- Annual Report of Employee Stock Plans (11-K)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 11-K

(Mark One)

 

x	ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2010

OR

 

¨	TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 1-8344

 

A.	Full title of the plan and the address of the plan, if different from that of the issuer named below:

Limited Brands, Inc.

Savings and Retirement Plan

 

B.	Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

Limited Brands, Inc.

Three Limited Parkway

Columbus, Ohio 43230

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Financial Statements and Supplemental Schedule

Limited Brands, Inc. Savings and Retirement Plan

Years Ended December 31, 2010 and 2009

W ITH R EPORT OF I NDEPENDENT R EGISTERED P UBLIC A CCOUNTING F IRM

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Limited Brands, Inc. Savings and Retirement Plan

Financial Statements and Supplemental Schedule

Years Ended December 31, 2010 and 2009

Contents

 

Report of Independent Registered Public Accounting Firm			1
Audited Financial Statements
Statements of Net Assets Available for Benefits			2
Statements of Changes in Net Assets Available for Benefits			3
Notes to Financial Statements			4
Supplemental Schedule
Schedule H, Line 4i – Schedule of Assets (Held at End of Year)			22

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Report of Independent Registered Public Accounting Firm

To the Retirement Plan Committee of

Limited Brands, Inc. and

Plan Administrator of the Limited Brands, Inc.

Savings and Retirement Plan

We have audited the accompanying statements of net assets available for benefits of Limited Brands, Inc. Savings and Retirement Plan (the Plan) as of December 31, 2010 and 2009, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2010 and 2009, and the changes in its net assets available for benefits for the years then ended, in conformity with US generally accepted accounting principles.

Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2010 is presented for purposes of additional analysis and are not a required part of the financial statements but are supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.

 

		/s/ Ernst & Young, LLP
Columbus, Ohio
June 24, 2011

 

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Limited Brands, Inc. Savings and Retirement Plan

Statements of Net Assets Available for Benefits

 

		December 31,
		2010				2009
Assets
Investments (at fair market value)		$	705,191,312			$	568,133,128
Wrapper contracts (at fair market value)			655,277				541,035
Total investments			705,846,589				568,674,163
Receivable for contributions from employer			31,160,453				30,128,944
Cash and cash equivalents			1,334,181				1,339,864
Due from brokers			128,505				1,534,919
Accrued fees			297,147				152,401
Accrued interest and dividends			748				524,267
Total assets			738,767,623				602,354,558
Liabilities
Due to brokers			13,887,196				16,353,280
Administrative expenses payable			507,376				379,306
Total liabilities			14,394,572				16,732,586
Net assets reflecting all investments at fair value			724,373,051				585,621,972
Adjustment from fair value to contract value for fully benefit-responsive investment contracts			(32,825	)			5,556,051
Net assets available for benefits		$	724,340,226			$	591,178,023

See accompanying notes.

 

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Limited Brands, Inc. Savings and Retirement Plan

Statements of Changes in Net Assets Available for Benefits

 

		Years Ended December 31,
		2010				2009
Additions:
Investment income:
Net appreciation in fair value of investments		$	88,343,126			$	106,003,386
Dividends			17,589,589				2,386,848
Earnings from mutual funds			3,222,848				3,361,546
Earnings from investment contracts			2,611,419				3,551,178
Earnings from common collective trusts			4,365				5,284
Other earnings			768,165				652,211
Total investment income			112,539,512				115,960,453
Contributions:
Employer			48,843,351				47,234,624
Participant deferrals			30,643,912				29,282,152
Participant rollovers			1,515,770				600,371
Total contributions			81,003,033				77,117,147
Total additions			193,542,545				193,077,600
Deductions:
Distributions to participants			58,254,366				63,201,035
Administrative expenses			2,125,976				1,849,035
Total deductions			60,380,342				65,050,070
Net increase			133,162,203				128,027,530
Net assets available for benefits:
Beginning of year			591,178,023				463,150,493
End of year		$	724,340,226			$	591,178,023

See accompanying notes.

 

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1. Description of the Plan

General

The Limited Brands, Inc. Savings and Retirement Plan (“the Plan”) is a defined contribution plan covering eligible employees of Limited Brands, Inc. and its affiliates (“the Employer”). The following description of the Plan provides only general information. Participants should refer to the Plan document (as amended and restated effective as of January 1, 2010) for a more complete description of the Plan’s provisions. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended.

Significant Plan Amendments

Effective January 1, 2010, the Plan was amended to increase the maximum participant voluntary tax-deferred contribution as a percent of annual eligible compensation, to adjust the eligibility requirements for certain full-time employees, and to increase the minimum annual hours required for participants to receive the annual Employer retirement contribution and be credited with a year of vested service. The amendment’s provisions had no material effect on the financial statements either individually or in the aggregate.

Eligibility

Effective January 1, 2010, employees become eligible to participate in the Plan upon becoming at least 21 years of age and either (1) a full-time employee, or (2) a part-time employee having completed a year of employment with 1,000 or more hours of service. Prior to 2010, full-time employees could not participate prior to completing a year of employment with 1,000 or more hours of service.

All employees eligible to participate in the Plan must complete a year of employment with 1,000 or more hours of service to become eligible for Employer contributions.

Contributions

Employer contributions:

The Employer provides a matching contribution of 100% of each participant’s voluntary contributions up to 4% of annual eligible compensation.

The Employer also provides a non-elective annual retirement contribution equal to a percentage of annual eligible compensation to such eligible participants who are employed on the last day of the Plan year and have completed 1,000 or 500 hours of service during the Plan year for 2010 and 2009, respectively.

 

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Annual retirement contributions are determined based on each participant’s annual eligible compensation and accumulated years of vested service as follows:

 

Years of Vested Service		Earnings Up To Social Security Wage Base		Earnings Above Social Security Wage Base
Less than 5 years		3%		6%
5 or more years		4%		8%

Annual eligible compensation used to determine Employer contributions is based on each participant’s qualified plan compensation less any compensation received prior to becoming eligible for Employer contributions, and is limited to the maximum amount permitted under Section 401(a)(17) of the Internal Revenue Code (the “Code”). The annual compensation limit was $245,000 for the years ended December 31, 2010 and 2009.

Participant voluntary contributions:

Participants may elect to make voluntary tax-deferred contributions up to 75% in 2010 and up to 15% in 2009 of annual eligible compensation up to the maximum contribution permitted under Section 402(g) of the Code adjusted annually ($16,500 for the years ended December 31, 2010 and 2009). This voluntary tax-deferred contribution may be limited by Section 401(k) of the Code.

Plan participants age 50 or above before the end of the Plan year whose contributions to the Plan reach the maximum amount allowed by the Plan are eligible to make voluntary “catch up” contributions to the Plan. Catch-up contributions are limited to the maximum permitted under Section 414(v) of the Code adjusted annually ($5,500 for the years ended December 31, 2010 and 2009). Catch-up contributions are not eligible for Employer matching contributions.

Investment Options

Both the Employer and participant contributions are directed solely through each participant’s election into investment alternatives offered by the Plan. At any time, participants may also elect to reallocate existing account balances between investment alternatives or to change their investment elections for future contributions. The Plan’s investment options offered as of December 31, 2010 include six mutual funds, one unitized pooled mutual fund, six common collective trusts, one pooled account of the Employer’s common stock, one pooled account of common collective trusts and synthetic investment contracts, and self-managed brokerage accounts. The Employer periodically reviews and may make changes to the investment choices available. On June 30, 2010, the Plan eliminated two pooled accounts for the common stock of former affiliates.

 

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If a participant makes no investment fund election, any contributions made into the participant’s account are invested into the Plan’s qualified default investment alternative (“QDIA”). The Plan’s QDIA is the age-appropriate Schwab Managed Retirement Trust Fund, which is selected based on the participant’s date of birth.

Participant Accounts

Each participant’s account is credited with the participant’s and Employer contributions as well as allocated investment earnings. The benefit to which a participant is entitled is equal to the vested balance in the participant’s account.

Vesting

Participants are fully and immediately vested in all voluntary, rollover, and Employer matching contributions. Participants become vested in the Employer retirement contributions over a period of 6 years of vested service as follows:

 

Years of Vested Service		Percentage
Less than 2 years			0	%
2 years			20	%
3 years			40	%
4 years			60	%
5 years			80	%
6 or more years			100	%

Employees hired on or after January 1, 2010 are credited with a year of vested service for each Plan year in which they have at least 1,000 hours of service. Employees hired prior to January 1, 2010 are credited with a year of vested service for each Plan year in which they have at least 500 hours of service.

Payment of Benefits

The full value of a participant’s account becomes payable upon retirement, disability or death. Upon termination of employment for any other reason, each participant’s account, to the extent vested, becomes payable. Terminated participants whose vested account balances are greater than $1,000 have the option of leaving their accounts invested in the Plan until they reach age 65.

Participants whose account balances are invested in pooled accounts of Employer stock have the option of receiving such amounts in whole shares of Employer securities and cash for any fractional shares. Participants have the option of having benefits paid directly to an eligible retirement plan specified by the participant.

 

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The Plan allows any qualifying actively-employed participant to withdraw all or a portion of his or her vested account balance through an in-service withdrawal. The Plan provides certain in-service withdraw options including an age 59  ¹ / 2 withdrawal, early withdrawal, or a financial hardship withdrawal.

Amounts Allocated to Participants Withdrawn from the Plan

Amounts allocated to participants withdrawn from the Plan, but not yet paid, were $764,887 and $4,439 as of December 31, 2010 and 2009, respectively.

Forfeitures

Forfeitures are used to reduce the Employer’s required contributions, and if so elected by the Employer, to reduce administrative expenses. Forfeitures used to reduce contributions were $1,501,923 and $1,508,333 for the years ended December 31, 2010 and 2009, respectively. Forfeitures used to pay administrative expenses were $192,391 and $189,366 for the years ended December 31, 2010 and 2009, respectively. There were no unused forfeitures at December 31, 2010 or 2009.

Administrative Expenses

Expenses of the Plan are deducted from participants’ accounts as follows:

 

1)

a participant fee of $2.50 per quarter;

2)

third-party administrative expenses allocated to participant accounts based on the total number of accounts;

3)

a $20 disbursement fee for withdrawals and terminations; and

4)

a $50 annual fee for participants having a self-managed brokerage account.

Investments in pooled Employer stock funds are charged an administrative fee of 3 basis points on such investment fund balances through a reduction in earnings. Investments in the Plan’s Stable Value Fund are charged an administrative fee of 30 basis points on such investment fund balances through a reduction in earnings.

The Employer pays any additional Plan expenses from accumulated forfeitures.

The Plan pays no indirect expenses, as all revenue sharing arrangements and sub transfer fees are reflected as direct expenses on the Plan’s financial statements. The investment funds pay such administrative fees to the Plan’s trustee by crediting the Plan’s trust accounts, from which the Plan’s trustee subsequently withdraws such fee payments. Fees paid through the Plan’s trust accounts in this manner were $767,877 and $616,644 for the years ended December 31, 2010 and 2009, respectively, and are reported in the Plan’s financial statements in both administrative expenses and also as other earnings.

 

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2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements have been prepared on the accrual basis of accounting, as required by Accounting Standards Codification (“ASC”) 962, Plan Accounting – Defined Contribution Pension Plans , including investment valuation and income recognition. Participant benefit payments are recorded upon distribution. The Plan year is January 1 through December 31.

Use of Estimates

The Plan prepares its financial statements in conformity with US generally accepted accounting principles (“GAAP)”, which require management to make estimates and assumptions that affect the reported amounts of net assets available for benefits at the date of the financial statements and the changes in net assets available for benefits during the reporting period and, when applicable, disclosures of contingent assets and liabilities at the date of the financial statements. Actual results could differ from these estimates.

Risks

The Plan provides for the various investment options as described in Notes 1, 3, 4 and 5. Any investment is exposed to various risks, such as interest rate, market and credit risks. These risks could have a material effect on participants’ account balances and the amounts reported in the Statements of Net Assets Available for Benefits and the Statements of Changes in Net Assets Available for Benefits.

Investment Valuation and Income Recognition

Investments are reported at fair value. Fair value is the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. See Note 4 for discussion of fair value measurements.

Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.

Recently Issued Accounting Pronouncements

Fair Value Measurements:

In January 2010, the Financial Accounting Standards Board issued Accounting Standard Update 2010-06, Improving Disclosures about Fair Value Measurements (ASU 2010-06), which amends ASC 820, Fair Value Measurement and Disclosures. This guidance requires new disclosures

 

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and provides amendments to clarify existing disclosures. The new requirements include disclosing transfers in and out of Levels 1 and 2 fair value measurements and the reasons for the transfers and further disaggregating activity in Level 3 fair value measurements. This guidance is effective for interim and annual reporting periods beginning in 2010, except for the new disclosures regarding the activity in Level 3 measurements, which will be effective in 2011. The Plan adopted this guidance for 2010, except for the new disclosure regarding the activity in Level 3 measurements, which the Plan will adopt beginning in 2011. Since ASU 2010-06 only affects fair value measurement disclosures, adoption of ASU 2010-06 did not have an effect on the Plan’s net assets available for benefits or its changes in net assets available for benefits.

Adjustment from Fair Value to Contract Value

In accordance with the FASB authoritative guidance included in ASC 962, Defined Contribution Pension Plans , the Statements of Assets Available for Benefits present investment contracts at fair value. However, contract value is the relevant measurement attribute for the Plan’s fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the plan. The Statement of Net Assets Available for Benefits presents the fair value of the investment contracts as well as the adjustment of the fully benefit-responsive investment contract from fair value to contract value. The Statement of Changes in Net Assets Available for Benefits is prepared on a contract value basis.

Net Appreciation in Fair Value of Investments

Net realized and unrealized appreciation (depreciation) is recorded in the accompanying Statements of Changes in Net Assets Available for Benefits as net appreciation in fair value of investments.

Benefit Payments

Benefits are recorded when paid.

 

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3. Investments

The Plan’s investments are held by Wells Fargo Bank, N.A., trustee of the Plan.

The following table presents balances at December 31, 2010 and 2009 for the Plan’s current investments. Investments that represent five percent or more of the Plan’s net assets at December 31, 2010 or 2009 are separately identified.

 

		December 31,
		2010				2009
Investments at fair value as determined by:
Quoted market price:
Common stocks:
Limited Brands, Inc.		$	128,902,578			$	73,820,032
Common stocks – other			2,572,234				4,415,567
Mutual funds:
Vanguard Institutional Index Fund			86,880,437				75,305,885
Managers Cadence Capital Appreciation Fund (formerly Allianz CCM Capital Appreciation Fund)			47,463,867				40,542,156
Dodge & Cox Stock Fund			45,156,202				37,867,986
Artisan International Investor Shares			36,976,537				34,444,360
Mutual funds – other			58,405,910				46,695,318
Other investments			27,422				19,203
Estimated fair value:
Synthetic investment contracts			165,874,928				163,325,464
Common collective trusts:
Schwab Managed Retirement Trust – 2040 Class II			37,733,504				24,026,581
Common collective trusts - other			62,818,384				44,374,031
Unitized pooled mutual fund			33,034,586				23,837,580
Total investments at fair value		$	705,846,589			$	568,674,163

 

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The appreciation (depreciation) in fair value of the Plan’s investments, including investments bought, sold, and held during the year, for the years ended December 31, 2010 and 2009, is as follows:

 

		December 31,
		2010				2009
Net appreciation (depreciation) in fair value of investments as determined by:
Quoted market price:
Common stocks		$	43,238,203			$	38,060,342
Mutual funds			30,256,468				49,014,901
Other investments			(14,587	)			79,763
			73,480,084				87,155,006
Estimated fair value:
Common collective trusts			12,562,978				16,239,700
Unitized pooled mutual fund			2,300,064				2,608,680
			14,863,042				18,848,380
Net appreciation in fair value of investments		$	88,343,126			$	106,003,386

4. Fair Value Measurements

The authoritative guidance included in ASC 820, Fair Value Measurements and Disclosure , defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principle or most advantageous market for the asset or liability in an orderly transaction between market participants. This authoritative guidance further establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

 

Level 1		Quoted market prices in active markets for identical assets or liabilities.
Level 2		Observable inputs other than quoted market prices included in Level 1, such as quoted prices of similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3		Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant observable inputs.

Following is a description of the valuation methodologies used for assets measured at fair value. There have been no significant changes in the methodologies used at December 31, 2010 and 2009.

 

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Mutual funds and common stocks: are determined by quoted market prices and are classified within Level 1 of the valuation hierarchy.

Common collective trusts (“CCTs”) and the unitized pooled mutual fund: are valued at the respective net asset values (“NAV”) as reported by such trusts/funds, which are reported at fair value. The value of each unit is determined by subtracting total liabilities from the total value of the assets, including accrued income, and dividing the amount remaining by the number of units outstanding on the valuation date. There are no restrictions as to the redemption of these investments nor does the Plan have any contractual obligations to further invest in any of these funds. The NAV is a quoted price in a market that is not active and classified within Level 2 of the valuation hierarchy.

Synthetic investment contracts (“SICs”): are portfolios of securities (debt securities or units of common collective trusts) owned by the Plan with wrapper contracts. The fair value of such wrapper contracts is determined based on the present value of the expected contract fees discounted at current market rates. A limited number of the underlying investments in debt securities (corporate debt instruments, U.S government and federal agency obligations and U.S. government-sponsored enterprise obligations) are valued at the closing price reported on the major market on which the individual securities are traded. Where quoted prices are available in an active market, the investments are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available for the specified security, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. When quoted market prices for the specific security are not available in an active market, they are classified within either Level 2 or 3 of the valuation hierarchy. SICs may have elements of risk due to lack of a secondary market and resale restrictions which may result in the inability of the Plan to sell a contract at a fair price and may substantially delay the sale of contracts which the Plan seeks to sell (see Note 5). In addition, wrapper contracts may be subject to credit risk based on the ability of the insurance company or bank to meet interest or principal payments, or both, as they become due. These are classified under Level 3 of the valuation hierarchy.

The preceding methods described may produce a fair value calculation that may not be indicative of net realizable values or reflective of future fair values. Furthermore, although the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

 

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The following tables set forth by level, within the fair value hierarchy, the Plan’s investments at fair value as of December 31, 2010 and 2009. ASC 820-10 requires investments to be shown by major security types.

 

		Assets at Fair Value as of December 31, 2010
		Level 1				Level 2				Level 3				Total
CCT Equity funds (a)		$	—			$	100,551,888			$	—			$	100,551,888
Common stocks
Retail industry			129,147,969				—				—				129,147,969
Other			2,326,843				—				—				2,326,843
Total common stocks			131,474,812				—				—				131,474,812
Mutual funds
Balanced funds			27,460,766				—				—				27,460,766
Equity funds			207,905,086				—				—				207,905,086
International funds			37,234,012				—				—				37,234,012
Other funds			2,283,089				—				—				2,283,089
Total mutual funds			274,882,953				—				—				274,882,953
Synthetic investment contracts:
CCT bond funds (b)			—				24,111,697				—				24,111,697
Corporate bonds			—				34,123,884				—				34,123,884
CCT fixed income funds (c)			—				24,170,533				—				24,170,533
Government obligations			8,324,407				73,933,028				556,102				82,813,537
Wrapper contracts			—				—				655,277				655,277
Total synthetic investment contracts			8,324,407				156,339,142				1,211,379				165,874,928
Unitized pooled mutual (d) bond fund			—				33,034,586				—				33,034,586
Other investments			27,422				—				—				27,422
Total assets at fair value		$	414,709,594			$	289,925,616			$	1,211,379			$	705,846,589

 

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		Assets at Fair Value as of December 31, 2009
		Level 1				Level 2				Level 3				Total
CCT Equity funds (a)		$	—			$	68,400,612			$	—			$	68,400,612
Common stocks
Retail industry			76,268,790				—				—				76,268,790
Other			1,966,809				—				—				1,966,809
Total common stocks			78,235,599				—				—				78,235,599
Mutual funds
Balanced funds			24,862,570				—				—				24,862,570
Equity funds			175,278,799				—				—				175,278,799
International funds			34,567,080				—				—				34,567,080
Other funds			147,256				—				—				147,256
Total mutual funds			234,855,705				—				—				234,855,705
Synthetic investment contracts:
CCT bond funds (b)			—				23,013,972				—			$	23,013,972
Corporate bonds			—				35,568,643				513,259				36,081,902
CCT fixed income funds (c)			—				24,242,742				—				24,242,742
Foreign bonds			—				1,765,855				—				1,765,855
Government obligations			13,070,908				64,609,050				—				77,679,958
Wrapper contracts			—				—				541,035				541,035
Total synthetic investment contracts			13,070,908				149,200,262				1,054,294				163,325,464
Unitized pooled mutual (d) bond fund			—				23,837,580				—				23,837,580
Other investments			14,400				4,803				—				19,203
Total assets at fair value		$	326,176,612			$	241,443,257			$	1,054,294			$	568,674,163

 

(a)

This category includes funds designed to provide single investment portfolios that adjust over time to meet the changing risk and return objectives of investors based on retirement date. The funds are diversified across several asset classes, including, but not limited, to Large Cap Equities, Mid Cap Equities, Small Cap Equities, International Equities, Fixed Income and Stable Value.

(b)	This category includes investments in U.S. government and agency obligations, asset-backed securities, commercial and residential mortgaged-backed securities, corporate debt securities and FDIC-insured debt securities.

(c)	This category includes short-term investments in U.S. government and agency obligations, commercial paper, certificates of deposits and repurchase agreements.

(d)	This category invests in Wells Fargo Collective Fund for Pimco Total Return. Total Return is a core bond portfolio strategy that seeks maximum current income and price

 

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appreciation consistent with the preservation of capital and prudent risk taking. All sectors of the bond markets are utilized.

Gains and Losses on Level 3 Investments

The following tables set forth a summary of changes in the fair value of the Plan’s Level 3 investments for the year ended December 31, 2010 and 2009.

 

		Level 3 Assets Year Ended December 31, 2010
		Corporate Bonds				Government Obligations				Wrapper Contracts				Total
Balance at December 31, 2009		$	513,259			$	—			$	541,035			$	1,054,294
Total net unrealized gains included in net investment income in the Statements of Changes in Net Assets Available for Benefits			566,569				—				—				566,569
Total net realized losses included in net investment income in the Statements of Changes in Net Assets Available for Benefits			(444,650	)			—				—				(444,650	)
Total net unrealized gains not included in net investment income in the Statements of Changes in Net Assets Available for Benefits			—								114,242				114,242
Net purchases			(277,736	)			556,102				—				278,366
Net transfers out of Level 3			(357,442	)			—				—				(357,442	)
Balance at December 31, 2010		$	—			$	556,102			$	655,277			$	1,211,379
The amount of total gains or losses for the period attributable to the change in unrealized gains or losses relating to assets still held at the reporting date		$	—			$	—			$	—			$	—

 

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Transfers into level 3 are recorded at the beginning of the year and transfers out of level 3 are recorded at the end of the year. The Plan had no significant transfers between Level 1 and Level 2.

 

		Level 3 Assets Year Ended December 31, 2009
		Corporate Bonds				Wrapper Contracts				Total
Balance at December 31, 2008		$	3,212,309			$	378,075			$	3,590,384
Total net unrealized gains included in net investment income in the Statements of Changes in Net Assets Available for Benefits (a)			2,153,094				—				2,153,094
Total net realized losses included in net investment income in the Statements of Changes in Net Assets Available for Benefits			(1,629,196	)			—				(1,629,196	)
Total net unrealized gains not included in net investment income in the Statements of Changes in Net Assets Available for Benefits			—				162,960				162,960
Net sales			(2,308,404	)			—				(2,308,404	)
Net transfers out of Level 3			(914,544	)			—				(914,544	)
Balance at December 31, 2009		$	513,259			$	541,035			$	1,054,294
The amount of total gains or losses for the period attributable to the change in unrealized gains or losses relating to assets still held at the reporting date		$	15,175			$	—			$	15,175

Transfers into level 3 are recorded at the beginning of the year and transfers out of levels 3 are recorded at the end of the year. The Plan had no significant transfers between Level 1 and Level 2.

 

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5. Investment Contracts

Nature of Investment Contracts

The Plan, under its Stable Value Fund investment option, invests primarily in SICs. In a SIC structure, the underlying investments are owned by the Plan and held in trust for Plan participants. The Plan enters into wrapper contracts from third-party insurance companies or banks that serve to substantially offset the price fluctuations in the underlying investments caused by movements in interest rates. Each wrapper contract obligates the wrapper provider to maintain the “contract value” of the underlying investments. The contract value is generally equal to the contract, less any adjustments for withdrawals (as specified in the wrapper agreement). Under the terms of the wrapper contract, the realized and unrealized gains and losses on the underlying investments are, in effect, amortized over the duration of the underlying investments through adjustments to the future contract interest crediting rate (which is the rate earned by the Plan). The wrapper contract provides that the adjustments to the interest crediting rate will not result in future interest crediting rates that are less than zero. These wrapper contracts are designed to insulate the Plan from investment losses as a result of movements in interest rates.

However, they generally do not protect the Plan from loss if a wrapper provider defaults. A default by the wrapper provider on its obligation could result in a decrease in the value of the Plan’s assets.

In general, if the contract value of the wrapper agreement exceeds the market value of the underlying investments, including accrued interest, the wrapper provider becomes obligated to pay the difference to the Plan in the event that Plan redemptions result in a total contract liquidation. In the event that there are partial Plan redemptions that would otherwise cause the contract’s crediting rate to fall below zero percent, the wrapper provider is obligated to contribute to the Plan an amount necessary to maintain the contract’s crediting rate at a minimum of zero percent. The circumstances under which payments are made and the timing of payments between the Plan and the wrapper provider may vary based on the terms of the wrapper contract.

Calculating the Interest Crediting Rate in Wrapper Contracts

The key factors that influence future interest crediting rates for wrapper contracts include:

 

•

The level of market interest rates;

•

The amount and timing of participant contributions, transfers and withdrawals in/out of the wrapper contract;

•

The investment returns generated by the fixed income investments that back the wrapper contract; and

•

The duration of the underlying fixed income investments backing the wrapper.

The Plan has no reserves against the contract value for credit risk of the contract issuer or otherwise. The average annual yield for the investment contracts was approximately 4.94% and 8.32% for the years ended December 31, 2010 and 2009, respectively. The average annual yield

 

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adjusted to reflect the rate credited to participants was approximately 1.48% and 2.00% for the years ended December 31, 2010 and 2009, respectively.

The wrapper contracts’ interest crediting rates are typically reset on a monthly or quarterly basis according to each contract.

Because changes in market interest rates affect the yield to maturity and the market value of the underlying investments, they can have a material impact on the wrapper contract’s interest crediting rate. In addition, participant withdrawals and transfers from the Plan’s Stable Value Fund investment option are paid at contract value, but are funded through the market value liquidation of the underlying investments, also impacting the interest crediting rate. The resulting difference between the market value of the underlying investments relative to the wrapper contract value is presented on the Plan’s Statements of Net Assets Available for Benefits as Adjustment from fair value to contract value for fully benefit-responsive investment contracts. If the adjustment from fair value to contract value is positive for a given contract, this indicates that the wrapper contract value is greater than the market value of the underlying investments. The embedded market value losses will be amortized in the future through a lower interest crediting rate than would otherwise be the case. If the adjustment from fair value to contract value is negative, this indicates that the wrapper contract value is less than the market value of the underlying investments. The amortization of the embedded market value gains will cause the future interest crediting rate to be higher than it otherwise would have been.

Events That Limit the Ability of the Plan to Transact at Contract Value

In certain circumstances, the amount withdrawn from the wrapper contract would be payable at fair value rather than at contract value. These events include Plan disqualification, termination of the Plan, a material adverse change to the provisions of the Plan, the Employer’s election to withdraw from a wrapper contract in order to change to a different investment provider, or if the terms of a successor plan (in the event of the spin-off or sale of a division) do not meet the wrapper contract issuer’s underwriting criteria for issuance of a clone wrapper contract. While the Employer does consider that the spin-off or sale of an affiliate is possible, they do not consider these or other events to limit the ability of the Plan to transact at contract value.

Issuer-Initiated Contract Termination

Wrapper contracts generally are evergreen contacts that contain termination provisions. Events that would permit a wrapper contract issuer to terminate a wrapper contract upon short notice include the Plan’s loss of its qualified status, uncured material breaches of responsibilities, failure to make fee payments to the issuer, determination that any of the transactions are or will become prohibitive and material and adverse changes to the provisions of the Plan. If one of these events were to occur, the wrapper contract issuer could terminate the wrapper contract at the market value of the underlying investments (or in the case of a guaranteed investment contract, at the hypothetical market value based upon a contractual formula).

 

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6. Tax Status

The Plan has received a determination letter from the Internal Revenue Service (“IRS”) dated April 28, 2009, stating that the Plan is qualified under Section 401(a) of the Code and, therefore, the related trust is exempt from taxation. Although the Plan has been amended since receiving the determination letter, the Plan administrator believes that the plan is designed and is currently being operated in compliance with the applicable requirements of the Code and, therefore, believes that the plan is qualified and the related trust is tax-exempt.

U.S GAAP requires Plan management to evaluate uncertain tax positions taken by the Plan. The financial statement effects of a tax position are recognized when the position is more likely than not, based on the technical merits, to be sustained upon examination by the IRS. The Plan administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2010, there are no uncertain positions taken or expected to be taken. The Plan has recognized no interest or penalties related to uncertain tax positions. The Plan is subject to routine audits by taxing jurisdiction; however, there are currently no audits for any tax periods in progress. The Plan administrator believes it is no longer subject to income tax examinations for years prior to 2007.

7. Plan Administration

The Retirement Plan Committee, comprised of members appointed by the Compensation Committee of the Board of Directors of the Employer, administers the Plan. The Board of Directors has delegated the day-to-day administrative duties to the Retirement Plan Committee.

8. Plan Termination

Although the Employer has not expressed any intent to do so, the Employer has the right under the Plan to discontinue its contributions at any time. Limited Brands, Inc. has the right at any time, by action of its Board of Directors, to terminate the Plan subject to provisions of ERISA. Upon Plan termination or partial termination, participants will become fully vested in their accounts.

9. Parties-in-Interest

On March 31, 2010, Wachovia Bank, N.A. completed its integration into Wells Fargo Bank, N.A., pursuant to the December 31, 2008 merger of Wells Fargo & Company (“Wells Fargo”) with Wachovia Corporation, through which Wells Fargo acquired all of Wachovia Corporation and its businesses and obligations. There was no material impact to the Plan as a result of the integration.

Wells Fargo Bank, N.A., trustee of the Plan, its subsidiaries and affiliates maintain and manage certain of the investments of the Plan, for which the Plan is charged investment expenses.

 

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10. Reconciliation of Financial Statements to Form 5500

The following is a reconciliation of net assets available for benefits per the financial statements to Form 5500:

 

		December 31,
		2010				2009
Net assets available for benefits per the financial statements		$	724,340,226			$	591,178,023
Contract value above (below) fair value			32,825				(5,556,051	)
Amounts allocated to withdrawing participants			(764,887	)			(4,439	)
Net assets available for benefits per Form 5500		$	723,608,164			$	585,617,533

The following is a reconciliation of total additions per the financial statements to the total earnings per the Form 5500:

 

		Year Ended December 31, 2010
Total additions per the financial statements		$	193,542,545
Adjustments from contract value to fair value			5,588,876
Total income per Form 5500		$	199,131,421

The following is a reconciliation of benefits paid to participants per the financial statements to Form 5500:

 

		Year Ended December 31, 2010
Benefits paid to participants per the financial statements		$	58,254,366
Amounts allocated to withdrawing participants:
At December 31, 2010			764,887
At December 31, 2009			(4,439	)
Benefits paid to participants per Form 5500		$	59,014,814

Amounts allocated to withdrawing participants are recorded on Form 5500 for benefit claims that have been processed and approved for payment prior to December 31 but not yet paid as of that date.

 

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Supplemental Schedule

 

21

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Limited Brands, Inc. Savings and Retirement Plan

EIN #31-1048997 Plan #002

Schedule H, Line 4i

Schedule of Assets (Held at End of Year)

December 31, 2010

 

(a)		(b)		(c)		(e)
		Identity of Issue, Borrower, Lessor, or Similar Party		Description of Investment Including Maturity Date, Rate of Interest, Collateral, Par or Maturity Value		Current Value
*		Limited Brands, Inc.		Common Stock – 4,194,682 – shares		$	128,902,578
		Schwab Managed Retirement Trust 2040 Class II		Common Collective Trust – 2,051,849 – shares			37,733,504
		Schwab Managed Retirement Trust 2030 Class II		Common Collective Trust – 1,840,983 – shares			33,524,293
		Schwab Managed Retirement Trust 2020 Class II		Common Collective Trust – 1,090,070 – shares			19,130,723
		Schwab Managed Retirement Trust 2010 Class II		Common Collective Trust – 395,956 – shares			6,553,071
		Schwab Managed Retirement Trust 2050 Class II		Common Collective Trust – 263,146 – shares			2,573,563
		Schwab Managed Retirement Trust Income Class II		Common Collective Trust – 79,443 – shares			1,036,734
		Vanguard Institutional Index Fund		Mutual Fund – 755,416 – shares			86,880,437
		Managers Cadence Capital Appreciation		Mutual Fund – 2,854,111 – shares			47,463,867
		Dodge & Cox Stock Fund		Mutual Fund – 419,044 – shares			45,156,202
		Artisan International Investor Shares		Mutual Fund – 1,703,988 – units			36,976,537
		Hartford Midcap Holdings Fund		Mutual Fund – 1,077,267 – shares			27,728,860
		American Funds Balanced Fund		Mutual Fund – 1,531,757 – shares			27,433,765
*		Wells Fargo Heritage Money Market Fund		Mutual Fund – 1,172,379 – shares			1,172,379
		PIMCO Total Return Fund		Collective Fund – 2,296,712 – shares			33,034,586
		Self Directed Brokerage Accounts					4,670,562
		Pooled Stable Value Fund
		RiverSource Trust Income Fund I		Common Collective Trust – 100,390 – shares			8,352,850
		RiverSource Trust Money Market Fund I		Common Collective Trust – 1,953,686 – shares			1,953,686
		Synthetic Contracts and Underlying Investments
		Bank of America I Wrapper		Contract Wrapper – 1.89%			37,068
		Bank of America II Wrapper		Contract Wrapper – 1.63%			52,363
		IXIS I Wrapper		Contract Wrapper – 1.73%			95,131
		IXIS II Wrapper		Contract Wrapper – 1.60%			26,660
		JP Morgan Wrapper		Contract Wrapper – 1.86%			79,594
		Pacific Life Wrapper		Contract Wrapper – 2.05%			44,703
		RaboBank Wrapper		Contract Wrapper – 1.86%			23,332
		State Street Wrapper		Contract Wrapper – 1.60%			95,687
		Royal Bank of Canada Wrapper		Contract Wrapper – 1.94%			93,056
		Monumental I Wrapper		Contract Wrapper – 2.29%			102,449
		Monumental II Wrapper		Contract Wrapper – 1.47%			5,234
		RiverSource Trust Bond Fund		Common Collective Trust – 1,177,904 – shares			24,111,697
		RiverSource Trust Money Market Fund I		Common Collective Trust – 13,861,635 – shares			13,863,997
		FNMA TBA		Government Obligation – 5.00% – due 01/01/18			3,522,314
		FHLMC TBA		Government Obligation – 6.00% – due 01/01/33			3,249,375
		FEDERAL HOME LN MTG CORP MTN		Government Obligation – 4.00% – due 06/12/13			2,959,812
		FHLMC GOLD TBA 15YR		Government Obligation – 3.50% – due 01/15/26			2,313,657
		FEDERAL NATL MTGE ASSN POOL #930958		Government Obligation – 5.00% – due 04/01/39			2,175,036
		FHLMC REMIC SERIES 3676		Government Obligation – 4.00% – due 07/15/24			2,080,301
		FANNIE MAE		Government Obligation – 1.63% – due 10/26/15			1,862,353
		UNITED STATES TREAS NTS		Government Obligation – 3.63% – due 08/15/19			1,852,164
		FNMA MORT #AD0319		Government Obligation – 5.50% – due 10/01/39			1,622,444
		FNMA TBA 15YR		Government Obligation – 3.50% – due 01/15/26			1,560,656
		FEDERAL HOME MORTGAGE CORP POOL #G04688		Government Obligation – 5.50% – due 09/01/38			1,499,611
		FEDERAL NATL MTGE ASSN POOL #995753		Government Obligation – 4.50% – due 05/01/24			1,470,441
		FNMA 10 YEAR		Government Obligation – 3.50% – due 10/01/20			1,430,290
		UNITED STATES TREAS NTS		Government Obligation – 2.25% – due 11/30/17			1,388,647
		GNMA REMIC TRUST 2009-99 A		Government Obligation – 3.42% – due 11/16/35			1,378,908
		FEDERAL NATL MTGE ASSN POOL #745418		Government Obligation – 5.50% – due 04/01/36			1,309,839
		GNMA REMIC TRUST 2009-105		Government Obligation – 3.40% – due 12/16/50			1,248,245
		GNMA REMIC		Government Obligation – 2.46% – due 08/16/22			1,244,789
		UNITED STATES TREAS NTS		Government Obligation – 1.38% – due 11/30/15			1,221,130
		GNMA REMIC TRUST 2009-114		Government Obligation – 3.10% – due 12/16/38			1,214,063
		FNMA TBA		Government Obligation – 4.50% – due 01/01/19			1,153,109
		BARCLAYS BK PLC		Corporate Bond – 2.70% – due 03/05/12			1,146,066
		BSCMS 2005-T20-A2		Corporate Bond – 5.13% – due 10/12/42			1,089,672
		FORD CR AUTO TR 2009-E		Corporate Bond – 2.42% – due 11/15/14			1,026,335
		FEDERAL NATL MTG ASSN		Government Obligation – 1.60% – due 11/23/15			1,015,042
		PRIVATE EXPORT		Corporate Bond – 3.05% – due 10/15/14			1,002,332

Note : Column (d) is not applicable for participant-directed investments.

* Represents a party-in-interest

 

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Limited Brands, Inc. Savings and Retirement Plan

EIN #31-1048997 Plan #002

Schedule H, Line 4i

Schedule of Assets (Held at End of Year)

December 31, 2010

 

(a)		(b)		(c)		(e)
		Identity of Issue, Borrower, Lessor, or Similar Party		Description of Investment Including Maturity Date, Rate of Interest, Collateral, Par or Maturity Value		Current Value
		FNMA POOL#AE0085		Government Obligation – 0.55% – due 06/01/40			981,131
		FNMA 889052		Government Obligation – 6.00% – due 02/01/38			973,410
		GE CAP CCMT TALF 2009-2 A		Corporate Bond – 3.69% – due 07/15/15			936,365
		FNMA REMIC TRUST 2010-87B		Government Obligation – 4.00% – due 02/25/24			917,771
		GNMA SERIES 2009-80		Government Obligation – 3.08% – due 03/16/38			916,770
		GNMA REMIC TRUST 2010-74		Government Obligation – 2.63% – due 09/16/33			912,424
		WBCMT 2006-C29-A4		Corporate Bond – 5.31% – due 11/15/48			905,893
		WBCMT 2006-C27-APB		Corporate Bond – 5.73% – due 07/17/04			900,329
		UNITED STATES TREAS NTS		Government Obligation – 1.88% – due 10/31/17			877,513
		UNITED STATES TREAS NTS		Government Obligation – 3.50% – due 05/15/20			874,586
		GNMA REMIC TRUST 2010-148		Government Obligation – 1.69% – due 11/16/35			866,103
		GNMA REMIC TRUST 2010-100		Government Obligation – 2.35% – due 06/16/50			853,929
		CDC COMMERCIAL MTGE		Corporate Bond – 5.68% – due 11/15/30			849,017
		FNMA #725425		Government Obligation – 5.50% – due 04/01/34			836,654
		WORLD OMNI AUTO REC TR		Corporate Bond – 0.03% – due 05/15/13			817,638
		GNMA REMIC TRUST 2010-83		Government Obligation – 2.02% – due 10/16/50			797,942
		FNMA #745727		Government Obligation – 4.91% – due 05/01/16			793,918
		FNMA #745563		Government Obligation – 5.50% – due 08/01/34			784,570
		GE CAPITAL CREDIT CARD MASTER NOTE TRUST 2010-3 A		Corporate Bond – 2.21% – due 06/15/13			763,122
		CDN IMPERIAL BK OF COMMERCE		Corporate Bond – 1.45% – due 09/13/13			756,692
		GNMA REMIC TRUST 2010-122 A		Government Obligation – 1.90% – due 01/16/32			748,306
		FEDERAL NATL MTG ASSN GTD MTG PASS THRU CTF POOL NBR #0974740		Government Obligation – 6.00% – due 04/01/23			747,928
		FNMA #888414		Government Obligation – 5.00% – due 11/01/35			730,850
		UNITED STATES TREAS NTS		Government Obligation – 2.63% – due 08/15/20			723,261
		GCCFC 2007-GG9-A2		Corporate Bond – 5.38% – due 03/10/39			721,190
		LB-UBS CMBS 2007-C7		Corporate Bond – 5.87% – due 09/15/45			715,224
		CNH EQUIPMENT TR		Corporate Bond – 5.65% – due 01/15/16			711,903
		UNITED STATES TREAS NTS		Government Obligation – 3.13% – due 05/15/19			710,223
		FNMA MORTPASS PN#AE4151		Government Obligation – 3.50% – due 10/01/20			704,346
		GNMA REMIC TRUST 2010-52		Government Obligation – 2.94% – due 08/16/27			680,625
		UNITED STATES TREAS NTS		Government Obligation – 2.63% – due 11/15/20			676,883
		GENERAL ELEC CAP CORP MTN BE		Corporate Bond – 5.90% – due 05/13/14			668,775
		GOLDMAN SACHS GROUP INC		Corporate Bond – 5.13% – due 01/15/15			658,809
		FGLMC 6 2008		Government Obligation – 6.00% – due 12/01/38			657,031
		GNMA REMIC TRUST 2010-65 A		Government Obligation – 2.02% – due 11/16/28			645,974
		MSC 2006-HQ9-AAB		Corporate Bond – 5.68% – due 07/12/44			641,748
		MORGAN STANLEY		Corporate Bond – 5.38% – due 10/15/15			637,029
		FNMA #387608		Government Obligation – 4.48% – due 09/01/15			632,165
		COOPERATIEVE CENTRALE RAIFF		Corporate Bond – 2.13% – due 10/13/15			631,543
		JPMORGAN CHASE & CO		Corporate Bond – 3.70% – due 01/20/15			630,861
		VERIZON PENNSYLVANIA		Corporate Bond – 5.65% – due 11/13/11			624,528
		FNMA #735224		Government Obligation – 5.50% – due 02/01/35			623,044
		HARLEY DAVIDSON TR TALF 2009 A-4		Corporate Bond – 3.32% – due 02/15/17			620,750
		FEDERAL HOME LN MTG CORP		Government Obligation – 0.50% – due 09/17/13			620,201
		ROYAL BANK OF SCOTLAND GTD NTS		Corporate Bond – 2.65% – due 04/23/12			618,201
		BANK AMER FDG CORP		Corporate Bond – 7.38% – due 05/15/14			616,552
		GREAT AMER LS REC TALF 2009- A-4		Corporate Bond – 3.19% – due 12/15/13			615,341
		FANNIE MAE 2010-M4		Government Obligation – 2.00% – due 04/15/13			610,512
		FREDDIE MAC GIANT		Government Obligation – 6.00% – due 09/01/38			607,035
		BANK NEW YORK MTN BK ENT		Corporate Bond – 2.95% – due 06/18/15			602,094
		PACIFIC GAS & ELEC CO		Corporate Bond – 4.80% – due 03/01/14			588,960
		UNITED STATES TREAS NTS		Government Obligation – 1.25% – due 04/15/14			572,027
		FEDERAL NATL MTG ASSN GTD MTG PASS THRU CTF POOL NBR #0725066		Government Obligation – 6.00% – due 12/01/33			570,825
		FEDERAL HOME LN MTG CORP		Government Obligation – 0.63% – due 01/28/13			565,648
		UNITED STATES TREAS NTS		Government Obligation – 1.88% – due 07/15/15			564,789
		HARLEY-DAVIDSON MT TALF 2009-4		Corporate Bond – 2.40% – due 07/15/14			561,455
		GNMA REMIC TRUST 2011		Government Obligation – 2.20% – due 01/16/35			556,102
		FNMA #638591		Government Obligation – 6.50% – due 04/01/32			553,846
		FNMA #766731		Government Obligation – 5.00% – due 03/01/34			551,410
		H 1G 1G087		Government Obligation – 4.71% – due 07/01/35			546,692
		FNMA #785506		Government Obligation – 5.00% – due 06/01/34			528,478
		GCCFC 2003-C2 A3		Corporate Bond – 4.53% – due 07/05/10			512,891

Note : Column (d) is not applicable for participant-directed investments.

* Represents a party-in-interest

 

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Limited Brands, Inc. Savings and Retirement Plan

EIN #31-1048997 Plan #002

Schedule H, Line 4i

Schedule of Assets (Held at End of Year)

December 31, 2010

 

(a)		(b)		(c)		(e)
		Identity of Issue, Borrower, Lessor, or Similar Party		Description of Investment Including Maturity Date, Rate of Interest, Collateral, Par or Maturity Value		Current Value
		FEDERAL HOME MORTGAGE CORP POOL #J13715		Government Obligation – 3.50% – due 12/01/20			510,547
		BACM 2006-2-AAB		Corporate Bond – 5.72% – due 05/10/36			510,447
		GNMA_10-159		Government Obligation – 2.16% – due 01/16/33			506,017
		JPMCC 2005-CIBC12		Corporate Bond – 4.85% – due 09/12/37			502,115
		GNMA REMIC TRUST 2010-141 A		Government Obligation – 1.86% – due 08/16/31			501,480
		GNMA REMIC TRUST 2010-102		Government Obligation – 1.85% – due 07/16/32			497,726
		FORD CREDIT		Corporate Bond – 4.00% – due 09/15/15			494,349
		RAMC 2006-1-AF3		Corporate Bond – 5.61% – due 05/25/36			492,055
		FNMA #763798		Government Obligation – 5.50% – due 03/01/34			491,449
		FANNIE MAE 2010-M4 0.000%		Government Obligation – 2.52% – due 06/25/20			484,029
		FNMA #555591		Government Obligation – 5.50% – due 07/01/33			481,795
		FNMA #725773		Government Obligation – 5.50% – due 09/01/34			476,117
		FNMA REMIC TRUST 2010-M5		Government Obligation – 2.26% – due 07/25/20			475,616
		FNMA #555432		Government Obligation – 5.50% – due 05/01/33			473,670
		FNMA #462237		Government Obligation – 5.16% – due 07/01/16			471,307
		GNMA II #003501		Government Obligation – 6.00% – due 01/20/34			471,026
		SBC COMMUNICATIONS		Corporate Bond – 6.25% – due 03/15/11			468,454
		FNMA #22092		Government Obligation – 5.50% – due 09/01/34			468,415
		CSMC 2006-C1-A2		Corporate Bond – 5.51% – due 02/15/39			466,092
		WORLD OMNI AUTO REC TRUST		Corporate Bond – 0.21% – due 05/15/15			461,469
		GNMA REMIC TRUST 2009-86		Government Obligation – 3.54% – due 09/16/35			461,276
		MERCEDES BENZ AUTO		Corporate Bond – 2.14% – due 08/15/16			459,888
		ALLY AUTO 2010-1		Corporate Bond – 2.30% – due 12/15/14			457,561
		HONDA AUTO RECEIVABLES OWNER TRUST 2010-2 A4		Corporate Bond – 1.92% – due 06/18/13			456,930
		AMERICREDIT AUTO		Corporate Bond – 1.00% – due 01/15/14			456,773
		FEDERAL NATL MTGE ASSN POOL #672194		Government Obligation – 5.00% – due 12/01/17			455,598
		FNMA # 735578		Government Obligation – 5.00% – due 06/01/35			438,503
		PROCTOR & GAMBLE		Corporate Bond – 1.80% – due 11/15/15			437,217
		BANK OF AMERICA FDIC GTD TLG		Corporate Bond – 2.10% – due 04/30/12			435,337
		FLORIDA POWER CORP		Corporate Bond – 5.65% – due 06/15/18			413,045
		FHLMC(NON GOLD) ARM #1G2450		Government Obligation – 5.90% – due 08/01/36			412,189
		JPMORGAN CHASE		Corporate Bond – 1.65% – due 02/23/11			403,113
		FNMA #704265		Government Obligation – 5.50% – due 05/01/33			398,357
		FNMA #555528		Government Obligation – 6.00% – due 04/01/33			377,935
		FNMA #725815		Government Obligation – 6.00% – due 12/01/33			364,118
		FNMA		Government Obligation – 5.00% – due 08/01/34			360,148
		U S BANCORP MEDIUM TERM NTS- BOOK ENTRY TRANCHE #TR00166		Corporate Bond – 2.45% – due 07/27/15			358,118
		FEDERAL NATL MTG ASSN		Government Obligation – 1.13% – due 04/26/13			356,659
		CITIGROUP INC		Corporate Bond – 6.50% – due 01/18/11			355,859
		FNMA #357324		Government Obligation – 5.00% – due 01/01/33			354,844
		CNH EQUIPMENT TRUST		Corporate Bond – 1.17% – due 05/15/15			349,120
		FEDERAL HOME LN MTG CORP		Government Obligation – 1.88% – due 03/08/13			347,913
		FEDERAL HOME LN MTG CORP		Government Obligation – 0.75% – due 07/06/12			346,267
		FNMA #735935		Government Obligation – 5.00% – due 12/01/18			345,061
		CAMPBELL SOUP CO		Corporate Bond – 3.05% – due 07/15/17			325,609
*		WACHOVIA AUTO OWNER TR 2008-A ASSET BACKED NT CL A-3A		Corporate Bond – 4.81% – due 09/20/12			323,599
		FEDERAL NATL MTGE ASSN POOL #890231		Government Obligation – 5.00% – due 07/01/25			307,970
		FNMA ARM #826908		Government Obligation – 5.09% – due 08/01/35			290,607
		FHLMC REMIC SERIES 3296 NA		Government Obligation – 5.00% – due 02/15/21			284,351
		AMCAR 2008-AF A3		Corporate Bond – 5.68% – due 12/12/12			275,789
		F CI 988961		Government Obligation – 5.50% – due 08/01/23			274,956
		JPMCC 2003-C1-A1		Corporate Bond – 4.27% – due 01/12/37			274,876
		FEDERAL NATL MTGE ASSN POOL #995097		Government Obligation – 6.50% – due 10/01/37			273,739
		FNMA #646147		Government Obligation – 7.00% – due 06/01/32			271,192
		F CI 988113		Government Obligation – 5.50% – due 08/01/23			268,661
		BANC AMER CMBS 2005-3 A-3A 4.6210%		Corporate Bond – 4.62% – due 07/10/43			259,657
		RAMC 2006-2-AF3		Corporate Bond – 5.69% – due 08/25/36			259,397
		RENAISSANCE HOME EQUITY LN TR 2006-4 MTG PASS THRU CTF CL AF-6		Corporate Bond – 5.34% – due 01/25/37			255,971
		CITIGROUP INC		Corporate Bond – 5.50% – due 10/15/14			255,929
		JPMCC 2004-LN2-A1		Corporate Bond – 4.47% – due 07/15/41			251,509
		CS FIRST BOSTON MTGE SECURITIES		Corporate Bond – 5.10% – due 08/15/38			238,288
		FNMA #886054		Government Obligation – 7.00% – due 07/01/36			236,665

Note : Column (d) is not applicable for participant-directed investments.

* Represents a party-in-interest

 

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Limited Brands, Inc. Savings and Retirement Plan

EIN #31-1048997 Plan #002

Schedule H, Line 4i

Schedule of Assets (Held at End of Year)

December 31, 2010

 

(a)		(b)		(c)		(e)
		Identity of Issue, Borrower, Lessor, or Similar Party		Description of Investment Including Maturity Date, Rate of Interest, Collateral, Par or Maturity Value		Current Value
		WMALT 2007-OC1-A2		Corporate Bond – 0.59% – due 01/25/47			235,732
		FNMA 30YR TBA		Government Obligation – 6.50% – due 01/01/30			222,250
		RENAISSANCE HOME EQUITY LN TR 2007-2		Corporate Bond – 5.74% – due 06/25/37			213,706
		TRIAD AUTOMOBILE RECEIVABLES TR 2007-B ASSET BKD NT CL A-3		Corporate Bond – 5.24% – due 10/12/12			212,898
		FNMA #741897		Government Obligation – 5.00% – due 10/01/33			201,039
		FNMA #254793		Government Obligation – 5.00% – due 07/01/33			197,064
		CWL 2005-17-1AF2		Corporate Bond – 5.36% – due 12/25/35			188,694
		INDX 2006-AR13-1A1		Corporate Bond – 6.11% – due 07/25/36			188,561
		FNMA #672029		Government Obligation – 6.00% – due 12/01/17			182,792
		FNMA 2004-60 PA		Government Obligation – 5.50% – due 04/25/34			180,189
		FNMA ARM #887096		Government Obligation – 5.81% – due 07/01/36			172,089
		FGOLD 15 YR #G12101		Government Obligation – 5.00% – due 11/01/18			163,333
		FNMA ARM #849082		Government Obligation – 5.82% – due 01/01/36			162,767
		FNMA #545864		Government Obligation – 5.50% – due 08/01/17			144,477
		FNMA #865689		Government Obligation – 5.85% – due 02/01/36			143,704
		FEDERAL NATL MTGE ASSN POOL #976421		Government Obligation – 4.50% – due 03/01/23			143,537
		RAMC 2005-3-AF3		Corporate Bond – 4.77% – due 10/25/35			140,477
		GMACM 2004-HE-A4		Corporate Bond – 3.65% – due 10/25/33			133,499
		FHLMC #D95319		Government Obligation – 6.00% – due 03/01/22			131,981
		WBCMT 2005-C18-A2		Corporate Bond – 4.66% – due 04/15/42			124,599
		FNMA ARM #866097		Government Obligation – 6.14% – due 02/01/36			120,053
		FHLMC 2907-AG		Government Obligation – 4.50% – due 03/15/19			108,363
		FNMA 15YR TBA		Government Obligation – 5.50% – due 01/01/15			107,500
		AT&T INC		Corporate Bond – 2.50% – due 08/15/15			105,875
		FNMA #809534		Government Obligation – 5.13% – due 02/01/35			105,170
		FNMA #725090		Government Obligation – 4.81% – due 11/01/33			101,071
		GNMA REMIC TRUST 2010-63		Government Obligation – 2.54% – due 04/16/28			100,647
		FNMA #681400		Government Obligation – 5.50% – due 03/01/18			97,633
		FNMA #648349		Government Obligation – 6.00% – due 06/01/17			95,498
		PACIFICORP		Corporate Bond – 5.45% – due 09/15/13			94,498
		FNMA ARM #768117		Government Obligation – 5.44% – due 08/01/34			93,322
		FHLMC GOLD #E97247		Government Obligation – 5.00% – due 06/01/18			90,519
		FNMA #705304		Government Obligation – 4.91% – due 06/01/33			84,568
		RAMC 2005-4-A3		Corporate Bond – 5.56% – due 02/25/36			83,992
		FNMA #764082		Government Obligation – 4.80% – due 01/01/34			81,554
		FNMA ARM #872753		Government Obligation – 5.83% – due 06/01/36			81,519
		CWALT 2006-OA11-A3		Corporate Bond – 0.65% – due 09/25/04			81,471
		FNMA ARM #799769		Government Obligation – 5.05% – due 11/01/34			78,439
		FNMA ARM #786628		Government Obligation – 5.67% – due 07/01/34			76,100
		FHLMC 2843-BA		Government Obligation – 5.00% – due 01/15/18			73,633
		FNMA ARM #801344		Government Obligation – 5.06% – due 10/01/34			68,852
		FNMA #636030		Government Obligation – 6.50% – due 04/01/32			68,184
		FNMA #568049		Government Obligation – 6.00% – due 04/01/16			58,647
		FNMA #703937		Government Obligation – 5.50% – due 05/01/18			56,327
		FHLMC GOLD #E99565		Government Obligation – 5.50% – due 09/01/18			50,763
		BACM 2005-6-A2		Corporate Bond – 5.19% – due 09/10/47			50,001
		FHLMC GOLD #C66932		Government Obligation – 6.00% – due 05/01/32			48,158
		FHLMC #780514 ARM		Government Obligation – 5.01% – due 05/01/33			43,363
		FNMA #254536		Government Obligation – 7.00% – due 09/01/17			27,402
		FHLMC 2617 HD		Government Obligation – 7.00% – due 06/15/16			25,641
		FNMA 2004-W3 A15		Government Obligation – 5.00% – due 05/25/34			1,263
		FNMA #545701		Government Obligation – 7.00% – due 07/01/12			775
						$	705,846,589

Note : Column (d) is not applicable for participant-directed investments.

* Represents a party-in-interest

 

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

 

				Limited Brands, Inc. Savings and Retirement Plan
Date: June 24, 2011				By:		/s/ Ezra Singer
						Ezra Singer
						Senior Vice President,
						Talent Management & Total Rewards

 

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INDEX TO EXHIBITS

 

Exhibit No.		Description
23.1		Consent of Ernst & Young LLP

 

27