Amy Preston - Vice-President of Investor Relations Martyn Redgrave - Executive Vice President and Chief Administrative officer Stuart Burgdoerfer - Executive Vice President and Chief Financial Officer Sharen Turney - Chief Executive Officer, Victoria’s Secret Dian Neil - Chief Executive Officer, Bath & Body Works

Dana Telsey - Telsey Advisory Group Brian Tunick - J.P. Morgan Kimberly Greenberger - Citigroup Jennifer Black – Jennifer Black and Assoc. Paul Lejuez - Credit Suisse [Stacey Pack] – [SP Research] Richard Jaffe – Stifel Nicolaus Todd Slater - Lazard Capital Rick Patel for Lorraine Maikis – Bank of America, Merrill Lynch Analyst for Laura Champine – Cowen and Company Michelle Clark – Morgan Stanley Jeff Stein - Soleil Securities Janet Kloppenburg – JJK Research

Welcome everyone to the Limited Brands fourth quarter 2008 earnings conference call. (Operator Instructions) At this time I would like to turn the conference over to the Vice President of Investor Relations, Ms. Amy Preston. Please go ahead.

Good morning everyone. Thank you for joining us. As a matter of formality I need to remind you that any forward-looking statements we may make today are subject to our Safe Harbor statement found in our SEC filings. Our fourth quarter earnings release and related financial information are available on our website www.limitedbrands.com. This call is being taped and can be replayed by dialing 1-866-NEWS-LTD. You can also listen to an audio reply from our website. Martyn Redgrave, EVP and CAO; Stuart Burgdoerfer, EVP and CFO; Sharen Turney CEO of Victoria Secretes and Dian Neil, CEO of Bath & Body Works are all joining us today. After our prepared comments we will be available to take your questions for as long as time permits. So that we can speak with as many callers as possible please limit yourself to one question. Thanks and now I’ll turn the call over to Martyn Redgrave.

Thanks Amy. Good morning everyone. First of all let’s acknowledge what all of our competitors have said or will be saying; this is a time when there is extraordinary uncertainty and lack of visibility in all of our businesses. In this unprecedented environment we are choosing to take aggressive actions while remaining confident, disciplined and also looking forward to the opportunities that will come. In the fourth quarter although we anticipated the environment would be challenging the holiday time period was tougher than any of us had expected. Traffic levels declined versus previous trends and the environment was extremely competitive and promotional. As a result our sales and merchandise margins were below our initial expectations. We continue to be focused on the conservative management of retail fundamentals. First of all, our inventories are clean, below our initial targeted levels and down 34% per square foot on a 2-year basis. Second, we continue to tightly control operating expenses. Over the last 18 months we have taken actions to reduce our expense base by $150 million and as noted in our press release this morning we have taken further actions today by reducing our home office headcount by approximately 400 associates or roughly 10%. We are also suspending pay increases for salaried associates and reducing other controllable expenses across the enterprise. We expect these actions will result in annualized expense savings of between $200-250 million. Approximately $150 million of this will benefit 2009. Next, we continue to reduce capital expenditures. From a high of $749 million in 2007 to $479 million for 2008 and now to a target of roughly $200 million in 2009. We also are focusing on cash and liquidity. Free cash flow in 2008 was $475 million and we ended the year with $1.2 billion in cash. Finally, as we discussed in our press release we also proactively renegotiated our covenants on our term loan and revolving credit facilities. Our banks have been great partners to us in that effort. We ended 2008 in compliance with all of our covenants and with significant cushion in our leverage and fixed charge coverage financial covenants. As we look to 2009 we thought it was important to restructure our borrowing facilities to ensure flexibility in the event of a continued deterioration in the economic environment. This action coupled with our substantial cash flow, strong existing liquidity and lack of near-term debt maturities gives us great advantage as we continue to navigate through this very stormy and uncertain economy. Overall we continue to believe we are in the right businesses. Our brands lead their categories and offer high emotional content at accessible prices. As Sharen and Dian will further describe in a few minutes, we are managing the operating aspects of the business very conservatively while at the same time we are aggressively focused on bringing compelling merchandise assortments, marketing and store experiences to our customers to maximize sales and margins and we are continuing to be optimistic in this difficult environment. I would also like to give you a few updates on other key initiatives. We continue to be on track with our technology initiatives and the Victoria’s Secret Direct Distribution Center. We are planning to implement the last phase of our supply chain systems project at Victoria’s Secret stores this summer. We also continue to be very pleased with our performance in the six new BBW stores that we opened in Canada. Over the past five months since opening these stores are achieving about 2.5 times the average U.S. store sales volume. As a result we plan to open approximately 20 more stores in Canada in 2009. In addition, we are continuing our tests of the Henri Bendel Accessory Stores and are planning to open six new locations this year. Before I turn it over to Stuart I’d like to make some comments on La Senza’s fourth quarter performance. As you may know, the Canadian retail market has also been very negatively impacted by the global economic crisis. Our fourth quarter results at La Senza were below our expectations. Fourth quarter sales were $133.7 million, down 19% and comps were down 10%. Although it had no impact on comps, foreign currency translation negatively impacted total sales by roughly $30 million. Operating income dollars and rate were both down significantly to last year excluding the impact of the impairment charge which Stuart will discuss shortly and the most significant driver of La Senza’s operating income decline was a decline in the merchandise margin rate which was driven by higher promotional activity and the weakening of the Canadian dollar as La Senza purchases merchandise in U.S. dollars. Thanks and I will now turn it over to Stuart.

Thanks Martyn. Good morning everyone. Turning to our fourth quarter performance we reported earnings of $0.05 per share versus $1.10 last year. Both this and last year’s results include significant items as detailed in our press release. I won’t repeat last year’s items but the following significant items totaling $0.63 per share are included in this year’s results. First, a pre-tax, non-cash impairment charge of $215 million or $0.63 per share to reduce the value of La Senza goodwill and other intangible assets in accordance with the applicable accounting principles specifically SFAS 142. As you know, we acquired the La Senza business in January 2007. As Martyn mentioned the economic environment in Canada, similar to the U.S., has deteriorated significantly and negatively impacted La Senza’s operating performance. Second, a pre-tax charge of $22.6 million or $0.04 per share to accrue for severance charges related to a home office headcount reduction of roughly 10%. Finally, a tax benefit of $15 million or $0.05 per share primarily related to certain discrete, foreign and state income tax items. Excluding the above 2008 significant items and the 2007 significant items totaling $0.16 per share as detailed in our press release, our fourth quarter earnings per share were $0.68 versus $0.94 last year. All results discussed on this call exclude these significant items. Fourth quarter net sales were $2.991 billion versus $3.228 billion last year and comps were down 10%. The gross margin rate decreased 440 basis points to 34.3% driven roughly equally by the decline in the merchandise margin rate and buying and occupancy expense de-leverage. Sharen and Dian will cover the drivers of the merchandise margin rate decline in more detail. SG&A dollars declined by $41.3 million or 6% and the SG&A rate increased by 30 basis points. Roughly half of the dollar improvement was the result of lower cost at Victoria’s Secret Direct related to technology in the distribution center. Total operating income decreased $182.9 million to $390.7 million. By segment, the Victoria’s Secret segment decreased by $96.8 million to $213.4 million; Bath and Body Works decreased by $85.9 million to $209.4 million; the other segment operating loss was roughly flat at $32.1 million as a decline in Mast operating income was offset by expense favorability. Retail inventories per square foot at cost ended the quarter down 8% versus last year and down 34% on a 2-year basis. For the full year 2008 earnings per share were $1.05 versus $1.21 last year excluding significant items of $0.40 per share in 2008 and $0.68 per share in 2007. Fiscal year 2008 sales were $9.043 billion compared to $10.086 billion last year and comps were down 9%. The gross margin rate declined 110 basis points to 33.2% and the SG&A rate improved by 50 basis points. Total operating income decreased $143.5 million to $717.5 million. By segment, the Victoria’s Secret segment decreased by $50.8 million to $619.8 million. Bath and Body Works decreased by $85.7 million to $215.5 million and 2007 apparel operating income of $19.6 million was eliminated in connection with the disposition of those businesses. The other segment operating loss decreased by $12.7 million to a loss of $117.8 million. Capital expenditures in 2008 were $479 million and depreciation and amortization was $343 million. Looking forward to 2009, as Martyn said the current environment is very challenging and uncertain and we expect it to remain so. Having said that we believe it is important to share with you our perspectives on how we are managing the business as well as a range of possible financial outcomes emphasizing that our visibility to economic and consumer trends is limited particularly in the all-important fourth quarter. The most important thing that I would like to stress is that we are managing the financial aspects of the business including inventory, expenses, capital expenditures, cash and liquidity on a very conservative basis. In this environment we think a reasonable comp expectation ranges from down 5 to down 10% for the full year. We expect a similar decline in sales at Victoria’s Secret Direct. Finally, we expect Mast sales to decline between 15-20% as customers reduce inventory and their orders. Our merchandise margin rate is difficult to forecast. Although inventories are well controlled and we are planning them conservatively we expect that the environment will remain very promotional and customers are reluctant to pay full price. We will stay very flexible and responsive to traffic trends and we will adjust our promotional plans accordingly. We are also pursuing opportunities to reduce our cost of merchandise, the benefit of which will be weighted to the latter part of the year. Taking all of this into account our current view is that full year gross margins will be down to last year driven by buying and occupancy de-leverage partially offset by an improvement in merchandise margin rate. With respect to expenses we are focused on a number of initiatives to reduce costs in areas including home office, non-merchandise spending, marketing and other discretionary costs. As Martyn mentioned we expect these actions will result in an expense reduction of approximately $150 million in 2009. We anticipate that 2009 depreciation and amortization expense will approximate $320 million. Interest expense will be approximately $60 million in the first quarter reflecting the increase in the amended term loan interest rate and a portion of other fees and costs that are not amortized over the life of the facilities. We expect interest expense to be approximately $52 million per quarter for the remainder of the year reflecting the increased interest rate in the amended term loan and the amortized portion of other fees and costs. Interest income will be about $15 million lower than 2008 driven by very low yields given market rates and our conservative investment posture. Our tax rate will be approximately 38% and weighted average shares will approximate $324 million. So assuming all of these inputs we expect earnings per share to be between $0.60 and $0.85 per share. Turning to the first quarter specifically it is more difficult leverage fixed costs on the lower sales base. We expect that first quarter comps will be down in the high single digit range based on a challenging environment. Our February comps are currently tracking down mid to high single digits. We expect that gross margins will be down significantly driven primarily by a decline in merchandise margins in our business and buying and occupancy de-leverage on the negative comps. We expect SG&A de-leverage in the first quarter on the negative comps as the benefit of our expense reductions is weighted to the back half of the year. Assuming these inputs for the first quarter we expect to lose between $0.07 and $0.12. We will continue to proactively manage inventory levels for 2009 with receipts for the first half of the year down between 10-12% and inventory levels down in the high single digits at the end of the second quarter. Our monthly inventory levels for March, April and May will be impacted by the pull forward of first half receipts for Victoria’s Secret stores in connection with our systems implementation this summer. We continue to aggressively manage capital expenditures. As Martyn mentioned we are projecting 2009 CapEx at about $200 million, down from $479 million in 2008 and $749 million in 2007. Approximately 70% of total 2009 capital spending will be focused on real estate, reflecting investment in key U.S. centers and significant growth for Bath and Body Works in Canada. In the U.S. total square footage is expected to grow by 1% while square footage in Canada is expected to grow by 3%. More specifically, in 2009 we plan to open 50 new stores, 23 of which will be in the U.S. and 27 in Canada, which is down from 145 new stores opened in 2008. In terms of store reconstructions we are planning 44 reconstructions in 2009 primarily in the United States, down from 153 reconstructions in 2008. Turning to liquidity, we ended the year with $1.2 billion in cash and we expect to generate between $350-450 million in free cash flow in 2009. Our free cash flow and cash position along with the additional $1 billion available under our revolving credit facility results in very strong liquidity which is more than sufficient to fund our working capital, capital expenditures, dividends and any other foreseeable needs. We have substantial cushion under our renegotiated term loan and revolver financial covenants and we have no debt maturities until 2012. The 8K filing of the amendment and our additional information package available from our website details the new financial covenants. The amendment allows us the flexibility to continue to pay our dividends at the current level. We do not anticipate having to borrow under our additional $1 billion in available credit facilities in 2009. Thanks. Now I will turn the discussion over to Sharen.

Thank you Stuart and good morning everyone. In the fourth quarter sales for our total segments including La Senza decreased 4% to $1.767 billion. Comp store sales were down 10%. Total segment operating income decreased $96.8 million or 470 basis points to $213.4 million primarily driven by a decline at the Victoria’s Secret stores. Turning to performance by channel, Victoria’s Secret stores comps declined by 10% and total sales decreased 5% to $1.185 billion. Comp store sales for the quarter were below expectations. Pink Friday, our version of black Friday, was a record sales day for us but as all retail experienced, traffic fell significantly in the first few weeks of December. Overall, the customer was more responsive to promotion. We saw this in increased CRM redemption rates and high balance of promotional sales. We responded by pulling up our bra sale and our semi-annual sale and implementing targeted promotions across the store. This helped us appropriately manage inventory to target levels but as a result merchandise margin rates in the quarter were significantly lower than planned. Buying and occupancy and SG&A expenses de-leveraged on the negative 10% comp. Operating income dollars and rates were down significantly to last year. During the holidays customer responded well to newness and product that was special or differentiated with color and embellishment. We saw this in our positive response to the Big Heart theme which was colorful and fresh. We continue to be pleased by the strength in the teen sub-brand compared to the rest of the brand and competitors. Bra sales were up in the quarter aided by the pre-Christmas bra sale. Our launches met our expectations and fashion bras in particular were strong. However, we continued to experience weakness in beauty in part due to the macro environment but also due to a lack of newness in our beauty pipeline which we have discussed on previous calls. Although we did see some individual successes with our new sleepwear line, overall results were disappointing. Now let’s review performance at Direct. Sales for our web and catalog business were $449.2 million, up 4%. This was below expectation as we were lapping last year’s issues with our distribution center. Demand as measured by total orders received was well below the spring trends and was negatively impacted by the pull back in catalog circulation in the third quarter 2008. We responded to softness in demand with aggressive promotions to drive sales and close inventory. Consequently there was a significant decline in the gross margin rate which adversely affected operating income rates and in turn operating income dollars. The sales softness and promotional activity more than offset the profit improvements we had initially anticipated from lapping the DC issues in 2007. The new distribution center continues to meet shipping and accuracy milestones and supported several record days in the holiday time period. We still have work to do to achieve our productivity targets but significant progress has been made. Looking ahead to this first quarter we are anticipating the continuation of current consumer trends and therefore are preparing our business accordingly. Based on current sales projections we are preparing contingencies and specific actions to continue to match inventory levels to projected sales declines. We are also continuing to tighten and control expenses. At the same time we are focused on leveraging the strength of the brand through newness, compelling in-store presentation, customer service and best in class marketing. We will continue to differentiate ourselves by offering sophisticated, feminine and sexy products and providing our customers with an unmatched store experience. We are continuing to tell her a brand story that is regularly refreshed with innovative merchandise. In late January and early February we featured Vintage Victoria which featured classic Victoria’s Secret sexy and feminine lingerie and Beauty introduced Noir, a new fragrance just in time for Valentines Day. This month in bras we also introduced the new Body Bare line at the entry price point of $29.50. This is a beautiful, every day line that will introduce even more women to our most celebrated product, our bras. Last week we launched in all stores our swimwear collection which we tested in 350 stores last year. In Beauty we introduced a new Pink Body Care line. For the remainder of the spring season we are building on our insight from holiday with a calendar that emphasizes constant newness with regular core sets refreshing. Specifically, the season will be anchored by three major bra launches and supplemented by fragrance and body care launches as well as fashion and seasonal themed floor sets. Let me review some examples for the first quarter. In March we will anniversary last year’s Bio Fit launch with a bra we call The Perfect One. A bra with perfectly placed padding that conforms over the body. Also in March we will be launching a new body care line we call Naturally Victoria’s Secret. This line uses natural ingredients that offer high quality skin care benefits with a beautiful, light sense. This line will be followed up in April by the launch of the Dream Angels push up bra. The Dream Angels launch will be supplemented by the introduction of a new beauty fragrance that suggests a sexy, cozy feel of our Intimates products. In the direct channel, we are experiencing softness in the face of a highly promotional external environment. We are responding by leveraging the store channel intimate apparel initiative. Swimwear alone has more than 500 styles from which to choose on line. In apparel we are driving a quality initiative and offer new and exciting products in all of our categories. These are examples of activities this spring that will deliver great products and newness to our customers. In closing, early indications are that the environment will remain very difficult but our brand is in a unique position. We have worked hard to build a deep, emotional connection to our customers. We continue to be one of the most recognized and most desired brands in the world and that connection is our best incentive. So while we may selectively use promotions to drive traffic, we will not do so indiscriminately or in ways that are inconsistent with the Victoria’s Secret brand proposition. We see every launch as an opportunity for up side. When products are successful we will chase those opportunities. Further, we will broaden and extend them by identifying adjacencies and leveraging opportunities across both store and direct channels. Above all, we will continue to leverage our strength which is the unparalleled emotion position of the brand. Thank you and I will turn it over to Dian.

Thank you Sharen. Good morning. As we discussed in our monthly sales call, the economic climate presented challenges during holiday but we have also had a number of positive results and learned valuable lessons during the fourth quarter. Black Friday was the biggest date ever for Bath and Body Works. Our customers responded favorably to the newness in our assortment and their in-store experience. The Signature collection restage launched in 400 stores in the eastern half of the United States and rolled nationwide earlier this month. This preliminary launch helped us to test and learn and to roll out the remaining 1,200 stores successfully. Finally, January comps were stronger than expected driven by our successful semi-annual sale. Despite some positive news we faced some major challenges. The most significant was traffic. It was below expectations and required us to be more promotional than we had planned. Additionally, we saw that our customers spent less in each transaction than last year. At this time I would like to take you through the fourth quarter financial results. Bath and Body Works fourth quarter comps were below expectations at negative 11%. The comp performance was primarily the result of softness in store traffic and lower sales per transaction. Total sales for the quarter were $997 million, down 8% or $83 million from last year. The 3% spread between comp and decline in total sales decline represent sales from new stores and growth in our e-commerce business. For the quarter operating income versus last year declined $86 million to $209 million driven primarily by sales and gross margin declines as well as buying and occupancy increases over last year. Gross margin rates decreased significantly versus last year caused primarily by merchandise margin rates. Fixed occupancy expense combined with negative comp sales also contributed to the lower gross margin rate. The significant decline in merchandise margin rates to last year was caused by the increased promotional activity aimed at driving transactions and in clearing seasonal inventory through the very difficult holiday season. Although circulation of our direct mail promotional activity was in line with last year’s levels, we did see an increase in the number of customer redemptions utilizing this vehicle. SG&A expense dollars were down to last year driven by our tight focus on expense management. Our SG&A rate de-leverage was the result of the fixed component of our cost structure and the negative comp environment. The active management of inventory throughout the season allowed us to finish the year with inventory levels that were down to last year. During the quarter the performance of our e-commerce business met our expectations. We continue to view the channel as both a revenue and profit generator as well as a marketing vehicle for the Bath and Body Works brand and our collection of sub-brands. In light of the difficult economic conditions we will continue to actively control discretionary sending and aggressively manage inventory levels to mitigate any top line softness. Additionally, we are focused on executing our spring priorities which are: First and foremost, the nationwide re-launch of our Signature collection which happened on February 9. This re-launch has improved the perception of this brand under more sophisticated packaging, improved formulas and new and improved in-store marketing and navigation. Second, we are capitalizing on the success of our presentation tests we ran in the fall by rolling out our Home Fragrance and Signature collection segmentation to over 500 stores. The roll out, which occurred last week, and the initiative at large allows us to leverage our system capabilities to [distort] inventories to drive store and SKU productivity as well as drive top line and margin growth. Third is about newness. Our customers have been and are responding to newness. In addition to the new Signature collection we are launching over 10 additional collections, fragrances and/or forms across our sub-brands throughout the spring season. With those as our priorities for spring, we continue to focus on our Signature collection re-stage during the first quarter with a major fragrance launch in March and many creative ways to drive trial and receipts across the selection focusing on new forms and formulas. Despite the difficulty in and constraints on consumer spending we remain positioned to read and react and capitalize on the opportunities as they arise. With that I will turn the discussion back over to Amy.

Thanks Dian. At this time we are happy to take any questions you might have. Again, as a reminder in the interest of time and consideration to others please limit yourself to one question. Operator, I will turn it back over to you.

(Operator Instructions) The first question comes from the line of Dana Telsey - Telsey Advisory Group. Dana Telsey - Telsey Advisory Group: Can you talk a little bit about the real estate side of the business? What are you seeing for both businesses in terms of renegotiation of existing leases and potentially is there a store closing that would be evaluated too? Then you talk about margins for both businesses and promotional level. How are you planning price points and the impact on gross margin?

It is an interesting situation on the real estate front. Because we are such a strong presence in the mall and we are a very successful part of that presence we are approaching our conversations with landlords in a very respectful and confidential way. We are leading with our emphasis on strengthening our relationship with the landlords rather than simply asking them for concessions. Obviously when we have lease renewals or repositioning within the mall going on we are looking for the right kind of market rate on those lease renewals but we are not seeking to do more than that at this stage of our discussions with our landlords.

At Bath and Body Works we have actually done a lot of testing throughout the fourth quarter and continue to test a lot of different buy ins to most of our collections. Our AUR’s are basically flat to last year but as I mentioned earlier our overall ABS or average basket is actually below last year. So we started selling fewer units but the AUR’s are pretty well flat.

At Victoria’s Secret as we see the deterioration of traffic within the malls we are positioned to take action with promotion, if necessary. We have a very conservative plan within our gross margin strategy. We are not looking to over promote Victoria’s Secret but actually pulse throughout the [weekend] very specific targeted promotions. For example as we have one that started this week with Pink giving away a free lip gloss with a purchase. So it is all strategized. It is within the budget. We will only pull the trigger if necessary.

The next question comes from Brian Tunick - J.P. Morgan. Brian Tunick - J.P. Morgan: I was wondering if Sharen and Dian maybe could just talk about why they think maybe February, the month, is trending significantly better than your original expectations? Then Stuart on the free cash flow guidance other than inventories what are the other buckets of working capital improvements?

At Bath and Body Works we are actually our Signature collection as you all know is a very large part of our business and it is actually selling better than we had expected at the beginning of the month as well as our home fragrance business is actually trending better than we had expected but we are pleased with the initial results.

At Victoria’s Secret we came in with the Valentines Day where we actually did a Godiva gift with purchase which exceeded our expectations. We have more newness in beauty. We already have two launches in this year going into the spring season. The pipeline is full in beauty which we are getting good results from that. Our Pink Collegiate line as well as Pink Business has been strong and continues to be as well in Victoria’s Secrets the bra business remains healthy.

On 2009 free cash flow assumptions we did not make any aggressive assumptions with respect to additional improvements on payables or things on the liability side of the balance sheet. There will be some modest decline in receivables related to the Mast business to third party customers and obviously some improvement or source of cash from inventory. The key thing is really the reduction in CapEx year-over-year versus 2008.

The next question comes from Kimberly Greenberger – Citigroup. Kimberly Greenberger - Citigroup: I was hoping you could help us Stuart with how to think about SG&A dollars here in the first half of the year and when you expect on a run rate basis to get the full benefit from the SG&A cost cutting efforts you have undertaken?

As we outlined in an overall sense we believe that the benefit of our SG&A or expense reductions to be on an annualized basis to be between $200-250 million. We expect to get $150 million of that in 2009. Implicit in your question is your understanding, which is the case, that some of that or I should say the $150 million does skew more so to the latter half of the year than the first half. With that said as Martyn outlined in the introductory comments and as you would tell from the release the most significant home office action is being implemented currently. We won’t get a full benefit of that in the first quarter but will largely get that in Q2 through Q4. So there is some back end weighting to it. In terms of getting more specific than that I’d rather kind of keep it at that level. Kimberly Greenberger - Citigroup: Would a 3-4% potential decline in dollars be a reasonable range for us to assume?

Are you asking on a full year basis? Kimberly Greenberger - Citigroup: Just Q1 and Q2.

It would be reasonable to assume that on total dollar basis the reduction would be between 5-10%. Kimberly Greenberger - Citigroup: That is for the full year Stuart?

That is for the first quarter. Again, that is Limited Brands, Inc. total dollars.

The next question comes from Jennifer Black – Jennifer Black and Assoc. Jennifer Black – Jennifer Black and Assoc.: I wonder if you could talk about La Senza. How do you think about it today and has it changed since you acquired it? Then a question for Sharen, can you talk about how the test of Pink swimwear is doing and swimwear as a category?

Obviously we have owned the business now for a couple of years in Canada. We bought the business for strategic reasons. It was really our first entrée into the rest of the world’s space as you know. We think we have learned a lot from that entrée. Obviously the rest of the world learning in dealing with our international franchise business that we also acquired with La Senza has been very helpful to us in starting to think about how to take our brands, the other brands to the rest of the world. It has also served as a very important platform for the successful introduction now of BBW Canada and our planned introduction in 2009 of Pink and we are also working on finding the right sites, the right kind of flagship sites for the introduction of Victoria’s Secret to Canada. So it is a very strong operating platform and learning platform for those expansions into Canada. So as we think about it we think from a strategic point of view it is everything we wanted it to be. Its operating performance in 2008 has been disappointing but relatively speaking and given the retail market in Canada, similar to the experience we have been having in the United States. The fact we have an investment that we made two years ago and are taking essentially a 35% mark down in that investment today is very similar in my opinion to what most other companies that acquired something in the last two years are having to do with 35% being about the same mark down in the overall stock market in the United States at least in the last 3-4 months. From that point of view it is a non-cash charge. We recognize what it is but it doesn’t change our commitment to La Senza or the operating business that we have in Canada or the opportunity to expand further into Canada.

As you know we tested the swim at 350 stores last year and for the Victoria’s Secret store site the swim is meeting our expectations. On Pink it is slightly below our expectations but as we go into and people start ramping up for spring break the true test will be how we come through that. Jennifer Black – Jennifer Black and Assoc.: How many stores are you testing the Pink swimwear in?

It is in all stores.

The next question comes from Paul Lejuez - Credit Suisse. Paul Lejuez - Credit Suisse: Since the fourth quarter is such a large percentage of your year’s operating earnings could you maybe share with us how you are thinking about the fourth quarter this year? I understand the visibility is limited but I’m just wondering what is factored into your guidance for fourth quarter? Then also your cash balance I think came in higher than you had planned despite missing fourth quarter. I’m just wondering how that happened?

In terms of trying to help you with an understanding of the fourth quarter and how we are thinking about it I really would reference back to the full year guidance parameters because we think those are largely applicable. Obviously I understand the math effect on the first quarter and the differential between that and the year guidance but in terms of magnitude and breadth of range the parameters we have laid out for the full year largely apply to the fourth quarter recognizing that there is some level of improvement assumed just given the Mast of the first quarter. With respect to the cash outcome, we had been tracking in the range consistently viewing we would end the year with more than $1 billion in cash and we did. Really the variation is just in the actualization of working capital accounts and other balance sheet accounts that drive operating cash flow. We are very focused on driving the cash flow and are pleased with the results.

The next question comes from [Stacey Pack] – [SP Research]. [Stacey Pack] – [SP Research]: Given what you said about comps month to date, it sounds like it is the above plan is coming from the BBW side but could you help us think a little bit more about the Q1 guidance by division given what is happening here in February and re-stage Signature and swim and all that? Can you also give us a little clarification on the potential merchandise margin increase in 2009?

I don’t think necessarily we meant to imply that BBW was necessarily beating their expectation by more than VS. I think both businesses are ahead of our initial expectations for February. For the first quarter in terms of our overall comp guidance BBW and VS are pretty close. I would say roughly about the same. For merchandise margin rate for the full year we will go to Stuart. [Stacey Pack] – [SP Research]: Also the Q1 guidance was the other piece.

Q1 guidance on what? [Stacey Pack] – [SP Research]: By division. Just some sense. You are guiding to down 7-12% and I wanted to get some sense of where most of that was coming from.

We are not going to get further in terms of breaking it out by segment in terms of operating income. But I don’t think we can go there but Stuart can help with merchandise margins.

With respect to merchandise margin, on a full year basis we are going to get benefits fundamentally from three things. One, we are working to reduce our cost of goods and the benefit of that will be realized principally in the back half of the year as you would understand through timing and its turnover through the balance sheet into the P&L as its sold. The second key thing to understand as you think about full year merchandise margin rate is the relative size of VS, BBW and separately Mast meaning that as Mast sales decline at a greater rate than Victoria’s Secret or Bath and Body Works that provides a favorable overall mix shift to LBI or Limited Brands, Inc. merch margin rate and then also in the back half of the year we also believe we will get some merch margin rate benefit as we continue to closely match inventory flow with the rate of sales. [Stacey Pack] – [SP Research]: Is there any overall number you will commit to?

In terms of merchandise margin rate specifically? No.

The next question comes from Richard Jaffe – Stifel Nicolaus. Richard Jaffe – Stifel Nicolaus: The resizing of stores we should anticipate there is some opportunity there over time as you said very discretely with your landlords but is that an objective to shrink some of the footprint of Victoria’s Secret stores?

We are not focused necessarily on shrinking the footprint of the Victoria’s Secret stores. Across our system the profitability of the Victoria’s Secret stores, store-by-store remains very robust. We are obviously looking to take full advantage of the current market conditions and in a partnership, if you will, with the landlords and we will leverage the numerous lease expirations or kick out rights or other things that we have available to us to consistently reposition the store base mall by mall but it is not driven necessarily by an overall focus on reducing the footprint. We are also looking at co-tenancy and other issues and we will be very competitive but again the direction and the focus that we have is to be a good partner to our landlords in that process. Richard Jaffe – Stifel Nicolaus: Given your focus on liquidity what should we assume about buybacks for 2009? Similarly, given your discipline and your very lean inventories is there a point that you anticipate where you have under-inventoried stores particularly the SKU intensive Victoria’s Secret business?

In terms of share repurchase activity what we are focused on right now is cash and liquidity. We do have a small amount remaining authorized under a prior program but we are focused on cash and liquidity at this point and that is what we would convey to you. With respect to inventory, inventory levels per foot are at their lowest level in five years for Limited Brands, Inc. and we have reduced them consistently for 19-20 months now. With that said we are very focused on providing good experiences for our customers and realize that we need to be in-stock to do that. So we work very hard to strike that balance in the right way. To your point one can’t just reduce inventory without limitation.

One of the things that we have strategically done is we have gone into the spring season this year and tried to narrow down the amount of SKU’s and styles that we are carrying. We really have focused on the few that produce the many. What are our top 10, 20, 30 or 40 styles to make sure that we are in inventory in our best selling items as well as to make sure we are positioned for speed to be able to read its react. An example of that would have been last year as we launched the Bio Fit bra we were able to come back within 90 days and actually re-launch that. We have taken that same discipline this year. I’m sure there will be always something that beats our expectations that we will be low on inventory but I think with the focus on the few to produce the many the focus in making sure we can shave inventory I think we will be in a good position and a conservative position as we go through these economic times.

At Bath and Body Works I will just add some things about inventory as well. We are focused on our three major categories which are our fastest turning categories and every single week we re-forecast. Specifically since Signature is exceeding our expectations we re-forecast every single form and fragrance on a weekly basis and we have a 12-week turnaround time so we can get back into stock. Then secondly, our balance by store our in-store system roll out has now been better. Our top best seller stores in stock are the same as our bottom best seller stores and we are carrying a lot less inventory in the back rooms because it is on the floor. So we feel very positive about the direction we are going.

The next question comes from Todd Slater - Lazard Capital. Todd Slater - Lazard Capital: I was wondering if you could just update us on the state of your international strategy excluding Canada in light of the global economy and I’m assuming your 2009 guidance has zero contribution from international. Secondly, I’m trying to reconcile the 5-10% better comp in February and your first quarter earnings guidance reduction. I’m just wondering if you are expecting a big deceleration in March and April or are you planning promotional activity to accelerate substantially? Maybe you could just help us reconcile that.

I would be disappointed if you didn’t ask so thank you for bringing it up. First and foremost as I think you have heard a couple of times now our emphasis is on Canada both the La Senza business, the BBW as well as our expansion in the VS and Pink into Canada. We see great opportunity there. It is a company-owned base and we think that can be a significant contributor to profitability in the next 2-3 years. The rest of the world is in crisis as you know. So in all of our conversations with potential partners, whether joint venture or franchisees, we have kind of hit the pause button in light of the economic crisis over the last 3-4 months. However, with the new year we have renewed a number of those conversations and we are now aggressively moving against a couple of parts of the world where I am fairly optimistic we will find the right answer for a partnership or a franchised arrangement with key partners. So we are not retreating from the rest of the world agenda but we are being very realistic about the rest of the world economy and the ability of potential partners to move forward with us. So stay tuned. It is taking us longer than we had hoped but we remain very committed to the rest of the world and finding the right way to take our brands to it.

Probably there are 3-4 things to convey there. One our February comp result to date is running a little better or somewhat better than our expectation at the beginning of the month. With that said, the February result is pretty consistent with our view for the quarter and we obviously just finished up our guidance numbers in the last few days. So that would be the first point I would make. The second point is we do have a very tough comparison at Victoria’s Secret in March overlapping the Bio Fit launch. The third thing I would mention is that there is a lot of pressure in merchandise margin in this environment and we see pressure in merch margin particularly in the first quarter. Two other things just to mention quickly, as we outlined there is pressure in interest expense uniquely in the first quarter with the recognition of some up-front fees related to the amendments. Lastly, our portion of earnings from our interest in Express and Limited we expect unfavorability there as well in the first quarter and for the full year.

The next question comes from Rick Patel for Lorraine Maikis – Bank of America, Merrill Lynch. Rick Patel for Lorraine Maikis – Bank of America, Merrill Lynch: Could you provide some more color on the performance of the Bath and Body Works re-stage product? Has the sell through gone well on a unit basis? Has that been drawing in new customers or is it just your most loyal customers that are coming back for it?

As I mentioned earlier it is beating our expectations and it is really kind of across most of the forms and the fragrances. Especially as we have kind of re-marketed and re-merchandised it by fragrance family it has created some new interest. Also the way we have re-merchandised the walls, we tested so many things in the fourth quarter and I think the wall navigation is much easier for the customer to understand. Another thing that I am hearing on different surveys that are taken we are getting a younger customer base in some of the new fragrances we have launched and I think we are getting more of our old customers to come back in.

The next question comes from Laura Champine – Cowen and Company. Analyst for Laura Champine – Cowen and Company: Could you give us a little bit more color on your capital structure and your plans going forward? I’m just looking at your restrictions in your new covenants and given you have been buying back stock for a long time now and it looks like it is going to be restricted given some of the covenants. Do you favor dividends over share repurchases going forward? Could you give us some color there?

The first thing I would say is at the end of the day we feel pretty good about our capital structure. So we feel good about the actions we took and we feel good about the amendments we have announced and recently renegotiated and feel particularly solid with respect to cash, liquidity, etc. With respect to your question about dividend visa vie share repurchases or other uses of cash, the dividend is very important to our shareholders and as we have outlined we have the flexibility to continue that dividend.

The next question comes from Michelle Clark – Morgan Stanley. Michelle Clark – Morgan Stanley: On the other segment line could you just detail for us what specifically happened there during the quarter from an operating margin standpoint and how we should be thinking about that line item for 2009?

In terms of the other segment we had some decline in Mast profitability offset by expense favorability. That would really be the key thing to understand about the fourth quarter. As it relates to the other segment going forward for the full year 2009 we would expect the other segment to have a somewhat lower net loss, fundamentally by expense favorability somewhat offset again by a decline in Mast profitability.

The next question comes from Jeff Stein - Soleil Securities. Jeff Stein - Soleil Securities: Stuart you mentioned for the first quarter SG&A is expected to be down 5-10%. I’m wondering if you could give us some indication for the full year where you see that line item.

Quickly, for the full year I think we said we expect SG&A expense to be down by $150 million. Jeff Stein - Soleil Securities: Down by $150 million?

Yes. Jeff Stein - Soleil Securities: On the systems roll out at Victoria’s Secret several years ago when you implemented the Bath and Body Works roll out there were some issues and I’m wondering what your learning was from that experience and are you confident you can complete the roll out without similar mishaps?

You are absolutely right. When we implemented the supply chain systems at BBW in 2006 we did experience a lot of stabilization issues. As Dian mentioned in one of her earlier comments we do feel those systems are now paying back and in terms of efficiency speed and cost and in stock positions in the stores at BBW. We are planning to implement another phase of those same systems at Victoria’s Secret stores this summer. An important difference in the approach we have taken to this implementation for the Victoria’s Secret stores is we implemented the store scene and production part of the systems in 2008 so the Mast Industries business which is basically manufacturing for to DC for has already been implemented. We didn’t talk a lot about that but that was a major global implementation that took place in March and April of 2008 and it is now and has been up and running for the past 8-9 months and is working well in terms of that part of the business. What we will be implementing for the Victoria’s Secret stores business is basically the distribution center to the store floor if you will, just trying to keep it in a supply chain terminology. These are also systems from a technology point of view that are the same as those that have been running now for the past 2.5 years in our businesses. So we are not actually implementing any new technology. We are obviously moving the Victoria’s Secret stores organization onto that technology and there is a major change in the way they will be doing business to utilize these new tools. So we do expect there will be a stabilization period after the cut over if you will in the summer but we are confident that stabilization period will be more manageable and less disruptive than it was for BBW. Jeff Stein - Soleil Securities: The gross margin pressure that you expect to see in the first quarter is any of it related to the re-stage at Bath and Body Works and potentially some inventory mark downs to clear old products?

Actually we have been clearing the old product starting in December and our semi-annual sale in January so we are actually in a really good position today. Operator, I think we can squeeze in just one more question.

The final question comes from Janet Kloppenburg – JJK Research. Janet Kloppenburg – JJK Research: I had a question for Sharen on the $29.95 bra event and if that had been sourced at margins that were acceptable for the brand and if we could see more of that kind of activity but maybe with some lower opening price points? Dian, on the Signature collection I think you said it is performing well. The re-do. I’m wondering what upgrades we could see in that line through fiscal 2009?

On the $29.50 bra the introductory price point. We do have good margins. It is not at our optimal margin rate at that price point. It is a great, every day bra. We are actually looking at all of our good/better/best pyramid in use in fashion and so I think we are going to be very strategic in terms of how we approach this. Janet Kloppenburg – JJK Research: And you will be able to source with the lower sourcing costs that Stuart talked about in the back half we may see some shopper prices but also good margins as we move into the back half?

You will definitely see improved cost and while we see more promotional shopper price points again it is going to be strategic depending on the bra but we will have a good/better/best strategy.

In the Signature collection we have two major fragrance launches coming this spring as well as a more useful capsule within the Signature brand itself. We are also introducing a new shower gel form this spring as well we are upgrading two of our key formulas in the fall season.

Thanks Dian. I would like to thank everyone for joining us this morning and for your continuing interest in Limited Brands.

Thank you very much ladies and gentlemen for joining today’s Limited Brands conference call. This concludes your conference. You may now disconnect.