Gap inc annual report 2012. Gap Inc (GPS) SEC Annual Report (10 2022-12-09

Gap Inc. Reports Fourth Quarter and Full Year Results for Fiscal Year 2011

The company assumes no obligation to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. We will adopt the provisions of this accounting standards update in the first quarter of fiscal 2012. We make intercompany royalty payments on a quarterly basis, and we enter into foreign exchange forward contracts to hedge intercompany royalty payments generally occurring in 9 to 15 months. During the fourth quarter of fiscal 2011, we completed our annual impairment testing of goodwill and the trade name and did not recognize any impairment charges. We have performed a sensitivity analysis as of January28, 2012 based on a model that measures the impact of a hypothetical 10 percent adverse change in the level of foreign currency exchange rates to U.

Gap Inc. Investor Relations

The range of merchandise displayed in each store varies depending on the selling season and the size and location of the store. Moody's assigned a rating of Baa3, and Fitch assigned a rating of BBB-. Our business is highly competitive. Under these agreements, third parties operate, or will operate, stores that sell apparel and related products under our brand names. For impaired assets, we recognize a loss equal to the difference between the carrying amount of the asset or asset group and its estimated fair value.

Gap Inc (GPS) 10K Annual Reports & 10Q SEC Filings

In addition, data and security breaches can also occur as a result of non-technical issues, including breach by us or by persons with whom we have commercial relationships that result in the unauthorized release of personal or confidential information. The asset group is defined as the lowest level for which identifiable cash flows are available, which for retail stores is at the store level. As a result, we have additional costs that include interest payable semiannually on the notes and at least quarterly on the term loan. Net square footage for company-operated stores is expected to decrease by about 1 percent by the end of fiscal year 2012 compared with the end of fiscal year 2011. We believe our distinct brands are among our most important assets.

GPS

The percentage change in Comp sales by brand and region and for total Company, including the associated comparable online sales, as compared with the preceding year, is as follows: Fiscal Year 2011 2010 Gap North America 4 % - % Old Navy North America 3 % 3 % Banana Republic North America 1 % 3 % International 7 % 2 % The Gap, Inc. Delays in the shipment or delivery of our products due to the availability of transportation, work stoppages, port strikes, infrastructure congestion, or other factors, and costs and delays associated with transitioning between vendors, could adversely impact our financial performance. We have Company-operated stores in the United States, Canada, the United Kingdom, France, Ireland, Japan, and beginning in November 2010, China and Italy. The brand targets young families, with a focus on providing a fun shopping environment and value-priced apparel. Our effective tax rate in a given financial statement period may also be materially impacted by changes in the mix and level of income or losses, changes in the expected outcome of audits, or changes in the deferred tax valuation allowance. In addition, Liz Meltzer will join the company as senior vice president of Gap International Merchandising, bringing deep global product experience to the brand. Accordingly, our cost of goods sold and occupancy expenses and operating expenses may not be comparable to those of other companies.

Gap Inc.

We have not made any material changes in the accounting methodology used to estimate future sales returns in the past three fiscal years. On May9, 2006, the 2002 Plan was discontinued, and those awards then outstanding continued to be subject to the terms of the 2002 Plan under which they were granted. The increase in cost of goods sold as a percentage of net sales was primarily driven by increased cost of merchandise primarily due to higher cotton prices. We also have entered into franchise agreements with unaffiliated franchisees to operate stores in many countries around the world. Treasury Stock We account for treasury stock under the cost method, using the first-in, first-out flow assumption, and include treasury stock as a component of stockholders' equity. For example, the global financial economic downturn that began in 2008 and continued throughout 2011, particularly in Europe, has negatively impacted consumer confidence. In fiscal 2012, net of repositions, we expect to open about 125 new Company-operated store locations and close about 115 Company-operated store locations.

Gap Inc. Revenue: Annual, Historic, And Financials

A co-tenancy failure by our landlord during the lease term may result in a reduction of the required cash payments made to the landlord for the duration of the co-tenancy failure and is recorded as a reduction to rent expense as the reduced cash payments are made. Our franchise business is subject to certain risks not directly within our control and could impair the value of our brands. The term loan agreement contains financial and other covenants including, but not limited to, limitations on liens and subsidiary debt as well as the maintenance of two financial ratios — a minimum annual fixed charge coverage ratio of 2. Any future reduction in these ratings would increase our interest costs related to our term loan and could result in reduced access to the credit and capital markets and higher interest costs on future financings. The principal currencies hedged against changes in the U. In many of these locations, we face major, established competitors. Unemployment remained high in our core North America markets and the apparel retail environment was quite promotional.

Gap Inc (GPS) SEC Annual Report (10

Violation of these covenants could result in a default under the Facility and letter of credit agreement, which would permit the participating banks to terminate our ability to access the Facility for letters of credit and advances, terminate our ability to request letters of credit under the letter of credit agreement, require the immediate repayment of any outstanding advances under the Facility, and require the immediate posting of cash collateral in support of any outstanding letters of credit under the letter of creditagreement. Then, the implied fair value of the reporting unit's goodwill is compared to the carrying amount of that goodwill. In September 2010, we entered into two separate agreements to make unsecured revolving credit facilities available for our operations in China the "China Facilities". Long-lived assets are considered impaired if the estimated undiscounted future cash flows of the asset or asset group are less than the carrying amount. Our responsibility is to express an opinion on these financial statements and an opinion on the Company's internal control over financial reporting based on our audits. Unredeemed Gift Cards, Gift Certificates, and Credit Vouchers Upon issuance of a gift card, gift certificate, or credit voucher, a liability is established for its cash value.

Gap Revenue 2010

As of January28, 2012 and January29, 2011, we had foreign exchange forward contracts outstanding to hedge the net assets of our Japanese subsidiary in the following notional amounts: notional amounts in millions January28, 2012 January29, 2011 Japanese yen ¥ - ¥ 3,000 As of January28, 2012 and January29, 2011, we had foreign exchange forward contracts outstanding to buy the following currencies related to our intercompany balances that bear foreign exchange risk: notional amounts in millions January28, 2012 January29, 2011 U. Comparable Sales Beginning in fiscal 2011, the Company reports comparable "Comp" sales including the associated comparable online sales. The increase in operating expenses was primarily due to higher store payroll, store benefits, and other store-related expenses and higher expenses due to our New York and San Francisco headquarter office moves, partially offset by a decrease in bonus expense. However, there can be no assurances that we will successfully launch these systems as planned or that they will occur without disruptions to our operations. Gap entered the children's apparel market in 1986 with GapKids and in 1989 with babyGap. Effective October30, 2011, we adopted an accounting standards update to simplify the testing of goodwill for impairment. Inventory On a year-over-year basis inventory dollars per store were down 0.

The Facility and letter of credit agreement contain financial and other covenants, including but not limited to limitations on liens and subsidiary debt, as well as the maintenance of two financial ratios-a minimum annual fixed charge coverage ratio of 2. We continue to evaluate and implement upgrades and changes to our IT systems, some of which are significant. Trade letters of credit represent a payment undertaking guaranteed by a bank on our behalf to pay a vendor a given amount of money upon presentation of specific documents demonstrating that merchandise has shipped. Our ability to deliver strong comparable sales results and margins depends in large part on accurately forecasting demand and fashion trends, selecting effective marketing techniques, providing an appropriate mix of merchandise for our broad and diverse customer base, managing inventory effectively, using effective pricing strategies, and optimizing store performance. Breakage income is recorded in other income, which is a component of operating expenses in the Consolidated Statements of Income, when we can determine the portion of the liability where redemption is remote, which is three years after the gift certificate or credit voucher is issued. Vendor payables are recorded in the Consolidated Balance Sheets at the time of merchandise title transfer, although the letters of credit are generally issued prior to this.

Lease Rights and Key Money Lease rights are costs incurred to acquire the right to lease a specific property. If it is determined that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the first step of the two-step goodwill impairment test is required to compare the fair value of the reporting unit to its carrying amount, including goodwill. The company reports its operating results under 4 segments: Gap Global, Old Navy Global, Banana Republic Global and Other. Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. In addition to share repurchases, we also continue to return cash to our shareholders in the form of dividends. Additional information is presented in Item8, Financial Statements and Supplementary Data, Note 7 of Notes to Consolidated Financial Statements. Net square footage of company-operated stores decreased 2.