SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

__________________________________

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 3, 2001
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from______________ to______________
Commission file number 1-8344
THE LIMITED, INC.
(Exact name of registrant as specified in its charter)

Delaware	31-1029810
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
Three Limited Parkway, P.O. Box 16000, Columbus, Ohio	43216
(Address of principal executive offices)	(Zip Code)
Registrant's telephone number, including area code         (614) 415-7000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Common Stock, $.50 Par Value Outstanding at November 30, 2001 428,850,083 Shares

THE LIMITED, INC.

TABLE OF CONTENTS

					Page No.
Part I. Financial Information
	Item 1. Financial Statements
		Consolidated Statements of Income
			Thirteen and Thirty-nine Weeks Ended
				November 3, 2001 and October 28, 2000	4
		Consolidated Balance Sheets
				November 3, 2001, February 3, 2001 and October 28, 2000	5
		Consolidated Statements of Cash Flows
			Thirty-nine Weeks Ended
				November 3, 2001 and October 28, 2000	6
		Notes to Consolidated Financial Statements			7
	Item 2. Management's Discussion and Analysis of
				Results of Operations and Financial Condition	14
	Item 3. Quantitative and Qualitative Disclosures About Market Risk				23
Part II. Other Information
	Item 1. Legal Proceedings				24
	Item 6. Exhibits and Reports on Form 8-K				25

2

Safe Harbor Statement Under The Private Securities Litigation Act Of 1995

The Company cautions that any forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) contained in this Quarterly Report on Form 10-Q ("Report") or made by management of the Company involve risks and uncertainties and are subject to change based on various important factors, many of which may be beyond the Company's control. Accordingly, the Company's 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," and similar expressions may identify forward-looking statements. The following factors, among others, in some cases have affected and in the future could affect the Company's financial performance and actual results and could cause actual results for 2001 and beyond to differ materially from those expressed or implied in any forward-looking statements included in this Report or otherwise made by management: changes in consumer spending patterns, consumer preferences and overall economic conditions; the potential impact of national and international security concerns on the retail environment; the impact of competition and pricing; changes in weather patterns; political stability; postal rate increases and charges; paper and printing costs; risks associated with the seasonality of the retail industry; risks related to consumer acceptance of the Company's products and the ability to develop new merchandise; the ability to retain, hire and train key personnel; risks associated with the possible inability of the Company's manufacturers to deliver products in a timely manner; risks associated with relying on foreign sources of production and availability of suitable store locations on appropriate terms. See the Company's Annual Report on Form 10-K for a more detailed discussion of these matters and other risk factors. The Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.

3

PART I—FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

THE LIMITED, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Thousands except per share amounts)
(Unaudited)

	Thirteen Weeks Ended						Thirty-nine Weeks Ended
	November 3, 2001			October 28, 2000			November 3, 2001			October 28, 2000
Net sales	$	1,906,484		$	2,168,375		$	6,225,440		$	6,582,678
Costs of goods sold, buying and occupancy		(1,339,899	)		(1,448,820	)		(4,296,341	)		(4,422,658	)
Gross income		566,585			719,555			1,929,099			2,160,020
General, administrative and store operating expenses		(583,127	)		(615,095	)		(1,805,868	)		(1,771,437	)
Special and nonrecurring item		170,000			—			170,000			—
Operating income		153,458			104,460			293,231			388,583
Interest expense		(8,674	)		(14,826	)		(25,370	)		(41,505	)
Other income, net		2,631			4,508			15,682			25,343
Minority interest		1,736			(6,911	)		(15,253	)		(33,667	)
Gains on sale of stock by investees		—			—			62,102			—
Income before income taxes		149,151			87,231			330,392			338,754
Income tax expense		59,000			38,000			138,000			149,000
Net income	$	90,151		$	49,231		$	192,392		$	189,754
Net income per share:
Basic	$	0.21		$	0.12		$	0.45		$	0.44
Diluted	$	0.21		$	0.11		$	0.44		$	0.42
Dividends per share	$	0.075		$	0.075		$	0.225		$	0.225

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

4

THE LIMITED, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Thousands)

	November 3, 2001			February 3, 2001			October 28, 2000
		(Unaudited)					(Unaudited)
ASSETS
Current assets:
Cash and equivalents	$	317,867		$	563,547		$	6,174
Accounts receivable		127,152			93,745			122,359
Inventories		1,343,329			1,157,140			1,581,682
Other		304,605			253,366			348,809
Total current assets		2,092,953			2,067,798			2,059,024
Property and equipment, net		1,391,215			1,394,619			1,352,563
Deferred income taxes		79,433			132,028			95,572
Other assets		593,140			493,677			509,092
Total assets	$	4,156,741		$	4,088,122		$	4,016,251
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	386,772		$	273,021		$	411,359
Commercial paper		—			—			124,080
Current portion of long-term debt		150,000			—			150,000
Accrued expenses		550,113			581,584			512,162
Income taxes		13,847			145,580			7,220
Total current liabilities		1,100,732			1,000,185			1,204,821
Long-term debt		250,000			400,000			400,000
Other long-term liabilities		235,581			228,397			222,070
Minority interest		142,355			143,085			101,558
Shareholders’ equity:
Common stock		216,096			216,096			215,817
Paid-in capital		60,923			83,503			75,166
Retained earnings		2,253,657			2,167,869			1,963,890
		2,530,676			2,467,468			2,254,873
Less: treasury stock, at average cost		(102,603	)		(151,013	)		(167,071	)
Total shareholders’ equity	2,428,073			2,316,455			2,087,802
Total liabilities and shareholders' equity	$	4,156,741		$	4,088,122		$	4,016,251

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

5

THE LIMITED, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Thousands)

(Unaudited)

			Thirty-nine Weeks Ended
			November 3, 2001			October 28, 2000
Operating activities:
	Net income		$	192,392		$	189,754
	Adjustments to reconcile net income to net cash
	provided by (used for) operating activities
		Special and nonrecurring item		(170,000	)		—
		Gains on sale of stock by investees		(62,102	)		—
		Depreciation and amortization		211,614			198,544
		Minority interest, net of dividends paid		(961	)		16,717
		Change in assets and liabilities (net of effects from
		sale of subsidiary):
		Accounts receivable		(32,238	)		(13,565	)
		Inventories		(295,058	)		(530,769	)
		Accounts payable and accrued expenses         Income taxes         Other assets and liabilities		117,916 (79,138 (29,926	) )		129,755 (140,256 (51,899	) )
Net cash used for operating activities				(147,501	)		(201,719	)
Investing activities:
	Proceeds from sale of subsidiary			280,000			—
	Capital expenditures			(299,814	)		(318,968	)
	Net expenditures related to Easton real estate investment			(9,319	)		(20,149	)
Net cash used for investing activities				(29,133	)		(339,117	)
Financing activities:
	Net proceeds from commercial paper borrowing			—			124,080
	Repayment of long-term debt			—			(100,000	)
	Repurchase of common stock, including transaction costs Repurchase of Intimate Brands, Inc. common stock Dividends paid Proceeds from exercise of stock options and other			— (7,794 (96,798 35,546	) )		(199,985 (31,391 (95,421 32,459	) ) )
Net cash used for financing activities				(69,046	)		(270,258	)
Net decrease in cash and equivalents				(245,680	)		(811,094	)
Cash and equivalents, beginning of year				563,547			817,268
Cash and equivalents, end of period			$	317,867		$	6,174

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

6

THE LIMITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.	Basis of Presentation
	The Limited, Inc. (the "Company") sells women's and men's apparel, women's intimate apparel and personal care products under various trade names through its specialty retail stores and direct response (catalog and e-commerce) businesses.
	The consolidated financial statements include the accounts of the Company and its subsidiaries, including Intimate Brands, Inc. ("IBI"), an 84%-owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation.
	Investments in unconsolidated entities over which the Company exercises significant influence but does not have control are accounted for using the equity method. The Company's share of the net income or loss of those unconsolidated entities is included in other income (expense).
	The consolidated financial statements as of and for the thirteen and thirty-nine week periods ended November 3, 2001 and October 28, 2000 are unaudited and are presented pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, these consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company's 2000 Annual Report on Form 10-K. 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.
	The consolidated financial statements as of and for the thirteen and thirty-nine week periods ended November 3, 2001 and October 28, 2000 included herein have been reviewed by the independent public accounting firm of PricewaterhouseCoopers LLP and the report of such firm follows the Notes to Consolidated Financial Statements. PricewaterhouseCoopers LLP is not subject to the liability provisions of Section 11 of the Securities Act of 1933 for its report on the consolidated financial statements because that report is not a "report" within the meaning of Sections 7 and 11 of that Act.
	Certain prior year amounts have been reclassified to conform to the current year presentation.

7

2.	Special and Nonrecurring Item
	On August 16, 2001, the Company sold one of its apparel businesses, Lane Bryant, to Charming Shoppes, Inc. for $280 million of cash and 8.7 million shares of Charming Shoppes, Inc. common stock valued at $55 million. On December 12, 2001, the Company received additional Charming Shoppes, Inc. common stock valued at $4.3 million based on a final determination of Lane Bryant's net tangible assets at closing. The transaction resulted in a third quarter pretax gain of $170 million (net of $24 million of transaction costs) and a $68 million tax provision.
	As a result of the transaction, the Company owns approximately 8% of Charming Shoppes, Inc. outstanding common stock, and is prohibited from selling the stock until August 16, 2002. The investment is accounted for using the cost method and is classified in the consolidated balance sheet as an available-for-sale security. The market value of our investment holdings at November 3, 2001 was $41.3 million.
	The Company will continue to provide certain corporate services to Lane Bryant through a transition period under services agreements.
3.	Gains on Sale of Stock by Investees
	During the thirteen week period ended August 4, 2001, the Company recognized $62.1 million of pretax gains as a result of the initial public offerings ("IPO's") of Alliance Data Systems Corp. ("ADS") and Galyan's Trading Company, Inc. ("Galyan's"). ADS is a provider of electronic transaction services, credit services and loyalty and database marketing services. Galyan's is a specialty retailer that sells outdoor and athletic equipment, apparel and footwear and accessories. Prior to the IPO's, the Company's ownership interest in ADS and Galyan's was 31% and 37%, respectively. As of November 3, 2001, the Company owns 14.7 million shares of ADS common stock, representing a 20% ownership interest, and 4.2 million shares of Galyan's common stock, representing a 24% ownership interest. Deferred taxes were provided on the gains using the Company's effective tax rate. The investments are accounted for using the equity method.
	The market values of the Company's investments in ADS and Galyan's common stock at November 3, 2001 were $234 million and $46 million, respectively.
4.	Earnings Per Share and Shareholders' Equity
	Earnings per basic share is computed based on the weighted average number of outstanding common shares. Earnings per diluted share includes the weighted average effect of dilutive options and restricted stock on the weighted average shares outstanding. Additionally, earnings per diluted share includes the impact of the dilutive options and restricted stock at IBI, which resulted in a $0.01 reduction to earnings per diluted share for the thirty-nine week period ended October 28, 2000, but had no impact to any other reported periods.

8

Weighted average common shares outstanding (millions):

		Thirteen Weeks Ended				Thirty-nine Weeks Ended
		November 3, 2001		October 28, 2000		November 3, 2001		October 28, 2000
	Common shares issued	432		432		432		432
	Treasury shares	(3	)	(7	)	(4	)	(4	)
	Basic shares	429		425		428		428
	Dilutive effect of stock
	options and restricted shares	4		16		7		16
	Diluted shares	433		441		435		444
	The quarterly computation of earnings per diluted share excludes options to purchase 17.8 million and 0.6 million shares of common stock at November 3, 2001 and October 28, 2000, and the year-to-date computation of earnings per diluted share excludes options to purchase 10.8 million and 0.8 million shares, because the options’ exercise prices were greater than the average market price of the common shares during the period.
5.	Inventories
	The fiscal year of the Company and its subsidiaries is comprised of two principal selling seasons: spring (the first and second quarters) and fall (the third and fourth quarters). Inventories are principally valued at the lower of average cost or market, on a first-in first-out basis, using the retail method. Inventory valuation at the end of the first and third quarters reflects adjustments for inventory markdowns for the total selling season.
6.	Property and Equipment, Net
	Property and equipment, net, consisted of (millions):

		November 3, 2001			February 3, 2001			October 28, 2000
Property and equipment, at cost	$	3,092		$	3,145		$	3,101
Accumulated depreciation and
amortization		(1,701	)		(1,750	)		(1,748	)
Property and equipment, net	$	1,391		$	1,395		$	1,353

9

7.	Income Taxes
	The provision for income taxes is based on the current estimate of the annual effective tax rate. Income taxes paid during the thirty-nine weeks ended November 3, 2001 and October 28, 2000 were $205.9 million and $268.0 million. Other current assets included net current deferred tax assets of $24.6 million at October 28, 2000. Income taxes payable included net current deferred tax liabilities of $11.1 million and $14.1 million at November 3, 2001 and February 3, 2001.
	The Internal Revenue Service (IRS) has assessed the Company for additional taxes and interest for the years 1992 to 1998 relating to the undistributed earnings of foreign affiliates for which the Company has provided deferred taxes. On September 7, 1999, the United States Tax Court sustained the position of the IRS with respect to the 1992 year. In connection with an appeal of the Tax Court judgment, in 1999 the Company made a $112 million payment of taxes and interest for the years 1992 to 1998 that reduced deferred tax liabilities. The Company continues to provide deferred taxes on the undistributed earnings of foreign affiliates, and management believes the ultimate resolution of this matter will not have a material adverse effect on the Company's results of operations or financial condition.
8.	Long-Term Debt
	Unsecured long-term debt consisted of (millions):

		November 3,		February 3,		October 28,
		2001		2001		2000
7 1/2% Debentures due March 2023	$	250	$	250	$	250
7 4/5% Notes due May 2002		150		150		150
9 1/8% Notes due February 2001		—		—		150
		400		400		550
Less: current portion of long-term debt		150		—		150
	$	250	$	400	$	400

The 7 ½% debentures may be redeemed, in whole or in part, at the option of the Company at any time on or after March 15, 2003, at declining premiums.

On July 13, 2001, the Company entered into a $1.25 billion unsecured revolving credit facility (the "Facility"). The Facility is comprised of a $500 million 364-day agreement and a $750 million 5-year agreement. Borrowings outstanding under the Facility, if any, are due July 13, 2002 and July 13, 2006, respectively. The Facility has several borrowing and interest rate options, both fixed and variable rate. Fees payable under the Facility are based on the Company's long-term credit ratings, and are 0.1% (for the 364-day agreement) and 0.125% (for the 5-year agreement) of the committed amount per year.

10

	The Facility requires the Company to maintain certain specified fixed charge and debt to capital ratios. The Company was in compliance with these requirements at November 3, 2001.
	The Facility supports the Company's commercial paper and letter of credit programs, which are used from time to time to fund working capital and other general corporate requirements. Commercial paper outstanding at October 28, 2000 was $124.1 million. No commercial paper or amounts under the Facility (or the previous credit facility) were outstanding at November 3, 2001 or February 3, 2001.
	The Company has a shelf registration statement under which up to $250 million of debt securities and warrants to purchase debt securities may be issued.
	Interest paid during the thirty-nine weeks ended November 3, 2001 and October 28, 2000 was $27.9 million and $48.8 million, respectively.
9.	Segment Information
	The Company identifies operating segments based on a business's operating characteristics. Reportable segments were determined based on similar economic characteristics, the nature of products and services and the method of distribution. The apparel segment derives its revenues from sales of women's and men's apparel. The Intimate Brands segment derives its revenues from sales of women's intimate and other apparel, and personal care products and accessories. Sales outside the United States were not significant.
	The Company and IBI have entered into intercompany agreements for services that include merchandise purchases, capital expenditures, real estate management and leasing, inbound and outbound transportation and corporate services. These agreements specify that identifiable costs be passed through to IBI and that other service-related costs be allocated based upon various methods. Costs are passed through and allocated to the apparel businesses in a similar manner. Management believes that the methods of allocation are reasonable.
	As a result of the transaction discussed in Note 2, the operating results of Lane Bryant are included in the "Other" category for all periods presented.

11

Segment information as of and for the thirteen and thirty-nine weeks ended November 3, 2001 and October 28, 2000 follows (in millions):

2001	Apparel Businesses			Intimate Brands			Other (A)			Reconciling Items			Total
Thirteen weeks:
Net sales		$   965			$   906			$      35			—		$1,906
Intersegment sales		185			—			—			($185	) (B)	—
Operating income (loss)		2			(13	)		(6	)		170	(D)	153
Thirty-nine weeks:
Net sales		$2,620			$3,084			$    521			—		$6,225
Intersegment sales		553			—			—			($553	) (B)	—
Operating income (loss)		(60	)		165			18			170	(D)	293
Total assets		1,063			1,725			1,866			(497	) (C)	4,157

(A)	Included in the “Other” category are Lane Bryant (through August 16, 2001), Henri Bendel, non-core real estate and corporate activities, including equity investments. None of the businesses included in “Other” are significant operating segments.
(B)	Represents intersegment sales elimination.
(C)	Represents intersegment receivable/payable elimination.
(D)	The 2001 special and nonrecurring item represents a $170 million gain from the sale of Lane Bryant (see Note 2).

2000	Apparel Businesses	Intimate Brands	Other (A)	Reconciling Items		Total
Thirteen weeks:
Net sales	$   998	$   944	$    226	—		$2,168
Intersegment sales	221	—	—	($221	) (B)	—
Operating income	23	80	1	—		104
Thirty-nine weeks:
Net sales	$2,707	$3,180	$    696	—		$6,583
Intersegment sales	567	—	—	($567	) (B)	—
Operating income	11	367	11	—		389
Total assets	1,087	1,685	1,824	(580	) (C)	4,016

(A)—(C) See description under 2001 table.

12

Report of Independent Accountants

To the Board of Directors and
Shareholders of
The Limited, Inc.:

We have reviewed the accompanying consolidated balance sheets of The Limited, Inc. and its subsidiaries (the "Company") as of November 3, 2001 and October 28, 2000, and the related consolidated statements of income for each of the thirteen and thirty-nine week periods ended November 3, 2001 and October 28, 2000 and the consolidated statements of cash flows for each of the thirty-nine week periods ended November 3, 2001 and October 28, 2000. These financial statements are the responsibility of the Company's management.

We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We previously audited, in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet as of February 3, 2001, and the related consolidated statements of income, of shareholders' equity, and of cash flows for the year then ended (not presented herein), and in our report dated March 1, 2001 we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of February 3, 2001 is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.

/s/ PricewaterhouseCoopers LLP
Columbus, OH
November 20, 2001

13

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

RESULTS OF OPERATIONS

Net sales for the third quarter of 2001 were $1.906 billion compared to $2.168 billion in 2000. Excluding Lane Bryant's net sales in both periods (Lane Bryant was sold to Charming Shoppes, Inc. on August 16, 2001), net sales decreased 4% to $1.879 billion for the third quarter of 2001. Operating income increased to $153.5 million from $104.5 million in 2000. Net income increased to $90.2 million from $49.2 million in 2000, and earnings per share increased to $0.21 from $0.11 in 2000.

Net income in the third quarter of 2001 included an after-tax special and nonrecurring gain of $102 million related to the sale of Lane Bryant. Excluding this gain, the Company incurred a net loss for the third quarter of 2001 of $11.8 million or $.03 per share.

Net sales for the thirty-nine weeks ended November 3, 2001 were $6.225 billion compared to $6.583 billion in 2000. Excluding Lane Bryant's net sales in both periods, net sales decreased 3% to $5.730 billion for the thirty-nine weeks ended November 3, 2001. Operating income decreased to $293.2 million from $388.6 million in 2000. Net income increased to $192.4 million from $189.8 million in 2000, and earnings per share increased to $0.44 from $0.42 in 2000.

Net income for the thirty-nine weeks ended November 3, 2001 included: 1) after-tax non-operating gains totaling $37.1 million as a result of the initial public offerings of Alliance Data Systems Corp. and Galyan's Trading Company, Inc., companies in which the Company has a non-controlling ownership interest and 2) the special and nonrecurring gain from the sale of Lane Bryant. Excluding these gains, net income and earnings per share for the thirty-nine weeks ended November 3, 2001 were $53.3 million and $0.12.

14

Financial Summary

The following summarized financial and statistical data compares reported results for the thirteen week and thirty-nine week periods ended November 3, 2001 to the comparable periods for 2000 (millions):

	Third Quarter								Year-to-Date
	2001			2000		Change			2001			2000		Change
Net Sales:
Express	$	389		$	419		(7	%)	$	1,059		$	1,090		(3%)
Lerner New York		220			237		(7	%)		642			666		(4%)
Limited Stores		152			163		(7	%)		428			465		(8%)
Structure		120			142		(15	%)		336			378		(11%)
Other (principally Mast)		84			37		127	%		155			108		44%
Total apparel businesses	$	965		$	998		(3	%)	$	2,620		$	2,707		(3%)
Victoria's Secret Stores	$	457		$	462		(1	%)	$	1,500		$	1,510		(1%)
Bath & Body Works		301			313		(4	%)		979			964		2%
Victoria's Secret Direct		148			159		(7	%)		603			684		(12%)
Other (principally Gryphon)		—			10		N/M			2			22		N/M
Total Intimate Brands	$	906		$	944		(4	%)	$	3,084		$	3,180		(3%)
Lane Bryant (through August 16, 2001)		27			216		N/M			495			668		N/M
Henri Bendel		8			10		(20	%)		26			28		(7%)
Total net sales	$	1,906		$	2,168		(12	%)	$	6,225		$	6,583		(5%)
Operating Income (Loss):
Apparel businesses	$	2		$	23		(91	%)		($60	)	$	11		N/M
Intimate Brands		(13	)		80		(116	%)		165			367		(55%)
Other		(6	)		1		N/M			18			11		N/M
Sub-total		(17	)		104		(116	%)		123			389		(68%)
Special and nonrecurring item (a)		170			—		N/M			170			—		N/M
Total operating income	$	153		$	104		47	%	$	293		$	389		(25%)

N/M - Not meaningful

(a) 2001 special and nonrecurring item: a $170 million gain resulting from the sale of Lane Bryant, which relates to the "Other" category.

15

	Third Quarter				Year-to-Date
	2001		2000		2001		2000
Comparable Store Sales:
Express	(4	%)	18	%	(2	%)	16	%
Lerner New York	(5	%)	7	%	(2	%)	2	%
Limited Stores	(3	%)	4	%	(3	%)	4	%
Structure	(10	%)	2	%	(9	%)	(2	%)
Total apparel businesses	(5	%)	10	%	(3	%)	7	%
Victoria’s Secret Stores	(5	%)	8	%	(5	%)	11	%
Bath & Body Works	(16	%)	5	%	(11	%)	5	%
Total Intimate Brands	(10	%)	6	%	(7	%)	9	%
Lane Bryant (through August 16, 2001)	N/M		5	%	3	%	4	%
Henri Bendel	(17	%)	(5	%)	(8	%)	0	%
Total comparable store sales increase (decrease)	(7	%)	8	%	(5	%)	7	%

N/M—not meaningful

	Third Quarter						Year-to-Date
	2001		2000		Change		2001		2000		Change
Store Data:
Retail sales increase (decrease) attributable to net new (closed) and remodeled stores:
Apparel businesses	(4	%)	(3	%)			(2	%)	(4	%)
Intimate Brands	8	%	8	%			7	%	8	%
Retail sales per average selling square foot:
Apparel businesses	$    71		$    73		(3	%)	$  195		$  193		1	%
Intimate Brands	$    98		$  112		(13	%)	$  328		$  366		(10	%)
Retail sales per average store (thousands):
Apparel businesses	$  430		$  444		(3	%)	$1,192		$1,187		0	%
Intimate Brands	$  296		$  341		(13	%)	$  993		$1,113		(11	%)
Average store size at end of quarter (selling           square feet):
Apparel businesses	6,081		6,104		0	%
Intimate Brands	3,023		3,026		0	%
Selling square feet at end of quarter           (thousands):
Apparel businesses	12,454		13,155		(5	%)
Intimate Brands	7,872		7,072		11	%

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Number of Stores:

	Third Quarter				Year-to-Date
	2001		2000		2001		2000
Apparel and Other Businesses
Beginning of period	2,697		2,833		2,739		2,913
Opened	20		10		28		16
Closed	(17	)	(24	)	(67	)	(110	)
Sale of Lane Bryant	(651	)	—		(651	)	—
End of period	2,049		2,819		2,049		2,819
Intimate Brands
Beginning of period	2,521		2,205		2,390		2,110
Opened	86		136		220		238
Closed	(3	)	(4	)	(6	)	(11	)
End of period	2,604		2,337		2,604		2,337

	Number of Stores				Selling Sq. Ft. (thousands)
	November 3, 2001	October 28, 2000	Change		November 3, 2001	October 28, 2000	Change
Express	669	677	(8	)	4,291	4,342	(51	)
Lerner New York	543	579	(36	)	3,978	4,349	(371	)
Limited Stores	382	418	(36	)	2,359	2,547	(188	)
Structure	454	481	(27	)	1,826	1,917	(91	)
Total apparel businesses	2,048	2,155	(107	)	12,454	13,155	(701	)
Victoria’s Secret Stores	1,003	927	76		4,437	4,094	343
Bath & Body Works	1,601	1,410	191		3,435	2,978	457
Total Intimate Brands	2,604	2,337	267		7,872	7,072	800
Lane Bryant (sold on August 16, 2001)	—	663	(663	)	—	3,216	(3,216	)
Henri Bendel	1	1	—		35	35	—
Total stores and selling square feet	4,653	5,156	(503	)	20,361	23,478	(3,117	)

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Net Sales

Net sales for the third quarter of 2001 were $1.906 billion compared to $2.168 billion for the same period in 2000. Excluding Lane Bryant's net sales in both periods, net sales decreased 4% to $1.879 billion due to a 7% comparable store sales decrease and a 7% decrease in sales at Victoria's Secret Direct. The events of September 11^th and the overall economic environment negatively impacted sales for the quarter. These declines were partially offset by an increase in sales from the net addition of 267 stores (800,000 selling square feet) at Intimate Brands, Inc. ("IBI").

At IBI, net sales for the third quarter of 2001 decreased 4% to $905.6 million from $944.0 million for the same period in 2000. The net sales decline was primarily due to a 10% comparable store sales decrease and a sales decline at Victoria's Secret Direct, partially offset by an increase in sales from the net addition of 267 new stores (800,000 selling square feet). Victoria's Secret Stores' sales decreased 1% to $457.0 million due to a 5% decrease in comparable store sales, partially offset by the net addition of 76 stores (343,000 selling square feet). Bath & Body Works' sales decreased 4% to $300.6 million due to a 16% decrease in comparable store sales, partially offset by the net addition of 191 new stores (457,000 selling square feet). Net sales at Victoria's Secret Direct decreased 7% to $148.0 million due to unfavorable results in the clothing categories and a 5% decrease in the number of books mailed, partially offset by an increase in e-commerce sales.

At the apparel businesses, net sales for the third quarter of 2001 decreased 3% to $964.8 million from $998.1 million in 2000. The net sales decrease was primarily due to a comparable store sales decrease of 5%, partially offset by an increase in Mast third party sales as a result of sales to Lane Bryant, which became a third party subsequent to August 16, 2001.

The 2001 year-to-date net sales were $6.225 billion compared to $6.583 billion in 2000. The sales decrease was due to a comparable store sales decrease of 5% and the loss of Lane Bryant sales after the August 16, 2001 sale of the business, partially offset by an increase in sales from the net addition of 267 stores at IBI.

Gross Income

For the third quarter of 2001, the gross income rate (expressed as a percentage of net sales) decreased to 29.7% from 33.2% for the same period in 2000. The gross income rate decreased both at IBI and, to a lesser extent, at the apparel businesses.

At IBI, the decrease in the gross income rate was due to an increase in the buying and occupancy expense rate and a lower merchandise margin rate. The increased buying and occupancy expense rate was due to the inability to achieve leverage on store-related costs as comparable store sales decreased 10%. In addition, the buying and occupancy expense rate increase was due to the expansion of Bath & Body Works' stores into non-mall locations, which, although profitable, typically have higher occupancy costs as a percentage of net sales. The decrease in the merchandise margin rate was primarily due to higher markdowns resulting, in part, from the difficult economic environment.

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At the apparel businesses, the decrease in the gross income rate was primarily due to a lower merchandise margin rate and an increase in the buying and occupancy expense rate, resulting from the inability to achieve leverage as comparable store sales decreased 5%. The merchandise margin rate improved at Lerner New York, Limited Stores and Structure, but decreased at Express. Additionally, Mast had an unfavorable impact on Apparel merchandise margins due to an increase in third party sales, which earn a lower merchandise margin than retail sales. The increase in Mast third party sales resulted from sales to Lane Bryant, which became a third party subsequent to August 16, 2001.

The 2001 year-to-date gross income rate decreased to 31.0% from 32.8% in 2000. The decrease was principally driven by an increase in the buying and occupancy expense rate due to the inability to achieve leverage as comparable store sales decreased 5%. The merchandise margin rate was relatively flat compared to 2000.

General, Administrative and Store Operating Expenses

For the third quarter of 2001, the general, administrative and store operating expense rate (expressed as a percentage of net sales) increased to 30.6% from 28.4% last year. The increase was driven primarily by a rate increase at IBI, which resulted from the 10% decrease in comparable store sales. Additionally, store selling expenses increased at IBI as a result of the net addition of 267 new stores (800,000 selling square feet).

The 2001 year-to-date general, administrative and store operating expense rate increased to 29.0% from 26.9% in 2000. The rate increase was primarily due to increases in store selling expenses and the inability to achieve leverage due to the decrease in comparable store sales.

Special and Nonrecurring Item

On August 16, 2001, the Company sold one of its apparel businesses, Lane Bryant, to Charming Shoppes, Inc. for $280 million of cash and 8.7 million shares of Charming Shoppes, Inc. common stock valued at $55 million. On December 12, 2001, the Company received additional Charming Shoppes, Inc. common stock valued at $4.3 million based on a final determination of Lane Bryant's net tangible assets at closing. The transaction resulted in a third quarter pretax gain of $170 million (net of $24 million of transaction costs) and a $68 million tax provision.

Operating Income

The third quarter operating income rate (expressed as a percentage of net sales) was 8.0% in 2001, including $170 million, or 8.9% of special and nonrecurring income. The third quarter operating income rate in 2000 was 4.8%. Excluding the special and nonrecurring item in 2001, the decrease in the operating income (loss) rate from 4.8% to (0.9%) was due to the 3.5% decrease in the gross income rate and the 2.2% increase in the general, administrative and store operating expense rate.

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The year-to-date operating income rate was 4.7% in 2001, including $170 million, or 2.7% of special and nonrecurring income. The year-to-date operating income rate in 2000 was 5.9%. Excluding the special and nonrecurring item in 2001, the decrease in the operating income rate from 5.9% to 2.0% was due to the 1.8% decrease in the gross income rate and the 2.1% increase in the general, administrative and store operating expense rate.

Interest Expense

	Third Quarter						Year - to - Date
	2001			2000			2001			2000
Average borrowings (millions)	$	400.0		$	741.4		$	400.3		$	690.1
Average effective interest rate		7.61	%		8.00	%		7.61	%		8.02	%

The company incurred $8.7 million in interest expense for the third quarter of 2001 compared to $14.8 million for the same period in 2000. Year-to-date interest expense decreased to $25.4 million in 2001 from $41.5 million in 2000. The decreases were primarily the result of decreased borrowing levels.

Other Income, Net

For the third quarter of 2001, other income, net was $2.6 million versus $4.5 million in 2000. The decrease was primarily due to a decrease in the average effective interest rate, which more than offset higher invested cash balances resulting from the $280 million in cash proceeds from the sale of Lane Bryant.

Year-to-date other income, net was $15.7 million versus $25.3 million in 2000. The decrease was due to lower average effective interest rates and lower invested cash balances during the first half of the year as a result of debt repayments and stock repurchases in 2000.

Gains on Sale of Stock by Investees

During the thirteen week period ended August 4, 2001, the Company recognized $62.1 million of pretax gains as a result of the initial public offerings ("IPO's") of Alliance Data Systems Corp. ("ADS") and Galyan's Trading Company, Inc. ("Galyan's"). ADS is a provider of electronic transaction services, credit services and loyalty and database marketing services. Galyan's is a specialty retailer that sells outdoor and athletic equipment, apparel and footwear and accessories. Prior to the IPO's, the Company's ownership interest in ADS and Galyan's was approximately 31% and 37%, respectively. As of November 3, 2001, the Company owns approximately 14.7 million shares of ADS common stock, representing a 20% ownership interest, and 4.2 million shares of Galyan's common stock, representing a 24% ownership interest. Deferred taxes were provided on the gains using the Company's effective tax rate. The investments are accounted for using the equity method.

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FINANCIAL CONDITION

Liquidity and Capital Resources

Cash provided from operating activities and funds available from commercial paper backed by bank credit agreements provide the resources to support current operations, projected growth, seasonal funding requirements and capital expenditures. A summary of the Company's working capital position and capitalization follows (millions):

	November 3, 2001		February 3, 2001		October 28, 2000
Working capital	$	992	$	1,068	$	854
Capitalization:
Long-term debt	$	250	$	400	$	400
Shareholders' equity		2,428		2,316		2,088
Total capitalization	$	2,678	$	2,716	$	2,488
Additional amounts available under
credit agreements	$	1,250	$	1,000	$	876

In addition, the Company may offer up to $250 million of debt securities and warrants to purchase debt securities under its shelf registration statement.

The Company's operations are seasonal in nature, leading to significant fluctuations in certain asset and liability accounts between fiscal year-end and subsequent interim periods. Consequently, the Company analyzes operating cash flows by comparing the current interim period changes to the prior interim period changes.

Net cash used for operating activities was $147.5 million for the thirty-nine weeks ended November 3, 2001 versus $201.7 million for the same period in 2000. The decrease in cash used for operating activities compared to a year ago was primarily driven by a decrease in inventory purchases, partially offset by lower net income (excluding the gain on the sale of Lane Bryant and the gains on sale of stock by investees).

Investing activities in 2001 primarily included cash proceeds of $280 million from the sale of Lane Bryant, offset by $300 million in capital expenditures.

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Financing activities in 2001 primarily consisted of the quarterly dividend payments of $0.075 per share. Further, IBI repurchased 0.8 million shares of common stock from its public shareholders for $7.8 million.

Financing activities in 2000 primarily included net proceeds of $124.1 million from commercial paper borrowing, the repayment of $100 million Series C floating rate notes and the quarterly dividend payments of $0.075 per share. In addition, the Company repurchased 8.7 million shares of common stock for $200.0 million. Also, in 2000, IBI repurchased 1.4 million shares from its public shareholders for $31.4 million and 7.4 million shares from The Limited, Inc. for $166.5 million, which had no cash flow impact to The Limited, Inc.

Capital Expenditures

Capital expenditures amounted to $299.8 million for the thirty-nine weeks ended November 3, 2001 compared to $319.0 million for the same period in 2000. The decrease in 2001 is primarily related to a decrease in the number of new and remodeled stores, partially offset by increased investments in information technology.

The Company anticipates spending approximately $435 million for capital expenditures in 2001, of which approximately $290 million will be for new stores and for the remodeling of and improvements to existing stores. Remaining capital expenditures are primarily related to information technology and distribution centers. The Company expects that 2001 capital expenditures will be funded by net cash provided by operating activities.

Recently Issued Accounting Pronouncements

Emerging Issues Task Force ("EITF") Issue No. 00-14, "Accounting for Certain Sales Incentives," will be effective in the first quarter of 2002 and addresses the accounting for, and classification of, various sales incentives. The Company has determined that adopting the provisions of this EITF Issue will not have a material impact on its results of operations or financial position.

On June 29, 2001 the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 141, "Business Combinations," and No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001, and also addresses the accounting for goodwill and other intangible assets. SFAS No. 142 addresses the accounting for goodwill and other intangible assets subsequent to their acquisition, and will be effective in the first quarter of 2002. The Company is assessing the provisions of SFAS No. 141 and SFAS No. 142 and does not expect the adoption of these statements to have a material impact on its results of operations or its financial position.

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In August 2001 the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". This statement establishes a single accounting model for long-lived assets to be disposed of by sale and resolves significant implementation issues related to SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and For Long-Lived Assets to be Disposed Of" and is effective for fiscal years beginning after December 15, 2001. The Company is currently evaluating the impact of adopting SFAS No. 144.

Impact of Inflation

The Company's results of operations and financial condition are presented based on historical cost. While it is difficult to accurately measure the impact of inflation due to the imprecise nature of the estimates required, the Company believes the effects of inflation, if any, on the results of operations and financial condition have been minor.

Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The market risk of the Company's financial instruments as of November 3, 2001 has not significantly changed since February 3, 2001. Information regarding the Company's financial instruments and market risk as of February 3, 2001 is disclosed in the Company's 2000 Annual Report on Form 10-K.

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PART II - OTHER INFORMATION
Item 1.	LEGAL PROCEEDINGS
	The Company is a defendant in a variety of lawsuits arising in the ordinary course of business.
	On January 13, 1999, two lawsuits were filed against the Company, as well as other defendants, including many national retailers. Both lawsuits relate to labor practices allegedly employed on the island of Saipan, Commonwealth of the Northern Mariana Islands, by apparel manufacturers unrelated to the Company (some of which have sold goods to the Company) and seek injunctions, unspecified monetary damages, and other relief. One lawsuit, on behalf of a class of unnamed garment workers, was filed in the United States District Court for the Central District of California, Western Division and subsequently transferred to the United States District Court for the Northern Mariana Islands. It alleged violations of federal statutes, the United States Constitution, and international law. A first amended complaint was filed on April 28, 2000, which added additional defendants but did not otherwise substantively alter either the claims alleged or relief sought. On November 26, 2001, a motion to dismiss the first amended complaint for failure to state a claim upon which relief can be granted was granted in part and denied in part. The second lawsuit was filed by a national labor union and other organizations in the Superior Court of the State of California, San Francisco County, and alleges unfair business practices under California law. A motion for summary judgment on that complaint was filed on October 30, 2001, and remains pending.
	In May and June 1999, purported shareholders of the Company filed three derivative actions in the Court of Chancery of the State of Delaware, naming as defendants the members of the Company's board of directors and the Company, as nominal defendant. The actions thereafter were consolidated. The operative complaint generally alleged that the rescission of the Contingent Stock Redemption Agreement previously entered into by the Company with Leslie H. Wexner and The Wexner Children's Trust (the "Contingent Stock Redemption Agreement") constituted a waste of corporate assets and a breach of the board members' fiduciary duties, and that the issuer tender offer completed on June 3, 1999 was a "wasteful transaction in its own right." On July 30, 1999, all defendants moved to dismiss the complaint, both on the ground that it failed to allege facts showing that demand on the board to institute such an action would be futile and for failure to state a claim. Plaintiffs did not respond to that motion, but on February 16, 2000, plaintiffs filed a first amended consolidated derivative complaint (the "amended complaint"), which makes allegations similar to the first complaint

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	concerning the rescission of the Contingent Stock Redemption Agreement and the 1999 issuer tender offer and adds allegations apparently intended to show that certain directors were not disinterested in those decisions. Defendants moved to dismiss the amended complaint on April 14, 2000. The motion has been fully briefed, oral argument was heard on March 28, 2001 and the motion is now under consideration by the Court.
	Although it is not possible to predict with certainty the eventual outcome of any litigation, in the opinion of management, the foregoing proceedings are not expected to have a material adverse effect on the Company's financial position or results of operations.
Item 6.	EXHIBITS AND REPORTS ON FORM 8-K
(a)	Exhibits.
*10.	Stock Purchase Agreement dated as of July 9, 2001 among Charming Shoppes, Inc., Venice Acquisition Corporation, LFAS, Inc. and The Limited, Inc. related to the Purchase and Sale of 100% of the Common Stock of LBH, Inc.
11.	Statement re: Computation of Per Share Earnings.
15.	Letter re: Unaudited Interim Financial Information to Securities and Exchange Commission re: Incorporation of Report of Independent Accountants.
(b)	Reports on Form 8-K.
	None.
* Schedules omitted. The Registrant will furnish a supplementary copy of any omitted schedule to the Commission upon request.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

THE LIMITED, INC.
(Registrant)

	By	/s/ V. Ann Hailey
		V. Ann Hailey, Executive Vice President and Chief Financial Officer*
Date: December 14, 2001
*Ms. Hailey is the principal financial officer and has been duly authorized to sign on behalf of the Registrant.

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