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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

~~/x/~~[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ~~For the quarterly period ended October 28, 2000~~

For the quarterly period ended May 5, 2001

/[ /] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ~~For the transition period from to~~

For the transition period from to

Commission file number 1-13814

INTIMATE BRANDS, INC. (Exact name of registrant as specified in its charter)

INTIMATE BRANDS, INC.
(Exact name of registrant as specified in its charter)
Delaware		31-1436998
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
Three Limited Parkway, P.O. Box 16000, Columbus, OH 43230
(Address of principal executive offices)(Zip Code)

Delaware		31-1436998
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

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) 415-6900

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 / /~~

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 A Common Stock		Outstanding at ~~November~~May 2425, ~~2000~~2001
$.01 Par Value		79,~~016~~387,~~999~~487 Shares
Class B Common Stock		Outstanding at ~~November~~May 2425, ~~2000~~2001
$.01 Par Value		411,635,902 Shares

INTIMATE BRANDS, INC.

TABLE OF CONTENTS

				~~Page No.~~	Page No.
Part I. Financial Information
	Item 1. Financial Statements
		Consolidated Statements of Income Thirteen and Thirty-nine Weeks Ended October 28, 2000 and October 30, 1999		3
		Consolidated Statements of Income
		Consolidated Balance Sheets October 28, 2000, January 29, 2000 and October 30, 1999		4
			Thirteen Weeks Ended May 5, 2001 and April 29, 2000		4
		Consolidated Statements of Cash Flows Thirty-nine Weeks Ended October 28, 2000 and October 30, 1999		5
		Consolidated Balance Sheets
		Notes to Consolidated Financial Statements		6
			May 5, 2001, February 3, 2001 and April 29, 2000		5
	Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition			12
		Consolidated Statements of Cash Flows
Part II. Other Information
			Thirteen Weeks Ended May 5, 2001 and April 29, 2000		6
	Item 1. Legal Proceedings			18
		Notes to Consolidated Financial Statements			7
	Item 5. Other Information			18
	Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition				12
	Item 6. Exhibits and Reports on Form 8-K			19
	Item 3. Quantitative and Qualitative Disclosures About Market Risk				16
Part II. Other Information
	Item 1. Legal Proceedings				17
	Item 4. Submission of Matters to a Vote of Security Holders				17
	Item 5. Other Information				18
	Item 6. Exhibits and Reports on Form 8-K				18

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

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

PART I—FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

INTIMATE BRANDS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Thousands except per share amounts)

(Unaudited)

		Thirteen Weeks Ended	~~Thirteen Weeks Ended~~						~~Thirty-nine Weeks Ended~~
			October 28, 2000			October 30, 1999			October 28, 2000			October 30, 1999
		May 5, 2001			April 29, 2000
Net sales		$	$1,027,908	~~925,108~~	$	$1,044,742	~~814,158~~		$	~~3,087,139~~		$	~~2,709,088~~
	Costs of goods sold and buying and occupancy costs			(566,089	)		(498,480	)		(1,888,824	)		(1,672,953	)
Costs of goods sold, buying and occupancy			(664,075	)		(644,169	)
Gross income			363,833	~~359,019~~		400,573	~~315,678~~			~~1,198,315~~			~~1,036,135~~
General, administrative and store operating expenses	~~General, administrative and store operating expenses~~		(303,019	~~(278,900~~)	)	(284,302	~~(243,620~~)	)		~~(831,257~~	)		~~(713,445~~	)
Operating income			60,814	~~80,119~~		116,271	~~72,058~~			~~367,058~~			~~322,690~~
Interest expense	~~Interest expense~~		(2,061	~~(8,023~~)	)	(5,350	~~(7,915~~)	)		~~(18,723~~	)		~~(24,673~~	)
	Other income			—			—			3,131			2,035
Other income (expense), net			(459	)		2,259
Income before income taxes			58,294	~~72,096~~		113,180	~~64,143~~			~~351,466~~			~~300,052~~
Provision for income taxes	~~Provision for income taxes~~		23,200	~~28,900~~		45,300	~~25,700~~			~~140,600~~			~~120,000~~
Net income		$	$35,094	~~43,196~~	$	$67,880	~~38,443~~		$	~~210,866~~		$	~~180,052~~
Net income per share:
	Basic		$0.07	~~0.09~~		$0.14	~~0.08~~		$	~~0.43~~		$	~~0.36~~
	Diluted		$0.07	~~0.09~~		$0.13	~~0.08~~		$	~~0.42~~		$	~~0.35~~
Dividends per share			$0.07	~~0.07~~		$0.07	~~0.07~~		$	~~0.21~~		$	~~0.21~~

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

INTIMATE BRANDS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Thousands)

			October 28, 2000			January 29, 2000			October 30, 1999
		May 5, 2001			February 3, 2001			April 29, 2000
		(Unaudited)	~~(Unaudited)~~					(Unaudited)	~~(Unaudited)~~
ASSETS
Current assets:
	Cash and equivalents	$	$18,513	~~24,252~~	$	$8,923	~~76,373~~	$	$13,025	~~21,038~~
	Accounts receivable		13,149	~~19,775~~		13,974	~~18,135~~		17,098	~~18,394~~
	Inventories		639,432	~~869,415~~		632,389	~~583,469~~		644,412	~~795,744~~
	Stores supplies		47,035	~~45,715~~		46,220	~~42,103~~		43,568	~~38,536~~
	Other		54,191	~~86,017~~		56,205	~~51,832~~		92,515	~~47,295~~
Total current assets			772,320	~~1,045,174~~		757,711	~~771,912~~		810,618	~~921,007~~
Property and equipment, net			557,025	~~517,285~~		560,451	~~449,043~~		445,462	~~423,569~~
Other assets			136,748	~~122,305~~		139,186	~~124,036~~		122,967	~~112,275~~
Total assets		$	$1,466,093	~~1,684,764~~	$	$1,457,348	~~1,344,991~~	$	$1,379,047	~~1,456,851~~
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Accounts payable	$	$103,075	~~136,242~~	$	$113,080	~~102,446~~	$	$99,034	~~125,838~~
	Current portion of long-term debt		—	~~150,000~~		—	~~150,000~~		150,000	—
	Accrued expenses		236,484	~~192,596~~		288,985	~~248,729~~		194,522	~~186,098~~
	Payable to The Limited, Inc.		250,490	~~580,279~~		113,063	~~23,741~~		121,811	~~556,227~~
	Income taxes		51,843	—		120,825	~~128,845~~		75,921	~~7,125~~
Total current liabilities			641,892	~~1,059,117~~		635,953	~~653,761~~		641,288	~~875,288~~
Long-term debt			100,000	~~100,000~~		100,000	~~100,000~~		100,000	~~250,000~~
Deferred income taxes			—	~~12,168~~		—	~~816~~		816	—
Other long-term liabilities			57,121	~~49,902~~		56,067	~~45,683~~		55,734	~~44,561~~
Shareholders' equity:
	Common stock		5,318	~~5,305~~		5,318	~~2,646~~		5,305	~~2,646~~
	Paid-in capital		1,214,910	~~1,215,143~~		1,215,278	~~1,217,806~~		1,213,555	~~1,215,183~~
	Retained earnings (deficit)		181,860	~~(6,151~~	)	181,100	~~(113,067~~	)	(80,083	~~(357,041~~)	)
				1,214,297			1,107,385			860,788
			1,402,088			1,401,696			1,138,777
	Less: treasury stock, at average cost		(735,008	~~(750,720~~)	)	(736,368	~~(562,654~~)	)	(557,568	~~(573,786~~)	)
Total shareholders' equity			667,080	~~463,577~~		665,328	~~544,731~~		581,209	~~287,002~~
Total liabilities and shareholders' equity		$	$1,466,093	~~1,684,764~~	$	$1,457,348	~~1,344,991~~	$	$1,379,047	~~1,456,851~~

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

INTIMATE BRANDS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Thousands)

(Unaudited)

				Thirty-nine Weeks Ended
				Thirteen Weeks Ended
				October 28, 2000			October 30, 1999
				May 5, 2001			April 29, 2000
Operating activities:
	Net income			$	~~210~~35,~~866~~094		$	~~180~~67,~~052~~880
	Adjustments to reconcile net income to net cash provided by (used for) operating activities:
		Depreciation and amortization			8231,~~281~~548			7727,~~385~~176
		Changes in assets and liabilities:
			Accounts receivable		(1,640	)		(2,767	)
			Inventories		(7,043	)		(60,943	)
			Inventories		(285,946	)		(315,848	)
			Accounts payable and accrued expenses		(62,506	)		(49,382	)
			Accounts payable and accrued expenses		(22,337	)		(14,420	)
			Income taxes		(68,982	)		(92,365	)
			Income taxes		(149,878	)		(136,816	)
			Other assets and liabilities		9,040			(159	)
			Other assets and liabilities		9,387			7,513
Net cash used for operating activities					(62,849	)		(107,793	)
Net cash used for operating activities					(157,267	)		(204,901	)
Investing activities:
	Capital expenditures				(~~155~~31,~~827~~526	)		(~~110~~22,~~409~~223	)
Financing activities:
	Repayment of long-term debt				—			(100,000	)
	Net increase in payable to The Limited, Inc.				137,427			98,070
	Change in payable to The Limited, Inc.				556,538			550,367
	Dividends paid				(34,334	)		(34,896	)
	Repurchase of common stock				(197,878	)		(404,410	)
	Proceeds from exercise of stock options and other				872			3,494
	Dividends paid				(103,950	)		(101,623	)
Net cash provided by financing activities					103,965			66,668
	Stock options and other				6,263			4,240
Net increase (decrease) in cash and equivalents					9,590			(63,348	)
Net cash provided by (used for) financing activities					260,973			(51,426	)
Cash and equivalents, beginning of year					8,923			76,373
Net decrease in cash and equivalents					(52,121	)		(366,736	)
Cash and equivalents, end of period				$	18,513		$	13,025
Cash and equivalents, beginning of year					76,373			387,774
Cash and equivalents, end of period				$	24,252		$	21,038

In 1999, noncash financing activities include the addition of $0.1 million common stock and $544.9 million paid-in capital as a result of the 5% stock dividend which resulted in the issuance of 23.6 million additional shares of common stock.

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

INTIMATE BRANDS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Intimate Brands, Inc. (the Company) includes specialty retail and direct response (catalogue and e-commerce) operations, which offer women's intimate and other apparel, personal care products and accessories. The Company consists of Victoria's Secret Stores, Victoria's Secret Direct, and Bath & Body Works. The Limited, Inc. owns 84% of the outstanding common stock of the Company.

The consolidated financial statements include the accounts of 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.

In September 2000, the Company formed a joint venture with Shiseido Co., Ltd. to develop, market and sell new lines of prestige beauty products. Because the Company has the ability to significantly influence the joint venture's operations and financial policies, the Company's investment in the joint venture is accounted for on the equity method.

The consolidated financial statements as of and for the thirteen and thirty-nine week periods ended October 28, 2000 and October 30, 1999 are unaudited and are presented pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, these consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company's 1999 Annual Report on Form 10-K. In the opinion of management, the accompanying consolidated financial statements reflect all adjustments (which are of a normal recurring nature) necessary 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 and thirty-nine week periods ended October 28, 2000 and October 30, 1999 included herein have been reviewed by the independent public accounting firm of PricewaterhouseCoopers LLP and the report of such firm follows the Notes to Consolidated Financial Statements. PricewaterhouseCoopers LLP is not subject to the liability provisions of Section 11 of the Securities Act of 1933 for its report on the consolidated financial statements because that report is not a "report" within the meaning of Sections 7 and 11 of that Act.

On May 2, 2000, the Company declared a two-for-one stock split ("stock split") in the form of a stock dividend distributed on May 30, 2000 to shareholders of record on May 12, 2000. Shareholders' equity reflects the reclassification of an amount equal to the par value of the increase in issued common shares ($2.7 million) from paid-in capital to common stock. All share and per share data throughout this report has been restated to reflect the stock split.

INTIMATE BRANDS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Basis of Presentation

Intimate Brands, Inc. (the "Company") includes specialty retail stores and direct response (catalog and e-commerce) businesses, which offer women's intimate and other apparel, personal care products and accessories. The Company consists of Victoria's Secret Stores, Victoria's Secret Direct, and Bath & Body Works. The Limited, Inc. ("The Limited") owns approximately 84% of the outstanding common stock of the Company, which initiated public ownership on October 24, 1995.

The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Investments in unconsolidated entities over which the Company exercises significant influence but does not have control are accounted for using the equity method. The Company's share of the net income or loss of those unconsolidated entities is included in other income (expense).

The consolidated financial statements as of and for the thirteen week periods ended May 5, 2001 and April 29, 2000 are unaudited and are presented pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, these consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company's 2000 Annual Report on Form 10-K. In the opinion of management, the accompanying consolidated financial statements reflect all adjustments (which are of a normal recurring nature) necessary for a fair statement of the results for the interim periods, but are not necessarily indicative of the results of operations for a full fiscal year.

The consolidated financial statements as of and for the thirteen week periods ended May 5, 2001 and April 29, 2000 included herein have been reviewed by the independent public accounting firm of PricewaterhouseCoopers LLP and the report of such firm follows the Notes to Consolidated Financial Statements. PricewaterhouseCoopers LLP is not subject to the liability provisions of Section 11 of the Securities Act of 1933 for its report on the consolidated financial statements because that report is not a "report" within the meaning of Sections 7 and 11 of that Act.

Certain prior year amounts have been reclassified to conform to the current year presentation.

2. Earnings Per Share and Shareholders' Equity

Earnings per basic share is computed based on the weighted average number of outstanding common shares. Earnings per diluted share includes the weighted average effect of dilutive options and restricted stock on the weighted average shares outstanding.

Weighted average common shares outstanding (thousands):

		Thirteen Weeks Ended	~~Thirteen Weeks Ended~~				~~Thirty-nine Weeks Ended~~
			October 28, 2000		October 30, 1999		October 28, 2000		October 30, 1999
		May 5, 2001		April 29, 2000
Common shares issued	~~Common shares issued~~	532,222	~~532,069~~	531,857	~~531,676~~		~~531,982~~		~~531,602~~
Treasury shares	~~Treasury shares~~	(41,299	~~(41,783~~)	)(33,217	~~(33,634~~)	)	~~(37,884~~	)	~~(31,334~~	)
Basic shares	~~Basic shares~~	490,923	~~490,286~~	498,640	~~498,042~~		~~494,098~~		~~500,268~~
	Dilutive effect of stock options and restricted shares		6,154		7,584		6,603		8,307
Dilutive effect of stock options and restricted stock		4,121		6,212
Diluted shares	~~Diluted shares~~	495,044	~~496,440~~	504,852	~~505,626~~		~~500,701~~		~~508,575~~

The computation of earnings per diluted share excludes options to purchase 1.1 million and 0.5 million shares of common stock at quarter-end 2000 and 1999, because the options' exercise price was greater than the average market price of the common shares during the period.

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 using 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.

Property and equipment, net, consisted of (thousands):

	October 28, 2000			January 29, 2000			October 30, 1999
Property and equipment, at cost	$	1,061,588		$	936,612		$	890,123
Accumulated depreciation and amortization		(544,303	)		(487,569	)		(466,554	)
Property and equipment, net	$	517,285		$	449,043		$	423,569

The Company is included in The Limited's consolidated federal and certain state income tax groups for income tax reporting purposes and is responsible for its proportionate share of income taxes calculated upon its federal taxable income at a current estimate of the Company's annual effective tax rate. Income taxes paid to The Limited during the thirty-nine weeks ended October 28, 2000 and October 30, 1999 approximated $283 million and $250 million. Income tax assets of $32.4 million were included in other current assets at October 28, 2000. Income tax assets of $27 million were included in other assets at October 30, 1999.

Long-term debt consists of notes which represent the Company's proportionate share of certain long-term debt of The Limited. The interest rates and maturities of the notes parallel those of the corresponding debt of The Limited. The 71/2% debentures are subject to early redemption beginning in 2003 concurrent with any prepayment of the corresponding debt by The Limited.

The ~~Unsecured~~computation ~~long~~of earnings per diluted share excludes options to purchase 5.6 million and 4.0 million shares of common stock at quarter-~~term~~end ~~debt~~2001 ~~consisted~~and 2000, because the options' exercise price was greater than the average market price of ~~(thousands):~~the common shares during the period.

	October 28, 2000		January 29, 2000		October 30, 1999
71/2% Debentures due March 2023	$	100,000	$	100,000	$	100,000
91/8% Notes due February 2001		150,000		150,000		150,000
		250,000		250,000		250,000
Less: current portion of long-term debt		150,000		150,000		—
	$	100,000	$	100,000	$	250,000

~~Interest paid during the thirty-nine weeks ended October 28, 2000 and October 30, 1999, including interest on the intercompany cash management account (see Note 7), approximated $24~~3.~~1 million~~ ~~and $34.1 million.~~ Inventories

The ~~Limited~~ ~~provides~~fiscal ~~various~~year ~~services~~of to the Company ~~including,~~and ~~but~~its ~~not~~subsidiaries ~~limited~~is ~~to,~~comprised ~~store~~of ~~design~~two ~~and~~principal ~~construction~~selling ~~supervision,~~seasons: ~~real~~spring ~~estate~~(the ~~management,~~first ~~travel~~ and ~~flight~~second ~~support~~quarters) and ~~merchandise sourcing.~~fall To (the ~~extent~~third and ~~expenditures~~fourth ~~are~~quarters). ~~specifically~~Inventories ~~identifiable they~~ are ~~charged~~principally tovalued at the ~~Company.~~lower ~~All~~of ~~other~~average ~~service-related~~cost ~~costs~~or ~~not~~market, ~~specifically~~on ~~attributable~~a tofirst-in, anfirst-out ~~operating~~basis, ~~business~~using ~~have been allocated to~~ the ~~Company~~retail ~~based~~method. ~~upon~~Inventory ~~various~~valuation ~~allocation~~at the ~~methods,~~end ~~which~~of the ~~Company~~first ~~believes are reasonable. The Company~~ and ~~The~~third ~~Limited~~quarters ~~have~~reflects ~~entered~~adjustments ~~into~~for ~~intercompany~~inventory ~~agreements~~markdowns ~~which~~and ~~establish~~shrinkage ~~the provision~~estimates offor ~~services in accordance with~~ the ~~terms~~total ~~described~~selling ~~above~~season.

~~The Company participates in The Limited's centralized cash management system~~4. ~~Under~~Property ~~this system cash received from the Company's operations is transferred to The Limited's centralized cash accounts~~ and ~~cash~~Equipment, disbursements are funded from the centralized cash accounts on a daily basis. The intercompany cash management account is an interest-earning asset or interest-bearing liability of the Company. Interest on the intercompany cash management account is calculated based on the Federal Reserve AA Composite 30-day rate. Net

Property and equipment, net, consisted of (thousands):

	May 5, 2001			February 3, 2001			April 29, 2000
Property and equipment, at cost	$	1,153,713		$	1,134,143		$	955,335
Accumulated depreciation and amortization		(596,688	)		(573,692	)		(509,873	)

Property and equipment, net	$	557,025		$	560,451		$	445,462

5. Income Taxes

The provision for income taxes is based on the current estimate of the annual effective tax rate. Current income tax obligations are treated as having been settled through the intercompany accounts as if the Company was filing its income tax returns on a separate company basis. Such amounts were $92.1 million and $137.7 million for the thirteen weeks ended May 5, 2001 and April 29, 2000. Other assets included long-term deferred tax assets of $18.6 million at May 5, 2001 and February 3, 2001. Other current assets included current deferred tax assets of $12.2 million at May 5, 2001 and February 3, 2001 and $39.4 million at April 29, 2000.

6. Long-term Debt

Long-term debt consists of notes which represent the Company's proportionate share of certain long-term debt of The Limited. The interest rates and maturities of the notes parallel those of the corresponding debt of The Limited. The 7¹/2% debentures are subject to early redemption beginning in 2003 at specified declining premiums concurrent with any prepayment of the corresponding debt by The Limited.

Long-term debt consisted of (thousands):

		May 5, 2001		February 3, 2001		April 29, 2000
7¹/2% Debentures due March 2023		$	100,000	$	100,000	$	100,000
9¹/8% Notes due February 2001			—		—		150,000

			100,000		100,000		250,000
	Less: current portion of long-term debt		—		—		150,000

		$	100,000	$	100,000	$	100,000

Interest paid during the thirteen weeks ended May 5, 2001 and April 29, 2000, including interest on the intercompany cash management account (see Note 7), was $3.9 million and $10.7 million.

7. Intercompany Relationship with the Parent

The Limited provides various services to the Company including, among other things, merchandise sourcing, real estate management, store design and construction supervision, inbound and outbound transportation, financial support (certain tax, treasury, accounting and audit), aircraft, legal, corporate development, risk management, human resources (certain management and benefit plan administration) and government affairs services. To the extent expenditures are specifically identifiable they are charged to the Company. All other service-related costs not specifically attributable to an operating business have been allocated to the Company based upon various allocation methods, which the Company believes are reasonable. The Company and The Limited have entered into intercompany agreements which establish the provision of services in accordance with the terms described above.

The Company participates in The Limited's centralized cash management system. Under this system, cash received from the Company's operations is transferred to The Limited's centralized cash accounts and cash disbursements are funded from the centralized cash accounts on a daily basis. The intercompany cash management account is an interest-earning asset or interest-bearing liability of the Company. Interest on the intercompany cash management account is calculated based on the Federal Reserve AA Composite 30-day rate.

The Company's proprietary credit card processing is performed by Alliance Data Systems, which is approximately 31%-owned by The Limited.

The Company and The Limited are parties to a corporate agreement under which the Company granted to The Limited a continuing option to purchase, under certain circumstances, additional shares of Class B Common Stock or shares of nonvoting capital stock of the Company. The Corporate Agreement further provides that, upon request of The Limited, the Company will use its best efforts to effect the registration of any of the shares of Class B Common Stock and nonvoting capital stock held by The Limited for sale.

~~The Company identifies operating segments based on a business's operating characteristics~~8. ~~Reportable~~Segment segments were determined based on similar economic characteristics, the nature of products and services, and the method of distribution. The retail segment includes the store-based operations of Victoria's Secret Stores and Bath & Body Works. The VS Direct segment consists of the Victoria's Secret Direct catalogue and e-commerce operations. Sales outside the United States were not significant. Information

8 The Company identifies operating segments based on a business's operating characteristics. Reportable segments were determined based on similar economic characteristics, the nature of products and services, and the method of distribution. The retail segment includes the store-based operations of Victoria's Secret Stores and Bath & Body Works. The VS Direct segment consists of the Victoria's Secret Direct catalog and e-commerce operations. Sales outside the United States were not significant.

Segment information as of and for the thirteen and thirty-nine weeks ended October 28, 2000 and October 30, 1999 follows (in thousands):

2000	Retail		VS Direct		Corporate			Total
Thirteen Weeks:
Net sales	$	792,465	$	132,643		—		$	925,108
Operating income (loss)		104,271		2,689	($	26,841	)		80,119
Thirty-nine Weeks:
Net sales		2,517,737		569,402		—			3,087,139
Operating income (loss)		400,582		47,942		(81,466	)		367,058
Total assets		1,375,730		210,527		98,507			1,684,764

1999	Retail		VS Direct		Corporate			Total
Thirteen Weeks:
Net sales	$	690,337	$	123,821		—		$	814,158
Operating income (loss)		90,653		306	($	18,901	)		72,058
Thirty-nine Weeks:
Net sales		2,166,534		542,554		—			2,709,088
Operating income (loss)		342,509		44,663		(64,482	)		322,690
Total assets		1,137,601		221,269		97,981			1,456,851

In addition to its operating segments, management also focuses on Victoria's Secret as a brand. Sales of the Victoria's Secret brand grew 9% to $597.9 million for the thirteen weeks ended October 28, 2000, and 12% to $2.089 billion for the thirty-nine weeks ended October 28, 2000.

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities," which was subsequently amended and clarified by SFAS No. 138. SFAS No. 133, as amended, is effective for the Company's 2001 fiscal year. It requires that derivative instruments be recorded at fair value and that changes in their fair value be recognized in current earnings unless specific hedging criteria are met. With respect to SFAS No. 133, the Company has been educating Company personnel, identifying and documenting the Company's use of derivative instruments, including embedded derivatives, and addressing other related issues. Due to the Company's limited use of derivatives, management does not believe that the adoption of SFAS No. 133 will have a significant effect on the Company's results of operations or its financial position.

Emerging Issues Task Force ("EITF") Issue No. 00-10, "Accounting for Shipping and Handling Fees and Costs," will be effective in the fourth quarter of 2000 and addresses the classification of shipping and handling fees and costs.

EITF Issue No. 00-14, "Accounting for Certain Sales Incentives," will be effective in the second quarter of 2001 and addresses the accounting for, and classification of, various sales incentives.

The Securities and Exchange Commission ("SEC") has issued Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial Statements," which will be effective in the fourth

~~quarter~~ Segment ofinformation ~~2000.~~as ~~SAB~~of ~~No. 101~~and ~~provides~~for the ~~SEC~~thirteen ~~staff's~~weeks ~~views~~ended inMay 5, ~~applying~~2001 ~~generally~~and ~~accepted~~April 29, ~~accounting~~2000 ~~principles~~follows to(in ~~selected~~thousands): ~~revenue recognition issues.~~

The Company has determined that adopting the provisions of the above EITF Issues and SAB No. 101 will not have a material impact on its consolidated financial statements.

2001	Retail		VS Direct		Corporate			Total
Net sales	$	801,806	$	226,102		—		$	1,027,908
Operating income (loss)		82,903		9,573	$	(31,662	)		60,814
Total assets		1,182,263		186,564		97,266			1,466,093

2000	Retail		VS Direct		Corporate			Total
Net sales	$	802,086	$	242,656		—		$	1,044,742
Operating income (loss)		121,730		20,713	$	(26,172	)		116,271
Total assets		1,079,061		193,969		106,017			1,379,047

In addition to its operating segments, management also focuses on Victoria's Secret as a brand. Sales of the Victoria's Secret brand for the first quarter of 2001 decreased 4% to $705.8 million from $738.3 million in 2000.

Report of Independent Accountants

To the Board of Directors and Shareholders of Intimate Brands, Inc.:

We have reviewed the accompanying ~~condensed~~ consolidated balance sheets of Intimate Brands, Inc. and its subsidiaries (the "Company") as of ~~October~~May 285, ~~2000~~2001 and ~~October~~ April 3029, ~~1999~~2000, and the related ~~condensed~~ consolidated statements of income ~~for each of the thirteen~~ and ~~thirty-nine week periods ended October 28, 2000 and October 30, 1999 and the condensed consolidated statements~~ of cash flows for each of the ~~thirty~~thirteen-~~nine~~ week periods ended ~~October~~May 285, ~~2000~~2001 and ~~October~~April 3029, ~~1999~~2000. 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 ~~condensed~~ consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We previously audited in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet as of ~~January~~February 293, ~~2000~~2001, and the related consolidated statements of income, ~~and~~of shareholders' equity, and of cash flows for the year then ended (not presented herein), and in our report dated February 1627, ~~2000~~2001 we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet ~~information~~ as of ~~January~~February 293, ~~2000,~~2001 is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.

/s/ PricewaterhouseCoopers LLP

~~PricewaterhouseCoopers~~Columbus, ~~LLP~~Ohio May 21, 2001

Columbus, Ohio November 14, 2000

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

RESULTS OF OPERATIONS

Net sales for the ~~third~~first quarter of ~~2000~~2001 were $~~925.~~1.028 ~~million~~billion, ana ~~increase~~decrease of 142% from $~~814~~1.2045 ~~million~~billion for the ~~third~~first quarter of ~~1999~~2000. Gross income ~~increased~~decreased 149% to $~~359~~363.08 million from $~~315~~400.76 million in ~~1999~~2000, and operating income ~~increased~~decreased 1148% to $8060.18 million from $72116.13 million in ~~1999~~2000. The operating income decline resulted primarily from a sales decline of 2% and from increased store selling and occupancy expenses. Net income was $4335.21 million, ana ~~increase~~decrease of 1248% from $3867.49 million in ~~1999~~2000. Earnings per share ~~grew~~decreased ~~13%~~ to $0.0907 per share from $0.0813 per share in ~~1999 (adjusted to reflect the two-for-one stock split declared on May 2,~~ 2000).

~~Third~~On its May 21, 2001 earnings call, the Company stated that it expected negative sales trends to continue and that store selling and occupancy expenses would be higher in the second quarter ~~business~~of ~~highlights~~2001 ~~included~~versus last year. As a result, the ~~following:~~Company stated that it expected second quarter earnings would be down significantly from last year.

Net sales for the thirty-nine weeks ended October 28, 2000 were $3.087 billion, an increase of 14% from $2.709 billion in 1999. The increase was driven by a 9% comparable store sales increase and a 9% increase in selling square feet. Gross income increased 16% to $1.198 billion from $1.036 billion in 1999, and operating income increased 14% to $367.1 million from $322.7 million in 1999. Net income was $210.9 million, an increase of 17% from $180.1 million in 1999. Earnings per share increased 20% to $0.42 per share from $0.35 per share in 1999.

Financial Summary

The following summarized financial and statistical data compares the thirteen week ~~and~~period ~~thirty-nine week periods~~ ended ~~October~~May 285, ~~2000~~2001 to the comparable ~~1999~~2000 ~~periods~~period:

			Third Quarter								Year-To-Date
		2001			2000			Change
			2000			1999			Change		2000			1999			Change
Net Sales (millions):
Net Sales (millions):
Victoria's Secret Stores		$	480		$	496		(3	)%
Victoria's Secret Stores			$	465		$	423		10	%	$	1,520		$	1,331		14	%
Bath & Body Works			320			301		6	%
Bath & Body Works				317			260		22	%		976			820		19	%
Other			2			5		N/M
Other (principally Gryphon)				10			7		N/M			22			15		N/M
	Total retail sales		802			802		0	%
	Total retail sales			792			690		15	%		2,518			2,166		16	%
Victoria's Secret Direct			226			243		(7	)%
Victoria's Secret Direct				133			124		7	%		569			543		5	%
	Total net sales	$	1,028		$	1,045		(2	)%
	Total net sales		$	925		$	814		14	%	$	3,087		$	2,709		14	%
Comparable Store Sales:
Comparable Store Sales:
Victoria's Secret Stores			(7	)%		14	%
Victoria's Secret Stores				8	%		16	%				11	%		14	%
Bath & Body Works			(8	)%		6	%
Bath & Body Works				5	%		10	%				5	%		11	%
Total comparable store sales increase (decrease)			(7	)%		11	%
	Total comparable store sales increase			6	%		13	%				9	%		13	%

N/M Not meaningful

		2001			2000			Change
Store Data:
Retail sales increase attributable to net new and remodeled stores:
	Victoria's Secret Stores		4	%		4	%
	Bath & Body Works		14	%		12	%
Retail sales per average selling square foot:
	Victoria's Secret Stores	$	114		$	125		(9	)%
	Bath & Body Works	$	104		$	119		(13	)%
Retail sales per average store (thousands):
	Victoria's Secret Stores	$	499		$	554		(10	)%
	Bath & Body Works	$	220		$	244		(10	)%
Average store size at end of quarter (selling square feet):
	Victoria's Secret Stores		4,391			4,443		(1	)%
	Bath & Body Works		2,132			2,066		3	%
Selling square feet at end of quarter (thousands):
	Victoria's Secret Stores		4,242			3,972		7	%
	Bath & Body Works		3,140			2,582		22	%
Number of Stores:
Beginning of year			2,390			2,110
	Opened		51			38
	Closed		(2	)		(4	)

End of period			2,439			2,144

	Number of Stores		Selling Sq. Ft. (Thousands)
	May 5, 2001	April 29, 2000	May 5, 2001	April 29, 2000
Victoria's Secret Stores	966	894	4,242	3,972
Bath & Body Works	1,473	1,250	3,140	2,582

Total stores and selling square feet	2,439	2,144	7,382	6,554

		Third Quarter								Year-To-Date
		2000			1999			Change		2000			1999			Change
Store Data:
Retail sales increase attributable to net new and remodeled stores:
	Victoria's Secret Stores		2	%		6	%				3	%		6	%
	Bath & Body Works		17	%		9	%				14	%		11	%
Retail sales per average selling square foot:
	Victoria's Secret Stores	$	115		$	109		6	%	$	377		$	349		8	%
	Bath & Body Works	$	111		$	114		(3	%)	$	357		$	370		(4	%)
Retail sales per average store (thousands):
	Victoria's Secret Stores	$	508		$	485		5	%	$	1,668		$	1,551		8	%
	Bath & Body Works	$	234		$	227		3	%	$	744		$	737		1	%
Average store size at end of quarter (selling square feet):
	Victoria's Secret Stores		4,416			4,425		0	%
	Bath & Body Works		2,112			2,007		5	%
Retail selling square feet at end of quarter (thousands):
	Victoria's Secret Stores		4,094			3,924		4	%
	Bath & Body Works		2,978			2,340		27	%
Number of Stores:
Beginning of period			2,205			1,985					2,110			1,890
	Opened		136			70					238			174
	Closed		(4	)		(2	)				(11	)		(11	)
End of period			2,337			2,053					2,337			2,053

	Number of Stores		Selling Sq. Ft. (thousands)
	October 28, 2000	October 30, 1999	October 28, 2000	October 30, 1999
Victoria's Secret Stores	927	887	4,094	3,924
Bath & Body Works	1,410	1,166	2,978	2,340
Total stores and selling square feet	2,337	2,053	7,072	6,264

Net Sales

Net sales for the ~~third~~first quarter of ~~2000~~2001 ~~increased~~decreased 142% to $~~925.~~1.028 ~~million~~billion from $~~814~~1.2045 ~~million~~billion in ~~1999~~2000. The net sales ~~increase~~decline was primarily due to a ~~the~~7% ~~net~~decrease ~~addition~~in ofcomparable ~~284~~store ~~new~~sales ~~stores~~ and a 67% ~~increase~~decrease in ~~comparable~~sales ~~store~~at ~~sales~~Victoria's Secret Direct, partially offset by an increase from the net addition of 295 new stores (828,000 selling square feet).

InRetail sales of $801.8 million for the ~~third~~first quarter of ~~2000,~~2001 ~~retail~~were ~~sales~~relatively ~~increased~~flat ~~15%~~ to sales of $~~792~~802.51 million ~~from~~in ~~$690~~2000. Victoria's Secret Stores' sales decrease of 3% to $479.7 million was primarily due to a 7% decrease in ~~1999~~comparable store sales, resulting from a decrease in both the number of transactions and average sales price per unit and poor performance in certain merchandise categories, particularly sleepwear. The decline was partially offset by the net addition of 72 stores (270,000 selling square feet). Bath & Body Works' sales increase of 6% to $319.8 million was primarily attributable to the net addition of ~~244~~223 new stores ~~and~~(558,000 aselling 5square feet), partially offset by an 8% ~~increase~~decrease in comparable store sales as new product launches were not as successful as planned. Net sales at Victoria's Secret ~~Stores'~~Direct ~~sales~~decreased ~~increase of 10~~7% ~~was primarily due~~ to an$226.1 million 8%as ~~increase~~improved performance in ~~comparable~~bras ~~store sales,~~and ~~with~~swimwear ~~the~~was ~~remaining~~more ~~increase~~than offset ~~resulting~~by ~~from~~unfavorable ~~the~~results ~~net~~in ~~addition~~other ofmerchandise ~~40 stores~~categories.

Victoria's Secret Direct net sales for the third quarter of 2000 increased 7% to $132.6 million from $123.8 million a year ago. This sales increase was due to favorable results on shared bra styles with Victoria's Secret Stores and strong clothing results.

Year-to-date net sales in 2000 increased 14% to $3.087 billion from $2.709 billion in 1999. The net sales increase was due to a 9% increase in comparable store sales and the net addition of 284 new stores.

Gross Income

~~The~~For ~~third~~the first quarter of ~~2000~~2001, the gross income rate, (expressed as a percentage of net sales,) ofdecreased to 35.4% from 38.83% ~~was~~for ~~flat~~the tosame ~~last~~period ~~year~~in 2000. The rate ~~positive~~decrease was principally due to an increase in the buying and occupancy expense ~~leverage,~~ ~~driven~~rate bydue anto 8%the ~~increase~~inability into achieve leverage on store-related costs as comparable ~~stores~~store sales atdecreased ~~Victoria's~~7%. ~~Secret~~In addition, ~~Stores~~the buying and ~~leverage~~occupancy ofexpense ~~catalogue~~rate ~~expenses~~increase atwas ~~Victoria's~~due ~~Secret~~to ~~Direct,~~the ~~was~~continuing ~~offset~~expansion byof aBath & ~~decline~~Body inWorks' ~~the~~stores ~~merchandise margin~~into ~~rate~~non-mall locations, ~~primarily~~which, ~~due~~although tohighly ~~promotional~~profitable, typically ~~offers~~have athigher ~~Victoria's~~occupancy ~~Secret~~costs ~~Stores~~as ~~and~~a ~~Victoria's~~percentage ~~Secret~~of ~~Direct~~net sales.

The 2000 year-to-date gross income rate increased to 38.8% from 38.2% in 1999. The rate improvement was primarily due to positive buying and occupancy expense leverage, offset by a slight decline in the merchandise margin rate. These rate changes were primarily due to the factors discussed above.

General, Administrative and Store Operating Expenses

The general, administrative and store operating expense rate, (expressed as a percentage of net sales,) increased to 3029.15% in the ~~third~~first quarter of ~~2000~~2001 from 29 27.92% for the same period in ~~1999~~2000. ~~The~~General, ~~rate~~administrative ~~increase~~and ~~was~~store ~~primarily~~operating ~~driven~~expenses by increased ~~investments~~7% indue ~~product~~to ~~development~~higher ~~and~~ store selling atexpenses ~~Bath &~~resulting ~~Body~~from ~~Works~~the net addition of 295 new stores and higher labor costs. At Victoria's Secret Stores, ~~partially~~ higher average wage rates more than offset bya ~~slightly~~reduction ~~lower~~in ~~marketing~~payroll ~~expenses~~hours. atBath & ~~Victoria's~~Body ~~Secret~~Works ~~Stores~~experienced an increase in average wage rates and an increase in payroll hours due to new store additions.

The 2000 year-to-date general, administrative and store operating expense rate increased to 26.9% from 26.3% in 1999, primarily due to increased investments in product development and store selling at Bath & Body Works.

Operating Income

The ~~third~~first quarter operating income rate, (expressed as a percentage of net sales,) ~~was~~decreased 8to 5.79% ~~compared~~from ~~to 8~~11.91% for the same period in ~~1999~~2000. The rate decrease was ~~primarily~~ due to the 2.9% decrease in the gross income rate and the 2.3% increase in the general, administrative and store operating expense rate.

~~The 2000 year-to-date~~Interest ~~operating~~Expense ~~income rate of 11.9% was flat to last year, as the improved gross income rate was offset by an increase in the general, administrative~~ and ~~store~~Other ~~operating~~Income ~~expense rate.~~ (Expense)

15 First quarter interest expense was $2.1 million in 2001 compared to $5.4 million in 2000. The interest expense is primarily for the Company's long-term debt. The decrease in interest expense was primarily due to the repayment of $150 million in debt in February 2001.

~~Interest~~ The Company ~~Expense~~incurred ~~and~~$0.5 million ~~Other~~in ~~Income~~ other expense in 2001 compared to earnings of $2.3 million for the same period in 2000. The decrease in other income (expense) was primarily due to the use of cash that was previously invested to repay $150 million in debt.

Third quarter and year-to-date interest expense was $8.0 million and $18.7 million in 2000 compared to $7.9 million and $24.7 million in 1999, respectively. The interest expense is primarily for the Company's long-term debt. The year-to-date decrease is due to the repayment of $100 million in term debt in August 1999. 14

The Company did not earn other income in the third quarter of 2000 or 1999. The Company earned $3.1 million and $2.0 million of other income in the year-to-date periods in 2000 and 1999. This other income was primarily interest income earned from excess net cash from operations managed through The Limited's centralized cash management system (see Note 7 to the Consolidated Financial Statements).

FINANCIAL CONDITION

A detailed discussion of the Company's liquidity, capital resources and capital requirements follows.

Liquidity and Capital Resources

Cash provided from operating activities and ~~cash~~borrowings ~~funding~~ from The Limited's ~~centralized cash management system~~ provide the resources to support current operations, ~~including~~ projected growth, seasonal ~~working capital~~ funding requirements and capital expenditures. A summary of the Company's working capital position and capitalization follows (~~thousands~~millions):

			October 28, 2000			January 29, 2000			October 30, 1999
		May 5, 2001			February 3, 2001			April 29, 2000
Working capital (deficit)			$	(13,943	)	$	118,151		$	45,719
Working capital		$	130		$	122		$	169
Capitalization:
	Long-term debt	$	$100	~~100,000~~	$	$100	~~100,000~~	$	$100	~~250,000~~
	Shareholders' equity		667	~~463,577~~		665	~~544,731~~		581	~~287,002~~
Total capitalization		$	$767	~~563,577~~	$	$765	~~644,731~~	$	$681	~~537,002~~

Net cash used for operating activities totaled $~~157.3~~63 million for the ~~thirty-nine~~thirteen weeks ended ~~October~~May 285, ~~2000~~2001 versus net cash used for operating activities of $~~204.9~~108 million for the same period in ~~1999~~2000. The change in net cash used for operating activities was primarily driven by ~~increased net income and~~ less inventory growth compared to ~~1999~~2000.

Investing activities were for capital expenditures, which were primarily for new and remodeled stores.

Financing activities in ~~2000~~the ~~included~~first ~~three~~quarter ~~quarterly~~of 2001 included cash dividend payments of $0.07 per share. In addition, financing activities included the repurchase of 1.4 million shares of the Company's common stock from its public shareholders for $31.4 million. Additionally, the Company repurchased 7.4 million shares from The Limited for $166.5 million. The repurchases were proportionate and ~~did not change The Limited's 84% ownership interest in the Company. The cash dividend payment and stock repurchase were offset by~~ a $~~556.5~~137 million net increase in The Limited's intercompany cash management account payable (see Note 7 to the Consolidated Financial Statements).

In 1999, financing activities included the repayment of $100 million of long-term debt and three quarterly cash dividend payments. In addition, financing activities included a proportionate repurchase of approximately 20.4 million shares of the Company's common stock for $404.4 million, of which 17.2 million shares were repurchased from The Limited, for $341.8 million. The above cash outflows were offset by a $550.4 million net increase in The Limited, Inc. intercompany cash management account payable.

Capital Expenditures

Capital expenditures, primarily for new and remodeled stores, totaled $~~155.8~~32 million for the ~~thirty-nine~~thirteen weeks ended ~~October~~May 285, ~~2000~~2001, compared to to $~~110.4~~22 million for the comparable period of ~~1999~~2000. The increase is a combination of accelerated store openings, timing of certain expenditures and an overall increase in planned capital expenditures versus the prior year. The Company anticipates spending $~~225~~280 to $~~250~~310 million in ~~2000~~2001 for capital expenditures, of which $~~200~~250 to $~~225~~275 million will be for new stores and for remodeling of and improvements to existing stores. The Company expects that capital expenditures will be funded principally by net cash provided by operating activities.

The Company intends to add approximately ~~760~~900,000 selling square feet in ~~2000~~2001, which will represent a 1213% increase over year-end ~~1999~~2000. It is anticipated the increase will result from the addition of approximately ~~275~~280 ~~net~~ new stores and the expansion of ~~approximately~~59 40 stores., ~~The~~partially ~~Company~~offset ~~expects that capital expenditures will be funded principally~~ by ~~net~~the ~~cash~~closing ~~provided by~~of ~~operating~~15 ~~activities~~stores.

Recently Issued Accounting Pronouncements

~~In June 1998, the Financial Accounting Standards Board ("FASB") issued~~ Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities," ~~which was subsequently~~ amended and clarified by SFAS No. 138~~. SFAS No. 133~~, aswas ~~amended,~~adopted isby ~~effective~~the ~~for~~Company in the ~~Company's~~first quarter of 2001. ~~fiscal~~SFAS ~~year~~No. It 133 requires that derivative instruments be recorded at fair value and that changes in their fair value be recognized in current earnings unless specific hedging criteria are met. ~~With~~Because ~~respect to SFAS No. 133,~~ the Company ~~has been educating Company personnel, identifying and documenting the Company~~'s use of ~~derivative instruments, including embedded~~ derivatives, ~~and~~is ~~addressing other related issues. Due to the Company's~~ limited ~~use of derivatives~~, ~~management does not believe that~~ the adoption of SFAS No. 133 ~~will~~did not have a ~~significant~~material ~~effect~~impact on the Company's results of operations or ~~its~~ financial position.

~~Emerging Issues Task Force ("~~EITF") Issue No. 00-1014, "Accounting for ~~Shipping~~Certain ~~and~~Sales ~~Handling Fees and Costs~~Incentives," will be effective in the ~~fourth~~first quarter of ~~2000~~2002 and addresses the ~~classification~~ ofaccounting ~~shipping~~for, and ~~handling~~classification of, ~~fees~~various ~~and~~sales ~~costs~~incentives. The

~~EITF Issue No. 00-14, "Accounting for Certain Sales Incentives," will be effective in the second quarter of 2001 and addresses the accounting for, and classification of, various sales incentives.~~ 15

~~The~~ ~~Securities~~Company ~~and Exchange Commission ("SEC")~~ has ~~issued~~determined ~~Staff~~that ~~Accounting~~adopting ~~Bulletin ("SAB") No. 101, "Revenue Recognition in Financial Statements," which will be effective in~~ the ~~fourth~~provisions ~~quarter~~ of ~~2000.~~the ~~SAB~~EITF ~~No. 101~~Issue ~~provides~~will ~~the~~not ~~SEC~~have ~~staff's~~a ~~views~~material inimpact ~~applying~~on ~~generally~~its ~~accepted~~results ~~accounting~~of ~~principles~~operations toor ~~selected~~its ~~revenue~~financial ~~recognition issues~~position.

~~The Company~~Impact ~~has determined that adopting the provisions~~ of ~~the above EITF Issues and SAB No. 101 will not have a material impact on its consolidated financial statements.~~ Inflation

~~Safe~~ The ~~Harbor~~Company's ~~Statement~~results ~~Under~~of operations and financial condition are presented based on historical cost. While it is difficult to accurately measure the ~~Private~~impact ~~Securities~~of inflation ~~Litigation~~due ~~Reform~~to ~~Act~~the imprecise nature of ~~1995~~ the estimates required, the Company believes the effects of inflation, if any, on the results of operations and financial condition have been minor.

~~The~~ ~~Company cautions that any forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) contained in this~~ ~~Form 10-Q~~ ~~or made by management of the Company involve risks and uncertainties and are subject to change based on various important factors, many of which may be beyond the~~ ~~Company's~~Item ~~control~~3. ~~Accordingly,~~QUANTITATIVE ~~the~~AND ~~Company's~~QUALITATIVE ~~future~~DISCLOSURES ~~performance~~ABOUT ~~and~~MARKET financial results may differ materially from those expressed or implied in any such forward-looking statements. The following factors, among others, in some cases have affected and in the future could affect the Company's financial performance and actual results and could cause actual results for 2000 and beyond to differ materially from those expressed or implied in any forward-looking statements included in this Form 10-Q or otherwise made by management: changes in consumer spending patterns, consumer preferences and overall economic conditions, the impact of competition and pricing, changes in weather patterns, political stability, currency and exchange risks and changes in existing or potential duties, tariffs or quotas, postal rate increases and charges, paper and printing costs, availability of suitable store locations at appropriate terms, ability to develop new merchandise and ability to hire and train associates. RISK

17 The market risk of the Company's financial instruments as of May 5, 2001 has not significantly changed since February 3, 2001. Information regarding the Company's financial instruments and market risk as of February 3, 2001 is disclosed in the Company's 2000 Annual Report on Form 10-K.

PART II—OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

The Company is a defendant in a variety of lawsuits arising in the ordinary course of business.

On January 13, 1999, two complaints were filed against the Company's parent, The Limited, and one of its subsidiaries, as well as other defendants, including many national retailers. Both complaints relate to labor practices allegedly employed on the island of Saipan, Commonwealth of the Northern Mariana Islands, by apparel manufacturers unrelated to The Limited (some of which have sold goods to The Limited) and seek injunctions, unspecified monetary damages, and other relief. One complaint, on behalf of a class of unnamed garment workers, filed in the United States District Court for the Central District of California, Western Division, alleges violations of federal statutes, the United States Constitution, and international law. On April 12, 1999, a motion to dismiss that complaint for failure to state a claim upon which relief can be granted was filed, and it remains pending. On September 29, 1999, the United States District Court for the Central District of California, Western Division, transferred the case to the United States District Court for the District of Hawaii. A first amended complaint was filed on April 28, 2000, which adds additional defendants but does not otherwise substantively alter the claims alleged or relief sought. On June 23, 2000, the United States District Court for the District of Hawaii transferred the case to the United States District Court for the District of the Northern Mariana Islands, and on July 7, 2000, denied plaintiffs' motion for reconsideration of the transfer order. Plaintiffs ~~have~~ filed a Petition for a Writ of Mandamus challenging the transfer order and Motion for Emergency Stay inwhich ~~the U.S. 9th Circuit Court of Appeals. The Motion for Emergency Stay~~ was ~~granted~~denied onby ~~November 3, 2000. The Petition for~~ a ~~Writ~~panel of ~~Mandamus~~the ~~remains pending~~U.S. A9th ~~first~~Circuit ~~amended~~Court ~~complaint~~of Appeals ~~was filed~~ on ~~April~~March 2822, ~~2000, which adds additional defendants but does not otherwise substantively alter the claims alleged or relief sought~~2001. The second complaint, filed by a national labor union and other organizations in the Superior Court of the State of California, San Francisco County, and which alleges unfair business practices under California law, remains pending.

Although it is not possible to predict with certainty the eventual outcome of any litigation, in the opinion of management, the foregoing proceedings are not expected to have a material adverse effect on the Company's financial position or results of operations.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Company held its Annual Meeting of Stockholders on May 21, 2001. The matters voted upon and the results of the voting were as follows:

a) William E. Kirwan, Beth M. Pritchard, and Leslie H. Wexner were elected to the Board of Directors for a term of three years. Of the 1,303,798,649 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 voting authority was withheld in the election were as follows, with respect to each of the nominees:

Name	Shares Voted For Election	Shares as to Which Voting Authority Withheld
William E. Kirwan	1,302,300,879	1,497,770
Beth M. Pritchard	1,297,444,231	6,354,418
Leslie H. Wexner	1,297,186,474	6,612,175

In addition, directors whose term of office continued after the Annual Meeting were: Roger D. Blackwell, Grace A. Nichols, Donald B. Shackelford, E. Gordon Gee, and Donna A. James.

b) The Company's Amended and Restated Certificate of Incorporation previously authorized the issuance of 1,155,000,000 shares of Capital Stock, of which 1,100,000,000 shares were Common Stock and 55,000,000 shares were Preferred Stock. The shareholders were asked to consider and vote upon a

proposal to amend the Company's Amended and Restated Certificate of Incorporation to increase the number of shares of Common Stock that the Company is authorized to issue from 1,100,000,000 to 2,200,000,000. Of the 1,303,798,649 shares present in person or represented by proxy at the meeting, 1,280,413,293 shares were voted for the proposal, 23,286,501 shares were voted against the proposal, and 98,855 shares abstained from voting with respect to the proposal.

Item 5. OTHER INFORMATION

The Company's Certificate of Incorporation includes provisions relating to potential conflicts of interest that may arise between the Company and The Limited. Such provisions were adopted in light of the fact that the Company and The Limited and its subsidiaries are engaged in retail businesses and may pursue similar opportunities in the ordinary course of business. Among other things, these provisions generally eliminate the liability of directors and officers of the Company with respect to certain matters involving The Limited and its subsidiaries, including matters that may constitute corporate opportunities of The Limited, its subsidiaries or the Company. Any person purchasing or acquiring an interest in shares of capital stock of the Company will be deemed to have consented to such provisions relating to conflicts of interest and corporate opportunities, and such consent may restrict such person's ability to challenge transactions carried out in compliance with such provisions. Investors should review the Company's Certificate of Incorporation before making any investment in shares of the Company's capital stock.

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)

Exhibits

3.1: Certificate of Amendment of Amended and Restated Certificate of Incorporation, dated May 31, 2001.
15.: Letter re: Unaudited Interim Financial Information to Securities and Exchange Commission re: Incorporation of Report of Independent Accountants.

(b): Reports on Form 8-K.

19None.

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.

INTIMATE BRANDS, INC. (Registrant) By: /s/ V.TRACEY ~~ANN~~THOMAS ~~HAILEY~~TRAVIS V.Tracey ~~Ann~~Thomas ~~Hailey~~Travis, ~~Executive~~ Vice President, Finance and Chief Financial Officer of ~~The~~Intimate ~~Limited~~Brands, Inc.*

Date: ~~December~~ June 818, ~~2000~~2001

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INTIMATE BRANDS, INC. TABLE OF CONTENTS
PART I—FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF INCOME
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED STATEMENTS OF CASH FLOWS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Report of Independent Accountants

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

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

PART II—OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Item 5. OTHER INFORMATION

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

SIGNATURE

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