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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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31-1029810
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(State or other jurisdiction of
incorporation or organization)
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(IRS Employer Identification No.)
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Three Limited Parkway
Columbus, Ohio
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43230
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(Address of principal executive offices)
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(Zip Code)
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(614) 415-7000
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(Registrant's Telephone Number, Including Area Code)
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Large accelerated filer
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ý
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Accelerated filer
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o
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Emerging growth company
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o
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Common Stock, $.50 Par Value
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Outstanding at May 26, 2017
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286,843,179 Shares
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Page No.
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Item 1.
Financial Statements *
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Item 4.
Controls and Procedures
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Item 1.
Legal Proceedings
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Item 1A.
Risk Factors
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Item 3.
Defaults Upon Senior Securities
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Item 4.
Mine Safety Disclosures
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Item 5.
Other Information
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Item 6.
Exhibits
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*
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The Company's fiscal year ends on the Saturday nearest to January 31. As used herein, “first quarter of 2017” and “first quarter of 2016” refer to the thirteen week periods ending April 29, 2017 and April 30, 2016, respectively.
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Item 1.
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FINANCIAL STATEMENTS
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First Quarter
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||||||
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2017
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|
2016
|
||||
Net Sales
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$
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2,437
|
|
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$
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2,614
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Costs of Goods Sold, Buying and Occupancy
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(1,534
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)
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(1,571
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)
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Gross Profit
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903
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1,043
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General, Administrative and Store Operating Expenses
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(694
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)
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(720
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)
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Operating Income
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209
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|
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323
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|
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Interest Expense
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(101
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)
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(97
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)
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Other Income
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10
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7
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|
||
Income Before Income Taxes
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118
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233
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Provision for Income Taxes
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24
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81
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Net Income
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$
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94
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$
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152
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Net Income Per Basic Share
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$
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0.33
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$
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0.53
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Net Income Per Diluted Share
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$
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0.33
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$
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0.52
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Dividends Per Share
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$
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0.60
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$
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2.60
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First Quarter
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||||||
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2017
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2016
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||||
Net Income
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$
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94
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$
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152
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Other Comprehensive Income (Loss), Net of Tax:
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|
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||||
Foreign Currency Translation
|
3
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|
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8
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|
||
Unrealized Gain (Loss) on Cash Flow Hedges
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9
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(16
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)
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||
Reclassification of Cash Flow Hedges to Earnings
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(6
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)
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14
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|
||
Unrealized Loss on Marketable Securities
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—
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|
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(1
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)
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||
Reclassification of Gain on Marketable Securities to Earnings
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—
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(3
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)
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||
Total Other Comprehensive Income (Loss), Net of Tax
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6
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|
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2
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Total Comprehensive Income
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$
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100
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$
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154
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|
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April 29,
2017 |
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January 28,
2017 |
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April 30,
2016 |
||||||
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(Unaudited)
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(Unaudited)
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||||||
ASSETS
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||||||
Current Assets:
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||||||
Cash and Cash Equivalents
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$
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1,555
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$
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1,934
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$
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1,267
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Accounts Receivable, Net
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213
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|
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294
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|
|
249
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|||
Inventories
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1,147
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1,096
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|
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1,266
|
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|||
Other
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237
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|
|
141
|
|
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209
|
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|||
Total Current Assets
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3,152
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3,465
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2,991
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|||
Property and Equipment, Net
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2,761
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2,741
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2,423
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|||
Goodwill
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1,348
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1,348
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1,348
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|||
Trade Names and Other Intangible Assets, Net
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411
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411
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411
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|||
Deferred Income Taxes
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23
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|
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19
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29
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|||
Other Assets
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187
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186
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|
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224
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|||
Total Assets
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$
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7,882
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$
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8,170
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$
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7,426
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LIABILITIES AND EQUITY (DEFICIT)
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||||||
Current Liabilities:
|
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||||||
Accounts Payable
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$
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664
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$
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683
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$
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720
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Accrued Expenses and Other
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813
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997
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833
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Current Portion of Long-term Debt
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44
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36
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8
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|||
Income Taxes
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310
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298
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|
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44
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|
|||
Total Current Liabilities
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1,831
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2,014
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|
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1,605
|
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|||
Deferred Income Taxes
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360
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|
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352
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|
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269
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|||
Long-term Debt
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5,702
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5,700
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5,718
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|||
Other Long-term Liabilities
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824
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831
|
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920
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|||
Shareholders’ Equity (Deficit):
|
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||||||
Preferred Stock - $1.00 par value; 10 shares authorized; none issued
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—
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—
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—
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Common Stock - $0.50 par value; 1,000 shares authorized; 317, 315 and 314 shares issued; 286, 286 and 288 shares outstanding, respectively
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159
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157
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157
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Paid-in Capital
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695
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650
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572
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Accumulated Other Comprehensive Income
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18
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12
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42
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Retained Earnings (Accumulated Deficit)
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128
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205
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(283
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)
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|||
Less: Treasury Stock, at Average Cost; 31, 29 and 26 shares, respectively
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(1,836
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)
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(1,753
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)
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(1,575
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)
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|||
Total L Brands, Inc. Shareholders’ Equity (Deficit)
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(836
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)
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(729
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)
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(1,087
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)
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Noncontrolling Interest
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1
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2
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|
1
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|||
Total Equity (Deficit)
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(835
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)
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(727
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)
|
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(1,086
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)
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|||
Total Liabilities and Equity (Deficit)
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$
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7,882
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|
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$
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8,170
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$
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7,426
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Year-to-Date
|
||||||
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2017
|
|
2016
|
||||
Operating Activities:
|
|
|
|
||||
Net Income
|
$
|
94
|
|
|
$
|
152
|
|
Adjustments to Reconcile Net Income to Net Cash Provided by (Used for) Operating Activities:
|
|
|
|
||||
Depreciation and Amortization of Long-lived Assets
|
142
|
|
|
121
|
|
||
Amortization of Landlord Allowances
|
(12
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)
|
|
(11
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)
|
||
Share-based Compensation Expense
|
25
|
|
|
21
|
|
||
Deferred Income Taxes
|
5
|
|
|
15
|
|
||
Gain on Distribution from Easton Investments
|
(9
|
)
|
|
—
|
|
||
Gain on Sale of Marketable Securities
|
—
|
|
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(4
|
)
|
||
Changes in Assets and Liabilities, Net of Assets and Liabilities from Acquisition:
|
|
|
|
||||
Accounts Receivable
|
80
|
|
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3
|
|
||
Inventories
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(52
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)
|
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(135
|
)
|
||
Accounts Payable, Accrued Expenses and Other
|
(200
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)
|
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(102
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)
|
||
Income Taxes Payable
|
11
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|
|
(148
|
)
|
||
Other Assets and Liabilities
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(77
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)
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|
45
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|
||
Net Cash Provided by (Used for) Operating Activities
|
7
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|
|
(43
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)
|
||
Investing Activities:
|
|
|
|
||||
Capital Expenditures
|
(165
|
)
|
|
(187
|
)
|
||
Return of Capital from Easton Investments
|
10
|
|
|
1
|
|
||
Acquisition, Net of Cash Acquired of $1
|
—
|
|
|
(31
|
)
|
||
Proceeds from Sale of Marketable Securities
|
—
|
|
|
10
|
|
||
Other Investing Activities
|
—
|
|
|
2
|
|
||
Net Cash Used for Investing Activities
|
(155
|
)
|
|
(205
|
)
|
||
Financing Activities:
|
|
|
|
||||
Borrowings from Foreign Facilities
|
9
|
|
|
6
|
|
||
Repayments on Foreign Facilities
|
(1
|
)
|
|
—
|
|
||
Dividends Paid
|
(172
|
)
|
|
(750
|
)
|
||
Repurchases of Common Stock
|
(85
|
)
|
|
(260
|
)
|
||
Tax Payments related to Share-based Awards
|
(17
|
)
|
|
(40
|
)
|
||
Proceeds from Exercise of Stock Options
|
36
|
|
|
10
|
|
||
Financing Costs and Other
|
—
|
|
|
(1
|
)
|
||
Net Cash Used for Financing Activities
|
(230
|
)
|
|
(1,035
|
)
|
||
Effects of Exchange Rate Changes on Cash and Cash Equivalents
|
(1
|
)
|
|
2
|
|
||
Net Decrease in Cash and Cash Equivalents
|
(379
|
)
|
|
(1,281
|
)
|
||
Cash and Cash Equivalents, Beginning of Period
|
1,934
|
|
|
2,548
|
|
||
Cash and Cash Equivalents, End of Period
|
$
|
1,555
|
|
|
$
|
1,267
|
|
•
|
Victoria’s Secret
|
•
|
PINK
|
•
|
Bath & Body Works
|
•
|
La Senza
|
•
|
Henri Bendel
|
|
First Quarter
|
||||
|
2017
|
|
2016
|
||
|
(in millions)
|
||||
Weighted-average Common Shares:
|
|
|
|
||
Issued Shares
|
316
|
|
|
313
|
|
Treasury Shares
|
(30
|
)
|
|
(25
|
)
|
Basic Shares
|
286
|
|
|
288
|
|
Effect of Dilutive Options and Restricted Stock
|
3
|
|
|
5
|
|
Diluted Shares
|
289
|
|
|
293
|
|
Anti-dilutive Options and Awards (a)
|
5
|
|
|
2
|
|
(a)
|
These options and awards were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive.
|
|
Amount
Authorized
|
|
Shares
Repurchased
|
|
Amount
Repurchased
|
|
Average Stock Price of Shares Repurchased within Program
|
||||||||||||||||||
Repurchase Program
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||||||
|
(in millions)
|
|
(in thousands)
|
|
(in millions)
|
|
|
|
|
||||||||||||||||
February 2017
|
$
|
250
|
|
|
1,570
|
|
|
NA
|
|
|
$
|
80
|
|
|
NA
|
|
|
$
|
50.92
|
|
|
NA
|
|
||
February 2016
|
$
|
500
|
|
|
51
|
|
|
3,125
|
|
|
3
|
|
|
$
|
260
|
|
|
$
|
58.95
|
|
|
$
|
83.26
|
|
|
Total
|
|
|
1,621
|
|
|
3,125
|
|
|
$
|
83
|
|
|
$
|
260
|
|
|
|
|
|
|
|
Ordinary Dividends
|
|
Special Dividends
|
|
Total Dividends
|
|
Total Paid
|
||||||||
|
|
(per share)
|
|
(in millions)
|
||||||||||||
2017
|
|
|
|
|
|
|
|
|
||||||||
First Quarter
|
|
$
|
0.60
|
|
|
$
|
—
|
|
|
$
|
0.60
|
|
|
$
|
172
|
|
2016
|
|
|
|
|
|
|
|
|
||||||||
First Quarter
|
|
$
|
0.60
|
|
|
$
|
2.00
|
|
|
$
|
2.60
|
|
|
$
|
750
|
|
|
April 29,
2017 |
|
January 28,
2017 |
|
April 30,
2016 |
||||||
|
(in millions)
|
||||||||||
Finished Goods Merchandise
|
$
|
1,049
|
|
|
$
|
982
|
|
|
$
|
1,157
|
|
Raw Materials and Merchandise Components
|
98
|
|
|
114
|
|
|
109
|
|
|||
Total Inventories
|
$
|
1,147
|
|
|
$
|
1,096
|
|
|
$
|
1,266
|
|
|
April 29,
2017 |
|
January 28,
2017 |
|
April 30,
2016 |
||||||
|
(in millions)
|
||||||||||
Property and Equipment, at Cost
|
$
|
6,354
|
|
|
$
|
6,282
|
|
|
$
|
5,818
|
|
Accumulated Depreciation and Amortization
|
(3,593
|
)
|
|
(3,541
|
)
|
|
(3,395
|
)
|
|||
Property and Equipment, Net
|
$
|
2,761
|
|
|
$
|
2,741
|
|
|
$
|
2,423
|
|
|
April 29,
2017 |
|
January 28,
2017 |
|
April 30,
2016 |
||||||
|
(in millions)
|
||||||||||
Senior Unsecured Debt with Subsidiary Guarantee
|
|
|
|
|
|
||||||
$1 billion, 6.875% Fixed Interest Rate Notes due November 2035 (“2035 Notes”)
|
$
|
989
|
|
|
$
|
989
|
|
|
$
|
989
|
|
$1 billion, 5.625% Fixed Interest Rate Notes due February 2022 (“2022 Notes”)
|
993
|
|
|
992
|
|
|
991
|
|
|||
$1 billion, 6.625% Fixed Interest Rate Notes due April 2021 (“2021 Notes”)
|
993
|
|
|
992
|
|
|
991
|
|
|||
$700 million, 6.75% Fixed Interest Rate Notes due July 2036 (“2036 Notes”)
|
692
|
|
|
692
|
|
|
—
|
|
|||
$500 million, 5.625% Fixed Interest Rate Notes due October 2023 (“2023 Notes”)
|
497
|
|
|
497
|
|
|
496
|
|
|||
$500 million, 8.50% Fixed Interest Rate Notes due June 2019 (“2019 Notes”)(a)
|
496
|
|
|
496
|
|
|
499
|
|
|||
$400 million, 7.00% Fixed Interest Rate Notes due May 2020 (“2020 Notes”)
|
397
|
|
|
397
|
|
|
396
|
|
|||
Total Senior Unsecured Debt with Subsidiary Guarantee
|
$
|
5,057
|
|
|
$
|
5,055
|
|
|
$
|
4,362
|
|
Senior Unsecured Debt
|
|
|
|
|
|
||||||
$350 million, 6.95% Fixed Interest Rate Debentures due March 2033 (“2033 Notes”)
|
$
|
348
|
|
|
$
|
348
|
|
|
$
|
348
|
|
$300 million, 7.60% Fixed Interest Rate Notes due July 2037 (“2037 Notes”)
|
297
|
|
|
297
|
|
|
297
|
|
|||
$700 million, 6.90% Fixed Interest Rate Notes due July 2017 (“2017 Notes”)(b)
|
—
|
|
|
—
|
|
|
706
|
|
|||
Foreign Facilities
|
44
|
|
|
36
|
|
|
13
|
|
|||
Total Senior Unsecured Debt
|
$
|
689
|
|
|
$
|
681
|
|
|
$
|
1,364
|
|
Total
|
$
|
5,746
|
|
|
$
|
5,736
|
|
|
$
|
5,726
|
|
Current Portion of Long-term Debt
|
(44
|
)
|
|
(36
|
)
|
|
(8
|
)
|
|||
Total Long-term Debt, Net of Current Portion
|
$
|
5,702
|
|
|
$
|
5,700
|
|
|
$
|
5,718
|
|
(a)
|
The balances include a fair value interest rate hedge adjustment which increased the debt balance by
$2 million
as of
April 29, 2017
,
$2 million
as of
January 28, 2017
and
$8 million
as of
April 30, 2016
.
|
(b)
|
The balance includes a fair value interest rate hedge adjustment which increased the debt balance by
$7 million
as of
April 30, 2016
.
|
|
April 29,
2017 |
|
January 28,
2017 |
|
April 30,
2016 |
||||||
|
(in millions)
|
||||||||||
Notional Amount
|
$
|
362
|
|
|
$
|
360
|
|
|
$
|
147
|
|
|
April 29,
2017 |
|
January 28,
2017 |
|
April 30,
2016 |
||||||
|
(in millions)
|
||||||||||
Other Current Assets
|
$
|
27
|
|
|
$
|
18
|
|
|
$
|
—
|
|
Accrued Expenses and Other
|
1
|
|
|
1
|
|
|
—
|
|
|||
Other Long-term Assets
|
—
|
|
|
—
|
|
|
11
|
|
|
First Quarter
|
||||||
|
2017
|
|
2016
|
||||
|
(in millions)
|
||||||
Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss)
|
$
|
10
|
|
|
$
|
(16
|
)
|
(Gain) Loss Reclassified from Accumulated Other Comprehensive Income into Cost of Goods Sold, Buying and Occupancy Expense (a)
|
(2
|
)
|
|
—
|
|
||
(Gain) Loss Reclassified from Accumulated Other Comprehensive Income into Other Income (b)
|
(5
|
)
|
|
14
|
|
(a)
|
Represents reclassification of amounts from accumulated other comprehensive income (loss) to earnings when the hedged merchandise is sold to the customer.
No
ineffectiveness was associated with these foreign currency cash flow hedges.
|
(b)
|
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 loan.
No
ineffectiveness was associated with this foreign currency cash flow hedge.
|
|
April 29,
2017 |
|
January 28,
2017 |
|
April 30,
2016 |
||||||
|
(in millions)
|
||||||||||
Other Long-term Assets
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
10
|
|
|
April 29,
2017 |
|
January 28,
2017 |
|
April 30,
2016 |
||||||
|
(in millions)
|
||||||||||
Principal Value
|
$
|
5,750
|
|
|
$
|
5,750
|
|
|
$
|
5,750
|
|
Fair Value (a)
|
5,992
|
|
|
6,030
|
|
|
6,372
|
|
(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 Topic 820,
Fair Value Measurement
. The estimates presented are not necessarily indicative of the amounts that the Company could realize in a current market exchange.
|
•
|
Level
1
– Quoted market prices in active markets for identical assets or liabilities.
|
•
|
Level
2
– Observable inputs other than quoted market prices included in Level 1, such as quoted prices of similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
|
•
|
Level
3
– Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
As of April 29, 2017
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash and Cash Equivalents
|
$
|
1,555
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,555
|
|
Marketable Securities
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Interest Rate Fair Value Hedges
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Foreign Currency Cash Flow Hedges
|
—
|
|
|
27
|
|
|
—
|
|
|
27
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign Currency Cash Flow Hedges
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
As of January 28, 2017
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash and Cash Equivalents
|
$
|
1,934
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,934
|
|
Marketable Securities
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Interest Rate Fair Value Hedges
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Foreign Currency Cash Flow Hedges
|
—
|
|
|
18
|
|
|
—
|
|
|
18
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign Currency Cash Flow Hedges
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
As of April 30, 2016
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash and Cash Equivalents
|
$
|
1,267
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,267
|
|
Marketable Securities
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||
Interest Rate Fair Value Hedges
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
||||
Foreign Currency Cash Flow Hedges
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
|
Foreign Currency Translation
|
|
Cash Flow Hedges
|
|
Marketable Securities
|
|
Accumulated Other Comprehensive Income (Loss)
|
||||||||
|
(in millions)
|
||||||||||||||
Balance as of January 28, 2017
|
$
|
9
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
12
|
|
Other Comprehensive Income (Loss) Before Reclassifications
|
3
|
|
|
10
|
|
|
—
|
|
|
13
|
|
||||
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
||||
Tax Effect
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Current-period Other Comprehensive Income (Loss)
|
3
|
|
|
3
|
|
|
—
|
|
|
6
|
|
||||
Balance as of April 29, 2017
|
$
|
12
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
18
|
|
|
Foreign Currency Translation
|
|
Cash Flow Hedges
|
|
Marketable Securities
|
|
Accumulated Other Comprehensive Income (Loss)
|
||||||||
|
(in millions)
|
||||||||||||||
Balance as of January 30, 2016
|
$
|
28
|
|
|
$
|
4
|
|
|
$
|
8
|
|
|
$
|
40
|
|
Other Comprehensive Income (Loss) Before Reclassifications
|
8
|
|
|
(16
|
)
|
|
(2
|
)
|
|
(10
|
)
|
||||
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)
|
—
|
|
|
14
|
|
|
(4
|
)
|
|
10
|
|
||||
Tax Effect
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||
Current-period Other Comprehensive Income (Loss)
|
8
|
|
|
(2
|
)
|
|
(4
|
)
|
|
2
|
|
||||
Balance as of April 30, 2016
|
$
|
36
|
|
|
$
|
2
|
|
|
$
|
4
|
|
|
$
|
42
|
|
Details About Accumulated Other Comprehensive Income (Loss) Components
|
|
Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
|
|
Location on Consolidated Statements of Income
|
||||||
|
|
First Quarter
|
|
|
||||||
|
|
2017
|
|
2016
|
|
|
||||
|
|
(in millions)
|
|
|||||||
(Gain) Loss on Cash Flow Hedges
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
Cost of Goods Sold, Buying and Occupancy
|
|
|
(5
|
)
|
|
14
|
|
|
Other Income
|
||
|
|
1
|
|
|
—
|
|
|
Provision for Income Taxes
|
||
|
|
$
|
(6
|
)
|
|
$
|
14
|
|
|
Net Income
|
|
|
|
|
|
|
|
||||
Sale of Available-for-Sale Securities
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
Other Income
|
|
|
—
|
|
|
1
|
|
|
Provision for Income Taxes
|
||
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
Net Income
|
•
|
Victoria's Secret International, comprised of company-owned stores in the U.K. and Greater China, as well as stores operated by partners under franchise, and license and wholesale arrangements; and
|
•
|
Victoria's Secret Beauty and Accessories, comprised of company-owned stores in Greater China, as well as stores operated by partners under franchise, license and wholesale arrangements, which feature Victoria's Secret branded beauty and accessories products;
|
•
|
Bath & Body Works International stores operated by partners under franchise, license and wholesale arrangements.
|
•
|
Mast Global, a merchandise sourcing and production function serving the Company and its international partners;
|
•
|
La Senza, comprised of company-owned stores in the U.S. and Canada, as well as stores operated by partners under franchise and license arrangements, which feature women's intimate apparel;
|
•
|
Henri Bendel, operator of
29
specialty stores, which feature handbags, jewelry and other accessory products; and
|
•
|
Corporate functions including non-core real estate, equity investments and other governance functions such as treasury and tax.
|
|
Victoria’s
Secret
|
|
Bath &
Body Works
|
|
Victoria’s Secret
and
Bath & Body Works International
|
|
Other
|
|
Total
|
||||||||||
|
(in millions)
|
||||||||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
||||||||||
First Quarter:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
1,533
|
|
|
$
|
678
|
|
|
$
|
104
|
|
|
$
|
122
|
|
|
$
|
2,437
|
|
Operating Income (Loss)
|
159
|
|
|
102
|
|
|
(1
|
)
|
|
(51
|
)
|
|
209
|
|
|||||
2016
|
|
|
|
|
|
|
|
|
|
||||||||||
First Quarter:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Sales
|
$
|
1,741
|
|
|
$
|
660
|
|
|
$
|
95
|
|
|
$
|
118
|
|
|
$
|
2,614
|
|
Operating Income (Loss)
|
235
|
|
|
112
|
|
|
13
|
|
|
(37
|
)
|
|
323
|
|
|
April 29, 2017
|
||||||||||||||||||
|
L Brands, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-
guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
L Brands, Inc.
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and Cash Equivalents
|
$
|
—
|
|
|
$
|
1,207
|
|
|
$
|
348
|
|
|
$
|
—
|
|
|
$
|
1,555
|
|
Accounts Receivable, Net
|
1
|
|
|
130
|
|
|
82
|
|
|
—
|
|
|
213
|
|
|||||
Inventories
|
—
|
|
|
1,000
|
|
|
147
|
|
|
—
|
|
|
1,147
|
|
|||||
Other
|
—
|
|
|
130
|
|
|
107
|
|
|
—
|
|
|
237
|
|
|||||
Total Current Assets
|
1
|
|
|
2,467
|
|
|
684
|
|
|
—
|
|
|
3,152
|
|
|||||
Property and Equipment, Net
|
—
|
|
|
1,935
|
|
|
826
|
|
|
—
|
|
|
2,761
|
|
|||||
Goodwill
|
—
|
|
|
1,318
|
|
|
30
|
|
|
—
|
|
|
1,348
|
|
|||||
Trade Names and Other Intangible Assets, Net
|
—
|
|
|
411
|
|
|
—
|
|
|
—
|
|
|
411
|
|
|||||
Net Investments in and Advances to/from Consolidated Affiliates
|
4,819
|
|
|
16,358
|
|
|
1,449
|
|
|
(22,626
|
)
|
|
—
|
|
|||||
Deferred Income Taxes
|
—
|
|
|
10
|
|
|
13
|
|
|
—
|
|
|
23
|
|
|||||
Other Assets
|
129
|
|
|
34
|
|
|
636
|
|
|
(612
|
)
|
|
187
|
|
|||||
Total Assets
|
$
|
4,949
|
|
|
$
|
22,533
|
|
|
$
|
3,638
|
|
|
$
|
(23,238
|
)
|
|
$
|
7,882
|
|
LIABILITIES AND EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts Payable
|
$
|
2
|
|
|
$
|
371
|
|
|
$
|
291
|
|
|
$
|
—
|
|
|
$
|
664
|
|
Accrued Expenses and Other
|
109
|
|
|
394
|
|
|
310
|
|
|
—
|
|
|
813
|
|
|||||
Current Portion of Long-term Debt
|
—
|
|
|
—
|
|
|
44
|
|
|
—
|
|
|
44
|
|
|||||
Income Taxes
|
(11
|
)
|
|
226
|
|
|
95
|
|
|
—
|
|
|
310
|
|
|||||
Total Current Liabilities
|
100
|
|
|
991
|
|
|
740
|
|
|
—
|
|
|
1,831
|
|
|||||
Deferred Income Taxes
|
(3
|
)
|
|
(86
|
)
|
|
449
|
|
|
—
|
|
|
360
|
|
|||||
Long-term Debt
|
5,702
|
|
|
597
|
|
|
—
|
|
|
(597
|
)
|
|
5,702
|
|
|||||
Other Long-term Liabilities
|
3
|
|
|
752
|
|
|
84
|
|
|
(15
|
)
|
|
824
|
|
|||||
Total Equity (Deficit)
|
(853
|
)
|
|
20,279
|
|
|
2,365
|
|
|
(22,626
|
)
|
|
(835
|
)
|
|||||
Total Liabilities and Equity (Deficit)
|
$
|
4,949
|
|
|
$
|
22,533
|
|
|
$
|
3,638
|
|
|
$
|
(23,238
|
)
|
|
$
|
7,882
|
|
|
January 28, 2017
|
||||||||||||||||||
|
L Brands, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-
guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
L Brands, Inc.
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and Cash Equivalents
|
$
|
—
|
|
|
$
|
1,562
|
|
|
$
|
372
|
|
|
$
|
—
|
|
|
$
|
1,934
|
|
Accounts Receivable, Net
|
—
|
|
|
228
|
|
|
66
|
|
|
—
|
|
|
294
|
|
|||||
Inventories
|
—
|
|
|
976
|
|
|
120
|
|
|
—
|
|
|
1,096
|
|
|||||
Other
|
—
|
|
|
53
|
|
|
88
|
|
|
—
|
|
|
141
|
|
|||||
Total Current Assets
|
—
|
|
|
2,819
|
|
|
646
|
|
|
—
|
|
|
3,465
|
|
|||||
Property and Equipment, Net
|
—
|
|
|
1,897
|
|
|
844
|
|
|
—
|
|
|
2,741
|
|
|||||
Goodwill
|
—
|
|
|
1,318
|
|
|
30
|
|
|
—
|
|
|
1,348
|
|
|||||
Trade Names and Other Intangible Assets, Net
|
—
|
|
|
411
|
|
|
—
|
|
|
—
|
|
|
411
|
|
|||||
Net Investments in and Advances to/from Consolidated Affiliates
|
4,923
|
|
|
15,824
|
|
|
1,350
|
|
|
(22,097
|
)
|
|
—
|
|
|||||
Deferred Income Taxes
|
—
|
|
|
10
|
|
|
9
|
|
|
—
|
|
|
19
|
|
|||||
Other Assets
|
130
|
|
|
28
|
|
|
639
|
|
|
(611
|
)
|
|
186
|
|
|||||
Total Assets
|
$
|
5,053
|
|
|
$
|
22,307
|
|
|
$
|
3,518
|
|
|
$
|
(22,708
|
)
|
|
$
|
8,170
|
|
LIABILITIES AND EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts Payable
|
$
|
3
|
|
|
$
|
326
|
|
|
$
|
354
|
|
|
$
|
—
|
|
|
$
|
683
|
|
Accrued Expenses and Other
|
100
|
|
|
526
|
|
|
371
|
|
|
—
|
|
|
997
|
|
|||||
Current Portion of Long-term Debt
|
—
|
|
|
—
|
|
|
36
|
|
|
—
|
|
|
36
|
|
|||||
Income Taxes
|
(11
|
)
|
|
221
|
|
|
88
|
|
|
—
|
|
|
298
|
|
|||||
Total Current Liabilities
|
92
|
|
|
1,073
|
|
|
849
|
|
|
—
|
|
|
2,014
|
|
|||||
Deferred Income Taxes
|
(3
|
)
|
|
(93
|
)
|
|
448
|
|
|
—
|
|
|
352
|
|
|||||
Long-term Debt
|
5,700
|
|
|
597
|
|
|
—
|
|
|
(597
|
)
|
|
5,700
|
|
|||||
Other Long-term Liabilities
|
3
|
|
|
761
|
|
|
81
|
|
|
(14
|
)
|
|
831
|
|
|||||
Total Equity (Deficit)
|
(739
|
)
|
|
19,969
|
|
|
2,140
|
|
|
(22,097
|
)
|
|
(727
|
)
|
|||||
Total Liabilities and Equity (Deficit)
|
$
|
5,053
|
|
|
$
|
22,307
|
|
|
$
|
3,518
|
|
|
$
|
(22,708
|
)
|
|
$
|
8,170
|
|
|
April 30, 2016
|
||||||||||||||||||
|
L Brands, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-
guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
L Brands, Inc.
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and Cash Equivalents
|
$
|
—
|
|
|
$
|
888
|
|
|
$
|
379
|
|
|
$
|
—
|
|
|
$
|
1,267
|
|
Accounts Receivable, Net
|
2
|
|
|
189
|
|
|
58
|
|
|
—
|
|
|
249
|
|
|||||
Inventories
|
—
|
|
|
1,121
|
|
|
145
|
|
|
—
|
|
|
1,266
|
|
|||||
Other
|
—
|
|
|
121
|
|
|
88
|
|
|
—
|
|
|
209
|
|
|||||
Total Current Assets
|
2
|
|
|
2,319
|
|
|
670
|
|
|
—
|
|
|
2,991
|
|
|||||
Property and Equipment, Net
|
—
|
|
|
1,627
|
|
|
796
|
|
|
—
|
|
|
2,423
|
|
|||||
Goodwill
|
—
|
|
|
1,318
|
|
|
30
|
|
|
—
|
|
|
1,348
|
|
|||||
Trade Names and Other Intangible Assets, Net
|
—
|
|
|
411
|
|
|
—
|
|
|
—
|
|
|
411
|
|
|||||
Net Investments in and Advances to/from Consolidated Affiliates
|
4,551
|
|
|
14,752
|
|
|
1,363
|
|
|
(20,666
|
)
|
|
—
|
|
|||||
Deferred Income Taxes
|
—
|
|
|
11
|
|
|
18
|
|
|
—
|
|
|
29
|
|
|||||
Other Assets
|
140
|
|
|
37
|
|
|
658
|
|
|
(611
|
)
|
|
224
|
|
|||||
Total Assets
|
$
|
4,693
|
|
|
$
|
20,475
|
|
|
$
|
3,535
|
|
|
$
|
(21,277
|
)
|
|
$
|
7,426
|
|
LIABILITIES AND EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts Payable
|
$
|
1
|
|
|
$
|
387
|
|
|
$
|
332
|
|
|
$
|
—
|
|
|
$
|
720
|
|
Accrued Expenses and Other
|
110
|
|
|
432
|
|
|
291
|
|
|
—
|
|
|
833
|
|
|||||
Current Portion of Long-term Debt
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
|||||
Income Taxes
|
—
|
|
|
13
|
|
|
31
|
|
|
—
|
|
|
44
|
|
|||||
Total Current Liabilities
|
111
|
|
|
832
|
|
|
662
|
|
|
—
|
|
|
1,605
|
|
|||||
Deferred Income Taxes
|
(3
|
)
|
|
(76
|
)
|
|
348
|
|
|
—
|
|
|
269
|
|
|||||
Long-term Debt
|
5,713
|
|
|
598
|
|
|
5
|
|
|
(598
|
)
|
|
5,718
|
|
|||||
Other Long-term Liabilities
|
—
|
|
|
705
|
|
|
229
|
|
|
(14
|
)
|
|
920
|
|
|||||
Total Equity (Deficit)
|
(1,128
|
)
|
|
18,416
|
|
|
2,291
|
|
|
(20,665
|
)
|
|
(1,086
|
)
|
|||||
Total Liabilities and Equity (Deficit)
|
$
|
4,693
|
|
|
$
|
20,475
|
|
|
$
|
3,535
|
|
|
$
|
(21,277
|
)
|
|
$
|
7,426
|
|
|
First Quarter 2017
|
||||||||||||||||||
|
L Brands, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-
guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
L Brands, Inc.
|
||||||||||
Net Sales
|
$
|
—
|
|
|
$
|
2,310
|
|
|
$
|
696
|
|
|
$
|
(569
|
)
|
|
$
|
2,437
|
|
Costs of Goods Sold, Buying and Occupancy
|
—
|
|
|
(1,486
|
)
|
|
(571
|
)
|
|
523
|
|
|
(1,534
|
)
|
|||||
Gross Profit
|
—
|
|
|
824
|
|
|
125
|
|
|
(46
|
)
|
|
903
|
|
|||||
General, Administrative and Store Operating Expenses
|
(4
|
)
|
|
(635
|
)
|
|
(90
|
)
|
|
35
|
|
|
(694
|
)
|
|||||
Operating Income (Loss)
|
(4
|
)
|
|
189
|
|
|
35
|
|
|
(11
|
)
|
|
209
|
|
|||||
Interest Expense
|
(100
|
)
|
|
(11
|
)
|
|
(3
|
)
|
|
13
|
|
|
(101
|
)
|
|||||
Other Income
|
—
|
|
|
3
|
|
|
7
|
|
|
—
|
|
|
10
|
|
|||||
Income (Loss) Before Income Taxes
|
(104
|
)
|
|
181
|
|
|
39
|
|
|
2
|
|
|
118
|
|
|||||
Provision for Income Taxes
|
—
|
|
|
20
|
|
|
4
|
|
|
—
|
|
|
24
|
|
|||||
Equity in Earnings (Loss), Net of Tax
|
198
|
|
|
179
|
|
|
150
|
|
|
(527
|
)
|
|
—
|
|
|||||
Net Income (Loss)
|
$
|
94
|
|
|
$
|
340
|
|
|
$
|
185
|
|
|
$
|
(525
|
)
|
|
$
|
94
|
|
|
First Quarter 2017
|
||||||||||||||||||
|
L Brands, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-
guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
L Brands, Inc.
|
||||||||||
Net Income (Loss)
|
$
|
94
|
|
|
$
|
340
|
|
|
$
|
185
|
|
|
$
|
(525
|
)
|
|
$
|
94
|
|
Other Comprehensive Income (Loss), Net of Tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign Currency Translation
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|||||
Unrealized Gain on Cash Flow Hedges
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
|||||
Reclassification of Cash Flow Hedges to Earnings
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|||||
Total Other Comprehensive Income (Loss), Net of Tax
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|||||
Total Comprehensive Income (Loss)
|
$
|
94
|
|
|
$
|
340
|
|
|
$
|
191
|
|
|
$
|
(525
|
)
|
|
$
|
100
|
|
|
First Quarter 2016
|
||||||||||||||||||
|
L Brands, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-
guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
L Brands, Inc.
|
||||||||||
Net Sales
|
$
|
—
|
|
|
$
|
2,472
|
|
|
$
|
858
|
|
|
$
|
(716
|
)
|
|
$
|
2,614
|
|
Costs of Goods Sold, Buying and Occupancy
|
—
|
|
|
(1,539
|
)
|
|
(711
|
)
|
|
679
|
|
|
(1,571
|
)
|
|||||
Gross Profit
|
—
|
|
|
933
|
|
|
147
|
|
|
(37
|
)
|
|
1,043
|
|
|||||
General, Administrative and Store Operating Expenses
|
(3
|
)
|
|
(639
|
)
|
|
(113
|
)
|
|
35
|
|
|
(720
|
)
|
|||||
Operating Income (Loss)
|
(3
|
)
|
|
294
|
|
|
34
|
|
|
(2
|
)
|
|
323
|
|
|||||
Interest Expense
|
(97
|
)
|
|
(9
|
)
|
|
(2
|
)
|
|
11
|
|
|
(97
|
)
|
|||||
Other Income
|
—
|
|
|
1
|
|
|
6
|
|
|
—
|
|
|
7
|
|
|||||
Income (Loss) Before Income Taxes
|
(100
|
)
|
|
286
|
|
|
38
|
|
|
9
|
|
|
233
|
|
|||||
Provision for Income Taxes
|
—
|
|
|
62
|
|
|
19
|
|
|
—
|
|
|
81
|
|
|||||
Equity in Earnings (Loss), Net of Tax
|
252
|
|
|
62
|
|
|
68
|
|
|
(382
|
)
|
|
—
|
|
|||||
Net Income (Loss)
|
$
|
152
|
|
|
$
|
286
|
|
|
$
|
87
|
|
|
$
|
(373
|
)
|
|
$
|
152
|
|
|
First Quarter 2016
|
||||||||||||||||||
|
L Brands, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-
guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
L Brands, Inc.
|
||||||||||
Net Income (Loss)
|
$
|
152
|
|
|
$
|
286
|
|
|
$
|
87
|
|
|
$
|
(373
|
)
|
|
$
|
152
|
|
Other Comprehensive Income (Loss), Net of Tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign Currency Translation
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
|||||
Unrealized Loss on Cash Flow Hedges
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
(16
|
)
|
|||||
Reclassification of Cash Flow Hedges to Earnings
|
—
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
14
|
|
|||||
Unrealized Loss on Marketable Securities
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Reclassification of Gain on Marketable Securities to Earnings
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||||
Total Other Comprehensive Income (Loss), Net of Tax
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|||||
Total Comprehensive Income (Loss)
|
$
|
152
|
|
|
$
|
286
|
|
|
$
|
89
|
|
|
$
|
(373
|
)
|
|
$
|
154
|
|
|
Year-to-Date 2017
|
||||||||||||||||||
|
L Brands, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-
guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
L Brands, Inc.
|
||||||||||
Net Cash Provided by (Used for) Operating Activities
|
$
|
(96
|
)
|
|
$
|
181
|
|
|
$
|
(78
|
)
|
|
$
|
—
|
|
|
$
|
7
|
|
Investing Activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital Expenditures
|
—
|
|
|
(135
|
)
|
|
(30
|
)
|
|
—
|
|
|
(165
|
)
|
|||||
Return of Capital from Easton Investments
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|||||
Net Cash Used for Investing Activities
|
—
|
|
|
(135
|
)
|
|
(20
|
)
|
|
—
|
|
|
(155
|
)
|
|||||
Financing Activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings from Foreign Facilities
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
|||||
Repayments on Foreign Facilities
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Dividends Paid
|
(172
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(172
|
)
|
|||||
Repurchases of Common Stock
|
(85
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(85
|
)
|
|||||
Tax Payments related to Share-based Awards
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
|||||
Net Financing Activities and Advances to/from Consolidated Affiliates
|
334
|
|
|
(401
|
)
|
|
67
|
|
|
—
|
|
|
—
|
|
|||||
Proceeds from Exercise of Stock Options
|
36
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|||||
Net Cash Provided by (Used for) Financing Activities
|
96
|
|
|
(401
|
)
|
|
75
|
|
|
—
|
|
|
(230
|
)
|
|||||
Effects of Exchange Rate Changes on Cash and Cash Equivalents
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Net Decrease in Cash and Cash Equivalents
|
—
|
|
|
(355
|
)
|
|
(24
|
)
|
|
—
|
|
|
(379
|
)
|
|||||
Cash and Cash Equivalents, Beginning of Period
|
—
|
|
|
1,562
|
|
|
372
|
|
|
—
|
|
|
1,934
|
|
|||||
Cash and Cash Equivalents, End of Period
|
$
|
—
|
|
|
$
|
1,207
|
|
|
$
|
348
|
|
|
$
|
—
|
|
|
$
|
1,555
|
|
|
Year-to-Date 2016
|
||||||||||||||||||
|
L Brands, Inc.
|
|
Guarantor
Subsidiaries
|
|
Non-
guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
L Brands, Inc.
|
||||||||||
Net Cash Provided by (Used for) Operating Activities
|
$
|
(47
|
)
|
|
$
|
(25
|
)
|
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
(43
|
)
|
Investing Activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital Expenditures
|
—
|
|
|
(140
|
)
|
|
(47
|
)
|
|
—
|
|
|
(187
|
)
|
|||||
Return of Capital from Easton Investments
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Acquisition, Net of Cash Acquired of $1
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
—
|
|
|
(31
|
)
|
|||||
Proceeds from Sale of Marketable Securities
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|||||
Other Investing Activities
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
Net Cash Used for Investing Activities
|
—
|
|
|
(138
|
)
|
|
(67
|
)
|
|
—
|
|
|
(205
|
)
|
|||||
Financing Activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings from Foreign Facilities
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|||||
Dividends Paid
|
(750
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(750
|
)
|
|||||
Repurchases of Common Stock
|
(260
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(260
|
)
|
|||||
Tax Payments related to Share-based Awards
|
(40
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
|||||
Net Financing Activities and Advances to/from Consolidated Affiliates
|
1,087
|
|
|
(1,138
|
)
|
|
51
|
|
|
—
|
|
|
—
|
|
|||||
Proceeds from Exercise of Stock Options
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|||||
Financing Costs and Other
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||
Net Cash Provided by (Used for) Financing Activities
|
47
|
|
|
(1,139
|
)
|
|
57
|
|
|
—
|
|
|
(1,035
|
)
|
|||||
Effects of Exchange Rate Changes on Cash and Cash Equivalents
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|||||
Net Increase (Decrease) in Cash and Cash Equivalents
|
—
|
|
|
(1,302
|
)
|
|
21
|
|
|
—
|
|
|
(1,281
|
)
|
|||||
Cash and Cash Equivalents, Beginning of Period
|
—
|
|
|
2,190
|
|
|
358
|
|
|
—
|
|
|
2,548
|
|
|||||
Cash and Cash Equivalents, End of Period
|
$
|
—
|
|
|
$
|
888
|
|
|
$
|
379
|
|
|
$
|
—
|
|
|
$
|
1,267
|
|
•
|
general economic conditions, consumer confidence, consumer spending patterns and market disruptions including severe weather conditions, natural disasters, health hazards, terrorist activities, financial crises, political crises or other major events, or the prospect of these events;
|
•
|
the seasonality of our business;
|
•
|
the dependence on mall traffic and the availability of suitable store locations on appropriate terms;
|
•
|
our ability to grow through new store openings and existing store remodels and expansions;
|
•
|
our ability to successfully expand internationally and related risks;
|
•
|
our independent franchise, license and wholesale partners;
|
•
|
our direct channel businesses;
|
•
|
our ability to protect our reputation and our brand images;
|
•
|
our ability to attract customers with marketing, advertising and promotional programs;
|
•
|
our ability to 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, 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, significant health hazards, environmental hazards or natural disasters;
|
•
|
duties, taxes and other charges;
|
•
|
legal and regulatory matters;
|
•
|
volatility in currency exchange rates;
|
•
|
local business practices and political issues;
|
•
|
potential 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 supplier and distribution facilities in central Ohio;
|
•
|
fluctuations in foreign currency exchange rates;
|
•
|
stock price volatility;
|
•
|
our ability to pay dividends and related effects;
|
•
|
our ability to maintain our credit rating;
|
•
|
our ability to service or refinance our debt;
|
•
|
our ability to retain key personnel;
|
•
|
our ability to attract, develop and retain qualified associates and manage labor-related costs;
|
•
|
the ability of our manufacturers to deliver products in a timely manner, meet quality standards and comply with applicable laws and regulations;
|
•
|
fluctuations in product input costs;
|
•
|
our ability to adequately protect our assets from loss and theft;
|
•
|
fluctuations in energy costs;
|
•
|
increases in the costs of mailing, paper and printing;
|
•
|
claims arising from our self-insurance;
|
•
|
our ability to implement and maintain information technology systems and to protect associated data;
|
•
|
our ability to maintain the security of customer, associate, supplier or company information;
|
•
|
our ability to comply with regulatory requirements;
|
•
|
legal and compliance matters; and
|
•
|
tax, trade and other regulatory matters.
|
Item 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Year-to-Date
|
||||||
(in millions, except per share amounts)
|
2017
|
|
2016
|
||||
Detail of Special Items included in Operating Income - Income (Expense)
|
|
|
|
||||
Victoria's Secret Restructuring (a)
|
$
|
—
|
|
|
$
|
(35
|
)
|
Total Special Items included in Operating Income
|
$
|
—
|
|
|
$
|
(35
|
)
|
|
|
|
|
||||
Detail of Special Items included in Provision for Income Taxes - Benefit (Provision)
|
|
|
|
||||
Tax effect of Special Items
|
$
|
—
|
|
|
$
|
13
|
|
Total Special Items included in Provision for Income Taxes
|
$
|
—
|
|
|
$
|
13
|
|
|
|
|
|
||||
Reconciliation of Reported Operating Income to Adjusted Operating Income
|
|
|
|
||||
Reported Operating Income
|
$
|
209
|
|
|
$
|
323
|
|
Special Items included in Operating Income
|
—
|
|
|
35
|
|
||
Adjusted Operating Income
|
$
|
209
|
|
|
$
|
358
|
|
|
|
|
|
||||
Reconciliation of Reported Net Income to Adjusted Net Income
|
|
|
|
||||
Reported Net Income
|
$
|
94
|
|
|
$
|
152
|
|
Special Items included in Net Income
|
—
|
|
|
22
|
|
||
Adjusted Net Income
|
$
|
94
|
|
|
$
|
174
|
|
|
|
|
|
||||
Reconciliation of Reported Earnings Per Diluted Share to Adjusted Earnings Per Diluted Share
|
|
|
|
||||
Reported Earnings Per Diluted Share
|
$
|
0.33
|
|
|
$
|
0.52
|
|
Special Items included in Earnings Per Diluted Share
|
—
|
|
|
0.07
|
|
||
Adjusted Earnings Per Diluted Share
|
$
|
0.33
|
|
|
$
|
0.59
|
|
(a)
|
In the first quarter of 2016, we made strategic changes within the Victoria’s Secret segment designed to focus the brand on its core merchandise categories and streamline operations. As a result of these changes, we recorded charges related to severance and related costs, fabric cancellations and catalogue paper write-offs. For additional information see Note 5, “Restructuring Activities” included in Item 1. Financial Statements.
|
|
First Quarter
|
|||||||||
|
2017
|
|
2016
|
|
% Change
|
|||||
Sales per Average Selling Square Foot
|
|
|
|
|
|
|||||
Victoria’s Secret U.S.
|
$
|
167
|
|
|
$
|
192
|
|
|
(13
|
)%
|
Bath & Body Works U.S.
|
140
|
|
|
147
|
|
|
(5
|
)%
|
||
Sales per Average Store (in thousands)
|
|
|
|
|
|
|||||
Victoria’s Secret U.S.
|
$
|
1,061
|
|
|
$
|
1,187
|
|
|
(11
|
)%
|
Bath & Body Works U.S.
|
346
|
|
|
350
|
|
|
(1
|
)%
|
||
Average Store Size (selling square feet)
|
|
|
|
|
|
|||||
Victoria’s Secret U.S.
|
6,352
|
|
|
6,188
|
|
|
3
|
%
|
||
Bath & Body Works U.S.
|
2,467
|
|
|
2,386
|
|
|
3
|
%
|
||
Total Selling Square Feet (in thousands)
|
|
|
|
|
|
|||||
Victoria’s Secret U.S.
|
7,191
|
|
|
6,937
|
|
|
4
|
%
|
||
Bath & Body Works U.S.
|
3,935
|
|
|
3,760
|
|
|
5
|
%
|
|
Stores Operating at
|
|
|
|
|
|
Stores Operating at
|
||||
|
January 28, 2017
|
|
Opened
|
|
Closed
|
|
April 29, 2017
|
||||
Victoria’s Secret U.S.
|
1,131
|
|
|
2
|
|
|
(1
|
)
|
|
1,132
|
|
Victoria’s Secret Canada
|
46
|
|
|
1
|
|
|
(1
|
)
|
|
46
|
|
Total Victoria's Secret
|
1,177
|
|
|
3
|
|
|
(2
|
)
|
|
1,178
|
|
Bath & Body Works U.S.
|
1,591
|
|
|
7
|
|
|
(3
|
)
|
|
1,595
|
|
Bath & Body Works Canada
|
102
|
|
|
—
|
|
|
—
|
|
|
102
|
|
Total Bath & Body Works
|
1,693
|
|
|
7
|
|
|
(3
|
)
|
|
1,697
|
|
Victoria's Secret U.K.
|
18
|
|
|
—
|
|
|
—
|
|
|
18
|
|
Victoria's Secret Beauty and Accessories
|
31
|
|
|
—
|
|
|
—
|
|
|
31
|
|
Victoria's Secret China
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
Total Victoria's Secret and Bath & Body Works International
|
49
|
|
|
2
|
|
|
—
|
|
|
51
|
|
Henri Bendel
|
29
|
|
|
—
|
|
|
—
|
|
|
29
|
|
La Senza U.S.
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
La Senza Canada
|
122
|
|
|
1
|
|
|
(2
|
)
|
|
121
|
|
Total L Brands Stores
|
3,074
|
|
|
13
|
|
|
(7
|
)
|
|
3,080
|
|
|
Stores Operating at
|
|
|
|
|
|
Stores Operating at
|
||||
|
January 28, 2017
|
|
Opened
|
|
Closed
|
|
April 29, 2017
|
||||
Victoria’s Secret Beauty & Accessories
|
391
|
|
|
11
|
|
|
(6
|
)
|
|
396
|
|
Victoria's Secret
|
28
|
|
|
2
|
|
|
—
|
|
|
30
|
|
Bath & Body Works
|
159
|
|
|
7
|
|
|
(1
|
)
|
|
165
|
|
La Senza
|
203
|
|
|
2
|
|
|
(6
|
)
|
|
199
|
|
Total
|
781
|
|
|
22
|
|
|
(13
|
)
|
|
790
|
|
|
Stores Operating at
|
|
|
|
|
|
|
|
Stores Operating at
|
|||||
|
January 30, 2016
|
|
Opened
|
|
Closed
|
|
Transferred (a)
|
|
April 30, 2016
|
|||||
Victoria’s Secret Beauty & Accessories
|
373
|
|
|
14
|
|
|
(5
|
)
|
|
(26
|
)
|
|
356
|
|
Victoria's Secret
|
19
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
20
|
|
Bath & Body Works
|
125
|
|
|
7
|
|
|
(1
|
)
|
|
—
|
|
|
131
|
|
La Senza
|
221
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
217
|
|
Total
|
738
|
|
|
22
|
|
|
(10
|
)
|
|
(26
|
)
|
|
724
|
|
|
|
|
|
|
Operating Income Rate
|
||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||
First Quarter
|
(in millions)
|
|
|
|
|
||||||||
Victoria’s Secret
|
$
|
159
|
|
|
$
|
235
|
|
|
10.4
|
%
|
|
13.5
|
%
|
Bath & Body Works
|
102
|
|
|
112
|
|
|
15.0
|
%
|
|
16.9
|
%
|
||
Victoria’s Secret and Bath & Body Works International
|
(1
|
)
|
|
13
|
|
|
(0.5
|
)%
|
|
13.7
|
%
|
||
Other (a)
|
(51
|
)
|
|
(37
|
)
|
|
(41.6
|
)%
|
|
(30.6
|
)%
|
||
Total Operating Income
|
$
|
209
|
|
|
$
|
323
|
|
|
8.6
|
%
|
|
12.4
|
%
|
(a)
|
Includes Mast Global, La Senza, Henri Bendel and Corporate.
|
|
2017
|
|
2016
|
|
% Change
|
|||||
First Quarter
|
(in millions)
|
|
|
|||||||
Victoria’s Secret Stores (a)
|
$
|
1,247
|
|
|
$
|
1,381
|
|
|
(10
|
)%
|
Victoria’s Secret Direct
|
286
|
|
|
360
|
|
|
(20
|
)%
|
||
Total Victoria’s Secret
|
1,533
|
|
|
1,741
|
|
|
(12
|
)%
|
||
Bath & Body Works Stores (a)
|
588
|
|
|
587
|
|
|
—
|
%
|
||
Bath & Body Works Direct
|
90
|
|
|
73
|
|
|
22
|
%
|
||
Total Bath & Body Works
|
678
|
|
|
660
|
|
|
3
|
%
|
||
Victoria’s Secret and Bath & Body Works International
|
104
|
|
|
95
|
|
|
9
|
%
|
||
Other (b)
|
122
|
|
|
118
|
|
|
3
|
%
|
||
Total Net Sales
|
$
|
2,437
|
|
|
$
|
2,614
|
|
|
(7
|
)%
|
(a)
|
Includes company-owned stores in the U.S. and Canada.
|
(b)
|
Includes Mast Global, La Senza, Henri Bendel and Corporate.
|
|
Victoria’s
Secret
|
|
Bath &
Body Works
|
|
Victoria’s Secret
and
Bath & Body Works International
|
|
Other
|
|
Total
|
||||||||||
First Quarter
|
(in millions)
|
||||||||||||||||||
2016 Net Sales
|
$
|
1,741
|
|
|
$
|
660
|
|
|
$
|
95
|
|
|
$
|
118
|
|
|
$
|
2,614
|
|
Comparable Store Sales
|
(155
|
)
|
|
(6
|
)
|
|
(3
|
)
|
|
(2
|
)
|
|
(166
|
)
|
|||||
Sales Associated with New, Closed and Non-comparable Remodeled Stores, Net
|
20
|
|
|
8
|
|
|
22
|
|
|
1
|
|
|
51
|
|
|||||
Foreign Currency Translation
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||||
Direct Channels
|
(73
|
)
|
|
16
|
|
|
2
|
|
|
2
|
|
|
(53
|
)
|
|||||
International Wholesale, Royalty and Other
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
3
|
|
|
(4
|
)
|
|||||
2017 Net Sales
|
$
|
1,533
|
|
|
$
|
678
|
|
|
$
|
104
|
|
|
$
|
122
|
|
|
$
|
2,437
|
|
First Quarter
|
2017
|
|
2016
|
||
Comparable Sales (Stores and Direct) (a)
|
|
|
|
||
Victoria's Secret (b)
|
(14
|
)%
|
|
2
|
%
|
Bath & Body Works (b)
|
2
|
%
|
|
6
|
%
|
Total Comparable Sales
|
(9
|
)%
|
|
3
|
%
|
|
|
|
|
||
Comparable Store Sales (a)
|
|
|
|
||
Victoria’s Secret (b)
|
(12
|
)%
|
|
1
|
%
|
Bath & Body Works (b)
|
(1
|
)%
|
|
4
|
%
|
Total Comparable Store Sales
|
(9
|
)%
|
|
2
|
%
|
(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. A store is typically included in the calculation of comparable sales when it has been open or owned 12 months or more and it has not had a change in selling square footage of 20% or more. Additionally, stores of a given brand are excluded if total selling square footage for the brand in the mall changes by 20% or more through the opening or closing of a second store. Comparable sales attributable to our international stores are calculated on a constant currency basis.
|
(b)
|
Includes company-owned stores in the U.S. and Canada.
|
First Quarter
|
2017
|
|
2016
|
||||
Average daily borrowings (in millions)
|
$
|
5,790
|
|
|
$
|
5,759
|
|
Average borrowing rate (in percentages)
|
6.97
|
%
|
|
6.72
|
%
|
|
April 29,
2017 |
|
January 28,
2017 |
|
April 30,
2016 |
||||||
|
(in millions)
|
||||||||||
Senior Unsecured Debt with Subsidiary Guarantee
|
|
|
|
|
|
||||||
$1 billion, 6.875% Fixed Interest Rate Notes due November 2035 (“2035 Notes”)
|
$
|
989
|
|
|
$
|
989
|
|
|
$
|
989
|
|
$1 billion, 5.625% Fixed Interest Rate Notes due February 2022 (“2022 Notes”)
|
993
|
|
|
992
|
|
|
991
|
|
|||
$1 billion, 6.625% Fixed Interest Rate Notes due April 2021 (“2021 Notes”)
|
993
|
|
|
992
|
|
|
991
|
|
|||
$700 million, 6.75% Fixed Interest Rate Notes due July 2036 (“2036 Notes”)
|
692
|
|
|
692
|
|
|
—
|
|
|||
$500 million, 5.625% Fixed Interest Rate Notes due October 2023 (“2023 Notes”)
|
497
|
|
|
497
|
|
|
496
|
|
|||
$500 million, 8.50% Fixed Interest Rate Notes due June 2019 (“2019 Notes”) (a)
|
496
|
|
|
496
|
|
|
499
|
|
|||
$400 million, 7.00% Fixed Interest Rate Notes due May 2020 (“2020 Notes”)
|
397
|
|
|
397
|
|
|
396
|
|
|||
Total Senior Unsecured Debt with Subsidiary Guarantee
|
$
|
5,057
|
|
|
$
|
5,055
|
|
|
$
|
4,362
|
|
Senior Unsecured Debt
|
|
|
|
|
|
||||||
$350 million, 6.95% Fixed Interest Rate Debentures due March 2033 (“2033 Notes”)
|
$
|
348
|
|
|
$
|
348
|
|
|
$
|
348
|
|
$300 million, 7.60% Fixed Interest Rate Notes due July 2037 (“2037 Notes”)
|
297
|
|
|
297
|
|
|
297
|
|
|||
$700 million, 6.90% Fixed Interest Rate Notes due July 2017 (“2017 Notes”) (b)
|
—
|
|
|
—
|
|
|
706
|
|
|||
Foreign Facilities
|
44
|
|
|
36
|
|
|
13
|
|
|||
Total Senior Unsecured Debt
|
$
|
689
|
|
|
$
|
681
|
|
|
$
|
1,364
|
|
Total
|
$
|
5,746
|
|
|
$
|
5,736
|
|
|
$
|
5,726
|
|
Current Portion of Long-term Debt
|
(44
|
)
|
|
(36
|
)
|
|
(8
|
)
|
|||
Total Long-term Debt, Net of Current Portion
|
$
|
5,702
|
|
|
$
|
5,700
|
|
|
$
|
5,718
|
|
(a)
|
The balances include a fair value interest rate hedge adjustment which increased the debt balance by
$2 million
as of
April 29, 2017
,
$2 million
as of
January 28, 2017
and
$8 million
as of
April 30, 2016
.
|
(b)
|
The balance includes a fair value interest rate hedge adjustment which increased the debt balance by
$7 million
as of
April 30, 2016
.
|
|
April 29,
2017 |
|
January 28, 2017
|
|
April 30,
2016 |
||||||
|
(in millions)
|
||||||||||
Net Cash Provided by (Used for) Operating Activities (a) (b)
|
$
|
7
|
|
|
$
|
1,990
|
|
|
$
|
(43
|
)
|
Capital Expenditures (a)
|
165
|
|
|
990
|
|
|
187
|
|
|||
Working Capital
|
1,321
|
|
|
1,451
|
|
|
1,386
|
|
|||
Capitalization:
|
|
|
|
|
|
||||||
Long-term Debt
|
5,702
|
|
|
5,700
|
|
|
5,718
|
|
|||
Shareholders’ Equity (Deficit)
|
(836
|
)
|
|
(729
|
)
|
|
(1,087
|
)
|
|||
Total Capitalization
|
$
|
4,866
|
|
|
$
|
4,971
|
|
|
$
|
4,631
|
|
Remaining Amounts Available Under Credit Agreements (c)
|
$
|
992
|
|
|
$
|
992
|
|
|
$
|
992
|
|
(a)
|
The
January 28, 2017
amounts represent a twelve-month period, and the
April 29, 2017
and
April 30, 2016
amounts represent
three
-month periods.
|
(b)
|
As further discussed in Note 2 included in Item 1. Financial Statements, prior year amounts have been recast to reflect the retrospective application of ASU No. 2016-09,
Improvements to Employee Share-Based Payment Accounting.
|
(c)
|
Letters of credit issued reduce our remaining availability under the Revolving Facility. We have outstanding letters of credit that reduce our remaining availability under the Revolving Facility of
$8 million
as of
April 29, 2017
,
January 28, 2017
and
April 30, 2016
.
|
|
Moody’s
|
|
S&P
|
|
Fitch
|
Corporate
|
Ba1
|
|
BB+
|
|
BB+
|
Senior Unsecured Debt with Subsidiary Guarantee
|
Ba1
|
|
BB+
|
|
BB+
|
Senior Unsecured Debt
|
Ba2
|
|
BB-
|
|
BB
|
Outlook
|
Stable
|
|
Stable
|
|
Stable
|
|
Amount
Authorized
|
|
Shares
Repurchased
|
|
Amount
Repurchased
|
|
Average Stock Price of Shares Repurchased within Program
|
||||||||||||||||||
Repurchase Program
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||||||
|
(in millions)
|
|
(in thousands)
|
|
(in millions)
|
|
|
|
|
||||||||||||||||
February 2017
|
$
|
250
|
|
|
1,570
|
|
|
NA
|
|
|
$
|
80
|
|
|
NA
|
|
|
$
|
50.92
|
|
|
NA
|
|
||
February 2016
|
$
|
500
|
|
|
51
|
|
|
3,125
|
|
|
3
|
|
|
$
|
260
|
|
|
$
|
58.95
|
|
|
$
|
83.26
|
|
|
Total
|
|
|
1,621
|
|
|
3,125
|
|
|
$
|
83
|
|
|
$
|
260
|
|
|
|
|
|
|
|
Ordinary Dividends
|
|
Special Dividends
|
|
Total Dividends
|
|
Total Paid
|
||||||||
|
|
(per share)
|
|
(in millions)
|
||||||||||||
2017
|
|
|
|
|
|
|
|
|
||||||||
First Quarter
|
|
$
|
0.60
|
|
|
$
|
—
|
|
|
$
|
0.60
|
|
|
$
|
172
|
|
2016
|
|
|
|
|
|
|
|
|
||||||||
First Quarter
|
|
$
|
0.60
|
|
|
$
|
2.00
|
|
|
$
|
2.60
|
|
|
$
|
750
|
|
|
Year-to-Date
|
||||||
|
2017
|
|
2016
|
||||
|
(in millions)
|
||||||
Cash and Cash Equivalents, Beginning of Period
|
$
|
1,934
|
|
|
$
|
2,548
|
|
Net Cash Flows Provided by (Used for) Operating Activities
|
7
|
|
|
(43
|
)
|
||
Net Cash Flows Used for Investing Activities
|
(155
|
)
|
|
(205
|
)
|
||
Net Cash Flows Used for Financing Activities
|
(230
|
)
|
|
(1,035
|
)
|
||
Effects of Exchange Rate Changes on Cash and Cash Equivalents
|
(1
|
)
|
|
2
|
|
||
Net Decrease in Cash and Cash Equivalents
|
(379
|
)
|
|
(1,281
|
)
|
||
Cash and Cash Equivalents, End of Period
|
$
|
1,555
|
|
|
$
|
1,267
|
|
Item 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
April 29,
2017 |
|
January 28, 2017
|
|
April 30,
2016 |
||||||
|
(in millions)
|
||||||||||
Long-term Debt:
|
|
|
|
|
|
||||||
Principal Value
|
$
|
5,750
|
|
|
$
|
5,750
|
|
|
$
|
5,750
|
|
Fair Value, Estimated (a)
|
5,992
|
|
|
6,030
|
|
|
6,372
|
|
|||
Foreign Currency Cash Flow Hedges (b)
|
(26
|
)
|
|
(17
|
)
|
|
(11
|
)
|
|||
Interest Rate Fair Value Hedges (b)
|
(2
|
)
|
|
(2
|
)
|
|
(10
|
)
|
(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.
|
(b)
|
Hedge arrangements are in a net asset position.
|
Item 4.
|
CONTROLS AND PROCEDURES
|
Item 1.
|
LEGAL PROCEEDINGS
|
Item 1A.
|
RISK FACTORS
|
Item 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
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)
|
||||||||
February 2017
|
518
|
|
|
$
|
55.23
|
|
|
508
|
|
|
$
|
224,958
|
|
March 2017
|
848
|
|
|
49.94
|
|
|
797
|
|
|
185,084
|
|
||
April 2017
|
610
|
|
|
47.67
|
|
|
316
|
|
|
170,013
|
|
||
Total
|
1,976
|
|
|
|
|
1,621
|
|
|
|
(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 employee restricted stock 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
3
, “Earnings Per Share and Shareholders' Equity (Deficit)” included in Item
1
. Financial Statements.
|
Item 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
Item 4.
|
MINE SAFETY DISCLOSURES
|
Item 5.
|
OTHER INFORMATION
|
Item 6.
|
EXHIBITS
|
Exhibits
|
|
|
|
|
|
4.1
|
|
Amendment and Restatement Agreement dated May 11, 2017 among L Brands, Inc., a Delaware corporation, the Borrowing Subsidiaries party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent (the “Administrative Agent”), in respect of the Amended and Restated Five-Year Revolving Credit Agreement dated as of July 18, 2014 among the Company, the lenders from time to time party thereto and the Administrative Agent, incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K dated May 17, 2017.
|
|
|
|
10.1
|
|
Employment Agreement dated as of June 2, 2017 among L Brands, Inc., L Brands Service Company, LLC and Martin Waters.
|
|
|
|
15
|
|
Letter re: Unaudited Interim Financial Information re: Incorporation of Report of Independent Registered Public Accounting Firm.
|
|
|
|
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
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
L B
RANDS
, I
NC
.
|
|
|
(Registrant)
|
|
|
By:
|
/s/ STUART B. BURGDOERFER
|
|
|
Stuart B. Burgdoerfer
Executive Vice President and Chief Financial Officer *
|
*
|
Mr. Burgdoerfer is the principal financial officer and the principal accounting officer and has been duly authorized to sign on behalf of the Registrant.
|
“10.
|
Compensation Upon Certain Terminations
|
1.
|
I have reviewed this report on Form 10-Q of L Brands, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ LESLIE H. WEXNER
|
|
Leslie H. Wexner
|
|
Chairman and Chief Executive Officer
|
1.
|
I have reviewed this report on Form 10-Q of L Brands, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ STUART B. BURGDOERFER
|
|
Stuart B. Burgdoerfer
|
|
Executive Vice President and
Chief Financial Officer |
(i)
|
the Quarterly Report of the Company on Form 10-Q dated
June 2, 2017
for the period ending
April 29, 2017
(the “Form 10-Q”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(ii)
|
the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ LESLIE H. WEXNER
|
|
Leslie H. Wexner
|
|
Chairman and Chief Executive Officer
|
|
|
|
/s/ STUART B. BURGDOERFER
|
|
Stuart B. Burgdoerfer
|
|
Executive Vice President and Chief Financial Officer
|