FINAL_SB ICR Presentation 1.17.13

7/28/2019 FINAL_SB ICR Presentation 1.17.13

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ICR XCHANGE CONFERENCE

JANUARY 17, 2013


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We have global, category-leading brands with high emotional content thatgenerate substantial income and cash flow

Our overriding focus is on the substantial growth opportunity in North America

We believe there is substantial opportunity for international growth and expectit to be accretive to the total company operating margin

We are targeting a minimum of low double digit annual earnings growth and anoperating income rate in the high-teens

We continue to emphasize maintaining a strong cash and liquidity positionwhile optimizing our cost of capital

We will continue to manage inventory, expenses and capital with discipline

We remain committed to returning excess cash and generating superior

returns for shareholders

KEY MESSAGES


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253As of December 28, 2012

SUPERIOR RETURNS TO SHAREHOLDERS

1 Giordano 57.6 1 Limited Brands 34.2 1 Buckle 25.0

2 Limited Brands 50.4 2 Ascena Retail Group 27.4 2 Ralph Lauren 21.6

3 Foot Locker 46.5 3 Buckle 26.7 3 Coach 21.3

4 Inditex 36.5 4 TJ X 26.7 4 Limited Brands 20.3

5 Ann Stores 33.2 5 Foot Locker 26.4 5 Fast Retailing 19.8

6 TJX 33.2 6 Inditex 24.8 6 Inditex 18.9

7 Home Depot 31.5 7 Fast Retailing 24.7 7 Ascena Retail Group 18.6

8 Buckle 24.9 8 Home Depot 23.1 8 American Eagle 18.1

9 Ralph Lauren 22.8 9 Ralph Lauren 21.7 9 Li & Fung 17.8

10 Ascena Retail Group 16.3 10 Giordano 21.3 10 TJ X 16.8

11 Coach 15.8 11 Chico's 18.4 11 Giordano 15.4

12 Gap 15.7 12 Bed Bath & Beyond 16.0 12 Foot Locker 14.6

13 Bed Bath & Beyond 12.5 13 Coach 15.3 13 Aeropostale 14.5

14 American Eagle 12.2 14 Children's Place 13.7 14 Children's Place 13.9

15 Tiffany & Co. 11.6 15 Gap 11.4 15 H&M 13.8

16 Abercrombie & Fitch 11.3 16 Wal-Mart Stores 10.6 16 Home Depot 13.5

17 Wal-Mart Stores 10.9 17 H&M 8.9 17 Tiffany & Co. 10.2

18 Chico's 10.0 18 Tiffany & Co. 8.5 18 Abercrombie & Fitch 9.4

19 Children's Place 10.0 19 Ann Stores 6.9 19 Ann Stores 8.8

20 Fast Retailing 9.4 20 American Eagle 6.0 20 Gap 8.6

21 Target 8.7 21 Target 5.9 21 Target 8.2

22 H&M 8.4 22 Walgreen Co. 3.3 22 Chico's 6.5

23 Walgreen Co. 2.2 23 Li & Fung 0.0 23 Wal-Mart Stores 4.9

24 Li & Fung (2.9) 24 Aeropostale (6.3) 24 Bed Bath & Beyond 4.5

25 bebe (9.5) 25 Abercrombie & Fitch (7.7) 25 Walgreen Co. 2.6

26 Aeropostale (17.9) 26 Staples (10.3) 26 Esprit Holdings 2.4

27 Staples (21.3) 27 bebe (16.2) 27 bebe 1.6

28 Best Buy (32.4) 28 Best Buy (23.3) 28 Staples 0.7

29 Esprit Holdings (37.2) 29 Esprit Holdings (33.3) 29 Best Buy (1.9)

S&P 500 8.0 S&P 500 (0.1) S&P 500 4.4

S&P Retail Index 15.9 S&P Retail Index 11.1 S&P Retail Index 9.3

3-year Total Return 5-year Total Return 10-year Total Return

Median oftop quartile :

36.5%

Median of 2ndquartile :15.8%

Median of 3rdquartile :10.0%

Median ofbottom quartile :

(13.7%)


26.7%


Median of 3rdquartile :

8.5%


(9.0%)


20.3%


Median of 3rdquartile :9.4%


2.5%


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Adjusted Earnings Per Share

DRIVEN BY EARNINGS IMPROVEMENT

$1.05

$1.23

$2.06

$2.60

$2.85

2008 2009 2010 2011 2012F*

*Represents mid-point of 4Q earnings guidance


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AND CASH DISTRIBUTION

Note: Reflects cash distr ibuti ons from the beginning of 2000 through the dividend payment on December 26, 2012

*At an average price of $25.37 per share

Regular Dividends $ 2.7 bil l ion

Special Dividends $ 3.8 bil l ion

Share Repurchases* $ 7.8 bil l ion

Total $ 14.3 bil l ion

Cash Distributions


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15.7%

6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

12.0%

13.0%

14.0%

15.0%

16.0%

17.0%

18.0%

OperatingIncome

%o

fsales

TrailingTwelve

Months

6

15% by 2012Goal Announced

DELIVERED ON PATH TO 15%


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1. Strength of the Victorias Secret and Bath & Body Worksbrands and the attractiveness of the intimate appareland personal care/beauty categories

2. A focus on fundamentals:

Customers

Core (Best At ) merchandise categories Inventory management, flow, turn and in-stock

Speed / read and react / chase

Store selling and operations

3. Experienced, aligned and focused management team

IMPROVEMENTS DRIVEN BY:


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GROW INVENTORY SLOWER THAN SALES

-30%

-24%

-18%

-12%

-6%

0%

6%

12%

18%

Inventory PSSF Retail Sales

800 basis point spread between sales and inventory growth on a CAGR basis

*Victorias Secret Stores new technology systems implemented in Spring 2009

*


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-12%

-8%

-4%

0%

4%

8%

12%

16%

Sales Expenses

9

GROW EXPENSES SLOWER THAN SALES


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HEALTHY REAL ESTATE

1,85070%

77929%

> $250K

$0 - $250K

< $0

After-tax cash flow2

Total stores1 = 2,646

Note: data as of Q3 20121. Only includes stores that have been open for at least one year and have not had construction

activity for at least one year. Excludes Clearance stores.2. After-tax store profit plus depreciation.

99% of our store fleet is cash flow positive on an after-tax cash basis

17< 1%


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CONSISTENT LEVERAGE

(1) Pro forma the $1 billion bond issuance from February 2, 2012.

(2) Calculated as 8 times total rent expense, including all brands owned at the time.(3) Adjusted operating income, excluding depreciation & amortization and total rent expense.(4) Represents mid-point of 4Q earnings guidance

Pro forma

in billions 2000 2008 2009 2010 2011 2011(1) 2012F(4)

Balance Sheet Debt $0.4 $2.9 $2.7 $2.5 $3.5 $4.5 $4.5

Capitalized Lease

Obligations(2)$5.7 $3.9 $4.0 $4.1 $4.4 $4.4 $4.5

Total Adjusted Debt $6.1 $6.8 $6.8 $6.7 $7.9 $8.9 $9.0

EBITDAR(3) $1.8 $1.6 $1.7 $2.2 $2.5 $2.5 $2.6

Adjusted Debt / EBITDAR 3.4x 4.3x 3.9x 3.0x 3.2x 3.6x 3.4x

End of Year Cash $0.6 $1.2 $1.8 $1.1 $0.9 $1.9 $0.8

Debt Rating at End of Year BBB+/Baa1 BB+/Ba1 BB/Ba2 BB+/Ba2 BB+/Ba1 BB+/Ba1 BB+/Ba1


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TOTAL LEVERAGE COMPARABLE TOMOST RETAILERS

Source: Public filings as of December 28, 2012.

Note: U.S. dollars in millions.

(1) Debt adjusted per 8x rent expense methodology.

TOTAL LEVERAGE COMPARABLE TOMOST RETAILERS

Median: 3.3x

6.5x6.2x

5.0x5.4x

2.3x

0.1x 0.0x 0.0x 0.0x 0.3x 0.0x

0.7x 0.6x

0.0x 0.0x 0.0x

7.0x

6.4x6.2x

6.0x

3.6x

3.1x2.7x

2.2x

1.1x

3.7x3.5x

3.3x 3.3x

3.0x2.6x

2.3x

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

Dav

id's

Bri

da

l

Ne

iman

Marcus

Jo-A

nn

Stores

J.C

rew

Limite

d

Bran

ds

Fas

t

Re

tailing

H&M

Inditex

Coac

h

Abe

rcrom

bie

&

Fitc

h ANN

Gap

Express

American

Eag

le

Ou

tfitters

Chico

's

Urban

Ou

tfitters

Median: 6.3x Median: 2.4x

Debt / EBITDA

Lease Adj. Debt / EBITDAR(1)

Large U.S. Brands

Global Brands

Recent Retail LBOs


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THE BUSINESS GENERATES SIGNIFICANTCASH FLOW

* Represents mid-point of 4Q earnings guidance

2009 2010 2011 2012F*

($ in Mil lions)

Operating Cash Flow 1,174 1,284 1,266 $1,350 - 1,400

Capital Expenditures (202) (274) (426) (600)

Free Cash Flow 972 1,010 840 750 - 800

Regular Dividend (193) (197) (248) (290)

Retained Cash Flow 779 813 592 460 - 510


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OPERATING INCOME RATE POTENTIAL

13.6%

19.6%

18.4%

15.7%

5.0%

10.0%

15.0%

20.0%

25.0%

OperatingIncom

e%o

fsales

TrailingTwel

veMonths

Inditex

LimitedBrands

H&M

FastRetailing


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SUBSTANITAL GROWTH OPPORTUNITY INNORTH AMERICA


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FOCUS ON SPEED AND AGILITY


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2.72

2.82

3.12

3.56

3.72

YE2009

YE2010

YE2011YE2012

Trailing Twelve Month Dollar Turn - Total Limited Brands


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(in mill ions) 2008 2012F $ Change

Sales $8,081 ~$10,500 ~$2,419

Operating Income $660 ~$1,700 ~$1,040

Inventory $1,132 ~$1,000 ~($132)

Note: On like businesses, 2012F at midpoint of 4Q guidance


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FOCUS ON STORE SELLING AND EXECUTION MARKET INTENSIFICATION


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FOCUS ON STORE SELLING AND EXECUTION MARKET INTENSIFICATION


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Right size Lingerie

Over 950 stores do not carry the full Lingerie assortment

Right size PINK

Over 800 stores do not carry the full PINK assortment

Adjacent categories

Victorias Secret Sport (VSX)

Supermodel Essentials/Loungewear Swim

Expansions completed over last 5 years have IRRs > 30%

SQUARE FOOTAGE GROWTH VICTORIAS SECRET


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SQUARE FOOTAGE GROWTH VICTORIAS SECRET

Current average store size in U.S. 6,000

Target size for VS and PINK in each center 8,000

Incremental square footage per center 2,000

Number of center opportunities X 750

Total incremental square footage in U.S. 1,500,000

Growth over current U. S. square footage 25%

Plus continued growth in Canada

Dimensioning the opportunity with rough math

23


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WE ARE INCREASING OUR INVESTMENTTO DRIVE GROWTH

Capital Expenditures

(in millions)


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1. Very substantial sales and profit opportunity

2. At a rate equal to or accretive to the total

3. Outstanding returns on investment

4. Building for long-term, sustainable growth and profitability operating income dollar contribution not significant in the

short-term

INTERNATIONAL GROWTH OPPORTUNITY

25


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Our absolute priority is healthy, growing, domestic brands

Separate, dedicated teams to support International

Methodical, test and learn approach to expansion

Focused and fast

Zero distraction to domestic brands

FOUNDATIONAL PRINCIPLES


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A substantially partnership-based (franchise) business model

Small number of world-class partners

High control model: we own assortment, pricing, promotions, store designand real estate approval

Partners wil l own inventory, make capital investments, have real estateskills, have people skills and be expert in local practices

We get paid on retail royalty basis

We have our people living in country: training, coaching, inspecting andcoordinating with us

INTERNATIONAL OPERATING MODEL


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GROWTH TRAJECTORY BY STORE COUNT

Ranges

2011 YE 2012 YE 2013 YE

Canada

La Senza 230 158 150 - 155BBW 69 71 78 - 81

VS 11 16 21 - 24

PINK 8 10 10 - 10

Total 318 255 259 - 270

Rest o f Wor ldLa Senza 289 346 356 - 366

BBW 18 39 55 - 65

VS - 5 8 - 12

VSBA 57 116 186 - 216

Total 364 506 601 - 655

Total International 682 761 860 - 925


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We have global, category-leading brands with high emotional content thatgenerate substantial income and cash flow

Our overriding focus is on the substantial growth opportunity in North America

We believe there is substantial opportunity for international growth and expectit to be accretive to the total company operating margin

We are targeting a minimum of low double digit annual earnings growth and an

operating income rate in the high-teens

We continue to emphasize maintaining a strong cash and liquidity positionwhile optimizing our cost of capital

We will continue to manage inventory, expenses and capital with discipline

We remain committed to returning excess cash and generating superiorreturns for shareholders

SUMMARY


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Reconci liation of Reported Results to Adjusted Results

This presentation contains certain unaudited "Adjusted" financial information which represents non-GAAP financial measures. This unaudited " Adjusted" information should not be construed as an

alternative to the reported results determined in accordance with GAAP. Further, the Company'sdefinition of "Adjusted" information may differ from similarly titled measures used by othercompanies. While it is not possible to predict future results, management believes the unaudited"Adjusted" information is useful for the assessment of the ongoing operations of the Company. Theunaudited "Adjusted" information should be read in conjunction with the Company's historicalfinancial statements and notes thereto contained in the Company's quarterly reports on Form 10-Qand annual reports on Form 10-K. The following pages contain reconciliations of certain reported

results to the adjusted results used in this presentation.

APPENDIX


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APPENDIX

Reported Adjustments Adjusted

Net Sales 10,364$ -$ 10,364$

Gross Profit 4,057 17 4,074

General, Administrative and Store Operating Expenses 2,698 (171) 2,527

Operating Income 1,238 308 1,546

Earnings Per Share 2.70 (0.10) 2.60

The Reconciliation of Reported Results to Adjusted Results reflects the following:

The "Adjustments" column includes the following:

A $86 million pre-tax gain ($56M net of tax) related to the sale of shares on Express, Inc. common stock;

$24 million ($24M net of tax) of restructuring expenses at La Senza.

Reconcilia tion of Reported Results to Adjusted Results

2011(in m il l io ns except per share am ounts)

A $232 million pre-tax charge ($203M net of tax) related to the impairment of La Senza goodwill and other intangible

assets;

A $147 million non-taxable gain and associated pre-tax expense of $163 million ($112M net of tax) associated withour charitable contribution of Express, Inc. common stock to The Limited Brands Foundation;

A $111 million pre-tax gain ($99M net of tax) related to the sale of 51% of our third-party sourcing business to

Sycamore P artners;

A $56 million tax benefit related to certain discrete income tax matters; and


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APPENDIX


Net Sales 9,613$ -$ 9,613$

Gross Profit 3,631 - 3,631

General, Administrative and Store Operating Expenses 2,347 - 2,347

Operating Income 1,284 - 1,284




A $7 million pre-tax gain related to the Express dividend payment ($4M net of tax).

A $25 million pre-tax loss ($16M net of tax) associated with the early retirement of portions of our 2012 and 2014

maturity bonds;

A $20 million pre-tax gain and a related net tax benefit of $22 million associated with the sale of our remaining

25% interest in Limited Stores; and

Reconci li ation of Reported Results to Adjusted Results

2010

(in m ill ions except per share amounts)

A $52 million pre-tax gain ($32M net of tax) related to the initial public offering of Express including the sale of aportion of the companys shares;

A $49 million pre-tax gain ($30M net of tax) related to a $57 million cash distribution from Express;

A $45 million pre-tax gain related to the sale of Express stock ($28M net of tax);


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APPENDIX


Net Sales 8,632$ -$ 8,632$


General, Administrative and Store Operating Expenses 2,169 - 2,169

Operating Income 868 (9) 859




Reconci li ation of Reported Results to Adjusted Results

A pre-tax gain of $9 million and a related net tax benefit of $5 million related to the disposal of a non-core joint venture

$23 million of favorable income tax benefits primarily related to the reorganization of certain foreign subsidiaries; and

$9 million of favorable income tax benefits primarily due to the resolution of certain tax matters.

2009

(in millions)


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APPENDIX


Net Sales 9,043$ -$ 9,043$


General, Administrative and Store Operating Expenses 2,311 (23) 2,288

Operating Income 589 129 718

Earnings Per Share 0.65 0.40 1.05



$15 million of favorable income tax benefits primarily related to certain discrete foreign and state income tax

items.

Reconcil iati on of Reported Results to Adjusted Results

A pre-tax gain of $13 million ($8M net of tax) related to a cash distribution from Express; and

A pre-tax charge of $19 million ($20M net of tax) related to the impairment of the investment carrying value of

another non-core joint venture;

A pre-tax gain of $128 million ($81M net of tax) related to the sale of a non-core joint venture;

A pre-tax non-cash impairment charge of $215 million ($204M net of tax) to reduce the carrying value of La Senza

goodwill and other intangible assets;

2008

(in millions)

A pre-tax charge of $23 million ($14M net of tax) for severance related to the reduction of roughly 10% of home

office headcount, or approximately 400 associates;

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FINAL_SB ICR Presentation 1.17.13

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