<DOCUMENT>
<TYPE>EX-20
<SEQUENCE>4
<FILENAME>lb080401.txt
<DESCRIPTION>LANE BRYANT FINANCIALS 8/4/2001
<TEXT>
<PAGE> 1
EXHIBIT 20.2
LANE BRYANT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Twenty-six Weeks Ended
August 4, July 29,
2001 2000
---- ----
<S> <C> <C>
Net sales $467,593 $451,275
Costs of goods sold, buying and occupancy costs (322,615) (327,309)
-------- --------
Gross income 144,978 123,966
General, administrative and store operating
expenses (110,194) (100,197)
-------- --------
34,784 23,769
Corporate overhead allocations from The Limited (11,529) (12,085)
-------- --------
Operating income 23,255 11,684
Provision for income taxes 9,240 4,670
-------- --------
Net income $ 14,015 $ 7,014
======== ========
</TABLE>
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
1
<PAGE> 2
LANE BRYANT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Thousands)
<TABLE>
<CAPTION>
August 4, February 3, July 29,
2001 2001 2000
---- ---- ----
(Unaudited) (Unaudited)
<S> <C> <C> <C>
ASSETS
Current assets
Cash $ 5,797 $ 2,853 $ 1,141
Accounts receivable 2,001 5,286 4,409
Inventories 92,842 85,230 84,499
Store supplies 7,530 8,749 8,593
Deferred income taxes 4,664 5,279 6,615
Other 2,335 3,421 1,398
-------- -------- --------
Total current assets 115,169 110,818 106,655
Property and equipment, net 77,239 77,956 67,846
Deferred income taxes 7,061 11,198 9,580
Other assets 425 450 475
-------- -------- --------
Total assets $199,894 $200,422 $184,556
======== ======== ========
LIABILITIES AND SHAREHOLDER'S
EQUITY
Current liabilities
Accounts payable $ 12,721 $ 8,934 $ 16,809
Accrued expenses 32,615 30,673 23,573
-------- -------- --------
Total current liabilities 45,336 39,607 40,382
Other long-term liabilities 18,448 14,132 14,029
Net investment by The Limited 136,110 146,683 130,145
-------- -------- --------
Total liabilities and
shareholders' equity $199,894 $200,422 $184,556
======== ======== ========
</TABLE>
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
2
<PAGE> 3
LANE BRYANT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Twenty-six Weeks Ended
August 4, July 29,
2001 2000
---- ----
<S> <C> <C>
Operating activities:
Net income $14,015 $ 7,014
Adjustments to reconcile net income to net
cash provided by (used for) operating
activities:
Depreciation and amortization 9,250 8,682
Changes in assets and liabilities:
Accounts receivable 3,285 4,611
Inventories (7,612) (7,482)
Accounts payable and accrued expenses 5,729 (2,626)
Income taxes 4,752 (286)
Other assets and liabilities 6,629 333
------- -------
Net cash provided by operating activities 36,048 10,246
------- -------
Investing activities:
Capital expenditures (8,516) (8,652)
Financing activities:
Net decrease in net investment by
The Limited, Inc. (24,588) (3,673)
------- -------
Net increase (decrease) in cash and equivalents 2,944 (2,079)
Cash, beginning of year 2,853 3,220
------- -------
Cash, end of period $ 5,797 $ 1,141
======= =======
</TABLE>
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
3
<PAGE> 4
LANE BRYANT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. PRINCIPLES OF CONSOLIDATION
Lane Bryant, Inc. ("Lane Bryant" or the "Company"), a division of The
Limited, Inc. ("The Limited") is the leading specialty store retailer
of women's apparel, offering knit tops, sweaters, pants, jeans and
intimate apparel for women size 14-plus and has stores in 46 states.
The Company was founded in 1904 and was acquired by The Limited, Inc.
as a wholly-owned subsidiary in 1982. The Company has one reportable
segment, which includes all of its products.
The accompanying consolidated financial statements include the
accounts of Lane Bryant and its subsidiaries and reflect the Company's
assets, liabilities, results of operations and cash flows, including
certain allocations by The Limited, on a historical cost basis. The
consolidated financial statements include the accounts of the Company
and all significant subsidiaries which are more than 50 percent owned
and controlled. All significant intercompany balances and transactions
have been eliminated in consolidation.
The consolidated financial statements as of and for the twenty-six
week periods ended August 4, 2001 and July 29, 2000 are unaudited and
should be read in conjunction with the consolidated financial
statements and notes thereto for fiscal years ended February 3, 2001,
January 29, 2000 and January 30, 1999. In the opinion of management,
the accompanying consolidated financial statements reflect all
adjustments (which are of a normal recurring nature) necessary for a
fair statement of the results for the interim periods, but are not
necessarily indicative of the results of operations for a full fiscal
year.
2. PROPERTY AND EQUIPMENT, NET
Property and equipment, net, consisted of (thousands):
<TABLE>
<CAPTION>
August 4, February 3, July 29,
2001 2001 2000
---- ---- ----
<S> <C> <C> <C>
Property and equipment, at cost $244,514 $237,244 $224,943
Accumulated depreciation and
amortization (167,275) (159,288) (157,097)
-------- -------- --------
Property and equipment, net $ 77,239 $ 77,956 $ 67,846
======== ======== ========
</TABLE>
3. INCOME TAXES
The provision for income taxes is based on the current estimate of the
annual effective tax rate. Current income tax obligations are treated
as having been settled through the intercompany accounts as if the
Company was filing its income tax returns on a separate company basis.
Such amounts were $4.5 million and $5.0 million for the twenty-six
weeks ended August 4, 2001 and July 29, 2000.
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<PAGE> 5
4. INTERCOMPANY RELATIONSHIP WITH THE PARENT
The Limited provides various services to the Company including, among
other things, merchandise sourcing, real estate management, store
design and construction supervision, inbound and outbound
transportation, and corporate services (including corporate
administration, brand and business planning, information technology,
corporate development, finance human resources and benefits).
The Company is charged by The Limited for corporate costs relating to
these transactions and other services, using the following
methodologies:
- Direct Costs - costs incurred by The Limited specifically on behalf
of Lane Bryant or a group of Limited subsidiaries that are either
charged directly to the Company or allocated based on usage. These
costs are included within individual line items in the consolidated
income statements, as appropriate.
- Corporate overhead allocations - overhead costs not identified to a
specific Limited subsidiary are generally allocated to Lane Bryant
based on the Company's sales and selling square feet in relation to
totals for The Limited. These costs are included in the consolidated
income statements as "corporate overhead allocations." These
allocations were $11.5 million and $12.1 million for the twenty-six
weeks ended August 4, 2001 and July 29, 2000.
Management believes the direct costs and allocations described above
are fair and reasonable, however, they are not necessarily indicative
of the amounts that would have been or that will be recorded by Lane
Bryant on a stand-alone basis.
The Company participates in The Limited's centralized cash management
system. Cash received from the Company's operations is transferred to
The Limited's centralized cash accounts and cash disbursements are
funded from the centralized cash accounts on a daily basis. No
interest has been charged or earned on the cash management account.
Under this system, Lane Bryant has had no external sources of
financing, such as available lines of credit, as may be necessary to
operate a separate entity.
5. SUBSEQUENT EVENT
On August 16, 2001, The Limited completed the sale of Lane Bryant to
Charming Shoppes, Inc. for $280 million of cash and 8.7 million shares
of Charming Shoppes common stock valued at $55 million. The
consideration received by The Limited is subject to adjustment based
on Lane Bryant's net tangible assets at closing.
The Limited will continue to provide certain corporate services to
Lane Bryant through a transition period of up to three years.
5
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