Statement Of Income
Statement Of Income (USD $) | |||
In Millions, except Per Share data | 12 Months Ended
Jan. 30, 2010 | 12 Months Ended
Jan. 31, 2009 | 12 Months Ended
Feb. 02, 2008 |
Net Sales | $8,632 | $9,043 | $10,134 |
Costs of Goods Sold, Buying and Occupancy | (5,604) | (6,037) | (6,625) |
Gross Profit | 3,028 | 3,006 | 3,509 |
General, Administrative and Store Operating Expenses | (2,166) | (2,311) | (2,616) |
Impairment of Goodwill and Other Intangible Assets | (3) | (215) | (13) |
Gain on Divestiture of Express | 0 | 0 | 302 |
Loss on Divestiture of Limited Stores | 0 | 0 | (72) |
Net Gain on Joint Ventures | 9 | 109 | 0 |
Operating Income | 868 | 589 | 1,110 |
Interest Expense | (237) | (181) | (149) |
Interest Income | 2 | 18 | 18 |
Other Income | 17 | 23 | 128 |
Income Before Income Taxes | 650 | 449 | 1,107 |
Provision for Income Taxes | 202 | 233 | 411 |
Net Income | 448 | 216 | 696 |
Less: Net Income (Loss) Attributable to Noncontrolling Interest | 0 | (4) | (22) |
Net Income Attributable to Limited Brands, Inc. | $448 | $220 | $718 |
Net Income Attributable to Limited Brands, Inc. Per Basic Share | 1.39 | 0.66 | 1.91 |
Net Income Attributable to Limited Brands, Inc. Per Diluted Share | 1.37 | 0.65 | 1.89 |
Statement Of Financial Position
Statement Of Financial Position Classified (USD $) | ||
In Millions | Jan. 30, 2010
| Jan. 31, 2009
|
Current Assets: | ||
Cash and Cash Equivalents | $1,804 | $1,173 |
Accounts Receivable, Net | 219 | 236 |
Inventories | 1,037 | 1,182 |
Deferred Income Taxes | 30 | 77 |
Other | 160 | 199 |
Total Current Assets | 3,250 | 2,867 |
Property and Equipment, Net | 1,723 | 1,929 |
Goodwill | 1,442 | 1,426 |
Trade Names and Other Intangible Assets, Net | 594 | 580 |
Other Assets | 164 | 170 |
Total Assets | 7,173 | 6,972 |
Current Liabilities: | ||
Accounts Payable | 488 | 494 |
Accrued Expenses and Other | 693 | 669 |
Income Taxes | 141 | 92 |
Total Current Liabilities | 1,322 | 1,255 |
Deferred Income Taxes | 213 | 213 |
Long-term Debt | 2,723 | 2,897 |
Other Long-term Liabilities | 731 | 732 |
Shareholders' Equity: | ||
Preferred Stock-$1.00 par value; 10 shares authorized; none issued | 0 | 0 |
Common Stock-$0.50 par value; 1,000 shares authorized; 323 and 524 shares issued; 323 and 321 shares outstanding, respectively | 161 | 262 |
Paid-in Capital | 0 | 1,544 |
Accumulated Other Comprehensive Income (Loss) | (15) | (28) |
Retained Earnings | 2,037 | 4,777 |
Less: Treasury Stock, at Average Cost; 0 shares in 2009 and 203 shares in 2008 | 0 | (4,681) |
Total Limited Brands, Inc. Shareholders' Equity | 2,183 | 1,874 |
Noncontrolling Interest | 1 | 1 |
Total Equity | 2,184 | 1,875 |
Total Liabilities and Equity | $7,173 | $6,972 |
1_Statement Of Financial Positi
Statement Of Financial Position Classified (Parenthetical) (USD $) | ||
Share data in Millions, except Per Share data | Jan. 30, 2010
| Jan. 31, 2009
|
Preferred Stock, par value | $1 | $1 |
Preferred Stock, shares authorized | 10 | 10 |
Preferred Stock, issued | 0 | 0 |
Common Stock, par value | 0.5 | 0.5 |
Common Stock, shares authorized | 1,000 | 1,000 |
Common Stock, shares issued | 323 | 524 |
Common Stock, shares outstanding | 323 | 321 |
Treasury Stock, shares | 0 | 203 |
Statement Of Shareholders Equit
Statement Of Shareholders Equity And Other Comprehensive Income (USD $) | |||||||
In Millions | Common Stock
| Paid-In Capital
| Accumulated Other Comprehensive Income (Loss)
| Retained Earnings
| Treasury Stock, at Average Cost
| Noncontrolling Interest
| Total
|
Beginning Balance at Feb. 03, 2007 | $262 | $1,565 | ($17) | $4,277 | ($3,132) | $71 | $3,026 |
Beginning Balance (in shares) at Feb. 03, 2007 | 398 | ||||||
Capital Contributions from Noncontrolling Interest and Other | 6 | 6 | |||||
Adoption of Financial Accounting Standards Board Accounting Standards Codification Subtopic 740, Income Taxes | (10) | (10) | |||||
Comprehensive Income (Loss): | |||||||
Net Income (Loss) | 718 | (22) | 696 | ||||
Foreign Currency Translation | 37 | 37 | |||||
Unrealized (Loss) Gain on Cash Flow Hedges | (64) | (64) | |||||
Reclassification of Cash Flow Hedges to Earnings | 75 | 75 | |||||
Total Comprehensive Income (Loss) | 48 | 718 | (22) | 744 | |||
Cash Dividends ($0.60 per share) | (227) | (227) | |||||
Repurchase of Common Stock (in shares) | (59) | ||||||
Repurchase of Common Stock | (1,410) | (1,410) | |||||
Exercise of Stock Options and Other (in shares) | 7 | ||||||
Exercise of Stock Options and Other | (15) | 160 | 145 | ||||
Ending Balance (in shares) at Feb. 02, 2008 | 346 | ||||||
Ending Balance at Feb. 02, 2008 | 262 | 1,550 | 31 | 4,758 | (4,382) | 55 | 2,274 |
Capital Contributions from Noncontrolling Interest and Other | 4 | 4 | |||||
Divestiture of Personal Care Business | (54) | (54) | |||||
Comprehensive Income (Loss): | |||||||
Net Income (Loss) | 220 | (4) | 216 | ||||
Foreign Currency Translation | (34) | (34) | |||||
Unrealized (Loss) Gain on Cash Flow Hedges | 65 | 65 | |||||
Reclassification of Cash Flow Hedges to Earnings | (90) | (90) | |||||
Total Comprehensive Income (Loss) | (59) | 220 | (4) | 157 | |||
Cash Dividends ($0.60 per share) | (201) | (201) | |||||
Repurchase of Common Stock (in shares) | (28) | ||||||
Repurchase of Common Stock | (371) | (371) | |||||
Exercise of Stock Options and Other (in shares) | 3 | ||||||
Exercise of Stock Options and Other | (6) | 72 | 66 | ||||
Ending Balance (in shares) at Jan. 31, 2009 | 321 | 321 | |||||
Ending Balance at Jan. 31, 2009 | 262 | 1,544 | (28) | 4,777 | (4,681) | 1 | 1,875 |
Comprehensive Income (Loss): | |||||||
Net Income (Loss) | 448 | 448 | |||||
Foreign Currency Translation | (2) | (2) | |||||
Unrealized (Loss) Gain on Cash Flow Hedges | (56) | (56) | |||||
Reclassification of Cash Flow Hedges to Earnings | 71 | 71 | |||||
Total Comprehensive Income (Loss) | 13 | 448 | 461 | ||||
Cash Dividends ($0.60 per share) | (193) | (193) | |||||
Treasury Share Retirement | (101) | (1,545) | (2,995) | 4,641 | 0 | ||
Exercise of Stock Options and Other (in shares) | 2 | ||||||
Exercise of Stock Options and Other | 1 | 40 | 41 | ||||
Ending Balance (in shares) at Jan. 30, 2010 | 323 | 323 | |||||
Ending Balance at Jan. 30, 2010 | $161 | $0 | ($15) | $2,037 | $0 | $1 | $2,184 |
2_Statement Of Shareholders Equ
Statement Of Shareholders Equity And Other Comprehensive Income (Parenthetical) (USD $) | |||
12 Months Ended
Jan. 30, 2010 | 12 Months Ended
Jan. 31, 2009 | 12 Months Ended
Feb. 02, 2008 | |
Cash Dividends, per share | 0.6 | 0.6 | 0.6 |
Statement Of Cash Flows Indirec
Statement Of Cash Flows Indirect (USD $) | |||
In Millions | 12 Months Ended
Jan. 30, 2010 | 12 Months Ended
Jan. 31, 2009 | 12 Months Ended
Feb. 02, 2008 |
Operating Activities | |||
Net Income | $448 | $216 | $696 |
Adjustments to Reconcile Net Income to Net Cash Provided by (Used for) Operating Activities: | |||
Depreciation and Amortization of Long-lived Assets | 393 | 377 | 385 |
Amortization of Landlord Allowances | (36) | (34) | (33) |
Goodwill and Intangible Asset Impairment Charges | 3 | 215 | 13 |
Deferred Income Taxes | 49 | 46 | (5) |
Excess Tax Benefits From Share-based Compensation | 0 | (2) | (28) |
Share-based Compensation Expense | 40 | 35 | 44 |
Net Gain on Joint Ventures | (9) | (109) | 0 |
Gain on Distribution from Express | 0 | (13) | 0 |
Gain on Divestiture of Express | 0 | 0 | (302) |
Loss on Divestiture of Limited Stores | 0 | 0 | 72 |
Gain on Distribution from Easton Town Center, LLC | 0 | 0 | (100) |
Gains on Sales of Assets | 0 | 0 | (37) |
Changes in Assets and Liabilities, Net of Assets and Liabilities from Acquisitions: | |||
Accounts Receivable | 22 | 103 | (192) |
Inventories | 156 | 45 | 337 |
Accounts Payable, Accrued Expenses and Other | 17 | (39) | (152) |
Income Taxes Payable | 44 | (39) | (31) |
Other Assets and Liabilities | 47 | 153 | 98 |
Net Cash Provided by Operating Activities | 1,174 | 954 | 765 |
Investing Activities | |||
Capital Expenditures | (202) | (479) | (749) |
Net Proceeds from the Divestiture of Joint Venture | 9 | 159 | 0 |
Return of Capital from Express | 0 | 95 | 0 |
Proceeds from the Divestiture of Express, Net | 0 | 0 | 547 |
Proceeds from the Distribution from Easton Town Center, LLC | 0 | 0 | 102 |
Proceeds from Sale of Assets | 32 | 0 | 97 |
Other Investing Activities | (1) | (15) | 33 |
Net Cash (Used for) Provided by Investing Activities | (162) | (240) | 30 |
Financing Activities | |||
Proceeds from Long-term Debt, Net of Issuance and Discount Costs | 473 | 0 | 1,247 |
Payments of Long-term Debt | (656) | (15) | (7) |
Financing Costs Related to the Amendment of 5-Year Facility and Term Loan | (19) | 0 | 0 |
Repurchase of Common Stock | 0 | (379) | (1,402) |
Dividends Paid | (193) | (201) | (227) |
Excess Tax Benefits from Share-based Compensation | 0 | 2 | 28 |
Proceeds From Exercise of Stock Options and Other | 8 | 31 | 82 |
Net Cash Used for Financing Activities | (387) | (562) | (279) |
Effects of Exchange Rate Changes on Cash | 6 | 3 | 2 |
Net Increase in Cash and Cash Equivalents | 631 | 155 | 518 |
Cash and Cash Equivalents, Beginning of Year | 1,173 | 1,018 | 500 |
Cash and Cash Equivalents, End of Year | $1,804 | $1,173 | $1,018 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | |
12 Months Ended
Jan. 30, 2010 | |
Description of Business and Summary of Significant Accounting Policies | 1. Description of Business and Summary of Significant Accounting Policies Description of Business Limited Brands, Inc. (the Company) operates in the highly competitive specialty retail business. The Company is a retailer of womens intimate and other apparel, beauty and personal care products and accessories. The Company sells its merchandise through specialty retail stores in the United States and Canada, which are primarily mall-based, and through its websites, catalogue and other channels. The Company currently operates the following retail brands: Victorias Secret Pink La Senza Bath Body Works C. O. Bigelow The White Barn Candle Company Henri Bendel Fiscal Year The Companys fiscal year ends on the Saturday nearest to January31. As used herein, 2009, 2008 and 2007 refer to the 52-week periods ending January30, 2010,January31, 2009 and February2, 2008, 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 Consolidated Financial Statements include the results of Express and Limited Stores through their divestiture dates which were July6, 2007 and August3, 2007, respectively. The Companys Consolidated Financial Statements also include less than 100% owned variable interest entities in which the Company is designated as the primary beneficiary. 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 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 Companys share of net income or loss of unconsolidated entities from which the Company purchases merchandise or merchandise components is included in Cost of Goods Sold, Buying and Occupancy on the Consolidated Statements of Income. The Companys share of net income or loss of all other unconsolidated entities is included in Other Income (Expense) on the Consolidated Statements of Income. The Companys equity investments are required to be tested for impairment when it is determined there may be an other than temporary loss in value. Subsequent to the divestitures of Express and Limited Stores, the Companys remaining 25% ownership interest in each is accounted for under the equity method of accounting. The Company eliminates in consolidation 25% of merchandise sourcing sales to Express and Limited Stores consistent with the Companys ownership percentage. Cash and Cash Equivalents Cash and Cash Equivalents include cash on hand, demand deposits with financial institutions and highly liquid investments with original maturities of less than 90 days. The Companys outstanding checks, which amounted to $76 million as of January30, 2010 and $86 million as of J |
New Accounting Pronouncements a
New Accounting Pronouncements and Changes in Accounting Principle | |
12 Months Ended
Jan. 30, 2010 | |
New Accounting Pronouncements and Changes in Accounting Principle | 2. New Accounting Pronouncements and Changes in Accounting Principle New Accounting Pronouncements Accounting Standards Codification (Codification) and the Hierarchy of Generally Accepted Accounting Principles (GAAP) In June 2009, the Financial Accounting Standards Board (FASB) issued ASC Subtopic 105, Generally Accepted Accounting Principles, which reorganizes the thousands of U.S. GAAP pronouncements into roughly 90 accounting topics and displays all topics using a consistent structure. It also includes relevant Securities and Exchange Commission (SEC) guidance that follows the same topical structure in separate sections in the Codification. In the third quarter of 2009, the Company changed its historical U.S. GAAP references to comply with the Codification. The adoption of this guidance did not impact the Companys results of operations, financial condition or liquidity since the Codification is not intended to change or alter existing U.S. GAAP. Subsequent Events In May 2009, the FASB issued authoritative guidance included in ASC Subtopic 855, Subsequent Events, which incorporates guidance on subsequent events into authoritative accounting literature and clarifies the time following the balance sheet date that must be considered for subsequent events disclosures in the financial statements. In the second quarter of 2009, the Company adopted this guidance which requires disclosure of the date through which subsequent events have been reviewed.This guidance did not change the Companys procedures for reviewing subsequent events. In February 2010, the FASB issued Accounting Standards Update (ASU) 2010-09 to amend ASC Subtopic 855, Subsequent Events, to not require disclosure of the date through which management evaluated subsequent events in the financial statements for either originally issued financial statements or reissued financial statements. Derivative Instruments and Hedging Activities In March 2008, the FASB issued authoritative guidance included in ASC Subtopic 815, Derivatives and Hedging, which requires disclosures about the fair value of derivative instruments and their gains or losses in tabular format as well as disclosures regarding credit-risk-related contingent features in derivative agreements, counterparty credit risk and strategies and objectives for using derivative instruments. This guidance amends and expands previously released authoritative guidance and became effective prospectively beginning in 2009. In the first quarter of 2009, the Company adopted this guidance. For additional information, see Note 13, Derivative Instruments. Consolidation In December 2007, the FASB issued authoritative guidance included in ASC Subtopic 810, Consolidation, which modifies reporting for noncontrolling interest (minority interest) in consolidated financial statements.This guidance requires noncontrolling interest to be reported in equity and establishes a new framework for recognizing net income or loss and comprehensive income or loss by the controlling interest.This guidance further requires specific disclosures regarding changes in equity interest of both the controlling and noncontrolling parties and presenta |
Earnings Per Share
Earnings Per Share | |
12 Months Ended
Jan. 30, 2010 | |
Earnings Per Share | 3. Earnings Per Share Earnings per basic share is computed based on the weighted-average number of outstanding common shares. Earnings per diluted share include the weighted-average effect of dilutive options and restricted stock on the weighted-average shares outstanding. The following table provides shares utilized for the calculation of basic and diluted earnings per share for 2009, 2008 and 2007: 2009 2008 2007 (in millions) Weighted-average Common Shares: Issued Shares 524 524 524 Treasury Shares (202 ) (189 ) (149 ) Basic Shares 322 335 375 Effect of Dilutive Options and Restricted Stock 5 2 5 Diluted Shares 327 337 380 Anti-dilutive Options (a) 12 15 9 (a) These options were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. |
Divestitures
Divestitures | |
12 Months Ended
Jan. 30, 2010 | |
Divestitures | 4. Divestitures Joint Venture In April 2008, the Company and its investment partner completed the divestiture of a joint venture, which the Company consolidated, to a third-party. The Company recognized a pre-tax gain of $128 million and received pre-tax proceeds of $168 million on the divestiture. The pre-tax gain is included in Net Gain on Joint Ventures on the 2008 Consolidated Statement of Income. Total proceeds included $24 million, which was to be held in escrow until September 2009 to cover any post-closing contingencies. In December 2008, $15 million of $24 million in funds held in escrow were distributed to the Company. In September 2009, the remaining $9 million in funds held in escrow were distributed to the Company. Express On July6, 2007, the Company completed the divestiture of 75% of its ownership interest in Express to affiliates of Golden Gate Capital for pre-tax net cash proceeds of $547 million. The Company recorded a pre-tax gain on the divestiture of $302 million. For additional information, see Note 9, Equity Investments and Other. Limited Stores On August3, 2007, the Company completed the divestiture of 75% of its ownership interest in Limited Stores to affiliates of Sun Capital. As part of the agreement, Sun Capital contributed $50 million of equity capital into the business and arranged a $75 million credit facility. The Company recorded a pre-tax loss on the divestiture of $72 million. For additional information, see Note 9, Equity Investments and Other. |
Restructuring Activities
Restructuring Activities | |
12 Months Ended
Jan. 30, 2010 | |
Restructuring Activities | 5. Restructuring Activities 2008 During the fourth quarter of 2008, the Company initiated a restructuring program designed to resize the Companys corporate infrastructure and to adjust for the impact of the current retail environment. This program resulted in the elimination of approximately 400 positions (or 10%) of the Companys corporate and home office headcount. The Company recognized a pre-tax charge consisting of severance and related costs of $23 million for the fiscal year ended January31, 2009. These costs are included in General, Administrative and Store Operating Expenses on the 2008 Consolidated Statement of Income. The Company made cash payments of $15 million in 2009 related to this restructuring program. In addition, the liability was further reduced by $2 million in 2009 related to changes in estimates. The remaining balance of $6 million is included in Accrued Expenses and Other on the Consolidated Balance Sheet as of January30, 2010. 2007 In 2007, the Company completed a restructuring program designed to resize the Companys corporate infrastructure and to adjust for the impact of the Apparel divestitures. This program resulted in the elimination of approximately 500 positions (or 10%) of the Companys corporate and home office headcount through position eliminations and transfers to Express and Limited Stores. The Company recognized pre-tax charges consisting primarily of severance and related costs of $34 million for the fiscal year ended February2, 2008. These costs are included in General, Administrative and Store Operating Expenses on the 2007 Consolidated Statement of Income. The Company also recognized $25 million in gains related to the sale of corporate aircraft. These gains are included in General, Administrative and Store Operating Expenses on the 2007 Consolidated Statement of Income. |
Inventories
Inventories | |
12 Months Ended
Jan. 30, 2010 | |
Inventories | 6. Inventories The following table provides inventories as of January30, 2010 and January31, 2009: January30, 2010 January31, 2009 (in millions) Finished Goods Merchandise $ 973 $ 1,101 Raw Materials and Merchandise Components 64 81 Total Inventories $ 1,037 $ 1,182 During the second quarter of 2007, the Company recognized a pre-tax charge of $19 million related to excess raw material and component inventory at Bath Body Works. This cost was included in Cost of Goods Sold, Buying and Occupancy on the 2007 Consolidated Statement of Income. |
Property and Equipment, Net
Property and Equipment, Net | |
12 Months Ended
Jan. 30, 2010 | |
Property and Equipment, Net | 7. Property and Equipment, Net The following table provides property and equipment, net as of January30, 2010 and January31, 2009: January30, 2010 January31, 2009 (in millions) Land $ 60 $ 60 Buildings and Improvements 390 392 Furniture, Fixtures, Software and Equipment 2,429 2,375 Leaseholds and Improvements 1,151 1,085 Construction in Progress 28 119 Total 4,058 4,031 Accumulated Depreciation and Amortization (2,335 ) (2,102 ) Property and Equipment, Net $ 1,723 $ 1,929 Depreciation expense was $387 million in 2009 and $371 million in both 2008 and 2007. |
Goodwill, Trade Names and Other
Goodwill, Trade Names and Other Intangible Assets, Net | |
12 Months Ended
Jan. 30, 2010 | |
Goodwill, Trade Names and Other Intangible Assets, Net | 8. Goodwill, Trade Names and Other Intangible Assets, Net Goodwill The following table provides the rollforward of goodwill for the fiscal years ended January30, 2010 and January31, 2009: Victorias Secret BathBody Works Other Total (in millions) Balance as of February2, 2008 $ 1,057 $ 628 $ 48 $ 1,733 Divestiture (48 ) (48 ) Impairment (189 ) (189 ) Foreign Currency Translation (70 ) (70 ) Balance as of January31, 2009 798 628 1,426 Foreign Currency Translation 16 16 Balance as of January30, 2010 $ 814 $ 628 $ $ 1,442 Intangible AssetsIndefinite Lives Intangible assets with indefinite lives represent the Victorias Secret, Bath Body Works and La Senza trade names. These assets totaled $566 million as of January30, 2010 and $548 million as of January31, 2009 and are included in Trade Names and Other Intangible Assets, Net on the Consolidated Balance Sheets. Intangible AssetsFinite Lives The following table provides intangible assets with finite lives as of January30, 2010 and January31, 2009: January30, 2010 January31, 2009 (in millions) Intellectual Property $ 41 $ 41 Trademarks/Brands 19 19 Licensing Agreements and Customer Relationships 23 21 Favorable Operating Leases 19 18 Total 102 99 Accumulated Amortization (74 ) (67 ) Intangible Assets, Net $ 28 $ 32 Amortization expense was $6 million for 2009 and 2008 and $14 million for 2007. Estimated future annual amortization expense will be approximately $7 million in each of 2010 and 2011, $5 million in 2012, $4 million in 2013 and $5 million thereafter. Impairment Charges La Senza In conjunction with the January 2007 acquisition of La Senza, the Company recorded $313 million in goodwill, $170 million in intangible assets with indefinite lives and $26 million in intangible assets with finite lives. These assets are included in the La Senza reporting unit which is part of the Victorias Secret reportable segment. 2008 In the fourth quarter of 2008, the Company completed its annual impairment testing. During the latter half of 2008, La Senzas operating results were negatively impacted by the global economic downturn and the resulting impact on the Canadian retail environment. As part of the annual impairment evaluation, the Company assessed the recoverability of goodwill using a discounted cash flow methodology. The Company concluded that the carrying value of the La Senza goodwill exceeded the implied fair value based on the estimated fair value of the La Senza reporting unit. Accordingly, the Company recorded a goodwill impairment charge of $189 million. The goodwill impairment charge is included in Impairment of Goodwill and Other Intangible Assets on the 2008 Consolidated Statem |
Equity Investments and Other
Equity Investments and Other | |
12 Months Ended
Jan. 30, 2010 | |
Equity Investments and Other | 9. Equity Investments and Other Express In July 2007, the Company completed the divestiture of 75% of its ownership interest in Express. In conjunction with the transaction, the Company and Express entered into transition services agreements whereby the Company provides support to Express in various operational areas including logistics, technology and merchandise sourcing. The terms of these transition services arrangements varied and ranged from 3 months to 3 years. In October 2009, the Company entered into new agreements with Express whereby the Company will continue to provide logistics services and lease office space. These agreements are effective beginning in February 2010 and extend through April 2016 with certain renewal options. The Company also continues to provide sourcing services to Express. The Company recognized merchandise sourcing revenue from Express of $344 million in 2009, $435 million in 2008 and $353 million in 2007. These amounts are net of the elimination of 25% of the gross merchandise sourcing revenue consistent with the Companys ownership percentage. The Companys accounts receivable from Express for merchandise sourcing and other services provided in accordance with the terms and conditions of the transition services agreements totaled $80 million as of January30, 2010, $92 million as of January31, 2009 and $151 million as of February2, 2008. In March 2008, Express distributed cash to its owners and the Company received $41 million. The Companys portion representing a return of capital is $28 million and is included in Return of Capital from Express within the Investing Activities section of the 2008 Consolidated Statement of Cash Flows. The remaining $13 million is considered a return on capital and is included in Other Assets and Liabilities within the Operating Activities section of the 2008 Consolidated Statement of Cash Flows. In July 2008, Express distributed additional cash to its owners and the Company received $71 million. The Companys portion representing a return of capital is $67 million with the remaining $4 million representing a return on capital. The proceeds received from the cash distribution were in excess of the Companys carrying value of the investment in Express. As a result, the carrying value was reduced to zero as of the date of the cash distribution and a pre-tax gain of approximately $13 million was recorded. The gain is included in Other Income on the 2008 Consolidated Statements of Income. The Companys investment carrying value for Express was $5 million as of January30, 2010 and zero as of January31, 2009. These amounts are included in Other Assets on the Consolidated Balance Sheets. In March 2010, Express distributed a cash dividend to its owners and the Company received $57 million. The proceeds received from the cash dividend were in excess of the Companys carrying value of the investment in Express. As a result, the carrying value will be reduced to zero as of the date of the cash dividend and a pre-tax gain of approximately $50 million will be recorded. Limited Stores In August 2007, the Company completed the divestiture of 75% of its ownership interest in Lim |
Accrued Expenses and Other
Accrued Expenses and Other | |
12 Months Ended
Jan. 30, 2010 | |
Accrued Expenses and Other | 10. Accrued Expenses and Other The following table provides additional information about the composition of accrued expenses and other as of January30, 2010 and January31, 2009: January30, 2010 January31, 2009 (in millions) Deferred Revenue, Principally from Gift Card Sales $ 181 $ 166 Compensation, Payroll Taxes and Benefits 180 103 Taxes, Other Than Income 72 74 Returns Reserve 31 35 Insurance 34 34 Rent 20 25 Interest 30 31 Current Portion of Long-term Debt 2 Other 143 201 Total Accrued Expenses and Other $ 693 $ 669 |
Income Taxes
Income Taxes | |
12 Months Ended
Jan. 30, 2010 | |
Income Taxes | 11. Income Taxes The following table provides the components of the Companys provision for income taxes for 2009, 2008 and 2007: 2009 2008 2007 (in millions) Current: U.S. Federal $ 138 $ 151 $ 352 U.S. State 1 13 46 Non-U.S. 14 23 18 Total 153 187 416 Deferred: U.S. Federal 47 38 59 U.S. State 8 15 (56 ) Non-U.S. (6 ) (7 ) (8 ) Total 49 46 (5 ) Provision for Income Taxes $ 202 $ 233 $ 411 The foreign component of pre-tax income, arising principally from overseas operations, was income of $84 million for 2009, a loss of $90 million for 2008 and income of $40 million for 2007. The 2008 loss included the impact of the $215 million impairment of goodwill and other intangible assets and changes in transfer pricing. In 2009, the non-U.S. tax provision reflects the impact of enacted statutory rate decreases in Canada. The following table provides the reconciliation between the statutory federal income tax rate and the effective tax rate for 2009, 2008 and 2007: 2009 2008 2007 Federal Income Tax Rate 35.0 % 35.0 % 35.0 % State Income Taxes, Net of Federal Income Tax Effect 3.7 % 5.0 % 3.5 % State Net Operating Loss and Valuation Allowance Adjustment 0.3 % 2.2 % (3.4 %) Non-deductible Loss on Divestiture of Limited Stores % % 1.9 % Non-deductible Impairment of Goodwill and Other Intangible Assets 0.3 % 14.2 % % Impact of Non-U.S. Operations (5.0 %) % 1.6 % Other Items, Net (3.2 %) (4.9 %) (2.2 %) Effective Tax Rate 31.1 % 51.5 % 36.4 % The Companys effective tax rate has historically reflected a provision related to the undistributed earnings of foreign affiliates. The Company has recorded a deferred tax liability for those amounts, but taxes are not paid until the earnings are deemed repatriated to the United States. However, when the tax basis of a foreign subsidiary is greater than its carrying value, no deferred taxes are recorded. In the fourth quarter of 2009, the Company executed a re-organization of certain of its foreign subsidiaries which resulted in the recognition of a non-cash income tax benefit of $21 million associated with the reversal of deferred tax liabilities associated with undistributed earnings of a foreign subsidiary. Deferred Taxes The following table provides the effect of temporary differences that cause deferred income taxes as of January30, 2010 and January31, 2009. Deferred tax assets and liabilities represent the future effects on income taxes resulting from temporary differences and carryforwards at the end of the respective year. January30, 2010 January31, 2009 Assets Liabilities Total Assets Liabilities T |
Long-term Debt
Long-term Debt | |
12 Months Ended
Jan. 30, 2010 | |
Long-term Debt | 12. Long-term Debt The following table provides the Companys long-term debt balance as of January30, 2010 and January31, 2009: January30, 2010 January31, 2009 (in millions) Senior Secured Debt Term Loan due August 2012. Variable Interest Rate of 4.28% as of January30, 2010 $ 200 $ 750 5.30% Mortgage due August 2010 2 2 Total Senior Secured Debt $ 202 $ 752 Senior Unsecured Debt with Subsidiary Guarantee $500 million, 8.50% Fixed Interest Rate Notes due June 2019, Less Unamortized Discount $ 485 $ Senior Unsecured Debt $700 million, 6.90% Fixed Interest Rate Notes due July 2017, Less Unamortized Discount $ 699 $ 698 $500 million, 5.25% Fixed Interest Rate Notes due November 2014, Less Unamortized Discount 499 499 $350 million, 6.95% Fixed Interest Rate Debentures due March 2033, Less Unamortized Discount 350 350 $300 million, 7.60% Fixed Interest Rate Notes due July 2037, Less Unamortized Discount 299 299 6.125% Fixed Interest Rate Notes due December 2012, Less Unamortized Discount(a) 191 299 Total Senior Unsecured Debt $ 2,038 $ 2,145 Total $ 2,725 $ 2,897 Current Portion of Long-term Debt (2 ) Total Long-term Debt, Net of Current Portion $ 2,723 $ 2,897 (a) The principal balance outstanding was $191 million as of January30, 2010 and $300 million as of January31, 2009. The following table provides principal payments due on long-term debt in the next five fiscal years and the remaining years thereafter: Fiscal Year (in millions) 2010 $ 2 2011 2012 391 2013 2014 500 Thereafter 1,850 Cash paid for interest was $250 million in 2009, $174 million in 2008 and $151 million in 2007. Issuance of 2019 Notes In June 2009, the Company issued $500 million of 8.50% notes due in June 2019 (2019 Notes) through an institutional private placement offering. The obligation to pay principal and interest on these notes is jointly and severally guaranteed on a full and unconditional basis by certain of the Companys wholly-owned subsidiaries (the guarantors). The net proceeds from the issuance were $473 million, which included an issuance discount of $16 million and transaction costs of $11 million. These transaction costs are being amortized through the maturity date of June 2019 and are included within Other Assets on the January30, 2010 Consolidated Balance Sheet. The Company used the proceeds from this offering to repurchase $108 million of the Companys 2012 notes and to prepay $392 million of the Companys variable rate term loan (Term Loan). On November10, 2009, the Company and the guarantors filed a registration statement with the SEC to register new notes with materially identical terms to the 2019 Notes. On December15, 2009, the Company and the guarantors filed an amended registration statement to offer a public exchange of the 2019 Notes. On January 29, 2010, the exchange |
Derivative Instruments
Derivative Instruments | |
12 Months Ended
Jan. 30, 2010 | |
Derivative Instruments | 13. Derivative Instruments Foreign Exchange Risk In January 2007, the Company entered into a series of cross-currency swaps related to approximately $470 million of Canadian dollar denominated intercompany loans. These cross-currency swaps mitigate the exposure to fluctuations in the U.S. dollar-Canadian dollar exchange rate related to the Companys La Senza operations. The cross-currency swaps require the periodic exchange of fixed rate Canadian dollar interest payments for fixed rate U.S. dollar interest payments as well as exchange of Canadian dollar and U.S. dollar principal payments upon maturity. The cross-currency swaps mature between 2015 and 2018 at the same time as the related loans and are designated as cash flow hedges of foreign currency exchange risk. Changes in the U.S. dollar-Canadian dollar exchange rate and the related swap settlements result in reclassification of amounts from accumulated other comprehensive income (loss) to earnings to completely offset foreign currency transaction gains and losses recognized on the intercompany loans. The following table provides a summary of the fair value and balance sheet classification of the derivative financial instruments designated as foreign exchange cash flow hedges as of January30, 2010 and January31, 2009: January30, 2010 January31, 2009 (in millions) Other Assets $ $ 26 Other Long-term Liabilities 34 The following table provides a summary of the pre-tax financial statement effect of the gains and losses on the Companys derivative instruments designated as foreign exchange cash flow hedges for 2009 and 2008: Location 2009 2008 (in millions) Gain (Loss) Recognized in Other Comprehensive Income (Loss) Other Comprehensive Income (Loss) $ (60 ) $ 81 (Gain) Loss Reclassified from Accumulated Other Comprehensive Income (Loss) into Other Income (a) Other Income 57 (91 ) (a) Represents reclassification of amounts from accumulated other comprehensive income (loss) to earnings to completely offset foreign currency transaction gains and losses recognized on the intercompany loans. No ineffectiveness was associated with these foreign exchange cash flow hedges. Interest Rate Risk Interest Rate Designated Cash Flow Hedges In January 2008, the Company entered into participating interest rate swap arrangements to mitigate exposure to interest rate fluctuations related to the Term Loan. The participating interest rate swap arrangements effectively convert the Term Loan to a fixed interest rate while still allowing the Company to partially benefit from declines in short-term interest rates. The swap arrangements were designated as cash flow hedges of interest rate risk and expire in 2012, at the same time as the related debt. Amounts are reclassified from accumulated other comprehensive income (loss) to earnings as interest expense is recognized on the Term Loan. The Company prepaid $392 million of the Term Loan with cash proceeds from the $500 million note issuance in June 2009. In conjunction with the Term Loan prepayments, the Company de-designate |
Fair Value Measurements
Fair Value Measurements | |
12 Months Ended
Jan. 30, 2010 | |
Fair Value Measurements | 14. Fair Value Measurements The following table provides a summary of the carrying value and fair value of long-term debt as of January30, 2010 and January31, 2009: January30, 2010 January31, 2009 (in millions) Carrying Value $ 2,725 $ 2,897 Fair Value (a) 2,690 2,113 (a) The estimated fair value of the Companys publicly traded debt is based on quoted market prices. The estimated fair value of the Term Loan is equal to its carrying value. The estimates presented are not necessarily indicative of the amounts that the Company could realize in a current market exchange. The following table provides a summary of assets and liabilities measured in the financial statements at fair value on a recurring basis as of January30, 2010 and January31, 2009: Level 1 Level2 Level3 Total (in millions) As of January30, 2010 Assets: Cash and Cash Equivalents $ 1,804 $ $ $ 1,804 Interest Rate Non-designated Derivative Instrument 5 5 Liabilities: Cross-currency Cash Flow Hedges 34 34 Interest Rate Designated Cash Flow Hedges 10 10 Interest Rate Non-designated Derivative Instrument 5 5 Lease Guarantees 9 9 As of January31, 2009 Assets: Cash and Cash Equivalents $ 1,173 $ $ $ 1,173 Cross-currency Cash Flow Hedges 26 26 Liabilities: Interest Rate Designated Cash Flow Hedges 30 30 Lease Guarantees 15 15 Management believes that the carrying values of accounts receivable, accounts payable and accrued expenses approximate fair value because of their short maturity. The following table provides a reconciliation of the Companys lease guarantees measured at fair value on a recurring basis using unobservable inputs (Level 3) for 2009 and 2008: 2009 2008 (in millions) Beginning Balance $ 15 $ 10 Change in Estimated Fair Value Reported in Earnings (6 ) 5 Ending Balance 9 15 The Companys lease guarantees 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 certain businesses. The fair value of these lease guarantees is impacted by economic conditions, probability of rent obligation payments, period of obligation as well as the discount rate utilized. For additional information, see Note 17, Commitments and Contingencies. |
Comprehensive Income
Comprehensive Income (Loss) | |
12 Months Ended
Jan. 30, 2010 | |
Comprehensive Income (Loss) | 15. Comprehensive Income (Loss) Comprehensive Income (Loss) consists of gains and losses on derivative instruments and foreign currency translation adjustments. The cumulative gains and losses on these items are included in Accumulated Other Comprehensive Income (Loss) in the Consolidated Balance Sheets and Consolidated Statements of Shareholders Equity. The following table provides additional detail regarding the composition of accumulated other comprehensive income (loss) as of January30, 2010 and January31, 2009: January30, 2010 January31, 2009 (in millions) Foreign Currency Translation $ (6 ) $ (4 ) Cash Flow Hedges (9 ) (24 ) Total Accumulated Other Comprehensive Income (Loss) $ (15 ) $ (28 ) |
Leases
Leases | |
12 Months Ended
Jan. 30, 2010 | |
Leases | 16. Leases The Company is committed to noncancelable leases with remaining terms generally from one to ten years. A substantial portion of the Companys leases consist of store leases generally with an initial term of ten years. Annual store rent consists of a fixed minimum amount and/or contingent rent based on a percentage of sales exceeding a stipulated amount. Store lease terms generally require additional payments covering taxes, common area costs and certain other expenses. These additional payments are excluded from the table below. The following table provides rent expense for 2009, 2008 and 2007: 2009 2008 2007 (in millions) Store Rent: Fixed Minimum $ 407 $ 391 $ 431 Contingent 40 37 58 Total Store Rent 447 428 489 Office, Equipment and Other 61 64 70 Gross Rent Expense 508 492 559 Sublease Rental Income (2 ) (4 ) (9 ) Total Rent Expense $ 506 $ 488 $ 550 The following table provides the Companys minimum rent commitments under noncancelable operating leases in the next five fiscal years and the remaining years thereafter: Fiscal Year (in millions) (a) 2010 $ 478 2011 444 2012 396 2013 362 2014 337 Thereafter 1,115 (a) Excludes additional payments covering taxes, common area costs and certain other expenses generally required by store lease terms. The Companys future sublease income under noncancelable subleases was $12 million as of January30, 2010, which included $3 million of rent commitments related to disposed businesses under master lease arrangements. |
Commitments and Contingencies
Commitments and Contingencies | |
12 Months Ended
Jan. 30, 2010 | |
Commitments and Contingencies | 17. 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 Companys results of operations, financial condition or cash flows. On November6, 2009, a class action (International Brotherhood of Electrical Workers Local 697 Pension Fund v. Limited Brands, Inc. et al.) was filed against the Company and certain of its officers in the United States District Court for the Southern District of Ohio on behalf of a purported class of all persons who purchased or acquired shares of Limited Brands common stock between August22, 2007 and February28, 2008.The Company believes the complaint is without merit and that it has substantial factual and legal defenses to the claims at issue.The Company intends to vigorously defend against this action. The Company cannot reasonably estimate the possible loss or range of loss that may result from this lawsuit. Guarantees In connection with the disposition of certain businesses, the Company has remaining guarantees of approximately $135 million related to lease payments of Express, Limited Stores, Abercrombie Fitch, Dicks Sporting Goods (formerly Galyans), Lane Bryant, New York Company and Anne.x under the current terms of noncancelable leases expiring at various dates through 2017. These guarantees 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 the businesses. In certain instances, the Companys guarantee may remain in effect if the term of a lease is extended. In April 2008, the Company received an irrevocable standby letter of credit from Express of $34 million issued by a third-party bank to mitigate a portion of the Companys contingent liability for guaranteed future lease payments of Express. The Company can draw from the irrevocable standby letter of credit if Express were to default on any of the guaranteed leases. The irrevocable standby letter of credit is reduced through the November1, 2010 expiration date consistent with the overall reduction in guaranteed lease payments. The outstanding balance of the irrevocable standby letter of credit from Express was $6 million as of January30, 2010 and $19 million as of January31, 2009. The Companys guarantees related to Express, Limited Stores and New York Company require fair value accounting in accordance with U.S. GAAP in effect at the time of these divestitures. The guaranteed lease payments related to Express (net of the irrevocable standby letter of credit), Limited Stores and New York Company totaled $84 million as of January30, 2010 and $94 million as of January31, 2009. The estimated fair value of these guarantee obligati |
Retirement Benefits
Retirement Benefits | |
12 Months Ended
Jan. 30, 2010 | |
Retirement Benefits | 18. Retirement Benefits The Company sponsors a tax-qualified defined contribution retirement plan and a non-qualified supplemental retirement plan for substantially all of its associates within the United States of America. Participation in the tax-qualified plan is available to associates who meet certain age and service requirements. Participation in the non-qualified plan is made available to associates who meet certain age, service, job level and compensation requirements. The qualified plan permits participating associates to elect contributions up to the maximum limits allowable under the Internal Revenue Code. The Company matches associate contributions according to a predetermined formula and contributes additional amounts based on a percentage of the associates eligible annual compensation and years of service. Associate contributions and Company matching contributions vest immediately. Additional Company contributions and the related investment earnings are subject to vesting based on years of service. Total expense recognized related to the qualified plan was $46 million for 2009, $40 million for 2008 and $44 million for 2007. The non-qualified plan is an unfunded plan which provides benefits beyond the Internal Revenue Code limits for qualified defined contribution plans. The plan permits participating associates to elect contributions up to a maximum percentage of eligible compensation. The Company matches associate contributions according to a predetermined formula and contributes additional amounts based on a percentage of the associates eligible compensation and years of service. The plan also permits participating associates to defer additional compensation up to a maximum amount which the Company does not match. Associates accounts are credited with interest using a rate determined by the Company. Associate contributions and the related interest vest immediately. Company contributions, along with related interest, are subject to vesting based on years of service. Associates may elect in-service distributions for the unmatched additional deferred compensation component only. The remaining vested portion of associates accounts in the plan will be distributed upon termination of employment in either a lump sum or in equal annual installments over a specified period of up to 10 years. The following table provides the Companys annual activity for this plan and year-end liability, included in Other Long-term Liabilities on the Consolidated Balance Sheets, as of January30, 2010 and January31, 2009: January30, 2010 January31, 2009 (in millions) Balance at Beginning of Year $ 167 $ 175 Contributions: Associate 7 9 Company 8 9 Interest 12 13 Distributions (26 ) (39 ) Balance at End of Year $ 168 $ 167 Total expense recognized related to the non-qualified plan was $20 million for 2009, $21 million for 2008 and $22 million for 2007. |
Shareholders' Equity
Shareholders' Equity | |
12 Months Ended
Jan. 30, 2010 | |
Shareholders' Equity | 19. Shareholders Equity Under the authority of the Companys Board of Directors, the Company repurchased shares of its common stock under the following repurchase programs during the fiscal years ended January30, 2010,January31, 2009 andFebruary 2, 2008: AmountAuthorized Shares Repurchased AverageStock Priceof Shares Repurchased within Program 2009 2008 2007 (in millions) (in thousands) October 2008 (a) $ 250 19,048 $ 11.48 November 2007 (b) 250 8,539 5,887 17.33 August 2007 250 11,870 21.06 June 2007 1,000 38,656 25.87 June 2006 (c) 100 2,296 26.35 Total Shares Repurchased 27,587 58,709 (a) The repurchase program authorized in October 2008 had $31 million remaining as of January30, 2010. (b) The repurchase program authorized in November 2007 had repurchases of $150 million in 2008 at an average stock price of $17.54 and repurchases of $100 million in 2007 at an average stock price of $17.02. This repurchase program was completed in May 2008. (c) The repurchase program authorized in June 2006 had repurchases of $59 million in 2007 at an average stock price of $25.86 and repurchases of $41 million in 2006 at an average stock price of $27.11. This repurchase program was completed in May 2007. For the November 2007 repurchase program, $8 million of share repurchases were reflected in accounts payable as of February2, 2008 and were settled in February 2008. There were no share repurchases reflected in accounts payable as of January31, 2009 or January30, 2010. In 2009, no additional shares were repurchased. In January 2010, the Company retired 201million shares of its Treasury Stock. The retirement resulted in a reduction of $4.641 billion in Treasury Stock, $101 million in the par value of Common Stock, $1.545 billion in Paid-in Capital and $2.995 billion in Retained Earnings. In March 2010, the Companys Board of Directors declared a special dividend of $1 per share. In addition, the Companys Board of Directors authorized a share repurchase program of $200 million and cancelled the Companys previous $250 million share repurchase program, which had $31 million remaining. |
Share-based Compensation
Share-based Compensation | |
12 Months Ended
Jan. 30, 2010 | |
Share-based Compensation | 20. Share-based Compensation Plan Summary The shareholder approved Limited Brands, Inc. 1993 Stock Option and Performance Incentive Plan (2009 Restatement) as amended provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, performance-based restricted stock, performance units and unrestricted shares. The Company grants stock options at a price equal to the fair market value of the stock on the date of grant. Stock options have a maximum term of ten years. Stock options generally vest ratably over 3-4 years. Restricted stock generally vests (the restrictions lapse) over a three year period. The Limited Brands, Inc. Stock Award and Deferred Compensation Plan for Non-Associate Directors provides for an annual stock retainer for non-associate directors. The stock issued in conjunction with this plan has no restrictions. Under the Companys plans, approximately 102million options, restricted and unrestricted shares have been authorized to be granted to employees and directors. Approximately 14million options and shares were available for grant as of January30, 2010. Stock Options The following table provides the Companys stock option activity for the fiscal year ended January30, 2010: Numberof Shares Weighted Average Option Price Per Share Weighted Average Remaining Contractual Life Aggregate Intrinsic Value (inthousands) (in years) (inthousands) Outstanding as of January31, 2009 15,381 $ 19.62 Granted 3,853 8.73 Exercised (690 ) 14.40 Cancelled (3,514 ) 18.84 Outstanding as of January30, 2010 15,030 $ 17.26 6.04 $ 55,019 Vested and Expected to Vest as of January30, 2010 (a) 13,922 17.68 5.83 46,578 Options Exercisable as of January30, 2010 9,308 19.97 4.44 14,587 (a) The number of options expected to vest includes an estimate of expected forfeitures. Intrinsic value for stock options is the difference between the current market value of the Companys stock and the option strike price. The total intrinsic value of options exercised was $3 million for 2009, $10 million for 2008 and $80 million for 2007. The total fair value at grant date of option awards vested was $12 million for 2009, $13 million for 2008 and $23 million for 2007. The Companys total unrecognized compensation cost, net of estimated forfeitures, related to nonvested options was $7 million as of January30, 2010. This cost is expected to be recognized over a weighted-average period of 2.0 years. The weighted-average estimated fair value of stock options granted was $1.88 per share for 2009, $3.47 per share for 2008 and $6.97 per share for 2007. Cash received from stock options exercised was $10 million for 2009, $31 million for 2008 and $74 million for 2007. Tax benefits realized from tax deductions associated with stock options exercised were $1 million for 2009, $5 million for 2008 and $30 million for 2007. The Company uses the Black-Scholes option-pricing model for valuation |
Segment Information
Segment Information | |
12 Months Ended
Jan. 30, 2010 | |
Segment Information | 21. Segment Information Prior to the divestitures of Express and Limited Stores in the second quarter of 2007, the Company had three reportable segments: Victorias Secret, Bath Body Works and Apparel. The Victorias Secret reportable segment consists of the Victorias Secret and La Senza operating segments which are aggregated in accordance with the authoritative guidance included in ASC 280, Segment Reporting. The Victorias Secret segment sells womens intimate and other apparel, personal care and beauty products and accessories under the Victorias Secret, Pink and La Senza brand names. Victorias Secret merchandise is sold through retail stores, its website, www.VictoriasSecret.com, and its catalogue. Through its website and catalogue, certain Victorias Secrets merchandise may be purchased worldwide. La Senza sells merchandise through retail stores located throughout Canada and licensed stores in 49 other countries. La Senza products may also be purchased through its website, www.LaSenza.com. The Bath Body Works segment sells personal care, beauty and home fragrance products under the Bath Body Works, C.O. Bigelow, White Barn Candle Company and other brand names. Bath Body Works merchandise is sold at retail stores and through its website, www.bathandbodyworks.com. The Apparel segment sold womens and mens apparel through Express and Limited Stores. After the closing dates of the divestitures, the segment no longer exists. However, the Company retains a 25% ownership interest in Express and Limited Stores. Other consists of the following: Henri Bendel, operator of eleven specialty stores, which features accessories and personal care products; Mast, an apparel merchandise sourcing and production function serving Victorias Secret, La Senza and third-party customers; Beauty Avenues, a personal care sourcing and production function serving Victorias Secret, La Senza and Bath Body Works; International retail and wholesale operations (excluding La Senza), which include the Companys Bath Body Works and Victorias Secret Pink stores in Canada; and Corporate functions including non-core real estate, equity investments and other governance functions such as treasury and tax. The following table provides the Companys segment information as of and for the fiscal years ended January30, 2010,January31, 2009 andFebruary 2, 2008: Victorias Secret BathBody Works Apparel(a) Other Total (in millions) January30, 2010 Net Sales $ 5,307 $ 2,383 $ $ 942 $ 8,632 Depreciation and Amortization 163 58 136 357 Operating Income (Loss) 579 358 (69 ) 868 Total Assets 2,982 1,350 2,841 7,173 Capital Expenditures 114 24 64 202 January31, 2009 Net Sales $ 5,604 $ 2,374 $ $ 1,065 $ 9,043 Depreciation and Amortization 154 66 123 343 Operating Income (Loss) 405 215 (31 ) 589 Total Assets 3,086 |
Subsequent Events
Subsequent Events | |
12 Months Ended
Jan. 30, 2010 | |
Subsequent Events | 22. Subsequent Events In February 2010, Limited Stores distributed a cash dividend to its owners and the Company received $7 million. For additional information, see Note 9, Equity Investments and Other. In March 2010, the Company prepaid the remaining $200 million of the Term Loan due in 2012. In conjunction with the Term Loan prepayment, the Company terminated the remaining portion of the participating interest rate swap arrangement totaling $200 million. The Company also amended its 5-Year Facility by reducing the credit available from $1 billion to $927 million as well as extending the term through August 2014 on $800 million of the $927 million. For additional information, see Note 12, Long-term Debt and Note 13, Derivative Instruments. In March 2010, Express distributed a cash dividend to its owners and the Company received $57 million. For additional information, see Note 9, Equity Investments and Other. In March 2010, the Companys Board of Directors declared a special dividend of $1 per share. In addition, the Companys Board of Directors authorized a share repurchase program of $200 million and cancelled the Companys previous $250 million share repurchase program, which had $31 million remaining. For additional information, see Note 19, Shareholders Equity and Note 20, Share-based Compensation. |
Quarterly Financial Data
Quarterly Financial Data (Unaudited) | |
12 Months Ended
Jan. 30, 2010 | |
Quarterly Financial Data (Unaudited) | 23. Quarterly Financial Data (Unaudited) The following table provides summarized quarterly financial data for 2009: Fiscal Quarter Ended May2, 2009 August1, 2009(b) October31, 2009(c) January30, 2010(d) (in millions except per share data) Net Sales $ 1,725 $ 2,067 $ 1,777 $ 3,063 Gross Profit 548 668 563 1,249 Operating Income 65 158 59 586 Income Before Income Taxes 3 99 12 536 Net Income 3 74 15 356 Net Income Attributable to Limited Brands, Inc. 3 74 15 356 Net Income Attributable to Limited Brands, Inc. Per Basic Share (a) $ 0.01 $ 0.23 $ 0.05 $ 1.10 Net Income Attributed to Limited Brands, Inc. Per Diluted Share (a) $ 0.01 $ 0.23 $ 0.05 $ 1.08 (a) Due to changes in stock prices during the year and timing of issuances and repurchases of shares, the cumulative total of quarterly net income per share amounts may not equal the net income per share for the year. (b) Includes the effect of a pre-tax gain of $9 million, after-tax of $14 million, associated with the reversal of an accrued contractual liability. (c) Includes the effect of a tax benefit of $9 million related to certain discrete foreign and state income tax items. (d) Includes the effect of a tax benefit of $23 million primarily related to the reorganization of certain foreign subsidiaries. The following table provides summarized quarterly financial data for 2008: Fiscal Quarter Ended May3, 2008(b) August2, 2008(c) November1, 2008 January31, 2009(d) (in millions except per share data) Net Sales $ 1,925 $ 2,284 $ 1,843 $ 2,991 Gross Profit 641 761 580 1,024 Operating Income 209 186 41 153 Income Before Income Taxes 176 164 3 110 Net Income 97 99 4 16 Net Income Attributable to Limited Brands, Inc. 98 102 4 16 Net Income Attributable to Limited Brands, Inc. Per Basic Share (a) $ 0.29 $ 0.30 $ 0.01 $ 0.05 Net Income Attributable to Limited Brands, Inc. Per Diluted Share (a) $ 0.28 $ 0.30 $ 0.01 $ 0.05 (a) Due to changes in stock prices during the year and timing of issuances and repurchases of shares, the cumulative total of quarterly net income per share amounts may not equal the net income per share for the year. (b) Includes the effect of the following items: (i) A pre-tax gain of $128 million related to the divestiture of a personal care joint venture. (ii) A pre-tax loss of $19 million related to an impairment charge of an unconsolidated joint venture. (c) Includes the effect of a pre-tax gain of $13 million related to the $71 million distribution from Express. (d) Includes the effect of the following items: (i) A $215 million impairment charge of goodwill and other intangible assets for the La Senza business. (ii) A $23 million related to restructuring activities. (iii) A tax benefit of $15 |
Supplemental Guarantor Financia
Supplemental Guarantor Financial Information | |
12 Months Ended
Jan. 30, 2010 | |
Supplemental Guarantor Financial Information | 24. Supplemental Guarantor Financial Information The Companys 8.50% notes due in June 2019 are jointly and severally guaranteed on a full and unconditional basis by certain of the Companys wholly-owned subsidiaries. The Company is a holding company and its most significant assets are the stock of its subsidiaries. The guarantors represent (a)substantially all of the sales of the Companys domestic subsidiaries, (b)more than 90% of the assets owned by the Companys domestic subsidiaries, other than real property, certain other assets and intercompany investments and balances and (c)more than 95% of the accounts receivable and inventory directly owned by the Companys domestic subsidiaries. The following supplemental financial information sets forth for the Company and its guarantor and non-guarantor subsidiaries: the Condensed Consolidating Balance Sheets as of January30, 2010 and January31, 2009 and the Condensed Consolidating Statements of Income and Cash Flows for the years ended January30, 2010,January31, 2009 and February2, 2008. LIMITED BRANDS, INC. CONDENSED CONSOLIDATING BALANCE SHEET (in millions) January30, 2010 Limited Brands,Inc. Guarantor Subsidiaries Non-guarantor Subsidiaries Eliminations Consolidated Limited Brands, Inc. ASSETS Current Assets: Cash and Cash Equivalents $ $ 1,441 $ 363 $ $ 1,804 Accounts Receivable, Net 191 28 219 Inventories 883 154 1,037 Deferred Income Taxes 34 (4 ) 30 Other 107 54 (1 ) 160 Total Current Assets 2,656 595 (1 ) 3,250 Property and Equipment, Net 1,049 674 1,723 Goodwill 1,318 124 1,442 Trade Names and Other Intangible Assets, Net 420 174 594 Net Investments in and Advances to/from Consolidated Affiliates 12,746 11,997 6,511 (31,254 ) Other Assets 38 60 771 (705 ) 164 Total Assets $ 12,784 $ 17,500 $ 8,849 $ (31,960 ) $ 7,173 LIABILITIES AND EQUITY Current Liabilities: Accounts Payable $ $ 309 $ 179 $ $ 488 Accrued Expenses and Other 30 389 274 693 Income Taxes 4 121 16 141 Total Current Liabilities 34 819 469 1,322 Deferred Income Taxes (9 ) 30 192 213 Long-term Debt 2,723 608 81 (689 ) 2,723 Other Long-term Liabilities 25 551 170 (15 ) 731 Total Equity 10,011 15,492 7,937 (31,256 ) 2,184 Total Liabilities and Equity $ 12,784 $ 17,500 $ 8,849 $ (31,960 ) $ 7,173 |
Document Information
Document Information | |
12 Months Ended
Jan. 30, 2010 | |
Document Type | 10-K |
Amendment Flag | false |
Document Period End Date | 2010-01-30 |
Entity Information
Entity Information (USD $) | |||
12 Months Ended
Jan. 30, 2010 | Mar. 19, 2010
| Aug. 01, 2009
| |
Trading Symbol | LTD | ||
Entity Registrant Name | LIMITED BRANDS INC | ||
Entity Central Index Key | 0000701985 | ||
Current Fiscal Year End Date | --01-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 323,296,784 | ||
Entity Public Float | $3,450,695,967 |