Company Quick10K Filing
L Brands
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$0.00 278 $5,246
10-Q 2019-12-06 Quarter: 2019-11-02
10-Q 2019-09-06 Quarter: 2019-08-03
10-Q 2019-06-04 Quarter: 2019-05-04
10-K 2019-03-22 Annual: 2019-02-02
10-Q 2018-12-04 Quarter: 2018-11-03
10-Q 2018-09-07 Quarter: 2018-08-04
10-Q 2018-06-07 Quarter: 2018-05-05
10-K 2018-03-23 Annual: 2018-02-03
10-Q 2017-12-01 Quarter: 2017-10-28
10-Q 2017-09-01 Quarter: 2017-07-29
10-Q 2017-06-02 Quarter: 2017-04-29
10-K 2017-03-17 Annual: 2017-01-28
10-Q 2016-12-02 Quarter: 2016-10-29
10-Q 2016-09-02 Quarter: 2016-07-30
10-Q 2016-06-03 Quarter: 2016-04-30
10-K 2016-03-18 Annual: 2016-01-30
10-Q 2015-12-04 Quarter: 2015-10-31
10-Q 2015-09-04 Quarter: 2015-08-01
10-Q 2015-06-05 Quarter: 2015-05-02
10-K 2015-03-20 Annual: 2015-01-31
10-Q 2014-12-05 Quarter: 2014-11-01
10-Q 2014-09-05 Quarter: 2014-08-02
10-Q 2014-06-06 Quarter: 2014-05-03
10-K 2014-03-21 Annual: 2014-02-01
10-Q 2013-09-06 Quarter: 2013-08-03
10-Q 2013-06-07 Quarter: 2013-05-04
10-K 2013-03-22 Annual: 2013-02-02
10-Q 2012-11-30 Quarter: 2012-10-27
10-Q 2012-08-31 Quarter: 2012-07-28
10-Q 2012-06-01 Quarter: 2012-04-28
10-K 2012-03-23 Annual: 2012-01-28
10-Q 2011-12-02 Quarter: 2011-10-29
10-Q 2011-08-31 Quarter: 2011-07-30
10-Q 2011-06-03 Quarter: 2011-04-30
10-K 2011-03-18 Annual: 2011-01-29
10-Q 2010-12-03 Quarter: 2010-10-30
10-Q 2010-09-07 Quarter: 2010-07-31
10-Q 2010-06-03 Quarter: 2010-05-01
10-K 2010-03-26 Annual: 2010-01-30
8-K 2020-01-09 Earnings, Regulation FD, Exhibits
8-K 2019-11-20 Earnings, Regulation FD, Exhibits
8-K 2019-08-21 Earnings, Regulation FD, Exhibits
8-K 2019-08-13 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2019-06-20 Enter Agreement, Other Events, Exhibits
8-K 2019-06-05 Enter Agreement, Other Events, Exhibits
8-K 2019-05-22 Earnings, Regulation FD, Exhibits
8-K 2019-05-16 Shareholder Vote
8-K 2019-04-18 Enter Agreement, Other Events, Exhibits
8-K 2019-02-27 Earnings, Regulation FD, Exhibits
8-K 2019-02-07 Earnings, Regulation FD, Exhibits
8-K 2019-01-06 Earnings, Regulation FD, Exit Costs, Exhibits
8-K 2018-12-12 Exit Costs, Other Events, Exhibits
8-K 2018-11-19 Earnings, Regulation FD, Other Events, Exhibits
8-K 2018-11-08 Earnings, Regulation FD, Exhibits
8-K 2018-09-13 Other Events, Exhibits
8-K 2018-08-22 Earnings, Regulation FD, Exhibits
8-K 2018-08-09 Earnings, Regulation FD, Exhibits
8-K 2018-06-14 Other Events, Exhibits
8-K 2018-05-31 Other Events, Exhibits
8-K 2018-05-23 Earnings, Regulation FD, Exhibits
8-K 2018-05-17 Shareholder Vote
8-K 2018-05-10 Earnings, Regulation FD, Exhibits
8-K 2018-03-08 Regulation FD, Exhibits
8-K 2018-02-28 Earnings, Regulation FD, Exhibits
8-K 2018-02-08 Earnings, Regulation FD, Exhibits
8-K 2018-01-23 Other Events, Exhibits
8-K 2018-01-23 Enter Agreement, Other Events, Exhibits
8-K 2018-01-04 Earnings, Regulation FD, Exhibits
8-K 2018-01-03 Off-BS Arrangement, Other Events, Exhibits
LB 2019-11-02
Part I-Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part Ii-Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-15 ltd-2019112ex15.htm
EX-31.1 ltd-2019112ex311.htm
EX-31.2 ltd-2019112ex312.htm
EX-32 ltd-2019112ex32.htm

L Brands Earnings 2019-11-02

LB 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Comparables ($MM TTM)
Ticker M Cap Assets Liab Rev G Profit Net Inc EBITDA EV G Margin EV/EBITDA ROA
GPS 6,817 14,043 10,418 16,423 6,168 937 1,941 6,871 38% 3.5 7%
HBI 6,086 7,877 6,742 6,966 2,713 566 659 9,855 39% 15.0 7%
JWN 5,425 9,935 9,176 15,546 1,540 493 1,411 6,647 10% 4.7 5%
LB 5,246 10,618 11,551 13,158 4,813 575 1,208 9,868 37% 8.2 5%
FL 4,537 6,720 4,208 7,984 2,546 520 841 3,699 32% 4.4 8%
AEO 3,111 3,359 2,131 4,175 1,538 267 536 2,794 37% 5.2 8%
URBN 2,740 3,138 1,777 3,929 1,295 257 464 2,578 33% 5.6 8%
DSW 1,731 2,557 1,828 3,461 715 52 174 1,914 21% 11.0 2%
PLCE 1,497 1,304 1,054 1,886 659 68 147 1,432 35% 9.8 5%
ANF 1,065 3,407 2,404 3,592 2,153 75 290 795 60% 2.7 2%

Document
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Table of Contents

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 _________________________________
FORM 10-Q
 _________________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 2, 2019
OR
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
 _________________________________
L BRANDS, INC.
(Exact name of registrant as specified in its charter)
 _______________________________
Delaware
 
31-1029810
(State or other jurisdiction of
incorporation or organization)
 
(IRS Employer Identification No.)
Three Limited Parkway
 
Columbus,
Ohio
43230
(Address of principal executive offices)
(Zip Code)
(614)
415-7000
(Registrant's Telephone Number, Including Area Code)
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      No  
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes     No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
 
 
 
 
Non-accelerated filer
  (Do not check if a smaller reporting company)
Smaller reporting company
 
 
 
 
 
 
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.):    Yes      No  
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.50 Par Value
LB
The New York Stock Exchange
As of November 29, 2019, the number of outstanding shares of the Registrant’s common stock, was 276,474,678 shares.
 


Table of Contents

L BRANDS, INC.
TABLE OF CONTENTS
 
 
Page No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 1A. Risk Factors
 
 
 
 
 
 
 
 
 
 
Item 6. Exhibits
 
 
 
*
The Company's fiscal year ends on the Saturday nearest to January 31. As used herein, “third quarter of 2019” and “third quarter of 2018” refer to the thirteen-week periods ended November 2, 2019 and November 3, 2018, respectively. "Year-to-date 2019" and "year-to-date 2018" refer to the thirty-nine-week periods ending November 2, 2019 and November 3, 2018, respectively.


2

Table of Contents

PART I—FINANCIAL INFORMATION
 
Item 1.
FINANCIAL STATEMENTS

L BRANDS, INC.
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(in millions except per share amounts)
(Unaudited)
 
 
Third Quarter
 
Year-to-Date
 
2019
 
2018
 
2019
 
2018
Net Sales
$
2,677

 
$
2,775

 
$
8,207

 
$
8,385

Costs of Goods Sold, Buying and Occupancy
(1,936
)
 
(1,847
)
 
(5,550
)
 
(5,454
)
Gross Profit
741

 
928


2,657


2,931

General, Administrative and Store Operating Expenses
(892
)
 
(874
)
 
(2,480
)
 
(2,494
)
Operating Income (Loss)
(151
)
 
54


177


437

Interest Expense
(92
)
 
(96
)
 
(286
)
 
(292
)
Other Income (Loss)
(34
)
 
1

 
(66
)
 
1

Income (Loss) Before Income Taxes
(277
)
 
(41
)

(175
)

146

Provision (Benefit) for Income Taxes
(25
)
 
2

 
(1
)
 
42

Net Income (Loss)
$
(252
)
 
$
(43
)

$
(174
)

$
104

Net Income (Loss) Per Basic Share
$
(0.91
)
 
$
(0.16
)
 
$
(0.63
)
 
$
0.37

Net Income (Loss) Per Diluted Share
$
(0.91
)
 
$
(0.16
)
 
$
(0.63
)
 
$
0.37

Dividends Per Share
$
0.30

 
$
0.60

 
$
0.90

 
$
1.80



L BRANDS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in millions)
(Unaudited)
 
Third Quarter
 
Year-to-Date
 
2019
 
2018
 
2019
 
2018
Net Income (Loss)
$
(252
)
 
$
(43
)
 
$
(174
)
 
$
104

Other Comprehensive Income (Loss), Net of Tax:
 
 
 
 
 
 
 
   Foreign Currency Translation
6

 
(2
)
 
(5
)
 
(24
)
   Unrealized Gain (Loss) on Cash Flow Hedges
(2
)
 
1

 
2

 
10

   Reclassification of Cash Flow Hedges to Earnings

 

 
(3
)
 
3

Total Other Comprehensive Income (Loss), Net of Tax
4

 
(1
)

(6
)

(11
)
Total Comprehensive Income (Loss)
$
(248
)
 
$
(44
)
 
$
(180
)
 
$
93




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

3

Table of Contents

L BRANDS, INC.
CONSOLIDATED BALANCE SHEETS
(in millions except par value amounts)
 
 
November 2,
2019
 
February 2,
2019
 
November 3,
2018
 
(Unaudited)
 
 
 
(Unaudited)
ASSETS
 
 
 
 
 
Current Assets:
 
 
 
 
 
Cash and Cash Equivalents
$
340

 
$
1,413

 
$
348

Accounts Receivable, Net
295

 
367

 
321

Inventories
2,032

 
1,248

 
1,963

Other
259

 
232

 
301

Total Current Assets
2,926

 
3,260

 
2,933

Property and Equipment, Net
2,571

 
2,818

 
2,934

Operating Lease Assets
3,130

 

 

Goodwill
1,318

 
1,348

 
1,348

Trade Names
411

 
411

 
411

Deferred Income Taxes
63

 
62

 
20

Other Assets
211

 
191

 
183

Total Assets
$
10,630

 
$
8,090

 
$
7,829

LIABILITIES AND EQUITY (DEFICIT)
 
 
 
 
 
Current Liabilities:
 
 
 
 
 
Accounts Payable
$
1,024

 
$
711

 
$
1,060

Accrued Expenses and Other
980

 
1,082

 
1,018

Current Debt
75

 
72

 
56

Current Operating Lease Liabilities
460

 

 

Income Taxes
4

 
121

 
8

Total Current Liabilities
2,543

 
1,986

 
2,142

Deferred Income Taxes
246

 
226

 
234

Long-term Debt
5,477

 
5,739

 
5,814

Long-term Operating Lease Liabilities
3,108

 

 

Other Long-term Liabilities
494

 
1,004

 
951

Shareholders’ Equity (Deficit):
 
 
 
 
 
Preferred Stock - $1.00 par value; 10 shares authorized; none issued

 

 

Common Stock - $0.50 par value; 1,000 shares authorized; 284, 283 and 283 shares issued; 276, 275 and 275 shares outstanding, respectively
142

 
141

 
142

Paid-in Capital
828

 
771

 
747

Accumulated Other Comprehensive Income
53

 
59

 
11

Retained Earnings (Deficit)
(1,907
)
 
(1,482
)
 
(1,856
)
Less: Treasury Stock, at Average Cost; 8, 8 and 8 shares, respectively
(358
)
 
(358
)
 
(358
)
Total L Brands, Inc. Shareholders’ Equity (Deficit)
(1,242
)
 
(869
)
 
(1,314
)
Noncontrolling Interest
4

 
4

 
2

Total Equity (Accumulated Deficit)
(1,238
)
 
(865
)
 
(1,312
)
Total Liabilities and Equity (Deficit)
$
10,630

 
$
8,090

 
$
7,829


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

4

Table of Contents

L BRANDS, INC.
CONSOLIDATED STATEMENTS OF TOTAL EQUITY (DEFICIT)
(in millions except per share amounts)
(Unaudited)

Third Quarter 2019
 
Common Stock
 
Paid-In
Capital
 
Accumulated
Other
Comprehensive
Income
 
Retained
Earnings (Accumulated Deficit)
 
Treasury
Stock, at
Average
Cost
 
Noncontrolling Interest
 
Total Equity (Deficit)
Shares
Outstanding
 
Par
Value
Balance, August 3, 2019
276

 
$
142

 
$
806

 
$
49

 
$
(1,572
)
 
$
(358
)
 
$
4

 
$
(929
)
Net Loss

 

 

 

 
(252
)
 

 

 
(252
)
Other Comprehensive Income

 

 

 
4

 

 

 

 
4

Total Comprehensive Income (Loss)

 

 

 
4

 
(252
)
 

 

 
(248
)
Cash Dividends ($0.30 per share)

 

 

 

 
(83
)
 

 

 
(83
)
Share-based Compensation and Other

 

 
22

 

 

 

 

 
22

Balance, November 2, 2019
276

 
$
142

 
$
828

 
$
53

 
$
(1,907
)
 
$
(358
)
 
$
4

 
$
(1,238
)

Third Quarter 2018
 
Common Stock
 
Paid-In
Capital
 
Accumulated
Other
Comprehensive
Income
 
Retained
Earnings (Accumulated Deficit)
 
Treasury
Stock, at
Average
Cost
 
Noncontrolling Interest
 
Total Equity (Deficit)
Shares
Outstanding
 
Par
Value
Balance, August 4, 2018
275

 
$
142

 
$
718

 
$
12

 
$
(1,648
)
 
$
(348
)
 
$
2

 
$
(1,122
)
Net Loss

 

 

 

 
(43
)
 

 

 
(43
)
Other Comprehensive Loss

 

 

 
(1
)
 

 

 

 
(1
)
Total Comprehensive Loss

 

 

 
(1
)
 
(43
)
 

 

 
(44
)
Cash Dividends ($0.60 per share)

 

 

 

 
(165
)
 

 

 
(165
)
Repurchase of Common Stock

 

 

 

 

 
(10
)
 

 
(10
)
Share-based Compensation and Other

 

 
29

 

 

 

 

 
29

Balance, November 3, 2018
275

 
$
142

 
$
747

 
$
11

 
$
(1,856
)
 
$
(358
)
 
$
2

 
$
(1,312
)

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

5

Table of Contents

L BRANDS, INC.
CONSOLIDATED STATEMENTS OF TOTAL EQUITY (DEFICIT)
(in millions except per share amounts)
(Unaudited)

Year-to-Date 2019
 
Common Stock
 
Paid-In
Capital
 
Accumulated
Other
Comprehensive
Income
 
Retained
Earnings (Accumulated Deficit)
 
Treasury
Stock, at
Average
Cost
 
Noncontrolling Interest
 
Total Equity (Deficit)
Shares
Outstanding
 
Par
Value
Balance, February 2, 2019
275

 
$
141

 
$
771

 
$
59

 
$
(1,482
)
 
$
(358
)
 
$
4

 
$
(865
)
Cumulative Effect of Accounting Change

 

 

 

 
(2
)
 

 

 
(2
)
Balance, February 3, 2019
275

 
141

 
771

 
59

 
(1,484
)
 
(358
)
 
4

 
(867
)
Net Loss

 

 

 

 
(174
)
 

 

 
(174
)
Other Comprehensive Loss

 

 

 
(6
)
 

 

 

 
(6
)
Total Comprehensive Loss

 

 

 
(6
)
 
(174
)
 

 

 
(180
)
Cash Dividends ($0.90 per share)

 

 

 

 
(249
)
 

 

 
(249
)
Share-based Compensation and Other
1

 
1

 
57

 

 

 

 

 
58

Balance, November 2, 2019
276

 
$
142

 
$
828

 
$
53

 
$
(1,907
)
 
$
(358
)
 
$
4

 
$
(1,238
)

Year-to-Date 2018
 
Common Stock
 
Paid-In
Capital
 
Accumulated
Other
Comprehensive
Income
 
Retained
Earnings (Accumulated Deficit)
 
Treasury
Stock, at
Average
Cost
 
Noncontrolling Interest
 
Total Equity (Deficit)
Shares
Outstanding
 
Par
Value
Balance, February 3, 2018
280

 
$
141

 
$
678

 
$
24

 
$
(1,434
)
 
$
(162
)
 
$
2

 
$
(751
)
Cumulative Effect of Accounting Changes

 

 

 
(2
)
 
(26
)
 

 

 
(28
)
Balance, February 4, 2018
280

 
141

 
678

 
22

 
(1,460
)
 
(162
)
 
2

 
(779
)
Net Income

 

 

 

 
104

 

 

 
104

Other Comprehensive Loss

 

 

 
(11
)
 

 

 

 
(11
)
Total Comprehensive Income (Loss)

 

 

 
(11
)
 
104

 

 

 
93

Cash Dividends ($1.80 per share)

 

 

 

 
(500
)
 

 

 
(500
)
Repurchase of Common Stock
(5
)
 

 

 

 

 
(196
)
 

 
(196
)
Share-based Compensation and Other

 
1

 
69

 

 

 

 

 
70

Balance, November 3, 2018
275

 
$
142

 
$
747

 
$
11

 
$
(1,856
)
 
$
(358
)
 
$
2

 
$
(1,312
)

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


6

Table of Contents

L BRANDS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(Unaudited)
 
Year-to-Date
 
2019
 
2018
Operating Activities:
 
 
 
Net Income (Loss)
$
(174
)
 
$
104

Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by (Used for) Operating Activities:
 
 
 
Depreciation of Long-lived Assets
443

 
444

Amortization of Landlord Allowances

 
(32
)
Asset Impairment
248

 
81

Share-based Compensation Expense
67

 
75

Loss on Extinguishment of Debt
40

 

La Senza Charges
37

 

Deferred Income Taxes
19

 
(3
)
Gains on Distributions from Easton Investments
(4
)
 
(7
)
Unrealized Losses on Marketable Equity Securities

 
8

Changes in Assets and Liabilities:
 
 
 
Accounts Receivable
41

 
(8
)
Inventories
(785
)
 
(731
)
Accounts Payable, Accrued Expenses and Other
210

 
300

Income Taxes Payable
(198
)
 
(260
)
Other Assets and Liabilities
(34
)
 
42

Net Cash Provided by (Used for) Operating Activities
(90
)
 
13

Investing Activities:
 
 
 
Capital Expenditures
(392
)
 
(561
)
Other Investing Activities
(16
)
 
23

Net Cash Used for Investing Activities
(408
)
 
(538
)
Financing Activities:
 
 
 
Proceeds from Issuance of Long-Term Debt, Net of Issuance Costs
486

 

Payments of Long-term Debt
(799
)
 
(52
)
Borrowing from Secured Revolving Facility

 
85

Borrowings from Foreign Facilities
36

 
110

Repayments of Foreign Facilities
(21
)
 
(71
)
Dividends Paid
(249
)
 
(500
)
Repurchases of Common Stock

 
(198
)
Tax Payments related to Share-based Awards
(12
)
 
(13
)
Financing Costs and Other
(11
)
 
(4
)
Net Cash Used for Financing Activities
(570
)
 
(643
)
Effects of Exchange Rate Changes on Cash and Cash Equivalents
(5
)
 
1

Net Decrease in Cash and Cash Equivalents
(1,073
)
 
(1,167
)
Cash and Cash Equivalents, Beginning of Period
1,413

 
1,515

Cash and Cash Equivalents, End of Period
$
340

 
$
348


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

7

Table of Contents

L BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1. Description of Business and Basis of Presentation
Description of Business
L Brands, Inc. (the "Company”) operates in the highly competitive specialty retail business. The Company is a specialty retailer of women’s intimate and other apparel, personal care, beauty and home fragrance products. The Company sells its merchandise through company-owned specialty retail stores in the United States (“U.S.”), Canada, the United Kingdom (“U.K.”), Ireland and Greater China (China and Hong Kong), and through its websites and other channels. The Company's other international operations are primarily through franchise, license and wholesale partners. The Company currently operates the following retail brands:
Victoria’s Secret
PINK
Bath & Body Works
Fiscal Year
The Company’s fiscal year ends on the Saturday nearest to January 31. As used herein, “third quarter of 2019” and “third quarter of 2018” refer to the thirteen-week periods ended November 2, 2019 and November 3, 2018, respectively. “Year-to-date 2019” and “year-to-date 2018” refer to the thirty-nine-week periods ending November 2, 2019 and November 3, 2018, respectively.
Basis of Consolidation
The Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
The Company accounts for investments in unconsolidated entities where it exercises significant influence, but does not have control, using the equity method. Under the equity method of accounting, the Company recognizes its share of the investee's net income or loss. Losses are only recognized to the extent the Company has positive carrying value related to the investee. Carrying values are only reduced below zero if the Company has an obligation to provide funding to the investee. The Company’s share of net income or loss of unconsolidated entities from which the Company purchases merchandise or merchandise components is included in Costs of Goods Sold, Buying and Occupancy in the Consolidated Statements of Income (Loss). The Company’s share of net income or loss of all other unconsolidated entities is included in Other Income (Loss) in the Consolidated Statements of Income (Loss). The Company’s equity method investments are required to be reviewed for impairment when it is determined there may be an other-than-temporary loss in value.
On January 6, 2019, the Company completed the sale of the La Senza business. For additional information, see Note 5, "Restructuring Activities."
Interim Financial Statements
The Consolidated Financial Statements as of and for the periods ended November 2, 2019 and November 3, 2018 are unaudited and are presented pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto contained in the Company’s 2018 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 and necessary for a fair presentation of the results for the interim periods.
Seasonality of Business
Due to seasonal variations in the retail industry, the results of operations for any interim period are not necessarily indicative of the results expected for the full fiscal year.
Concentration of Credit Risk
The Company maintains cash and cash equivalents and derivative contracts with various major financial institutions. The Company monitors the relative credit standing of financial institutions with whom the Company transacts and limits the amount of credit exposure with any one entity. Typically, the Company’s investment portfolio is primarily comprised of U.S. government obligations, U.S. Treasury and AAA-rated money market funds, commercial paper and bank deposits.

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The Company also periodically reviews the relative credit standing of franchise, license and wholesale partners and other entities to which the Company grants credit terms in the normal course of business. The Company records an allowance for uncollectable accounts when it becomes probable that the counterparty will be unable to pay.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period, as well as the related disclosure of contingent assets and liabilities at the date of the financial statements. Actual results may differ from those estimates, and the Company revises its estimates and assumptions as new information becomes available.

2. New Accounting Pronouncements
Leases
In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) 842, Leases, which requires companies classified as lessees to account for most leases on their balance sheets but recognize expenses on their income statements in a manner similar to legacy accounting. The standard also requires enhanced quantitative and qualitative disclosures, including significant judgments made by management, to provide greater insight into the extent of expense recognized and expected to be recognized from existing leases. In July 2018, the FASB approved an amendment to the standard that provides companies a modified retrospective transition option that did not require earlier periods to be restated upon adoption.
The Company adopted the standard in the first quarter of 2019 under the modified retrospective approach. As allowed by the new standard, the Company elected the package of transition practical expedients but elected to not apply the hindsight practical expedient to its leases at transition.
Upon adoption at the beginning of 2019, the Company recorded operating lease liabilities of $3.7 billion and operating lease assets for its leases of $3.3 billion. The operating lease assets are net of $470 million of liabilities for deferred rent and unamortized landlord construction allowances that were previously recorded as Other Long-term Liabilities on the Consolidated Balance Sheet. The Company also recorded a decrease to opening retained earnings, net of tax, of $2 million. The adoption of the standard did not materially impact the Consolidated Statements of Income (Loss) or Cash Flows. See Note 9, “Leases” for additional disclosure required by the new standard.

Hedging Activities
In August 2017, the FASB issued Accounting Standards Update ("ASU") 2017-12, Targeted Improvements to Accounting for Hedging Activities, which is intended to better align risk management activities and financial reporting for hedging relationships. The standard eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. It also eases certain documentation and assessment requirements. The Company adopted the standard in the first quarter of fiscal 2019. The adoption of this standard did not have a material impact on the Company's consolidated results of operations, financial position or cash flows.
Goodwill
In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which simplifies the subsequent measurement of goodwill. The standard eliminates the second step from the goodwill impairment test, which requires a hypothetical purchase price allocation to determine the implied fair value of goodwill. Under the new standard, the goodwill impairment charge will be the excess of the reporting unit's carrying value over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The Company adopted this standard in the third quarter of 2019 and performed the interim goodwill impairment assessment in accordance with ASU 2017-04. For additional information, see Note 8, "Goodwill and Trade Names."

Credit Losses
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, which requires the use of a forward-looking expected loss impairment model for accounts receivable and certain other financial instruments. This guidance will be effective beginning in fiscal 2020, with early adoption permitted. The Company is currently evaluating the impact of this standard.


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3. Revenue Recognition
Accounts receivable, net from revenue-generating activities were $147 million as of November 2, 2019, $150 million as of February 2, 2019 and $160 million as of November 3, 2018. Accounts receivable primarily relate to amounts due from the Company's franchise, license and wholesale partners. Under these arrangements, payment terms are typically 60 to 90 days.
The Company records deferred revenue when cash payments are received in advance of transfer of control of goods or services. Deferred revenue primarily relates to gift cards, loyalty and private label credit card programs and direct channel shipments not yet delivered, which are all impacted by seasonal and holiday-related sales patterns. Deferred revenue was $280 million as of November 2, 2019, $331 million as of February 2, 2019 and $271 million as of November 3, 2018. The Company recognized $190 million as revenue year-to-date in 2019 from amounts recorded as deferred revenue at the beginning of the period. As of November 2, 2019, the Company recorded deferred revenue of $267 million within Accrued Expenses and Other, and $13 million within Other Long-term Liabilities on the Consolidated Balance Sheet.
The following table provides a disaggregation of Net Sales for the third quarter and year-to-date 2019 and 2018:
 
Third Quarter
 
Year-to-Date
 
2019
 
2018
 
2019
 
2018
 
(in millions)
Victoria’s Secret Stores (a)
$
1,081

 
$
1,178

 
$
3,462

 
$
3,778

Victoria’s Secret Direct
331

 
351

 
1,067

 
1,065

Total Victoria’s Secret
1,412

 
1,529

 
4,529

 
4,843

Bath & Body Works Stores (a)
872

 
808

 
2,469

 
2,281

Bath & Body Works Direct
192

 
148

 
527

 
399

Total Bath & Body Works
1,064

 
956

 
2,996

 
2,680

Victoria's Secret and Bath & Body Works International (b)
134

 
134

 
423

 
415

Other (c)
67

 
156

 
259

 
447

Total Net Sales
$
2,677

 
$
2,775

 
$
8,207

 
$
8,385

 _______________
(a)
Includes company-owned stores in the U.S. and Canada.
(b)
Includes company-owned stores in the U.K., Ireland and Greater China, direct sales in Greater China and wholesale sales, royalties and other fees associated with non-company owned stores.
(c)
Includes wholesale revenues from the Company's sourcing function. Results for 2018 also include store and direct sales for La Senza and Henri Bendel.

4. Earnings Per Share and Shareholders’ Equity (Deficit)
Earnings Per Share
Earnings per basic share is computed based on the weighted-average number of outstanding common shares. Earnings per diluted share include the weighted-average effect of dilutive options and restricted stock on the weighted-average shares outstanding.

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The following table provides shares utilized for the calculation of basic and diluted earnings per share for the third quarter and year-to-date 2019 and 2018:
 
Third Quarter
 
Year-to-Date
 
2019
 
2018
 
2019
 
2018
 
(in millions)
Weighted-average Common Shares:
 
 
 
 
 
 
 
Issued Shares
284

 
283

 
284

 
283

Treasury Shares
(8
)
 
(8
)
 
(8
)
 
(6
)
Basic Shares
276

 
275


276


277

Effect of Dilutive Options and Restricted Stock (a)

 

 

 
2

Diluted Shares
276

 
275


276


279

Anti-dilutive Options and Awards (a)
2

 
2

 
2

 
5

 _______________
(a)
These options and awards were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive. For 2019 and the third quarter 2018, the dilutive impact of outstanding options and awards were excluded from dilutive shares as a result of the Company's net loss for the respective periods.

Shareholders’ Equity (Deficit)
Common Stock Share Repurchases
The Company did not repurchase any shares during year-to-date 2019.
Under the authority of the Company’s Board of Directors, the Company repurchased shares of its common stock under the following repurchase programs during year-to-date 2018:
 
Amount
Authorized
 
Shares
Repurchased
 
Amount
Repurchased
 
Average Stock Price of Shares Repurchased within Program
Repurchase Program
 
 
 
 
(in millions)
 
(in thousands)
 
(in millions)
 
 
March 2018
$
250

 
4,852

 
$
171

 
$
35.29

September 2017
250

 
527

 
25

 
$
46.98

Total
 
 
5,379

 
$
196

 
 

In March 2018, the Company's Board of Directors approved a $250 million repurchase program, which included the $23 million remaining under the