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 presentation 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 presentation or otherwise made by our
company or our management:
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 relationships with 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 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;
2

Safe Harbor Statement Under the Private Securities Litigation

Reform Act of 1995
Continued

potential delays or disruptions in shipping and transportation and related pricing impacts;
disruption due to labor disputes; and
changing expectations regarding product safety due to new legislation;
our geographic concentration of supplier and distribution facilities in central Ohio;
fluctuations in foreign currency exchange rates;
stock price volatility;
our ability to pay dividends and related effects;
our ability to maintain our credit rating;
our ability to service or refinance our debt;
our ability to retain key personnel;
our ability to attract, develop and retain qualified employees and manage labor-related costs;
the ability of our manufacturers to deliver products in a timely manner, meet quality standards and comply with applicable laws and regulations;
fluctuations in product input costs;
fluctuations in energy costs;
increases in the costs of mailing, paper and printing;
claims arising from our self-insurance;
our ability to implement and maintain information technology systems and to protect associated data;
our ability to maintain the security of customer, associate, supplier or company information;
our ability to comply with regulatory requirements;
legal and compliance matters; and
tax 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
presentation to reflect circumstances existing after the date of this presentation 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. Additional information regarding these and other
factors can be found in Item 1A. Risk Factors in our 2015 Annual Report on Form 10-K.

GROWTH AND SUPERIOR RETURNS FOR SHAREHOLDERS

We are focused on the disciplined execution of

retail fundamentals
We are confident in the growth opportunity for
our business
We are committed to increasing shareholder
value through the consistent return of excess
cash to shareholders

DISCIPLINED EXECUTION OF RETAIL FUNDAMENTALS

SAID

DID

Grow inventory per foot slower than sales

Achieved in 4 out of last 5 years

Grow expenses slower than sales

Achieved in 5 out of last 5 years

Grow operating income dollars by 10%+

Achieved in 4 out of last 5 years

High-teens operating income rate

Achieved 18.0% at the end of 2015

Maintain healthy real estate

99% of stores are cash flow positive

Return excess cash to shareholders

$8.5 billion returned since 2011

Increase shareholder value

In top quartile of shareholder returns amongst

retailers in 3, 5 and 10 year periods
5

GREW INVENTORY SLOWER THAN SALES 4 OUT OF LAST 5 YEARS

15%

10%

5%

0%

-5%

-10%

-15%
2011

2012

2013

Sales 1
1Sales

on like businesses

2014

2015

Inventory PSSF
6

GREW EXPENSES SLOWER THAN SALES 5 OUT OF LAST 5 YEARS

12%

10%

8%

6%

4%

2%

0%
2011

2012

2013

Sales1
1Sales

2014

2015

Expenses

on like businesses

SINCE 2011 SALES UP 26%; OPERATING INCOME UP 46%

Sales1

Operating Income1

($Billions)

($Billions)
$12.2
$11.5

$10.3

$2.19

$10.8
$1.95

$9.7
$1.67

$1.74

$1.50

% Growth

2011

2012

11%

7%

2013

4%

26% Growth

1On

like businesses, on an adjusted basis.

2014

6%

2011

2015

6%

% Growth

22%

2012

11%

2013

5%

2014

12%

2015

12%

46% Growth

SIGNIFICANT GROWTH IN EPS 11% CAGR

$3.99
$3.50
$2.92

$3.05

$2.60

2011

2012

2013

2014

2015

EPS amounts are on an adjusted basis

12012 represents 53-week view (52-week estimate is $2.84).

OPERATING INCOME RATE GROWTH

2011 Operating Income Rate1

Merchandise Margin Expansion

~50bps

Buying & Occupancy Expense Leverage

~60bps

Selling, General & Administrative Expense Leverage

~130bps

2015 Operating Income Rate1

1On

15.6%

like businesses, on an adjusted basis

18.0%

10

HEALTHY REAL ESTATE

11

HEALTHY REAL ESTATE

High profitability across all location

types
Delivering sales growth across all
location types
Leases provide significant protection
based on occupancy and co-tenancy
provisions

12

SIGNIFICANT CASH FLOW

2011

2012

2013

2014

2015

Operating Cash Flow

1,266

1,351

1,248

1,786

1,869

Capital Expenditures

(426)

(588)

(691)

(715)

(727)

Free Cash Flow

840

763

557

1,071

1,143

Regular Dividend

(248)

(296)

(349)

(399)

(587)

Retained Cash Flow

592

467

208

672

556

($ in Millions)

13

BALANCED, PROACTIVE CAPITAL STRUCTURE MANAGEMENT

($ in Billions)

2005

2011

2012

2013

2014

2015

Balance Sheet Debt

$1.7

$3.5

$4.5

$5.0

$4.8

$5.7

Capitalized Lease Obligations1

$4.6

$4.4

$4.6

$4.9

$5.2

$5.5

Total Adjusted Debt

$6.3

$7.9

$9.1

$9.9

$9.9

$11.2

EBITDAR2

$1.9

$2.5

$2.6

$2.7

$3.0

$3.3

Adjusted Debt / EBITDAR

3.3x

3.2x

3.4x

3.6x

3.3x

3.4x

End of Year Cash

$1.2

$0.9

$0.8

$1.5

$1.7

$2.5

BBB/
Baa2/NR

BB+/
Ba1/BB+

BB+/
Ba1/BB+

BB+/
Ba1/BB+

BB+/
Ba1/BB+

BB+/
Ba1/BB+

Debt Rating at End of Year

(S&P/Moody's/Fitch)

1Calculated
2Adjusted

as 8 times total rent expense, including all businesses owned at the time.
operating income, excluding depreciation & amortization and total rent expense, including all businesses owned at the time.

14

$8.5 BILLION RETURNED TO SHAREHOLDERS

CASH DISTRIBUTIONS1 SINCE 2011

Regular Dividends

$2.2 billion

Special Dividends

$3.5 billion

Share Repurchases2

$2.8 billion

Total

$8.5 billion

At an average price of $47.74 per share2

1Reflects
2From

cash distributions from fiscal 2011 through July 29, 2016.

fiscal 2011 through July 29, 2016, 59.4M shares were repurchased at an average price of $47.74 per share.

15

SIGNIFICANT GROWTH IN REGULAR DIVIDENDS SINCE 2011 25% CAGR

Regular Dividend per Share

$2.40 1
$2.00

$1.20

$1.36

$1.00
$0.80

2011
1Paid

2012

$1.80 in regular dividends as of Q3 2016.

2013

2014

2015

2016

16

SUPERIOR SHAREHOLDER RETURNS

Median of top
quartile:
20.8%

1-year Total Return

1 Children's Place
2 Coach
3 American Eagle

Median of top
quartile:
(16.4%)

4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19

Median of top
quartile:
(33.6%)

20
21
22
23
24
25
26

Median of top
quartile:
1.4%

Wal-Mart Stores
Best Buy
Foot Locker
Giordano
TJX
Home Depot
Gap
Esprit Holdings
Inditex
Target
Tiffany & Co.
Walgreen Co.
Chico's
Ralph Lauren
Fast Retailing
L Brands
H&M
Abercrombie & Fitch
Bed Bath & Beyond
Buckle
Li & Fung
Staples
Ascena Retail Group
S&P 500
S&P Retail Index

As of October 21, 2016

35.0%
22.4%
22.0%

Median of top

20.8%
17.5%

quartile:
13.7%

Median of top
quartile:
(12.8%)

4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19

Walgreen Co.
Children's Place
L Brands
American Eagle
TJX
Target
Fast Retailing
H&M
Best Buy
Tiffany & Co.
Wal-Mart Stores
Chico's
Gap
Coach
Giordano
Ralph Lauren

Median of top
quartile:
(19.8%)

20
21
22
23
24
25
26

Buckle
Staples
Bed Bath & Beyond
Li & Fung
Esprit Holdings
Abercrombie & Fitch
Ascena Retail Group

8.6%
6.0%
3.7%
3.7%
1.8%
1.4%
0.2%

Median of top
quartile:
1.2%

(3.5%)
(4.3%)
(7.7%)
(10.6%)
(13.3%)
(16.4%)
(18.6%)
(19.2%)
(20.9%)
(31.3%)
(33.4%)
(33.6%)
(37.0%)
(60.9%)
5.5%
9.6%

3-year Total Return

1 Foot Locker
2 Home Depot
3 Inditex

S&P 500
S&P Retail Index

28.4%
21.7%
14.1%

Median of top

13.7%
12.4%

quartile:
21.9%

Median of top
quartile:
(6.8%)

4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19

Inditex
Walgreen Co.
TJX
L Brands
Best Buy
American Eagle
Children's Place
Gap
H&M
Target
Wal-Mart Stores
Chico's
Tiffany & Co.
Giordano
Esprit Holdings
Buckle

Median of top
quartile:
(14.0%)

20
21
22
23
24
25
26

Ralph Lauren
Coach
Bed Bath & Beyond
Staples
Li & Fung
Ascena Retail Group
Abercrombie & Fitch

11.9%
11.2%
9.6%
4.9%
3.3%
1.2%
0.7%

Median of top
quartile:
9.7%

(0.2%)
(0.8%)
(8.1%)
(8.3%)
(9.8%)
(12.8%)
(14.9%)
(18.7%)
(18.8%)
(18.9%)
(19.7%)
(19.8%)
(20.9%)
(37.2%)
9.3%
17.5%

5-year Total Return

1 Home Depot
2 Foot Locker
3 Fast Retailing

S&P 500
S&P Retail Index

Median of top
quartile:
0.4%

10-year Total Return

1 TJX
2 Inditex
3 L Brands
4 Home Depot
5 Foot Locker
6 Fast Retailing
7 Buckle
8 Tiffany & Co.
9 H&M
10 Walgreen Co.
11 Giordano
12 Wal-Mart Stores
13 Gap
14 Ralph Lauren
15 Target
16 Coach
17 Children's Place
18 Bed Bath & Beyond
19 Best Buy

Median of top
quartile:
(9.2%)

20
21
22
23
24
25
26

30.8%
27.6%
22.8%

Median of top

21.9%
21.7%

quartile:
16.4%

21.1%
18.3%
12.4%
11.1%
10.5%
9.7%
7.4%

Median of top
quartile:
6.7%

7.4%
6.4%
1.8%
1.6%
1.0%
(6.8%)
(6.8%)
(7.3%)
(7.5%)
(8.0%)
(9.4%)
(14.0%)
(19.1%)
(23.8%)
14.0%
21.2%

American Eagle
Li & Fung
Chico's
Ascena Retail Group
Staples
Abercrombie & Fitch
Esprit Holdings
S&P 500
S&P Retail Index

19.0%
18.5%
16.8%
16.4%
14.9%
13.9%
9.8%
9.5%
9.0%
8.4%
6.7%
5.7%
5.5%
4.5%
3.8%
1.8%
1.2%
0.4%
(0.9%)
(1.5%)
(4.1%)
(5.2%)
(7.7%)
(9.2%)
(12.7%)
(18.2%)
6.8%
12.1%

17

18

L BRANDS CONTRIBUTIONS TO TOTAL ANNUAL SALES GROWTH

North America
Comp Stores

North America
Square Footage

Low to
Mid-Single
Digits

Low to
Mid-Single
Digits

Direct Sales

Mid to High
Teens

International

Low to Mid
Twenties

7 10% TOTAL SALES GROWTH

19

SALES GROWTH OPPORTUNITY

Increase comp store sales low to mid-single digits
Best brands: category dominant, high
emotional content
Continued focus on newness and speed
Store selling initiative

Square Footage Growth

Direct Growth
International Growth

20

DIFFERENTIATED CATEGORIES AND LEADING BRANDS

Victorias Secret
#1 lingerie brand
#1 in dollar share for bras and panties
Global brand leader in awareness

PINK is the leading specialty collegiate brand

More than doubled sales in the last 5 years
Nearly $3 billion business

3 of the top 10 fragrances in the U.S.

Bombshell
Heavenly
Tease

Victorias Secret Fashion Show

Shown in nearly 200 countries
Generated 100 billion media impressions worldwide

21

VICTORIAS SECRET STRATEGIC INITIATIVES AND UPDATE

Fashion businesses need to change and evolve to stay relevant. We are focused on
executing significant change in the business:
Organizational change: 3 separate business units
Lingerie (Jan Singer)
PINK (Denise Landman)
Beauty (Greg Unis)
Focus on our core categories to accelerate growth (eliminate swim and apparel)
Evolve promotional strategy to focus on more effective, brand-building promotions
(reduce direct mail coupons and eliminate catalogue)
Streamline the business and increase efficiency (elimination of nearly 300 positions)
22

DIFFERENTIATED CATEGORIES AND LEADING BRANDS

Bath & Body Works

One of the largest specialty retail beauty brands in the world
In 2015, Bath & Body Works had nearly 130 million transactions
165 stores outside North America with strong customer
response

#1 in America for
Body lotion brand
Body cream brand
Shower gel brand
Fine fragrance mist
Fragrance collection Japanese Cherry Blossom
Fragrance diffuser for the home Wallflower
Liquid hand soap brand
Hand sanitizer brand
Spa collection

#1 specialty retailer for candles

23

CONSISTENT SALES GROWTH

27 CONSECUTIVE QUARTERS OF SALES GROWTH

15%

SalesGrowthvs.LY

12%

12%

12%
10%

9%

11%
9%
8%

8%
7%

7%

6%
5%

3%

6%

6%

5%

5%
3%

7%

7%

7%
5%
3%

4%

5%

0%

1Q4

12 excludes 53rd week

On like businesses

24

INDUSTRY-LEADING SALES PRODUCTIVITY

Victorias Secret

Bath & Body Works

$815

$864
$836

$824

$807

$774

$754

$725

$711
$658

2011

2012

2013

2014

2015

2011

15% Growth
12012 calculation is based on 52 weeks.
Note: Sales per Selling Square Foot

20121

2013

2014

2015

24% Growth

25

SPEED DRIVES SALES GROWTH AND LOWER MARKDOWNS

26

SPEED DRIVES INVENTORY TURN

4.1

Average dollar turn

3.9
3.7
3.6
3.6

2011

2012

2013

2014

2015

27

SPEED DRIVES AGILITY (READ, REACT, CHASE)

~90% 2016 fourth quarter open to buy at beginning of Fall season

28

SPEED DRIVES AGILITY (READ, REACT, CHASE)

BEFORE
BEAUTY PARK (2010)

TODAY

BOTTLE

Canada to Virginia:
570 miles

0.4 miles

FOAMER PUMP

China to Virginia:
12,000 miles (boat, truck)

0.3 miles

FILLING

Virginia to Columbus:
400 miles

Beauty Park to Distribution Center:

0 miles

TOTAL DISTANCE
AND TIME

12,970 miles
84 days

0.7 miles
19 days

29

FOCUS ON STORE SELLING AND EXECUTION

Higher caliber talent
Pay for performance
Focus on driving sales productivity
Increased training
Increase full-time/part-time ratio
Enhance performance management
Reduce associate turnover
30

SALES GROWTH OPPORTUNITY

Increase comp store sales to low - mid single digits
Best brands: category dominant, high
emotional content
Continued focus on newness and speed
Store selling initiative

Square Footage Growth

Direct Growth
International Growth

31

$300 MILLION +/- ANNUAL SALES GROWTH FROM REAL ESTATE

Victorias Secret / PINK and Bath & Body Works square footage growth in North America is
accelerating, driving total company growth
SSF Growth (CAGR)
2011 - 2015

2016F

2017F

Gross

4%

4%

3%

Net of closures

4%

3%

2%

Gross

1%

5%

5%

Net of closures

0%

5%

5%

Gross

3%

4%

4%

Net of closures

1%

4%

3%

Victorias Secret / PINK

Bath & Body Works

L Brands

32

INVESTING IN GROWTH

70%+ invested in stores; consistent improvement in ROIC

PERFORMANCE-BASED
33

EFFICIENT USE OF CAPITAL

16%

16%

16%

2012

2013

2014

17%

ROIC1

15%

2011

1Return

2015

on invested capital is calculated using net operating profit after tax (NOPAT) that incorporates an adjustment for leases, divided by the average invested capital.
34

SQUARE FOOTAGE GROWTH VICTORIAS SECRET

177 U.S. EXPANSIONS
2011 Q1 2016
Selling Square Footage
Average Store Size

Sales
Productivity

Profits
Projected IRR

Up about 40%
8,500 ssf

Up about 30%
About $900 per ssf

Up about 10%
About 25%
35

SQUARE FOOTAGE GROWTH VICTORIAS SECRET

5th Avenue New York

36

SQUARE FOOTAGE GROWTH VICTORIAS SECRET

Eastwood Mall Niles, OH

37

SQUARE FOOTAGE GROWTH VICTORIAS SECRET

130 U.S. PINK FREE-STANDING STORES OPENED
THROUGH SECOND QUARTER 2016
PINK free-standing store productivity is more
than $1,400 per foot
Average store size is approximately 3,400 ssf
Expected total center IRR about 25+%

38

SQUARE FOOTAGE GROWTH VICTORIAS SECRET

Roosevelt Field Garden City, NY

39

SQUARE FOOTAGE GROWTH BATH & BODY WORKS

We are increasing our investment in Bath & Body Works North America
2015

2016F

2017F

New

Remodel

Total

New

Remodel

Total

New

Remodel

Total

Core

30

32

62

Shop-in-Shop

28

71

99

40

195

235

Side-by-Side

45

48

75

81

15

20

33

83

116

35

147

182

45

210

255

Total

40

SQUARE FOOTAGE GROWTH BATH & BODY WORKS

Easton Town Center Columbus, OH

41

SQUARE FOOTAGE GROWTH BATH & BODY WORKS

Wolfchase Mall Memphis, TN

42

SQUARE FOOTAGE GROWTH BATH & BODY WORKS

Garden State Plaza - Paramus, NJ

43

SALES GROWTH OPPORTUNITY

Increase comp store sales to low - mid single digits
Best brands: category dominant, high
emotional content
Continued focus on newness and speed
Store selling initiative

Square Footage Growth

Direct Growth
International Growth

44

DIRECT CHANNEL GROWTH

A Very Significant Business

Nearly $2 billion in volume at ~20% operating income rate

Focused on growth in core categories

Ongoing investments to improve customer experience, market the

brands and upgrade capabilities

Victorias Secret Direct

~20% penetration to total brand, core category growth 16% in 2015

Bath & Body Works Direct

~10% penetration to total brand, 20% growth in 2015

5 year sales CAGR greater than 20%

45

HOW WILL WE GROW?

Increase comp store sales to low - mid single digits
Best brands: category dominant, high
emotional content
Continued focus on newness and speed
Store selling initiative

Square Footage Growth

Direct Growth

International Growth

46

47

SUPERIOR SHAREHOLDER RETURNS

Median of top
quartile:
20.8%

1-year Total Return

1 Children's Place
2 Coach
3 American Eagle

Median of top
quartile:
(16.4%)

4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19

Median of top
quartile:
(33.6%)

20
21
22
23
24
25
26

Median of top
quartile:
1.4%

Wal-Mart Stores
Best Buy
Foot Locker
Giordano
TJX
Home Depot
Gap
Esprit Holdings
Inditex
Target
Tiffany & Co.
Walgreen Co.
Chico's
Ralph Lauren
Fast Retailing
L Brands
H&M
Abercrombie & Fitch
Bed Bath & Beyond
Buckle
Li & Fung
Staples
Ascena Retail Group
S&P 500
S&P Retail Index

As of October 21, 2016

35.0%
22.4%
22.0%

Median of top

20.8%
17.5%

quartile:
13.7%

Median of top
quartile:
(12.8%)

4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19

Walgreen Co.
Children's Place
L Brands
American Eagle
TJX
Target
Fast Retailing
H&M
Best Buy
Tiffany & Co.
Wal-Mart Stores
Chico's
Gap
Coach
Giordano
Ralph Lauren

Median of top
quartile:
(19.8%)

20
21
22
23
24
25
26

Buckle
Staples
Bed Bath & Beyond
Li & Fung
Esprit Holdings
Abercrombie & Fitch
Ascena Retail Group

8.6%
6.0%
3.7%
3.7%
1.8%
1.4%
0.2%

Median of top
quartile:
1.2%

(3.5%)
(4.3%)
(7.7%)
(10.6%)
(13.3%)
(16.4%)
(18.6%)
(19.2%)
(20.9%)
(31.3%)
(33.4%)
(33.6%)
(37.0%)
(60.9%)
5.5%
9.6%

3-year Total Return

1 Foot Locker
2 Home Depot
3 Inditex

S&P 500
S&P Retail Index

28.4%
21.7%
14.1%

Median of top

13.7%
12.4%

quartile:
21.9%

Median of top
quartile:
(6.8%)

4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19

Inditex
Walgreen Co.
TJX
L Brands
Best Buy
American Eagle
Children's Place
Gap
H&M
Target
Wal-Mart Stores
Chico's
Tiffany & Co.
Giordano
Esprit Holdings
Buckle

Median of top
quartile:
(14.0%)

20
21
22
23
24
25
26

Ralph Lauren
Coach
Bed Bath & Beyond
Staples
Li & Fung
Ascena Retail Group
Abercrombie & Fitch

11.9%
11.2%
9.6%
4.9%
3.3%
1.2%
0.7%

Median of top
quartile:
9.7%

(0.2%)
(0.8%)
(8.1%)
(8.3%)
(9.8%)
(12.8%)
(14.9%)
(18.7%)
(18.8%)
(18.9%)
(19.7%)
(19.8%)
(20.9%)
(37.2%)
9.3%
17.5%

5-year Total Return

1 Home Depot
2 Foot Locker
3 Fast Retailing

S&P 500
S&P Retail Index

Median of top
quartile:
0.4%

10-year Total Return

1 TJX
2 Inditex
3 L Brands
4 Home Depot
5 Foot Locker
6 Fast Retailing
7 Buckle
8 Tiffany & Co.
9 H&M
10 Walgreen Co.
11 Giordano
12 Wal-Mart Stores
13 Gap
14 Ralph Lauren
15 Target
16 Coach
17 Children's Place
18 Bed Bath & Beyond
19 Best Buy

Median of top
quartile:
(9.2%)

20
21
22
23
24
25
26

30.8%
27.6%
22.8%

Median of top

21.9%
21.7%

quartile:
16.4%

21.1%
18.3%
12.4%
11.1%
10.5%
9.7%
7.4%

Median of top
quartile:
6.7%

7.4%
6.4%
1.8%
1.6%
1.0%
(6.8%)
(6.8%)
(7.3%)
(7.5%)
(8.0%)
(9.4%)
(14.0%)
(19.1%)
(23.8%)
14.0%
21.2%

American Eagle
Li & Fung
Chico's
Ascena Retail Group
Staples
Abercrombie & Fitch
Esprit Holdings
S&P 500
S&P Retail Index

19.0%
18.5%
16.8%
16.4%
14.9%
13.9%
9.8%
9.5%
9.0%
8.4%
6.7%
5.7%
5.5%
4.5%
3.8%
1.8%
1.2%
0.4%
(0.9%)
(1.5%)
(4.1%)
(5.2%)
(7.7%)
(9.2%)
(12.7%)
(18.2%)
6.8%
12.1%

48

49

50

APPENDIX
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures
This presentation contains certain unaudited Adjusted financial information which represents non-GAAP
financial measures. 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 Companys
definition of adjusted income information may differ from similarly titled measures used by other companies.
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. The adjusted financial information should be read in
conjunction with the Companys historical financial statements and notes thereto contained in the Companys
quarterly reports on Form 10-Q and annual report on Form 10-K. The following pages contain reconciliations of
certain reported results to the adjusted results used in this presentation.

51

APPENDIX
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures

Q2 2016 YTD
(in millions except per share amounts)
Reported
Net Sales

$ 5,504

Adjustments
$

Adjusted
$ 5,504

Gross Profit

2,156

11

2,167

General, Administrative and Store Operating Expenses

1,424

(24)

1,400

Operating Income

732

Earnings Per Share

1.39

35
(0.09)

767
1.30

The Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures reflect the following:
The "Adjustments" column includes the following:
Pre-tax charges of $34.5 million ($21.4 million net of tax of $13.1 million)
related to previously announced actions at Victorias Secret, including
severance charges, fabric cancellations and the write-off of catalogue paper.

A $108.3 million pre-tax gain ($70.2 million net of tax of $38.1 million),
included in other income (loss), related to a $124.4 million cash distribution
from Easton Town Center.

A $35.8 million pre-tax loss ($22.4 million net of tax of $13.4 million),
included in other income (loss), associated with the early extinguishment of
our July 2017 notes.

52

APPENDIX
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures

2015
(in millions except per share amounts)
Reported
Net Sales

Adjustments

$ 12,154

Adjusted

$ 12,154

Gross Profit

5,203

5,203

General, Administrative and Store Operating Expenses

3,012

3,012

Operating Income

2,192

2,192

4.22

(0.23)

3.99

Earnings Per Share

The Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures reflect the following:
The "Adjustments" column includes the following:
A $78.1 million pre-tax gain ($69 million net of tax) included in other income
related to the sale of our remaining interest in the third-party apparel
sourcing business.

53

APPENDIX
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures

2012
(in millions except per share amounts)
Reported

Adjustments

Adjusted

Net Sales

$10,459

$10,459

Gross Profit

4,386

40

4,426

General, Administrative and Store Operating Expenses

2,720

(1)

2,719

Operating Income

1,573

134

1,707

Earnings Per Share

2.54

0.38

2.92

The Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures reflect the following:
The "Adjustments" column includes the following:
A $93.2 million pre-tax charge ($91.2 million net of tax) related to the impairment of La Senza goodwill and other
intangible assets;
A $26.9 million pre-tax charge ($16.6 million net of tax), included in buying and occupancy expenses, related to the
impairment of Henri Bendel store fixed assets;
$14.0 million ($14.0 million net of tax) of store closure costs at La Senza; and

A $12.7 million pre-tax gain ($8.2 million net of tax), included in other income and expense, from $13.4 million of
cash distributions related to the companys Easton investments.

54

APPENDIX
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures

2011
(in millions)
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 GAAP Financial Measures to Non-GAAP Financial Measures reflect the following:
The "Adjustments" column includes the following:
A $232 million pre-tax charge ($203 million 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 ($112 million net of tax) associated
with our charitable contribution of Express, Inc. common stock to The Limited Brands Foundation;
A $111 million pre-tax gain ($99 million net of tax) related to the sale of 51% of our third-party sourcing business to
Sycamore Partners;
A $86 million pre-tax gain ($56 million net of tax) related to the sale of shares on Express, Inc. common stock;

A $56 million tax benefit related to certain discrete income tax matters; and
$24 million ($24 million net of tax) of restructuring expenses at La Senza.

55

55

10

11

11

12

13

14

14

BBW

CANADA

103

INTERNATIONAL SEGMENT

165

VSBA

431

VSFA

PINK

LA SENZA

TOTAL

37

121

270

38

OTHER

TOTAL

268

431

75

17

642
205

205

326

1117

15

BBW

CANADA

103

INTERNATIONAL SEGMENT

165

VSBA

431

VSFA

PINK

LA SENZA

TOTAL

37

121

270

38

OTHER

TOTAL

268

431

75

17

642
205

205

326

1117

16

17

18

19

TALENT: NEW LEADERS

BRAND LEADERS

VS

BBW

LA SENZA

DEDICATED INTERNATIONAL FUNCTIONS

FINANCE

HUMAN
RESOURCES

COMMUNICATIONS

CENTER FUNCTION
LEADERS

GEOGRAPHIES

REAL ESTATE

MIDDLE EAST
TURKEY

STORE DESIGN &

CONSTRUCTION

EUROPE

MAST GLOBAL
TECHNOLOGIES

GREATER CHINA

MAST GLOBAL
LOGISTICS

SOUTHEAST
ASIA

LEGAL

INTERNATIONAL
E-COMMERCE
TRAVEL RETAIL

20

10

TALENT: OUR LEADERSHIP TEAM

BRAND LEADERS

VS

BBW

LA SENZA

DEDICATED INTERNATIONAL FUNCTIONS

FINANCE

HUMAN
RESOURCES

COMMUNICATIONS

CENTER FUNCTION
LEADERS

GEOGRAPHIES

REAL ESTATE

MIDDLE EAST
TURKEY

STORE DESIGN &

CONSTRUCTION

EUROPE

MAST GLOBAL
TECHNOLOGIES

GREATER CHINA

MAST GLOBAL
LOGISTICS

SOUTHEAST
ASIA

LEGAL

INTERNATIONAL
E-COMMERCE
TRAVEL RETAIL

21

22

11

23

24

12

25

26

13

27

27

VSFASHION
SHOWVIDEO

28

14

29

30

15

31

32

16

33

34

17

35

36

18

37

38

19

39

40

20

41

42

21

43

44

22

45

46

23

47

48

24

49

50

25

51

52

52

26

BBW
VSBA

53

54

27

55

56

28

57

BBW
VSBA

58

29

2011

2012

2013

2014

2015

2011-15
CAGR

75

151

262

394

531

63%

% growth

226%

101%

74%

50%

35%

Retail Sales (USD)*

$180

$298

$519

$765

$1,006

% growth

78%

66%

74%

47%

32%

L Brands Recognized Revenue (USD)

$118

$132

$222

$336

$385

% growth

55%

12%

68%

51%

15%

$8

$4

$38

$78

$88

(12%)

(55%)

939%

103%

13%

Total VS & BBW International Segment

Store Count

Operating Income (USD)

% growth

54%

34%

81%

*Represents total retail sales from company-owned and partner-owned stores; partner-owned sales may be unaudited and/or non-GAAP.

59

Year End 2015

Year End 2016 (F)

New in 2017

Year End 2017 (F)

VSBA

373

431

~64

~495

VSFA

28

38

~24

~62

PINK (free standing)

~3

~11

BBW

125

165

~54

~219

Total Segment

531

642

~145

~787

60

30

61

62

31

642 STORES AT 2016 YEAR END

64

~787 STORES AT 2017 YEAR END

65