0000701985-20-000004.txt : 20200226 0000701985-20-000004.hdr.sgml : 20200226 20200226165337 ACCESSION NUMBER: 0000701985-20-000004 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 16 CONFORMED PERIOD OF REPORT: 20200226 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20200226 DATE AS OF CHANGE: 20200226 FILER: COMPANY DATA: COMPANY CONFORMED NAME: L Brands, Inc. CENTRAL INDEX KEY: 0000701985 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-WOMEN'S CLOTHING STORES [5621] IRS NUMBER: 311029810 STATE OF INCORPORATION: DE FISCAL YEAR END: 0201 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08344 FILM NUMBER: 20656669 BUSINESS ADDRESS: STREET 1: THREE LIMITED PKWY STREET 2: P O BOX 16000 CITY: COLUMBUS STATE: OH ZIP: 43216 BUSINESS PHONE: 6144157000 MAIL ADDRESS: STREET 1: THREE LIMITED PARKWAY STREET 2: P.O. BOX 16000 CITY: COLUMBUS STATE: OH ZIP: 43216 FORMER COMPANY: FORMER CONFORMED NAME: LIMITED BRANDS INC DATE OF NAME CHANGE: 20020613 FORMER COMPANY: FORMER CONFORMED NAME: LIMITED INC DATE OF NAME CHANGE: 19920703 8-K 1 lb-20194qearningsrelea.htm 8-K Document
false0000701985 0000701985 2020-02-26 2020-02-26


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): February 26, 2020
 
 
L Brands, Inc.
 
 
 
(Exact Name of Registrant
as Specified in Its Charter)
 
 
 
 
Delaware
 
 
 
(State or Other Jurisdiction of Incorporation)
 
 
1-8344
 
31-1029810
(Commission File Number)
 
(IRS Employer Identification No.)
 
Three Limited Parkway
 
 
Columbus,
OH
 
43230
(Address of Principal Executive Offices)
 
(Zip Code)
(614) 415-7000
(Registrant's Telephone Number, Including Area Code)

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.50 Par Value
LB
The New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.





Item 2.02. Results of Operations and Financial Condition
and
Item 7.01. Regulation FD Disclosure.
The following information is being furnished pursuant to Item 2.02, "Results of Operations and Financial Condition" and Item 7.01, “Regulation FD Disclosure”, and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
On February 26, 2020, L Brands, Inc. issued a press release setting forth its fourth quarter and full-year 2019 results, and its first quarter 2020 earnings guidance. In addition, the press release provides information on the previously announced transaction pursuant to which L Brands, Inc. will separate its Victoria’s Secret Lingerie, Victoria’s Secret Beauty and PINK businesses (collectively, “Victoria’s Secret”) and sell a 55% interest in Victoria’s Secret to affiliates of Sycamore Partners. A copy of the press release is attached hereto as Exhibit 99.1 and is hereby incorporated by reference.

Item 9.01. Financial Statements and Exhibits.
Exhibit 104    Cover Page Interactive Data File (embedded within the Inline XBRL document)






SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
L Brands, Inc.
 
 
 
 
 
 
 
 
Date:
February 26, 2020
By:
/s/ STUART B. BURGDOERFER
 
 
 
Stuart B. Burgdoerfer
 
 
 
Executive Vice President and Chief Financial Officer




EX-99.1 2 ex991lb-20194qearnings.htm PRESS RELEASE Exhibit


Exhibit 99.1
lbrandsa02aa19.jpg
L BRANDS REPORTS FOURTH QUARTER AND FULL-YEAR
2019 EARNINGS
- BATH & BODY WORKS REPORTS RECORD FOURTH QUARTER
AND FULL-YEAR RESULTS -

- L BRANDS PROVIDES FIRST QUARTER 2020 GUIDANCE -

Columbus, Ohio, Feb. 26, 2020 - L Brands, Inc. (NYSE: LB) today reported 2019 fourth quarter and full-year results.

Fourth Quarter Results
The company reported a loss per share of $0.70 for the fourth quarter ended Feb. 1, 2020, compared to earnings per share of $1.94 for the quarter ended Feb. 2, 2019. Fourth quarter operating income was $81.7 million compared to operating income of $799.4 million last year, and the net loss was $192.3 million compared to net income of $540.1 million last year.

Reported results above include the following significant items:

In 2019:
Pre-tax, non-cash impairment charges of $725.0 million ($2.58 per share) related to Victoria’s Secret goodwill and store-related assets.

In 2018:
A pre-tax charge, principally non-cash, related to the sale of La Senza of $99.2 million ($0.20 per share).

Excluding the above charges, adjusted fourth quarter earnings per share were $1.88 compared to $2.14 last year, adjusted operating income was $806.7 million compared to $898.7 million last year, and adjusted net income was $523.7 million compared to $595.2 million last year.

The company reported net sales of $4.707 billion for the fourth quarter ended Feb. 1, 2020, compared to net sales of $4.852 billion for the fourth quarter ended Feb. 2, 2019. Comparable sales decreased 2 percent for the fourth quarter ended Feb. 1, 2020.
 
Full-Year Results
The company reported a loss per share of $1.33 for the year ended Feb. 1, 2020, compared to earnings per share of $2.31 for the year ended Feb. 2, 2019. Full-year operating income was $258.4 million compared to operating income of $1.237 billion last year, and the net loss was $366.4 million compared to net income of $643.9 million last year.


VICTORIA'S SECRET / PINK / BATH & BODY WORKS
Three Limited Parkway Columbus, OH 43230 www.LB.com



Excluding significant items, adjusted full-year earnings per share were $2.29 compared to $2.82 last year; adjusted operating income was $1.231 billion compared to $1.437 billion last year; and adjusted net income was $637.3 million compared to $786.7 million last year.

Net sales were $12.914 billion for the year ended Feb. 1, 2020, compared to $13.237 billion for the year ended Feb. 2, 2019. Comparable sales decreased 1 percent for the year ended Feb. 1, 2020.

The Bath & Body Works business reported record results for the fourth quarter and full-year 2019. For the year, Bath & Body Works North America segment comparable sales increased 10 percent, including a 5 percent increase in stores and a 32 percent increase in the direct business. Sales increased 12 percent to $5.170 billion and operating income increased 11 percent to $1.191 billion.

In the Victoria’s Secret North America segment, sales for the full year declined 8 percent to $6.805 billion, on a comparable sales decline of 7 percent. The full-year reported operating loss, which includes significant items of $730.7 million in non-cash impairment charges, was $616.1 million.

At the conclusion of this press release is a reconciliation of reported-to-adjusted results, including a description of the significant items.

Transformative Transaction with Sycamore Partners
As previously announced on February 20, 2020, L Brands and Sycamore Partners, a private equity firm specializing in consumer and retail investments, entered into a definitive agreement that is intended to deliver long-term value to L Brands shareholders by positioning Bath & Body Works as a highly profitable, standalone public company and separating Victoria’s Secret Lingerie, Victoria’s Secret Beauty and PINK (collectively, Victoria’s Secret) into a privately-held entity focused on reinvigorating its market-leading businesses and returning them to historic levels of profitability and growth. Under the terms of the transaction, and after taking into account certain liabilities, Sycamore will purchase a 55% interest in Victoria’s Secret for approximately $525 million. L Brands will retain a 45% stake in Victoria’s Secret to enable its shareholders to meaningfully participate in the upside potential of these businesses. The transaction is the result of a comprehensive review of a broad range of options undertaken by the board of directors, with input from outside financial advisors, designed to best position the company’s brands for long-term success and drive shareholder value. The transaction is expected to close in the second quarter 2020.

First Quarter 2020 Outlook
The company currently expects a 2020 first quarter adjusted loss per share of about $0.05. The company will not provide guidance for the full year at this time due to the pending transaction with Sycamore Partners, but the company’s guidance for the first quarter 2020 includes the Victoria’s Secret business.

Earnings Call and Additional Information
Additional fourth quarter financial information, including management commentary, is currently available at www.LB.com.  L Brands will conduct its fourth quarter earnings call at 9:00 a.m. Eastern on Feb. 27.  To listen, call 1-866-363-4673 (international dial-in number: 1-973-200-3978); conference ID 6695987.  For an audio replay, call 1-855-859-2056 (international replay number: 1-404-537-3406); conference ID 6695987 or log onto www.LB.com

ABOUT L BRANDS:
L Brands, through Victoria’s Secret, PINK and Bath & Body Works, is an international company. The company operates 2,920 company-owned specialty stores in the United States, Canada, the United Kingdom and Greater China, and its brands are also sold in more than 700 franchised locations worldwide. The company’s products are also available online at www.VictoriasSecret.com and www.BathandBodyWorks.com.


VICTORIA'S SECRET / PINK / BATH & BODY WORKS
Three Limited Parkway Columbus, OH 43230 www.LB.com



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

the risk that the transactions contemplated by the Transaction Agreement dated as of Feb. 20, 2020 between the company and SP VS Buyer LP (the “Transaction”) is not consummated, including the risk that required regulatory approvals for the Transaction may not be obtained;
diversion of our management’s attention away from other business concerns due to the Transaction;
the ongoing obligations of the company in connection with the Transaction;
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 vendor 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;

VICTORIA'S SECRET / PINK / BATH & BODY WORKS
Three Limited Parkway Columbus, OH 43230 www.LB.com



shareholder activism matters;
our ability to retain key personnel;
our ability to attract, develop and retain qualified associates and manage labor-related costs;
the ability of our vendors 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;
liabilities arising from divested businesses;
our ability to implement and maintain information technology systems and to protect associated data;
our ability to maintain the security of customer, associate, third-party or company information;
our ability to comply with regulatory requirements;
legal and compliance matters; and
tax, trade and other regulatory matters.

We are not under any obligation and do not intend to make publicly available any update or other revisions to any of the forward-looking statements contained in this press release to reflect circumstances existing after the date of this press release or to reflect the occurrence of future events even if experience or future events make it clear that any expected results expressed or implied by those forward-looking statements will not be realized.

For further information, please contact:
L Brands:
Investor Relations
 
Media Relations
Amie Preston
 
Tammy Roberts Myers
(614) 415-6704
 
(614) 415-7072
apreston@lb.com
 
communications@lb.com


VICTORIA'S SECRET / PINK / BATH & BODY WORKS
Three Limited Parkway Columbus, OH 43230 www.LB.com



L BRANDS
FOURTH QUARTER 2019

Comparable Sales Increase (Decrease) (Stores and Direct):
 
Fourth
Quarter
 
Fourth
Quarter
 
Year
 
Year
 
2019
 
2018
 
2019
 
2018
Victoria's Secret1
(10%)
 
(3%)
 
(7%)
 
(2%)
Bath & Body Works1
10%
 
12%
 
10%
 
11%
L Brands2
(2%)
 
3%
 
(1%)
 
3%

1 - Results include company-owned stores in the U.S. and Canada and direct sales.
2 - Results include company-owned stores in the U.S., Canada, the U.K. and Greater China and direct sales.

Comparable Sales Increase (Decrease) (Stores Only):
 
Fourth
Quarter
 
Fourth
Quarter
 
Year
 
Year
 
2019
 
2018
 
2019
 
2018
Victoria's Secret1
(10%)
 
(7%)
 
(9%)
 
(6%)
Bath & Body Works1
5%
 
8%
 
5%
 
8%
L Brands2
(4%)
 
(1%)
 
(3%)
 
(1%)

1 - Results include company-owned stores in the U.S. and Canada.
2 - Results include company-owned stores in the U.S., Canada, the U.K. and Greater China.

Total Sales (Millions):
 
Fourth
Quarter
 
Fourth
Quarter
 
Year
 
Year
 
2019
 
2018
 
2019
 
2018
Victoria's Secret1
$
1,649.3

 
$
1,849.3

 
$
5,111.5

 
$
5,627.9

Victoria's Secret Direct
626.5

 
682.5

 
1,693.0

 
1,747.0

  Total Victoria's Secret
$
2,275.8

 
$
2,531.8

 
$
6,804.5

 
$
7,374.9

 
 
 
 
 
 
 
 
Bath & Body Works1
$
1,744.0

 
$
1,626.1

 
$
4,212.4

 
$
3,907.2

Bath & Body Works Direct
430.8

 
324.7

 
958.1

 
723.8

  Total Bath & Body Works
$
2,174.8

 
$
1,950.8

 
$
5,170.5

 
$
4,631.0

 
 
 
 
 
 
 
 
VS & BBW International2
$
177.1

 
$
190.7

 
$
600.0

 
$
605.3

Other
$
79.4

 
$
179.0

 
$
339.2

 
$
625.7

L Brands
$
4,707.1

 
$
4,852.3

 
$
12,914.2

 
$
13,236.9


1 - Results include company-owned stores in the U.S. and Canada.
2 - Results include retail sales from company-owned stores outside of the U.S. and Canada, direct sales in China, royalties associated with franchised stores and wholesale sales.






VICTORIA'S SECRET / PINK / BATH & BODY WORKS
Three Limited Parkway Columbus, OH 43230 www.LB.com



Total Company-Owned Stores:
 
Stores
 
Stores
 
Operating
Operating
 
at 2/2/19
Opened
Closed
at 2/1/20
Victoria's Secret U.S.
957

4

(52
)
909

PINK U.S.
141

3


144

Victoria's Secret Canada
39


(6
)
33

PINK Canada
6


(1
)
5

   Total Victoria's Secret
1,143

7

(59
)
1,091

 
 
 
 
 
Bath & Body Works U.S.
1,619

38

(20
)
1,637

Bath & Body Works Canada
102

1

(1
)
102

   Total Bath & Body Works
1,721

39

(21
)
1,739

 
 
 
 
 
Victoria's Secret U.K./Ireland
21



21

PINK U.K.
5



5

Victoria's Secret Beauty and Accessories
38

10

(7
)
41

Victoria's Secret Greater China
15

8


23

   Total International
79

18

(7
)
90

Total L Brands Stores
2,943

64

(87
)
2,920


Total Noncompany-Owned Stores:
 
Stores
 
 
Stores
 
Operating
 
 
Operating
 
at 2/2/19
Opened
Closed
at 2/1/20
Victoria's Secret Beauty & Accessories - Travel Retail
164

15

(26
)
153

Bath & Body Works - Travel Retail
12

4


16

Victoria's Secret Beauty & Accessories
219

9

(21
)
207

Victoria's Secret
47

25


72

PINK
9

3


12

Bath & Body Works
223

43

(4
)
262

Total
674

99

(51
)
722



VICTORIA'S SECRET / PINK / BATH & BODY WORKS
Three Limited Parkway Columbus, OH 43230 www.LB.com



L BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
THIRTEEN WEEKS ENDED FEBRUARY 1, 2020 AND FEBRUARY 2, 2019
(Unaudited)
(In thousands except per share amounts)
 
2019
 
2018
Net Sales
$
4,707,141

 
$
4,852,309

Costs of Goods Sold, Buying and Occupancy
(2,913,454
)
 
(2,884,629
)
Gross Profit
1,793,687

 
1,967,680

General, Administrative and Store Operating Expenses
(1,022,397
)
 
(1,068,990
)
Impairment of Victoria's Secret Goodwill
(689,576
)
 

Loss on Divestiture of La Senza

 
(99,242
)
Operating Income
81,714

 
799,448

Interest Expense
(91,977
)
 
(92,812
)
Other Income
3,720

 
4,390

Income (Loss) Before Income Taxes
(6,543
)
 
711,026

Provision for Income Taxes
185,712

 
170,944

Net Income (Loss)
$
(192,255
)
 
$
540,082

 
 
 
 
Net Income (Loss) Per Diluted Share
$
(0.70
)
 
$
1.94

 
 
 
 
Weighted Average Shares Outstanding
276,477

 
277,935


L BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
FIFTY-TWO WEEKS ENDED FEBRUARY 1, 2020 AND FEBRUARY 2, 2019
(Unaudited)
(In thousands except per share amounts)
 
2019
 
2018
Net Sales
$
12,914,236

 
$
13,236,878

Costs of Goods Sold, Buying and Occupancy
(8,463,793
)
 
(8,338,071
)
Gross Profit
4,450,443

 
4,898,807

General, Administrative and Store Operating Expenses
(3,471,946
)
 
(3,562,778
)
Impairment of Victoria's Secret Goodwill
(720,051
)
 

Loss on Divestiture of La Senza

 
(99,242
)
Operating Income
258,446

 
1,236,787

Interest Expense
(378,082
)
 
(384,728
)
Other Income (Loss)
(61,830
)
 
5,124

Income (Loss) Before Income Taxes
(181,466
)
 
857,183

Provision for Income Taxes
184,930

 
213,300

Net Income (Loss)
$
(366,396
)
 
$
643,883

 
 
 
 
Net Income (Loss) Per Diluted Share
$
(1.33
)
 
$
2.31

 
 
 
 
Weighted Average Shares Outstanding
276,163

 
278,840


VICTORIA'S SECRET / PINK / BATH & BODY WORKS
Three Limited Parkway Columbus, OH 43230 www.LB.com



L BRANDS, INC. AND SUBSIDIARIES
ADJUSTED FINANCIAL INFORMATION
 (Unaudited)
(In thousands except per share amounts)
 
 
 
 
 
 
 
 
 
Fourth Quarter
 
Year-to-Date
 
2019
 
2018
 
2019
 
2018
Details of Special Items - Income (Expense)
 
 
 
 
 
 
 
Impairment of Victoria's Secret Goodwill
$
(689,576
)
 
$

 
$
(720,051
)
 
$

Victoria's Secret Store-Related Asset Impairment
(35,384
)
 

 
(252,442
)
 
(80,878
)
Henri Bendel Closure Costs

 

 

 
(20,310
)
Loss on Divestiture of La Senza

 
(99,242
)
 

 
(99,242
)
Special Items included in Operating Income
(724,960
)
 
(99,242
)
 
(972,493
)
 
(200,430
)
La Senza Charges

 

 
(37,217
)
 

Loss on Extinguishment of Debt

 

 
(39,564
)
 

Special Items included in Other Income (Loss)

 

 
(76,781
)
 

Tax Effect of Special Items included in Operating Income and
     Other Income (Loss)
8,997

 
44,117

 
45,544

 
57,580

Special Items included in Net Income (Loss)
$
(715,963
)
 
$
(55,125
)
 
$
(1,003,730
)
 
$
(142,850
)
Special Items included in Earnings (Loss) Per Diluted Share
$
(2.58
)
 
$
(0.20
)
 
$
(3.62
)
 
$
(0.51
)
 
 
 
 
 
 
 
 
Reconciliation of Reported Operating Income to Adjusted
     Operating Income
 
 
 
 
 
 
 
Reported Operating Income
$
81,714

 
$
799,448

 
$
258,446

 
$
1,236,787

Special Items included in Operating Income
724,960

 
99,242

 
972,493

 
200,430

Adjusted Operating Income
$
806,674

 
$
898,690

 
$
1,230,939

 
$
1,437,217

 
 
 
 
 
 
 
 
Reconciliation of Reported Net Income (Loss) to Adjusted Net
     Income
 
 
 
 
 
 
 
Reported Net Income (Loss)
$
(192,255
)
 
$
540,082

 
$
(366,396
)
 
$
643,883

Special Items included in Net Income (Loss)
715,963

 
55,125

 
1,003,730

 
142,850

Adjusted Net Income
$
523,708

 
$
595,207

 
$
637,334

 
$
786,733

 
 
 
 
 
 
 
 
Reconciliation of Reported Earnings (Loss) Per Diluted Share
     to Adjusted Earnings Per Diluted Share
 
 
 
 
 
 
 
Reported Earnings (Loss) Per Diluted Share
$
(0.70
)
 
$
1.94

 
$
(1.33
)
 
$
2.31

Special Items included in Earnings (Loss) Per Diluted Share
2.58

 
0.20

 
3.62

 
0.51

Adjusted Earnings Per Diluted Share
$
1.88

 
$
2.14

 
$
2.29

 
$
2.82


See Notes to Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures.

VICTORIA'S SECRET / PINK / BATH & BODY WORKS
Three Limited Parkway Columbus, OH 43230 www.LB.com



L BRANDS, INC. AND SUBSIDIARIES
NOTES TO RECONCILIATION OF GAAP FINANCIAL MEASURES
TO NON-GAAP FINANCIAL MEASURES
(Unaudited)

The “Adjusted Financial Information” provided in the attached reflects the following non-GAAP financial measures:

Fiscal 2019

In the fourth quarter of 2019, adjusted results exclude the following:

A $689.6 million charge ($686.4 million net of tax of $3.2 million) related to the impairment of Victoria’s Secret goodwill.

A $35.4 million charge ($29.5 million net of tax of $5.8 million), included in buying and occupancy expenses, related to the impairment of Victoria’s Secret store-related assets.

In the third quarter of 2019, adjusted results exclude the following:

A $217.1 million charge ($199.6 million net of tax of $17.5 million), included in buying and occupancy expenses, related to the impairment of Victoria’s Secret store-related assets.

A $30.5 million charge (no tax impact) related to the impairment of Victoria’s Secret goodwill.

A $37.2 million charge ($27.7 million net of tax of $9.5 million), included in other income (loss), to increase reserves related to ongoing guarantees for the La Senza business which was sold in the fourth quarter of 2018.

In the second quarter of 2019, adjusted results exclude the following:

A $39.6 million pre-tax loss ($30.0 million net of tax of $9.5 million), included in other income (loss), associated with the early extinguishment of $764 million in outstanding notes maturing between 2020 and 2022 through the issuance of $500 million of new notes maturing in 2029 and the use of $315 million in cash, lowering total debt by $264 million.

In the first quarter of 2019, there were no adjustments to results.

Fiscal 2018

In the fourth quarter of 2018, adjusted results exclude the following:

A $99.2 million ($55.1 million net of tax of $44.1 million) loss on the sale of La Senza to an affiliate of Regent LP.

In the third quarter of 2018, adjusted results exclude the following:

An $80.9 million charge ($72.7 million net of tax of $8.2 million), included in buying and occupancy expenses, related to the impairment of certain Victoria’s Secret store-related assets.

$20.3 million ($15.0 million net of tax of $5.3 million) of Henri Bendel closure costs, included in buying and occupancy expenses ($13.8 million) and general, administrative and store operating expenses ($6.5 million).

In the first and second quarter of 2018, there were no adjustments to results.

VICTORIA'S SECRET / PINK / BATH & BODY WORKS
Three Limited Parkway Columbus, OH 43230 www.LB.com




The Adjusted Financial Information should not be construed as an alternative to the reported results determined in accordance with generally accepted accounting principles. Further, the Company’s definition of adjusted income information may differ from similarly titled measures used by other companies. Management believes that the presentation of adjusted financial information provides additional information to investors to facilitate the comparison of past and present operations. While it is not possible to predict future results, management believes the adjusted information is useful for the assessment of the ongoing operations of the Company because the adjusted items are not indicative of our ongoing operations due to their size and nature. Additionally, management uses adjusted financial information as key performance measures of results of operations for the purpose of evaluating performance internally. The Adjusted Financial Information should be read in conjunction with the Company’s historical financial statements and notes thereto contained in the Company’s quarterly reports on Form 10-Q and annual report on Form 10-K.

VICTORIA'S SECRET / PINK / BATH & BODY WORKS
Three Limited Parkway Columbus, OH 43230 www.LB.com
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Document and Entity Information
Feb. 26, 2020
Cover page.  
Document Type 8-K
Document Period End Date Feb. 26, 2020
Entity Registrant Name L Brands, Inc.
Entity Central Index Key 0000701985
Amendment Flag false
Entity Incorporation, State or Country Code DE
Entity File Number 1-8344
Entity Tax Identification Number 31-1029810
Entity Address, Address Line One Three Limited Parkway
Entity Address, City or Town Columbus,
Entity Address, State or Province OH
Entity Address, Postal Zip Code 43230
City Area Code 614
Local Phone Number 415-7000
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $0.50 Par Value
Trading Symbol LB
Security Exchange Name NYSE
Entity Emerging Growth Company false
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