor to Citibank, N.A.), as Trustee (the “1997 Indenture”)	Exhibit 4.4 to the ~~Company’s~~Company's Amendment No. 1 to Form S-3 (Registration No. 333-34321) filed on September 11, 1997

4.5.1	First Supplemental Indenture to the 1997 Indenture, dated as of February 6, 1998, between the Company and U.S. Bank National Association (successor to Citibank, N.A.), as Trustee	Exhibit 2 to the ~~Company’s~~Company's Current Report on Form 8-K filed on February 6, 1998

4.5.2	Third Supplemental Indenture to the 1997 Indenture, dated as of March 24, 1999, between the Company and U.S. Bank National Association (successor to Citibank, N.A.), as Trustee	Exhibit 4.2 to the ~~Company’s~~Company's Registration Statement on Form S-4 (Registration No. 333-76795) filed on April 22, 1999

4.5.3	Seventh Supplemental Indenture to the 1997 Indenture, dated as of August 30, 2005 among the Company, ~~Macy’s~~Macy's Retail and U.S. Bank National Association (successor to Citibank, N.A.), as Trustee	Exhibit 10.15 to the August 30, 2005 Form 8-K

4.5.4	Guarantee of Securities, dated as of August 30, 2005, by the Company relating to the 1997 Indenture	Exhibit 10.17 to the August 30, 2005 Form 8-K

4.6	Indenture, dated as of June 17, 1996, among the Company (as successor to May Delaware), ~~Macy’s~~Macy's Retail (f/k/a May New York) and The Bank of New York Mellon Trust Company, N.A. (“BNY Mellon”, successor to J.P. Morgan Trust Company), as Trustee (the “1996 Indenture”)	Exhibit 4.1 to the Registration Statement on Form S-3 (Registration No. 333-06171) filed on June 18, 1996 by May Delaware

4.6.1	First Supplemental Indenture to the 1996 Indenture, dated as of August 30, 2005, by and among the Company (as successor to May Delaware), ~~Macy’s~~Macy's Retail (f/k/a May New York) and BNY Mellon, as Trustee	Exhibit 10.9 to the August 30, 2005 Form 8-K

4.7	Indenture, dated as of July 20, 2004, among the Company (as successor to May Delaware), ~~Macy’s~~Macy's Retail (f/k/a May New York) and BNY Mellon, as Trustee (the “2004 Indenture”)	Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-00079) filed on July 21, 2004 by May Delaware

4.7.1	First Supplemental Indenture to the 2004 Indenture, dated as of August 30, 2005 among the Company (as successor to May Delaware), ~~Macy’s~~Macy's Retail and BNY Mellon, as Trustee	Exhibit 10.10 to the August 30, 2005 Form 8-K

4.8	Indenture, dated as of November 2, 2006, by and among ~~Macy’s~~Macy's Retail, the Company and U.S. Bank National Association, as Trustee (the “2006 Indenture”)	Exhibit 4.6 to the ~~Company’s~~Company's Registration Statement on Form S-3ASR (Registration No. 333-138376) filed on November 2, 2006

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Exhibit Number	Description	Document if Incorporated by Reference
4.8.1	First Supplemental Indenture to the 2006 Indenture, dated November 29, 2006, among ~~Macy’s~~Macy's Retail, the Company and U.S. Bank National Association, as Trustee	Exhibit 4.1 to the ~~Company’s~~Company's Current Report on Form 8-K filed on November 29, 2006

4.8.2	Third Supplemental Indenture to the 2006 Indenture, dated March 12, 2007, among ~~Macy’s~~Macy's Retail, the Company and U.S. Bank National Association, as Trustee	Exhibit 4.2 to the Company's Current Report on Form 8-K filed on March 12, 2007 ~~Form 8-K~~

4.8.3	Fifth Supplemental Trust Indenture to the 2006 Indenture, dated as of June 26, 2008, among ~~Macy’s~~Macy's Retail, as issuer, the Company, as guarantor, and U.S. Bank National Association, as trustee	Exhibit 4.1 to the Company's Current Report on Form 8-K filed on June 26, 2008

4.9	Indenture, dated as of January 13, 2012, among Macy's Retail, the Company and BNY Mellon, as Trustee (the "2012 Indenture")	Exhibit 4.1 to the Company's Current Report on Form 8-K filed on January 13, 2012 (the “January 13, 2012 Form 8-K”)

4.9.1	First Supplemental Trust Indenture to the 2012 Indenture, dated as of January 13, 2012, among Macy's Retail, as issuer, the Company, as guarantor, and BNY Mellon, as trustee	Exhibit 4.2 to the January 13, 2012 Form 8-K

4.9.2	Second Supplemental Trust Indenture to the 2012 Indenture, dated as of January 13, 2012, among Macy's Retail, as issuer, the Company, as guarantor, and BNY Mellon, as trustee	Exhibit 4.3 to the January 13, 2012 Form 8-K

4.9.3	Third Supplemental Trust Indenture, dated as of November 20, 2012, among Macy's Retail, as issuer, the Company, as guarantor, and BNY Mellon, as trustee	Exhibit 4.2 to the Company's Current Report on Form 8-K ~~dated~~filed on November 20, 2012 (the “November 20, 2012 Form 8-K”)

4.9.4	Fourth Supplemental Trust Indenture, dated as of November 20, 2012, among Macy's Retail, as issuer, the Company, as guarantor, and BNY Mellon, as trustee	Exhibit 4.3 to the November 20, 2012 Form 8-K

4.9.5	Fifth Supplemental Trust Indenture, dated as of September 6, 2013, among Macy's Retail, as issuer, the Company, as guarantor, and BNY Mellon, as trustee	Exhibit 4.2 to the Company's Current Report on Form 8-K filed on September 6, 2013

10.1+	Credit ~~Amendment,~~Agreement, dated as of ~~June 20, 2011,~~May 10, 2013, among the Company, Macy's Retail, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent and paying agent, and Bank of America, N.A., as administrative agent	Exhibit 10.01 to the Company's Current Report on Form 8-K filed on ~~June 20, 2011~~May 14, 2013 (the ~~“June 20, 2011~~“May 14, 2013 Form 8-K”)

10.1.1	First Amendment, dated as of May 30, 2013, to the Credit Agreement, among Macy's Retail and JPMorgan Chase Bank, N.A. and the Bank of America, N.A., as Administrative Agents	Exhibit 10.1.1 to the Company's Quarterly Report on Form 10-Q filed on June 10, 2013

10.2	Guarantee Agreement, dated as of ~~June 20, 2011,~~May 10, 2013, among the Company, ~~Macy’s~~Macy's Retail, certain subsidiary guarantors and JPMorgan Chase Bank, N.A., as paying agent	Exhibit 10.02 to the ~~June 20, 2011~~May 14, 2013 Form 8-K

10.3	Commercial Paper Dealer Agreement, dated as of August 30, 2005, among the Company, ~~Macy’s~~Macy's Retail and Banc of America Securities LLC	Exhibit 10.6 to the August 30, 2005 Form 8-K

10.4	Commercial Paper Dealer Agreement, dated as of August 30, 2005, among the Company, ~~Macy’s~~Macy's Retail and Goldman, Sachs & Co.	Exhibit 10.7 to the August 30, 2005 Form 8-K

Table of Contents



Exhibit Number	Description	Document if Incorporated by Reference
10.5	Commercial Paper Dealer Agreement, dated as of August 30, 2005, among the Company, ~~Macy’s~~Macy's Retail and J.P. Morgan Securities Inc.	Exhibit 10.8 to the August 30, 2005 Form 8-K

10.6	Commercial Paper Dealer Agreement, dated as of October 4, 2006, among the Company and Loop Capital Markets, LLC	Exhibit 10.6 to the Company's Annual Report on Form 10-K (File No. 1-13536) for the fiscal year ended February 3, 2007 ~~( the 2006 “Form 10-K”)~~

10.7	Tax Sharing Agreement	Exhibit 10.10 to the ~~Company’s~~Company's Registration Statement on Form 10, filed on November 27, 1991, as amended (the “Form 10”)

~~Table of Contents~~



~~Exhibit~~ ~~Number~~	~~Description~~	~~Document if Incorporated by Reference~~
10.8+	Purchase, Sale and Servicing Transfer Agreement, effective as of June 1, 2005, among the Company, FDS Bank, Prime II Receivables Corporation (“Prime II”) and Citibank, N.A. (“Citibank”)	Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q filed on September 8, 2009 (the "September 8, 2009 Form ~~10-Q~~10-Q")

10.8.1	Letter Agreement, dated August 22, 2005, among the Company, FDS Bank, Prime II and Citibank	Exhibit 10.17.1 to the ~~Company’s~~Company's Annual Report on Form 10-K (File No. 1-13536) for the fiscal year ended January 28, 2006 (the “2005 Form 10-K”)

10.8.2+	Second Amendment to Purchase, Sale and Servicing Transfer Agreement, dated October 24, 2005, between the Company and Citibank	Exhibit 10.4 to the September 8, 2009 Form 10-Q

10.8.3	Third Amendment to Purchase, Sale and Servicing Transfer Agreement, dated May 1, 2006, between the Company and Citibank	Exhibit 10.1 to the ~~Company’s~~Company's Current Report on Form 8-K filed on May 3, 2006

10.8.4+	Fourth Amendment to Purchase, Sale and Servicing Transfer Agreement, dated May 22, 2006, between the Company and Citibank	Exhibit 10.5 to the September 8, 2009 Form 10-Q

10.9+	Credit Card Program Agreement, effective as of June 1, 2005, among the Company, FDS Bank, ~~Macy’s~~Macy's Credit and Customer Services, Inc. (“MCCS”) (f/k/a FACS Group, Inc.) and Citibank	Exhibit 10.6 to the September 8, 2009 Form 10-Q

10.9.1+	First Amendment to Credit Card Program Agreement, dated October 24, 2005, between the Company and Citibank	Exhibit 10.7 to the September 8, 2009 Form 10-Q

10.9.2+	Second Amendment to Credit Card Program Agreement, dated May 22, 2006, between the Company, FDS Bank, MCCS, ~~Macy’s~~Macy's West Stores, Inc. (f/k/a ~~Macy’s~~Macy's Department Stores, Inc,) (“MWSI”), Bloomingdale’s, Inc. (“Bloomingdale’s”) and Department Stores National Bank (“DSNB”) and Citibank	Exhibit 10.8 to the September 8, 2009 Form 10-Q

10.9.3	Restated Letter Agreement, dated May 30, 2008 and effective as of December 18, 2006, among the Company, FDS Bank, MCCS, MWSI, Bloomingdale’s, Inc. (“Bloomingdale’s), and DSNB (as assignee of Citibank, N.A.)	Exhibit 10.6 to the ~~Company’s~~Company's Quarterly Report on Form 10-Q ~~for the quarterly period ended May 3,~~filed on June 9, 2008 (the ~~“May 3,~~“June 9, 2008 Form 10-Q”)

10.9.4	Restated Letter Agreement, dated May 30, 2008 and effective as of March 22, 2007, among the Company, FDS Bank, MCCS, MWSI, Bloomingdale’s and DSNB	Exhibit 10.7 to the ~~May 3,~~June 9, 2008 Form 10-Q

10.9.5	Restated Letter Agreement, dated May 30, 2008 and effective as of April 6, 2007, among the Company, FDS Bank, MCCS, MWSI, Bloomingdale’s and DSNB	Exhibit 10.8 to the ~~May 3,~~June 9, 2008 Form 10-Q

Table of Contents



Exhibit Number	Description	Document if Incorporated by Reference
10.9.6	Restated Letter Agreement, dated May 30, 2008 and effective as of June 1, 2007, among the Company, FDS Bank, MCCS, MWSI, Bloomingdale’s and DSNB	Exhibit 10.9 to the ~~May 3,~~June 9, 2008 Form 10-Q

10.9.7	Restated Third Amendment to Credit Card Program Agreement, dated May 31, 2008 and effective as of February 3, 2008, among the Company, FDS Bank, MCCS, MWSI, Bloomingdale’s and DSNB	Exhibit 10.10 to the ~~May 3,~~June 9, 2008 Form 10-Q

10.9.8+	Fourth Amendment to Credit Card Program Agreement, effective as of August 1, 2008, among the Company, FDS Bank, MCCS, MWSI, Bloomingdale’s and DSNB.	Exhibit 10.9 to the September 8, 2009 Form 10-Q

~~Table of Contents~~



~~Exhibit~~ ~~Number~~	~~Description~~	~~Document if Incorporated by Reference~~
10.9.9+	Fifth Amendment to Credit Card Program Agreement, effective as of January 1, 2009, among the Company, FDS Bank, MCCS, MWSI, Bloomingdale’s and DSNB	Exhibit 10.10 to the September 8, 2009 Form 10-Q

10.9.10+	Sixth Amendment to Credit Card Program Agreement, effective as of June 1, 2009, among the Company, FDS Bank, MCCS, MWSI, Bloomingdale’s and DSNB	Exhibit 10.11 to the September 8, 2009 Form 10-Q

10.9.11+	Seventh Amendment to Credit Card Program Agreement, effective as of February 26, 2010, among the Company, FDS Bank, MCCS, MWSI, Bloomingdale’s and DSNB	Exhibit 10.9.11 to the ~~Company’s~~Company's Annual Report on Form 10-K (File No. 1-13536) for the fiscal year ended January 30, 2010

10.9.12+	Eighth Amendment to Credit Card Program Agreement, effective as of April 16, 2012, among the Company, FDS Bank, MCCS, MWSI, Bloomingdale’s and DSNB	Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed on December 3, 2012 ~~(the “December 3, 2012~~

10.9.13+	Letter Agreement, dated October 30, 2013, among the Company, FDS Bank, MCCS, MWSI, Bloomingdale’s and DSNB	Exhibit 10.1 to the Company's Quarterly Report on Form ~~10-Q”)~~10-Q filed on December 9, 2013

10.10	1995 Executive Equity Incentive Plan, as amended and restated as of June 1, 2007 (the “1995 Plan”) *	Exhibit 10.11 to the ~~Company’s~~Company's Annual Report on Form 10-K (File No. 1-13536) for the fiscal year ended January 31, 2009 (the “2008 Form 10-K”)

10.11	~~1992~~Senior Executive Incentive ~~Bonus~~Compensation Plan ~~as amended and restated as of February 3, 2007~~ *	Appendix B to the ~~Company’s~~Company's Proxy Statement dated ~~April 4, 2007~~March 28, 2012

10.12	1994 Stock Incentive Plan, as amended and restated as of June 1, 2007 *	Exhibit 10.13 to the 2008 Form 10-K

10.13	Form of Indemnification Agreement *	Exhibit 10.14 to the Form 10

10.14	Executive Severance Plan, effective November 1, 2009, as revised and restated January 1, 2014 *	~~Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on December 7, 2009 (the “December 7, 2009 Form 10-Q”)~~

10.15	Form of Non-Qualified Stock Option Agreement for the 1995 Plan (for Executives and Key Employees) *	Exhibit 10.2 to the ~~Company’s~~Company's Current Report on Form 8-K ~~dated~~filed on March ~~25,~~29, 2005

10.15.1	Form of Non-Qualified Stock Option Agreement for the 1995 Plan (for Executives and Key Employees), as amended *	Exhibit 10.33.1 to the 2005 Form 10-K

10.15.2	Form of Non-Qualified Stock Option Agreement for the 1994 Stock Incentive Plan *	Exhibit 10.7 to the Current Report on From 8-K (File No. 001-00079) filed on March 23, 2005 by May Delaware (the “March 23, 2005 Form 8-K”)

10.15.3	Form of Nonqualified Stock Option Agreement under the 2009 Omnibus Incentive Compensation Plan (for Executives and Key Employees) *	Exhibit 10.15.3 to the Company's Annual Report on Form 10-K (File No. 1-13536) for the fiscal year ended February 2, 2013 (the "2012 Form 10-K")

Table of Contents



Exhibit Number	Description	Document if Incorporated by Reference

10.16	Nonqualified Stock Option Agreement, dated as of October 26, 2007, by and between the Company and Terry Lundgren *	Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 1, 2007

10.17	Form of Restricted Stock Agreement for the 1994 Stock Incentive Plan *	Exhibit 10.4 to the March 23, 2005 Form 8-K

10.17.1	Form of Time-Based Restricted Stock Agreement under the 2009 Omnibus Incentive Compensation Plan *	Exhibit 10.3 to the Company's Current Report on Form 8-K filed on March 25, 2010 ~~Form 8-K~~

10.18	Form of Performance-Based Restricted Stock Unit Agreement under the 2009 Omnibus Incentive Compensation Plan for the 2013-2015 performance period *	Exhibit 10.18 to the 2012 Form 10-K

10.18.1	Form of Performance-Based Restricted Stock Unit Agreement under the 2009 Omnibus Incentive Compensation Plan for the 2014-2016 performance period *

10.19	Form of Time-Based Restricted Stock Unit Agreement under the 2009 Omnibus Incentive Compensation Plan *	Exhibit 10.19 to the 2012 Form 10-K

~~Table of Contents~~



~~Exhibit~~ ~~Number~~	~~Description~~	~~Document if Incorporated by Reference~~
10.20	Supplementary Executive Retirement Plan *	Exhibit 10.29 to the 2008 Form 10-K

10.20.1	First Amendment to the Supplementary Executive Retirement Plan effective January 1, 2012 *	Exhibit 10.21.1 to the Company's Annual Report on Form 10-K (File No. 1-13536) for the fiscal year ended January 28, 2012 ~~(the “2011 Form 10-K”)~~

10.20.2	Second Amendment to Supplementary Executive Retirement Plan effective January 1, 2012 *	Exhibit 10.20.2 to the 2012 Form 10-K

10.20.3	Third Amendment to Supplementary Executive Retirement Plan effective December 31, 2013 *

10.21	Executive Deferred Compensation Plan *	Exhibit 10.30 to the 2008 Form 10-K

10.21.1	First Amendment to Executive Deferred Compensation Plan effective December 19, 2013 *

10.22	Macy's, Inc. ~~Profit Sharing~~ 401(k) Retirement Investment Plan (the "Plan") (amending and restating the Macy's, Inc. ~~Profit Sharing~~ 401(k) Retirement Investment ~~Plan and The May Department Stores Company Profit Sharing~~ Plan), effective as of September 1, 2008 *	~~Exhibit 10.31 to the 2008 Form 10-K~~

~~10.22.1~~	~~First Amendment to the Plan regarding matching rate with respect to the Plan's 2009 plan year,~~ effective as of January 1, ~~2009~~2014 *	~~Exhibit 10.28.1 to the Company's Annual Report on Form 10-K (File No. 1-13536) for the fiscal year ended January 29, 2011 (the “2010 Form 10-K”)~~

~~10.22.2~~	Second Amendment to the Plan regarding certain rollover requirements added by the Pension Protection Act of 2006, restated effective as of January 1, 2008 *	~~Exhibit 10.28.2 to the 2010 Form 10-K~~

~~10.22.3~~	Third Amendment to the Plan regarding matching rate with respect to the Plan's 2010 plan year, effective January 1, 2010 *	~~Exhibit 10.28.3 to the 2010 Form 10-K~~

~~10.22.4~~	Fourth Amendment to the Plan regarding deferral percentage and average actual contribution limits, effective January 1, 2010 *	~~Exhibit 10.28.4 to the 2010 Form 10-K~~

~~10.22.5~~	Fifth Amendment to the Plan regarding the Heroes Earnings Assistance and Relief Tax Act of 2008, effective as of January 1, 2008 *	~~Exhibit 10.28.5 to the 2010 Form 10-K~~

~~10.22.6~~	Sixth Amendment to the Plan regarding matching rate with respect to the Plan's plan year on or after January 1, 2011, effective as of January 1, 2011 *	~~Exhibit 10.28.6 to the 2010 Form 10-K~~

~~10.22.7~~	Seventh Amendment to the Plan regarding name change of the Plan effective as of April 1, 2011 *	~~Exhibit 10.28.7 to the 2010 Form 10-K~~

~~10.22.8~~	Eighth Amendment to the Plan regarding matching contribution formula effective January 1, 2012 *	~~Exhibit 10.23.8 to the 2011 Form 10-K~~

~~10.22.9~~	Ninth Amendment to the Plan regarding the provisions of the Workers, Retiree and Employer Recovery Act of 2007 that waived required minimum distributions for 2009, effective January 1, 2009 *	~~Exhibit 10.23.9 to the 2011 Form 10-K~~

~~10.22.10~~	Tenth Amendment to the Plan regarding diversification requirements effective January 1, 2007 *	~~Exhibit 10.23.10 to the 2011 Form 10-K~~

~~10.22.11~~	Eleventh Amendment to the Plan regarding Puerto Rico participants effective January 1, 2011 *	~~Exhibit 10.23.11 to the 2011 Form 10-K~~

~~10.22.12~~	Twelfth Amendment to the Plan regarding qualified nonelective contributions effective January 1, 2012 *	~~Exhibit 10.23.12 to the 2011 Form 10-K~~

10.23	Director Deferred Compensation Plan *	Exhibit 10.33 to the 2008 Form 10-K

10.24	Stock Credit Plan for 2008 - 2009 of Macy's, Inc. (as amended as of August 22, 2008) *	~~Exhibit 10.1 to the August 2, 2008 Form 10-Q~~

~~10.25~~	Macy's, Inc. 2009 Omnibus Incentive Compensation Plan *	Appendix B to the Company's Proxy Statement dated April 1, 2009

10.25	Macy's, Inc. Deferred Compensation Plan *	Exhibit 4.5 to the Company's Registration Statement on Form S-8 (Registration No. 333-192917) filed on December 18, 2013

10.26	Change in Control Plan, effective November 1, 2009, as revised and restated January 1, 2014 *

10.27	Time Sharing Agreement between Macy's, Inc. and Terry J. Lundgren, dated March 25, 2011 *	Exhibit 10.33 to the Company's Annual Report on Form 10-K (File No. 1-13536) for the fiscal year ended January 29, 2011

21	Subsidiaries

3839

Table of Contents



Exhibit Number	Description	Document if Incorporated by Reference
~~10.26~~	Change in Control Plan, effective November 1, 2009, as amended December 9, 2011 *	~~Exhibit 10.27 to the 2011 Form 10-K~~

~~10.27~~	Time Sharing Agreement between Macy's, Inc. and Terry J. Lundgren, dated March 25, 2011 *	~~Exhibit 10.33 to the 2010 Form 10-K~~

~~10.28~~	Senior Executive Incentive Compensation Plan *	~~Appendix B to the Company's Proxy Statement dated March 28, 2012~~

21	~~Subsidiaries~~

23	Consent of KPMG LLP

24	Powers of Attorney

31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)

31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)

32.1	Certification by Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act

32.2	Certification by Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act

101**	The following financial statements from ~~Macy’s,~~Macy's, Inc.’s Annual Report on Form 10-K for the year ended February ~~2, 2013,~~1, 2014, filed on April ~~3, 2013,~~2, 2014, formatted in XBRL: (i) Consolidated Statements of Income, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Changes in Shareholders’ Equity, (v) Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements, tagged as blocks of text and in detail.

___________________



+	Portions of the exhibit have been omitted pursuant to a request for confidential treatment. The confidential portions have been provided to the SEC.
*	Constitutes a compensatory plan or arrangement.
**	As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.

3940

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



	MACY’S, INC.

	By:	/s/ DENNIS J. BRODERICK
		Dennis J. Broderick Executive Vice President, General Counsel and Secretary

Date: April ~~3, 2013~~2, 2014

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on April ~~3, 2013~~2, 2014.



Signature		Title

*		Chairman of the Board ~~President~~ and Chief Executive Officer (principal executive officer) and Director
Terry J. Lundgren

*		Chief Financial Officer (principal financial officer)
Karen M. Hoguet

*		Executive Vice President and Controller (principal accounting officer)
Joel A. Belsky

*		Director
Stephen F. Bollenbach

*		Director
Deirdre Connelly

*		Director
Meyer Feldberg

*		Director
Sara Levinson

*		Director
Joseph Neubauer

*		Director
Joyce M. Roché

*		Director
Paul C. Varga

*		Director
Craig E. Weatherup

*		Director
Marna C. Whittington

___________________



*	The undersigned, by signing his name hereto, does sign and execute this Annual Report on Form 10-K pursuant to the Powers of Attorney executed by the above-named officers and directors and filed herewith.



	By:	/s/ DENNIS J. BRODERICK
		Dennis J. Broderick Attorney-in-Fact

4041

Table of Contents

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



	Page
Report of Management	F-2
Report of Independent Registered Public Accounting Firm	F-3
Consolidated Statements of Income for the fiscal years ended February 1, 2014, February 2, 2013 and January 28, 2012 ~~and January 29, 2011~~	F-4
Consolidated Statements of Comprehensive Income for the fiscal years ended February 1, 2014, February 2, 2013 and January 28, 2012 ~~and January 29, 2011~~	F-5
Consolidated Balance Sheets at February 1, 2014 and February 2, 2013 ~~and January 28, 2012~~	F-6
Consolidated Statements of Changes in Shareholders’ Equity for the fiscal years ended February 1, 2014, February 2, 2013 and January 28, 2012 ~~and January 29, 2011~~	F-7
Consolidated Statements of Cash Flows for the fiscal years ended February 1, 2014, February 2, 2013 and January 28, 2012 ~~and January 29, 2011~~	F-8
Notes to Consolidated Financial Statements	F-9

F-1

Table of Contents

REPORT OF MANAGEMENT

To the Shareholders of

Macy’s, Inc.:

The integrity and consistency of the Consolidated Financial Statements of Macy’s, Inc. and subsidiaries, which were prepared in accordance with accounting principles generally accepted in the United States of America, are the responsibility of management and properly include some amounts that are based upon estimates and judgments.

The Company maintains a system of internal accounting controls, which is supported by a program of internal audits with appropriate management follow-up action, to provide reasonable assurance, at appropriate cost, that the Company’s assets are protected and transactions are properly recorded. Additionally, the integrity of the financial accounting system is based on careful selection and training of qualified personnel, organizational arrangements which provide for appropriate division of responsibilities and communication of established written policies and procedures.

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f) and has issued Management’s Report on Internal Control over Financial Reporting.

The Consolidated Financial Statements of the Company have been audited by KPMG LLP. Their report expresses their opinion as to the fair presentation, in all material respects, of the financial statements and is based upon their independent audits.

The Audit Committee, composed solely of outside directors, meets periodically with KPMG LLP, the internal auditors and representatives of management to discuss auditing and financial reporting matters. In addition, KPMG LLP and the Company’s internal auditors meet periodically with the Audit Committee without management representatives present and have free access to the Audit Committee at any time. The Audit Committee is responsible for recommending to the Board of Directors the engagement of the independent registered public accounting firm and the general oversight review of management’s discharge of its responsibilities with respect to the matters referred to above.

Terry J. Lundgren

Chairman ~~President~~ and Chief Executive Officer

Karen M. Hoguet

Chief Financial Officer

Joel A. Belsky

Executive Vice President and Controller

F-2

Table of Contents

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

~~Macy's,~~Macy’s, Inc.:

We have audited the accompanying consolidated balance sheets of ~~Macy's,~~Macy’s, Inc. and subsidiaries as of February 1, 2014 and February 2, 2013, ~~and January 28, 2012,~~ and the related consolidated statements of income, comprehensive income, ~~shareholders'~~shareholders’ equity and cash flows for each of the years in the three-year period ended February ~~2, 2013.~~1, 2014. We also have audited ~~Macy's,~~Macys, Inc.'s’s internal control over financial reporting as of February ~~2, 2013,~~1, 2014, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). ~~Macy's,~~Macy’s, Inc.'s’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A(b), ~~“Management's~~“Management’s Report on Internal Control over Financial ~~Reporting”.~~Reporting.” Our responsibility is to express an opinion on these consolidated financial statements and an opinion on ~~Macy's,~~Macy’s Inc.'s’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A ~~company's~~company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A ~~company's~~company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the ~~company's~~company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of ~~Macy's,~~Macy’s, Inc. and subsidiaries as of February 1, 2014 and February 2, 2013, ~~and January 28, 2012,~~ and the results of their operations and their cash flows for each of the years in the three-year period ended February ~~2, 2013,~~1, 2014, in conformity with U.S. generally accepted accounting principles. Also in our opinion, ~~Macy's,~~Macy’s, Inc. maintained, in all material respects, effective internal control over financial reporting as of February ~~2, 2013,~~1, 2014, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

/s/ KPMG LLP

Cincinnati, Ohio

April ~~3, 2013~~2, 2014

F-3

Table of Contents

MACY’S, INC.

CONSOLIDATED STATEMENTS OF INCOME

(millions, except per share data)



	2012			2011			2010			2013			2012			2011
Net sales	$	27,686		$	26,405		$	25,003		$	27,931		$	27,686		$	26,405
Cost of sales	(16,538		)	(15,738		)	(14,824		)	(16,725		)	(16,538		)	(15,738		)
Gross margin	11,148			10,667			10,179			11,206			11,148			10,667
Selling, general and administrative expenses	(8,482		)	(8,281		)	(8,260		)	(8,440		)	(8,482		)	(8,281		)
Impairments, store closing costs and gain on sale of leases	(5		)	25			(25		)
Impairments, store closing and other costs and gain on sale of leases										(88		)	(5		)	25
Operating income	2,661			2,411			1,894			2,678			2,661			2,411
Interest expense	(425		)	(447		)	(513		)	(390		)	(425		)	(447		)
Premium on early retirement of debt	(137		)	—			(66		)	—			(137		)	—
Interest income	3			4			5			2			3			4
Income before income taxes	2,102			1,968			1,320			2,290			2,102			1,968
Federal, state and local income tax expense	(767		)	(712		)	(473		)	(804		)	(767		)	(712		)
Net income	$	1,335		$	1,256		$	847		$	1,486		$	1,335		$	1,256
Basic earnings per share	$	3.29		$	2.96		$	2.00		$	3.93		$	3.29		$	2.96
Diluted earnings per share	$	3.24		$	2.92		$	1.98		$	3.86		$	3.24		$	2.92

The accompanying notes are an integral part of these Consolidated Financial Statements.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

The accompanying notes are an integral part of these Consolidated Financial Statements.

CONSOLIDATED BALANCE SHEETS

The accompanying notes are an integral part of these Consolidated Financial Statements.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

The accompanying notes are an integral part of these Consolidated Financial Statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

The accompanying notes are an integral part of these Consolidated Financial Statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Nature of Operations

Macy’s, Inc. and subsidiaries (the “Company”) is an omnichannel retail organization operating stores and Internet websites under two brands (Macy’s and Bloomingdale’s) that sell a wide range of merchandise, including apparel and accessories (men's, women's and children's), cosmetics, home furnishings and other consumer goods in 45 states, the District of Columbia, Guam and Puerto Rico. As of February ~~2, 2013~~1, 2014, the Company’s operations and reportable segments were conducted through Macy’s, macys.com, Bloomingdale’s, bloomingdales.com and Bloomingdale’s Outlet, which are aggregated into one reporting segment in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280, “Segment Reporting.” The metrics used by management to assess the performance of the Company’s operating divisions include sales trends, gross margin rates, expense rates, and rates of earnings before interest and taxes (“EBIT”) and earnings before interest, taxes, depreciation and amortization (“EBITDA”). The Company’s operating divisions have historically had similar economic characteristics and are expected to have similar economic characteristics and long-term financial performance in future periods.

The Company’s fiscal year ends on the Saturday closest to January 31. Fiscal years ~~2012~~2013, ~~2011~~2012 and ~~2010~~2011 ended on February 1, 2014, February 2, 2013, and January 28, 2012 ~~and~~ ~~January 29, 2011~~, respectively. Fiscal ~~year 2012 includes 53~~years 2013 and 2011 included 52 weeks and fiscal ~~years 2011 and 2010~~year 2012 included 5253 weeks. References to years in the Consolidated Financial Statements relate to fiscal years rather than calendar years.

Basis of Presentation

The Consolidated Financial Statements include the accounts of the Company and its 100%-owned subsidiaries. The Company from time to time invests in companies engaged in complementary businesses. Investments in companies in which the Company has the ability to exercise significant influence, but not control, are accounted for by the equity method. All marketable equity and debt securities held by the Company are accounted for under ASC Topic 320, “Investments – Debt and Equity Securities,” with unrealized gains and losses on available-for-sale securities being included as a separate component of accumulated other comprehensive income, net of income tax effect. All other investments are carried at cost. All significant intercompany transactions have been eliminated.

Certain reclassifications were made to prior years’ amounts to conform with the classifications of such amounts for the most recent year.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions are subject to inherent uncertainties, which may result in actual amounts differing from reported amounts.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Net sales include merchandise sales, licensed department income, shipping and handling fees, sales of private brand goods directly to third party retailers and sales of excess inventory to third parties. Sales of merchandise are recorded at the time of delivery to the customer and are reported net of merchandise returns. The Company licenses third parties to operate certain departments in its stores. The Company receives commissions from these licensed departments based on a percentage of net sales. Commissions are recognized as income at the time merchandise is sold to customers. Sales taxes collected from customers are not considered revenue and are included in accounts payable and accrued liabilities until remitted to the taxing authorities.

Cost of sales consists of the cost of merchandise, including inbound freight, and shipping and handling costs. An estimated allowance for future sales returns is recorded and cost of sales is adjusted accordingly.

Cash and Cash Equivalents

Cash and cash equivalents include cash and liquid investments with original maturities of three months or less. Cash and cash equivalents includes amounts due in respect of credit card sales transactions that are settled early in the following period in the amount of $101 million at February 1, 2014 and $99 million at February 2, 2013.

The Company from time to time invests in debt and ~~$107 million~~ at ~~January 28, 2012~~.equity securities, including companies engaged in complementary businesses. All marketable equity and debt securities held by the Company are accounted for under ASC Topic 320, “Investments – Debt and Equity Securities.” Unrealized holding gains and losses on trading securities are recognized in statement of operations and unrealized holding gains and losses on available-for-sale securities are included as a separate component of accumulated other comprehensive income, net of income tax effect, until realized. At February 1, 2014, the Company did not hold any held-to-maturity or available-for-sale securities.

In connection with the sale of most of the Company’s credit assets to Citibank, the Company and Citibank entered into a long-term marketing and servicing alliance pursuant to the terms of a Credit Card Program Agreement (the “Program Agreement”) ~~(see Note 3, “Receivables”)~~. Income earned under the Program Agreement is treated as a reduction of selling, general and administrative ~~expenses~~ ("SG&A") expenses on the Consolidated Statements of Income. Under the Program Agreement, Citibank offers proprietary and non-proprietary credit to the Company’s customers through previously existing and newly opened accounts.

The Company maintains customer loyalty programs in which customers earn rewards based on their spending. Upon reaching certain levels of qualified spending, customers automatically receive rewards to apply toward future purchases. The Company recognizes the estimated net amount of the rewards that will be earned and redeemed as a reduction to net sales.

Merchandise Inventories

Merchandise inventories are valued at lower of cost or market using the last-in, first-out (LIFO) retail inventory method. Under the retail inventory method, inventory is segregated into departments of merchandise having similar characteristics, and is stated at its current retail selling value. Inventory retail values are converted to a cost basis by applying specific average cost factors for each merchandise department. Cost factors represent the average cost-to-retail ratio for each merchandise department based on beginning inventory and the fiscal year purchase activity. At February ~~2, 2013~~1, 2014 and ~~January 28, 2012~~February 2, 2013, merchandise inventories valued at LIFO, including adjustments as necessary to record inventory at the lower of cost or market, approximated the cost of such inventories using the first-in, first-out (FIFO) retail inventory method. The application of the LIFO retail inventory method did not result in the recognition of any LIFO charges or credits affecting cost of sales for ~~2012~~2013, ~~2011~~2012 or ~~2010~~2011. The retail inventory method inherently requires management judgments and estimates, such as the amount and timing of permanent markdowns to clear unproductive or slow-moving inventory, which may impact the ending inventory valuation as well as gross margins.

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~Table of Contents~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)~~

The Company receives certain allowances as reimbursement for markdowns taken and/or to support the gross margins earned in connection with the sales of merchandise. These allowances are generally credited to cost of sales at the time the merchandise is sold in accordance with ASC Subtopic 605-50, “Customer Payments and Incentives.” The Company also receives advertising allowances from approximately 1,000 of its merchandise vendors pursuant to cooperative advertising programs, with some vendors participating in multiple programs. These allowances represent reimbursements by vendors of costs incurred by the Company to promote the vendors’ merchandise and are netted against advertising and promotional costs when the related costs are incurred in accordance with ASC Subtopic 605-50. Advertising allowances in excess of costs incurred are recorded as a reduction of merchandise costs and, ultimately, through cost of sales when the merchandise is sold.

Department store non-direct response advertising and promotional costs are expensed either as incurred or the first time the advertising occurs. Direct response advertising and promotional costs are deferred and expensed over the period during which the sales are expected to occur, generally one to four months. Advertising and promotional costs and cooperative advertising allowances were as follows:

Property and Equipment

Depreciation of owned properties is provided primarily on a straight-line basis over the estimated asset lives, which range from fifteen to fifty years for buildings and building equipment and three to fifteen years for fixtures and equipment. Real estate taxes and interest on construction in progress and land under development are capitalized. Amounts capitalized are amortized over the estimated lives of the related depreciable assets. The Company receives contributions from developers and merchandise vendors to fund building improvement and the construction of vendor shops. Such contributions are netted against the capital expenditures.

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~Table of Contents~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)~~

The Company recognizes operating lease minimum rentals on a straight-line basis over the lease term. Executory costs such as real estate taxes and maintenance, and contingent rentals such as those based on a percentage of sales are recognized as incurred.

Goodwill and Other Intangible Assets

The carrying value of goodwill and other intangible assets with indefinite lives are reviewed at least annually for possible impairment in accordance with ASC Subtopic 350-20 “Goodwill.” Goodwill and other intangible assets with indefinite lives have been assigned to reporting units for purposes of impairment testing. The reporting units are the Company’s retail operating divisions. Goodwill and other intangible assets with indefinite lives are tested for impairment annually at the end of the fiscal month of May. The Company evaluates qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying value and whether it is necessary to perform the two-step goodwill impairment process. If required, the first step involves a comparison of each reporting unit’s fair value to its carrying value and the Company estimates fair value based on discounted cash flows. The reporting unit’s discounted cash flows require significant management judgment with respect to sales, gross margin and SG&A rates, capital expenditures and the selection and use of an appropriate discount rate. The projected sales, gross margin and SG&A expense rate assumptions and capital expenditures are based on the Company’s annual business plan or other forecasted results. Discount rates reflect market-based estimates of the risks associated with the projected cash flows directly resulting from the use of those assets in operations. The estimates of fair value of reporting units are based on the best information available as of the date of the assessment. If the carrying value of a reporting unit exceeds its estimated fair value in the first step, a second step is performed, in which the reporting unit’s goodwill is written down to its implied fair value. The second step requires the Company to allocate the fair value of the reporting unit derived in the first step to the fair value of the reporting unit’s net assets, with any fair value in excess of amounts allocated to such net assets representing the implied fair value of goodwill for that reporting unit. If the carrying value of an individual indefinite-lived intangible asset exceeds its fair value, such individual indefinite-lived intangible asset is written down by an amount equal to such excess.

Capitalized Software

The Company capitalizes purchased and internally developed software and amortizes such costs to expense on a straight-line basis over two to five years. Capitalized software is included in other assets on the Consolidated Balance Sheets.

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company only offers no-fee, non-expiring gift cards to its customers. At the time gift cards are sold, no revenue is recognized; rather, the Company records an accrued liability to customers. The liability is relieved and revenue is recognized equal to the amount redeemed at the time gift cards are redeemed for merchandise. The Company records income from unredeemed gift cards (breakage) as a reduction of SG&A expenses, and income is recorded in proportion and over the time period gift cards are actually redeemed. At least three years of historical data, updated annually, is used to determine actual redemption patterns.

Self-Insurance Reserves

The Company, through its insurance subsidiary, is self-insured for workers compensation and general liability claims up to certain maximum liability amounts. Although the amounts accrued are actuarially determined based on analysis of historical trends of losses, settlements, litigation costs and other factors, the amounts the Company will ultimately disburse could differ from such accrued amounts.

~~Table of Contents~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)~~

Post Employment and Postretirement Obligations

The Company, through its actuaries, utilizes assumptions when estimating the liabilities for pension and other employee benefit plans. These assumptions, where applicable, include the discount rates used to determine the actuarial present value of projected benefit obligations, the rate of increase in future compensation levels, the long-term rate of return on assets and the growth in health care costs. The cost of these benefits is generally recognized in the Consolidated Financial Statements over an employee’s term of service with the Company, and the accrued benefits are reported in accounts payable and accrued liabilities and other liabilities on the Consolidated Balance Sheets, as appropriate.

Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and net operating loss and tax credit carryforwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in the Consolidated Statements of Income in the period that includes the enactment date. Deferred income tax assets are reduced by a valuation allowance when it is more likely than not that some portion of the deferred income tax assets will not be realized.

The Company records derivative transactions according to the provisions of ASC Topic 815 “Derivatives and Hedging,” which establishes accounting and reporting standards for derivative instruments and hedging activities and requires recognition of all derivatives as either assets or liabilities and measurement of those instruments at fair value. The Company makes limited use of derivative financial instruments. The Company does not use financial instruments for trading or other speculative purposes and is not a party to any leveraged financial instruments. On the date that the Company enters into a derivative contract, the Company designates the derivative instrument as either a fair value hedge, a cash flow hedge or as a free-standing derivative instrument, each of which would receive different accounting treatment. Prior to entering into a hedge transaction, the Company formally documents the relationship between hedging instruments and hedged items, as well as the risk management objective and strategy for undertaking various hedge transactions. Derivative instruments that the Company may use as part of its interest rate risk management strategy include interest rate swap and interest rate cap agreements and Treasury lock agreements. At February ~~2, 2013~~1, 2014, the Company was not a party to any derivative financial instruments.

Stock Based Compensation

The Company records stock-based compensation expense according to the provisions of ASC Topic 718, “Compensation – Stock Compensation.” ASC Topic 718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. Under the provisions of ASC Topic 718, the Company ~~must determine~~determines the appropriate fair value model to be used for valuing share-based payments and the amortization method for compensation cost. ~~See Note 11, “Stock Based Compensation,” for further information.~~

~~Impairments, store closing costs and gain on sale of leases consist of the following:~~

The Company expects to pay out the 2012 accrued severance costs, which are included in accounts payable and accrued liabilities on the Consolidated Balance Sheets, prior to May 4, 2013. The 2011 and 2010 accrued severance costs, which are included in accounts payable and accrued liabilities on the Consolidated Balance Sheets, were paid out in the fiscal year subsequent to incurring such severance costs.

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Impairments, store closing and other costs and gain on sale of leases consist of the following:

During January 2014, the Company announced a series of cost-reduction initiatives, including organization changes that combine certain region and district organizations of the My Macy’s store management structure and the realignment and elimination of certain store, central office and administrative functions.

The Company expects to pay out the 2013 accrued severance costs, which are included in accounts payable and accrued liabilities on the Consolidated Balance Sheets, prior to May 3, 2014. The 2012 and 2011 accrued severance costs, which were included in accounts payable and accrued liabilities on the Consolidated Balance Sheets, were paid out in the fiscal year subsequent to incurring such severance costs.

Receivables were $438 million at February 1, 2014, compared to $371 million at February 2, 2013~~, compared to~~ ~~$368 million~~ at ~~January 28, 2012~~.

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~Table of Contents~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)~~



Title of Each Class		Name of Each Exchange on Which Registered
Common Stock, par value $.01 per share		New York Stock Exchange
7.45% Senior Debentures due 2017		New York Stock Exchange
6.79% Senior Debentures due 2027		New York Stock Exchange
7% Senior Debentures due 2028		New York Stock Exchange



Class		Outstanding at ~~March 1, 2013~~February 28, 2014
Common Stock, $0.01 par value per share		~~389,307,949~~367,048,648 shares



Name	Age	Position with the Company
Terry J. Lundgren	61	Chairman of the Board; President and Chief Executive Officer; Director
Timothy M. Adams	5960	Chief Private Brand Officer
William S. Allen	5556	Chief Human Resources Officer
Jeffrey Gennette	5152	Chief Merchandising Officer
Julie Greiner	5960	Chief Merchandise Planning Officer
Robert B. Harrison	4950	Chief Omnichannel Officer
Karen M. Hoguet	5657	Chief Financial Officer
Jeffrey Kantor	5455	Chairman of macys.com
Martine Reardon	5051	Chief Marketing Officer
Peter Sachse	5556	Chief Stores Officer
Joel A. Belsky	5960	Executive Vice President and Controller
Dennis J. Broderick	6465	Executive Vice President, General Counsel and Secretary


	2012			2011			2013			2012
	Low	High	Dividend	Low	High	Dividend	Low	High	Dividend	Low	High	Dividend
1st Quarter	33.18	41.50	0.2000	21.69	25.99	0.0500	38.52	46.45	0.2000	33.18	41.50	0.2000
2nd Quarter	32.31	42.17	0.2000	23.98	30.62	0.1000	45.72	50.77	0.2500	32.31	42.17	0.2000
3rd Quarter	34.89	41.24	0.2000	22.66	32.35	0.1000	42.18	49.72	0.2500	34.89	41.24	0.2000
4th Quarter	36.30	41.98	0.2000	28.69	35.92	0.1000	45.59	56.65	0.2500	36.30	41.98	0.2000


Geographic Region	Total Stores	Owned Stores	Leased Stores	Stores Subject to a Ground Lease	Total Stores	Owned Stores	Leased Stores	Stores Subject to a Ground Lease
Mid-Atlantic	105	55	33	17	128	68	40	20
Midwest	94	56	27	11
North	82	64	14	4
Northeast	106	55	42	9	119	62	48	9
North Central					119	82	26	11
Northwest	128	39	71	18	126	39	69	18
Southeast					119	78	20	21
South Central	103	76	18	9	101	77	16	8
Southeast	110	72	18	20
Southwest	113	45	46	22	128	54	50	24
	841	462	269	110	840	460	269	111


Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.



	Total Number of Shares Purchased	Average Price per Share ($)	Number of Shares Purchased under Program (1)	Open Authorization Remaining (1)($)
	(thousands)		(thousands)	(millions)
October 28, 2012 – November 24, 2012	1,144	39.55	1,144	315
November 25, 2012 – December 29, 2012	6,823	38.46	6,823	1,553
December 30, 2012 – February 2, 2013	1,349	37.80	1,349	1,502
	9,316	38.50	9,316


	2012*			2011			2010			2009			2008			2013			2012*			2011			2010			2009
	(millions, except per share)															(millions, except per share)
Consolidated Statement of Operations Data:
Consolidated Statement of Income Data:
Net sales	$	27,686		$	26,405		$	25,003		$	23,489		$	24,892		$	27,931		$	27,686		$	26,405		$	25,003		$	23,489
Cost of sales	(16,538		)	(15,738		)	(14,824		)	(13,973		)	(15,009		)	(16,725		)	(16,538		)	(15,738		)	(14,824		)	(13,973		)
Gross margin	11,148			10,667			10,179			9,516			9,883			11,206			11,148			10,667			10,179			9,516
Selling, general and administrative expenses	(8,482		)	(8,281		)	(8,260		)	(8,062		)	(8,481		)	(8,440		)	(8,482		)	(8,281		)	(8,260		)	(8,062		)
Impairments, store closing costs, gain on sale of leases and division consolidation costs	(5		)	25			(25		)	(391		)	(398		)
Goodwill impairment charges	—			—			—			—			(5,382		)
Operating income (loss)	2,661			2,411			1,894			1,063			(4,378		)
Impairments, store closing and other costs, gain on sale of leases and division consolidation costs																(88		)	(5		)	25			(25		)	(391		)
Operating income																2,678			2,661			2,411			1,894			1,063
Interest expense	(425		)	(447		)	(513		)	(562		)	(588		)	(390		)	(425		)	(447		)	(513		)	(562		)
Premium on early retirement of debt	(137		)	—			(66		)	—			—			—			(137		)	—			(66		)	—
Interest income	3			4			5			6			28			2			3			4			5			6
Income (loss) before income taxes	2,102			1,968			1,320			507			(4,938		)
Federal, state and local income tax benefit (expense)	(767		)	(712		)	(473		)	(178		)	163
Net income (loss)	$	1,335		$	1,256		$	847		$	329		$	(4,775	)
Income before income taxes																2,290			2,102			1,968			1,320			507
Federal, state and local income tax expense																(804		)	(767		)	(712		)	(473		)	(178		)
Net income																$	1,486		$	1,335		$	1,256		$	847		$	329

Basic earnings (loss) per share	$	3.29		$	2.96		$	2.00		$	0.78		$	(11.34	)
Diluted earnings (loss) per share	$	3.24		$	2.92		$	1.98		$	0.78		$	(11.34	)
Basic earnings per share																$	3.93		$	3.29		$	2.96		$	2.00		$	0.78
Diluted earnings per share																$	3.86		$	3.24		$	2.92		$	1.98		$	0.78
Average number of shares outstanding	405.5			424.5			423.3			421.7			421.2			378.3			405.5			424.5			423.3			421.7
Cash dividends paid per share	$	.8000		$	.3500		$	.2000		$	.2000		$	.5275		$	.9500		$	.8000		$	.3500		$	.2000		$	.2000
Depreciation and amortization	$	1,049		$	1,085		$	1,150		$	1,210		$	1,278		$	1,020		$	1,049		$	1,085		$	1,150		$	1,210
Capital expenditures	$	942		$	764		$	505		$	460		$	897		$	863		$	942		$	764		$	505		$	460
Balance Sheet Data (at year end):
Cash and cash equivalents	$	1,836		$	2,827		$	1,464		$	1,686		$	1,385		$	2,273		$	1,836		$	2,827		$	1,464		$	1,686
Total assets	20,991			22,095			20,631			21,300			22,145			21,634			20,991			22,095			20,631			21,300
Short-term debt	124			1,103			454			242			966			463			124			1,103			454			242
Long-term debt	6,806			6,655			6,971			8,456			8,733			6,728			6,806			6,655			6,971			8,456
Shareholders’ equity	6,051			5,933			5,530			4,653			4,620			6,249			6,051			5,933			5,530			4,653


Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.


	2012 *							2011							2010								2013							2012 *							2011
	Amount				% to Sales			Amount				% to Sales			Amount				% to Sales				Amount				% to Sales			Amount				% to Sales			Amount				% to Sales
	(dollars in millions, except per share figures)																						(dollars in millions, except per share figures)
Net sales	$	27,686						$	26,405						$	25,003							$	27,931						$	27,686						$	26,405
Increase in sales	4.9			%				5.6			%												0.9			%				4.9			%
Increase in comparable sales	3.7			%				5.3			%												1.9			%				3.7			%
Cost of sales	(16,538		)		(59.7	)	%	(15,738		)		(59.6	)	%	(14,824		)		(59.3	)	%		(16,725		)		(59.9	)	%	(16,538		)		(59.7	)	%	(15,738		)		(59.6	)	%
Gross margin	11,148				40.3		%	10,667				40.4		%	10,179				40.7		%		11,206				40.1		%	11,148				40.3		%	10,667				40.4		%
Selling, general and administrative expenses	(8,482		)		(30.7	)	%	(8,281		)		(31.4	)	%	(8,260		)		(33.0	)	%		(8,440		)		(30.2	)	%	(8,482		)		(30.7	)	%	(8,281		)		(31.4	)	%
Impairments, store closing costs and gain on sale of leases	(5		)		—		%	25				0.1		%	(25		)		(0.1	)	%
Impairments, store closing and other costs and gain on sale of leases																							(88		)		(0.3	)	%	(5		)		—		%	25				0.1		%
Operating income	2,661				9.6		%	2,411				9.1		%	1,894				7.6		%		2,678				9.6		%	2,661				9.6		%	2,411				9.1		%
Interest expense - net	(422		)					(443		)					(508		)						(388		)					(422		)					(443		)
Premium on early retirement of debt	(137		)					—							(66		)						—							(137		)					—
Income before income taxes	2,102							1,968							1,320								2,290							2,102							1,968
Federal, state and local income tax expense	(767		)					(712		)					(473		)						(804		)					(767		)					(712		)
Net income	$	1,335			4.8		%	$	1,256			4.8		%	$	847			3.4		%		$	1,486			5.3		%	$	1,335			4.8		%	$	1,256			4.8		%

Diluted earnings per share	$	3.24						$	2.92						$	1.98							$	3.86						$	3.24						$	2.92

Supplemental Non-GAAP Financial Measures
Comparable sales growth including the impact of growth in comparable sales of departments licensed to third parties																							2.8			%				4.0			%				5.7			%
Operating income, excluding certain items	$	2,666			9.6		%	$	2,386			9.0		%	$	1,919			7.7		%		$	2,766			9.9		%	$	2,666			9.6		%	$	2,386			9.0		%
Diluted earnings per share, excluding certain items	$	3.46						$	2.88						$	2.11							$	4.00						$	3.46						$	2.88
Adjusted EBITDA as a percent to net sales	13.4			%				13.1			%				12.3			%					13.6			%				13.4			%				13.1			%
ROIC	21.2			%				19.7			%				17.4			%					21.5			%				21.2			%				19.7			%

See pages 16 to 18 for a reconciliation of these non-GAAP financial measures to their most comparable GAAP financial measure and for other important information.
See pages 16 to 19 for a reconciliation of these non-GAAP financial measures to their most comparable GAAP financial measure and for other important information.																						See pages 16 to 19 for a reconciliation of these non-GAAP financial measures to their most comparable GAAP financial measure and for other important information.

Store information (at year-end):
Stores operated	841							842							850								840							841							842
Square footage (in millions)	150.6							151.9							154.2								150.1							150.6							151.9
___________________ * 53 weeks



	February 2, 2013			January 28, 2012			February 1, 2014			February 2, 2013
ASSETS
Current Assets:
Cash and cash equivalents	$	1,836		$	2,827		$	2,273		$	1,836
Receivables	371			368			438			371
Merchandise inventories	5,308			5,117			5,557			5,308
Prepaid expenses and other current assets	361			465			420			361
Total Current Assets	7,876			8,777			8,688			7,876
Property and Equipment – net	8,196			8,420			7,930			8,196
Goodwill	3,743			3,743			3,743			3,743
Other Intangible Assets – net	561			598			527			561
Other Assets	615			557			746			615
Total Assets	$	20,991		$	22,095		$	21,634		$	20,991
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Short-term debt	$	124		$	1,103		$	463		$	124
Merchandise accounts payable	1,579			1,593			1,691			1,579
Accounts payable and accrued liabilities	2,610			2,788			2,810			2,610
Income taxes	355			371			362			355
Deferred income taxes	407			408			400			407
Total Current Liabilities	5,075			6,263			5,726			5,075
Long-Term Debt	6,806			6,655			6,728			6,806
Deferred Income Taxes	1,238			1,141			1,273			1,238
Other Liabilities	1,821			2,103			1,658			1,821
Shareholders’ Equity:
Common stock (387.7 and 414.2 shares outstanding)	4			5
Common stock (364.9 and 387.7 shares outstanding)							4			4
Additional paid-in capital	3,872			5,408			2,522			3,872
Accumulated equity	5,108			4,015			6,235			5,108
Treasury stock	(2,002		)	(2,434		)	(1,847		)	(2,002		)
Accumulated other comprehensive loss	(931		)	(1,061		)	(665		)	(931		)
Total Shareholders’ Equity	6,051			5,933			6,249			6,051
Total Liabilities and Shareholders’ Equity	$	20,991		$	22,095		$	21,634		$	20,991



	Common Stock			Additional Paid-In Capital			Accumulated Equity			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity			Common Stock			Additional Paid-In Capital			Accumulated Equity			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity
Balance at January 30, 2010	$	5		$	5,689		$	2,227		$	(2,515	)	$	(753	)	$	4,653
Net income							847									847
Other comprehensive income													23			23
Common stock dividends ($.20 per share)							(84		)							(84		)
Stock repurchases										(1		)				(1		)
Stock-based compensation expense				47												47
Stock issued under stock plans				(40		)				82						42
Deferred compensation plan distributions										3						3
Balance at January 29, 2011	5			5,696			2,990			(2,431		)	(730		)	5,530			$	5		$	5,696		$	2,990		$	(2,431	)	$	(730	)	$	5,530
Net income							1,256									1,256									1,256									1,256
Other comprehensive loss													(331		)	(331		)													(331		)	(331		)
Common stock dividends ($.55 per share)							(231		)							(231		)							(231		)							(231		)
Stock repurchases										(502		)				(502		)										(502		)				(502		)
Stock-based compensation expense				48												48						48												48
Stock issued under stock plans				(81		)				242						161						(81		)				242						161
Retirement of common stock				(255		)				255						—						(255		)				255						—
Deferred compensation plan distributions										2						2												2						2
Balance at January 28, 2012	5			5,408			4,015			(2,434		)	(1,061		)	5,933			5			5,408			4,015			(2,434		)	(1,061		)	5,933
Net income							1,335									1,335									1,335									1,335
Other comprehensive income													130			130															130			130
Common stock dividends ($.60 per share)							(242		)							(242		)							(242		)							(242		)
Stock repurchases										(1,397		)				(1,397		)										(1,397		)				(1,397		)
Stock-based compensation expense				55												55						55												55
Stock issued under stock plans				(111		)				345						234						(111		)				345						234
Retirement of common stock	(1		)	(1,480		)				1,481						—			(1		)	(1,480		)				1,481						—
Deferred compensation plan distributions										3						3												3						3
Balance at February 2, 2013	$	4		$	3,872		$	5,108		$	(2,002	)	$	(931	)	$	6,051		4			3,872			5,108			(2,002		)	(931		)	6,051
Net income																									1,486									1,486
Other comprehensive income																															266			266
Common stock dividends ($.95 per share)																									(359		)							(359		)
Stock repurchases																												(1,571		)				(1,571		)
Stock-based compensation expense																						60												60
Stock issued under stock plans																						(84		)				399						315
Retirement of common stock																			—			(1,326		)				1,326						—
Deferred compensation plan distributions																												1						1
Balance at February 1, 2014																			$	4		$	2,522		$	6,235		$	(1,847	)	$	(665	)	$	6,249


1.	Organization and Summary of Significant Accounting Policies


	February 2, 2013		January 28, 2012		February 1, 2014		February 2, 2013
	(millions)				(millions)
Land	$	1,736	$	1,689	$	1,696	$	1,736
Buildings on owned land	5,398		5,234		5,405		5,398
Buildings on leased land and leasehold improvements	2,057		2,165		2,041		2,057
Fixtures and equipment	4,909		5,275		4,811		4,909
Leased properties under capitalized leases	43		43		43		43
	14,143		14,406		13,996		14,143
Less accumulated depreciation and amortization	5,947		5,986		6,066		5,947
	$	8,196	$	8,420	$	7,930	$	8,196


Item 1.	Business.


Item 1A.	Risk Factors.


Item 1B.	Unresolved Staff Comments.


Item 2.	Properties.


	Capitalized Leases		Operating Leases		Total		Capitalized Leases		Operating Leases		Total
	(millions)						(millions)
Fiscal year
2013	$	5	$	257	$	262
2014	4		249		253		$	4	$	282	$	286
2015	3		211		214		3		253		256
2016	3		183		186		3		224		227
2017	3		165		168		3		202		205
After 2017	49		1,649		1,698
2018							3		184		187
After 2018							46		1,775		1,821
Total minimum lease payments	67		$	2,714	$	2,781	62		$	2,920	$	2,982
Less amount representing interest	32						30
Present value of net minimum capitalized lease payments	$	35					$	32



	February 2, 2013			January 28, 2012			January 29, 2011
	(millions)
Balance, beginning of year	$	179		$	205		$	207
Additions based on tax positions related to the current year	18			23			19
Additions for tax positions of prior years	18			—			—
Reductions for tax positions of prior years	(19		)	(21		)	(8		)
Settlements	(9		)	(15		)	(4		)
Statute expirations	(17		)	(13		)	(9		)
Balance, end of year	$	170		$	179		$	205
Amounts recognized in the Consolidated Balance Sheets at February 2, 2013, January 28, 2012 and January 29, 2011
Current income taxes	$	20		$	18		$	11
Long-term deferred income taxes	23			27			24
Other liabilities	127			134			170
	$	170		$	179		$	205



	Fair Value Measurements
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(millions)
Cash and cash equivalents	$	204	$	—	$	204	$	—
Equity securities:
U.S.	832		290		542		—
International	818		—		818		—
Fixed income securities:
U. S. Treasury bonds	136		—		136		—
Other Government bonds	34		—		34		—
Agency backed bonds	6		—		6		—
Corporate bonds	338		—		338		—
Mortgage-backed securities and forwards	102		—		102		—
Asset-backed securities	24		—		24		—
Pooled funds	303		—		303		—
Other types of investments:
Real estate	280		—		—		280
Hedge funds	154		—		—		154
Private equity	160		—		—		160
Total	$	3,391	$	290	$	2,507	$	594


	1 – Percentage Point Increase	1 – Percentage Point Decrease	1 – Percentage Point Increase	1 – Percentage Point Decrease
	(millions)		(millions)
Effect on total of service and interest cost	$1	$(1)	$1	$(1)
Effect on accumulated postretirement benefit obligations	$15	$(13)	$13	$(11)


	Expected Benefit Payments		Expected Federal Subsidy		Expected Benefit Payments		Expected Federal Subsidy
	(millions)				(millions)
Fiscal Year
2013	$	27	$	1
2014	25		1		$	25	$	1
2015	22		1		22		1
2016	21		1		20		1
2017	19		1		19		1
2018-2022	86		4
2018					19		1
2019-2023					80		3



	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
	(thousands)				(years)	(millions)
Outstanding, beginning of period	34,405.3		$	26.36
Granted	3,627.8		$	39.84
Canceled or forfeited	(670.5	)	$	31.58
Exercised	(7,569.7	)	$	21.69
Outstanding, end of period	29,792.9		$	29.07
Exercisable, end of period	19,991.4		$	30.09	4.0	$	188
Options expected to vest	8,429.3		$	26.99	8.0	$	106



	~~Shares~~
	~~(thousands)~~
~~Stock credits, beginning of period~~	~~1,649.9~~
~~Additional dividend equivalents earned~~	~~17.2~~
~~Stock credits forfeited~~	—
~~Stock credits distributed~~	~~(830.8~~	)
~~Stock credits, end of period~~	~~836.3~~


	Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
	(thousands)				(thousands)
Nonvested, beginning of period	213.6		$	22.23	142.3		$	22.36
Granted	—		—		—		—
Forfeited	(10.8	)	21.46		(5.7	)	21.84
Vested	(60.5	)	22.07		(57.4	)	22.11
Nonvested, end of period	142.3		$	22.36	79.2		$	22.58



			Treasury Stock
	Common Stock Issued		Deferred Compensation Plans		Other		Total		Common Stock Outstanding
					(thousands)
Balance at January 30, 2010	495,038.5		(1,366.1	)	(72,829.2	)	(74,195.3	)	420,843.2
Stock issued under stock plans			(48.8	)	2,439.5		2,390.7		2,390.7
Stock repurchases
Repurchase program							—		—
Other					(58.5	)	(58.5	)	(58.5	)
Deferred compensation plan distributions			165.9				165.9		165.9
Balance at January 29, 2011	495,038.5		(1,249.0	)	(70,448.2	)	(71,697.2	)	423,341.3
Stock issued under stock plans			(87.2	)	7,274.1		7,186.9		7,186.9
Stock repurchases
Repurchase program					(16,356.5	)	(16,356.5	)	(16,356.5	)
Other					(80.1	)	(80.1	)	(80.1	)
Deferred compensation plan distributions			89.4				89.4		89.4
Retirement of common stock	(7,700.0	)			7,700.0		7,700.0		—
Balance at January 28, 2012	487,338.5		(1,246.8	)	(71,910.7	)	(73,157.5	)	414,181.0
Stock issued under stock plans			(89.2	)	10,325.1		10,235.9		10,235.9
Stock repurchases
Repurchase program					(35,572.9	)	(35,572.9	)	(35,572.9	)
Other					(1,269.4	)	(1,269.4	)	(1,269.4	)
Deferred compensation plan distributions			126.5				126.5		126.5
Retirement of common stock	(42,732.7	)			42,732.7		42,732.7		—
Balance at February 2, 2013	444,605.8		(1,209.5	)	(55,695.2	)	(56,904.7	)	387,701.1


	Unrealized Gains on Marketable Securities			Post Employment and Postretirement Benefit Plans			Total Accumulated Other Comprehensive (Income) Loss			Unrealized Gains on Marketable Securities			Post Employment and Postretirement Benefit Plans			Total Accumulated Other Comprehensive (Income) Loss
	(millions)									(millions)
Balance at January 30, 2010	$	(5	)	$	758		$	753
Other comprehensive income	(5		)	(18		)	(23		)
Balance at January 29, 2011	(10		)	740			730			$	(10	)	$	740		$	730
Other comprehensive loss	10			321			331			10			321			331
Balance at January 28, 2012	—			1,061			1,061			—			1,061			1,061
Other comprehensive income	—			(130		)	(130		)	—			(130		)	(130		)
Balance at February 2, 2013	$	—		$	931		$	931		—			931			931
Other comprehensive income										—			(266		)	(266		)
Balance at February 1, 2014										$	—		$	665		$	665


13.	Fair Value Measurements and Concentrations of Credit Risk



	February 2, 2013						January 28, 2012
	Notional Amount		Carrying Amount		Fair Value		Notional Amount		Carrying Amount		Fair Value
	(millions)
Long-term debt	$	6,583	$	6,774	$	7,351	$	6,404	$	6,620	$	7,343


	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			First Quarter			Second Quarter			Third Quarter			Fourth Quarter
	(millions, except per share data)												(millions, except per share data)
2013:
Net sales													$	6,387		$	6,066		$	6,276		$	9,202
Cost of sales													(3,911		)	(3,533		)	(3,817		)	(5,464		)
Gross margin													2,476			2,533			2,459			3,738
Selling, general and administrative expenses													(2,041		)	(1,999		)	(2,099		)	(2,301		)
Impairments, store closing and other costs and gain on sale of leases													—			—			—			(88		)
Net income													217			281			177			811
Basic earnings per share													.56			.73			.47			2.21
Diluted earnings per share													.55			.72			.47			2.16
2012:
Net sales	$	6,143		$	6,118		$	6,075		$	9,350		$	6,143		$	6,118		$	6,075		$	9,350
Cost of sales	(3,757		)	(3,555		)	(3,672		)	(5,554		)	(3,757		)	(3,555		)	(3,672		)	(5,554		)
Gross margin	2,386			2,563			2,403			3,796			2,386			2,563			2,403			3,796
Selling, general and administrative expenses	(1,995		)	(2,009		)	(2,078		)	(2,400		)	(1,995		)	(2,009		)	(2,078		)	(2,400		)
Impairments, store closing costs and gain on sale of leases	—			—			—			(5		)
Impairments, store closing and other costs and gain on sale of leases													—			—			—			(5		)
Net income	181			279			145			730			181			279			145			730
Basic earnings per share	.43			.68			.36			1.86			.43			.68			.36			1.86
Diluted earnings per share	.43			.67			.36			1.83			.43			.67			.36			1.83
2011:
Net sales	$	5,889		$	5,939		$	5,853		$	8,724
Cost of sales	(3,586		)	(3,457		)	(3,544		)	(5,151		)
Gross margin	2,303			2,482			2,309			3,573
Selling, general and administrative expenses	(1,973		)	(1,976		)	(2,018		)	(2,314		)
Impairments, store closing costs and gain on sale of leases	—			—			—			25
Net income	131			241			139			745
Basic earnings per share	.31			.56			.33			1.77
Diluted earnings per share	.30			.55			.32			1.74



	Parent		Subsidiary Issuer		Other Subsidiaries		Consolidating Adjustments			Consolidated
ASSETS:
Current Assets:
Cash and cash equivalents	$	1,955	$	84	$	234	$	—		$	2,273
Receivables	—		102		336		—			438
Merchandise inventories	—		2,896		2,661		—			5,557
Prepaid expenses and other current assets	—		103		317		—			420
Income taxes	80		—		—		(80		)	—
Total Current Assets	2,035		3,185		3,548		(80		)	8,688
Property and Equipment – net	—		4,590		3,340		—			7,930
Goodwill	—		3,315		428		—			3,743
Other Intangible Assets – net	—		97		430		—			527
Other Assets	4		101		641		—			746
Deferred Income Taxes	19		—		—		(19		)	—
Intercompany Receivable	—		—		3,561		(3,561		)	—
Investment in Subsidiaries	4,625		3,157		—		(7,782		)	—
Total Assets	$	6,683	$	14,445	$	11,948	$	(11,442	)	$	21,634
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current Liabilities:
Short-term debt	$	—	$	461	$	2	$	—		$	463
Merchandise accounts payable	—		760		931		—			1,691
Accounts payable and accrued liabilities	10		1,265		1,535		—			2,810
Income taxes	—		80		362		(80		)	362
Deferred income taxes	—		315		85		—			400
Total Current Liabilities	10		2,881		2,915		(80		)	5,726
Long-Term Debt	—		6,708		20		—			6,728
Intercompany Payable	362		3,199		—		(3,561		)	—
Deferred Income Taxes	—		544		748		(19		)	1,273
Other Liabilities	62		522		1,074		—			1,658
Shareholders’ Equity	6,249		591		7,191		(7,782		)	6,249
Total Liabilities and Shareholders’ Equity	$	6,683	$	14,445	$	11,948	$	(11,442	)	$	21,634

Large accelerated filer ý

Accelerated filer o

Non-accelerated filer o

Smaller reporting company o

(Do not check if a smaller reporting company)