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 April 30, 1994
--------------
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
------
THE LIMITED, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 31-1029810
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Three Limited Parkway, P.O. Box 16000, Columbus, OH 43230
---------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (614) 479-7000
------------------------------
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
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at May 27, 1994
- ------------------------------- ---------------------------
Common Stock, $.50 Par Value 358,027,713 Shares
THE LIMITED, INC.
TABLE OF CONTENTS
Page No.
--------
Part I. Financial Information
Item 1. Financial Statements
Consolidated Statements of Income
Thirteen Weeks Ended
April 30, 1994 and May 1, 1993............................... 3
Consolidated Balance Sheets
April 30, 1994 and January 29, 1994.......................... 4
Consolidated Statements of Cash Flows
Thirteen Weeks Ended
April 30, 1994 and May 1, 1993............................... 5
Notes to Consolidated Financial Statements....................... 6
Item 2. Management's Discussion and Analysis of
Results of Operations and Financial Condition............ 10
Part II Other Information
Item 4. Submission of Matters to a Vote of Security
Holders.................................................. 15
Item 6. Exhibits and Reports on Form 8-K.......................... 15
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
-----------------------
April 30, May 1,
1994 1993
---------- ----------
NET SALES $1,481,628 $1,518,561
Cost of Goods Sold, Occupancy and
Buying Costs 1,096,697 1,137,834
---------- ----------
GROSS INCOME 384,931 380,727
General, Administrative and Store
Operating Expenses 293,761 295,238
---------- ----------
OPERATING INCOME 91,170 85,489
Interest Expense (14,670) (14,988)
Other Income, net 2,776 1,724
---------- ----------
INCOME BEFORE INCOME TAXES 79,276 72,225
Provision for Income Taxes 32,000 28,000
---------- ----------
NET INCOME $ 47,276 $ 44,225
========== ==========
NET INCOME PER SHARE $.13 $.12
========== ==========
DIVIDENDS PER SHARE $.09 $.09
========== ==========
WEIGHTED AVERAGE SHARES
OUTSTANDING 358,563 364,054
========== ==========
The accompanying notes are an integral part of these consolidated financial
statements.
3
THE LIMITED, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Thousands)
April 30, January 29,
ASSETS 1994 1994
------ --------- -----------
(Unaudited)
CURRENT ASSETS:
Cash and Equivalents $ 159,115 $ 320,558
Accounts Receivable 1,066,876 1,056,911
Inventories 803,437 733,700
Other 106,433 109,456
---------- ----------
TOTAL CURRENT ASSETS 2,135,861 2,220,625
PROPERTY AND EQUIPMENT, NET 1,668,066 1,666,588
OTHER ASSETS 245,739 247,892
---------- ----------
TOTAL ASSETS $4,049,666 $4,135,105
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts Payable $ 235,376 $ 250,363
Accrued Expenses 333,755 347,892
Certificates of Deposit 17,100 15,700
Income Taxes 27,657 93,489
---------- ----------
TOTAL CURRENT LIABILITIES 613,888 707,444
LONG-TERM DEBT 650,000 650,000
DEFERRED INCOME TAXES 265,566 275,101
OTHER LONG-TERM LIABILITIES 60,990 61,267
SHAREHOLDERS' EQUITY:
Common Stock 189,727 189,727
Paid-in Capital 129,638 128,906
Retained Earnings 2,412,179 2,397,112
---------- ----------
2,731,544 2,715,745
Less Treasury Stock, at cost (272,322) (274,452)
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 2,459,222 2,441,293
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $4,049,666 $4,135,105
========== ==========
The accompanying notes are an integral part of these consolidated financial
statements.
4
THE LIMITED, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands)
(Unaudited)
Thirteen Weeks Ended
--------------------
April 30, May 1,
1994 1993
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 47,276 $ 44,225
Impact of other operating activities on cash flows:
Depreciation and amortization 67,978 68,468
Changes in assets and liabilities:
Accounts receivable (9,965) (5,139)
Inventory (69,737) (70,304)
Accounts payable and accrued expenses (29,124) 23,313
Income taxes (65,832) (77,794)
Other assets and liabilities (5,987) (15,727)
--------- ---------
NET CASH USED FOR OPERATING ACTIVITIES (65,391) (32,958)
--------- ---------
CASH USED FOR INVESTING ACTIVITIES
Capital expenditures (68,105) (56,540)
--------- ---------
FINANCING ACTIVITIES:
Net proceeds (repayments) of commercial paper
borrowings and certificates of deposits 1,400 (110,509)
Proceeds from issuance of unsecured notes - 250,000
Dividends paid (32,209) (32,643)
Stock options and other 2,862 1,946
--------- ---------
NET CASH (USED FOR) PROVIDED BY FINANCING
ACTIVITIES (27,947) 108,794
--------- ---------
NET (DECREASE) INCREASE IN CASH AND
EQUIVALENTS (161,443) 19,296
Cash and equivalents, beginning of year 320,558 41,235
--------- ---------
CASH AND EQUIVALENTS, END OF PERIOD $ 159,115 $ 60,531
========= =========
The accompanying notes are an integral part of these consolidated financial
statements.
5
THE LIMITED, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
The consolidated financial statements include the accounts of The Limited,
Inc. (the "Company") and all significant subsidiaries which are more than
50 percent owned and controlled. All significant intercompany balances and
transactions have been eliminated in consolidation.
Investments in other entities (including joint ventures) which are more
than 20 percent owned are accounted for on the equity method.
The consolidated financial statements as of and for the periods ended April
30, 1994 and May 1, 1993 are unaudited and are presented pursuant to the
rules and regulations of the Securities and Exchange Commission.
Accordingly, the consolidated financial statements should be read in
conjunction with the financial statement disclosures contained in the
Company's 1993 Annual Report. In the opinion of management, the
accompanying consolidated financial statements reflect all adjustments
(which are of a normal recurring nature) necessary to present fairly the
financial position and results of operations and cash flows 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 week
periods ended April 30, 1994 and May 1, 1993 included herein have been
reviewed by the independent accounting firm of Coopers & Lybrand and the
report of such firm follows the notes to consolidated financial statements.
2. 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). Valuation of finished goods inventories
is based principally upon the lower of average cost or market determined on
a first-in, first-out basis utilizing the retail method. Inventory
valuation at the end of the first and third quarters reflects adjustments
for inventory markdowns and shrinkage estimates for the total selling
season.
3. INCOME TAXES
The provision for income taxes is based on the current estimate of the
annual effective tax rate. Income taxes paid during the first quarter of
1994 and 1993 approximated $98.2 million and $106.3 million.
The Internal Revenue Service has issued a notice of deficiency to the
Company for additional taxes and interest for 1989 and 1990. The IRS
notice was based primarily on the treatment of transactions involving the
Company's foreign operations and construction allowances. The Company
strongly disagrees with the IRS position and intends to vigorously
contest the matter. This matter will not have a material adverse effect
on the Company's results of operations or financial condition.
6
4. FINANCING ARRANGEMENTS
Long-term debt consisted of ($000):
April 30, January 29,
1994 1994
--------- -----------
7 1/2% Debentures due March, 2023 $250,000 $250,000
7.80% Notes due May, 2002 150,000 150,000
9 1/8% Notes due February, 2001 150,000 150,000
8 7/8% Notes due August, 1999 100,000 100,000
-------- --------
$650,000 $650,000
======== ========
Effective April 28, 1994, the Company amended its two revolving credit
agreements (the "Agreements") totaling $840 million. One Agreement
provides the Company available borrowings of up to $490 million. The other
Agreement provides World Financial Network National Bank, a wholly-owned
consolidated subsidiary, available borrowings of up to $350 million.
Borrowings outstanding under the Agreements are due December 4, 1996.
However, the revolving terms of each of the Agreements may be extended an
additional two years upon notification by the Company at least 60 days
prior to December 4, 1996, subject to the approval of the lending banks.
Both Agreements have similar borrowing options, including interest rates
which are based on either the lender's "Base Rate", as defined, LIBOR, CD
based options or at a rate submitted under a bidding process. Aggregate
commitment and facility fees for the Agreements approximate 0.11% of the
total commitment. The Agreements place restrictions on the amount of the
Company's working capital, debt and net worth. No amounts were outstanding
under the Agreements at April 30, 1994.
The Agreements support the Company's commercial paper program which funds
working capital and other general corporate requirements. No commercial
paper was outstanding at April 30, 1994.
Under the Company's shelf registration statement, up to $250 million of
debt securities and warrants to purchase debt securities may be issued.
All long-term debt outstanding at April 30, 1994 and January 29, 1994 is
unsecured.
Interest paid during the first quarter of 1994 and 1993 approximated $18.6
million and $10.8 million.
7
5. PROPERTY AND EQUIPMENT, NET
Property and equipment, net, consisted of ($000):
April 30, January 29,
1994 1994
--------- -----------
Property and equipment, at cost $ 2,675,885 $2,638,197
Accumulated depreciation and amortization (1,007,819) (971,609)
----------- ----------
Property and equipment, net $ 1,668,066 $1,666,588
=========== ==========
6. SPECIAL AND NONRECURRING ITEMS
During the third quarter of 1993, the Company approved a plan which
includes the following components: the sale of a 60% interest in the
Brylane mail order business; the acceleration of store remodeling,
downsizing and closing program at the Limited Stores and Lerner divisions;
and the refocusing of the merchandise strategy at the Henri Bendel
division.
The remodeling, downsizing and closing program includes approximately 360
Limited and Lerner stores and is expected to be completed by the end of
1995. The Company had closed approximately 80 of these stores and
remodeled approximately 60 of these stores as of April 30, 1994.
The net impact of the plan is anticipated to be immaterial to future
operations.
8
[LETTERHEAD OF COOPERS & LYBRAND APPEARS HERE]
Securities and Exchange Commission
450 5th Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
We are aware that our report dated June 3, 1994, on our review of the interim
consolidated financial information of The Limited, Inc. and Subsidiaries for
the thirteen-week period ended April 30, 1994 and included in this Form 10-Q
is incorporated by reference in the Company's registration statements on Form
S-8, Registration Nos. 33-18533, 33-25005, 2-92277, 33-24829, 33-24507, 33-
24828, 2-95788, 2-88919, 33-24518, 33-6965, 33-14049, 33-22844, 33-44041, 33-
49871, and the registration statements on Form S-3, Registration Nos. 33-
20788, 33-31540, 33-43832, and 33-53366. Pursuant to Rule 436(c) under the
Securities Act of 1933, this report should not be considered a part of the
registration statement prepared or certified by us within the meaning of
Sections 7 and 11 of that Act.
COOPERS & LYBRAND
Columbus, Ohio
June 8, 1994
9
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
RESULTS OF OPERATIONS
Net sales for the first quarter of 1994 grew to $1.482 billion, an increase of
6% from $1.403 billion a year ago (excluding Brylane sales). Net income of
$47.3 million increased 7% from last year's $44.2 million, and earnings per
share were $0.13 versus $0.12 last year. This increase was largely due to
store-for-store sales gains of 18% at the non-women's apparel businesses.
Divisional highlights include the following:
Victoria's Secret Stores turned in an excellent quarter and produced a
significant increase in operating income.
Victoria's Secret Catalogue produced the highest first quarter operating
income dollars in their history.
Structure had their best first quarter ever in terms of sales, operating
income and operating income as a percentage of sales.
Bath & Body Works had record profitability in the first quarter, and the
Company's largest increase in comparable store sales and operating income
rate.
The women's apparel businesses (Express, Lerner, Limited Stores, Lane Bryant and
Henri Bendel) were considerably less price promotional this quarter than in the
past. Management believes that, as a consequence, the women's apparel
businesses (other than Lane Bryant) produced lower sales than last year.
10
Financial Summary
- -----------------
The following summarized financial data compares the thirteen week period ended
April 30, 1994 to the comparable period for 1993:
% Change
First Quarter First Quarter From Prior
1994 1993 Year
------------- ------------- ----------
Retail Sales (millions) $ 1,360 $ 1,298 5%
Catalogue Sales (millions) 122 221 (45%)
------------- ------------- ----------
Total Net Sales (millions) $ 1,482 $ 1,519 (2%)
============= ============= ==========
Change in Comparable Store
Store Sales 0% (3%)
Retail Sales Increase
Attributable to New and
Remodeled Stores 5% 9%
Retail Sales per Average Selling
Square Foot $55.53 $56.39 (2%)
Retail Sales per Average Store
(thousands) $ 294 $ 292 1%
Average Store Size at End
of Quarter (square feet) 5,291 5,198 2%
Retail Selling Square Feet
(thousands) 24,555 23,167 6%
Number of Stores:
Beginning of Year 4,623 4,425
Opened 50 58
Closed (32) (26)
------------- -------------
End of First Quarter 4,641 4,457
============= =============
Net Sales
- ---------
Retail sales for the first quarter of 1994 increased 5% over the first quarter
of 1993 primarily as a result of the net addition of 184 new stores and the
remodeling of 44 stores representing an increase of 1.388 million selling square
feet. However, average sales productivity for the quarter declined slightly to
$55.53 per square foot.
Catalogue sales decreased 45% in the first quarter, due to Brylane sales being
excluded in the first quarter of 1994. Had the first quarter of 1993 excluded
Brylane, catalogue sales would have increased 16% as the number of books mailed
increased significantly and average demand per book also increased slightly.
11
# of Stores Selling Sq. Ft. (000's)
----------------------------- -----------------------------
Change Change
From From
April 30, May 1, Prior April 30, May 1, Prior
1994 1993 Period 1994 1993 Period
--------- ------ ------ --------- ------ ------
Express 682 644 38 3,985 3,515 470
Lerner New York 871 906 (35) 6,761 6,945 (184)
The Limited 725 759 (34) 4,422 4,330 92
Victoria's Secret Stores 577 554 23 2,402 2,092 310
Lane Bryant 817 812 5 3,852 3,794 58
Structure 402 344 58 1,455 1,148 307
The Limited Too 184 185 (1) 569 568 1
Bath & Body Works 213 125 88 279 137 142
Abercrombie & Fitch Co. 50 40 10 412 334 78
Henri Bendel 4 4 - 93 93 -
Cacique 109 78 31 322 208 114
Penhaligon's 7 6 1 3 3 -
------ ------ ------ ------ ------ ------
Total Stores and
Selling Square
Feet 4,641 4,457 184 24,555 23,167 1,388
====== ====== ====== ====== ====== ======
Gross Income
- ------------
Gross income increased as a percentage of sales to 26.0% for the first quarter
of 1994 from 25.1% last year. Merchandise margins increased 2.5% as the Company
moved to a less promotional pricing policy particularly in women's apparel.
Buying and occupancy costs which increased 1.6%, as a percentage of sales
somewhat offset this impact, due to lower sales productivity principally in the
new, remodeled and expanded stores.
General, Administrative and Store Operating Expenses
- ----------------------------------------------------
General, administrative and store operating expenses increased as a percentage
of sales to 19.8% for the first quarter of 1994 as compared to 19.4% for the
same period in 1993. This increase was due to lower sales productivity at both
existing stores and new, remodeled and expanded stores. The Company continues
to maintain a high level of customer service.
Operating Income
- ----------------
Operating income, as a percentage of sales, was 6.2% and 5.6% for the first
quarter of 1994 and 1993. Higher merchandise margins spurred by less
promotional pricing policies were somewhat offset by higher buying and occupancy
costs and higher general, administrative and store operating expenses, expressed
as a percentage of sales.
12
Interest Expense
- ----------------
First Quarter
---------------
1994 1993
------ ------
Average Borrowings $681.3 $774.6
(in millions)
Average Effective Interest Rate 8.61% 7.74%
Interest expense decreased slightly in the first quarter of 1994 as compared to
the first quarter of 1993. Higher interest rates increased interest costs
approximately $1.5 million, while lower borrowing levels reduced interest costs
approximately $1.8 million.
FINANCIAL CONDITION
Liquidity and Capital Resources
- -------------------------------
Cash provided from operating activities, commercial paper backed by funds
available under committed long-term credit agreements and the Company's capital
structure continue to provide the resources to support operations, including
projected growth, seasonal requirements and capital expenditures. A summary of
the Company's working capital position and capitalization follows ($000):
April 30, January 29,
1994 1994
---------- -----------
Working Capital $1,521,973 $1,513,181
========== ==========
Capitalization -
Long-term debt $ 650,000 $ 650,000
Deferred income taxes 265,566 275,101
Shareholders' equity 2,459,222 2,441,293
---------- ----------
Total Capitalization $3,374,788 $3,366,394
========== ==========
Additional amounts available under
long-term credit agreements $ 840,000 $ 840,000
========== ==========
Net cash used for operating activities was $65.4 million in the first quarter of
1994 versus $33.0 million in the first quarter last year. Cash requirements in
the first quarter for inventories and income taxes are typical due to the timing
of Spring season merchandise deliveries and tax payments associated with fourth
quarter earnings. Cash requirements for accounts payable and accrued expenses
vary based on timing of payments and sales volumes.
Investing activities are primarily capital expenditures for new and remodeled
stores and cash dividends paid of $.09 per share is the primary financing
activity.
13
Capital Expenditures
- --------------------
Capital expenditures totaled $68.1 million for the first quarter of 1994,
compared to $56.5 million for the first quarter of 1993. The Company
anticipates spending $375 - $400 million for capital expenditures in 1994, of
which $275 - $300 million will be for new stores, the remodeling of existing
stores and related improvements for the retail businesses. The Company also
anticipates spending approximately $10 million for a 24-hour telephone catalogue
sales center in Kettering, Ohio to expand the Victoria's Secret Catalogue
operations.
The Company expects that substantially all 1994 capital expenditures will be
funded by net cash provided by operating activities. In addition, the Company
presently has available $840 million under its long-term credit agreements and
has the ability to offer up to $250 million of debt securities and warrants to
purchase debt securities under its shelf registration statement authorization.
14
PART II - OTHER INFORMATION
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its Annual Meeting of Stockholders on May 23, 1994. The
matters voted upon and the results of the voting were as follows:
(a) E. Gordon Gee, Claudine B. Malone, Allen R. Tessler and Bella Wexner
were elected to the Board of Directors for a term of three years. Of
the 291,346,148 shares present in person or represented by proxy at the
meeting, the number of shares voted for and the number of shares as to
which authority to vote in the election was withheld, were as follows
with respect to each of the nominees:
Shares as to Which
Shares Voted for Voting Authority
Name Election Withheld
---- ---------------- ------------------
E. Gordon Gee 289,054,649 2,291,499
Claudine B. Malone 288,296,565 3,049,583
Allen R. Tessler 289,673,046 1,673,102
Bella Wexner 278,621,731 12,724,417
In addition, directors whose term of office continued after the Annual
Meeting were: Kenneth B. Gilman, Thomas G. Hopkins, David T. Kollat,
John K. Pfahl, Donald B. Shackelford, Martin Trust, Michael A. Weiss,
Leslie H. Wexner and Raymond Zimmerman.
(b) The shareholders were also asked to consider and vote upon a proposal
to approve the adoption of the Company's Incentive Compensation Plan.
Of the 291,346,148 shares present in person or represented by proxy at
the meeting, 276,719,649 shares were voted for the proposal, 12,845,049
shares were voted against the proposal, and 1,781,450 shares abstained
from voting with respect to the proposal.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
---------
4. Instruments Defining the Rights of Security Holders.
4.1. Copy of the form of Global Security representing the Company's
7 1/2% Debentures due 2023, incorporated by reference to
Exhibit 1 to the Company's Current Report on Form 8-K dated
March 4, 1993.
4.2. $900,000,000 Credit Agreement dated as of August 30, 1990 (the
"Credit Agreement") among the Company, Morgan Guaranty Trust
Company of New York and certain other banks (collectively, the
"Banks"), incorporated by reference to Exhibit 4.7 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
August 4, 1990, as amended by Amendment No. 1 dated as of
December 4, 1992, incorporated by reference to Exhibit 4.8 to
the Company's Quarterly Report on Form 10-Q for the quarter
ended October 31, 1992.
15
4.3. $280,000,000 Credit Agreement dated as of December 4, 1992
(the "WFNNB Credit Agreement") among the World Financial
Network National Bank, the Company, the Banks and Morgan
Guaranty Trust Company of New York, incorporated by reference
to Exhibit 4.9 to the Company's Quarterly Report on Form 10-Q
for the quarter ended October 31, 1992.
4.4. Conformed copy of the Indenture dated as of March 15, 1988
between the Company and The Bank of New York, incorporated by
reference to Exhibit 4.1(a) to the Company's Current Report on
Form 8-K dated March 21, 1989.
4.5. Copy of the form of Global Security representing the Company's
8 7/8% Notes due August 15, 1999, incorporated by reference to
Exhibit 4.1 to the Company's Current Report on Form 8-K dated
August 14, 1989.
4.6. Copy of the form of Global Security representing the Company's
9 1/8% Notes due February 1, 2001, incorporated by reference
to Exhibit 4.1 to the Company's Current Report on Form 8-K
dated February 6, 1991.
4.7. Proposed form of Debt Warrant Agreement for Warrants attached
to Debt Securities, with proposed form of Debt Warrant
Certificate incorporated by reference to Exhibit 4.2 to the
Company's Registration Statement on Form S-3 (File no. 33-
53366) originally filed with the Securities and Exchange
Commission (the "Commission") on October 16, 1992, as amended
by Amendment No. 1 thereto, filed with the Commission on
February 23, 1993 (the "1993 Form S-3").
4.8. Proposed form of Debt Warrant Agreement for Warrants not
attached to Debt Securities, with proposed form of Debt
Warrant Certificate incorporated by reference to Exhibit 4.3
to the 1993 Form S-3.
4.9. Amendment No. 2 dated as of April 28, 1994 to the Credit
Agreement among the Company, Morgan Guaranty Trust Company of
New York and the Banks.
4.10. Amendment No. 1 dated as of April 28, 1994 to the WFNNB Credit
Agreement among the Company, Morgan Guaranty Trust Company of
New York and the Banks.
11. Statement re: Computation of Per Share Earnings.
12. Statement re: Computation of Ratio of Earnings to Fixed Charges.
15. Letter re: Unaudited Interim Financial Information to Securities and
Exchange Commission re: Incorporation of Accountants' Report.
(b) Reports on Form 8-K.
-------------------
No reports on Form 8-K were filed during the first quarter of fiscal
year 1994.
16
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/ Kenneth B. Gilman
-----------------------------
Kenneth B. Gilman,
Vice Chairman and Chief
Financial Officer*
Date: June 8, 1994
- -----------------------------------------
* Mr. Gilman is the principal financial officer and has been duly authorized to
sign on behalf of the Registrant.
17
EXHIBIT INDEX
-------------
Exhibit No. Document
- ----------- -----------------------------------------
4.9 Amendment No. 2 dated as of April 28, 1994 to the Credit
Agreement among the Company, Morgan Guaranty Trust Company of
New York and the Banks.
4.10 Amendment No. 1 dated as of April 28, 1994 to the WFNNB Credit
Agreement among the Company, Morgan Guaranty Trust Company of
New York and the Banks.
11 Statement re Computation of
Per Share Earnings.
12 Statement re Ratio of
Earnings to Fixed Charges.
15 Letter re: Unaudited Interim Financial Information re:
Incorporation of Report of Independent Accountants
18
EXHIBIT 4.9
[EXECUTION COPY]
AMENDMENT NO. 2 TO TLI CREDIT AGREEMENT
AMENDMENT dated as of April 28, 1994 to the Credit Agreement dated as of
August 30, 1990 and amended as of December 4, 1992 (the "Agreement") among THE
LIMITED, INC. (the "Borrower"), the BANKS party thereto (the "Banks") and MORGAN
GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent").
W I T N E S S E T H :
WHEREAS, the parties hereto desire to amend the Agreement to reduce the
aggregate amount of the commitments thereunder from $560,000,000 to
$490,000,000, to change the tenor of the facility and to make other changes as
set forth below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise specifically defined
-----------------------
herein, each term used herein which is defined in the Agreement has the meaning
assigned to such term in the Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference contained in the
Agreement shall, after this Amendment becomes effective, refer to the Agreement
as amended hereby.
SECTION 2. Changes to Commitments. The commitment amounts set forth
----------------------
opposite the names of the Banks on the signature pages of the Agreement are
changed to the respective amounts set forth opposite their names on the
signature pages hereof.
SECTION 3. Amendment to Section 1.1 of the Agreement. (a) The following
-----------------------------------------
definitions in Section 1.1 are amended to read as follows:
"CD Margin" means (i) during any period that the Company has a High
Company Rating, .37 of 1% per annum, (ii) during any period that the
Company has an Adequate Company Rating, .475 of 1% per annum, and (iii)
during any period that the Company has neither a High Company Rating nor an
Adequate Company Rating, .675 of 1% per annum.
"Euro-Dollar Margin" means (i) during any period that
the Company has a High Company Rating, .245 of 1% per annum, (ii) during
any period that the Company has an Adequate Company Rating, .35 of 1% per
annum, and (iii) during any period that the Company has neither a High
Company Rating nor an Adequate Company Rating, .55 of 1% per annum.
(b) The definition of "$280,000,000 Credit Agreement" in Section 1.1
is amended to read as follows:
"WFN Credit Agreement" means the Credit Agreement dated as of December
4, 1992, among WFN, the Company, the banks listed therein and Morgan
Guaranty Trust Company of New York, as agent for such banks, as amended
from time to time.
(c) Each reference in the Agreement to the $280,000,000 Credit
Agreement is amended to refer to the WFN Credit Agreement.
SECTION 4. Amendment of Section 2.1.3 of the Agreement. (a) Section
-------------------------------------------
2.1.3 is amended to read in its entirety as follows:
2.1.3. For the purposes of this Agreement, the "Termination Date"
shall be December 4, 1999; provided, however, that on December 4, 1996 (the
"Extension Date"), the Termination Date may be extended an additional two
years (i.e., from December 4, 1999 to December 4, 2001) if at least 60 days
---
before the Extension Date, the Company has given written notice to the
Agent requesting the extension of the Termination Date, unless at least 30
days before the Extension Date the Agent (after having delivered a notice
substantially in the form of Exhibit H hereto to each Bank and received a
written request from any Bank that the Termination Date not be extended)
delivers written notice to the Company that the Termination Date is not to
be so extended. The Company shall have the right, within such thirty-day
period, to replace any Bank which has requested that the Termination Date
not be extended in the same manner as the Company may replace a Certificate
Bank pursuant to Section 2.9.5, and in the event the Company so replaces
each Bank making such request, the Termination Date shall then be extended
as provided in the preceding sentence. Upon receipt of any notice from the
Company pursuant to this Section 2.1.3, the Agent shall promptly notify
each Bank thereof.
(b) Exhibit H to the Agreement is replaced by the document identified
as Exhibit H and attached hereto.
SECTION 5. Amendment of Section 2.8.1 of the
---------------------------------
2
Agreement. Section 2.8.1 is amended to read in its entirety as follows:
- ---------
2.8.1. (a) For each day when the Company has neither a High
Company Rating nor an Adequate Company Rating, the Company shall pay to the
Agent, for the accounts of the Banks ratably in proportion to their
Commitments, a commitment fee at the rate of .05 of 1% per annum on the
amount by which the aggregate amount of the Commitments exceeds the
aggregate outstanding principal amount of all Loans. Such commitment fee
shall be calculated for each such day from and including April 28, 1994 to
but excluding the Termination Date and shall be payable quarterly in
arrears on each March 31, June 30, September 30 and December 31 prior to
the Termination Date and on the Termination Date upon receipt of a
statement from the Agent calculating the amount thereof.
(b) On June 30, 1994 the Company shall pay to the Agent, for the
accounts of the Banks ratably in proportion to their commitments, the
commitment fee accrued for the period from March 31, 1994 to but excluding
April 28, 1994 under the provisions of this Section 2.8.1 as in effect
during such period.
SECTION 6. Amendment of Section 2.8.2 of the Agreement. Section
-------------------------------------------
2.8.2(b) is amended to read in its entirety as follows:
(b) The facility fee payable pursuant to Section 2.8.2(a) shall be
calculated on the aggregate amount of the Commitments, regardless of usage,
(i) for each day when the Company has a High Company Rating, at the rate of
.10 of 1% per annum (or 0.125 of 1% per annum if such day falls before
April 28, 1994), (ii) for each day when the Company has an Adequate Company
Rating, at the rate of .15 of 1% per annum, and (iii) for each day when the
Company has neither a High Company Rating nor an Adequate Company Rating,
at the rate of .20 of 1% per annum.
SECTION 7. Amendment of Section 4.4.2 of the Agreement. Section
-------------------------------------------
4.4.2 is amended by changing the date December 4, 1992 to April 28, 1994.
SECTION 8. Governing Law. This Amendment shall be governed by and
-------------
construed in accordance with the laws of the State of New York.
3
SECTION 9. Effectiveness. This Amendment shall become effective upon
-------------
the date of satisfaction of the following conditions:
9.1.1. the Agent shall have received duly executed counterparts of
this Amendment signed by each of the parties listed on the signature pages
hereof (or, in the case of any party as to which an executed counterpart shall
not have been received, the Agent shall have received telegraphic, telex or
other written confirmation from such party of execution of a counterpart by such
party);
9.1.2. the Agent shall have received opinions of Cleary, Gottlieb,
Steen & Hamilton, special counsel for the Company, and Samuel Fried, Esq.,
General Counsel of the Company, substantially in the forms of Exhibits A and B
hereto, respectively, and covering such additional matters relating to the
transactions contemplated hereby as the Required Banks may reasonably request;
9.1.3. the Agent shall have received a certificate signed by the
chief financial officer or the treasurer of the Company, to the effect that (i)
the representations and warranties of the Company contained in Section 4 of the
Agreement are true on and as of the date of such certificate and (ii)
immediately after giving effect to this Amendment, no Default shall have
occurred and be continuing;
9.1.4. the Agent shall have received all documents it may reasonably
request relating to the existence of the Company, the corporate authority for
and the validity of this Amendment and the Agreement as amended hereby and any
other matters relevant hereto, all in form and substance satisfactory to the
Agent; and
9.1.5. Amendment No. 1 to the WFN Credit Agreement (as defined in the
Agreement as amended hereby) shall become effective concurrently with the
effectiveness of this Amendment.
The opinions and certificate referred to in clauses 9.1.2 and 9.1.3 above shall
be dated the date of effectiveness of this Amendment.
4
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of the date first above written.
THE LIMITED, INC.
By: _______________________________
Title:
Three Limited Parkway
P.O. Box 16000
Columbus, Ohio 43216
Telecopy number: 614-479-7060
Telephone number: 614-479-7033
Attn: Patrick Hectorne
Treasurer
With a copy to:
Kenneth B. Gilman
Vice Chairman and
Chief Financial Officer
Telecopy number: 614-479-7225
Commitments
- -----------
$26,250,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: ________________________________
Title:
$26,250,000 J.P. MORGAN DELAWARE
By: ________________________________
Title:
5
Commitments
- -----------
$47,250,000 CITIBANK, N.A.
By: ________________________________
Title:
$40,250,000 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: ______________________________
Title:
$35,000,000 THE FIRST NATIONAL BANK
OF CHICAGO
By: ______________________________
Title:
$35,000,000 THE HONG KONG AND SHANGHAI BANKING
CORPORATION LIMITED
By: _______________________________
Title:
$35,000,000 MELLON BANK, N.A.
By: _______________________________
Title:
6
Commitments
- -----------
$26,250,000 THE BANK OF NEW YORK
By: ________________________________
Title:
$26,250,000 BANK ONE, COLUMBUS, NA
By: ______________________________
Title:
$26,250,000 THE CHASE MANHATTAN BANK
NATIONAL ASSOCIATION
By: ________________________________
Title:
$26,250,000 CHEMICAL BANK
By: ________________________________
Title:
7
Commitments
- -----------
$26,250,000 CREDIT SUISSE
By: ________________________________
Title:
By: ________________________________
Title:
$26,250,000 DEUTSCHE BANK AG, NEW YORK AND/OR
CAYMAN ISLANDS BRANCHES
By: ______________________________
Title:
By: ______________________________
Title:
$26,250,000 NATIONSBANK OF NORTH CAROLINA, N.A.
By: ________________________________
Title:
By: ________________________________
Title:
$26,250,000 UNION BANK OF SWITZERLAND
By: ______________________________
Title:
8
Commitments
- -----------
$17,500,000 THE BANK OF NOVA SCOTIA
By: ______________________________
Title:
$17,500,000 NATIONAL CITY BANK, COLUMBUS
By: _______________________________
Title:
Total Commitments
$490,000,000
9
EXHIBIT A
---------
Opinion of
Cleary, Gottlieb, Steen & Hamilton
Special Counsel for the Company
[Effective Date]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
We have acted as counsel for The Limited, Inc., a Delaware
corporation (the "Company"), in connection with the preparation of Amendment
No. 2 dated as of April 28, 1994 ("Amendment No. 2") to the Credit Agreement
dated as of August 30, 1990 and amended as of December 4, 1992 (the
"Agreement") among the Company, the Banks party thereto and Morgan Guaranty
Trust Company of New York, as Agent (the "Agent"). This letter is furnished
pursuant to Section 9.1.2 of Amendment No. 2. Capitalized terms used herein
have the meanings set forth in the Agreement unless the context otherwise
requires.
In arriving at the opinions expressed below, we have examined and
relied on originals or copies certified or otherwise identified to our
satisfaction of the certificate of incorporation and bylaws of the Company,
the Agreement, Amendment No. 2 and all such corporate records of the Company
and such other instruments, certificates and representations of public
officials, officers and representatives of the Company and such other persons,
and have made such investigations of law, as we have deemed appropriate as a
basis for the opinions expressed below.
In addition, we have assumed, and have not verified, that the
signatures on all the documents which we have examined are genuine, and that
each of the Agreement and Amendment No. 2 has been duly authorized, executed
and delivered by, and constitutes a legal, valid, binding and
enforceable obligation of, each of the parties thereto other than the Company.
We have also assumed the authenticity of all documents submitted to us as
originals and the conformity to the original documents of all documents
submitted to us as copies.
We express no opinion as to the laws of any jurisdiction other than
the laws of the State of New York, the General Corporation Law of the State of
Delaware and the federal laws of the United States of America.
Based upon and subject to the foregoing, it is our opinion that:
1. The execution, delivery and performance by the Company of
Amendment No. 2 and the Agreement as amended thereby (i) are within the
Company's corporate power, (ii) have been duly authorized by all
necessary corporate action, (iii) require no action by or in respect of,
or filing with, any governmental body, agency or official of the State of
New York or the United States of America (except for possible periodic
reports filed with the Securities and Exchange Commission), and (iv) do
not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or
bylaws of the Company.
2. Each of Amendment No. 2 and the Agreement as amended thereby
constitutes a valid, binding and enforceable agreement of the Company,
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally, and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or at law).
We are furnishing this opinion letter to you solely for your
benefit. This opinion letter may not be relied upon by you for any other
purpose or relied upon by any other person without our prior written consent.
Very truly yours,
CLEARY, GOTTLIEB, STEEN & HAMILTON
By:________________________________
Robert L. Tortoriello, a Partner
EXHIBIT B
---------
Opinion of
Samuel Fried, Esq.
General Counsel to the Company
[Effective Date]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 9.1.2 of
Amendment No. 2 dated as of April 28, 1994 ("Amendment No. 2") to the Credit
Agreement dated as of August 30, 1990 as amended as of December 4, 1992 (the
"Agreement") among The Limited, Inc., a Delaware corporation (the "Company"),
the Banks listed on the signature pages thereof and Morgan Guaranty Trust
Company of New York (the "Agent"). Capitalized terms used herein have the
meanings set forth in Amendment No. 2 and the Agreement unless the context
otherwise requires.
In arriving at the opinions expressed below, I have examined and
relied on originals or copies, certified or otherwise identified to my
satisfaction, of the certificate of incorporation and bylaws of the Company,
Amendment No. 2, and all such corporate records of the Company, such other
instruments, certificates and representations of public officials, officers
and representatives of the Company and such other persons, and have made such
investigations of law, as I have deemed appropriate as a basis for the
opinions expressed below.
In addition, I have assumed, and have not verified, that the
signatures on all the documents which I have examined are genuine, and that
each of the Agreement
and Amendment No. 2 has been duly authorized, executed and delivered by, and
constitutes a legal, valid, binding and enforceable agreement of, each of the
parties thereto other than the Company. I have also assumed the authenticity
of all documents submitted to me as originals and the conformity to the
original documents of all documents submitted to me as copies.
Based on the foregoing and subject to the qualifications stated
herein, I am of the opinion that:
(a) The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and has all
requisite corporate power to own and operate its properties and to carry on
its business as presently conducted.
(b) The execution, delivery and performance by the Company of
Amendment No. 2 and the Agreement as amended thereby (i) are within the
Company's corporate power, (ii) have been duly authorized by all necessary
corporate action, (iii) require no action by or in respect of, or filing
with, any governmental body, agency or official (except for possible
periodic reports filed with the Securities and Exchange Commission), and
(iv) do not contravene, or constitute a default under, (A) any provision of
applicable law or regulation or of the certificate of incorporation or
bylaws of the Company or (B) to my knowledge, any agreement, judgment,
injunction, order, decree or other instrument binding upon the Company, or
result in the creation or imposition of any Lien under any agreement known
to me on any asset of the Company or any of its Subsidiaries.
(c) Each of Amendment No. 2 and the Agreement as amended thereby
constitutes a valid, binding and enforceable agreement of the Company.
(d) To my knowledge, there is no action, suit or proceeding pending
or threatened against the Company or any of its Subsidiaries before any
court or arbitrator or any governmental body, agency or official, in which
there is a reasonable possibility of an adverse decision which will
materially adversely affect the business or the consolidated financial
position of the Company and its Consolidated Subsidiaries considered as a
whole, or which in any manner draws into question the validity of Amendment
No. 2 or the Agreement as amended thereby.
(e) The Company is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
My opinion is subject to the following qualifications and limitations:
(1) The enforceability of Amendment No. 2 and the Agreement as
amended thereby may be limited by any applicable bankruptcy, insolvency and
similar laws affecting the enforcement of creditors' rights generally and
the application by a court of equitable principles.
(2) I express no opinion as to the laws of any jurisdiction other
than the General Corporation Law of the State of Delaware and the federal
laws of the United States of America. Insofar as the opinions expressed
herein involve matters of New York law, I have relied with your permission
entirely on the opinion of even date herewith furnished to you by Cleary,
Gottlieb, Steen & Hamilton.
(3) The opinions set forth herein are expressed as of the date hereof
and I disclaim any undertaking to advise you of any change which may
subsequently be brought to my attention in the facts and legal conclusions
upon which such opinions are based.
This opinion letter is furnished by me as counsel to the Company and is solely
for your benefit. This opinion letter may not be relied upon by you for any
other purpose or relied upon by any other person without my prior written
consent.
Very truly yours,
EXHIBIT H
---------
Form of Notice of Request to Extend
[Date]
To: [Name of Bank]
From: Morgan Guaranty Trust Company of New York (the "Agent")
Re: Credit Agreement dated as of August 30, 1990, as amended (the
"Credit Agreement") among The Limited, Inc. (the "Borrower"),
the Banks party thereto and the Agent.
Pursuant to Section 2.1.3 of the Credit Agreement, the Borrower has
requested an extension of the Termination Date (as defined therein) of the
Credit Agreement from December 4, 1999 to December 4, 2001.
If you elect so to extend the Termination Date, no further action on
your part is required.
If you elect not so to extend the Termination Date, please notify the
Agent in writing (which may be by bank wire, telex, telecopy or similar
writing) at its address, telecopy number or telex number set forth below no
later than _______ __, 1996:
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, New York 10260
Telex Number/Answerback:
177615/MGTUI
Telecopy Number:
Attn: Deborah Brodheim
EXHIBIT 4.10
[EXECUTION COPY]
AMENDMENT NO. 1 TO WFN CREDIT AGREEMENT
AMENDMENT dated as of April 28, 1994 to the Credit Agreement dated as of
December 4, 1992 (the "Agreement") among WORLD FINANCIAL NETWORK NATIONAL BANK
(the "Borrower"), THE LIMITED, INC. (the "Company"), the BANKS party thereto
(the "Banks") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the
"Agent").
W I T N E S S E T H :
WHEREAS, the parties hereto desire to amend the Agreement to increase the
aggregate amount of the commitments thereunder from $280,000,000 to
$350,000,000, to change the tenor of the facility and to make other changes as
set forth below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise specifically defined
-----------------------
herein, each term used herein which is defined in the Agreement has the meaning
assigned to such term in the Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference contained in the
Agreement shall, after this Amendment becomes effective, refer to the Agreement
as amended hereby.
SECTION 2. Changes to Commitments. The commitment amounts set forth
----------------------
opposite the names of the Banks on the signature pages of the Agreement are
changed to the respective amounts set forth opposite their names on the
signature pages hereof.
SECTION 3. Amendment to Section 1.1 of the Agreement. (a) The following
-----------------------------------------
definitions in Section 1.1 are amended to read as follows:
"CD Margin" means (i) during any period that the Company has a High
Company Rating, .225 of 1% per annum, (ii) during any period that the
Company has an Adequate Company Rating, .275 of 1% per annum, and (iii)
during any period that the Company has neither a High Company Rating nor an
Adequate Company Rating, .275 of 1% per annum.
"Euro-Dollar Margin" means (i) during any period that the Company
has a High Company Rating, .10 of 1% per annum, (ii) during any period
that the Company has an Adequate Company Rating, .15 of 1% per annum, and
(iii) during any period that the Company has neither a High Company
Rating nor an Adequate Company Rating, .15 of 1% per annum.
(b) The definition of "$560,000,000 Credit Agreement" in Section 1.1
is amended to read as follows:
"TLI Credit Agreement" means the $900,000,000 Credit Agreement as
amended from time to time.
(c) Each reference in the Agreement to the $560,000,000 Credit
Agreement is amended to refer to the TLI Credit Agreement.
SECTION 4. Amendment of Section 2.1.3 of the Agreement. (a) Section
-------------------------------------------
2.1.3 is amended to read in its entirety as follows:
2.1.3. For the purposes of this Agreement, the "Termination Date"
shall be December 4, 1999; provided, however, that on December 4, 1996 (the
"Extension Date"), the Termination Date may be extended an additional two
years (i.e., from December 4, 1999 to December 4, 2001) if at least 60 days
---
before the Extension Date, the Borrower has given written notice to the
Agent requesting the extension of the Termination Date, unless at least 30
days before the Extension Date the Agent (after having delivered a notice
substantially in the form of Exhibit I hereto to each Bank and received a
written request from any Bank that the Termination Date not be extended)
delivers written notice to the Borrower that the Termination Date is not to
be so extended. The Borrower shall have the right, within such thirty-day
period, to replace any Bank which has requested that the Termination Date
not be extended in the same manner as the Borrower may replace a
Certificate Bank pursuant to Section 2.9.5, and in the event the Borrower
so replaces each Bank making such request, the Termination Date shall then
be extended as provided in the preceding sentence. Upon receipt of any
notice from the Borrower pursuant to this Section 2.1.3, the Agent shall
promptly notify each Bank thereof.
(b) Exhibit I to the Agreement is replaced by the document identified
as Exhibit I and attached hereto.
SECTION 5. Amendment of Section 2.8.1 of the Agreement. Section
-------------------------------------------
2.8.1 is amended to read in its entirety as follows:
2
2.8.1. (a) For each day when the Company has neither a High
Company Rating nor an Adequate Company Rating, the Borrower shall pay to
the Agent, for the accounts of the Banks ratably in proportion to their
Commitments, a commitment fee at the rate of .05 of 1% per annum on the
amount by which the aggregate amount of the Commitments exceeds the
aggregate outstanding principal amount of all Loans. Such commitment fee
shall be calculated for each such day from and including April 28, 1994 to
but excluding the Termination Date and shall be payable quarterly in
arrears on each March 31, June 30, September 30 and December 31 prior to
the Termination Date and on the Termination Date upon receipt of a
statement from the Agent calculating the amount thereof.
(b) On June 30, 1994 the Borrower shall pay to the Agent, for
the accounts of the Banks ratably in proportion to their Commitments, the
commitment fee accrued for the period from March 31, 1994 to but excluding
April 28, 1994 under the provisions of this Section 2.8.1 as in effect
during such period.
SECTION 6. Amendment of Section 4.4.2 of the Agreement. Section
-------------------------------------------
4.4.2 is amended by changing "Effective Date" to "April 28, 1994".
SECTION 7. Governing Law. This Amendment shall be governed by and
-------------
construed in accordance with the laws of the State of New York.
SECTION 8. Effectiveness. This Amendment shall become effective upon
-------------
the date of satisfaction of the following conditions:
8.1.1. the Agent shall have received duly executed counterparts of
this Amendment signed by each of the parties listed on the signature pages
hereof (or, in the case of any party as to which an executed counterpart shall
not have been received, the Agent shall have received telegraphic, telex or
other written confirmation from such party of execution of a counterpart by such
party);
8.1.2. the Agent shall have received opinions of Cleary, Gottlieb,
Steen & Hamilton, special counsel for the Borrower and the Company, and Samuel
Fried, Esq., General Counsel of the Borrower and the Company, substantially in
the forms of Exhibits A and B hereto, respectively, and covering such
additional matters relating to the transactions contemplated hereby as the
Required Banks may reasonably request;
3
8.1.3. the Agent shall have received a certificate signed by the
chief financial officer or the treasurer of the Company, to the effect that (i)
the representations and warranties of the Company and the Borrower contained in
Sections 4 and 11 of the Agreement are true on and as of the date of such
certificate and (ii) immediately after giving effect to this Agreement, no
Default shall have occurred and be continuing;
8.1.4. the Agent shall have received all documents it may reasonably
request relating to the existence of the Borrower and the Company, the corporate
authority for and the validity of this Amendment and the Agreement as amended
hereby and any other matters relevant hereto, all in form and substance
satisfactory to the Agent; and
8.1.5. Amendment No. 2 to the TLI Credit Agreement (as defined in the
Agreement as amended hereby) shall become effective concurrently with the
effectiveness of this Amendment.
The opinions and certificate referred to in clauses 8.1.2 and 8.1.3 above shall
be dated the date of effectiveness of this Amendment.
4
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of the date first above written.
WORLD FINANCIAL NETWORK
NATIONAL BANK
By: _______________________________
Title:
4590 East Broad Street
Whitehall, Ohio 43213
Notices to:
The Limited, Inc.
Three Limited Parkway
P.O. Box 16000
Columbus, Ohio 43216
Telecopy number: 614-479-7060
Telephone number: 614-479-7033
Attn: Patrick Hectorne
Treasurer
THE LIMITED, INC.
By: _______________________________
Title:
Three Limited Parkway
P.O. Box 16000
Columbus, Ohio 43216
Telecopy number: 614-479-7060
Telephone number: 614-479-7033
Attn: Patrick Hectorne
Treasurer
With a copy to:
Kenneth B. Gilman
Vice Chairman and
Chief Financial Officer
Telecopy number: 614-479-7225
5
Commitments
- -----------
$18,750,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: ________________________________
Title:
$18,750,000 J.P. MORGAN DELAWARE
By: ________________________________
Title:
$33,750,000 CITIBANK, N.A.
By: ________________________________
Title:
$28,750,000 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: ______________________________
Title:
$25,000,000 THE FIRST NATIONAL BANK
OF CHICAGO
By: ______________________________
Title:
6
Commitments
- -----------
$25,000,000 THE HONG KONG AND SHANGHAI BANKING
CORPORATION LIMITED
By: _______________________________
Title:
$25,000,000 MELLON BANK, N.A.
By: _______________________________
Title:
$18,750,000 THE BANK OF NEW YORK
By: ________________________________
Title:
$18,750,000 BANK ONE, COLUMBUS, NA
By: ______________________________
Title:
$18,750,000 THE CHASE MANHATTAN BANK
NATIONAL ASSOCIATION
By: ________________________________
Title:
$18,750,000 CHEMICAL BANK
By: ________________________________
Title:
7
Commitments
- -----------
$18,750,000 CREDIT SUISSE
By: ________________________________
Title:
By: ________________________________
Title:
$18,750,000 DEUTSCHE BANK AG, NEW YORK AND/OR
CAYMAN ISLANDS BRANCHES
By: ______________________________
Title:
By: ______________________________
Title:
$18,750,000 NATIONSBANK OF NORTH CAROLINA, N.A.
By: ________________________________
Title:
By: ________________________________
Title:
$18,750,000 UNION BANK OF SWITZERLAND
By: ______________________________
Title:
8
Commitments
- -----------
$12,500,000 THE BANK OF NOVA SCOTIA
By: ______________________________
Title:
$12,500,000 NATIONAL CITY BANK, COLUMBUS
By: _______________________________
Title:
Total Commitments
$350,000,000
============
9
EXHIBIT A
---------
Opinion of
Cleary, Gottlieb, Steen & Hamilton
Special Counsel for the Company
[Effective Date]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
We have acted as counsel for The Limited, Inc., a Delaware
corporation (the "Company"), and World Financial Network National Bank, a
national banking association (the "Borrower" and, together with the Company,
the "Obligors"), in connection with the preparation of Amendment No. 1 dated
as of April 28, 1994 ("Amendment No. 1") to the Credit Agreement dated as of
December 4, 1992 (the "Agreement") among the Borrower, the Company, the Banks
party thereto and Morgan Guaranty Trust Company of New York, as Agent (the
"Agent"). This letter is furnished pursuant to Section 8.1.2 of Amendment
No. 1. Capitalized terms used herein have the meanings set forth in the
Agreement unless the context otherwise requires.
In arriving at the opinions expressed below, we have examined and
relied on originals or copies certified or otherwise identified to our
satisfaction of the certificate of incorporation and bylaws of the Company,
the articles of association and bylaws of the Borrower, the Agreement,
Amendment No. 1 and all such corporate records of the Obligors and such other
instruments, certificates and representations of public officials, officers
and representatives of the Obligors and such other persons, and have made such
investigations of law, as we have deemed appropriate as a basis for the
opinions expressed below.
In addition, we have assumed, and have not verified, that the
signatures on all the documents which we
have examined are genuine, and that each of the Agreement and Amendment No. 1
has been duly authorized, executed and delivered by, and constitutes a legal,
valid, binding and enforceable obligation of, each of the parties thereto
other than the Obligors. We have also assumed the authenticity of all
documents submitted to us as originals and the conformity to the original
documents of all documents submitted to us as copies.
We express no opinion as to the laws of any jurisdiction other than
the laws of the State of New York, the General Corporation Law of the State of
Delaware and the federal laws of the United States of America.
Based upon and subject to the foregoing, it is our opinion that:
1. The Borrower is a national banking association validly existing
in good standing under the laws of the United States of America and has
all necessary corporate power and authority to execute, deliver and
perform its obligations under Amendment No. 1 and the Agreement as
amended thereby. The Borrower is an "insured depository institution"
under the provisions of Section 4(a) of the FDIA, 12 U.S.C. Section
1814(a).
2. The execution, delivery and performance by each of the Obligors
of Amendment No. 1 and the Agreement as amended thereby (i) are within
such Obligor's corporate power, (ii) have been duly authorized by all
necessary corporate action, (iii) require no action by or in respect of,
or filing with, any governmental body, agency or official of the State of
New York or the United States of America (except for possible periodic
reports filed with the Securities and Exchange Commission), and (iv) do
not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or
bylaws of the Company or of the articles of association or bylaws of the
Borrower.
3. Each of Amendment No. 1 and the Agreement as amended thereby
constitutes a valid, binding and enforceable agreement of each of the
Obligors, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally, and subject, as to enforceability,
to general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law).
4. The Borrower is not an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
We are furnishing this opinion letter to you solely for your
benefit. This opinion letter may not be relied upon by you for any other
purpose or relied upon by any other person without our prior written consent.
Very truly yours,
CLEARY, GOTTLIEB, STEEN & HAMILTON
By:________________________________
Robert L. Tortoriello, a Partner
EXHIBIT B
---------
Opinion of
Samuel Fried, Esq.
General Counsel to the Company
[Effective Date]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 8.1.2 of
Amendment No. 1 dated as of April 28, 1994 ("Amendment No. 1") to the Credit
Agreement dated as of December 4, 1992 (the "Agreement") among World Financial
Network National Bank, a national banking association (the "Borrower"), The
Limited, Inc., a Delaware corporation (the "Company" and, together with the
Borrower, the "Obligors"), the Banks listed on the signature pages thereof and
Morgan Guaranty Trust Company of New York (the "Agent"). Capitalized terms
used herein have the meanings set forth in the Agreement unless the context
otherwise requires.
In arriving at the opinions expressed below, I have examined and
relied on originals or copies, certified or otherwise identified to my
satisfaction, of the certificate of incorporation and bylaws of the Company,
the articles of association and bylaws of the Borrower, the Agreement,
Amendment No. 1, and all such corporate records of the Obligors, such other
instruments, certificates and representations of public officials, officers
and representatives of the Obligors and such other persons, and have made such
investigations of law, as I have deemed appropriate as a basis for the
opinions expressed below.
In addition, I have assumed, and have not
verified, that the signatures on all the documents which I have examined are
genuine, and that each of the Agreement and Amendment No. 1 has been duly
authorized, executed and delivered by, and constitutes a legal, valid, binding
and enforceable agreement of, each of the parties thereto other than the
Obligors. I have also assumed the authenticity of all documents submitted to
me as originals and the conformity to the original documents of all documents
submitted to me as copies.
Based on the foregoing and subject to the qualifications stated
herein, I am of the opinion that:
(a) The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and has all
requisite corporate power to own and operate its properties and to carry on
its business as presently conducted.
(b) The execution, delivery and performance by each of the Obligors
of Amendment No. 1 and the Agreement as amended thereby (i) are within such
Obligor's corporate power, (ii) have been duly authorized by all necessary
corporate action, (iii) require no action by or in respect of, or filing
with, any governmental body, agency or official (except for possible
periodic reports filed with the Securities and Exchange Commission or
banking agencies), and (iv) do not contravene, or constitute a default
under, (A) any provision of applicable law or regulation or of the
certificate of incorporation or bylaws of the Company or of the articles of
association or bylaws of the Borrower or (B) to my knowledge, any
agreement, judgment, injunction, order, decree or other instrument binding
upon either of the Obligors, or result in the creation or imposition of any
Lien under any agreement known to me on any asset of the Company or any of
its Subsidiaries.
(c) Each of Amendment No. 1 and the Agreement as amended thereby
constitutes a valid, binding and enforceable agreement of each of the
Obligors.
(d) To my knowledge, there is no action, suit or proceeding pending
or threatened against the Company or any of its Subsidiaries before any
court or arbitrator or any governmental body, agency or official, in which
there is a reasonable possibility of an adverse decision which will
materially adversely affect the business or the consolidated financial
position of the Company and its Consolidated Subsidiaries considered as a
whole, or which
in any manner draws into question the validity of Amendment No. 1 or the
Agreement as amended thereby.
(e) The Company is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
My opinion is subject to the following qualifications and limitations:
(1) The enforceability of Amendment No. 1 and the Agreement as
amended thereby may be limited by any applicable bankruptcy, insolvency and
similar laws affecting the enforcement of creditors' rights generally and
the application by a court of equitable principles.
(2) I express no opinion as to the laws of any jurisdiction other
than the General Corporation Law of the State of Delaware and the federal
laws of the United States of America. Insofar as the opinions expressed
herein involve matters of New York law, I have relied with your permission
entirely on the opinion of even date herewith furnished to you by Cleary,
Gottlieb, Steen & Hamilton.
(3) The opinions set forth herein are expressed as of the date hereof
and I disclaim any undertaking to advise you of any change which may
subsequently be brought to my attention in the facts and legal conclusions
upon which such opinions are based.
This opinion letter is furnished by me as counsel to the Obligors and is
solely for your benefit. This opinion letter may not be relied upon by you
for any other purpose or relied upon by any other person without my prior
written consent.
Very truly yours,
EXHIBIT I
---------
Form of Notice of Request to Extend
[Date]
To: [Name of Bank]
From: Morgan Guaranty Trust Company of New York (the "Agent")
Re: Credit Agreement dated as of December 4, 1992, as amended (the
"Credit Agreement") among World Financial Network National
Bank (the "Borrower"), The Limited, Inc., the Banks party
thereto and the Agent.
Pursuant to Section 2.1.3 of the Credit Agreement, the Borrower has
requested an extension of the Termination Date (as defined therein) of the
Credit Agreement from December 4, 1999 to December 4, 2001.
If you elect so to extend the Termination Date, no further action on
your part is required.
If you elect not so to extend the Termination Date, please notify the
Agent in writing (which may be by bank wire, telex, telecopy or similar
writing) at its address, telecopy number or telex number set forth below no
later than _______ __, 1996:
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, New York 10260
Telex Number/Answerback:
177615/MGTUI
Telecopy Number:
Attn: Deborah Brodheim
EXHIBIT 11
THE LIMITED, INC. AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
(Thousands except per share amounts)
Thirteen Weeks Ended
--------------------
April 30, May 1,
1994 1993
--------- --------
Net income $ 47,276 $ 44,225
======== ========
Common shares outstanding:
Weighted average 379,454 379,454
Dilutive effect of stock options 671 1,324
Weighted average treasury shares (21,562) (16,724)
-------- --------
Weighted average used to calculate
net income per share 358,563 364,054
======== ========
Net income per share $.13 $.12
======== ========
EXHIBIT 12
THE LIMITED, INC. AND SUBSIDIARIES
RATIO OF EARNINGS TO FIXED CHARGES
(Thousands except ratio amounts)
Thirteen Weeks Ended
--------------------
April 30, May 1,
1994 1993
---------- --------
Adjusted Earnings
- -----------------
Income before income taxes $ 79,276 $ 72,225
Portion of minimum rent ($150,922 in 1994
and $142,503 in 1993) representative
of interest 50,306 47,501
Interest on indebtedness 14,670 14,988
-------- --------
Total Earnings as Adjusted $144,252 $134,714
======== ========
Fixed Charges
- -------------
Portion of minimum rent representative
of interest $ 50,306 $ 47,501
Interest on indebtedness 14,670 14,988
-------- --------
Total Fixed Charges $ 64,976 $ 62,489
======== ========
Ratio of Earnings to Fixed Charges 2.22x 2.16x
======== ========
[LETTERHEAD OF COOPERS & LYBRAND EXHIBIT 15
APPEARS HERE]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Audit Committee of
The Board of Directors of
The Limited, Inc.
We have reviewed the condensed consolidated balance sheet of The Limited, Inc.
and Subsidiaries at April 30, 1994, and the related condensed consolidated
statements of income and cash flows for the thirteen-week periods ended April
30, 1994 and May 1, 1993. These financial statements are the responsibility of
the Company's management.
We conducted our review 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 generally accepted auditing standards, 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 review, we are not aware of any material modifications that
should be made to the accompanying financial statements for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of January 29, 1994, and the
related consolidated statements of income, shareholders' equity, and cash
flows for the year then ended (not presented herein); and in our report dated
February 14, 1994 we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying condensed consolidated balance sheet as of January 29, 1994, is
fairly stated, in all material respects, in relation to the consolidated
balance sheet from which it has been derived.
COOPERS & LYBRAND
Columbus, Ohio
June 3, 1994
