Macy's 2009 Annual Report Download - page 56

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MACY’S, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Organization and Summary of Significant Accounting Policies
Macy’s, Inc. and subsidiaries (the “Company”) is a retail organization operating retail stores and Internet
websites under two brands (Macy’s and Bloomingdale’s) that sell a wide range of merchandise, including men’s,
women’s and children’s apparel and accessories, cosmetics, home furnishings and other consumer goods in 45
states, the District of Columbia, Guam and Puerto Rico. As of January 30, 2010, the Company’s operations were
conducted through four retail operating divisions – Macy’s, macys.com, Bloomingdale’s, and
bloomingdales.com – 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.
For 2009, 2008 and 2007, the following merchandise constituted the following percentages of sales:
2009 2008 2007
Feminine Accessories, Intimate Apparel, Shoes and Cosmetics ........................ 36% 36% 36%
Feminine Apparel ............................................................ 26 27 27
Men’s and Children’s ......................................................... 22 22 22
Home/Miscellaneous ......................................................... 16 15 15
100% 100% 100%
The Company’s fiscal year ends on the Saturday closest to January 31. Fiscal years 2009, 2008 and 2007
ended on January 30, 2010, January 31, 2009 and February 2, 2008, respectively. References to years in the
Consolidated Financial Statements relate to fiscal years rather than calendar years.
The Consolidated Financial Statements include the accounts of the Company and its wholly-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.
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.
Certain reclassifications were made to prior years’ amounts to conform with the classifications of such
amounts for the most recent year.
F-8