UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________

FORM 10-Q

_________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~October~~July 30, ~~2021~~2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-8344

_________________________________

BATH & BODY WORKS, INC.

(Exact name of registrant as specified in its charter)

_______________________________


Delaware		31-1029810
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)
Three Limited Parkway
Columbus,	Ohio	43230
(Address of principal executive offices)		(Zip Code)
(614)	415-7000
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐ (Do not check if a smaller reporting company)	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.50 Par Value	BBWI	The New York Stock Exchange

As of ~~November~~August 26, ~~2021,~~2022, the number of outstanding shares of the Registrant’s common stock, was ~~257,722,930~~228,374,316 shares.

Table of Contents

BATH & BODY WORKS, INC.

TABLE OF CONTENTS


			Page No.
Part I. Financial Information

Item 1. Financial Statements *

Consolidated Statements of Income ~~(Loss)~~ for the Thirteen-Weeks and ~~Thirty-Nine-Weeks~~T wenty-Six -Weeks Ended ~~October~~July 30, ~~2021~~2022 and ~~October~~July 31 ~~2020~~ , 2021 (Unaudited)			3

Consolidated Statements of Comprehensive Income ~~(Loss)~~ for the Thirteen-Weeks and Tw enty-Six-Weeks Ended July 30, 2022 and ~~Thirty~~July 3 -~~Nine-Weeks Ended~~ ~~October 30~~,1, 2021 ~~and~~ ~~October~~ 3 ~~1, 2020~~ (Unaudited)			3

Consolidated Balance Sheets as of ~~October~~ July 30, ~~2021,~~2022 (Unaudited), January ~~30,~~29, 2022 and July 31 , 2021 ~~and October 31, 2020~~ (Unaudited)			4

Consolidated Statements of Total Equity (Deficit) for the Thirteen-Weeks and T ~~hirty~~-~~Nine-Weeks Ended~~ ~~October 30, 2021 and~~ ~~October~~Twenty-Six-Weeks Ended July 30, 2022 and July 3 1, ~~2020~~2021 (Unaudited)			5

Consolidated Statements of Cash Flows for the T ~~hirty~~-~~Nine~~wenty-Six -Weeks Ended ~~October~~July 30,~~, 2021~~ 2022 and ~~October~~July 3 1, 2021 3 ~~1, 2020~~ (Unaudited)			7

Notes to Consolidated Financial Statements (Unaudited)			8

Report of Independent Registered Public Accounting Firm			2118

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995			2219

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			2320

Item 3. Quantitative and Qualitative Disclosures About Market Risk			3631

Item 4. Controls and Procedures			3732

Part II. Other Information			3833

Item 1. Legal Proceedings			3833

Item 1A. Risk Factors			3833

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			3933

Item 3. Defaults Upon Senior Securities			3933

Item 4. Mine Safety Disclosures			3934

Item 5. Other Information			3934

Item 6. Exhibits			4034

Signature			4135


*			The Company's fiscal year ends on the Saturday nearest to January 31. As used herein, ~~“third~~“second quarter of ~~2021”~~2022” and ~~“third~~“second quarter of ~~2020”~~2021” refer to the thirteen-week periods ended ~~October~~July 30, ~~2021~~2022 and ~~October~~July 31, ~~2020,~~2021, respectively. “Year-to-date ~~2021”~~2022” and “year-to-date ~~2020”~~2021” refer to the ~~thirty-nine-week~~twenty-six-week periods ended ~~October~~July 30, ~~2021~~2022 and ~~October~~July 31, ~~2020,~~2021, respectively.

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

BATH & BODY WORKS, INC.

CONSOLIDATED STATEMENTS OF INCOME ~~(LOSS)~~

(in millions, except per share amounts)

(Unaudited)


		Third Quarter				Year-to-Date					Second Quarter				Year-to-Date
		2021		2020		2021		2020			2022		2021		2022		2021
Net Sales	Net Sales	$	1,681	$	1,702	$	4,854	$	3,716	Net Sales	$	1,618	$	1,704	$	3,067	$	3,173
Costs of Goods Sold, Buying and Occupancy	Costs of Goods Sold, Buying and Occupancy	(842)		(839)		(2,445)		(2,027)		Costs of Goods Sold, Buying and Occupancy	(958)		(876)		(1,739)		(1,603)
Gross Profit	Gross Profit	839		863		2,409		1,689		Gross Profit	660		828		1,328		1,570
General, Administrative and Store Operating Expenses	General, Administrative and Store Operating Expenses	(430)		(427)		(1,279)		(954)		General, Administrative and Store Operating Expenses	(418)		(444)		(806)		(849)
Operating Income	Operating Income	409		436		1,130		735		Operating Income	242		384		522		721
Interest Expense	Interest Expense	(91)		(119)		(301)		(317)		Interest Expense	(86)		(97)		(175)		(210)
Other Loss		(91)		(52)		(196)		(47)
Other Income (Loss)										Other Income (Loss)	2		—		3		(105)
Income from Continuing Operations Before Income Taxes	Income from Continuing Operations Before Income Taxes	227		265		633		371		Income from Continuing Operations Before Income Taxes	158		287		350		406
Provision for Income Taxes	Provision for Income Taxes	50		69		150		63		Provision for Income Taxes	38		72		75		100
Net Income from Continuing Operations	Net Income from Continuing Operations	177		196		483		308		Net Income from Continuing Operations	120		215		275		306
Income (Loss) from Discontinued Operations, Net of Tax		(89)		135		256		(324)
Net Income (Loss)		$	88	$	331	$	739	$	(16)
Income from Discontinued Operations, Net of Tax										Income from Discontinued Operations, Net of Tax	—		159		—		345
Net Income										Net Income	$	120	$	374	$	275	$	651

Net Income (Loss) per Basic Share
Net Income per Basic Share										Net Income per Basic Share
Continuing Operations	Continuing Operations	$	0.67	$	0.70	$	1.77	$	1.11	Continuing Operations	$	0.52	$	0.78	$	1.17	$	1.10
Discontinued Operations	Discontinued Operations	$	(0.34)	$	0.48	$	0.94	$	(1.17)	Discontinued Operations	—		0.58		—		1.25
Total Net Income (Loss) per Basic Share		$	0.33	$	1.19	$	2.71	$	(0.06)
Total Net Income per Basic Share										Total Net Income per Basic Share	$	0.52	$	1.36	$	1.17	$	2.35

Net Income (Loss) per Diluted Share
Net Income per Diluted Share										Net Income per Diluted Share
Continuing Operations	Continuing Operations	$	0.66	$	0.69	$	1.74	$	1.10	Continuing Operations	$	0.52	$	0.77	$	1.16	$	1.08
Discontinued Operations	Discontinued Operations	$	(0.33)	$	0.48	$	0.92	$	(1.15)	Discontinued Operations	—		0.57		—		1.22
Total Net Income (Loss) per Diluted Share		$	0.33	$	1.17	$	2.67	$	(0.06)
Total Net Income per Diluted Share										Total Net Income per Diluted Share	$	0.52	$	1.34	$	1.16	$	2.31

Dividends Per Share		$	0.15	$	—	$	0.30	$	0.30

BATH & BODY WORKS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ~~(LOSS)~~

(in millions)

(Unaudited)


		Third Quarter				Year-to-Date					Second Quarter				Year-to-Date
		2021		2020		2021		2020			2022		2021		2022		2021
Net Income (Loss)		$	88	$	331	$	739	$	(16)
Net Income										Net Income	$	120	$	374	$	275	$	651
Other Comprehensive Income (Loss), Net of Tax:	Other Comprehensive Income (Loss), Net of Tax:									Other Comprehensive Income (Loss), Net of Tax:
Foreign Currency Translation	Foreign Currency Translation	1		(1)		4		(4)		Foreign Currency Translation	—		(2)		—		4
Unrealized Gain (Loss) on Cash Flow Hedges	Unrealized Gain (Loss) on Cash Flow Hedges	(1)		—		(1)		2		Unrealized Gain (Loss) on Cash Flow Hedges	—		2		—		(1)
Reclassification of Cash Flow Hedges to Earnings	Reclassification of Cash Flow Hedges to Earnings	1		—		2		(2)		Reclassification of Cash Flow Hedges to Earnings	—		1		—		1
Total Other Comprehensive Income (Loss), Net of Tax		1		(1)		5		(4)
Total Comprehensive Income (Loss)		$	89	$	330	$	744	$	(20)
Total Other Comprehensive Income, Net of Tax										Total Other Comprehensive Income, Net of Tax	—		1		—		4
Total Comprehensive Income										Total Comprehensive Income	$	120	$	375	$	275	$	655

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

Table of Contents

BATH & BODY WORKS, INC.

CONSOLIDATED BALANCE SHEETS

(in millions, except par value amounts)

~~(Unaudited)~~


									July 30, 2022		January 29, 2022		July 31, 2021
		October 30, 2021		January 30, 2021		October 31, 2020			(Unaudited)				(Unaudited)
ASSETS	ASSETS							ASSETS
Current Assets:	Current Assets:							Current Assets:
Cash and Cash Equivalents	Cash and Cash Equivalents	$	1,441	$	3,568	$	2,433	Cash and Cash Equivalents	$	452	$	1,979	$	1,695
Accounts Receivable, Net	Accounts Receivable, Net	242		148		161		Accounts Receivable, Net	184		240		131
Inventories	Inventories	1,149		572		883		Inventories	971		709		728
Other	Other	153		52		72		Other	147		81		134
Current Assets of Discontinued Operations	Current Assets of Discontinued Operations	—		1,239		1,378		Current Assets of Discontinued Operations	—		—		1,826
Total Current Assets	Total Current Assets	2,985		5,579		4,927		Total Current Assets	1,754		3,009		4,514
Property and Equipment, Net	Property and Equipment, Net	1,017		1,017		1,064		Property and Equipment, Net	1,071		1,009		1,002
Operating Lease Assets	Operating Lease Assets	1,023		968		875		Operating Lease Assets	1,087		1,021		1,051
Goodwill	Goodwill	628		628		628		Goodwill	628		628		628
Trade Names	Trade Names	165		165		165		Trade Names	165		165		165
Deferred Income Taxes	Deferred Income Taxes	62		58		59		Deferred Income Taxes	45		45		59
Other Assets	Other Assets	151		175		279		Other Assets	151		149		142
Other Assets of Discontinued Operations	Other Assets of Discontinued Operations	—		2,981		3,164		Other Assets of Discontinued Operations	—		—		2,831
Total Assets	Total Assets	$	6,031	$	11,571	$	11,161	Total Assets	$	4,901	$	6,026	$	10,392
LIABILITIES AND EQUITY (DEFICIT)	LIABILITIES AND EQUITY (DEFICIT)							LIABILITIES AND EQUITY (DEFICIT)
Current Liabilities:	Current Liabilities:							Current Liabilities:
Accounts Payable	Accounts Payable	$	655	$	345	$	553	Accounts Payable	$	587	$	435	$	460
Accrued Expenses and Other	Accrued Expenses and Other	636		727		871		Accrued Expenses and Other	512		651		717

Current Operating Lease Liabilities	Current Operating Lease Liabilities	143		173		182		Current Operating Lease Liabilities	158		170		148
Income Taxes	Income Taxes	1		83		112		Income Taxes	1		34		—
Current Liabilities of Discontinued Operations	Current Liabilities of Discontinued Operations	—		1,498		1,612		Current Liabilities of Discontinued Operations	—		—		1,300
Total Current Liabilities	Total Current Liabilities	1,435		2,826		3,330		Total Current Liabilities	1,258		1,290		2,625
Deferred Income Taxes	Deferred Income Taxes	146		141		117		Deferred Income Taxes	157		157		149
Long-term Debt	Long-term Debt	4,852		6,366		6,364		Long-term Debt	4,858		4,854		5,346
Long-term Operating Lease Liabilities	Long-term Operating Lease Liabilities	993		942		857		Long-term Operating Lease Liabilities	1,050		989		1,020
Other Long-term Liabilities	Other Long-term Liabilities	280		290		164		Other Long-term Liabilities	240		253		270
Other Long-term Liabilities of Discontinued Operations	Other Long-term Liabilities of Discontinued Operations	—		1,667		1,893		Other Long-term Liabilities of Discontinued Operations	—		—		2,170
Shareholders’ Equity (Deficit):	Shareholders’ Equity (Deficit):							Shareholders’ Equity (Deficit):
Preferred Stock - $1.00 par value; 10 shares authorized; none issued	Preferred Stock - $1.00 par value; 10 shares authorized; none issued	—		—		—		Preferred Stock - $1.00 par value; 10 shares authorized; none issued	—		—		—
Common Stock - $0.50 par value; 1,000 shares authorized; 275, 286 and 286 shares issued; 260, 278 and 278 shares outstanding, respectively		137		143		143
Common Stock - $0.50 par value; 1,000 shares authorized; 243, 269 and 280 shares issued; 228, 254 and 265 shares outstanding, respectively								Common Stock - $0.50 par value; 1,000 shares authorized; 243, 269 and 280 shares issued; 228, 254 and 265 shares outstanding, respectively	122		134		140
Paid-in Capital	Paid-in Capital	904		891		879		Paid-in Capital	791		893		911
Accumulated Other Comprehensive Income	Accumulated Other Comprehensive Income	80		83		48		Accumulated Other Comprehensive Income	80		80		87
Retained Earnings (Accumulated Deficit)	Retained Earnings (Accumulated Deficit)	(1,975)		(1,421)		(2,280)		Retained Earnings (Accumulated Deficit)	(2,834)		(1,803)		(1,505)
Less: Treasury Stock, at Average Cost; 15, 8 and 8 shares, respectively		(822)		(358)		(358)
Less: Treasury Stock, at Average Cost; 15, 15 and 15 shares, respectively								Less: Treasury Stock, at Average Cost; 15, 15 and 15 shares, respectively	(822)		(822)		(822)
Total Shareholders’ Equity (Deficit)	Total Shareholders’ Equity (Deficit)	(1,676)		(662)		(1,568)		Total Shareholders’ Equity (Deficit)	(2,663)		(1,518)		(1,189)
Noncontrolling Interest	Noncontrolling Interest	1		1		4		Noncontrolling Interest	1		1		1
Total Equity (Deficit)	Total Equity (Deficit)	(1,675)		(661)		(1,564)		Total Equity (Deficit)	(2,662)		(1,517)		(1,188)
Total Liabilities and Equity (Deficit)	Total Liabilities and Equity (Deficit)	$	6,031	$	11,571	$	11,161	Total Liabilities and Equity (Deficit)	$	4,901	$	6,026	$	10,392

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

Table of Contents

BATH & BODY WORKS, INC.

CONSOLIDATED STATEMENTS OF TOTAL EQUITY (DEFICIT)

(in millions, except per share amounts)

(Unaudited)

~~Third~~Second Quarter ~~2021~~2022

Common Stock Paid-In
Capital Accumulated
Other
Comprehensive
Income Retained
Earnings (Accumulated Deficit) Treasury
Stock, at
Average
Cost Noncontrolling Interest Total Equity (Deficit)
Shares
Outstanding Par
Value
Balance, July 31, 2021 265 $ 140 $ 911 $ 87 $ (1,505) $ (822) $ 1 $ (1,188)
Net Income — — — — 88 — — 88
Other Comprehensive Income — — — 1 — — — 1
Total Comprehensive Income — — — 1 88 — — 89
Victoria's Secret Spin-Off — — — (8) (175) — — (183)
Cash Dividends ($0.15 per share) — — — — (39) — — (39)
Repurchases of Common Stock (5) — — — — (365) — (365)
Treasury Share Retirement — (3) (18) — (344) 365 — —
Share-based Compensation and Other — — 11 — — — — 11
Balance, October 30, 2021 260 $ 137 $ 904 $ 80 $ (1,975) $ (822) $ 1 $ (1,675)


	Common Stock			Paid-In Capital		Accumulated Other Comprehensive Income		Retained Earnings (Accumulated Deficit)		Treasury Stock, at Average Cost		Noncontrolling Interest		Total Equity (Deficit)
	Shares Outstanding	Par Value
Balance, April 30, 2022	236	$	126	$	618	$	80	$	(2,661)	$	(822)	$	1	$	(2,658)
Net Income and Total Comprehensive Income	—	—		—		—		120		—		—		120


Cash Dividends ($0.20 per share)	—	—		—		—		(46)		—		—		(46)
Repurchases of Common Stock	(2)	—		—		—		—		(77)		—		(77)
Accelerated Share Repurchase Program	(7)	—		200		—		—		(200)		—		—
Treasury Share Retirement	—	(4)		(26)		—		(247)		277		—		—
Share-based Compensation and Other	1	—		(1)		—		—		—		—		(1)
Balance, July 30, 2022	228	$	122	$	791	$	80	$	(2,834)	$	(822)	$	1	$	(2,662)

~~Third~~Second Quarter ~~2020~~2021


		Common Stock			Paid-In Capital		Accumulated Other Comprehensive Income		Retained Earnings (Accumulated Deficit)		Treasury Stock, at Average Cost		Noncontrolling Interest		Total Equity (Deficit)			Common Stock			Paid-In Capital		Accumulated Other Comprehensive Income		Retained Earnings (Accumulated Deficit)		Treasury Stock, at Average Cost		Noncontrolling Interest		Total Equity (Deficit)
		Shares Outstanding	Par Value															Shares Outstanding	Par Value
Balance, August 1, 2020		278	$	143	$	869	$	49	$	(2,611)	$	(358)	$	4	$	(1,904)
Balance, May 1, 2021																	Balance, May 1, 2021	277	$	144	$	903	$	86	$	(1,144)	$	(523)	$	1	$	(533)
Net Income	Net Income	—	—		—		—		331		—		—		331		Net Income	—	—		—		—		374		—		—		374
Other Comprehensive Loss		—	—		—		(1)		—		—		—		(1)
Other Comprehensive Income																	Other Comprehensive Income	—	—		—		1		—		—		—		1
Total Comprehensive Income	Total Comprehensive Income	—	—		—		(1)		331		—		—		330		Total Comprehensive Income	—	—		—		1		374		—		—		375

Cash Dividends ($0.15 per share)																	Cash Dividends ($0.15 per share)	—	—		—		—		(42)		—		—		(42)
Repurchases of Common Stock																	Repurchases of Common Stock	(14)	—		—		—		—		(1,029)		—		(1,029)
Treasury Share Retirement																	Treasury Share Retirement	—	(5)		(32)		—		(693)		730		—		—
Share-based Compensation and Other	Share-based Compensation and Other	—	—		10		—		—		—		—		10		Share-based Compensation and Other	2	1		40		—		—		—		—		41
Balance, October 31, 2020		278	$	143	$	879	$	48	$	(2,280)	$	(358)	$	4	$	(1,564)
Balance, July 31, 2021																	Balance, July 31, 2021	265	$	140	$	911	$	87	$	(1,505)	$	(822)	$	1	$	(1,188)

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

Table of Contents

BATH & BODY WORKS, INC.

CONSOLIDATED STATEMENTS OF TOTAL EQUITY (DEFICIT)

(in millions except per share amounts)

(Unaudited)

Year-to-Date ~~2021~~2022

Common Stock Paid-In
Capital Accumulated
Other
Comprehensive
Income Retained
Earnings (Accumulated Deficit) Treasury
Stock, at
Average
Cost Noncontrolling Interest Total Equity (Deficit)
Shares
Outstanding Par
Value
Balance, January 30, 2021 278 $ 143 $ 891 $ 83 $ (1,421) $ (358) $ 1 $ (661)
Net Income — — — — 739 — — 739
Other Comprehensive Income — — — 5 — — — 5
Total Comprehensive Income — — — 5 739 — — 744
Victoria's Secret Spin-Off — — — (8) (175) — — (183)
Cash Dividends ($0.30 per share) — — — — (81) — — (81)
Repurchases of Common Stock (22) — — — — (1,559) — (1,559)
Treasury Share Retirement — (8) (50) — (1,037) 1,095 — —
Share-based Compensation and Other 4 2 63 — — — — 65
Balance, October 30, 2021 260 $ 137 $ 904 $ 80 $ (1,975) $ (822) $ 1 $ (1,675)


	Common Stock			Paid-In Capital		Accumulated Other Comprehensive Income		Retained Earnings (Accumulated Deficit)		Treasury Stock, at Average Cost		Noncontrolling Interest		Total Equity (Deficit)
	Shares Outstanding	Par Value
Balance, January 29, 2022	254	$	134	$	893	$	80	$	(1,803)	$	(822)	$	1	$	(1,517)
Net Income and Total Comprehensive Income	—	—		—		—		275		—		—		275


Cash Dividends ($0.40 per share)	—	—		—		—		(94)		—		—		(94)
Repurchases of Common Stock	(7)	—		—		—		—		(312)		—		(312)
Accelerated Share Repurchase Program	(20)	—		—		—		—		(1,000)		—		(1,000)
Treasury Share Retirement	—	(13)		(87)		—		(1,212)		1,312		—		—
Share-based Compensation and Other	1	1		(15)		—		—		—		—		(14)
Balance, July 30, 2022	228	$	122	$	791	$	80	$	(2,834)	$	(822)	$	1	$	(2,662)

Year-to-Date ~~2020~~2021

Common Stock Paid-In
Capital Accumulated
Other
Comprehensive
Income Retained
Earnings (Accumulated Deficit) Treasury
Stock, at
Average
Cost Noncontrolling Interest Total Equity (Deficit)
Shares
Outstanding Par
Value
Balance, February 1, 2020 277 $ 142 $ 847 $ 52 $ (2,182) $ (358) $ 4 $ (1,495)
Net Loss — — — — (16) — — (16)
Other Comprehensive Loss — — — (4) — — — (4)
Total Comprehensive Loss — — — (4) (16) — — (20)
Cash Dividends ($0.30 per share) — — — — (83) — — (83)
Share-based Compensation and Other 1 1 32 — — — — 33
Balance, October 31, 2020 278 $ 143 $ 879 $ 48 $ (2,280) $ (358) $ 4 $ (1,564)


	Common Stock			Paid-In Capital		Accumulated Other Comprehensive Income		Retained Earnings (Accumulated Deficit)		Treasury Stock, at Average Cost		Noncontrolling Interest		Total Equity (Deficit)
	Shares Outstanding	Par Value
Balance, January 30, 2021	278	$	143	$	891	$	83	$	(1,421)	$	(358)	$	1	$	(661)
Net Income	—	—		—		—		651		—		—		651
Other Comprehensive Income	—	—		—		4		—		—		—		4
Total Comprehensive Income	—	—		—		4		651		—		—		655
Cash Dividends ($0.15 per share)	—	—		—		—		(42)		—		—		(42)
Repurchases of Common Stock	(17)	—		—		—		—		(1,194)		—		(1,194)
Treasury Share Retirement	—	(5)		(32)		—		(693)		730		—		—
Share-based Compensation and Other	4	2		52		—		—		—		—		54
Balance, July 31, 2021	265	$	140	$	911	$	87	$	(1,505)	$	(822)	$	1	$	(1,188)

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

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BATH & BODY WORKS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(Unaudited)


		Year-to-Date					Year-to-Date
		2021 (a)		2020 (a)			2022		2021 (a)
Operating Activities:	Operating Activities:					Operating Activities:
Net Income (Loss)		$	739	$	(16)
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by Operating Activities:
Net Income						Net Income	$	275	$	651
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:						Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation of Long-lived Assets	Depreciation of Long-lived Assets	310		393		Depreciation of Long-lived Assets	106		258
Loss on Extinguishment of Debt	Loss on Extinguishment of Debt	195		53		Loss on Extinguishment of Debt	—		105
Victoria's Secret Asset Impairment Charges		—		214
Share-based Compensation Expense	Share-based Compensation Expense	38		39		Share-based Compensation Expense	15		30
Deferred Income Taxes	Deferred Income Taxes	19		(14)		Deferred Income Taxes	—		16
Gain from Victoria's Secret Hong Kong Store Closure and Lease Termination		—		(39)
Gain Related to Formation of Victoria's Secret U.K. Joint Venture		—		(30)
Changes in Assets and Liabilities:	Changes in Assets and Liabilities:					Changes in Assets and Liabilities:
Accounts Receivable	Accounts Receivable	(61)		9		Accounts Receivable	55		39
Inventories	Inventories	(617)		(590)		Inventories	(261)		(200)
Accounts Payable, Accrued Expenses and Other	Accounts Payable, Accrued Expenses and Other	132		591		Accounts Payable, Accrued Expenses and Other	16		(42)
Income Taxes Payable	Income Taxes Payable	(149)		(29)		Income Taxes Payable	(69)		(144)
Other Assets and Liabilities	Other Assets and Liabilities	(159)		125		Other Assets and Liabilities	(56)		(140)
Net Cash Provided by Operating Activities	Net Cash Provided by Operating Activities	447		706		Net Cash Provided by Operating Activities	81		573
Investing Activities:	Investing Activities:					Investing Activities:
Capital Expenditures	Capital Expenditures	(241)		(200)		Capital Expenditures	(161)		(178)
Other Investing Activities	Other Investing Activities	13		17		Other Investing Activities	(1)		10
Net Cash Used for Investing Activities	Net Cash Used for Investing Activities	(228)		(183)		Net Cash Used for Investing Activities	(162)		(168)
Financing Activities:	Financing Activities:					Financing Activities:
Proceeds from Issuance of Long-Term Debt, Net of Issuance Costs		—		2,219

Proceeds from Victoria's Secret & Co. Notes						Proceeds from Victoria's Secret & Co. Notes	—		600
Payments of Long-term Debt	Payments of Long-term Debt	(1,716)		(1,307)		Payments of Long-term Debt	—		(1,130)
Proceeds from Spin-Off of Victoria's Secret & Co.		976		—
Transfers and Payments to Victoria's Secret & Co. related to Spin-Off		(362)		—
Borrowing from Credit Agreement		—		950
Repayment of Credit Agreement		—		(950)

Net Repayments of Victoria's Secret Foreign Facilities		—		(57)

Repurchases of Common Stock	Repurchases of Common Stock	(1,544)		—		Repurchases of Common Stock	(1,312)		(1,194)
Dividends Paid	Dividends Paid	(81)		(83)		Dividends Paid	(94)		(42)
Tax Payments related to Share-based Awards	Tax Payments related to Share-based Awards	(58)		(8)		Tax Payments related to Share-based Awards	(31)		(56)
Proceeds from Stock Option Exercises	Proceeds from Stock Option Exercises	81		1		Proceeds from Stock Option Exercises	2		76
Other Financing Activities	Other Financing Activities	(9)		(36)		Other Financing Activities	(11)		(6)
Net Cash Provided by (Used for) Financing Activities		(2,713)		729
Net Cash Used for Financing Activities						Net Cash Used for Financing Activities	(1,446)		(1,752)
Effects of Exchange Rate Changes on Cash and Cash Equivalents and Restricted Cash	Effects of Exchange Rate Changes on Cash and Cash Equivalents and Restricted Cash	2		(1)		Effects of Exchange Rate Changes on Cash and Cash Equivalents and Restricted Cash	—		2
Net Increase (Decrease) in Cash and Cash Equivalents and Restricted Cash		(2,492)		1,251
Net Decrease in Cash and Cash Equivalents and Restricted Cash						Net Decrease in Cash and Cash Equivalents and Restricted Cash	(1,527)		(1,345)
Cash and Cash Equivalents and Restricted Cash, Beginning of Period	Cash and Cash Equivalents and Restricted Cash, Beginning of Period	3,933		1,499		Cash and Cash Equivalents and Restricted Cash, Beginning of Period	1,979		3,933
Cash and Cash Equivalents and Restricted Cash, End of Period	Cash and Cash Equivalents and Restricted Cash, End of Period	$	1,441	$	2,750	Cash and Cash Equivalents and Restricted Cash, End of Period	$	452	$	2,588

_______________

(a)The cash flows related to discontinued operations have not been segregated. Accordingly, the 2021 Consolidated ~~Statements~~Statement of Cash Flows ~~include~~includes the results of continuing and discontinued operations.

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

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BATH & BODY WORKS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Description of Business and Basis of Presentation

Description of Business

Bath & Body Works, Inc. ("Bath & Body Works" or the "Company") is a specialty retailer of home fragrance, ~~products,~~ body care and ~~soaps~~soap and ~~sanitizers. Through the Bath & Body Works retail brand, the~~sanitizer products. The Company sells merchandise through ~~company-operated~~its specialty retail stores in the United States of America ("U.S.") and Canada, and through its websites and other ~~channels.~~channels, under the Bath & Body Works, White Barn and other brand names. The Company's international ~~operations are~~business is primarily conducted through franchise, license and wholesale partners. The Company operates as and reports a single segment that includes all of its continuing operations.

On August 2, 2021, the Company completed the tax-free spin-off of its Victoria's Secret business, which included the Victoria's Secret and PINK brands, into an independent publicly traded ~~company. As a result,~~company (the "Separation"). Accordingly, the operating results ~~for~~of, and costs to separate, the Victoria's Secret business ~~through the date of the spin-off~~ are reported in Income ~~(Loss)~~ from Discontinued Operations, Net of Tax in the Consolidated Statements of Income ~~(Loss)~~ for all periods presented. In addition, the related assets and liabilities are reported as Assets and Liabilities of Discontinued Operations on the Consolidated Balance Sheets. ~~Unless otherwise noted, all~~All amounts and disclosures included in the Notes to Consolidated Financial Statements reflect only the Company's continuing ~~operations.~~operations unless otherwise noted. For additional information, see Note 2, "Discontinued Operations."

On August 2, 2021, in connection with the spin-off of the Victoria's Secret business discussed above, the Company changed its name from L Brands, Inc. to Bath & Body Works, Inc. Additionally, starting August 3, 2021, the Company's common stock began trading under the stock symbol "BBWI."

~~Impacts of~~ COVID-19

The coronavirus ~~pandemic~~ ("COVID-19") pandemic has created significant public health concerns as well as economic disruption, uncertainty and volatility. The Company's operations and financial performance have been materially impacted by the COVID-19 pandemic. In the first quarter of 2020, all the Company-operated stores were closed on March 17, 2020, but the Company was able to re-open the majority of its stores as of the end of the second quarter of 2020. The Direct business remained open for the duration of 2020. During 2020, the Company took prudent actions to manage expenses and to maintain its cash position and financial flexibility.

~~The Company adopted new operating models focused on safety. The Company continues to remain~~remains focused on providing a safe store environment for its customers and associates while ~~also~~ delivering an engaging shopping ~~experience. The Company also remains focused on~~experience, and in establishing the necessary protocols to ensure the safe operations of its distribution and fulfillment centers ~~while maximizing~~and corporate offices. As expected, the Company has experienced channel and product category shifts as customer mindset and needs have shifted coming out of the pandemic.

The Company continues to monitor the COVID-19 pandemic and the effects on its ~~direct business.~~operations and financial performance. There remains the potential for ~~COVID-related~~future COVID-19-related closures or operating restrictions, which could materially impact the Company's operations and financial performance in future periods.

Fiscal Year

The Company’s fiscal year ends on the Saturday nearest to January 31. As used herein, ~~“third~~“second quarter of ~~2021”~~2022” and ~~“third~~“second quarter of ~~2020”~~2021” refer to the thirteen-week periods ended ~~October~~July 30, ~~2021~~2022 and ~~October~~July 31, ~~2020,~~2021, respectively. “Year-to-date ~~2021”~~2022” and “year-to-date ~~2020”~~2021” refer to the ~~thirty-nine-week~~twenty-six-week periods ended ~~October~~July 30, ~~2021~~2022 and ~~October~~July 31, ~~2020,~~2021, respectively.

Basis of Consolidation

The Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

The Company accounts for investments in unconsolidated entities where it exercises significant influence, but does not have control, using the equity method. Under the equity method of accounting, the Company recognizes its share of the investee's net income or loss. Losses are only recognized to the extent the Company has positive carrying value related to the investee. Carrying values are only reduced below zero if the Company has an obligation to provide funding to the investee. The Company’s share of net income or loss of all unconsolidated entities is included in Other ~~Loss~~Income (Loss) in the Consolidated Statements of ~~Income (Loss).~~Income. The Company’s equity method investments are required to be reviewed for impairment when it is determined there may be an other-than-temporary loss in value.

~~Segment Reporting~~

The Company operates as a single segment that includes all of its continuing operations, which is designed to enable customers to purchase its products through stores or digital channels. The Company previously had two reportable segments: Bath & Body Works and Victoria's Secret. The Victoria's Secret reportable segment was spun-off on August 2, 2021 and is now reported as discontinued operations for all periods through that date.

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Interim Financial Statements

The Consolidated Financial Statements as of and for the periods ended ~~October~~July 30, ~~2021~~2022 and ~~October~~July 31, ~~2020~~2021 are unaudited and are presented pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto contained in the Company’s ~~2020~~2021 Annual Report on Form 10-K.

In the opinion of management, the accompanying Consolidated Financial Statements reflect all adjustments that are of a normal recurring nature and necessary for a fair presentation of the results for the interim periods.

Seasonality of Business

Due to the seasonal variations in the retail industry, the results of operations for the interim ~~period~~periods are not necessarily indicative of the results expected for the full fiscal year.

~~Restricted Cash~~

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During 2020, the Company placed cash on deposit with certain financial institutions as collateral for their lending commitments to certain former Victoria's Secret subsidiaries. These deposits totaled $30 million and $128 million as of January 30, 2021 and October 31, 2020, respectively, and were recorded in Other Assets on the Consolidated Balance Sheets. During the second quarter of 2021, these lending commitments were terminated which released the restrictions on this cash. Accordingly, the balance was reclassified to Cash and Cash Equivalents ~~during~~and Restricted Cash

The following table summarizes the ~~second quarter~~location of ~~2021.~~the Company's Cash and Cash Equivalents and restricted cash in the Consolidated Balance Sheets as of July 30, 2022, January 29, 2022 and July 31, 2021:


	July 30, 2022		January 29, 2022		July 31, 2021
	(in millions)
Cash and Cash Equivalents	$	452	$	1,979	$	1,695
Current Assets of Discontinued Operations	—		—		893
Total Cash and Cash Equivalents and Restricted Cash	$	452	$	1,979	$	2,588

Derivative Financial Instruments

The Company uses derivative financial instruments to manage exposure to foreign currency exchange rates. The Company does not use derivative instruments for trading purposes. All derivative instruments are recorded on the Consolidated Balance Sheets at fair value.

~~The earnings of the~~ Company's Canadian ~~operations~~dollar denominated earnings are subject to exchange rate risk as substantially all the Company's merchandise sold in Canada is sourced through U.S. dollar transactions. The Company uses foreign currency forward contracts designated as cash flow hedges to mitigate this foreign currency exposure. Amounts are reclassified from accumulated other comprehensive income (loss) upon sale of the hedged merchandise to the customer. These gains and losses are recognized in Costs of Goods Sold, Buying and Occupancy in the Consolidated Statements of ~~Income (Loss).~~Income. All designated cash flow hedges are recorded on the Consolidated Balance Sheets at fair value. The fair value of designated cash flow hedges is not significant for any period presented. The Company does not use derivative financial instruments for trading purposes.

Concentration of Credit Risk

The Company maintains cash and cash equivalents and derivative contracts with various major financial institutions. The Company monitors the relative credit standing of financial institutions with whom the Company transacts and limits the amount of credit exposure with any one entity. The Company’s investment portfolio is primarily comprised of U.S. government obligations, U.S. Treasury and AAA-rated money market funds, commercial paper and bank deposits.

The Company also periodically reviews the relative credit standing of franchise, license and wholesale partners and other entities to which the Company grants credit terms in the normal course of business. The Company determines the required allowance for expected credit losses using information such as customer credit history and financial condition. Amounts are recorded to the allowance when it is determined that expected credit losses may occur.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with U.S. generally accepted accounting principles ~~(“GAAP”)~~ requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period, as well as the related disclosure of contingent assets and liabilities at the date of the financial statements. Actual results may differ from those estimates, and the Company revises its estimates and assumptions as new information becomes available.

Recently Issued Accounting Pronouncements

The Company did not adopt any new accounting standards ~~during the third quarter of 2021~~in 2022 that had a material impact on ~~the Company's~~its consolidated results of operations, financial position or cash flows. In addition, as of September 2, 2022, there ~~are~~were no new accounting standards that the Company has not yet adopted that are expected to have a material impact on ~~the Company's~~its consolidated results of operations, financial position or cash flows.

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2. Discontinued Operations

Victoria's Secret & Co. Spin-Off

On July 9, 2021, the Company announced that its Board of Directors (the "Board") approved the previously announced ~~separation~~Separation of the Victoria’s Secret business ~~(the "Separation")~~ into an independent, publicly traded company, Victoria's Secret & Co. On August 2, 2021 (the ~~“Distribution Date”~~"Distribution Date"), after the New York Stock Exchange ("NYSE") market closing, the Separation was completed. The Separation was achieved through the Company's tax-free distribution (the "Distribution") of 100% of the shares of Victoria's Secret & Co. common stock to holders of L Brands, Inc. common stock as of the close of business on the record date of July 22, 2021. The Company's stockholders of record received one share of Victoria’s Secret & Co. common stock for every three shares of the Company's common stock. On August 3, 2021, Victoria’s Secret & Co. became an independent, publicly-traded company trading on the NYSE under the stock symbol "VSCO." The Company retained no ownership interest in Victoria’s Secret & Co. following the Separation.

In July 2021, Victoria’s Secret & Co., prior to the Separation and while a subsidiary of the Company, issued $600 million of 4.625% notes due in July 2029 (the "VSCO Notes"). As of July 31, 2021, the initial proceeds were held in escrow for release to Victoria's Secret & Co. upon satisfaction of certain conditions, including completion of the Separation. Additionally, on August 2, 2021, in connection with the Separation, Victoria's Secret & Co. entered into a term loan facility with a credit limit of $400 million and a senior secured asset-based revolving credit facility with a credit limit of $750 million. In connection with the Separation, Victoria's Secret & Co. received net cash proceeds of $384 million from its $400 million borrowing under its credit facilities. The proceeds from the credit facilities and the $592 million net proceeds from the VSCO Notes were used to fund cash payments of $976 million to the Company in connection with the Separation. The Company does not guarantee the VSCO Notes, the Victoria's Secret & Co. term loan facility or the Victoria's Secret & Co. senior secured asset-based revolving credit facility following the Separation.

Cash and Cash Equivalents of $282 million held by Victoria's Secret subsidiaries were transferred to Victoria's Secret & Co. on the Distribution Date. Additionally, the Company made payments of $80 million to Victoria's Secret & Co. during the third quarter for costs incurred prior to the Distribution Date pursuant to the terms of the Separation agreements.

During the third quarter of 2021, the Company recognized a net reduction to retained earnings of $175 million as a result of the Separation, primarily related to the transfer of certain assets and liabilities associated with its Victoria's Secret business to Victoria's Secret & Co. net of the $976 million of cash payments received from Victoria's Secret & Co. Additionally, the Company reclassified out of accumulated other comprehensive income $8 million of accumulated foreign currency translation adjustments related to the Victoria's Secret business.

In connection with the Separation, the Company entered into several agreements with Victoria's Secret & Co. that govern the relationship of the parties following the spin-off, including the Separation and Distribution Agreement, the Transition Services

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Agreements, the Tax Matters Agreement, the Employee Matters Agreement and the Domestic Transportation Services Agreement.

Under the terms of the Transition Services Agreements, as amended, the Company ~~will provide~~provides to Victoria's Secret & Co. various services or functions, including human resources, payroll and certain logistics functions. Additionally, Victoria's Secret & Co. ~~will provide~~provides to the Company various services or functions, including information technology, certain logistics functions, customer marketing and customer call center services. Generally, these services will be performed for a period of up to two years following the Distribution, except for information technology services, which will be provided for a period of up to three years following the Distribution and may be extended for a maximum of 2two additional one-year periods subject to increased administrative charges. Consideration and costs for the transition services are determined using several billing methodologies as described in the agreements, including customary billing, pass-through billing, percent of sales billing or fixed fee billing. Consideration for transition services provided to Victoria's Secret & Co. are recorded within the ~~2021~~2022 Consolidated Statements of Income based on the nature of the service and as an offset to expenses incurred to provide the services. Costs for transition services provided by Victoria's Secret & Co. are recorded within the ~~2021~~2022 Consolidated Statements of Income based on the nature of the service. During the ~~third~~second quarter of ~~2021,~~2022, the Company recognized consideration of ~~$20~~$19 million and recognized costs of ~~$24~~$20 million pursuant to the Transition Service Agreements. During year-to-date 2022, the Company recognized consideration of $38 million and recognized costs of $40 million pursuant to the Transition Service Agreements.

Under the terms of the Domestic Transportation Services Agreement, the Company ~~will continue to provide~~provides transportation services for Victoria's Secret & Co. merchandise in the ~~United States~~U.S. and Canada for an initial term of three years following the Distribution, which term will thereafter continuously renew unless and until Victoria’s Secret & Co. or the Company elects to terminate the arrangement upon 18 or 36 months’ prior written notice, respectively. Consideration for the transportation services is determined using customary billing and fixed billing methodologies, which are described in the agreement, and are subject to an administrative charge. Consideration for logistics services provided to Victoria's Secret & Co. are recorded within Costs of Goods Sold, Buying and Occupancy in the 2022 Consolidated Statements of Income and as an offset to expenses incurred to provide the services. During the ~~third~~second quarter of ~~2021,~~2022, the Company recognized consideration of ~~$18~~$21 million pursuant to the Domestic Transportation Services Agreement. During year-to-date 2022, the Company recognized consideration of $39 million pursuant to the Domestic Transportation Services Agreement.

In conjunction with the Separation, the Company has contingent obligations relating to certain lease payments under the current terms of noncancelable leases. For additional information, see Note ~~13,~~12, "Commitments and Contingencies."

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Financial Information of Discontinued Operations

Income ~~(Loss)~~ from Discontinued Operations, Net of Tax in the Consolidated Statements of Income ~~(Loss)~~ reflects the after-tax results of the Victoria's Secret business and Separation-related fees, and does not include any allocation of general corporate overhead expense or interest expense of the Company. The Company did not report any results from discontinued operations year-to-date 2022.

The following table summarizes the significant line items included in Income ~~(Loss)~~ from Discontinued Operations, Net of Tax in the ~~Consolidated Statements of Income (Loss) for the third~~second quarter and year-to-date 2021 ~~and 2020:~~

Third Quarter Year-to-Date
2021 2020 2021 2020
(in millions)
Net Sales $ 25 $ 1,353 $ 3,194 $ 3,313
Costs of Goods Sold, Buying and Occupancy (14) (856) (1,841) (2,643)
General, Administrative and Store Operating Expenses (a) (83) (352) (975) (1,098)
Interest Expense — (1) (2) (5)
Other Income (Loss) — 1 (1) (1)
Income (Loss) from Discontinued Operations Before Income Taxes (72) 145 375 (434)
Provision (Benefit) for Income Taxes 17 10 119 (110)
Income (Loss) from Discontinued Operations, Net of Tax $ (89) $ 135 $ 256 $ (324)
Consolidated Statements of Income:


	Second Quarter		Year-to-Date
	(in millions)
Net Sales	$	1,614	$	3,168
Costs of Goods Sold, Buying and Occupancy	(944)		(1,826)
General, Administrative and Store Operating Expenses (a)	(455)		(892)
Interest Expense	(2)		(2)
Other Loss	(1)		(1)
Income from Discontinued Operations Before Income Taxes	212		447
Provision for Income Taxes	53		102
Income from Discontinued Operations, Net of Tax	$	159	$	345

_______________

(a)~~Includes~~The second quarter of 2021 includes Separation-related ~~expenses~~costs of ~~$76 million and $104 million for the third quarter and year-to-date~~$18 million. Year-to-date 2021 ~~respectively.~~includes Separation-related costs of $27 million. Prior to the ~~third quarter of 2021,~~Separation, these costs were reported in the Other category under the Company's previous segment reporting.

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The information presented as discontinued operations on the Consolidated Balance Sheets includes certain assets and liabilities that were transferred to Victoria’s Secret & Co. pursuant to the Separation agreements, and excludes certain liabilities that were retained by the Company in connection with the Separation.

There were no assets or liabilities classified as discontinued operations as of ~~October~~July 30, ~~2021.~~ 2022 or January 29, 2022.

In July 2021, Victoria’s Secret & Co., prior to the Separation and while a subsidiary of the Company, issued $600 million of 4.625% notes due in July 2029 (the "Victoria's Secret & Co. Notes"). As of July 31, 2021, the initial proceeds were held in escrow for release to Victoria's Secret & Co. upon satisfaction of certain conditions, including completion of the Separation. The $600 million initial proceeds are included in Current Assets of Discontinued Operations on the July 31, 2021 Consolidated Balance Sheet. The long-term debt is included in Other Long-Term Liabilities of Discontinued Operations on the July 31, 2021 Consolidated Balance Sheet. On August 2, 2021, the Victoria's Secret & Co. Notes became the obligations of Victoria's Secret & Co. concurrent with the Separation.

The following table summarizes the carrying value of the significant classes of assets and liabilities classified as discontinued operations as of ~~January 30, 2021 and October~~July 31, ~~2020:~~2021:

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January 30,
2021 October 31,
2020
(in millions)
Cash and Cash Equivalents $ 335 $ 189
Accounts Receivable, Net 121 135
Inventories 701 981
Other 82 73
Current Assets of Discontinued Operations 1,239 1,378
Property and Equipment, Net 1,078 1,167
Operating Lease Assets 1,590 1,683
Trade Names 246 246
Deferred Income Taxes 11 11
Other Assets 56 57
Other Assets of Discontinued Operations $ 2,981 $ 3,164
Accounts Payable $ 338 $ 548
Accrued Expenses and Other 730 608
Current Debt — 11
Current Operating Lease Liabilities 421 443
Income Taxes 9 2
Current Liabilities of Discontinued Operations 1,498 1,612
Deferred Income Taxes 93 73
Long-term Debt — 87
Long-term Operating Lease Liabilities 1,553 1,709
Other Long-term Liabilities 21 24
Other Long-term Liabilities of Discontinued Operations $ 1,667 $ 1,893


	(in millions)
Cash and Cash Equivalents	$	293
Cash in Escrow related to Victoria's Secret & Co. Spin-Off	600
Accounts Receivable, Net	99
Inventories	745
Other	89
Current Assets of Discontinued Operations	1,826

Property and Equipment, Net	999
Operating Lease Assets	1,513
Trade Names	246
Deferred Income Taxes	11
Other Assets	62
Other Assets of Discontinued Operations	$	2,831

Accounts Payable	$	379
Accrued Expenses and Other	587

Current Operating Lease Liabilities	332
Income Taxes	2
Current Liabilities of Discontinued Operations	1,300

Deferred Income Taxes	101
Long-term Debt	592
Long-term Operating Lease Liabilities	1,457
Other Long-term Liabilities	20
Other Long-term Liabilities of Discontinued Operations	$	2,170

The cash flows related to discontinued operations have not been ~~segregated, and are included in~~segregated. Accordingly, the 2021 Consolidated ~~Statements~~Statement of Cash Flows ~~for all periods presented.~~ includes the results of continuing and discontinued operations. The Company did not report any cash flows from discontinued operations year-to-date 2022.

The following table summarizes ~~depreciation~~Depreciation of Long-Lived Assets, Share-based Compensation Expense, Capital Expenditures and ~~other significant operating noncash items, capital expenditures and financing activities~~Financing Activities of discontinued operations for ~~each period presented:~~year-to-date 2021:

Year-to-Date
2021 2020
(in millions)
Depreciation of Long-Lived Assets $ 158 $ 250
Share-based Compensation Expense 15 20
Victoria's Secret Asset Impairment Charges — 214
Gain from Victoria's Secret Hong Kong Store Closure and Lease Termination — (39)
Gain Related to Formation of Victoria's Secret U.K. Joint Venture — (30)
Capital Expenditures (66) (111)
Net Repayments of Victoria's Secret Foreign Facilities — (57)


	(in millions)
Depreciation of Long-Lived Assets	$	158
Share-based Compensation Expense	15
Capital Expenditures	(66)
Proceeds from Victoria's Secret & Co. Notes	600

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3. Revenue Recognition

Accounts receivable, net from revenue-generating activities were ~~$86~~$98 million as of ~~October~~July 30, ~~2021, $51~~2022, $64 million as of January ~~30, 2021~~29, 2022 and ~~$82~~$56 million as of ~~October~~July 31, ~~2020.~~2021. Accounts receivable primarily relate to amounts due from the Company's franchise, license and wholesale partners. Under these arrangements, payment terms are typically 45 to 75 days.

The Company records deferred revenue when cash payments are received in advance of transfer of control of goods or services. Deferred revenue primarily relates to gift cards, loyalty points and direct channel shipments, which are all impacted by seasonal and holiday-related sales patterns. Deferred revenue, which is recorded within Accrued Expenses and Other on the

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Consolidated Balance Sheets, was $123 million as of ~~October~~July 30, ~~2021, $115~~2022, $148 million as of January ~~30, 2021~~29, 2022 and ~~$98~~$106 million as of ~~October~~July 31, ~~2020.~~2021. The Company recognized ~~$66~~$76 million as revenue year-to-date ~~2021~~2022 from amounts recorded as deferred revenue at the beginning of the Company's 2022 fiscal year.

The following table provides a disaggregation of Net Sales for the ~~third quarter~~second quarters of and year-to-date ~~2021~~2022 and ~~2020:~~2021:


		Third Quarter				Year-to-Date					Second Quarter				Year-to-Date
		2021		2020		2021		2020			2022		2021		2022		2021
		(in millions)									(in millions)
Stores - U.S. and Canada	Stores - U.S. and Canada	$	1,238	$	1,202	$	3,518	$	2,304	Stores - U.S. and Canada	$	1,161	$	1,230	$	2,220	$	2,280
Direct - U.S. and Canada	Direct - U.S. and Canada	369		446		1,126		1,254		Direct - U.S. and Canada	367		407		684		756
International (a)	International (a)	74		54		210		158		International (a)	90		67		163		137
Total Net Sales	Total Net Sales	$	1,681	$	1,702	$	4,854	$	3,716	Total Net Sales	$	1,618	$	1,704	$	3,067	$	3,173

_______________

(a)Results include royalties associated with franchised ~~store~~stores and wholesale sales.

The Company’s net sales outside of the U.S. include sales from ~~company-operated~~Company-operated stores and its e-commerce site in Canada, ~~royalty revenue from franchise and license arrangements~~royalties associated with franchised stores and wholesale ~~revenues.~~sales. Certain of these sales are subject to the impact of fluctuations in foreign currency. The Company’s net sales outside of the U.S. totaled ~~$159~~$164 million and ~~$134~~$122 million for the ~~third quarter~~second quarters of ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~$397~~$301 million and ~~$308~~$238 million for year-to-date ~~2021~~2022 and ~~2020,~~2021, respectively.

4. ~~Restructuring Activities~~

During the second quarter of 2020, the Company completed a comprehensive review of its home office organizations in order to achieve meaningful reductions in overhead expenses and decentralize significant shared functions and services to support the separation of the Bath & Body Works and Victoria's Secret businesses. Pre-tax severance and related costs associated with these reductions, totaling $30 million, are included in General, Administrative and Store Operating Expenses in the year-to-date 2020 Consolidated Statement of Loss. The remaining liability for unpaid severance and related costs was not significant as of October 30, 2021.

5. Earnings ~~(Loss)~~ Per Share and Shareholders’ Equity (Deficit)

Earnings ~~(Loss)~~ Per Share

Earnings ~~(loss)~~ per basic share is computed based on the weighted-average number of common ~~shares.~~shares outstanding. Earnings ~~(loss)~~ per diluted share include the weighted-average effect of dilutive restricted stock units, performance share units and stock options (collectively, "Dilutive Awards") on the weighted-average common shares outstanding.

The following table provides the weighted-average shares utilized for the calculation of basic and diluted earnings ~~(loss)~~ per share for the ~~third quarter~~second quarters of and year-to-date ~~2021~~2022 and ~~2020:~~2021:


		Third Quarter		Year-to-Date			Second Quarter		Year-to-Date
		2021	2020	2021	2020		2022	2021	2022	2021
		(in millions)					(in millions)

Common Shares	Common Shares	278	287	285	286	Common Shares	245	288	250	288
Treasury Shares	Treasury Shares	(15)	(8)	(13)	(8)	Treasury Shares	(15)	(13)	(15)	(11)
Basic Shares	Basic Shares	263	279	272	278	Basic Shares	230	275	235	277
Effect of Dilutive Restricted Stock and Options		4	4	5	3
Effect of Dilutive Awards						Effect of Dilutive Awards	1	5	2	5
Diluted Shares	Diluted Shares	267	283	277	281	Diluted Shares	231	280	237	282
Anti-dilutive Options and Awards (a)		1	4	1	5
Anti-dilutive Awards (a)						Anti-dilutive Awards (a)	2	1	1	1

_______________

(a)~~These options and~~The awards were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.

~~Shareholders’ Equity (Deficit)~~

Common Stock Share Repurchases

2021 Repurchase Programs

In March 2021, the ~~Company's~~ Board ~~of Directors~~ authorized a ~~new~~ $500 million share repurchase plan (the "March 2021 Program"), which replaced the $79 million remaining under ~~the~~a March 2018 repurchase program. ~~Pursuant to the Board's authorization, the Company entered into a Rule 10b5-1 purchase plan to effectuate share repurchases for the first $250 million. In May 2021, the Company initiated a~~

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~~second $250 million Rule 10b5-1 purchase plan to effectuate the remaining share repurchases under the March 2021 repurchase plan.~~

In July 2021, the ~~Company's~~ Board ~~of Directors~~ authorized a ~~new~~ $1.5 billion share repurchase program (the "July 2021 Program"), which replaced the $36 million remaining under the March 2021 ~~repurchase program.~~Program. Under the authorization of this program, ~~in July 2021~~ the Company entered into a stock

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repurchase agreement with its former Chief Executive Officer and certain of his affiliated entities pursuant to which the Company repurchased 10 million shares of its common stock for an aggregate purchase price of $730 ~~million.~~million in July 2021.

The Company repurchased the following shares of its common stock during year-to-date 2021:
Repurchase Program Amount
Authorized Shares
Repurchased Amount
Repurchased Average Stock Price
(in millions) (in thousands) (in millions)
March 2021 (a) $ 500 6,996 $ 464 $ 66.30
July 2021 (a) $ 1,500 10,000 $ 730 $ 73.01
July 2021 (b) 5,510 $ 365 $ 66.21


Repurchase Program	Amount Authorized		Shares Repurchased	Amount Repurchased		Average Stock Price
	(in millions)		(in thousands)	(in millions)
March 2021 (a)	$	500	6,996	$	464	$	66.30
July 2021 (a)	1,500		10,000	730		73.01
Total			16,996	$	1,194

_______________

(a)Reflects repurchases of L Brands, Inc. common stock prior to the August 2, 2021 spin-off of Victoria's Secret & Co.

~~(b)Reflects repurchases of Bath & Body Works, Inc. common stock subsequent to~~Under the ~~August 2, 2021 spin-off of Victoria's Secret & Co.~~

~~The~~ July 2021 Program, ~~had $405 million remaining as of October 30, 2021. There were $15 million of share repurchases reflected in Accounts Payable on the October 30, 2021 Consolidated Balance Sheet.~~

~~Subsequent to October 30, 2021,~~ the Company repurchased an additional ~~2.2~~11 million shares of its common stock for ~~$166~~an aggregate purchase price of $770 million during the third and fourth quarters of 2021.

2022 Repurchase Program

In February 2022, the Board authorized a new $1.5 billion share repurchase program (the "February 2022 Program"). As part of the February 2022 Program, the Company entered into an accelerated share repurchase program ("ASR") under which the Company repurchased $1 billion of its own outstanding common stock. The delivery of shares under the ASR resulted in an immediate reduction of the Company's outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted net income per share. Pursuant to the Board's authorization, the Company made other share repurchases in the open market under the February 2022 Program during 2022.

On February 4, 2022, the Company delivered $1 billion to the ASR bank, and the bank delivered 13.6 million shares of common stock to the Company (the "Initial Shares"). Pursuant to the terms of the ASR, the Initial Shares represented 80% of the number of shares determined by dividing the $1 billion Company payment by the closing price of its common stock on February 2, 2022.

In May 2022, the Company received an additional 6.7 million shares of its common stock from the ASR bank for the final settlement of the ASR. The final number of shares of common stock delivered under the ASR was based generally upon a discount to the average daily Rule 10b-18 volume-weighted average price at which the shares of common stock traded during the regular trading sessions on the NYSE during the term of the repurchase period. In connection with the final settlement, in the second quarter the Company reclassified the $200 million recorded in Paid-in Capital as of April 30, 2022.

The Company repurchased the following shares of its common stock during year-to-date 2022:


Repurchase Program	Amount Authorized		Shares Repurchased	Amount Repurchased		Average Stock Price
	(in millions)		(in thousands)	(in millions)
February 2022	$	1,500	6,401	$	312	$	48.77
February 2022 - Accelerated Share Repurchase Program			20,295	1,000		49.27
Total			26,696	$	1,312

The February 2022 Program had $188 million of remaining authority as of July ~~2021 Program.~~30, 2022.

Common Stock Retirement

~~In accordance with the Company's Board of Directors' resolution, shares~~Shares of common stock repurchased under the July 2021 Program ~~will be~~were retired and cancelled upon repurchase. As a result, the Company retired the 1610 million shares repurchased under the July 2021 Program ~~during year-to-date~~in the second quarter of 2021, which resulted in reductions of $8$5 million in the par value of Common Stock, ~~$50~~$32 million in Paid-in Capital and ~~$1.037~~$693 million in Retained Earnings (Accumulated Deficit).

Shares of common stock repurchased under the February 2022 Program were retired and cancelled upon repurchase, including shares repurchased under the ASR. As a result, the Company retired the 27 million shares repurchased under the February 2022 Program during 2022, which resulted in reductions of $13 million in the par value of Common Stock, $87 million in Paid-in Capital and $1.212 billion in Retained ~~Earnings.~~Earnings (Accumulated Deficit).

Dividends

~~Under the authority and declaration of the Board of Directors, the Company paid the following dividends during year-to-date 2021 and 2020:~~

Ordinary Dividends Total Paid
(per share) (in millions)
2021
First Quarter $ — $ —
Second Quarter 0.15 42
Third Quarter 0.15 39
Total $ 0.30 $ 81
2020
First Quarter $ 0.30 $ 83
Second Quarter — —
Third Quarter — —
Total $ 0.30 $ 83

The Board ~~of Directors~~ suspended the Company's quarterly cash dividend beginning in the second quarter of ~~2020 as a proactive measure to strengthen the Company's financial flexibility and manage through the COVID-19 pandemic.~~2020. In March 2021, the ~~Company's~~ Board ~~of Directors~~ reinstated the annual dividend at $0.60 per share, beginning with the quarterly dividend paid in June 2021.

In ~~November 2021,~~February 2022, the ~~Company's~~ Board ~~of Directors declared~~increased the ~~fourth quarter of 2021 ordinary~~annual dividend ~~of $0.15~~to $0.80 per ~~share.~~

share, beginning with the quarterly dividend paid in March 2022.

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6.The Company paid the following dividends during 2022 and 2021:


	Ordinary Dividends			Total Paid
	(per share)		(in millions)
2022
First Quarter	$	0.20		$	48
Second Quarter	0.20			46

Total	$	0.40		$	94
2021
First Quarter	$	—		$	—
Second Quarter	0.15			42

Total	$	0.15		$	42

On September 2, 2022, the Company paid the third quarter 2022 ordinary dividend of $0.20 per share to shareholders of record at the close of business on August 19, 2022.

5. Inventories

The following table provides details of ~~inventories~~Inventories as of ~~October~~July 30, ~~2021,~~2022, January ~~30, 2021~~29, 2022 and ~~October~~July 31, ~~2020:~~2021:


		October 30, 2021		January 30, 2021		October 31, 2020			July 30, 2022		January 29, 2022		July 31, 2021
		(in millions)							(in millions)
Finished Goods Merchandise	Finished Goods Merchandise	$	941	$	410	$	693	Finished Goods Merchandise	$	739	$	521	$	551
Raw Materials and Merchandise Components	Raw Materials and Merchandise Components	208		162		190		Raw Materials and Merchandise Components	232		188		177
Total Inventories	Total Inventories	$	1,149	$	572	$	883	Total Inventories	$	971	$	709	$	728

Inventories are principally valued at the lower of cost or net realizable value, on an average cost basis.

7.6. Long-Lived Assets

The following table provides details of ~~property~~Property and ~~equipment, net~~Equipment, Net as of ~~October~~July 30, ~~2021,~~2022, January ~~30, 2021~~29, 2022 and ~~October~~July 31, ~~2020:~~2021:


		October 30, 2021		January 30, 2021		October 31, 2020			July 30, 2022		January 29, 2022		July 31, 2021
		(in millions)							(in millions)
Property and Equipment, at Cost	Property and Equipment, at Cost	$	2,569	$	2,412	$	2,416	Property and Equipment, at Cost	$	2,721	$	2,583	$	2,519
Accumulated Depreciation and Amortization	Accumulated Depreciation and Amortization	(1,552)		(1,395)		(1,352)		Accumulated Depreciation and Amortization	(1,650)		(1,574)		(1,517)
Property and Equipment, Net	Property and Equipment, Net	$	1,017	$	1,017	$	1,064	Property and Equipment, Net	$	1,071	$	1,009	$	1,002

Depreciation expense from continuing operations was ~~$52~~$53 million and ~~$48~~$51 million for the ~~third quarter~~second quarters of ~~2021~~2022 and ~~2020,~~2021, respectively. Depreciation expense from continuing operations was ~~$152~~$106 million and ~~$143~~$100 million for year-to-date ~~2021~~2022 and ~~2020,~~2021, respectively.

8.7. Equity Investments

~~Easton~~

The Company has land and other investments in Easton, a planned community in Columbus, Ohio, that integrates office, hotel, retail, residential and recreational space. These investments, totaling $125 million as of ~~October~~July 30, ~~2021,~~2022, $126 million as of January 29, 2022 and $119 million as of ~~January 30,~~July 31, 2021, ~~and $125 million as of October 31, 2020,~~ are recorded in Other Assets on the Consolidated Balance Sheets.

Included in the Company’s Easton investments are equity interests in Easton Town Center, LLC (“ETC”) and Easton Gateway, LLC (“EG”), entities that own and develop commercial entertainment and shopping centers. The Company’s investments in ETC and EG are accounted for using the equity method of accounting. The Company has a majority financial ~~interest~~interests in ETC and EG, but another unaffiliated member manages them, and certain significant decisions regarding ETC and EG require the consent of unaffiliated members in addition to the Company.

9.8. Income Taxes

The provision for income taxes is based on the current estimate of the annual effective tax rate and is adjusted as necessary for quarterly events. ~~Due to~~

For the ~~impacts of the COVID-19 pandemic, the income tax expense for the third~~second quarter of ~~2020 was computed on a year-to-date effective tax rate.~~

~~For the third quarter of 2021,~~2022, the Company’s effective tax rate was ~~22.0%~~23.9% compared to ~~26.0%~~25.1% in the ~~third~~second quarter of ~~2020.~~2021. The ~~third~~second quarter of ~~2021~~2022 rate was lower than the Company's combined estimated federal and state statutory rate primarily

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due to the resolution of certain tax ~~matters.~~ matters during the quarter. The ~~third~~second quarter of ~~2020 rate was generally consistent with the Company's combined federal and state statutory rate~~.

~~For year-to-date 2021, the Company's effective tax rate was 23.7% compared to 16.9% year-to-date 2020. The year-to-date~~ 2021 rate was ~~lower than~~consistent with the Company's combined estimated federal and state statutory rate.

For year-to-date 2022, the Company’s effective tax rate ~~primarily due~~was 21.4% compared to ~~the recognition of excess tax benefits recorded through the Consolidated Statements of Income (Loss) on share-based awards that vested year-to-date.~~ 24.7% year-to-date 2021. The year-to-date ~~2020~~2022 rate was lower than the Company's combined estimated federal and state statutory rate primarily due to the resolution of certain tax matters ~~which resulted in a $50 million tax benefit.~~during the period. The year-to-date 2021 rate was consistent with the Company's combined estimated federal and state statutory rate.

Income taxes paid were ~~$73~~$144 million and $9$320 million for the ~~third quarter~~second quarters of ~~2021~~2022 and ~~2020,~~2021, respectively. Income taxes paid were ~~$403~~$152 million and ~~$31~~$330 million for the year-to-date ~~2021~~2022 and ~~2020,~~2021, respectively.

~~Table of~~ ~~Contents~~

On August 2, 2021, the Company and Victoria's Secret & Co. entered into a Tax Matters Agreement (“TMA”). Under the TMA, the Company will generally be responsible for all U.S. federal, state, local and non-U.S. income taxes of Victoria's Secret & Co. for any taxable period or portion of such period ending on or before the Distribution Date.

~~10.~~9. Long-term Debt and Borrowing Facilities

The following table provides the Company’s outstanding long-term debt balance, net of unamortized debt issuance costs and discounts, as of ~~October~~July 30, ~~2021,~~2022, January ~~30, 2021~~29, 2022 and ~~October~~July 31, ~~2020:~~2021:


		October 30, 2021		January 30, 2021		October 31, 2020			July 30, 2022		January 29, 2022		July 31, 2021
		(in millions)							(in millions)
Senior Secured Debt with Subsidiary Guarantee
$750 million, 6.875% Fixed Interest Rate Secured Notes due July 2025 ("2025 Secured Notes")		$	—	$	740	$	740

Senior Debt with Subsidiary Guarantee	Senior Debt with Subsidiary Guarantee							Senior Debt with Subsidiary Guarantee

$1 billion, 5.625% Fixed Interest Rate Notes due February 2022 (“2022 Notes”)		$	—	$	284	$	284

$500 million, 5.625% Fixed Interest Rate Notes due October 2023 (“2023 Notes”)	$500 million, 5.625% Fixed Interest Rate Notes due October 2023 (“2023 Notes”)	—		319		319		$500 million, 5.625% Fixed Interest Rate Notes due October 2023 (“2023 Notes”)	$	—	$	—	$	319
$320 million, 9.375% Fixed Interest Rate Notes due July 2025 ("2025 Notes")	$320 million, 9.375% Fixed Interest Rate Notes due July 2025 ("2025 Notes")	316		493		493		$320 million, 9.375% Fixed Interest Rate Notes due July 2025 ("2025 Notes")	317		316		494
$297 million, 6.694% Fixed Interest Rate Notes due January 2027 (“2027 Notes”)	$297 million, 6.694% Fixed Interest Rate Notes due January 2027 (“2027 Notes”)	280		278		277		$297 million, 6.694% Fixed Interest Rate Notes due January 2027 (“2027 Notes”)	282		281		279
$500 million, 5.250% Fixed Interest Rate Notes due February 2028 (“2028 Notes”)	$500 million, 5.250% Fixed Interest Rate Notes due February 2028 (“2028 Notes”)	497		497		496		$500 million, 5.250% Fixed Interest Rate Notes due February 2028 (“2028 Notes”)	497		497		497
$500 million, 7.500% Fixed Interest Rate Notes due June 2029 ("2029 Notes")	$500 million, 7.500% Fixed Interest Rate Notes due June 2029 ("2029 Notes")	489		488		488		$500 million, 7.500% Fixed Interest Rate Notes due June 2029 ("2029 Notes")	490		489		489
$1 billion, 6.625% Fixed Interest Rate Notes due October 2030 ("2030 Notes")	$1 billion, 6.625% Fixed Interest Rate Notes due October 2030 ("2030 Notes")	989		988		988		$1 billion, 6.625% Fixed Interest Rate Notes due October 2030 ("2030 Notes")	990		990		989
$1 billion, 6.875% Fixed Interest Rate Notes due November 2035 (“2035 Notes”)	$1 billion, 6.875% Fixed Interest Rate Notes due November 2035 (“2035 Notes”)	992		991		991		$1 billion, 6.875% Fixed Interest Rate Notes due November 2035 (“2035 Notes”)	993		992		991
$700 million, 6.750% Fixed Interest Rate Notes due July 2036 (“2036 Notes”)	$700 million, 6.750% Fixed Interest Rate Notes due July 2036 (“2036 Notes”)	694		694		694		$700 million, 6.750% Fixed Interest Rate Notes due July 2036 (“2036 Notes”)	694		694		694
Total Senior Debt with Subsidiary Guarantee	Total Senior Debt with Subsidiary Guarantee	$	4,257	$	5,032	$	5,030	Total Senior Debt with Subsidiary Guarantee	$	4,263	$	4,259	$	4,752
Senior Debt	Senior Debt							Senior Debt
$350 million, 6.950% Fixed Interest Rate Debentures due March 2033 (“2033 Notes”)	$350 million, 6.950% Fixed Interest Rate Debentures due March 2033 (“2033 Notes”)	$	349	$	348	$	348	$350 million, 6.950% Fixed Interest Rate Debentures due March 2033 (“2033 Notes”)	$	349	$	349	$	348��
$247 million, 7.600% Fixed Interest Rate Notes due July 2037 (“2037 Notes”)	$247 million, 7.600% Fixed Interest Rate Notes due July 2037 (“2037 Notes”)	246		246		246		$247 million, 7.600% Fixed Interest Rate Notes due July 2037 (“2037 Notes”)	246		246		246
Total Senior Debt	Total Senior Debt	$	595	$	594	$	594	Total Senior Debt	595		595		594
Total Long-term Debt	Total Long-term Debt	$	4,852	$	6,366	$	6,364	Total Long-term Debt	$	4,858	$	4,854	$	5,346

Repurchases of Notes

In September 2021, the Company completed the tender offers to purchase $270 million of its outstanding 2023 Notes and $180 million of its outstanding 2025 Notes for an aggregate purchase price of $532 million. Additionally, in October 2021, the Company redeemed the remaining $50 million of its outstanding 2023 Notes for an aggregate purchase price of $54 million. The Company recognized a pre-tax loss related to this extinguishment of debt of $89 million (after-tax loss of $68 million), which ~~includes~~included the write-offs of unamortized issuance ~~costs. This loss is included in Other Loss~~costs, in the ~~2021 Consolidated Statements~~third quarter of ~~Income.~~2021.

In April 2021, the Company redeemed the remaining $285 million of its outstanding 5.625% senior notes due February 2022 ~~Notes~~ and ~~the~~ $750 million of its outstanding ~~2025 Secured Notes.~~6.875% senior secured notes due July 2025. The Company recognized a pre-tax loss related to this extinguishment of debt of $105 million (after-tax loss of $80 million), which ~~includes~~included the write-offs of unamortized issuance costs. This loss is included in Other ~~Loss~~Income (Loss) in the year-to-date 2021 Consolidated Statement of Income.

In October 2020, the Company completed tender offers to purchase $576 million of its outstanding 2022 Notes, $180 million of its outstanding 2023 Notes and $53 million of its outstanding 2037 Notes for $844 million. The Company used the proceeds from the 2030 Notes to fund the purchase price of the tender offers. Additionally, utilizing cash on hand, the Company redeemed the remaining $450 million of its outstanding 6.625% Fixed Interest Rate Notes due April 2021 (the "2021 Notes") for $463 million. The Company recognized a pre-tax loss related to this extinguishment of debt of $53 million (after-tax loss of $40 million), which includes the write-offs of unamortized issuance costs. This loss is included in Other Loss in the 2020 Consolidated Statements of Income (Loss).

Asset-backed Revolving Credit Facility

The Company and certain of the Company's 100% owned subsidiaries guarantee and pledge collateral to secure ~~a revolving credit facility ("Credit Agreement"). In April 2020, the Company entered into an amendment and restatement of the Credit~~

~~Table of~~ ~~Contents~~

~~Agreement to convert the Company’s credit facility into~~ an asset-backed revolving credit facility (“ABL Facility”),. The ABL Facility, which allows borrowings and letters of credit in U.S. dollars or Canadian dollars. During the first quarter of 2020, in an abundance of caution and as a proactive measure in response to the COVID-19 pandemic, the Company elected to borrow $950 million from its revolving facility. This borrowing was repaid during the first quarter of 2020 upon completion of the April amendment.

~~In August 2021, the Company entered into an amendment and restatement (“Amendment”) of the Credit Agreement. The Amendment reduced the~~dollars, has aggregate commitments ~~under the ABL Facility to~~of $750 million reduced the interest rates on outstanding borrowings by 50 basis points, removed the requirement to prepay outstanding amounts under the ABL Facility should the Company's consolidated cash balance exceed $350 million, extended theand an expiration date ~~from~~in August ~~2024 to August 2026 and released Victoria's Secret & Co. subsidiaries as guarantors, among other things.~~2026.

Availability under the ABL Facility is the lesser of (i) the borrowing base, determined primarily based on the Company's eligible U.S. and Canadian credit card receivables, accounts receivable, inventory and eligible real property, or (ii) the aggregate commitment. If at any time the outstanding amount under the ABL Facility exceeds the lesser of (i) the borrowing base and (ii) the aggregate commitment, the Company is required to ~~prepay~~repay the outstanding amounts under the ABL Facility to

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the extent of such excess. As of ~~October~~July 30, ~~2021,~~2022, the Company's borrowing base was ~~$1.033 billion.~~$730 million, and it had no borrowings outstanding under the ABL Facility.

The ABL Facility supports the Company’s letter of credit program. The Company had $16 million of outstanding letters of credit as of ~~October~~July 30, ~~2021~~2022 that reduced its availability under the ABL Facility. As of July 30, 2022, the Company's availability under the ABL Facility was $714 million.

As of ~~October~~July 30, ~~2021,~~2022, the ABL Facility fees related to committed and unutilized amounts were ~~0.30%~~0.25% per annum, and the fees related to outstanding letters of credit were 1.25% per annum. In addition, the interest rate on outstanding U.S. dollar borrowings was the London Interbank Offered Rate plus 1.25% per annum. The interest rate on outstanding Canadian dollar-denominated borrowings was the Canadian Dollar Offered Rate plus 1.25% per annum.

The ABL Facility requires the Company to maintain a fixed charge coverage ratio of not less than 1.00 to 1.00 during an event of default or any period commencing on any day when specified excess availability is less than the greater of ~~(1)~~(i) $70 million or ~~(2)~~(ii) 10% of the maximum borrowing amount. As of ~~October~~July 30, ~~2021,~~2022, the Company was not required to maintain this ratio.

~~As of October 30, 2021, there were no borrowings outstanding under the ABL Facility.~~

~~11.~~10. Fair Value Measurements

Cash and Cash Equivalents include cash on hand, deposits with financial institutions and highly liquid investments with original maturities of less than 90 days. The Company's Cash and Cash Equivalents are considered Level 1 fair value measurements as they are valued using unadjusted quoted prices in active markets for identical assets.

The following table provides a summary of the principal value and estimated fair value of outstanding publicly traded debt as of ~~October~~July 30, ~~2021,~~2022, January ~~30, 2021~~29, 2022 and ~~October~~July 31, ~~2020:~~2021:


		October 30, 2021		January 30, 2021		October 31, 2020			July 30, 2022		January 29, 2022		July 31, 2021
		(in millions)							(in millions)
Principal Value	Principal Value	$	4,915	$	6,449	$	6,449	Principal Value	$	4,915	$	4,915	$	5,414
Fair Value, Estimated (a)	Fair Value, Estimated (a)	5,720		7,243		6,678		Fair Value, Estimated (a)	4,631		5,493		6,581

_______________

(a)The estimated fair value of the Company’s publicly traded debt is based on reported transaction prices, which are considered Level 2 inputs in accordance with ~~ASC~~Accounting Standards Codification ("ASC") 820, Fair Value Measurement. The estimates presented are not necessarily indicative of the amounts that the Company could realize in a current market exchange.

Management believes that the carrying values of accounts receivable, accounts payable and accrued expenses approximate fair value because of their short maturity.

11. Accumulated Other Comprehensive Income

The following tables provide the rollforward of Accumulated Other Comprehensive Income for year-to-date 2022 and 2021:


	Foreign Currency Translation		Cash Flow Hedges		Accumulated Other Comprehensive Income
	(in millions)
Balance as of January 29, 2022	$	79	$	1	$	80
Other Comprehensive Income Before Reclassifications	—		—		—
Amounts Reclassified from Accumulated Other Comprehensive Income	—		—		—
Tax Effect	—		—		—
Current-period Other Comprehensive Income	—		—		—
Balance as of July 30, 2022	$	79	$	1	$	80

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~~12. Comprehensive Income~~

~~The following table provides the rollforward of accumulated other comprehensive income for year-to-date 2021:~~

Foreign Currency Translation Cash Flow Hedges Accumulated Other Comprehensive Income
(in millions)
Balance as of January 30, 2021 $ 85 $ (2) $ 83
Other Comprehensive Income (Loss) Before Reclassifications 4 (2) 2
Amounts Reclassified from Accumulated Other Comprehensive Income — 3 3
Tax Effect — — —
Current-period Other Comprehensive Income 4 1 5
Victoria's Secret Spin-Off (8) — (8)
Balance as of October 30, 2021 $ 81 $ (1) $ 80

~~The following table provides the rollforward of accumulated other comprehensive income for year-to-date 2020:~~


		Foreign Currency Translation		Cash Flow Hedges		Accumulated Other Comprehensive Income			Foreign Currency Translation		Cash Flow Hedges		Accumulated Other Comprehensive Income
		(in millions)							(in millions)
Balance as of February 1, 2020		$	52	$	—	$	52
Balance as of January 30, 2021								Balance as of January 30, 2021	$	85	$	(2)	$	83
Other Comprehensive Income (Loss) Before Reclassifications	Other Comprehensive Income (Loss) Before Reclassifications	(4)		2		(2)		Other Comprehensive Income (Loss) Before Reclassifications	4		(1)		3
Amounts Reclassified from Accumulated Other Comprehensive Income	Amounts Reclassified from Accumulated Other Comprehensive Income	—		(2)		(2)		Amounts Reclassified from Accumulated Other Comprehensive Income	—		2		2
Tax Effect	Tax Effect	—		—		—		Tax Effect	—		(1)		(1)
Current-period Other Comprehensive Loss		(4)		—		(4)
Balance as of October 31, 2020		$	48	$	—	$	48
Current-period Other Comprehensive Income								Current-period Other Comprehensive Income	4		—		4
Balance as of July 31, 2021								Balance as of July 31, 2021	$	89	$	(2)	$	87

~~13.~~12. Commitments and Contingencies

The Company is subject to various claims and contingencies related to lawsuits, taxes, insurance, regulatory and other matters arising out of the normal course of business. Actions filed against the Company from time to time include commercial, tort, intellectual property, customer, employment, data privacy, securities and other claims, including purported class action lawsuits. Management believes that the ultimate liability arising from such claims and contingencies, if any, is not likely to have a material adverse effect on the Company’s results of operations, financial ~~condition~~position or cash flows.

On May 19, 2020 and January 12, 2021, certain ~~shareholders~~ of the ~~Company~~Company's stockholders filed derivative lawsuits in the Court of Common Pleas for Franklin County, Ohio (subsequently removed to the United States District Court for the Southern District of Ohio) and the Delaware Court of Chancery, respectively, naming as defendants certain current and former directors and officers of the Company and alleging, among other things, breaches of fiduciary duty through asserted violations of law and failures to monitor workplace conduct (the ~~“Lawsuits”~~"Lawsuits"). In addition, the Company also received litigation and books-and-records demands from certain other ~~shareholders~~stockholders related to the same matters (together with the Lawsuits, the ~~“Actions”~~"Actions").

In July 2021, the Company announced the global settlement resolving the Actions. The settlement ~~resolves~~resolved all derivative claims that have been or could have been asserted in the Actions or that involve in any way the allegations referred to in the Actions and ~~releases~~released all such claims against the Company and its past and present ~~Company~~ employees, officers and directors, among others. As part of the settlement, the Company has agreed to implement certain management and governance measures, including the maintenance of a Diversity, Equity, and Inclusion Council. Following the August 2, 2021 spin-off of Victoria’s Secret & Co., the settlement terms ~~will~~ apply to both the Company and Victoria’s Secret & Co. Each company has committed to invest $45 million over at least five years to fund the management and governance measures. ~~The settlement is subject to approval of~~In May 2022, the ~~United States~~U.S. District Court of the Southern District of ~~Ohio.~~

~~Table~~Ohio granted final approval of ~~Contents~~

the settlement.

Lease Guarantees

In connection with the spin-off of Victoria's Secret & Co., and the sale of the La Senza business, the Company ~~has~~had remaining contingent obligations of ~~approximately $280~~$295 million as of July 30, 2022 related to lease payments under the current terms of noncancelable leases, primarily related to office space, expiring at various dates through 2037. In addition, in connection with the sale of La Senza in the fourth quarter of 2018, the Company has remaining contingent obligations of approximately $27 million related to lease payments under the current terms of noncancelable leases expiring at various dates through 2028. These obligations include minimum rent and additional payments covering taxes, common area costs and certain other expenses and relate to leases that commenced prior to the disposition of these businesses. The Company's reserves related to these obligations were not significant as of ~~October~~July 30, ~~2021.~~

~~14. Share-based Compensation~~

In connection with the spin-off of Victoria's Secret & Co. on August 2, 2021, the Company adjusted its outstanding share-based awards in accordance with the terms of the Employee Matters Agreement. Adjustments to the underlying shares and terms of outstanding restricted stock and stock options were made to preserve the intrinsic value of the awards immediately before the Separation. The adjustment of the underlying shares and exercise prices, as applicable, was determined using a ratio based on the relative values of the Company's pre-Distribution stock price and the Company's post-Distribution stock price. The outstanding awards continue to vest over their original vesting periods. The Company did not recognize any incremental compensation cost related to the adjustment of outstanding awards.

~~Restricted Stock~~

~~The following table provides the Company’s restricted stock activity for the year-to-date period ended October 30, 2021:~~


			Number of Shares
			~~(in thousands)~~
~~Unvested as of January 30, 2021~~			~~6,647~~
~~Converted to Victoria's Secret & Co. Shares~~			~~(2,537)~~
~~Spin-Off Related Adjustment~~			~~807~~
~~Granted~~			~~1,501~~
~~Vested~~			~~(2,150)~~
~~Cancelled~~			~~(161)~~
~~Unvested as of October 30, 2021~~			~~4,107~~

~~Stock Options~~

~~The following table provides the Company’s stock option activity for the year-to-date period ended October 30, 2021:~~


			Number of Shares
			~~(in thousands)~~
~~Outstanding as of January 30, 2021~~			~~4,163~~
~~Converted to Victoria's Secret & Co. Shares~~			~~(1,042)~~
~~Spin-Off Related Adjustment~~			~~288~~
~~Granted~~			~~228~~
~~Exercised~~			~~(1,861)~~
~~Cancelled~~			~~(607)~~
~~Outstanding as of October 30, 2021~~			~~1,169~~
~~Options Exercisable as of October 30, 2021~~			~~915~~

~~15. Retirement Benefits~~

The Company previously sponsored a non-qualified supplemental retirement plan. The non-qualified plan was an unfunded plan, which provided benefits beyond the Internal Revenue Code limits for qualified defined contribution plans. On June 27, 2020, the Human Capital and Compensation Committee of the Board of Directors authorized the termination of the non-qualified plan. In July 2021, the Company made payments of $143 million for the final settlement of all its obligations and2022.

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~~benefits payable under the non-qualified plan. Total expense recognized related to the non-qualified plan was not significant for any period presented.~~

~~16. Subsequent Events~~

~~Subsequent to October 30, 2021, the Company repurchased an additional 2.2 million shares of its common stock for $166 million under the July 2021 Program.~~

2017

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Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of Bath & Body Works, Inc.

Results of Review of Interim Financial Statements

We have reviewed the accompanying consolidated balance sheets of Bath & Body Works, Inc. (the Company) as of ~~October~~July 30, ~~2021~~2022 and ~~October~~July 31, ~~2020,~~2021, and the related consolidated statements of income, ~~(loss),~~ comprehensive income, ~~(loss),~~ and total equity (deficit) for the thirteen and ~~thirty-nine~~twenty-six week periods ended ~~October~~July 30, ~~2021~~2022 and ~~October~~July 31, ~~2020,~~2021, and the consolidated statements of cash flows for the ~~thirty-nine~~twenty-six week periods ended ~~October~~July 30, ~~2021~~2022 and ~~October~~July 31, ~~2020,~~2021, and the related notes (collectively referred to as the “consolidated interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial statements for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of January ~~30, 2021,~~29, 2022, and the related consolidated statements of income, ~~(loss),~~ comprehensive income, ~~(loss),~~ total equity (deficit), and cash flows for the year then ended, and the related notes (not presented herein); and in our report dated March ~~19, 2021,~~18, 2022, we expressed an unqualified audit opinion on those consolidated financial statements. ~~As described~~In our opinion, the information set forth in ~~Note 2~~the accompanying consolidated balance sheet as of January 29, 2022, is fairly stated, in all material respects, in relation to the Company’s unaudited interim financial statements, on August 2, 2021, the Company completed the separation of the Victoria’s Secret business by means of a spin-off. Accordingly, the Company presented the assets and liabilities of the Victoria’s Secret business as discontinued operations separate from the Company’s continuing operations on a retrospective basis, resulting in revision of the January 30, 2021 consolidated balance ~~sheet. We have not audited and reported on the revised balance~~ sheet ~~reflecting Victoria’s Secret as discontinued operations.~~from which it has been derived.

Basis for Review Results

These financial statements are the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the SEC and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial statements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ Ernst & Young LLP

Grandview Heights, Ohio

~~December 3, 2021~~September 2, 2022

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SAFE HARBOR STATEMENT UNDER THE PRIVATE

SECURITIES LITIGATION ACT OF ~~1995~~

~~Safe Harbor Statement Under the Private Securities Litigation Reform Act of~~ 1995

We caution that any forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) contained in this report or made by our ~~company~~Company or our management involve risks and uncertainties and are subject to change based on various factors, many of which are beyond our control. Accordingly, our future performance and financial results may differ materially from those expressed or implied in any such forward-looking statements. Words such as “estimate,” “project,” “plan,” “believe,” “expect,” “anticipate,” “intend,” “planned,” “potential” and any similar expressions may identify forward-looking statements. Risks associated with the following factors, among others, in some cases have affected and in the future could affect our financial performance and actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements included in this report or otherwise made by our ~~company~~Company or our management:

•~~the spin-off of Victoria’s Secret may not be tax-free for U.S. federal income tax purposes;~~

•a loss of synergies from separating the businesses that could negatively impact the balance sheet, profit margins or earnings of the Company or that the Company does not realize all of the expected benefits of the spin-off;

•general economic conditions, inflation, consumer confidence, consumer spending patterns and market disruptions including pandemics or significant health hazards, severe weather conditions, natural disasters, terrorist activities, financial crises, political crises or other major events, or the prospect of these events;

•the COVID-19 ~~global~~ pandemic has had and ~~is expected to~~may continue to have an adverse effect on our business and results of operations;

•the seasonality of our business;

•~~divestitures or other dispositions and related operations and contingent liabilities~~the anticipated benefits from ~~businesses that we have divested;~~the Victoria's Secret & Co. spin-off may not be realized;

•the spin-off of Victoria’s Secret & Co. may not be tax-free for U.S. federal income tax purposes;

•our dependence on Victoria's Secret & Co. for information technology services;

•difficulties arising from turnover in ~~company~~Company leadership or other key positions;

•our ability to attract, develop and retain qualified associates and manage labor-related costs;

•the dependence on ~~mall~~store traffic and the availability of suitable store locations on appropriate terms;

•our ~~ability to grow~~continued growth in part through new store openings and existing store remodels and expansions;

•our ability to successfully operate and expand internationally and related risks;

•our independent franchise, license and wholesale partners;

•our direct channel ~~businesses;~~business;

•our ability to protect our reputation and our brand ~~images;~~image;

•our ability to successfully complete environmental, social and governance initiatives, and associated costs thereof;

•our ability to attract customers with marketing, advertising and promotional programs;

•our ability to maintain, enforce and protect our trade names, trademarks and patents;

•the highly competitive nature of the retail industry and the segments in which we operate;

•consumer acceptance of our products and our ability to manage the life cycle of our ~~brands, keep up with fashion trends,~~brand, develop new merchandise and launch new product lines successfully;

•our ability to source, distribute and sell goods and materials on a global basis, including risks related to:

• political instability, wars and other armed conflicts, environmental hazards or natural disasters;

▪•significant health hazards or pandemics, which could result in closed factories and/or stores, reduced workforces, scarcity of raw materials, and scrutiny or embargoing of goods produced in impacted areas;

▪•duties, taxes and other charges;

▪•legal and regulatory matters;

▪•volatility in currency exchange rates;

▪•local business practices and political issues;

▪•delays or disruptions in shipping and transportation and related pricing impacts;

▪•disruption due to labor disputes; and

▪•changing expectations regarding product safety due to new legislation;

•our geographic concentration of vendor and distribution facilities in central Ohio;

•~~fluctuations in foreign currency exchange rates;~~

~~Table~~our reliance on a limited number of ~~Contents~~suppliers to support a substantial portion of our inventory purchasing needs;

•the ability of our vendors to deliver products in a timely manner, meet quality standards and comply with applicable laws and regulations;

•fluctuations in foreign currency exchange rates;

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•fluctuations in product input ~~costs, including those caused by inflation;~~costs;

•fluctuations in energy costs;

•our ability to adequately protect our assets from loss and theft;

•~~fluctuations in energy costs, including those caused by inflation;~~

•increases in the costs of mailing, paper, printing or other order fulfillment logistics;

•claims arising from our self-insurance;

•our and our third-party service providers', including Victoria's Secret & Co. during the term of the Transition Services Agreement between us and Victoria's Secret & Co., ability to implement and maintain information technology systems and to protect associated data;

•our ability to maintain the security of customer, associate, third-party and ~~company~~Company information;

•stock price volatility;

•our ability to pay dividends and ~~related effects;~~make share repurchases under share repurchase authorizations;

•shareholder activism matters;

•our ability to maintain our credit ratings;

•our ability to service or refinance our debt and maintain compliance with our restrictive covenants;

•the impact of the transition from London Interbank Offered Rate and our ability to adequately manage such transition;

•our ability to comply with laws, regulations and technology platform rules or other obligations related to data privacy and security;

•our ability to comply with regulatory requirements;

•legal and compliance matters; and

•tax, trade and other regulatory matters.

We are not under any obligation and do not intend to make publicly available any update or other revisions to any of the forward-looking statements contained in this report to reflect circumstances existing after the date of this report or to reflect the occurrence of future events even if experience or future events make it clear that any expected results expressed or implied by those forward-looking statements will not be realized. Additional information regarding these and other factors can be found in Item 1A. Risk Factors ~~and~~ in our ~~2020~~2021 Annual Report on Form 10-K.

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of financial condition and results of operations are based upon our Consolidated Financial Statements, which have been prepared in accordance with ~~GAAP.~~accounting principles generally accepted in the United States of America ("GAAP") as codified in the ASC. The following information should be read in conjunction with our financial statements and the related notes included in Part 1, Item 1. Financial Statements in this Quarterly Report on Form 10-Q.

~~Victoria's Secret Spin-Off~~

On August 2, 2021, we completed the tax-free spin-off of our Victoria's Secret business, which included the Victoria's Secret and PINK brands, into an independent publicly traded company. ~~As a result,~~Accordingly, the operating results ~~for~~of, and costs to separate, the Victoria's Secret business ~~through the date of the spin-off~~ are reported in Income ~~(Loss)~~ from Discontinued Operations, Net of Tax in the Consolidated Statements of Income ~~(Loss)~~ for all periods presented. In addition, the related assets and liabilities are reported as Assets and Liabilities of Discontinued Operations on the Consolidated Balance Sheets.

Unless otherwise noted, all amounts, percentages and ~~discussion~~discussions reflect only the results of operations and financial condition ~~from~~of our continuing operations.

In connection with the spin-off, we expect future capital and expense related to the implementation of new information technology platforms. Although our work is in the early stages and our estimates are preliminary, we currently estimate that our total expenditures could be $100 million to $150 million over the next several years. Such estimates are subject to change as our work continues. Victoria’s Secret & Co. will provide technology services to us under a Transition Services Agreement while we create independent system environments, which we believe will help to minimize dis-synergies. The above estimates are preliminary in nature, are based solely on information available to us as of the date of this quarterly report and are inherently uncertain and subject to change.

Executive Overview

In the ~~third~~second quarter of 2022, net sales decreased $86 million, or 5%, to $1.618 billion compared to the second quarter of 2021. In our stores and direct channels, net sales decreased 6% to $1.161 billion, and 10% to $367 million, respectively. These declines compared to 2021 were driven by both a decrease in transactions and lower average dollar sale in both channels. In our international business, net sales increased 35% to $90 million.

In the second quarter of 2022, operating income decreased $142 million, or 37%, to $242 million, from $384 million in the second quarter of 2021, and the operating income rate (expressed as a percentage of sales) decreased to 15.0% from 22.5%. These decreases were primarily due to the decline in net sales, ~~decreased $21~~incremental inflationary cost pressures totaling approximately $65 million ~~or 1%, to $1.681 billion~~ and ~~our operating income decreased $27 million, or 6%, to $409 million. On a two-year basis, net sales~~ increased $582 million, or 53%, compared to $1.099 billion in the third quarter of 2019. Performance was strong throughout the quarter as we saw good customer response to our fall seasonal and Halloween merchandise. Higher supply chain and transportation costs this year, due to market constraints and inflation, negatively impacted gross margin dollars. We were able to offset some of these cost increases through ticket price increases and adjustments to promotional ~~offers.~~

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We believe we are well-positioned as we go into the important Holiday season and fourth quarter. We proactively managed production and promotions throughout the third quarter and did not experience significant out-of-stocks, and we expect our assortments to be full and abundant for Holiday. We are partnering closely with our vendors to support production needs in order to continue to meet customer demand. Inflationary pressure in raw materials, wages, supply chain and transportation costs negatively impacted our third quarter results and will put even more pressure on our fourth quarter results. We will continue to proactively manage pricing and promotion with the goal of offsetting this cost pressure where possible. Risks related to COVID-19 persist, and we expect to continue to operate both of our channels in a safe manner for our customers and associates.activity.

For additional information related to our ~~third~~second quarter ~~2021~~2022 financial performance, see “Results of Operations.”

~~Impacts~~

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Global Supply Chain and Inflationary Impacts

There continues to be volatility and inflation in the global supply chain. We are continuing to experience increased costs in raw materials, transportation and wage rates. We estimate that our full year 2022 incremental inflation impact could range between $230 million and $240 million, with approximately $50 million to $55 million of pressure expected in the third quarter of 2022. In the second half of 2022, we plan to increase promotional activity compared to the corresponding period last year given the current macro-environment. We expect these pressures to have a negative impact on our gross profit dollars and rate in 2022. Additionally, we are proactively pulling forward the purchase and delivery of certain inventory items to generate capacity during the third quarter of 2022 peak period, which we expect to provide us with additional agility in the second half of 2022.

Information Technology and Other Costs

Subsequent to the completion of the Separation, Victoria’s Secret & Co. has provided technology services and systems to us under a Transition Services Agreement. During the first quarter of 2022, we decided to accelerate the separation of our technology systems, which we now expect to be predominantly completed during 2023. We believe that completing technology separation on this accelerated basis will enable us to more quickly build additional technology capabilities to support our long-term growth.

Further, we expect to incur additional costs related to our Chief Executive Officer transition, including retention for key talent and other associated expenses. We expect these costs, the previously mentioned investments in information technology and increases in store wage rates to have a negative impact on our general, administrative and store operating expenses and rate in 2022.

Profit Improvement Initiatives and Organizational Realignment

We are pursuing a number of initiatives to improve financial performance and better position the organization for long-term growth. These initiatives include organizational changes, additional cost control actions and merchandise margin improvement opportunities. As part of efforts to better position the organization for long-term growth and create organizational efficiencies, we simplified and realigned our operating structure in August 2022. These actions included the elimination of about 130 roles, the majority of which were leadership positions.

COVID-19

The ~~coronavirus~~COVID-19 pandemic has created significant public health concerns as well as economic disruption, uncertainty and volatility. Our operations and financial performance have been materially impacted by the COVID-19 pandemic. In the first quarter of 2020, all of our company-operated stores were closed on March 17, 2020, but we were able to re-open the majority of our stores as of the end of the second quarter of 2020. Our Direct business remained open for the duration of 2020. During 2020, we took prudent actions to manage expenses and to maintain our cash position and financial flexibility.

We ~~adopted new operating models focused on safety. We continue to~~ remain focused on providing a safe store environment for our customers and associates while ~~also~~ delivering an engaging shopping ~~experience. We also remain focused on~~experience, and in establishing the necessary protocols to ensure the safe operations of our distribution and fulfillment centers ~~while maximizing~~and corporate offices. As expected, we have experienced channel and product category shifts as customer mindset and needs have shifted coming out of the pandemic.

We continue to monitor the COVID-19 pandemic and the effects on our ~~direct business.~~operations and financial performance. There remains the potential for ~~COVID-related~~future COVID-19-related closures or operating restrictions, which could materially impact our operations and financial performance in future periods.

Adjusted Financial Information from Continuing Operations

In addition to our results provided in accordance with GAAP above and throughout this Quarterly Report on Form 10-Q, provided below are non-GAAP measurements which present ~~operating income,~~ net income from continuing operations and earnings from continuing operations per diluted share infor year-to-date 2021 ~~and 2020~~ on an adjusted basis, which ~~remove~~removes a certain special ~~items.~~item recorded in the first quarter of 2021. We believe that ~~these~~this special ~~items are~~item is not indicative of our ongoing operations due to ~~their~~its size and nature. We use adjusted financial information as key performance measures of results of operations for the purpose of evaluating performance internally. These non-GAAP measurements are not intended to replace the presentation of our financial results in accordance with GAAP. Instead, we believe that the presentation of adjusted financial information provides additional information to investors to facilitate the comparison of past and present operations. Further, our definitions of adjusted financial information may differ from similarly titled measures used by other companies.

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The table below reconciles the year-to-date 2021 GAAP financial measures to the non-GAAP financial ~~measures.~~measures:

Third Quarter Year-to-Date
(in millions, except per share amounts) 2021 2020 2021 2020
Reconciliation of Reported Operating Income to Adjusted Operating Income
Reported Operating Income $ 409 $ 436 $ 1,130 $ 735
Restructuring Charges (a) — — — 30
Adjusted Operating Income $ 409 $ 436 $ 1,130 $ 765
Reconciliation of Reported Net Income from Continuing Operations to Adjusted Net Income from Continuing Operations
Reported Net Income from Continuing Operations $ 177 $ 196 $ 483 $ 308
Restructuring Charges (a) — — — 30
Loss on Extinguishment of Debt (b) 89 53 195 53
Tax Benefit from the Resolution of Certain Tax Matters (c) — — — (50)
Tax Benefit of Special Items in Operating Income and Other Loss (21) (13) (47) (18)
Adjusted Net Income from Continuing Operations $ 245 $ 236 $ 631 $ 323
Reconciliation of Reported Earnings from Continuing Operations Per Diluted Share to Adjusted Earnings from Continuing Operations Per Diluted Share
Reported Earnings from Continuing Operations Per Diluted Share $ 0.66 $ 0.69 $ 1.74 $ 1.10
Restructuring Charges (a) — — — 0.09
Loss on Extinguishment of Debt (b) 0.25 0.14 0.53 0.14
Tax Benefit from the Resolution of Certain Tax Matters (c) — — — (0.18)
Adjusted Earnings from Continuing Operations Per Diluted Share $ 0.92 $ 0.83 $ 2.28 $ 1.14

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(in millions, except per share amounts)
Reconciliation of Reported Net Income from Continuing Operations to Adjusted Net Income from Continuing Operations
Reported Net Income from Continuing Operations	$	306
Loss on Extinguishment of Debt (a)	105
Tax Benefit of Loss on Extinguishment of Debt	(25)
Adjusted Net Income from Continuing Operations	$	386

Reconciliation of Reported Earnings from Continuing Operations Per Diluted Share to Adjusted Earnings from Continuing Operations Per Diluted Share
Reported Earnings from Continuing Operations Per Diluted Share	$	1.08
Loss on Extinguishment of Debt (a)	0.28
Adjusted Earnings from Continuing Operations Per Diluted Share	$	1.37

________________

(a)In the second quarter of 2020, we recognized pre-tax severance charges of $30 million ($24 million after tax) related to headcount reductions as a result of restructuring activities. For additional information, see Note 4, “Restructuring Activities" included in Item 1. Financial Statements.

~~(b)In the third and~~ first quarter of 2021, we recognized pre-tax losses of $89 million and $105 million (after-tax losses of $68 million and $80 million), respectively, due to the early extinguishment of outstanding notes. In the third quarter of 2020, we recognized a pre-tax loss of ~~$53~~$105 million (after-tax loss of ~~$40~~$80 million) due to the early extinguishment of outstanding notes. For additional information, see Note ~~10,~~9, "Long-term Debt and Borrowing Facilities" ~~included in Item 1. Financial Statements.~~

~~(c)In the first quarter of 2020, we recognized a $50 million tax benefit related to the resolution of certain tax matters. For additional information, see Note 9, "Income Taxes"~~ included in Item 1. Financial Statements.

Company-Operated Store Data

The following table compares ~~company-operated~~Company-operated U.S. store data for the ~~third quarter~~second quarters of 2022 and 2021, ~~to the third quarter of 2020,~~as well as year-to-date 2022 and ~~year-to-date 2021 to year-to-date 2020:~~2021:

Third Quarter Year-to-Date
2021 2020 % Change 2021 2020 % Change
Sales per Average Selling Square Foot (a) $ 257 $ 258 — % $ 751 $ 497 51 %
Sales per Average Store (in thousands) (a) $ 692 $ 683 1 % $ 2,014 $ 1,314 53 %
Average Store Size (selling square feet) 2,700 2,654 2 %
Total Selling Square Feet (in thousands) 4,514 4,360 4 %

~~________________~~

~~(a)~~Sales per average selling square foot and sales per average store, which are indicators of store productivity, are calculated based on store sales for the period divided by the average, including the beginning and end of period, of total square footage and store count, respectively. As a result of the COVID-19 pandemic, all our stores in the U.S. were closed on March 17, 2020 with the majority having been re-opened as of the beginning of the third quarter of 2020. As a result, comparisons of year-to-date trends are not a meaningful way to discuss our operating results in the current year.


	Second Quarter						Year-to-Date
	2022		2021		% Change		2022		2021		% Change
Sales per Average Selling Square Foot	$	241	$	265	(9	%)	$	462	$	493	(6	%)
Sales per Average Store (in thousands)	$	658	$	709	(7	%)	$	1,261	$	1,320	(4	%)
Average Store Size (selling square feet)	2,741		2,689		2	%
Total Selling Square Feet (in thousands)	4,574		4,472		2	%

The following table represents ~~company-operated~~Company-operated store data for year-to-date ~~2021:~~2022:


		Stores			Stores		Stores			Stores
		January 30, 2021	Opened	Closed	October 30, 2021		January 29, 2022	Opened	Closed	July 30, 2022
United States	United States	1,633	50	(11)	1,672	United States	1,651	35	(17)	1,669
Canada	Canada	103	—	—	103	Canada	104	—	—	104
Total	Total	1,736	50	(11)	1,775	Total	1,755	35	(17)	1,773

The following table represents ~~company-operated~~Company-operated store data for year-to-date ~~2020:~~2021:
Stores Stores
February 1, 2020 Opened Closed October 31, 2020
United States 1,637 24 (18) 1,643
Canada 102 1 — 103
Total 1,739 25 (18) 1,746

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	Stores			Stores
	January 30, 2021	Opened	Closed	July 31, 2021
United States	1,633	41	(11)	1,663
Canada	103	—	—	103
Total	1,736	41	(11)	1,766

Partner-Operated Store Data

The following table represents partner-operated store data for year-to-date ~~2021:~~2022:


		Stores			Stores		Stores			Stores
		January 30, 2021	Opened	Closed	October 30, 2021		January 29, 2022	Opened	Closed	July 30, 2022
International	International	270	30	(7)	293	International	317	31	(1)	347
International - Travel Retail	International - Travel Retail	18	1	—	19	International - Travel Retail	21	1	—	22
Total International	Total International	288	31	(7)	312	Total International	338	32	(1)	369

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The following table represents partner-operated store data for year-to-date ~~2020:~~2021:


		Stores			Stores		Stores			Stores
		February 1, 2020	Opened	Closed	October 31, 2020		January 30, 2021	Opened	Closed	July 31, 2021
International	International	262	10	(3)	269	International	270	21	(5)	286
International - Travel Retail	International - Travel Retail	16	1	—	17	International - Travel Retail	18	1	—	19
Total International	Total International	278	11	(3)	286	Total International	288	22	(5)	305

Results of Operations

~~Third~~Second Quarter of ~~2021~~2022 Compared to ~~Third~~Second Quarter of ~~2020~~

~~For the third quarter of~~ 2021 operating income decreased $27 million, to $409 million, from $436 million in the third quarter of 2020, and the operating income rate decreased to 24.3% from 25.6%. The drivers of the operating income results are discussed in the following sections.

Net Sales

The following table provides ~~net sales~~Net Sales for the ~~third~~second quarter of ~~2021~~2022 in comparison to the ~~third~~second quarter of ~~2020:~~2021:


		2021		2020		% Change			2022		2021		% Change
Third Quarter		(in millions)
Second Quarter								Second Quarter	(in millions)
Stores - U.S. and Canada	Stores - U.S. and Canada	$	1,238	$	1,202	3	%	Stores - U.S. and Canada	$	1,161	$	1,230	(6	%)
Direct - U.S. and Canada	Direct - U.S. and Canada	369		446		(17	%)	Direct - U.S. and Canada	367		407		(10	%)
International (a)	International (a)	74		54		37	%	International (a)	90		67		35	%
Total Net Sales	Total Net Sales	$	1,681	$	1,702	(1	%)	Total Net Sales	$	1,618	$	1,704	(5	%)

_______________

(a)Results include royalties associated with franchised ~~store~~stores and wholesale sales.

The following table provides a reconciliation of ~~net sales~~Net Sales for the ~~third~~second quarter of ~~2021~~2022 to the ~~third~~second quarter of ~~2020:~~2021:


	(in millions)
~~2020~~2021 Net Sales	$	~~1,702~~1,704
Comparable Store Sales	~~(22)~~(110)
Sales Associated with New, Closed and Non-comparable Remodeled Stores, Net	5443
Direct Channels	~~(77)~~(40)
International Wholesale, Royalty and Other	2023
Foreign Currency Translation	4 (2)
~~2021~~2022 Net Sales	$	~~1,681~~1,618

~~The following table compares~~For the ~~third~~second quarter of ~~2021 comparable sales to the third quarter of 2020:~~

2021 2020
Comparable Sales (Stores and Direct) (a) (7 %) 56 %
Comparable Store Sales (a) (2 %) 38 %

~~Table of~~ ~~Contents~~

~~________~~

~~(a)~~The percentage change in comparable sales represents direct and comparable store sales. The percentage change in comparable store sales represents the change in sales at comparable stores only and excludes the change in sales from our direct channels. The change in comparable sales provides an indication of period over period growth (decline). A store is typically included in the calculation of comparable sales when it has been open 12 months or more and it has not had a change in selling square footage of 20% or more. Closed stores are excluded from the comparable sales calculation if they have been closed for four consecutive days or more. Upon re-opening, the stores are included in the calculation. Therefore, comparable sales results for 2021 and 2020 exclude the closure period of stores that were closed for four consecutive days or more as a result of the COVID-19 pandemic. Additionally, stores are excluded if total selling square footage in the center changes by 20% or more through the opening or closing of a second store. The percentage change in comparable sales is calculated on a comparable calendar period as opposed to a fiscal basis. Comparable sales attributable to our Canadian stores are calculated on a constant currency basis.

~~For the third quarter of 2021,~~2022, net sales decreased ~~$21~~$86 million to ~~$1.681 billion.~~$1.618 billion compared to the second quarter of 2021. Net sales ~~increased~~decreased in the stores channel by ~~$36~~$69 million, or 3%6%, primarily due to ~~the 29 net new stores opened subsequent to the third quarter of 2020.~~both a decrease in transactions and lower average dollar sale. Direct net sales decreased ~~$77~~$40 million, or ~~17%~~10%, partially due to last year's strong results as well as our customers continuing to select our buy online-pick up in store option (which is recognized as store net sales). These decreases were partially offset by a $23 million, or 35%, increase in international net sales primarily due to ~~declines in digital traffic and conversion given~~ the ~~impact from the store closures last year. International net sales increased~~new stores opened by ~~$20 million, or 37%, due to increases in partner-operated stores and websites~~our partners as well as ~~the COVID-19 related closures in the third quarter~~timing of ~~2020.~~

Performance was strong throughout the quarter as we saw good customer response to our fall seasonal and Halloween merchandise. We experienced growth in fragrant body care, home fragrance, and gifting and accessories. As expected, soaps and sanitizers declined versus last year’s significant growth.

The decrease in comparable sales was primarily driven by declines in conversion in both channels and digital traffic, partially offset by increased traffic and average unit retail in the stores channel and average order size in the digital channel. Comparable sales trends in both channels were impacted by changing consumer behaviors associated with the COVID-19 pandemic.wholesale shipments.

Gross Profit

For the ~~third~~second quarter of ~~2021,~~2022, our gross profit decreased ~~$24~~$168 million to ~~$839~~$660 million, and our gross profit rate (expressed as a percentage of net sales) decreased to ~~49.9%~~40.8% from ~~50.7%~~48.6%. Gross profit decreased due to the ~~decrease in merchandise margin dollars related to the~~ decline in net sales and ~~higher supply chain and transportation costs this year,~~a decline in merchandise margin dollars as a result of a significant decrease in our merchandise margin rate due to ~~market constraints~~continued inflationary cost pressures and ~~inflation.~~ increased promotional activity. Additionally, our occupancy expenses increased as a result of direct channel fulfillment expenses and our investments in store real estate.

The gross profit rate ~~decreased~~decline was driven by a significant decrease in the merchandise margin rate and buying and occupancy expense deleverage due to ~~the higher supply chain and transportation costs this year, partially offset by a higher average unit retail pricing.~~lower net sales.

General, Administrative and Store Operating Expenses

For the ~~third~~second quarter of ~~2021,~~2022, our general, administrative and store operating expenses ~~increased $3~~decreased $26 million to ~~$430~~$418 million, and the rate ~~increased~~(expressed as a percentage of net sales) decreased to ~~25.6%~~25.8% from ~~25.1%~~26.1%. ~~General,~~The general, administrative and store operating expenses and rate ~~increased~~decreased primarily due to ~~an increase~~lower home office and stores bonus expense related to business performance, as well as certain legal fees and other discrete items totaling approximately $20 million that were incurred in ~~marketing investments.~~the second quarter of 2021.

Table of Contents

Other Income and Expense

Interest Expense

The following table provides the average daily borrowings and average borrowing rates for the ~~third quarter~~second quarters of ~~2021~~2022 and ~~2020:~~2021:

Third Quarter 2021 2020
Average daily borrowings (in millions) $ 5,116 $ 6,922
Average borrowing rate (in percentages) 7.2 % 7.0 %


Second Quarter	2022			2021
Average daily borrowings (in millions)	$	4,915		$	5,414
Average borrowing rate	7.0		%	7.3		%

For the ~~third~~second quarter of ~~2021,~~2022, our interest expense decreased ~~$28~~$11 million to ~~$91~~$86 million due to lower average daily borrowings ~~partially offset by~~and a ~~higher~~lower average borrowing rate.

~~Other Loss~~

For third quarter of 2021, our other loss was $91 million, primarily due to an $89 million pre-tax loss associated with the early extinguishment of outstanding notes. For third quarter of 2020, our other loss was $52 million, primarily due to a $53 million pre-tax loss associated with the early extinguishment of outstanding notes.

Provision for Income Taxes

For the ~~third~~second quarter of ~~2021,~~2022, our effective tax rate was ~~22.0%~~23.9% compared to ~~26.0%~~25.1% in the ~~third~~second quarter of ~~2020.~~2021. The ~~thi~~rdsecond quarter of ~~2021~~2022 rate was lower than our combined estimated federal and state statutory rate primarily due to the resolution of certain tax ~~matters.~~ matters during the quarter. The ~~third~~second quarter of ~~2020~~2021 rate was ~~generally~~ consistent with our combined estimated federal and state statutory ~~rate~~.rate.

~~Table of~~ ~~Contents~~

Results of Operations

Year-to-Date ~~2021~~2022 Compared to Year-to-Date ~~2020~~2021

For year-to-date ~~2021,~~2022, operating income ~~increased $395~~decreased $199 million to ~~$1.130 billion,~~$522 million, from ~~$735~~$721 million year-to-date ~~2020,~~2021, and the operating income rate ~~increased~~(expressed as a percentage of sales) decreased to ~~23.3%~~17.0% from ~~19.8%~~22.7%. The drivers of the year-to-date operating income results are discussed in the following sections.

Net Sales

The following table provides ~~net sales~~Net Sales for year-to-date ~~2021~~2022 in comparison to year-to-date ~~2020:~~2021:


		2021		2020		% Change			2022		2021		% Change
Year-to-Date	Year-to-Date	(in millions)						Year-to-Date	(in millions)
Stores - U.S. and Canada	Stores - U.S. and Canada	$	3,518	$	2,304	53	%	Stores - U.S. and Canada	$	2,220	$	2,280	(3	%)
Direct - U.S. and Canada	Direct - U.S. and Canada	1,126		1,254		(10	%)	Direct - U.S. and Canada	684		756		(10	%)
International (a)	International (a)	210		158		33	%	International (a)	163		137		19	%
Total Net Sales	Total Net Sales	$	4,854	$	3,716	31	%	Total Net Sales	$	3,067	$	3,173	(3	%)

_______________

(a)Results include royalties associated with franchised ~~store~~stores and wholesale sales.

The following table provides a reconciliation of ~~net sales~~Net Sales for year-to-date ~~2021~~2022 to year-to-date ~~2020:~~2021:


	(in millions)
~~2020~~2021 Net Sales	$	~~3,716~~3,173
Comparable Store Sales	~~(123)~~(149)
Sales Associated with New, Closed and Non-comparable Remodeled Stores, Net ~~(a)~~	~~1,327~~91
Direct Channels	~~(128)~~(72)
International Wholesale, Royalty and Other	5226
Foreign Currency Translation	10 (2)
~~2021~~2022 Net Sales	$	~~4,854~~3,067

~~_______________~~

~~(a)Includes the increased~~For year-to-date 2022, net sales ~~from period over period due~~decreased $106 million to ~~the 2020 COVID-19 related stores closures.~~

~~The following table compares year-to-date 2021 comparable sales~~$3.067 billion compared to year-to-date ~~2020:~~

2021 2020
Comparable Sales (Stores and Direct) (a) (8 %) 70 %
Comparable Store Sales (a) (6 %) 45 %

~~________~~

~~For year-to-date 2021, net sales increased $1.138 billion to $4.854 billion.~~2021. Net sales ~~increased~~decreased in the stores channel by ~~$1.214 billion,~~$60 million, or ~~53%~~3%, primarily due to both a decrease in transactions and lower average dollar sale, partially offset by higher 2022 net sales in Canada due to the COVID-19-related store closures in 2021. Direct net sales decreased $72 million, or 10%, due to last year's strong results as well as our customers continuing to select our buy online-pick up in store option, partially offset by increased net sales in the Canada Direct business which launched in the third quarter of 2021. International net sales increased by $26 million, or 19%, primarily due to the ~~COVID-19 related store closures in 2020. Direct net sales decreased $128 million, or 10%, primarily due to the reopening of~~new stores ~~this year, as compared to the prior year when stores were closed which drove an increase in sales in the direct channel. International net sales increased~~opened by ~~$52 million, or 33%, due to increases in partner-operated stores and websites~~our partners as well as ~~the COVID-19~~timing of wholesale shipments.

Further, we estimate that year-to-date 2021 total Company net sales benefited by approximately $50 million related ~~closures~~to government stimulus payments, which did not reoccur in ~~2020.~~

Performance was strong throughout the period as we saw positive customer response to our merchandise. We experienced significant growth in fragrant body care, home fragrance and gifting and accessories. As expected, soaps and sanitizers declined versus last year’s significant growth.year-to-date 2022.

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Gross Profit

For year-to-date ~~2021,~~2022, our gross profit ~~increased $720~~decreased $242 million to ~~$2.409~~$1.328 billion, and our gross profit rate (expressed as a percentage of net sales) ~~increased~~decreased to ~~49.6%~~43.3% from ~~45.5%~~49.5%. Gross profit ~~increased~~decreased due to the ~~increase~~decline in net sales and a decline in merchandise margin dollars ~~related~~as a result of a significant decrease in our merchandise margin rate due to ~~the increase in net sales, partially offset by higher~~continued inflationary cost pressures and increased promotional activity. Additionally, our occupancy expenses ~~due to the increase~~increased as a result of direct channel fulfillment expenses and our investments in ~~net sales.~~ store real estate.

The gross profit rate ~~increased due to~~decline was driven by a significant decrease in the merchandise margin rate and buying and occupancy ~~leverage on higher~~expense deleverage due to lower net sales.

General, Administrative and Store Operating Expenses

For year-to-date ~~2021,~~2022, our general, administrative and store operating expenses ~~increased $325~~decreased $43 million to ~~$1.279 billion,~~$806 million, and the rate ~~increased~~(expressed as a percentage of net sales) decreased to 26.3% from ~~25.7%~~26.7%. General, administrative and store operating expenses increased due to an increase in store selling expenses as a result of the increase in net sales, an increase in marketing investments and an increase in charitable contributions to support philanthropic funds. These increases were partially offset by severance and related costs associated with headcount reductions totaling $30 million in the prior year. The general, administrative and store operating ~~expense~~expenses and rate ~~increased~~decreased primarily due to lower home office and stores bonus expense related to business performance, charitable contributions made in the ~~increase~~first quarter of 2021, as well as certain legal fees and other discrete items totaling approximately $20 million that were incurred in ~~marketing investments.~~the second quarter of 2021.

Other Income and Expense

Interest Expense

The following table provides the average daily borrowings and average borrowing rates for year-to-date ~~2021~~2022 and ~~2020:~~2021:


Year-to-Date	Year-to-Date	2021			2020			Year-to-Date	2022			2021
Average daily borrowings (in millions)	Average daily borrowings (in millions)	$	5,577		$	6,391		Average daily borrowings (in millions)	$	4,915		$	5,803
Average borrowing rate (in percentages)		7.2		%	6.7		%
Average borrowing rate								Average borrowing rate	7.1		%	7.2		%

For year-to-date ~~2021,~~2022, our interest expense decreased ~~$16~~$35 million to ~~$301~~$175 million due to lower average daily borrowings ~~partially offset by~~and a ~~higher~~lower average borrowing rate.

Other ~~Loss~~Income (Loss)

For year-to-date 2021, our other loss was ~~$196~~$105 million ~~primarily~~ due to ~~$195 million pre-tax losses associated with~~ the ~~early extinguishment of outstanding notes. For year-to-date 2020, our other loss was $47 million, primarily due to a $53~~$105 million pre-tax loss associated with the early extinguishment of outstanding notes.

Provision for Income Taxes

For year-to-date ~~2021,~~2022, our effective tax rate was ~~23.7%~~21.4% compared to ~~16.9%~~24.7% year-to-date ~~2020.~~2021. The year-to-date 2021 rate was lower than our combined estimated federal and state statutory rate primarily due to the recognition of excess tax benefits recorded through the Consolidated Statements of Income (Loss) on share-based awards that vested year-to-date. ~~The year-to-date 2020~~2022 rate was lower than our combined estimated federal and state statutory rate primarily due to the resolution of certain tax matters ~~which resulted in a $50 million tax benefit.~~during the period. The year-to-date 2021 rate was consistent with our combined estimated federal and state statutory rate.

FINANCIAL CONDITION

Liquidity and Capital Resources

Liquidity, or access to cash, is an important factor in determining our financial stability. We are committed to maintaining adequate liquidity. Cash generated from our operating activities provides the primary resources to support current operations, growth initiatives, seasonal funding requirements and capital expenditures. Our cash provided from operations is impacted by our net income ~~(loss)~~ and working capital changes. Our net income ~~(loss)~~ is impacted by, among other things, sales volume, seasonal sales patterns, success of new product introductions, profit margins and income taxes. Historically, our sales are higher during the fourth quarter of the fiscal year due to seasonal and holiday-related sales patterns. Generally, our need for working capital peaks during the summer and fall months as inventory builds in anticipation of the holiday period. Our cash and cash equivalents held by foreign subsidiaries were ~~$150~~$104 million as of ~~October~~July 30, ~~2021.~~2022.

We believe that our ~~available short-term~~current cash position, our cash flow generated from operations and ~~long-term capital resources are~~our borrowing capacity under our asset-backed revolving credit facility (“ABL Facility”) will be sufficient to ~~fund foreseeable requirements.~~meet our liquidity needs, including capital expenditure requirements, for at least the next twelve months.

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Working Capital and Capitalization

The following table provides a summary of our working capital position and capitalization as of ~~October~~July 30, ~~2021,~~2022, January ~~30, 2021~~29, 2022 and ~~October~~July 31, ~~2020:~~2021:


		October 30, 2021		January 30, 2021		October 31, 2020			July 30, 2022		January 29, 2022		July 31, 2021
		(in millions)							(in millions)

Working Capital, Net of Assets and Liabilities from Discontinued Operations (a)	Working Capital, Net of Assets and Liabilities from Discontinued Operations (a)	$	1,550	$	3,012	$	1,831	Working Capital, Net of Assets and Liabilities from Discontinued Operations (a)	$	496	$	1,719	$	1,363
Capitalization:	Capitalization:							Capitalization:
Long-term Debt(a)	Long-term Debt(a)	4,852		6,366		6,364		Long-term Debt(a)	4,858		4,854		5,346
Shareholders’ Equity (Deficit)	Shareholders’ Equity (Deficit)	(1,676)		(662)		(1,568)		Shareholders’ Equity (Deficit)	(2,663)		(1,518)		(1,189)
Total Capitalization	Total Capitalization	$	3,176	$	5,704	$	4,796	Total Capitalization	$	2,195	$	3,336	$	4,157
Amounts Available Under the ABL Facility (b)	Amounts Available Under the ABL Facility (b)	$	734	$	—	$	—	Amounts Available Under the ABL Facility (b)	$	714	$	479	$	—

_______________

(a)The ~~balances~~balance as of ~~January 30,~~July 31, 2021 ~~and October 31, 2020 exclude~~excludes the carrying value of assets and liabilities reported as discontinued operations on the Consolidated Balance ~~Sheets.~~Sheet.

(b)WeAs of July 30, 2022, our borrowing base was $730 million and we had outstanding letters of credit, which reduce our availability under the ABL Facility, of $16 ~~million as of October 30, 2021.~~million. As of January ~~30,~~29, 2022, our borrowing base was $495 million and we had outstanding letters of credit of $16 million. As of July 31, 2021, ~~and October 31, 2020,~~ we were unable to draw upon the ABL Facility as our consolidated cash balance exceeded $350 million.

In August 2021, we entered into an amendment and restatement of the ABL Facility to, among other things, remove the requirement to prepay outstanding amounts under the ABL Facility should our consolidated cash balance exceed $350 million.

Cash ~~Flow~~Flows

The cash flows related to discontinued operations have not been segregated. Accordingly, the 2021 Consolidated ~~Statements~~Statement of Cash Flows include the results of continuing and discontinued operations. We did not report any cash flows from discontinued operations year-to-date 2022.

The following table provides a summary of our cash flow activity ~~for~~during year-to-date ~~2021~~2022 and ~~2020:~~2021:


		Year-to-Date
		2021		2020			2022		2021
		(in millions)					(in millions)
Cash and Cash Equivalents and Restricted Cash, Beginning of Period	Cash and Cash Equivalents and Restricted Cash, Beginning of Period	$	3,933	$	1,499	Cash and Cash Equivalents and Restricted Cash, Beginning of Period	$	1,979	$	3,933
Net Cash Flows Provided by Operating Activities	Net Cash Flows Provided by Operating Activities	447		706		Net Cash Flows Provided by Operating Activities	81		573
Net Cash Flows Used for Investing Activities	Net Cash Flows Used for Investing Activities	(228)		(183)		Net Cash Flows Used for Investing Activities	(162)		(168)
Net Cash Flows Provided by (Used for) Financing Activities		(2,713)		729
Net Cash Flows Used for Financing Activities						Net Cash Flows Used for Financing Activities	(1,446)		(1,752)
Effects of Exchange Rate Changes on Cash and Cash Equivalents and Restricted Cash	Effects of Exchange Rate Changes on Cash and Cash Equivalents and Restricted Cash	2		(1)		Effects of Exchange Rate Changes on Cash and Cash Equivalents and Restricted Cash	—		2
Net Increase (Decrease) in Cash and Cash Equivalents and Restricted Cash		(2,492)		1,251
Net Decrease in Cash and Cash Equivalents and Restricted Cash						Net Decrease in Cash and Cash Equivalents and Restricted Cash	(1,527)		(1,345)
Cash and Cash Equivalents and Restricted Cash, End of Period	Cash and Cash Equivalents and Restricted Cash, End of Period	$	1,441	$	2,750	Cash and Cash Equivalents and Restricted Cash, End of Period	$	452	$	2,588

Operating Activities

Net cash provided by operating activities in ~~2021~~2022 was ~~$447~~$81 million, including net income of ~~$739~~$275 million. Net income included depreciation of ~~$310~~$106 million ~~loss on extinguishment of debt of $195 million,~~and share-based compensation expense of ~~$38 million and deferred tax expense of $19~~$15 million. Other changes in assets and liabilities represent items that had a current period cash flow impact, such as changes in working capital. The most significant ~~item~~items in working capital ~~was~~were the seasonal ~~change~~changes in Inventories, (and related increases in Accounts Payable), as we build our inventory levels in anticipation of the holiday season, which generates a substantial portion of our operating cash flow for the year. In addition, our Income Taxes Payable, ~~decrease was due~~Accounts Receivable, and the change in Other Assets and Liabilities. Additionally, we proactively pulled forward the purchase and delivery of certain Inventory items to ~~seasonal tax payments.~~generate capacity during the third quarter of 2022 peak period, which we expect to provide us with additional agility in the second half of 2022.

Net cash provided by operating activities in ~~2020~~2021 was ~~$706~~$573 million, including atotal net ~~loss~~income of ~~$16 million.~~$651 million (which included Income from Discontinued Operations, Net ~~loss~~of Tax of $345 million). Net income included depreciation of ~~$393~~$258 million (which included $158 million related to the Victoria's Secret ~~store and lease asset impairment charges of $214 million,~~business classified as discontinued operations), loss on extinguishment of debt of ~~$53 million, non-cash gain from Victoria's Secret Hong Kong store closure and lease termination of $39~~$105 million, share-based compensation expense of ~~$39~~$30 million ~~and gain from establishment of~~(which included $15 million related to the Victoria's Secret ~~U.K.~~business classified as discontinued operations), and ~~Ireland joint venture~~deferred tax expense of ~~$30~~$16 million. Other changes in assets and liabilities represent items that had a current period cash flow impact, such as changes in working capital. The most significant ~~item~~items in working capital ~~was~~were the seasonal changes in Inventories and Income Taxes Payable, and the change in Inventories (and related increases in Accounts Payable), as we build our inventory levels in anticipation of the holiday season, which generates a substantial portion of our operating cash flow for the year.Other Assets and Liabilities.

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Investing Activities

Net cash used for investing activities in 2022 was $162 million primarily related to capital expenditures. The capital expenditures included $72 million related to new non-mall stores and remodels, $46 million for our new Company-operated direct channel fulfillment center and $18 million related to information technology projects.

Net cash used for investing activities in 2021 was ~~$228~~$168 million consisting primarily of capital expenditures of ~~$241~~$178 million, partially offset by proceeds from other investing activities of ~~$13~~$10 million. The capital expenditures included ~~$105~~$75 million related to the completion of ~~108~~ North American Bath & Body Works real estate ~~projects including 50 new non-mall stores and 58 remodels.~~projects. Remaining capital expenditures, which included $66 million related to the Victoria's Secret business classified as discontinued operations, were primarily related to technology and logistics to support growth and capabilities.

Net cash used for investing activities in 2020 was $183 million consisting primarily of capital expenditures of $200 million. The capital expenditures were primarily related to spending on technology and logistics to support our digital businesses and other retail capabilities. Capital expenditures of $68 million related to the opening of new stores or the remodeling and improving of existing stores, primarily for Bath & Body Works.

~~Consistent with previous guidance, we are estimating 2021~~We estimate full year 2022 capital expenditures to be ~~between $275 million and $300 million for the Bath & Body Works~~approximately $400 million. We are continuing ~~operations business. While not fully returning to~~ our ~~pre-pandemic levels, we have resumed our investment~~investments in the remodeling and opening of new off-mall stores. We are forecasting approximately 100 new off-mall North American stores which, together with our planned remodels, are expected to result in net square footage growth of about 6% for full year 2022. Additionally, we are investing in technology, distribution ~~fulfillment~~ and logistics capabilities to support our growth.

Financing Activities

Net cash used for financing activities in ~~2021~~2022 was ~~$2.713~~$1.446 billion consisting of ~~$1.716~~$1.312 billion in payments for share repurchases, including the payment of $1 billion related to our accelerated share repurchase program ("ASR"), dividend payments of $0.40 per share, or $94 million, and $31 million of tax payments related to share-based awards.

Net cash used for financing activities in 2021 was $1.752 billion consisting primarily of payments of $1.194 billion for share repurchases, $1.130 billion in payments for the early extinguishment of outstanding notes, payments of $1.544 billion for share repurchases, transfers and payments to Victoria's Secret & Co. related to the spin-off of $362 million, dividend payments of $0.30 per share, or $81 million, and $58$56 million of tax payments related to share-based ~~awards.~~awards and dividend payments of $0.15 per share, or $42 million. These ~~uses~~decreases were partially offset by the $600 million initial proceeds ~~of $976 million~~ from the Victoria's Secret & Co. ~~spin-off~~Notes classified as discontinued operations, and proceeds from stock option exercises of ~~$81~~$76 million.

Net cash provided by financing activities in 2020 was $729 million consisting primarily of net proceeds of $2.219 billion from the issuance of new notes, partially offset by $1.307 billion in payments for the early extinguishment of outstanding notes, dividend payments of $0.30 per share, or $83 million, and $57 million of net repayments under certain bank facilities supporting certain Victoria's Secret foreign operations. We also borrowed and repaid $950 million under our Credit Agreement during 2020.

Common Stock Share Repurchases

Our Board of Directors (the "Board") will determine share repurchase authorizations, giving consideration to our levels of profit and cash flow, capital requirements, current and forecasted liquidity, the restrictions placed upon us by our borrowing arrangements as well as financial and other conditions existing at the time. We use cash flow generated from operating and financing activities to fund our share repurchase programs. The timing and amount of any repurchases will be made at our discretion, taking into account a number of factors, including market conditions.

2021 Repurchase Programs

In March 2021, ~~our~~the Board ~~of Directors~~ authorized a ~~new~~ $500 million share repurchase plan (the "March 2021 Program"), which replaced the $79 million remaining under ~~the~~a March 2018 repurchase program. Pursuant to the Board's authorization, we entered into a Rule 10b5-1 purchase plan to effectuate share repurchases for the first $250 million. In May 2021, we initiated a second $250 million Rule 10b5-1 purchase plan to effectuate the remaining share repurchases under the March 2021 repurchase plan.

In July 2021, ~~our~~the Board ~~of Directors~~ authorized a ~~new~~ $1.5 billion share repurchase program (the "July 2021 Program"), which replaced the $36 million remaining under the March 2021 ~~repurchase program.~~Program. Under the authorization of this program, ~~in July 2021~~ we entered into a stock repurchase agreement with our former Chief Executive Officer and certain of his affiliated entities pursuant to which we repurchased 10 million shares of our common stock for an aggregate purchase price of $730 ~~million.~~million in July 2021.

We repurchased the following shares of our common stock during year-to-date 2021:


Repurchase Program	Repurchase Program	Amount Authorized			Shares Repurchased			Amount Repurchased				Average Stock Price		Repurchase Program	Amount Authorized		Shares Repurchased	Amount Repurchased		Average Stock Price
		(in millions)			(in thousands)			(in millions)							(in millions)		(in thousands)	(in millions)
March 2021 (a)	March 2021 (a)	$	500		6,996			$	464			$	66.30	March 2021 (a)	$	500	6,996	$	464	$	66.30
July 2021 (a)	July 2021 (a)	$	1,500		10,000			$	730			$	73.01	July 2021 (a)	1,500		10,000	730		73.01
July 2021 (b)				5,510		$	365			$	66.21
Total														Total			16,996	$	1,194

_______________

(a)Reflects repurchases of L Brands, Inc. common stock prior to the August 2, 2021 spin-off of Victoria's Secret & Co.

~~(b)Reflects repurchases of Bath & Body Works, Inc. common stock subsequent to~~Under the ~~August 2, 2021 spin-off of Victoria's Secret & Co.~~

~~Table of~~ ~~Contents~~

~~Subsequent to October 30, 2021,~~ we repurchased an additional ~~2.2~~11 million shares of our common stock for ~~$166~~an aggregate purchase price of $770 million during the third and fourth quarters of 2021.

2022 Repurchase Program

In February 2022, the Board authorized a new $1.5 billion share repurchase program (the "February 2022 Program"). As part of the February 2022 Program, we entered into the ASR under which we repurchased $1 billion of our own outstanding common stock. The delivery of shares under the ~~July 2021 Program.~~ASR resulted in an immediate reduction of our outstanding shares used to

~~Common Stock Retirement~~

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~~In accordance with our Board of Directors' resolution,~~calculate the weighted-average common shares outstanding for basic and diluted net income per share. Pursuant to the Board's authorization, we made other share repurchases in the open market under the February 2022 Program during 2022.

On February 4, 2022, we delivered $1 billion to the ASR bank, and the bank delivered 13.6 million shares of common stock ~~repurchased~~to us (the "Initial Shares"). Pursuant to the terms of the ASR, the Initial Shares represented 80% of the number of shares determined by dividing the $1 billion Company payment by the closing price of our common stock on February 2, 2022.

In May 2022, we received an additional 6.7 million shares of our common stock from the ASR bank for the final settlement of the ASR. The final number of shares of common stock delivered under the ~~July 2021 Program will be retired and cancelled~~ASR was based generally upon ~~repurchase. As~~ a ~~result, we retired~~discount to the ~~16 million~~average daily Rule 10b-18 volume-weighted average price at which the shares ~~repurchased under~~of common stock traded during the ~~July 2021 Program~~regular trading sessions on the NYSE during ~~year-to-date 2021, which resulted in reductions~~the term of ~~$8 million~~the repurchase period. In connection with the final settlement, in the ~~par value of Common Stock, $50~~second quarter we reclassified the $200 million recorded in Paid-in Capital ~~and $1.037 billion in Retained Earnings.~~as of April 30, 2022.

We repurchased the following shares of our common stock during year-to-date 2022:


Repurchase Program	Amount Authorized		Shares Repurchased	Amount Repurchased		Average Stock Price
	(in millions)		(in thousands)	(in millions)
February 2022	$	1,500	6,401	$	312	$	48.77
February 2022 - Accelerated Share Repurchase Program			20,295	1,000		49.27
Total			26,696	$	1,312

The February 2022 Program had $188 million of remaining authority as of July 30, 2022.

Dividend Policy and Procedures

Our Board ~~of Directors~~ will determine future dividends after giving consideration to our levels of profit and cash flow, capital requirements, current and forecasted liquidity, the restrictions placed upon us by our borrowing arrangements as well as financial and other conditions existing at the time. We use cash flow generated from operating and financing activities to fund our dividends.

Our Board ~~of Directors~~ suspended our quarterly cash dividend beginning in the second quarter of ~~2020 as a proactive measure to strengthen our financial flexibility and manage through the COVID-19 pandemic.~~2020. In March 2021, our Board ~~of Directors~~ reinstated ~~our~~the annual dividend at $0.60 per share, beginning with the quarterly dividend paid in June 2021.

~~Under the authority and declaration of~~ In February 2022, our Board ~~of Directors, we~~increased the annual dividend to $0.80 per share, beginning with the quarterly dividend paid in March 2022.

We paid the following dividends during ~~year-to-date 2021~~2022 and ~~2020:~~2021:


	Ordinary Dividends			Total Paid
	(per share)		(in millions)
2022
First Quarter	$	0.20		$	48
Second Quarter	0.20			46

Total	$	0.40		$	94
2021
First Quarter	$	—		$	—
Second Quarter	0.15			42

Total	$	0.15		$	42

~~In November 2021, our Board of Directors declared~~On September 2, 2022, we paid the ~~fourth~~third quarter ~~of 2021~~2022 ordinary dividend of ~~$0.15~~$0.20 per ~~share.~~share to shareholders of record at the close of business on August 19, 2022.

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Long-term Debt and Borrowing Facilities

The following table provides our outstanding long-term debt balance, net of unamortized debt issuance costs and discounts, as of ~~October~~July 30, ~~2021,~~2022, January ~~30, 2021~~29, 2022 and ~~October~~July 31, ~~2020:~~2021:


		October 30, 2021		January 30, 2021		October 31, 2020			July 30, 2022		January 29, 2022		July 31, 2021
		(in millions)							(in millions)
Senior Secured Debt with Subsidiary Guarantee
$750 million, 6.875% Fixed Interest Rate Secured Notes due July 2025 ("2025 Secured Notes")		$	—	$	740	$	740

Senior Debt with Subsidiary Guarantee	Senior Debt with Subsidiary Guarantee							Senior Debt with Subsidiary Guarantee

$1 billion, 5.625% Fixed Interest Rate Notes due February 2022 (“2022 Notes”)		$	—	$	284	$	284

$500 million, 5.625% Fixed Interest Rate Notes due October 2023 (“2023 Notes”)	$500 million, 5.625% Fixed Interest Rate Notes due October 2023 (“2023 Notes”)	—		319		319		$500 million, 5.625% Fixed Interest Rate Notes due October 2023 (“2023 Notes”)	$	—	$	—	$	319
$320 million, 9.375% Fixed Interest Rate Notes due July 2025 ("2025 Notes")	$320 million, 9.375% Fixed Interest Rate Notes due July 2025 ("2025 Notes")	316		493		493		$320 million, 9.375% Fixed Interest Rate Notes due July 2025 ("2025 Notes")	317		316		494
$297 million, 6.694% Fixed Interest Rate Notes due January 2027 (“2027 Notes”)	$297 million, 6.694% Fixed Interest Rate Notes due January 2027 (“2027 Notes”)	280		278		277		$297 million, 6.694% Fixed Interest Rate Notes due January 2027 (“2027 Notes”)	282		281		279
$500 million, 5.250% Fixed Interest Rate Notes due February 2028 (“2028 Notes”)	$500 million, 5.250% Fixed Interest Rate Notes due February 2028 (“2028 Notes”)	497		497		496		$500 million, 5.250% Fixed Interest Rate Notes due February 2028 (“2028 Notes”)	497		497		497
$500 million, 7.500% Fixed Interest Rate Notes due June 2029 ("2029 Notes")	$500 million, 7.500% Fixed Interest Rate Notes due June 2029 ("2029 Notes")	489		488		488		$500 million, 7.500% Fixed Interest Rate Notes due June 2029 ("2029 Notes")	490		489		489
$1 billion, 6.625% Fixed Interest Rate Notes due October 2030 ("2030 Notes")	$1 billion, 6.625% Fixed Interest Rate Notes due October 2030 ("2030 Notes")	989		988		988		$1 billion, 6.625% Fixed Interest Rate Notes due October 2030 ("2030 Notes")	990		990		989
$1 billion, 6.875% Fixed Interest Rate Notes due November 2035 (“2035 Notes”)	$1 billion, 6.875% Fixed Interest Rate Notes due November 2035 (“2035 Notes”)	992		991		991		$1 billion, 6.875% Fixed Interest Rate Notes due November 2035 (“2035 Notes”)	993		992		991
$700 million, 6.750% Fixed Interest Rate Notes due July 2036 (“2036 Notes”)	$700 million, 6.750% Fixed Interest Rate Notes due July 2036 (“2036 Notes”)	694		694		694		$700 million, 6.750% Fixed Interest Rate Notes due July 2036 (“2036 Notes”)	694		694		694
Total Senior Debt with Subsidiary Guarantee	Total Senior Debt with Subsidiary Guarantee	$	4,257	$	5,032	$	5,030	Total Senior Debt with Subsidiary Guarantee	$	4,263	$	4,259	$	4,752
Senior Debt	Senior Debt							Senior Debt
$350 million, 6.950% Fixed Interest Rate Debentures due March 2033 (“2033 Notes”)	$350 million, 6.950% Fixed Interest Rate Debentures due March 2033 (“2033 Notes”)	$	349	$	348	$	348	$350 million, 6.950% Fixed Interest Rate Debentures due March 2033 (“2033 Notes”)	$	349	$	349	$	348
$247 million, 7.600% Fixed Interest Rate Notes due July 2037 (“2037 Notes”)	$247 million, 7.600% Fixed Interest Rate Notes due July 2037 (“2037 Notes”)	246		246		246		$247 million, 7.600% Fixed Interest Rate Notes due July 2037 (“2037 Notes”)	246		246		246
Total Senior Debt	Total Senior Debt	$	595	$	594	$	594	Total Senior Debt	595		595		594
Total Long-term Debt	Total Long-term Debt	$	4,852	$	6,366	$	6,364	Total Long-term Debt	$	4,858	$	4,854	$	5,346

Repurchases of Notes

In September 2021, we completed the tender offers to purchase $270 million of our outstanding 2023 Notes and $180 million of our outstanding 2025 Notes for an aggregate purchase price of $532 million. Additionally, in October 2021, we redeemed the remaining $50 million of our outstanding 2023 Notes for an aggregate purchase price of $54 million. We recognized a pre-tax loss related to this extinguishment of debt of $89 million (after-tax loss of $68 million), which ~~includes~~included the write-offs of unamortized issuance ~~costs. This loss is included in Other Loss~~costs, in the ~~2021 Consolidated Statements~~third quarter of ~~Income.~~2021.

In April 2021, we redeemed the remaining $285 million of our outstanding 5.625% senior notes due February 2022 ~~Notes~~ and ~~the~~ $750 million of our outstanding ~~2025 Secured Notes.~~6.875% senior secured notes due July 2025. We recognized a pre-tax loss related to this extinguishment of debt of $105 million (after-tax loss of $80 million), which ~~includes~~included the write-offs of unamortized issuance costs. This loss is included in Other ~~Loss~~Income (Loss) in the year-to-date 2021 Consolidated Statement of Income.

In October 2020, we completed tender offers to purchase $576 million of our outstanding 2022 Notes, $180 million of our outstanding 2023 Notes and $53 million of our outstanding 2037 Notes for $844 million. We used the proceeds from the 2030 Notes to fund the purchase price of the tender offers. Additionally, utilizing cash on hand, we redeemed the remaining $450 million of our outstanding 2021 Notes for $463 million. We recognized a pre-tax loss related to this extinguishment of debt of $53 million (after-tax loss of $40 million), which includes the write-offs of unamortized issuance costs. This loss is included in Other Loss in the 2020 Consolidated Statements of Income (Loss).

Asset-backed Revolving Credit Facility

We and certain of our 100% owned subsidiaries guarantee and pledge collateral to secure ~~a revolving credit facility. In April 2020, we entered into an amendment and restatement of the Credit Agreement to convert~~ our ~~credit facility into an asset-backed revolving credit facility,~~ABL Facility. The ABL Facility, which allows borrowings and letters of credit in U.S. dollars or Canadian dollars. During the first quarter of 2020, in an abundance of caution and as a proactive measure in response to the COVID-19 pandemic, we elected to borrow $950 million from our revolving facility. This borrowing was repaid during the first quarter of 2020 upon completion of the April amendment.

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~~In August 2021, we entered into an amendment and restatement of the Credit Agreement. The Amendment reduced the~~dollars, has aggregate commitments ~~under the ABL Facility to~~of $750 million reduced the interest rates on outstanding borrowings by 50 basis points, removed the requirement to prepay outstanding amounts under the ABL Facility should our consolidated cash balance exceed $350 million, extended theand an expiration date ~~from~~in August ~~2024 to August 2026 and released Victoria's Secret & Co. subsidiaries as guarantors, among other things.~~2026.

Availability under the ABL Facility is the lesser of (i) the borrowing base, determined primarily based on our eligible U.S. and Canadian credit card receivables, accounts receivable, inventory and eligible real property, or (ii) the aggregate commitment. If at any time the outstanding amount under the ABL Facility exceeds the lesser of (i) the borrowing base and (ii) the aggregate commitment, we are required to ~~prepay~~repay the outstanding amounts under the ABL Facility to the extent of such excess. As of ~~October~~July 30, ~~2021,~~2022, our borrowing base was ~~$1.033 billion.~~$730 million, and we had no borrowings outstanding under the ABL Facility.

The ABL Facility supports our letter of credit program. We had $16 million of outstanding letters of credit as of ~~October~~July 30, ~~2021~~2022 that reduced our availability under the ABL Facility. As of July 30, 2022, our availability under the ABL Facility was $714 million.

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The ABL Facility requires us to maintain a fixed charge coverage ratio of not less than 1.00 to 1.00 during an event of default or any period commencing on any day when specified excess availability is less than the greater of ~~(1)~~(i) $70 million or ~~(2)~~(ii) 10% of the maximum borrowing amount. As of ~~October~~July 30, ~~2021,~~2022, we were not required to maintain this ratio.

~~As of October 30, 2021, there were no borrowings outstanding under the ABL Facility.~~

Credit Ratings

The following table provides our credit ratings as of ~~October~~July 30, ~~2021:~~2022:


	Moody’s	S&P
Corporate	Ba2	BB
Senior Unsecured Debt with Subsidiary Guarantee	Ba2	BB
Senior Unsecured Debt	B1	B+
Outlook	Positive	~~Positive~~Stable

Subsequent to July 30, 2022, Moody's changed our outlook to Stable.

Guarantor Summarized Financial Information

Certain of our subsidiaries, which are listed on Exhibit 22 to this Quarterly Report on Form 10-Q, have guaranteed our obligations under the 2025 Notes, 2027 Notes, 2028 Notes, 2029 Notes, 2030 Notes, 2035 Notes and 2036 Notes (collectively, the "Notes"). As a result of the Separation and Amendment to our ABL Facility, both of which were completed on August 2, 2021, certain of our current and former subsidiaries were released as guarantors under the Notes.

The Notes have been issued by Bath & Body Works, Inc. (the “Parent Company”). The Notes are its senior unsecured obligations and rank equally in right of payment with all of our existing and future senior unsecured obligations, are senior to any of our future subordinated indebtedness, are effectively subordinated to all of our existing and future indebtedness that is secured by a lien and are structurally subordinated to all existing and future obligations of each of our subsidiaries that do not guarantee the Notes.

The Notes are fully and unconditionally guaranteed on a joint and several basis by certain of our wholly-owned subsidiaries, including ~~each subsidiary~~certain subsidiaries that also ~~guarantees~~guarantee our obligations under certain of our senior secured credit facilities (such guarantees, the “Guarantees”; and, such guaranteeing subsidiaries, the “Subsidiary Guarantors”). The Guarantees of the Subsidiary Guarantors are subject to release in limited circumstances only upon the occurrence of certain customary conditions. Each Guarantee is limited, by its terms, to an amount not to exceed the maximum amount that can be guaranteed by the applicable Subsidiary Guarantor subject to avoidance under applicable fraudulent conveyance provisions of U.S. and non-U.S. law.

The following tables set forth summarized financial information for the Parent Company and the Subsidiary Guarantors, on a combined basis after elimination of (i) intercompany transactions and balances among the Parent Company and the Subsidiary Guarantors and (ii) investments in and equity in the earnings of non-Guarantor subsidiaries. ~~Summarized financial information for periods prior to the Separation and Amendment to our ABL Facility on August 2, 2021 reflect the Subsidiary Guarantors in effect for those periods.~~

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SUMMARIZED BALANCE SHEETS	SUMMARIZED BALANCE SHEETS	October 30, 2021		January 30, 2021		SUMMARIZED BALANCE SHEETS	July 30, 2022		January 29, 2022
		(in millions)					(in millions)
ASSETS	ASSETS					ASSETS
Current Assets (a)	Current Assets (a)	$	3,043	$	6,813	Current Assets (a)	$	2,115	$	3,365
Noncurrent Assets ~~(b)~~	Noncurrent Assets ~~(b)~~	2,517		4,795		Noncurrent Assets ~~(b)~~	2,498		2,481

LIABILITIES	LIABILITIES					LIABILITIES
Current Liabilities ~~(c)~~(b)	Current Liabilities ~~(c)~~(b)	$	2,869	$	5,038	Current Liabilities ~~(c)~~(b)	$	2,912	$	2,956
Noncurrent Liabilities ~~(d)~~(c)	Noncurrent Liabilities ~~(d)~~(c)	6,172		9,433		Noncurrent Liabilities ~~(d)~~(c)	6,166		6,155

_______________

(a)Includes amounts due from non-Guarantor subsidiaries of ~~$371~~$565 million and ~~$1.933 billion~~$530 million as of ~~October~~July 30, ~~2021~~2022 and January ~~30, 2021,~~29, 2022, respectively.

(b)Includes amounts due ~~from~~to non-Guarantor subsidiaries of ~~$141 million~~$1.899 billion and $1.927 billion as of July 30, 2022 and January ~~30, 2021.~~29, 2022, respectively.

(c)Includes amounts due to non-Guarantor subsidiaries of ~~$1.675 billion and $3.096 billion as of October 30, 2021 and January 30, 2021, respectively.~~

~~(d)Includes amounts due to non-Guarantor subsidiaries of~~ $5 ~~million and $476~~ million as of ~~October~~both July 30, ~~2021~~2022 and January 29, 2022.

30 ~~2021, respectively.~~

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YEAR-TO-DATE SUMMARIZED STATEMENT OF INCOME	~~Year-to-Date~~
	~~2021~~2022
	(in millions)
Net Sales (a)	$	~~7,802~~2,978
Gross Profit	~~3,564~~1,232
Operating Income	~~1,498~~474
Income Before Income Taxes	~~971~~300
Net Income (b)	~~716~~235

_______________

(a)Includes net sales of ~~$128~~$114 million to non-Guarantor subsidiaries.

(b)Includes net loss of ~~$65~~$2 million related to transactions with non-Guarantor subsidiaries.

Contingent Liabilities and Contractual Obligations

Lease Guarantees

In connection with the spin-off of Victoria's Secret & Co., and the sale of the La Senza business, we ~~have~~had remaining contingent obligations of ~~approximately $280~~$295 million as of July 30, 2022 related to lease payments under the current terms of noncancelable leases, primarily related to office space, expiring at various dates through 2037. In addition, in connection with the sale of La Senza in the fourth quarter of 2018, we have remaining contingent obligations of approximately $27 million related to lease payments under the current terms of noncancelable leases expiring at various dates through 2028. These obligations include minimum rent and additional payments covering taxes, common area costs and certain other expenses and relate to leases that commenced prior to the disposition of these businesses. Our reserves related to these obligations were not significant as of ~~October~~July 30, ~~2021.~~2022.

Contractual Obligations

Our contractual obligations primarily consist of long-term debt and the related interest payments, operating leases, purchase orders for merchandise inventory and other long-term obligations. These contractual obligations impact our short-term and long-term liquidity and capital resource needs. There have been no material changes in our contractual obligations subsequent to January 29, 2022, as discussed in “Contingent Liabilities and Contractual Obligations” in our 2021 Annual Report on Form 10-K. Certain of our contractual obligations may fluctuate during the normal course of business (primarily changes in our merchandise inventory-related purchase obligations which fluctuate throughout the year as a result of the seasonal nature of our ~~operations)~~business).

There have been no material changes in our contractual obligations since January 30, 2021, as discussed in “Contingent Liabilities and Contractual Obligations” in our 2020 Annual Report on Form 10-K, other than the repurchase of the 2022 Notes, 2023 Notes, 2025 Secured Notes and certain of the 2025 Notes. Additionally, contractual obligations at the end of 2020 included approximately $2.6 billion of future lease obligations and approximately $500 million of purchase obligations and other liabilities related to the Victoria's Secret business which is now classified as discontinued operations.

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RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

We did not adopt any new accounting standards ~~during the third quarter of 2021~~in 2022 that had a material impact on our consolidated results of operations, financial position or cash flows. In addition, as of September 2, 2022, there ~~are~~were no new accounting standards that we have not yet adopted that are expected to have a material impact on our consolidated results of operations, financial position or cash flows.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in conformity with GAAP requires management to adopt accounting policies related to estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period, as well as the related disclosure of contingent assets and liabilities at the date of the financial statements. On an ongoing basis, management evaluates its accounting policies, estimates and judgments, including those related to inventories, valuation of long-lived store assets, claims and contingencies, income taxes and revenue recognition. Management bases our estimates and judgments on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

There have been no material changes to the critical accounting policies and estimates disclosed in our ~~2020~~2021 Annual Report on Form 10-K.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk

The market risk inherent in our financial instruments represents the potential loss in fair value, earnings or cash flows arising from adverse changes in foreign currency exchange rates or interest rates. We may use derivative financial instruments like foreign currency forward contracts, cross-currency swaps and interest rate swap arrangements to manage exposure to market risks. We do not use derivative financial instruments for trading purposes.

Foreign Exchange Rate Risk

Our Canadian dollar denominated earnings are subject to exchange rate risk as substantially all our merchandise sold in Canada is sourced through U.S. dollar transactions. Although we utilize foreign currency forward contracts to partially offset risks

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associated with our operations in Canada, these measures may not succeed in offsetting all the short-term impact of foreign currency rate movements and generally may not be effective in offsetting the long-term impact of sustained shifts in foreign currency rates.

Further, although our royalty arrangements with our international partners are denominated in U.S. dollars, the royalties we receive in U.S. dollars are calculated based on sales in the local currency. As a result, our royalties in these arrangements are exposed to foreign currency exchange rate fluctuations.

Interest Rate Risk

Our investment portfolio primarily consists of interest-bearing instruments that are classified as cash and cash equivalents based on their original maturities. Our investment portfolio is maintained in accordance with our investment policy, which specifies permitted types of investments, specifies credit quality standards and maturity profiles and limits credit exposure to any single issuer. The primary objective of our investment activities is the preservation of principal, the maintenance of liquidity and the maximization of interest income while minimizing risk. Our investment portfolio is primarily comprised of U.S. government obligations, U.S. Treasury and AAA-rated money market funds, commercial paper and bank deposits. Given the short-term nature and quality of investments in our portfolio, we do not believe there is any material risk to principal associated with increases or decreases in interest rates.

All of our long-term debt as of ~~October~~July 30, ~~2021~~2022 has fixed interest rates. We will from time to time adjust our exposure to interest rate risk by entering into interest rate swap arrangements. Our exposure to interest rate changes is limited to the fair value of the debt issued, which would not have a material impact on our earnings or cash flows.

Fair Value of Financial Instruments

As of ~~October~~July 30, ~~2021,~~2022, we believe that the carrying values of accounts receivable, accounts payable and accrued expenses approximate fair value because of their short maturity.

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		October 30, 2021		January 30, 2021		October 31, 2020			July 30, 2022		January 29, 2022		July 31, 2021
		(in millions)							(in millions)
Principal Value	Principal Value	$	4,915	$	6,449	$	6,449	Principal Value	$	4,915	$	4,915	$	5,414
Fair Value, Estimated (a)	Fair Value, Estimated (a)	5,720		7,243		6,678		Fair Value, Estimated (a)	4,631		5,493		6,581

_______________

(a)The estimated fair value is based on reported transaction prices. The estimates presented are not necessarily indicative of the amounts that we could realize in a current market exchange.

Concentration of Credit Risk

We maintain cash and cash equivalents and derivative contracts with various major financial institutions. We monitor the relative credit standing of financial institutions with whom we transact and limit the amount of credit exposure with any one entity. Our investment portfolio is primarily comprised of U.S. government obligations, U.S. Treasury and AAA-rated money market funds, commercial paper and bank deposits. We also periodically review the relative credit standing of franchise, license and wholesale partners and other entities to which we grant credit terms in the normal course of business.

Item 4. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures. As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Interim Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Based upon that evaluation, our Interim Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective and designed to ensure that information required to be disclosed by us in reports we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (2) accumulated and communicated to our management, including our Interim Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Changes in internal control over financial reporting. Following the Separation, Victoria's Secret & Co. began providing us with information technology services, including the provision of certain information technology and general computer controls, under the terms of an extended transition services agreement.

There were no ~~other~~ changes in our internal control over financial reporting that occurred in the ~~third~~second quarter of ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

We are a defendant in a variety of lawsuits arising in the ordinary course of business. Actions filed against our Company from time to time include commercial, tort, intellectual property, customer, employment, data privacy, securities and other claims, including purported class action lawsuits. Although it is not possible to predict with certainty the eventual outcome of any litigation, in the opinion of management, our current legal proceedings are not expected to have a material adverse effect on our results of operations, financial position or ~~results of operations.~~cash flows.

On May 19, 2020 and January 12, 2021, certain ~~shareholders~~ of ~~ours~~our stockholders filed derivative lawsuits in the Court of Common Pleas for Franklin County, Ohio (subsequently removed to the United States District Court for the Southern District of Ohio) and the Delaware Court of Chancery, respectively, naming as defendants certain current and former directors and officers of ours and alleging, among other things, breaches of fiduciary duty through asserted violations of law and failures to monitor workplace ~~conduct.~~conduct (the "Lawsuits"). In addition, we also received litigation and books-and-records demands from certain other ~~shareholders~~stockholders related to the same ~~matters.~~matters (together with the Lawsuits, the "Actions").

In July 2021, we announced the global settlement resolving the Actions. The settlement ~~resolves~~resolved all derivative claims that have been or could have been asserted in the Actions or that involve in any way the allegations referred to in the Actions and ~~releases~~released all such claims against us and our past and present employees, officers and directors, among others. As part of the settlement, we have agreed to implement certain management and governance measures, including the maintenance of a Diversity, Equity, and Inclusion Council. Following the August 2, 2021 spin-off of Victoria’s Secret & Co., the settlement terms ~~will~~ apply to both us and Victoria’s Secret & Co. Each company has committed to invest $45 million over at least five years to fund the management and governance measures. ~~The settlement is subject to approval of~~In May 2022, the ~~United States~~U.S. District Court of the Southern District of ~~Ohio.~~Ohio granted final approval of the settlement.

Item 1A. RISK FACTORS

The ~~following information supplements the~~ risk factors ~~described~~that affect our business and financial results are discussed in ~~“Item 1A:~~Item 1A. Risk ~~Factors”~~Factors in our ~~2020 Annual Report on Form 10-K and should be read in conjunction with the risk factors described in the 2020~~2021 Annual Report on Form 10-K. We wish to caution the reader that the risk factors discussed in ~~“Item 1A:~~Item 1A. Risk ~~Factors”~~Factors in our ~~2020~~2021 Annual Report on Form 10-K and those described elsewhere in this report or other SEC filings, could cause actual results to differ materially from those stated in any forward-looking statements.

Our recently completed spin-off of the Victoria’s Secret business and related operations could negatively impact our business, and contingent liabilities from the divestiture of such business could adversely affect our financial position and results of operations.

On August 2, 2021, we completed the spin-off of our Victoria’s Secret business. The spin-off poses risks and challenges that could negatively impact our business. The spin-off may impact our credit rating, dilute our earnings per share, have other adverse financial and accounting impacts and distract management. In addition, we may be required to indemnify the new Victoria’s Secret company against known and unknown contingent liabilities in connection with the spin-off of the Victoria’s Secret business. Further, we may not receive tax-free treatment for U.S. federal income tax purposes. The resolution of these contingencies may have a material effect on our financial position and results of operations. Uncertainty about the effect of the spin-off of the Victoria’s Secret business on associates, commercial partners and vendors may have an adverse effect on us. These uncertainties may impair our ability to retain and motivate key personnel and could cause commercial partners, vendors and others that deal with us to defer or decline entering into contracts with us or seek to change existing business relationships with us. In addition, if key employees depart because of uncertainty about, or changes to, their roles, our business could be harmed. The spin-off may cause disruption in our business and that disruption could result in a loss of revenue. We have incurred significant expenses in connection with the spin-off of the Victoria’s Secret business and may incur significant future expenses related to the spin-off, which may include expenses and challenges related to the separation of Victoria's Secret from our current information technology environment. Further, the efforts related to the separation of the information technology environment will require significant resources that could impact our ability to keep pace with ongoing advancement of information technology needs of the business.

In addition, we may not be able to achieve the full strategic and financial benefits that are expected to result from the spin-off and the anticipated benefits of the spin-off are based on a number of assumptions, some of which may prove incorrect. For example, there is risk that as a smaller company following the spin-off that is less diversified with a narrower business focus, we may be more vulnerable to changing market conditions as well as the risk of takeover by third parties. There may be a loss of synergies from separating the businesses that could negatively impact the balance sheet, profit margins or earnings of both businesses. Lastly, there is risk that that the combined value of the common stock of the two publicly-traded companies will not be equal to or greater than the value of the Company’s common stock had the spin-off not occurred.

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Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides our repurchases of our common stock during the ~~third~~second quarter of ~~2021:~~2022:

Period Total
Number of
Shares
Purchased (a) Average Price
Paid per
Share (b) Total Number of Shares Purchased as Part of Publicly Announced Programs (c) Maximum Number of Shares (or Approximate Dollar Value) that May Yet be Purchased Under the Programs (c)
(in thousands) (in thousands)
August 2021 631 $ 67.57 631 $ 727,297
September 2021 2,766 65.78 2,751 546,355
October 2021 2,148 66.34 2,128 405,093
Total 5,545 5,510


Period	Total Number of Shares Purchased (a)	Average Price Paid per Share (b)		Total Number of Shares Purchased as Part of Publicly Announced Programs (c)	Maximum Number of Shares (or Approximate Dollar Value) that May Yet be Purchased Under the Programs (c)
	(in thousands)			(in thousands)
May 2022	8,059	$	33.14	7,960	$	202,473
June 2022	394	37.54		392	187,775
July 2022	1	26.99		—	187,775
Total	8,454			8,352

_______________

(a)The total number of shares repurchased includes shares repurchased as part of publicly announced programs, with the remainder relating to shares repurchased in connection with tax payments due upon vesting of associate restricted stock and performance share unit awards and the use of our stock to pay the exercise price on employee stock options.

(b)The average price paid per share includes any broker commissions.

(c)For additional share repurchase program information, see Note 5,4, “Earnings ~~(Loss)~~ Per Share and Shareholders' Equity (Deficit)” included in Part 1, Item 1. Financial Statements.

Item 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

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Item 4. MINE SAFETY DISCLOSURES

Not applicable.

Item 5. OTHER INFORMATION

None.

~~Table of~~ ~~Contents~~

Item 6. EXHIBITS


Exhibits
10.1
~~2.1~~						Separation and Distribution Agreement between L Brands, Inc. and Victoria’s Secret & Co., dated August 2, 2021, incorporated by reference to Exhibit 2.1 to the Company's Form 8-K dated August 3, 2021.

~~3.1~~						~~Certificate of Amendment of the Amended and Restated Certificate of Incorporation of L Brands, Inc., incorporated by reference to Exhibit 3.1 to the Company's Form 8-K dated August 3, 2021.~~

~~3.2~~						~~Amended and Restated Bylaws of~~ Bath & Body Works, Inc.~~, adopted as of August 2, 2021, incorporated by reference to Exhibit 3.2 to the Company's Form 8-K dated August 3, 2021.~~

~~10.1~~						~~L Brands to VS Transition Services Agreement between L Brands, Inc. and Victoria’s Secret & Co., dated August 2, 2021, incorporated~~ Associate Stock Purchase Plan (incorporated by reference to Exhibit 10.1 to the ~~Company's~~Company’s Form 8-K dated ~~August 3, 2021.~~May 13, 2022).

10.2						~~VS to L Brands~~ Transition ~~Services~~& General Release Agreement, dated as of May 4, 2022, by and between ~~L Brands,~~Bath & Body Works, Inc. and ~~Victoria’s Secret & Co., dated August 2, 2021, incorporated~~Andrew M. Meslow (incorporated by reference to Exhibit ~~10.2~~10.1 to the ~~Company's~~Company’s Form 8-K dated ~~August 3, 2021.~~May 5, 2022).

10.3						~~Tax Matters~~Executive Severance Agreement, ~~between L Brands, Inc. and Victoria’s Secret & Co.,~~ dated ~~August 2, 2021, incorporated by reference to Exhibit 10.3 to the Company's Form 8-K dated August 3, 2021.~~

~~10.4~~						~~Employee Matters Agreement between L Brands, Inc. and Victoria’s Secret & Co., dated August 2, 2021, incorporated by reference to Exhibit 10.4 to the Company's Form 8-K dated August 3, 2021.~~

~~10.5~~						Domestic Transportation Services Agreement between Mast Logistics Services, LLC and Victoria’s Secret & Co., dated August 2, 2021, incorporated by reference to Exhibit 10.5 to the Company's Form 8-K dated August 3, 2021.

~~10.6~~						~~Amended and Restated Revolving Credit Agreement~~as of May 13, 2022, by and ~~among L Brands, Inc. and JPMorgan Chase Bank, N.A., dated August 2, 2021, incorporated by reference to Exhibit 10.6 to the Company's Form 8-K dated August 3, 2021.~~

~~10.7~~						~~Executive Letter Agreement~~ between Bath & Body Works, Inc. and Wendy C. ~~Arlin, dated August 2, 2021, incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended July 31, 2021.~~Arlin.

~~10.8~~10.4						Executive ~~Retirement~~Severance Agreement, dated as of May 13, 2022, by and between ~~L Brands,~~Bath & Body Works, Inc. and ~~Stuart B. Burgdoerfer, dated August 2, 2021, incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended July 31, 2021.~~Deon N. Riley.

10.5						15Executive Severance Agreement, dated as of May 13, 2022, by and between Bath & Body Works, Inc. and Julie B. Rosen.

10.6						Executive Retention Agreement, dated as of May 13, 2022, by and between Bath & Body Works, Inc. and Wendy C. Arlin.

10.7						Executive Retention Agreement, dated as of May 13, 2022, by and between Bath & Body Works, Inc. and Deon N. Riley.

10.8						Executive Retention Agreement, dated as of May 13, 2022, by and between Bath & Body Works, Inc. and Julie B. Rosen.

10.9*						Amendment No. 1 to L Brands to VS Transition Services Agreement between Bath & Body Works, Inc. and Victoria’s Secret & Co., dated as of July 20, 2022.

10.10*						Amendment No. 1 to VS to L Brands Transition Services Agreement between Bath & Body Works, Inc. and Victoria’s Secret & Co., dated as of July 20, 2022.

15						Letter ~~re:~~regarding Unaudited Interim Financial Information ~~re:~~regarding Incorporation of Report of Independent Registered Public Accounting Firm.

22						List of Guarantor Subsidiaries.

31.1						Section 302 Certification of CEO.

31.2						Section 302 Certification of CFO.

32						Section 906 Certification (by CEO and CFO).

101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH						Inline XBRL Taxonomy Extension Schema Document

101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF						Inline XBRL Taxonomy Definition Linkbase Document

101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document

104						Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)


* Certain exhibits and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby undertakes to furnish supplementally a copy of any omitted exhibit or schedule upon request by the Securities and Exchange Commission.

4034

Table of Contents

SIGNATURE

Pursuant to the requirements 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.


			BATH & BODY WORKS, INC.
			(Registrant)
			By:			/s/ WENDY C. ARLIN
						Wendy C. Arlin Executive Vice President and Chief Financial Officer *

Date: ~~December 3, 2021~~September 2, 2022

* Ms. Arlin is the principal financial officer and the principal accounting officer and has been duly authorized to sign on behalf of the Registrant.

4135


	2021		2020
Comparable Sales (Stores and Direct) (a)	(7	%)	56	%
Comparable Store Sales (a)	(2	%)	38	%