þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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94-1697231
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(State or other jurisdiction
of incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Two Folsom Street, San Francisco, California
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94105
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(Address of principal executive offices)
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(Zip code)
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•
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the impact of the adoption of new accounting standards;
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•
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recognition of unrealized gains and losses from designated cash flow hedges into net income;
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•
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the impact of the potential settlement of outstanding tax matters and the closing of audits;
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•
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the impact of losses due to indemnification obligations;
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•
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the outcome of proceedings, lawsuits, disputes, and claims;
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•
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continuing investment in our mobile digital capabilities;
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•
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further enhancing our shopping experience for our customers;
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•
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total store closures in fiscal 2016, including winding down Old Navy operations in Japan and closure of select Banana Republic stores, primarily internationally;
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•
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impact of store closures and streamlining measures, including annualized savings, lost sales, and restructuring costs;
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•
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the impact of foreign exchange rate fluctuations on our financial results;
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•
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current cash balances and cash flows being sufficient to support our business operations, including growth initiatives and planned capital expenditures;
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•
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ability to supplement near-term liquidity, if necessary, with our $500 million revolving credit facility or other available market instruments;
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•
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the impact of the seasonality of our operations;
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•
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dividend payments in fiscal 2016; and
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•
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the impact of changes in internal control over financial reporting.
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•
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the risk that adoption of new accounting pronouncements will impact future results;
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•
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the risk that we or our franchisees will be unsuccessful in gauging apparel trends and changing consumer preferences;
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•
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the risk that changes in global economic conditions or consumer spending patterns could adversely impact our results of operations;
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•
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the highly competitive nature of our business in the United States and internationally;
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•
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the risk that if we are unable to manage our inventory effectively, our gross margins will be adversely affected;
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•
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the risk that the failure to attract and retain key personnel, or effectively manage succession, could have an adverse impact on our results of operations;
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•
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the risk that we are subject to data or other security breaches that may result in increased costs, violations of law, significant legal and financial exposure, and a loss of confidence in our security measures, which could have an adverse effect on our results of operations and our reputation;
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•
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the risks to our efforts to expand internationally, including our ability to operate under a global brand structure and operating in regions where we have less experience;
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•
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the risk that foreign currency exchange rate fluctuations could adversely impact our financial results;
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•
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the risks to our business, including our costs and supply chain, associated with global sourcing and manufacturing;
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•
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the risks to our reputation or operations associated with importing merchandise from foreign countries, including failure of our vendors to adhere to our Code of Vendor Conduct;
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•
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the risk that trade matters could increase the cost or reduce the supply of apparel available to us and adversely affect our business, financial condition, and results of operations;
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•
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the risk that our franchisees’ operation of franchise stores is not directly within our control and could impair the value of our brands;
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•
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the risk that we or our franchisees will be unsuccessful in identifying, negotiating, and securing new store locations and renewing, modifying, or terminating leases for existing store locations effectively;
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•
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the risk that our investments in omni-channel shopping initiatives may not deliver the results we anticipate;
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•
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the risk that comparable sales and margins will experience fluctuations;
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•
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the risk that changes in our credit profile or deterioration in market conditions may limit our access to the capital markets and adversely impact our financial results or our business initiatives;
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•
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the risk that updates or changes to our information technology (“IT”) systems may disrupt our operations;
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•
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the risk that failure to maintain, enhance, and protect our brand image could have an adverse effect on our results of operations;
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•
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the risk that natural disasters, public health crises, political crises, or other catastrophic events could adversely affect our operations and financial results, or those of our franchisees or vendors;
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•
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the risk that changes in the regulatory or administrative landscape could adversely affect our financial condition, strategies, and results of operations;
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•
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the risk that we do not repurchase some or all of the shares we anticipate purchasing pursuant to our repurchase program; and
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•
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the risk that we will not be successful in defending various proceedings, lawsuits, disputes, claims, and audits.
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Page
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 6.
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Item 1.
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Financial Statements.
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($ and shares in millions except par value)
|
April 30,
2016 |
|
January 30,
2016 |
|
May 2,
2015 |
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ASSETS
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
1,313
|
|
|
$
|
1,370
|
|
|
$
|
1,234
|
|
Merchandise inventory
|
1,958
|
|
|
1,873
|
|
|
2,010
|
|
|||
Other current assets
|
674
|
|
|
742
|
|
|
874
|
|
|||
Total current assets
|
3,945
|
|
|
3,985
|
|
|
4,118
|
|
|||
Property and equipment, net of accumulated depreciation of $5,763, $5,644, and $5,599
|
2,864
|
|
|
2,850
|
|
|
2,790
|
|
|||
Other long-term assets
|
698
|
|
|
638
|
|
|
587
|
|
|||
Total assets
|
$
|
7,507
|
|
|
$
|
7,473
|
|
|
$
|
7,495
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Current maturities of debt
|
$
|
424
|
|
|
$
|
421
|
|
|
$
|
21
|
|
Accounts payable
|
1,108
|
|
|
1,112
|
|
|
1,156
|
|
|||
Accrued expenses and other current liabilities
|
974
|
|
|
979
|
|
|
960
|
|
|||
Income taxes payable
|
49
|
|
|
23
|
|
|
37
|
|
|||
Total current liabilities
|
2,555
|
|
|
2,535
|
|
|
2,174
|
|
|||
Long-term liabilities:
|
|
|
|
|
|
||||||
Long-term debt
|
1,318
|
|
|
1,310
|
|
|
1,331
|
|
|||
Lease incentives and other long-term liabilities
|
1,112
|
|
|
1,083
|
|
|
1,111
|
|
|||
Total long-term liabilities
|
2,430
|
|
|
2,393
|
|
|
2,442
|
|
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Commitments and contingencies (see Note 11)
|
|
|
|
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Stockholders’ equity:
|
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|
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Common stock $0.05 par value
|
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|
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||||||
Authorized 2,300 shares for all periods presented; Issued and Outstanding 398, 397, and 419 shares
|
20
|
|
|
20
|
|
|
21
|
|
|||
Additional paid-in capital
|
6
|
|
|
—
|
|
|
—
|
|
|||
Retained earnings
|
2,476
|
|
|
2,440
|
|
|
2,718
|
|
|||
Accumulated other comprehensive income
|
20
|
|
|
85
|
|
|
140
|
|
|||
Total stockholders’ equity
|
2,522
|
|
|
2,545
|
|
|
2,879
|
|
|||
Total liabilities and stockholders’ equity
|
$
|
7,507
|
|
|
$
|
7,473
|
|
|
$
|
7,495
|
|
|
13 Weeks Ended
|
||||||
($ and shares in millions except per share amounts)
|
April 30,
2016 |
|
May 2,
2015 |
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Net sales
|
$
|
3,438
|
|
|
$
|
3,657
|
|
Cost of goods sold and occupancy expenses
|
2,229
|
|
|
2,275
|
|
||
Gross profit
|
1,209
|
|
|
1,382
|
|
||
Operating expenses
|
987
|
|
|
996
|
|
||
Operating income
|
222
|
|
|
386
|
|
||
Interest expense
|
19
|
|
|
5
|
|
||
Interest income
|
(1
|
)
|
|
(1
|
)
|
||
Income before income taxes
|
204
|
|
|
382
|
|
||
Income taxes
|
77
|
|
|
143
|
|
||
Net income
|
$
|
127
|
|
|
$
|
239
|
|
Weighted-average number of shares - basic
|
398
|
|
|
421
|
|
||
Weighted-average number of shares - diluted
|
399
|
|
|
424
|
|
||
Earnings per share - basic
|
$
|
0.32
|
|
|
$
|
0.57
|
|
Earnings per share - diluted
|
$
|
0.32
|
|
|
$
|
0.56
|
|
Cash dividends declared and paid per share
|
$
|
0.23
|
|
|
$
|
0.23
|
|
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13 Weeks Ended
|
||||||
($ in millions)
|
April 30,
2016 |
|
May 2,
2015 |
||||
Net income
|
$
|
127
|
|
|
$
|
239
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
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Foreign currency translation
|
31
|
|
|
6
|
|
||
Change in fair value of derivative financial instruments, net of tax benefit of $(36) and $(4)
|
(89
|
)
|
|
(10
|
)
|
||
Reclassification adjustment for realized gains on derivative financial instruments, net of tax of $(4) and $(9)
|
(7
|
)
|
|
(21
|
)
|
||
Other comprehensive loss, net of tax
|
(65
|
)
|
|
(25
|
)
|
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Comprehensive income
|
$
|
62
|
|
|
$
|
214
|
|
|
13 Weeks Ended
|
||||||
($ in millions)
|
April 30,
2016 |
|
May 2,
2015 |
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
127
|
|
|
$
|
239
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
148
|
|
|
148
|
|
||
Amortization of lease incentives
|
(16
|
)
|
|
(15
|
)
|
||
Share-based compensation
|
15
|
|
|
22
|
|
||
Tax benefit from exercise of stock options and vesting of stock units
|
(3
|
)
|
|
15
|
|
||
Excess tax benefit from exercise of stock options and vesting of stock units
|
(1
|
)
|
|
(17
|
)
|
||
Non-cash and other items
|
(6
|
)
|
|
(20
|
)
|
||
Deferred income taxes
|
(9
|
)
|
|
2
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Merchandise inventory
|
(53
|
)
|
|
(117
|
)
|
||
Other current assets and other long-term assets
|
9
|
|
|
(8
|
)
|
||
Accounts payable
|
(20
|
)
|
|
(20
|
)
|
||
Accrued expenses and other current liabilities
|
(67
|
)
|
|
(81
|
)
|
||
Income taxes payable, net of prepaid and other tax-related items
|
46
|
|
|
61
|
|
||
Lease incentives and other long-term liabilities
|
(2
|
)
|
|
2
|
|
||
Net cash provided by operating activities
|
168
|
|
|
211
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property and equipment
|
(139
|
)
|
|
(150
|
)
|
||
Other
|
(1
|
)
|
|
—
|
|
||
Net cash used for investing activities
|
(140
|
)
|
|
(150
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuances under share-based compensation plans
|
10
|
|
|
35
|
|
||
Withholding tax payments related to vesting of stock units
|
(17
|
)
|
|
(66
|
)
|
||
Repurchases of common stock
|
—
|
|
|
(232
|
)
|
||
Excess tax benefit from exercise of stock options and vesting of stock units
|
1
|
|
|
17
|
|
||
Cash dividends paid
|
(91
|
)
|
|
(97
|
)
|
||
Net cash used for financing activities
|
(97
|
)
|
|
(343
|
)
|
||
Effect of foreign exchange rate fluctuations on cash and cash equivalents
|
12
|
|
|
1
|
|
||
Net decrease in cash and cash equivalents
|
(57
|
)
|
|
(281
|
)
|
||
Cash and cash equivalents at beginning of period
|
1,370
|
|
|
1,515
|
|
||
Cash and cash equivalents at end of period
|
$
|
1,313
|
|
|
$
|
1,234
|
|
Non-cash investing activities:
|
|
|
|
||||
Purchases of property and equipment not yet paid at end of period
|
$
|
61
|
|
|
$
|
85
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash paid for interest during the period
|
$
|
39
|
|
|
$
|
38
|
|
Cash paid for income taxes during the period, net of refunds
|
$
|
43
|
|
|
$
|
63
|
|
($ in millions)
|
April 30,
2016 |
|
January 30,
2016 |
|
May 2,
2015 |
||||||
Notes
|
$
|
1,248
|
|
|
$
|
1,248
|
|
|
$
|
1,247
|
|
Japan Term Loan
|
94
|
|
|
83
|
|
|
105
|
|
|||
Total long-term debt
|
1,342
|
|
|
1,331
|
|
|
1,352
|
|
|||
Less: Current portion
|
(24
|
)
|
|
(21
|
)
|
|
(21
|
)
|
|||
Total long-term debt, less current portion
|
$
|
1,318
|
|
|
$
|
1,310
|
|
|
$
|
1,331
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
($ in millions)
|
April 30, 2016
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
589
|
|
|
$
|
131
|
|
|
$
|
458
|
|
|
$
|
—
|
|
Derivative financial instruments
|
18
|
|
|
—
|
|
|
18
|
|
|
—
|
|
||||
Deferred compensation plan assets
|
40
|
|
|
40
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
647
|
|
|
$
|
171
|
|
|
$
|
476
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
|
$
|
85
|
|
|
$
|
—
|
|
|
$
|
85
|
|
|
$
|
—
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
($ in millions)
|
January 30, 2016
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
517
|
|
|
$
|
204
|
|
|
$
|
313
|
|
|
$
|
—
|
|
Derivative financial instruments
|
93
|
|
|
—
|
|
|
93
|
|
|
—
|
|
||||
Deferred compensation plan assets
|
37
|
|
|
37
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
647
|
|
|
$
|
241
|
|
|
$
|
406
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
($ in millions)
|
May 2, 2015
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
201
|
|
|
$
|
72
|
|
|
$
|
129
|
|
|
$
|
—
|
|
Derivative financial instruments
|
118
|
|
|
—
|
|
|
118
|
|
|
—
|
|
||||
Deferred compensation plan assets
|
45
|
|
|
45
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
364
|
|
|
$
|
117
|
|
|
$
|
247
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
—
|
|
($ in millions)
|
April 30,
2016 |
|
January 30,
2016 |
|
May 2,
2015 |
||||||
Derivatives designated as cash flow hedges
|
$
|
1,441
|
|
|
$
|
1,220
|
|
|
$
|
1,687
|
|
Derivatives designated as net investment hedges
|
32
|
|
|
30
|
|
|
33
|
|
|||
Derivatives not designated as hedging instruments
|
422
|
|
|
324
|
|
|
293
|
|
|||
Total
|
$
|
1,895
|
|
|
$
|
1,574
|
|
|
$
|
2,013
|
|
($ in millions)
|
April 30,
2016 |
|
January 30,
2016 |
|
May 2,
2015 |
||||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
|
||||||
Other current assets
|
$
|
15
|
|
|
$
|
71
|
|
|
$
|
89
|
|
Other long-term assets
|
$
|
2
|
|
|
$
|
8
|
|
|
$
|
19
|
|
Accrued expenses and other current liabilities
|
$
|
37
|
|
|
$
|
1
|
|
|
$
|
3
|
|
Lease incentives and other long-term liabilities
|
$
|
29
|
|
|
$
|
1
|
|
|
$
|
8
|
|
|
|
|
|
|
|
||||||
Derivatives designated as net investment hedges:
|
|
|
|
|
|
||||||
Other current assets
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Other long-term assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Accrued expenses and other current liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Lease incentives and other long-term liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
||||||
Other current assets
|
$
|
1
|
|
|
$
|
13
|
|
|
$
|
10
|
|
Other long-term assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Accrued expenses and other current liabilities
|
$
|
19
|
|
|
$
|
1
|
|
|
$
|
2
|
|
Lease incentives and other long-term liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Total derivatives in an asset position
|
$
|
18
|
|
|
$
|
93
|
|
|
$
|
118
|
|
Total derivatives in a liability position
|
$
|
85
|
|
|
$
|
3
|
|
|
$
|
13
|
|
|
13 Weeks Ended
|
||||||
($ in millions)
|
April 30,
2016 |
|
May 2,
2015 |
||||
Derivatives in cash flow hedging relationships:
|
|
|
|
||||
Loss recognized in other comprehensive income
|
$
|
(125
|
)
|
|
$
|
(14
|
)
|
Gain reclassified into cost of goods sold and occupancy expenses
|
$
|
13
|
|
|
$
|
28
|
|
Gain (loss) reclassified into operating expenses
|
$
|
(2
|
)
|
|
$
|
2
|
|
|
|
|
|
||||
Derivatives in net investment hedging relationships:
|
|
|
|
||||
Loss recognized in other comprehensive income
|
$
|
(3
|
)
|
|
$
|
(1
|
)
|
|
13 Weeks Ended
|
||||||
($ in millions)
|
April 30,
2016 |
|
May 2,
2015 |
||||
Loss recognized in operating expenses
|
$
|
(27
|
)
|
|
$
|
—
|
|
|
13 Weeks Ended
|
||||||
($ and shares in millions except average per share cost)
|
April 30,
2016 |
|
May 2,
2015 |
||||
Number of shares repurchased
|
—
|
|
|
5.6
|
|
||
Total cost
|
$
|
—
|
|
|
$
|
230
|
|
Average per share cost including commissions
|
$
|
—
|
|
|
$
|
41.01
|
|
|
13 Weeks Ended
|
||||||
($ in millions)
|
April 30,
2016 |
|
May 2,
2015 |
||||
Stock units
|
$
|
12
|
|
|
$
|
18
|
|
Stock options
|
2
|
|
|
3
|
|
||
Employee stock purchase plan
|
1
|
|
|
1
|
|
||
Share-based compensation expense
|
15
|
|
|
22
|
|
||
Less: Income tax benefit
|
(6
|
)
|
|
(8
|
)
|
||
Share-based compensation expense, net of tax
|
$
|
9
|
|
|
$
|
14
|
|
($ in millions)
|
Foreign Currency Translation
|
|
Cash Flow Hedges
|
|
Total
|
||||||
Balance at January 30, 2016
|
$
|
22
|
|
|
$
|
63
|
|
|
$
|
85
|
|
Foreign currency translation
|
31
|
|
|
—
|
|
|
31
|
|
|||
Change in fair value of derivative financial instruments
|
—
|
|
|
(89
|
)
|
|
(89
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
|||
Other comprehensive income (loss), net
|
31
|
|
|
(96
|
)
|
|
(65
|
)
|
|||
Balance at April 30, 2016
|
$
|
53
|
|
|
$
|
(33
|
)
|
|
$
|
20
|
|
|
|
|
|
|
|
||||||
($ in millions)
|
Foreign Currency Translation
|
|
Cash Flow Hedges
|
|
Total
|
||||||
Balance at January 31, 2015
|
$
|
60
|
|
|
$
|
105
|
|
|
$
|
165
|
|
Foreign currency translation
|
6
|
|
|
—
|
|
|
6
|
|
|||
Change in fair value of derivative financial instruments
|
—
|
|
|
(10
|
)
|
|
(10
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
(21
|
)
|
|
(21
|
)
|
|||
Other comprehensive income (loss), net
|
6
|
|
|
(31
|
)
|
|
(25
|
)
|
|||
Balance at May 2, 2015
|
$
|
66
|
|
|
$
|
74
|
|
|
$
|
140
|
|
|
13 Weeks Ended
|
||||
(shares in millions)
|
April 30,
2016 |
|
May 2,
2015 |
||
Weighted-average number of shares - basic
|
398
|
|
|
421
|
|
Common stock equivalents
|
1
|
|
|
3
|
|
Weighted-average number of shares - diluted
|
399
|
|
|
424
|
|
(1)
|
U.S. includes the United States, Puerto Rico, and Guam.
|
(2)
|
Includes Athleta and Intermix.
|
(3)
|
Includes Athleta, Intermix, and Piperlime.
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
Net sales for the
first quarter of fiscal 2016
decreased 6 percent compared with the
first quarter of fiscal 2015
.
|
•
|
Comparable sales for the
first quarter of fiscal 2016
decreased 5 percent compared with a 4 percent decrease for the
first quarter of fiscal 2015
.
|
•
|
Operating margin for the
first quarter of fiscal 2016
was
6.5 percent
compared with
10.6 percent
for the
first quarter of fiscal 2015
. Operating margin is defined as operating income as a percentage of net sales.
|
•
|
Net income for the
first quarter of fiscal 2016
was
$127 million
compared with
$239 million
for the
first quarter of fiscal 2015
, and diluted earnings per share was
$0.32
for the
first quarter of fiscal 2016
compared with
$0.56
for the
first quarter of fiscal 2015
.
|
•
|
During the
first quarter of fiscal 2016
, we distributed
$91 million
to shareholders through dividends.
|
|
13 Weeks Ended
|
||||
|
April 30,
2016 |
|
May 2,
2015 |
||
Gap Global
|
(3
|
)%
|
|
(10
|
)%
|
Old Navy Global
|
(6
|
)%
|
|
3
|
%
|
Banana Republic Global
|
(11
|
)%
|
|
(8
|
)%
|
The Gap, Inc.
|
(5
|
)%
|
|
(4
|
)%
|
|
13 Weeks Ended
|
||||||
|
April 30,
2016 |
|
May 2,
2015 |
||||
Net sales per average square foot (1)
|
$
|
74
|
|
|
$
|
78
|
|
(1)
|
Excludes net sales associated with our online and franchise businesses.
|
|
January 30, 2016
|
|
13 Weeks Ended April 30, 2016
|
|
April 30, 2016
|
|||||||||
|
Number of
Store Locations
|
|
Number of
Stores Opened
|
|
Number of
Stores Closed
|
|
Number of
Store Locations
|
|
Square Footage
(in millions)
|
|||||
Gap North America
|
866
|
|
|
2
|
|
|
6
|
|
|
862
|
|
|
9.0
|
|
Gap Asia
|
305
|
|
|
7
|
|
|
—
|
|
|
312
|
|
|
3.1
|
|
Gap Europe
|
175
|
|
|
1
|
|
|
3
|
|
|
173
|
|
|
1.4
|
|
Old Navy North America
|
1,030
|
|
|
2
|
|
|
3
|
|
|
1,029
|
|
|
17.3
|
|
Old Navy Asia
|
65
|
|
|
4
|
|
|
—
|
|
|
69
|
|
|
1.0
|
|
Banana Republic North America
|
612
|
|
|
—
|
|
|
5
|
|
|
607
|
|
|
5.1
|
|
Banana Republic Asia
|
51
|
|
|
—
|
|
|
—
|
|
|
51
|
|
|
0.2
|
|
Banana Republic Europe
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
0.1
|
|
Athleta North America
|
120
|
|
|
2
|
|
|
—
|
|
|
122
|
|
|
0.5
|
|
Intermix North America
|
41
|
|
|
—
|
|
|
—
|
|
|
41
|
|
|
0.1
|
|
Company-operated stores total
|
3,275
|
|
|
18
|
|
|
17
|
|
|
3,276
|
|
|
37.8
|
|
Franchise
|
446
|
|
|
21
|
|
|
16
|
|
|
451
|
|
|
N/A
|
|
Total
|
3,721
|
|
|
39
|
|
|
33
|
|
|
3,727
|
|
|
37.8
|
|
Decrease over prior year
|
|
|
|
|
|
|
(0.6
|
)%
|
|
(1.3
|
)%
|
|||
|
|
|
|
|
|
|
|
|
|
|||||
|
January 31, 2015
|
|
13 Weeks Ended May 2, 2015
|
|
May 2, 2015
|
|||||||||
|
Number of
Store Locations
|
|
Number of
Stores Opened
|
|
Number of
Stores Closed
|
|
Number of
Store Locations
|
|
Square Footage
(in millions)
|
|||||
Gap North America
|
960
|
|
|
10
|
|
|
7
|
|
|
963
|
|
|
10.1
|
|
Gap Asia
|
266
|
|
|
15
|
|
|
—
|
|
|
281
|
|
|
2.8
|
|
Gap Europe
|
189
|
|
|
1
|
|
|
2
|
|
|
188
|
|
|
1.6
|
|
Old Navy North America
|
1,013
|
|
|
4
|
|
|
7
|
|
|
1,010
|
|
|
17.1
|
|
Old Navy Asia
|
43
|
|
|
7
|
|
|
—
|
|
|
50
|
|
|
0.8
|
|
Banana Republic North America
|
610
|
|
|
6
|
|
|
4
|
|
|
612
|
|
|
5.1
|
|
Banana Republic Asia
|
44
|
|
|
2
|
|
|
—
|
|
|
46
|
|
|
0.2
|
|
Banana Republic Europe
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
0.1
|
|
Athleta North America
|
101
|
|
|
4
|
|
|
—
|
|
|
105
|
|
|
0.4
|
|
Intermix North America
|
42
|
|
|
1
|
|
|
—
|
|
|
43
|
|
|
0.1
|
|
Piperlime North America
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
Company-operated stores total
|
3,280
|
|
|
50
|
|
|
21
|
|
|
3,309
|
|
|
38.3
|
|
Franchise
|
429
|
|
|
14
|
|
|
3
|
|
|
440
|
|
|
N/A
|
|
Total
|
3,709
|
|
|
64
|
|
|
24
|
|
|
3,749
|
|
|
38.3
|
|
Increase over prior year
|
|
|
|
|
|
|
5.2
|
%
|
|
3.0
|
%
|
|
13 Weeks Ended
|
||||||
($ in millions)
|
April 30,
2016 |
|
May 2,
2015 |
||||
Cost of goods sold and occupancy expenses
|
$
|
2,229
|
|
|
$
|
2,275
|
|
Gross profit
|
$
|
1,209
|
|
|
$
|
1,382
|
|
Cost of goods sold and occupancy expenses as a percentage of net sales
|
64.8
|
%
|
|
62.2
|
%
|
||
Gross margin
|
35.2
|
%
|
|
37.8
|
%
|
•
|
Cost of goods sold increased 1.7 percent as a percentage of net sales in the
first quarter of fiscal 2016
compared with the
first quarter of fiscal 2015
primarily driven by increased markdown activities at Old Navy and Banana Republic.
|
•
|
Occupancy expenses increased 0.9 percentage points in the
first quarter of fiscal 2016
compared with the
first quarter of fiscal 2015
, primarily driven by the decrease in net sales without a corresponding decrease in occupancy expenses.
|
|
13 Weeks Ended
|
||||||
($ in millions)
|
April 30,
2016 |
|
May 2,
2015 |
||||
Operating expenses
|
$
|
987
|
|
|
$
|
996
|
|
Operating expenses as a percentage of net sales
|
28.7
|
%
|
|
27.2
|
%
|
||
Operating margin
|
6.5
|
%
|
|
10.6
|
%
|
|
13 Weeks Ended
|
||||||
($ in millions)
|
April 30,
2016 |
|
May 2,
2015 |
||||
Income taxes
|
$
|
77
|
|
|
$
|
143
|
|
Effective tax rate
|
37.7
|
%
|
|
37.4
|
%
|
•
|
a decrease of $112 million in net income; partially offset by
|
•
|
an increase of $64 million related to merchandise inventory, primarily due to the volume and timing of receipts.
|
•
|
No repurchases of common stock in the
first quarter of fiscal 2016
compared with $232 million cash outflows related to repurchases of common stock in the
first quarter of fiscal 2015
; and
|
•
|
$24 million less net cash outflows related to issuances under share-based compensation plans and withholding tax payments related to vesting of stock units.
|
|
13 Weeks Ended
|
||||||
($ in millions)
|
April 30,
2016 |
|
May 2,
2015 |
||||
Net cash provided by operating activities
|
$
|
168
|
|
|
$
|
211
|
|
Less: Purchases of property and equipment
|
(139
|
)
|
|
(150
|
)
|
||
Free cash flow
|
$
|
29
|
|
|
$
|
61
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Item 4.
|
Controls and Procedures.
|
Item 1.
|
Legal Proceedings.
|
Item 1A.
|
Risk Factors.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
|
Total
Number of
Shares
Purchased
|
|
Average
Price Paid
Per Share
Including
Commissions
|
|
Total Number
of Shares
Purchased as
Part of
Publicly
Announced
Plans or
Programs
|
|
Maximum
Number (or
approximate
dollar amount) of
Shares that May
Yet be Purchased
Under the Plans
or Programs (1)
|
||||||
Month #1 (January 31 - February 27)
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
1,000
|
million
|
Month #2 (February 28 - April 2)
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
1,000
|
million
|
Month #3 (April 3 - April 30)
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
1,000
|
million
|
Total
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
|
(1)
|
On February 26, 2015, we announced that the Board of Directors approved a $1 billion share repurchase authorization. On February 25, 2016, we announced that the Board of Directors approved a new $1 billion share repurchase authorization. The February 2015 repurchase program, which had $302 million remaining, was superseded and replaced by the February 2016 repurchase program, which has no expiration date.
|
Item 6.
|
Exhibits.
|
10.1
|
|
Fourth Amendment to Amended and Restated Consumer Credit Card Program Agreement by and among the
Registrant, Gap (Puerto Rico), Inc., GPS Consumer Direct, Inc., Gap (Apparel), LLC, Gap (ITM) Inc., Synchrony
Bank (f/k/a GE Capital Retail Bank) and Synchrony Financial, dated as of April 29, 2016. (1) (2)
|
10.2
|
|
Deferred Compensation Plan, amended and restated effective March 24, 2016. (2)
|
10.3
|
|
Agreement with Julie Gruber dated February 1, 2016 and confirmed on February 4, 2016. (2)
|
10.4
|
|
Agreement with Sonia Syngal dated April 11, 2016 and confirmed on April 11, 2016, filed as Exhibit 10.1 to
Registrant's Form 8-K on April 13, 2016.
|
10.5
|
|
Form of Non-Qualified Stock Option Agreement under the 2011 Long-Term Incentive Plan, filed as Exhibit 10.60 to
Registrant's Form 10-K for the year ended January 30, 2016.
|
10.6
|
|
Form of Performance Share Agreement under the 2011 Long-Term Incentive Plan, filed as Exhibit 10.69 to
Registrant's Form 10-K for the year ended January 30, 2016.
|
10.7
|
|
Form of Restricted Stock Unit Award Agreement under the 2011 Long-Term Incentive Plan, filed as Exhibit 10.75 to
Registrant's Form 10-K for the year ended January 30, 2016.
|
10.8
|
|
Form of Director Stock Unit Agreement and Stock Unit Deferral Election Form under the 2011 Long-Term
Incentive Plan, filed as Exhibit 10.79 to Registrant's Form 10-K for the year ended January 30, 2016.
|
31.1
|
|
Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer of The Gap, Inc. (Section 302 of the Sarbanes-Oxley Act of 2002). (2)
|
31.2
|
|
Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer of The Gap, Inc. (Section 302 of the Sarbanes-Oxley Act of 2002). (2)
|
32.1
|
|
Certification of the Chief Executive Officer of The Gap, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (3)
|
32.2
|
|
Certification of the Chief Financial Officer of The Gap, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (3)
|
101
|
|
The following materials from The Gap, Inc.’s Quarterly Report on Form 10-Q for the quarter ended April 30, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Income, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements. (2)
|
(1)
|
Pursuant to a request for confidential treatment, confidential portions of this Exhibit have been redacted and have been filed separately with the Securities and Exchange Commission.
|
(2)
|
Filed herewith.
|
(3)
|
Furnished herewith.
|
|
|
THE GAP, INC.
|
|
|
|
|
|
Date:
|
June 3, 2016
|
By
|
/s/ Arthur Peck
|
|
|
|
Arthur Peck
|
|
|
|
Chief Executive Officer
|
|
|
|
|
Date:
|
June 3, 2016
|
By
|
/s/ Sabrina L. Simmons
|
|
|
|
Sabrina L. Simmons
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
10.1
|
|
Fourth Amendment to Amended and Restated Consumer Credit Card Program Agreement by and among the Registrant, Gap (Puerto Rico), Inc., GPS Consumer Direct, Inc., Gap (Apparel), LLC, Gap (ITM) Inc., Synchrony Bank (f/k/a GE Capital Retail Bank) and Synchrony Financial, dated as of April 29, 2016. (1) (2)
|
10.2
|
|
Deferred Compensation Plan, amended and restated effective March 24, 2016. (2)
|
10.3
|
|
Agreement with Julie Gruber dated February 1, 2016 and confirmed on February 4, 2016. (2)
|
10.4
|
|
Agreement with Sonia Syngal dated April 11, 2016 and confirmed on April 11, 2016, filed as Exhibit 10.1 to Registrant's Form 8-K on April 13, 2016.
|
10.5
|
|
Form of Non-Qualified Stock Option Agreement under the 2011 Long-Term Incentive Plan, filed as Exhibit 10.60 to Registrant's Form 10-K for the year ended January 30, 2016.
|
10.6
|
|
Form of Performance Share Agreement under the 2011 Long-Term Incentive Plan, filed as Exhibit 10.69 to Registrant's Form 10-K for the year ended January 30, 2016.
|
10.7
|
|
Form of Restricted Stock Unit Award Agreement under the 2011 Long-Term Incentive Plan, filed as Exhibit 10.75 to Registrant's Form 10-K for the year ended January 30, 2016.
|
10.8
|
|
Form of Director Stock Unit Agreement and Stock Unit Deferral Election Form under the 2011 Long-Term Incentive Plan, filed as Exhibit 10.79 to Registrant's Form 10-K for the year ended January 30, 2016.
|
31.1
|
|
Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer of The Gap, Inc. (Section 302 of the Sarbanes-Oxley Act of 2002). (2)
|
31.2
|
|
Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer of The Gap, Inc. (Section 302 of the Sarbanes-Oxley Act of 2002). (2)
|
32.1
|
|
Certification of the Chief Executive Officer of The Gap, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (3)
|
32.2
|
|
Certification of the Chief Financial Officer of The Gap, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (3)
|
101
|
|
The following materials from The Gap, Inc.’s Quarterly Report on Form 10-Q for the quarter ended April 30, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Income, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements. (2)
|
(1)
|
Pursuant to a request for confidential treatment, confidential portions of this Exhibit have been redacted and have been filed separately with the Securities and Exchange Commission.
|
(2)
|
Filed herewith.
|
(3)
|
Furnished herewith.
|
1.
|
THE FOURTH AMENDMENT TO THE AMENDED AND RESTATED CONSUMER CREDIT CARD PROGRAM AGREEMENT BY AND AMONG THE GAP, INC., OLD NAVY, LLC, GAP (PUERTO RICO), INC., GPS CONSUMER DIRECT, INC., OLD NAVY (APPAREL), LLC, AND OLD NAVY (ITM) INC. AND THE SYNCHRONY ENTITIES (THE “OLD NAVY CONTRACT”);
|
2.
|
THE FOURTH AMENDMENT AMENDED AND RESTATED CONSUMER CREDIT CARD PROGRAM AGREEMENT BY AND AMONG THE GAP, INC., BANANA REPUBLIC, LLC, GAP (PUERTO RICO), INC., GPS CONSUMER DIRECT, INC., BANANA REPUBLIC (APPAREL), LLC, BANANA REPUBLIC (ITM) INC., AND THE SYNCHRONY ENTITIES (THE “BANANA REPUBLIC CONTRACT”); AND
|
3.
|
THE FOURTH AMENDMENT AMENDED AND RESTATED CONSUMER CREDIT CARD PROGRAM AGREEMENT BY AND AMONG THE GAP, INC., ATHLETA INC., ATHLETA LLC, ATHLETA (ITM) INC. AND GPS CONSUMER DIRECT, INC. AND THE SYNCHRONY ENTITIES (THE “ATHLETA CONTRACT”).
|
1.1
|
Amendment to Section 3.01(b).
Section 3.01(b) is deleted and replaced with the following:
|
1.2
|
Amendment to Section 3.07(k
). Section 3.07(k) is deleted and replaced with the following:
|
1.3
|
Addition of new Section 4.07.
A new Section 4.07 will be added to the agreement as follows:
|
A.
|
During [***], no changes will be made unless the parties otherwise agree;
|
B.
|
During [***], if required by Applicable Law, then as soon as reasonably practicable taking into account the effective date of changes required by Applicable Law, [***] (unless the parties otherwise agree);
|
C.
|
During [***], if necessary to conform with Bank’s policies or consumer-facing templates (as implemented or utilized by Bank in all material respects consistently across substantially all of the Retail Card consumer credit card portfolios), then as soon as reasonably practicable, [***] (unless the parties otherwise agree); and
|
D.
|
For all other requested changes or additions to the eQuickscreen Content, the parties will work together in good faith to discuss and implement changes or additions that contribute to the success of the Program.
|
1.4
|
Amendment to Schedule 3.07(k).
Schedule 3.07(k) is deleted and replaced with the new Schedule 3.07(k) attached hereto as
Attachment 1
.
|
BANK
:
SYNCHRONY BANK
By:
/s/ Thomas M. Quindlen
Name:
Thomas M. Quindlen
Title:
EVP Retail Card
|
RETAILERS
:
THE GAP, INC.
By:
/s/ Sabrina Simmons
Name: Sabrina Simmons
Title: EVP & CFO
|
|
|
|
GAP (PUERTO RICO), INC.
By:
/s/ Sabrina Simmons
Name: Sabrina Simmons
Title: EVP & CFO
|
|
|
BANK PARENT
:
SYNCHRONY FINANCIAL
By:
/s/ Thomas M. Quindlen
Name:
Thomas M. Quindlen
Title:
EVP Retail Card
|
GPS CONSUMER DIRECT, INC.
By:
/s/ Sabrina Simmons
Name: Sabrina Simmons
Title: EVP & CFO
GAP (APPAREL), LLC
By:
/s/ Sabrina Simmons
Name: Sabrina Simmons
Title: EVP & CFO
|
|
|
|
GAP (ITM) INC.
By:
/s/ Sabrina Simmons
Name: Sabrina Simmons
Title: EVP & CFO
|
Attachment 1
|
|||||||||||||||||||
Schedule 3.07 (k)
Cost Difference Schedule
|
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[***]
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[***]
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[***]
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|
|
PAGE
|
SECTION 1 Introduction
|
|
1.1 Purpose
|
1
|
1.2 Effective Date; Plan Year
|
1
|
1.3 Plan Administration
|
1
|
1.4 Unfunded Nature of Plan
|
2
|
|
|
SECTION 2 Definitions
|
3
|
2.1 Account
|
3
|
2.2 Accounting Date
|
3
|
2.3 Beneficiary
|
3
|
2.4 Board
|
3
|
2.5 Bonus
|
3
|
2.6 Bonus Deferrals
|
3
|
2.7 Code
|
3
|
2.8 Committee
|
3
|
2.9 Company
|
4
|
2.10 Compensation
|
4
|
2.11 Compensation Committee
|
4
|
2.12 Compensatoin Deferrals
|
4
|
2.13 Continuous Service
|
4
|
2.14 Effective Date
|
4
|
2.15 Eligible Individual
|
5
|
2.16 Employee
|
5
|
2.17 Employer
|
5
|
2.18 ERISA
|
5
|
2.19 Investment Funds
|
5
|
2.20 Matching Contributions
|
5
|
2.21 Participant
|
5
|
2.22 Plan
|
5
|
2.23 Plan Year/Plan Year Quarter/Fiscal Year
|
6
|
2.24 Qualified Domestic Relations Order
|
6
|
2.25 Retirement
|
6
|
2.26 Social Security Taxable Wage Base
|
6
|
2.27 Spouse
|
6
|
2.28 Termination Date
|
6
|
2.29 Other Definitions
|
7
|
|
|
SECTION 3 Eligibility and Participation
|
8
|
3.1 Initial Eligibility
|
8
|
3.2 Cessation of Participation
|
8
|
3.3 Eligibility for Matching Contributions
|
8
|
|
|
|
|
TABLE OF CONTENTS
|
|
(continued)
|
|
|
PAGE
|
SECTION 4 Deferrals and Contributions
|
9
|
4.1 Compensation Deferrals
|
9
|
4.2 Bonus Deferrals
|
10
|
4.3 Matching Contributions
|
11
|
4.4 No Election Changes During Plan Year
|
11
|
4.5 Crediting of Deferrals
|
11
|
4.6 Reduction of Deferrals or Contributions
|
12
|
|
|
SECTION 5 Notional Investments
|
13
|
5.1 Investment Funds
|
13
|
5.2 Investment Fund Elections
|
13
|
5.3 Investment Fund Transfers
|
13
|
|
|
SECTION 6 Accounting
|
14
|
6.1 Individual Accounts
|
14
|
6.2 Adjustment of Accounts
|
14
|
6.3 Accounting Methods
|
14
|
6.4 Statement of Account
|
15
|
|
|
SECTION 7 Vesting
|
16
|
|
|
SECTION 8 Funding
|
17
|
|
|
SECTION 9 Distribution of Accounts
|
18
|
9.1 Distribution of Accounts Prior to Retirment Date
|
18
|
9.2 Distribution of Accounts After Retirement Date
|
19
|
9.3 Key Employees
|
20
|
9.4 Mandatory Cash-Outs of Small Amounts
|
20
|
9.5 Designation of Beneficiary
|
20
|
9.6 Reemployment
|
21
|
9.7 Domestic Relations Orders
|
21
|
9.8 Special Distribution Rules
|
22
|
|
|
SECTION 10 General Provisions
|
24
|
10.1 Transferability of Plan Interests
|
24
|
10.2 Employment Rights
|
24
|
10.3 Litigation by Participants or Other Persons
|
24
|
10.4 Evidence
|
24
|
10.5 Waiver of Notice
|
24
|
10.6 Controlling Law
|
24
|
10.7 Statutory References
|
25
|
10.8 Severability
|
25
|
10.9 Action by the Company, the Employers or the Committee
|
25
|
10.10 Headings and Captions
|
25
|
TABLE OF CONTENTS
|
|
(continued)
|
|
|
PAGE
|
10.11 Gender and Number
|
25
|
10.12 Examination of Documents
|
25
|
10.13 Elections
|
25
|
10.14 Manner of Delivery
|
26
|
10.15 Facility of Payment
|
26
|
10.16 Missing Persons
|
26
|
10.17 Recovery of Benefits
|
27
|
10.18 Effect on other Benefits
|
27
|
10.19 Tax and Legal Effects
|
27
|
|
|
SECTION 11 PLAN ADMINISTRATION
|
28
|
11.1 Establishment of Committee
|
28
|
11.2 Committee General Powers, Rights, and Duties
|
28
|
11.3 Interested Committee Member
|
29
|
11.4 Compensation and Expenses
|
29
|
11.5 Information Required by Company
|
29
|
11.6 Unifrom Applicatoin of Rules
|
30
|
11.7 Review of Benefit Determinations
|
30
|
11.8 Company's Decision final
|
30
|
|
|
SECTION 12 AMENDMENT AND TERMINATION
|
31
|
1.4
|
Unfunded Nature of Plan
|
(a)
|
Compensation Deferral Account. A Compensation Deferral Account to reflect the Participant’s Compensation Deferrals and the notional gains, losses, expenses, appreciation and depreciation attributable thereto.
|
(b)
|
Bonus Deferral Account. A Bonus Deferral Account to reflect the Participant’s Bonus Deferrals, if applicable, and the notional gains, losses, expenses, appreciation and depreciation attributable thereto.
|
(c)
|
Matching Contribution Account. A Matching Contribution Account to reflect the Matching Contributions credited on behalf of the Participant, if applicable, and the notional gains, losses, expenses, appreciation and depreciation attributable thereto.
|
(a)
|
Installment Elections
. A Participant will be required to make his distribution election prior to the commencement of each Plan Year.
|
(b)
|
Installment Payments
. It is the intention of the Company to make the first installment payment by the end of the calendar year in which occurs the Participant’s Retirement Date or death, or, if calculation of the amount of the payment is not administratively practicable due to events beyond the control of the Participant or his beneficiary, during the first calendar year in which the calculation of the amount is administratively practicable. Succeeding payments shall be made by the end of each succeeding calendar year, or as soon as administratively feasible for the Company to make such payment. The amount to
|
(a)
|
is issued pursuant to a State’s domestic relations law;
|
(b)
|
relates to the provision of child support, alimony payments or marital property rights to a spouse, former spouse, child or other dependent of the Participant;
|
(c)
|
creates or recognizes the right of a spouse, former spouse, child or other dependent of the Participant to receive all or a portion of the Participant’s benefits under the Plan;
|
(d)
|
provides for an immediate lump sum payment as soon as administratively practicable after the later of (i) the date the Company determines that a Qualified Domestic Relations Order exists, and (ii) a date specified in the Qualified Domestic Relations Order; and
|
(e)
|
meets such other requirements established by the Company.
|
(b)
|
By paying such benefits to a court of competent jurisdiction for judicial determination of the right thereto.
|
(c)
|
By forfeiting such benefits in accordance with procedures established by the Company. If a Participant, Spouse, Beneficiary or other person entitled to a payment under the Plan is subsequently located, such benefits shall be restored (without adjustment) to the Participant, Spouse, Beneficiary or other person under the Plan.
|
(d)
|
By any equitable manner permitted by law under rules adopted by the Company.
|
(a)
|
To adopt such rules, procedures, and regulations as in its opinion may be necessary for the proper and efficient administration of the Plan and as are consistent with the Plan and to change, alter, or amend such rules, procedures, and regulations;
|
(b)
|
To construe and interpret the provisions of the Plan and make factual determinations thereunder;
|
(c)
|
To determine all questions arising in the administration of the Plan, including the power to determine the rights or eligibility of Employees or Participants or any other persons, and the amounts of their benefits (if any) under the Plan, and to remedy ambiguities, inconsistencies, or omissions, and any such determination shall be binding on all parties;
|
(d)
|
To employ and suitably compensate such agents, attorneys, accountants, actuaries, recordkeepers, or other persons (who also may be employed by the Company) to render advice and perform other services as the Company may deem necessary to carry out its powers, rights, and duties;
|
(e)
|
To the extent applicable, to direct payments or distributions in accordance with the provisions of the Plan;
|
(f)
|
To furnish the Employers with such information as may be required by them for tax or other purposes in connection with the Plan;
|
(h)
|
To take such actions as the Company may deem necessary or advisable to correct any errors in the operation of the Plan; and
|
(i)
|
To take such other actions as the Company may deem necessary for the proper administration and operation of the Plan in accordance with its terms.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of The Gap, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
June 3, 2016
|
|
|
|
|
/s/ Arthur Peck
|
|
|
Arthur Peck
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of The Gap, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
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(a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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June 3, 2016
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/s/ Sabrina L. Simmons
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Sabrina L. Simmons
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Executive Vice President and Chief Financial Officer
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(Principal Financial Officer)
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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June 3, 2016
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/s/ Arthur Peck
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Arthur Peck
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Chief Executive Officer
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(Principal Executive Officer)
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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June 3, 2016
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/s/ Sabrina L. Simmons
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Sabrina L. Simmons
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Executive Vice President and Chief Financial Officer
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(Principal Financial Officer)
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