☑
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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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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Common Stock, $0.05 par value
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GPS
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The New York Stock Exchange
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•
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the potential impact of COVID-19 on the assumptions and estimates used when preparing the quarterly financial statements; the potential impact of COVID-19 on our results of operations, financial position, and liquidity;
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•
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the impact of recent accounting pronouncements;
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•
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recognition of revenue deferrals as revenue;
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•
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compliance with applicable financial covenants under the 2023 Notes, 2025 Notes, 2027 Notes, and the ABL Facility;
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•
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unrealized gains and losses from designated cash flow hedges;
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•
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total gross unrecognized tax benefits;
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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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deferred record and payment dates for our previously announced first quarter fiscal year 2020 dividend;
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•
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suspension of our regular quarterly cash dividend and share repurchases;
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•
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capital expenditures in fiscal year 2020;
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•
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offering product that is consistently brand-appropriate and on-trend with high customer acceptance;
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•
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growing and operating our global e-commerce business;
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•
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restructuring Gap brand, with emphasis on the specialty fleet globally;
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•
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increasing focus on improving operational discipline and efficiency by streamlining operations and processes and leveraging scale;
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•
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managing inventory to support a healthy merchandise margin;
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•
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continuing to integrate social and environmental sustainability into business practices;
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•
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current cash balances and cash flows from our operations and from issuance of the 2023 Notes, 2025 Notes, 2027 Notes being sufficient to support our business operations;
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•
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ability to supplement near-term liquidity, if necessary, with our $1.8675 billion asset-based revolving credit facility or other available market instruments;
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•
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the impact of the seasonality of our operations; 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 overall global economic environment and risks associated with the COVID-19 pandemic;
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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 highly competitive nature of our business in the United States and internationally;
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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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engaging in or seeking to engage in strategic transactions that are subject to various risks and uncertainties;
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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 the failure to manage key executive succession and retention and to continue to attract qualified personnel could have an adverse impact on our results of operations;
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•
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the risk that our investments in customer, digital, and omni-channel shopping initiatives may not deliver the results we anticipate;
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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 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 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 risk that a failure of, or updates or changes to, our information technology ("IT") systems may disrupt our operations;
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•
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the risks to our efforts to expand internationally, including our ability to operate in regions where we have less experience;
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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 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 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 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 foreign currency exchange rate fluctuations could adversely impact our financial results;
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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 position or our business initiatives;
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•
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the risk that changes in the regulatory or administrative landscape could adversely affect our financial condition and results of operations;
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•
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the risk that natural disasters, public health crises (similar to and including the ongoing COVID-19 pandemic), political crises, negative global climate patterns, 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 reductions in income and cash flow from our credit card arrangement related to our private label and co-branded credit cards could adversely affect our operating results and cash flows;
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•
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the risk that the adoption of new accounting pronouncements will impact future results;
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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, and claims.
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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)
|
May 2,
2020 |
|
February 1,
2020 |
|
May 4,
2019 |
||||||
ASSETS
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
1,028
|
|
|
$
|
1,364
|
|
|
$
|
941
|
|
Short-term investments
|
51
|
|
|
290
|
|
|
272
|
|
|||
Merchandise inventory
|
2,217
|
|
|
2,156
|
|
|
2,242
|
|
|||
Other current assets
|
920
|
|
|
706
|
|
|
757
|
|
|||
Total current assets
|
4,216
|
|
|
4,516
|
|
|
4,212
|
|
|||
Property and equipment, net of accumulated depreciation of $5,886, $5,839 and $5,871
|
2,945
|
|
|
3,122
|
|
|
3,129
|
|
|||
Operating lease assets
|
4,851
|
|
|
5,402
|
|
|
5,732
|
|
|||
Other long-term assets
|
698
|
|
|
639
|
|
|
547
|
|
|||
Total assets
|
$
|
12,710
|
|
|
$
|
13,679
|
|
|
$
|
13,620
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Revolving credit facility
|
$
|
500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Accounts payable
|
971
|
|
|
1,174
|
|
|
994
|
|
|||
Accrued expenses and other current liabilities
|
1,051
|
|
|
1,067
|
|
|
882
|
|
|||
Current portion of operating lease liabilities
|
886
|
|
|
920
|
|
|
929
|
|
|||
Income taxes payable
|
23
|
|
|
48
|
|
|
26
|
|
|||
Total current liabilities
|
3,431
|
|
|
3,209
|
|
|
2,831
|
|
|||
Long-term liabilities:
|
|
|
|
|
|
||||||
Long-term debt
|
1,250
|
|
|
1,249
|
|
|
1,249
|
|
|||
Long-term operating lease liabilities
|
5,331
|
|
|
5,508
|
|
|
5,597
|
|
|||
Lease incentives and other long-term liabilities
|
381
|
|
|
397
|
|
|
372
|
|
|||
Total long-term liabilities
|
6,962
|
|
|
7,154
|
|
|
7,218
|
|
|||
Commitments and contingencies (see Note 9)
|
|
|
|
|
|
||||||
Stockholders’ equity:
|
|
|
|
|
|
||||||
Common stock $0.05 par value
|
|
|
|
|
|
||||||
Authorized 2,300 shares for all periods presented; Issued and Outstanding 373, 371, and 378 shares
|
19
|
|
|
19
|
|
|
19
|
|
|||
Additional paid-in capital
|
17
|
|
|
—
|
|
|
—
|
|
|||
Retained earnings
|
2,235
|
|
|
3,257
|
|
|
3,495
|
|
|||
Accumulated other comprehensive income
|
46
|
|
|
40
|
|
|
57
|
|
|||
Total stockholders’ equity
|
2,317
|
|
|
3,316
|
|
|
3,571
|
|
|||
Total liabilities and stockholders’ equity
|
$
|
12,710
|
|
|
$
|
13,679
|
|
|
$
|
13,620
|
|
|
13 Weeks Ended
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||||||
($ and shares in millions except per share amounts)
|
May 2,
2020 |
|
May 4,
2019 |
||||
Net sales
|
$
|
2,107
|
|
|
$
|
3,706
|
|
Cost of goods sold and occupancy expenses
|
1,839
|
|
|
2,362
|
|
||
Gross profit
|
268
|
|
|
1,344
|
|
||
Operating expenses
|
1,512
|
|
|
1,028
|
|
||
Operating income (loss)
|
(1,244
|
)
|
|
316
|
|
||
Interest expense
|
19
|
|
|
20
|
|
||
Interest income
|
(4
|
)
|
|
(6
|
)
|
||
Income (loss) before income taxes
|
(1,259
|
)
|
|
302
|
|
||
Income taxes
|
(327
|
)
|
|
75
|
|
||
Net income (loss)
|
$
|
(932
|
)
|
|
$
|
227
|
|
Weighted-average number of shares - basic
|
372
|
|
|
379
|
|
||
Weighted-average number of shares - diluted
|
372
|
|
|
381
|
|
||
Earnings (loss) per share - basic
|
$
|
(2.51
|
)
|
|
$
|
0.60
|
|
Earnings (loss) per share - diluted
|
$
|
(2.51
|
)
|
|
$
|
0.60
|
|
|
13 Weeks Ended
|
||||||
($ in millions)
|
May 2,
2020 |
|
May 4,
2019 |
||||
Net income (loss)
|
$
|
(932
|
)
|
|
$
|
227
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
||||
Foreign currency translation
|
(9
|
)
|
|
(1
|
)
|
||
Change in fair value of derivative financial instruments, net of tax of $2 and $4
|
19
|
|
|
9
|
|
||
Reclassification adjustment for gains on derivative financial instruments, net of tax of $- and $(2)
|
(4
|
)
|
|
(4
|
)
|
||
Other comprehensive income, net of tax
|
6
|
|
|
4
|
|
||
Comprehensive income (loss)
|
$
|
(926
|
)
|
|
$
|
231
|
|
|
|
Common Stock
|
|
Additional
Paid-in Capital |
|
Retained
Earnings |
|
Accumulated
Other Comprehensive Income |
|
|
|||||||||||||
($ and shares in millions except per share amounts)
|
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Shares
|
|
Amount
|
|
Total
|
|||||||||||||||||
Balance as of February 2, 2019
|
|
378
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
3,481
|
|
|
$
|
53
|
|
|
$
|
3,553
|
|
Cumulative effect of a change in accounting principle related to operating leases
|
|
|
|
|
|
|
|
(86
|
)
|
|
|
|
(86
|
)
|
|||||||||
Net income for the thirteen weeks ended May 4, 2019
|
|
|
|
|
|
|
|
227
|
|
|
|
|
227
|
|
|||||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Foreign currency translation
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
(1
|
)
|
|||||||||
Change in fair value of derivative financial instruments
|
|
|
|
|
|
|
|
|
|
9
|
|
|
9
|
|
|||||||||
Amounts reclassified from accumulated other comprehensive income
|
|
|
|
|
|
|
|
|
|
(4
|
)
|
|
(4
|
)
|
|||||||||
Repurchases and retirement of common stock
|
|
(2
|
)
|
|
—
|
|
|
(15
|
)
|
|
(35
|
)
|
|
|
|
(50
|
)
|
||||||
Issuance of common stock related to stock options and employee stock purchase plans
|
|
1
|
|
|
—
|
|
|
10
|
|
|
|
|
|
|
10
|
|
|||||||
Issuance of common stock and withholding tax payments related to vesting of stock units
|
|
1
|
|
|
—
|
|
|
(19
|
)
|
|
|
|
|
|
(19
|
)
|
|||||||
Share-based compensation, net of forfeitures
|
|
|
|
|
|
24
|
|
|
|
|
|
|
24
|
|
|||||||||
Common stock dividends declared and paid ($0.2425 per share)
|
|
|
|
|
|
|
|
(92
|
)
|
|
|
|
(92
|
)
|
|||||||||
Balance as of May 4, 2019
|
|
378
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
3,495
|
|
|
$
|
57
|
|
|
$
|
3,571
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of February 1, 2020
|
|
371
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
3,257
|
|
|
$
|
40
|
|
|
$
|
3,316
|
|
Net loss for the thirteen weeks ended May 2, 2020
|
|
|
|
|
|
|
|
(932
|
)
|
|
|
|
(932
|
)
|
|||||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Foreign currency translation
|
|
|
|
|
|
|
|
|
|
(9
|
)
|
|
(9
|
)
|
|||||||||
Change in fair value of derivative financial instruments
|
|
|
|
|
|
|
|
|
|
19
|
|
|
19
|
|
|||||||||
Amounts reclassified from accumulated other comprehensive income
|
|
|
|
|
|
|
|
|
|
(4
|
)
|
|
(4
|
)
|
|||||||||
Issuance of common stock related to stock options and employee stock purchase plans
|
|
1
|
|
|
—
|
|
|
6
|
|
|
|
|
|
|
6
|
|
|||||||
Issuance of common stock and withholding tax payments related to vesting of stock units
|
|
1
|
|
|
—
|
|
|
(7
|
)
|
|
|
|
|
|
(7
|
)
|
|||||||
Share-based compensation, net of forfeitures
|
|
|
|
|
|
18
|
|
|
|
|
|
|
18
|
|
|||||||||
Common stock dividends declared and not paid ($0.2425 per share) (1)
|
|
|
|
|
|
|
|
(90
|
)
|
|
|
|
(90
|
)
|
|||||||||
Balance as of May 2, 2020
|
|
373
|
|
|
$
|
19
|
|
|
$
|
17
|
|
|
$
|
2,235
|
|
|
$
|
46
|
|
|
$
|
2,317
|
|
|
13 Weeks Ended
|
||||||
($ in millions)
|
May 2,
2020 |
|
May 4,
2019 |
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
(932
|
)
|
|
$
|
227
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
130
|
|
|
138
|
|
||
Share-based compensation
|
18
|
|
|
24
|
|
||
Impairment of operating lease assets
|
360
|
|
|
—
|
|
||
Impairment of store assets
|
124
|
|
|
—
|
|
||
Non-cash and other items
|
3
|
|
|
7
|
|
||
Gain on sale of building
|
—
|
|
|
(191
|
)
|
||
Deferred income taxes
|
(41
|
)
|
|
23
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Merchandise inventory
|
(79
|
)
|
|
(83
|
)
|
||
Other current assets and other long-term assets
|
126
|
|
|
25
|
|
||
Accounts payable
|
(203
|
)
|
|
(100
|
)
|
||
Accrued expenses and other current liabilities
|
(86
|
)
|
|
(37
|
)
|
||
Income taxes payable, net of receivables and other tax-related items
|
(322
|
)
|
|
36
|
|
||
Lease incentives and other long-term liabilities
|
(18
|
)
|
|
14
|
|
||
Operating lease assets and liabilities, net
|
(20
|
)
|
|
(54
|
)
|
||
Net cash provided by (used for) operating activities
|
(940
|
)
|
|
29
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property and equipment
|
(122
|
)
|
|
(165
|
)
|
||
Purchase of building
|
—
|
|
|
(343
|
)
|
||
Proceeds from sale of building
|
—
|
|
|
220
|
|
||
Purchases of short-term investments
|
(59
|
)
|
|
(69
|
)
|
||
Proceeds from sales and maturities of short-term investments
|
297
|
|
|
86
|
|
||
Purchase of Janie and Jack
|
—
|
|
|
(69
|
)
|
||
Net cash provided by (used for) investing activities
|
116
|
|
|
(340
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from revolving credit facility
|
500
|
|
|
—
|
|
||
Proceeds from issuances under share-based compensation plans
|
6
|
|
|
10
|
|
||
Withholding tax payments related to vesting of stock units
|
(7
|
)
|
|
(19
|
)
|
||
Repurchases of common stock
|
—
|
|
|
(50
|
)
|
||
Cash dividends paid
|
—
|
|
|
(92
|
)
|
||
Net cash provided by (used for) financing activities
|
499
|
|
|
(151
|
)
|
||
Effect of foreign exchange rate fluctuations on cash, cash equivalents, and restricted cash
|
(8
|
)
|
|
—
|
|
||
Net decrease in cash, cash equivalents, and restricted cash
|
(333
|
)
|
|
(462
|
)
|
||
Cash, cash equivalents, and restricted cash at beginning of period
|
1,381
|
|
|
1,420
|
|
||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
1,048
|
|
|
$
|
958
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash paid for interest during the period
|
$
|
38
|
|
|
$
|
38
|
|
Cash paid for income taxes during the period, net of refunds
|
$
|
37
|
|
|
$
|
18
|
|
($ in millions)
|
May 2,
2020 |
|
February 1,
2020 |
|
May 4,
2019 |
||||||
Cash and cash equivalents, per Condensed Consolidated Balance Sheets
|
$
|
1,028
|
|
|
$
|
1,364
|
|
|
$
|
941
|
|
Restricted cash included in other current assets
|
—
|
|
|
—
|
|
|
—
|
|
|||
Restricted cash included in other long-term assets
|
20
|
|
|
17
|
|
|
17
|
|
|||
Total cash, cash equivalents, and restricted cash, per Condensed Consolidated Statements of Cash Flows
|
$
|
1,048
|
|
|
$
|
1,381
|
|
|
$
|
958
|
|
|
13 Weeks Ended
|
||||||
($ in millions)
|
May 2, 2020
|
|
May 4, 2019
|
||||
Store sales (1)
|
$
|
1,108
|
|
|
$
|
2,823
|
|
Online sales (2)
|
999
|
|
|
883
|
|
||
Total net sales
|
$
|
2,107
|
|
|
$
|
3,706
|
|
(1)
|
Store sales primarily includes sales made at our Company-operated stores and franchise sales. Fiscal 2020 store sales were negatively impacted by COVID-19. See Note 1 of Notes to Condensed Consolidated Financial Statements for further details.
|
(2)
|
Online sales primarily include sales made through our online channels including ship-from-store sales, buy online pick-up in store sales, and order-in-store sales.
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
($ in millions)
|
May 2, 2020
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
139
|
|
|
$
|
—
|
|
|
$
|
139
|
|
|
$
|
—
|
|
Short-term investments
|
51
|
|
|
—
|
|
|
51
|
|
|
—
|
|
||||
Derivative financial instruments
|
36
|
|
|
—
|
|
|
36
|
|
|
—
|
|
||||
Deferred compensation plan assets
|
47
|
|
|
47
|
|
|
—
|
|
|
—
|
|
||||
Other assets
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Total
|
$
|
275
|
|
|
$
|
47
|
|
|
$
|
226
|
|
|
$
|
2
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
($ in millions)
|
February 1, 2020
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
311
|
|
|
$
|
19
|
|
|
$
|
292
|
|
|
$
|
—
|
|
Short-term investments
|
290
|
|
|
117
|
|
|
173
|
|
|
—
|
|
||||
Derivative financial instruments
|
10
|
|
|
—
|
|
|
10
|
|
|
—
|
|
||||
Deferred compensation plan assets
|
51
|
|
|
51
|
|
|
—
|
|
|
—
|
|
||||
Other assets
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Total
|
$
|
664
|
|
|
$
|
187
|
|
|
$
|
475
|
|
|
$
|
2
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
($ in millions)
|
May 4, 2019
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
222
|
|
|
$
|
13
|
|
|
$
|
209
|
|
|
$
|
—
|
|
Short-term investments
|
272
|
|
|
129
|
|
|
143
|
|
|
—
|
|
||||
Derivative financial instruments
|
27
|
|
|
—
|
|
|
27
|
|
|
—
|
|
||||
Deferred compensation plan assets
|
51
|
|
|
51
|
|
|
—
|
|
|
—
|
|
||||
Other assets
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Total
|
$
|
574
|
|
|
$
|
193
|
|
|
$
|
379
|
|
|
$
|
2
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
—
|
|
($ in millions)
|
May 2,
2020 |
|
February 1,
2020 |
|
May 4,
2019 |
||||||
Derivatives designated as cash flow hedges
|
$
|
319
|
|
|
$
|
501
|
|
|
$
|
610
|
|
Derivatives not designated as hedging instruments
|
785
|
|
|
689
|
|
|
666
|
|
|||
Total
|
$
|
1,104
|
|
|
$
|
1,190
|
|
|
$
|
1,276
|
|
($ in millions)
|
May 2,
2020 |
|
February 1,
2020 |
|
May 4,
2019 |
||||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
|
||||||
Other current assets
|
$
|
16
|
|
|
$
|
6
|
|
|
$
|
20
|
|
Accrued expenses and other current liabilities
|
—
|
|
|
2
|
|
|
2
|
|
|||
|
|
|
|
|
|
||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
||||||
Other current assets
|
20
|
|
|
4
|
|
|
7
|
|
|||
Accrued expenses and other current liabilities
|
5
|
|
|
8
|
|
|
4
|
|
|||
|
|
|
|
|
|
||||||
Total derivatives in an asset position
|
$
|
36
|
|
|
$
|
10
|
|
|
$
|
27
|
|
Total derivatives in a liability position
|
$
|
5
|
|
|
$
|
10
|
|
|
$
|
6
|
|
|
13 Weeks Ended
|
||||||
($ in millions)
|
May 2,
2020 |
|
May 4,
2019 |
||||
Gain recognized in other comprehensive income
|
$
|
21
|
|
|
$
|
13
|
|
|
Location and Amount of Gain Recognized in Net Income (Loss)
|
||||||||||||||
|
13 Weeks Ended
May 2, 2020 |
|
13 Weeks Ended
May 4, 2019 |
||||||||||||
($ in millions)
|
Cost of goods sold and occupancy expense
|
|
Operating expenses
|
|
Cost of goods sold and occupancy expense
|
|
Operating expenses
|
||||||||
Total amount of expense line items presented in the Condensed Consolidated Statements of Operations in which the effects of derivatives are recorded
|
$
|
1,839
|
|
|
$
|
1,512
|
|
|
$
|
2,362
|
|
|
$
|
1,028
|
|
|
|
|
|
|
|
|
|
||||||||
Gain recognized in net income (loss)
|
|
|
|
|
|
|
|
||||||||
Derivatives designated as cash flow hedges
|
(4
|
)
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
||||
Derivatives not designated as hedging instruments
|
—
|
|
|
(43
|
)
|
|
—
|
|
|
(9
|
)
|
||||
Total gain recognized in net income (loss)
|
$
|
(4
|
)
|
|
$
|
(43
|
)
|
|
$
|
(6
|
)
|
|
$
|
(9
|
)
|
|
13 Weeks Ended
|
||||||
($ and shares in millions except average per share cost)
|
May 2,
2020 |
|
May 4,
2019 |
||||
Number of shares repurchased (1)
|
—
|
|
|
1.9
|
|
||
Total cost
|
$
|
—
|
|
|
$
|
50
|
|
Average per share cost including commissions
|
$
|
—
|
|
|
$
|
25.96
|
|
(1)
|
Excludes shares withheld to settle employee statutory tax withholding related to the vesting of stock units.
|
|
13 Weeks Ended
|
||||
(shares in millions)
|
May 2,
2020 |
|
May 4,
2019 |
||
Weighted-average number of shares - basic
|
372
|
|
|
379
|
|
Common stock equivalents (1)
|
—
|
|
|
2
|
|
Weighted-average number of shares - diluted
|
372
|
|
|
381
|
|
(1)
|
For the first quarter of fiscal 2020, the dilutive impact of outstanding options and awards was excluded from dilutive shares as a result of the Company’s net loss for the quarter.
|
($ in millions)
|
|
Old Navy Global
|
|
Gap Global
|
|
Banana Republic Global
|
|
Other (3)
|
|
Total
|
||||||||||
13 Weeks Ended May 2, 2020
|
|
|
|
|
|
|||||||||||||||
U.S. (1)
|
|
$
|
949
|
|
|
$
|
311
|
|
|
$
|
245
|
|
|
$
|
256
|
|
|
$
|
1,761
|
|
Canada
|
|
77
|
|
|
34
|
|
|
24
|
|
|
—
|
|
|
135
|
|
|||||
Europe
|
|
—
|
|
|
54
|
|
|
3
|
|
|
—
|
|
|
57
|
|
|||||
Asia
|
|
1
|
|
|
108
|
|
|
12
|
|
|
—
|
|
|
121
|
|
|||||
Other regions
|
|
11
|
|
|
17
|
|
|
5
|
|
|
—
|
|
|
33
|
|
|||||
Total
|
|
$
|
1,038
|
|
|
$
|
524
|
|
|
$
|
289
|
|
|
$
|
256
|
|
|
$
|
2,107
|
|
($ in millions)
|
|
Old Navy Global
|
|
Gap Global
|
|
Banana Republic Global (2)
|
|
Other (4)
|
|
Total
|
||||||||||
13 Weeks Ended May 4, 2019
|
|
|
|
|
|
|||||||||||||||
U.S. (1)
|
|
$
|
1,641
|
|
|
$
|
608
|
|
|
$
|
487
|
|
|
$
|
286
|
|
|
$
|
3,022
|
|
Canada
|
|
128
|
|
|
69
|
|
|
47
|
|
|
1
|
|
|
245
|
|
|||||
Europe
|
|
—
|
|
|
121
|
|
|
3
|
|
|
—
|
|
|
124
|
|
|||||
Asia
|
|
10
|
|
|
233
|
|
|
26
|
|
|
—
|
|
|
269
|
|
|||||
Other regions
|
|
20
|
|
|
21
|
|
|
5
|
|
|
—
|
|
|
46
|
|
|||||
Total
|
|
$
|
1,799
|
|
|
$
|
1,052
|
|
|
$
|
568
|
|
|
$
|
287
|
|
|
$
|
3,706
|
|
(1)
|
U.S. includes the United States, Puerto Rico, and Guam.
|
(2)
|
Banana Republic Global fiscal year 2019 net sales include the Janie and Jack brand beginning March 4, 2019.
|
(3)
|
Primarily consists of net sales for the Athleta, Intermix, and Hill City brands. Beginning in fiscal year 2020, Janie and Jack net sales are also included. Net sales for Athleta for the thirteen weeks ended May 2, 2020 were $205 million.
|
(4)
|
Primarily consists of net sales for the Athleta, Intermix, and Hill City brands as well as a portion of income related to our credit card agreement. Net sales for Athleta for the thirteen weeks ended May 4, 2019 were $223 million.
|
Scheduled Maturity ($ in millions)
|
Principal
|
|
Interest Rate
|
|
Interest Payments
|
|||
Senior Secured Notes (1)
|
|
|
|
|
|
|||
May 15, 2023
|
$
|
500
|
|
|
8.375
|
%
|
|
Semi-Annual
|
May 15, 2025
|
750
|
|
|
8.625
|
%
|
|
Semi-Annual
|
|
May 15, 2027
|
1,000
|
|
|
8.875
|
%
|
|
Semi-Annual
|
|
Total issuance
|
$
|
2,250
|
|
|
|
|
|
(1)
|
Includes an option to call the Notes in whole or in part at any time, subject to a make whole premium.
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
the draw-down of the entire $500 million available under our revolving credit facility and new debt financing that closed subsequent to the first quarter of fiscal 2020;
|
•
|
deferring the record and payment dates for our previously announced first quarter of fiscal 2020 dividend, and suspending our regular quarterly cash dividend for the remainder of fiscal 2020;
|
•
|
suspending stock repurchases for the remainder of fiscal 2020;
|
•
|
reducing planned capital expenditures in fiscal 2020;
|
•
|
reviewing all operating expenses for opportunities to reduce spending;
|
•
|
realigning inventory to expected sales trends based upon estimated timing of stores reopening;
|
•
|
furloughing the majority of our store teams in North America for the period stores were closed;
|
•
|
reducing headcount across our corporate functions which resulted in approximately $35 million of severance related costs during the first quarter of fiscal 2020;
|
•
|
temporarily reducing pay for the entire Gap Inc. leadership team along with the Board of Directors; and
|
•
|
suspending rent payments for our stores that have been closed in North America due to the COVID-19 pandemic.
|
•
|
offering product that is consistently brand-appropriate and on-trend with high customer acceptance and appropriate value perception;
|
•
|
growing and operating our global e-commerce business;
|
•
|
restructuring the Gap brand, with emphasis on the specialty fleet globally, to create a healthier business;
|
•
|
attracting and retaining strong talent in our businesses and functions;
|
•
|
increasing the focus on improving operational discipline and efficiency by streamlining operations and processes throughout the organization and leveraging our scale;
|
•
|
managing inventory to support a healthy merchandise margin; and
|
•
|
continuing to integrate social and environmental sustainability into business practices to support long-term growth.
|
•
|
Net sales for the first quarter of fiscal 2020 decreased 43 percent compared with the first quarter of fiscal 2019.
|
•
|
Gross profit for the first quarter of fiscal 2020 was $268 million compared with $1.34 billion for the first quarter of fiscal 2019. Gross margin for the first quarter of fiscal 2020 was 12.7 percent compared with 36.3 percent for the first quarter of fiscal 2019.
|
•
|
Operating loss for the first quarter of fiscal 2020 was $(1,244) million compared with operating income of $316 million for the first quarter of fiscal 2019.
|
•
|
The effective income tax rate for the first quarter of fiscal 2020 was 26.0 percent, compared with 24.8 percent for the first quarter of fiscal 2019.
|
•
|
Net loss for the first quarter of fiscal 2020 was $(932) million compared with net income of $227 million for the first quarter of fiscal 2019.
|
•
|
Diluted loss per share was $(2.51) for the first quarter of fiscal 2020 compared with diluted earnings per share of $0.60 for the first quarter of fiscal 2019.
|
|
February 1, 2020
|
|
13 Weeks Ended May 2, 2020
|
|
May 2, 2020
|
|||||||||
|
Number of
Store Locations
|
|
Number of
Stores Opened
|
|
Number of
Stores Closed (1)
|
|
Number of
Store Locations
|
|
Square Footage
(in millions)
|
|||||
Old Navy North America
|
1,207
|
|
|
4
|
|
|
3
|
|
|
1,208
|
|
|
19.5
|
|
Old Navy Asia
|
17
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
—
|
|
Gap North America
|
675
|
|
|
—
|
|
|
8
|
|
|
667
|
|
|
7.1
|
|
Gap Asia
|
358
|
|
|
5
|
|
|
2
|
|
|
361
|
|
|
3.2
|
|
Gap Europe
|
137
|
|
|
—
|
|
|
7
|
|
|
130
|
|
|
1.1
|
|
Banana Republic North America
|
541
|
|
|
—
|
|
|
2
|
|
|
539
|
|
|
4.5
|
|
Banana Republic Asia
|
48
|
|
|
1
|
|
|
3
|
|
|
46
|
|
|
0.2
|
|
Athleta North America
|
190
|
|
|
1
|
|
|
—
|
|
|
191
|
|
|
0.8
|
|
Intermix North America
|
33
|
|
|
—
|
|
|
—
|
|
|
33
|
|
|
0.1
|
|
Janie and Jack North America
|
139
|
|
|
—
|
|
|
1
|
|
|
138
|
|
|
0.2
|
|
Company-operated stores total
|
3,345
|
|
|
11
|
|
|
43
|
|
|
3,313
|
|
|
36.7
|
|
Franchise
|
574
|
|
|
29
|
|
|
5
|
|
|
598
|
|
|
N/A
|
|
Total
|
3,919
|
|
|
40
|
|
|
48
|
|
|
3,911
|
|
|
36.7
|
|
Increase (decrease) over prior year
|
|
|
|
|
|
|
1.6
|
%
|
|
(0.3
|
)%
|
|||
|
|
|
|
|
|
|
|
|
|
|||||
|
February 2, 2019
|
|
13 Weeks Ended May 4, 2019
|
|
May 4, 2019
|
|||||||||
|
Number of
Store Locations
|
|
Number of
Stores Opened
|
|
Number of
Stores Closed
|
|
Number of
Store Locations
|
|
Square Footage
(in millions)
|
|||||
Old Navy North America
|
1,139
|
|
|
6
|
|
|
1
|
|
|
1,144
|
|
|
18.7
|
|
Old Navy Asia
|
15
|
|
|
1
|
|
|
—
|
|
|
16
|
|
|
0.2
|
|
Gap North America
|
758
|
|
|
1
|
|
|
15
|
|
|
744
|
|
|
7.7
|
|
Gap Asia
|
332
|
|
|
20
|
|
|
14
|
|
|
338
|
|
|
3.1
|
|
Gap Europe
|
152
|
|
|
1
|
|
|
1
|
|
|
152
|
|
|
1.2
|
|
Banana Republic North America
|
556
|
|
|
2
|
|
|
4
|
|
|
554
|
|
|
4.7
|
|
Banana Republic Asia
|
45
|
|
|
2
|
|
|
1
|
|
|
46
|
|
|
0.2
|
|
Athleta North America
|
161
|
|
|
4
|
|
|
—
|
|
|
165
|
|
|
0.7
|
|
Intermix North America
|
36
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|
0.1
|
|
Janie and Jack North America (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
140
|
|
|
0.2
|
|
Company-operated stores total
|
3,194
|
|
|
37
|
|
|
36
|
|
|
3,335
|
|
|
36.8
|
|
Franchise
|
472
|
|
|
46
|
|
|
4
|
|
|
514
|
|
|
N/A
|
|
Total
|
3,666
|
|
|
83
|
|
|
40
|
|
|
3,849
|
|
|
36.8
|
|
Increase over prior year
|
|
|
|
|
|
|
6.4
|
%
|
|
0.8
|
%
|
(1)
|
This represents stores that have been permanently closed, not stores that were temporarily closed as a result of COVID-19.
|
(2)
|
On March 4, 2019, we acquired select assets of Gymboree Group, Inc. related to Janie and Jack. The 140 stores acquired were not included as store openings for fiscal 2019; however, they are included in the ending number of store locations as of May 4, 2019.
|
|
13 Weeks Ended
|
||||||
($ in millions)
|
May 2,
2020 |
|
May 4,
2019 |
||||
Cost of goods sold and occupancy expenses
|
$
|
1,839
|
|
|
$
|
2,362
|
|
Gross profit
|
$
|
268
|
|
|
$
|
1,344
|
|
Cost of goods sold and occupancy expenses as a percentage of net sales
|
87.3
|
%
|
|
63.7
|
%
|
||
Gross margin
|
12.7
|
%
|
|
36.3
|
%
|
•
|
Cost of goods sold increased 13.7 percentage points as a percentage of net sales in the first quarter of fiscal 2020 compared with the first quarter of fiscal 2019, primarily driven by higher inventory impairment due to store closures and decreased retail traffic as a result of COVID-19. Cost of goods sold as a percentage of net sales in the first quarter of fiscal 2020 also increased due to higher promotional activity at all brands.
|
•
|
Occupancy expenses increased 9.9 percentage points as a percentage of net sales in the first quarter of fiscal 2020 compared with the first quarter of fiscal 2019 primarily driven by a decrease in net sales largely due to store closures as a result of COVID-19 without a corresponding decrease in fixed occupancy expenses.
|
|
13 Weeks Ended
|
||||||
($ in millions)
|
May 2,
2020 |
|
May 4,
2019 |
||||
Operating expenses
|
$
|
1,512
|
|
|
$
|
1,028
|
|
Operating expenses as a percentage of net sales
|
71.8
|
%
|
|
27.7
|
%
|
||
Operating margin
|
(59.0
|
)%
|
|
8.5
|
%
|
•
|
an increase due to impairment charges related to store assets and operating lease assets of $484 million incurred during the first quarter of fiscal 2020 primarily due to the impact of COVID-19;
|
•
|
a gain that occurred during the first quarter of fiscal 2019 related to the sale of a building;
|
•
|
severance costs related to reductions in headquarters workforce of $35 million; partially offset by
|
•
|
a decrease in store payroll and benefits and other store operating expenses as a result of COVID-19 temporary store closures across all brands.
|
|
13 Weeks Ended
|
||||||
($ in millions)
|
May 2,
2020 |
|
May 4,
2019 |
||||
Interest expense
|
$
|
19
|
|
|
$
|
20
|
|
|
13 Weeks Ended
|
||||||
($ in millions)
|
May 2,
2020 |
|
May 4,
2019 |
||||
Income taxes
|
$
|
(327
|
)
|
|
$
|
75
|
|
Effective tax rate
|
26.0
|
%
|
|
24.8
|
%
|
•
|
Net loss compared with net income in the prior comparable period;
|
•
|
an increase of $484 million due to non-cash impairment charges of store assets and operating lease assets during the first quarter of fiscal 2020 compared with none during the first quarter of fiscal 2019; and
|
•
|
an increase of $191 million due to a gain that occurred during the first quarter of fiscal 2019 resulting from sale of a building compared with no gain in the first quarter of fiscal 2020;
|
•
|
a decrease of $358 million related to income taxes payable, net of receivables and other tax-related items, resulting from a net income tax receivable due to the taxable loss during the first quarter of fiscal 2020 as well as timing of tax-related payments.
|
•
|
$221 million higher net proceeds from available-for-sale securities during the first quarter of fiscal 2020 compared with the first quarter of fiscal 2019;
|
•
|
an increase of $123 million due to the net activity related to the purchase and sale of buildings during the first quarter of fiscal 2019 compared with no activity during the first quarter of 2020; and
|
•
|
an increase of $69 million due to the purchase of the Janie and Jack brand that occurred during the first quarter of fiscal 2019;
|
•
|
$500 million in proceeds received as a result of drawing down on our revolving credit facility during the first quarter of fiscal 2020; and
|
•
|
an increase of $142 million due to the suspension of both cash dividends and share repurchases during the first quarter of fiscal 2020.
|
|
13 Weeks Ended
|
||||||
($ in millions)
|
May 2,
2020 |
|
May 4,
2019 |
||||
Net cash provided by (used for) operating activities
|
$
|
(940
|
)
|
|
$
|
29
|
|
Less: Purchases of property and equipment (1)
|
(122
|
)
|
|
(165
|
)
|
||
Free cash flow
|
$
|
(1,062
|
)
|
|
$
|
(136
|
)
|
(1)
|
Excludes purchase of building in fiscal 2019.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Scheduled Maturity ($ in millions)
|
Principal
|
|
Interest Rate
|
|
Interest Payments
|
|||
Senior Secured Notes (1)
|
|
|
|
|
|
|||
May 15, 2023
|
$
|
500
|
|
|
8.375
|
%
|
|
Semi-Annual
|
May 15, 2025
|
750
|
|
|
8.625
|
%
|
|
Semi-Annual
|
|
May 15, 2027
|
1,000
|
|
|
8.875
|
%
|
|
Semi-Annual
|
|
Total issuance
|
$
|
2,250
|
|
|
|
|
|
(1)
|
Includes an option to call the Notes in whole or in part at any time, subject to a make whole premium.
|
Item 4.
|
Controls and Procedures.
|
Item 1.
|
Legal Proceedings.
|
Item 1A.
|
Risk Factors.
|
•
|
anticipating and quickly responding to changing apparel trends and customer demands;
|
•
|
attracting customer traffic both in stores and online;
|
•
|
competitively pricing our products and achieving customer perception of value;
|
•
|
maintaining favorable brand recognition and effectively marketing our products to customers in several diverse market segments and geographic locations;
|
•
|
anticipating and responding to changing customer shopping preferences and practices, including the increasing shift to digital brand engagement, social media communication, and online shopping;
|
•
|
developing innovative, high-quality products in sizes, colors, and styles that appeal to customers of varying age groups and tastes;
|
•
|
purchasing and stocking merchandise to match seasonal weather patterns, and our ability to react to shifts in weather that impact consumer demand;
|
•
|
sourcing and allocating merchandise efficiently; and
|
•
|
improving the effectiveness and efficiency of our processes in order to deliver cost savings to fund growth.
|
•
|
make it more difficult for us to satisfy our debt obligations, including with respect to the notes;
|
•
|
increase our vulnerability to general adverse economic and external conditions, including the COVID-19 pandemic;
|
•
|
impair our ability to obtain additional debt or equity financing in the future for working capital, capital expenditures, acquisitions or general corporate or other purposes;
|
•
|
require us to dedicate a material portion of our cash flows from operations to the payment of principal and interest on our indebtedness, thereby reducing the availability of our cash flows to fund working capital needs, capital expenditures, acquisitions and other general corporate purposes’
|
•
|
expose us to the risk of increased interest rates to the extent we make borrowings under the ABL Credit Facility, which bear interest at a variable rate;
|
•
|
limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
|
•
|
place us at a disadvantage compared to our competitors that have less indebtedness; and
|
•
|
limit our ability to adjust to changing market conditions.
|
•
|
grant or incur liens;
|
•
|
sell or otherwise dispose of assets, including capital stock of subsidiaries;
|
•
|
make investments in certain subsidiaries;
|
•
|
pay dividends, make distributions or redeem or repurchase capital stock; and
|
•
|
consolidate or merge with or into, or sell substantially all of our assets to another entity.
|
•
|
we or any guarantor, as applicable, were insolvent or rendered insolvent by reason of the issuance of the notes, the incurrence of the guarantees or the grant of security interests with respect to the notes or guarantees;
|
•
|
the issuance of the notes, the incurrence of any guarantees or the grant of security interests with respect to the notes or guarantees left us or any guarantor, as applicable, with an unreasonably small amount of capital or assets to carry on the business;
|
•
|
we or any guarantor intended to, or believed that we or such guarantor would, incur debts beyond our or such guarantor’s ability to pay as they mature; or
|
•
|
we or any guarantor were a defendant in an action for money damages, or had a judgment for money damages docketed against us or the guarantor if, in either case, the judgment is unsatisfied after final judgment.
|
•
|
the sum of its debts, including contingent and unliquidated liabilities, was greater than the fair saleable value of all of its assets;
|
•
|
the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or
|
•
|
it could not pay its debts as they became due.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
|
Total
Number of
Shares
Purchased (1)
|
|
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
|
||||||
Month #1 (February 2 - February 29)
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
800
|
million
|
Month #2 (March 1 - April 4)
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
800
|
million
|
Month #3 (April 5 - May 2)
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
800
|
million
|
Total
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
|
(1)
|
Excludes shares withheld to settle employee statutory tax withholding related to the vesting of stock units.
|
Item 6.
|
Exhibits.
|
|
|
|
|
Incorporated by Reference
|
|
|
||||||
Exhibit No.
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
|
Filed/
Furnished
Herewith
|
3.1
|
|
Amended and Restated Certificate of Incorporation (P)
|
|
10-K
|
|
1-7562
|
|
3.1
|
|
April 26, 1993
|
|
|
|
Certificate of Amendment of Amended and Restated Certificate of Incorporation
|
|
10-K
|
|
1-7562
|
|
3.2
|
|
April 4, 2000
|
|
|
|
|
Amended and Restated Bylaws (effective March 23, 2020)
|
|
8-K
|
|
1-7562
|
|
3.1
|
|
March 5, 2020
|
|
|
|
10.1†
|
|
Letter Agreement dated March 4, 2020 by and between Sonia Syngal and the Registrant
|
|
8-K
|
|
1-7562
|
|
10.1
|
|
March 5, 2020
|
|
|
10.2†
|
|
Letter Agreement dated March 9, 2020 by and between Mark Breitbard and the Registrant
|
|
10-K
|
|
1-7562
|
|
10.57
|
|
March 17, 2020
|
|
|
10.3†
|
|
Letter Agreement dated March 10, 2020 by and between Julie Gruber and the Registrant
|
|
10-K
|
|
1-7562
|
|
10.64
|
|
March 17, 2020
|
|
|
10.4†
|
|
Letter Agreement dated March 10, 2020 by and between Katrina O'Connell and the Registrant
|
|
10-K
|
|
1-7562
|
|
10.74
|
|
March 17, 2020
|
|
|
10.5†
|
|
2020 Form of Nonqualified Stock Option Agreement under the 2016 Long-Term Incentive Plan
|
|
8-K
|
|
1-7562
|
|
10.1
|
|
March 13, 2020
|
|
|
10.6†
|
|
2020 Form of Restricted Stock Unit Award Agreement under the 2016 Long-Term Incentive Plan
|
|
8-K
|
|
1-7562
|
|
10.2
|
|
March 13, 2020
|
|
|
10.7†
|
|
2020 Form of Performance Share Agreement under the 2016 Long-Term Incentive Plan
|
|
8-K
|
|
1-7562
|
|
10.3
|
|
March 13, 2020
|
|
|
10.8†
|
|
2020 Form of Director Stock Unit Agreement and Stock Unit Deferral Election Form under the 2016 Long-Term Incentive Plan
|
|
8-K
|
|
1-7562
|
|
10.4
|
|
March 13, 2020
|
|
|
10.9†
|
|
Form of Restricted Stock Unit Award Agreement with Bob L. Martin under the 2016 Long-Term Incentive Plan
|
|
|
|
|
|
|
|
|
|
X
|
|
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)
|
|
|
|
|
|
|
|
|
|
X
|
|
|
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)
|
|
|
|
|
|
|
|
|
|
X
|
|
|
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
|
|
|
|
|
|
|
|
|
|
X
|
|
|
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
|
|
|
|
|
|
|
|
|
|
X
|
|
101
|
|
The following materials from The Gap, Inc.’s Quarterly Report on Form 10-Q for the quarter ended May 2, 2020, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss), (iv) the Condensed Consolidated Statements of Stockholders' Equity; (v) the Condensed Consolidated Statements of Cash Flows; and (vi) Notes to Condensed Consolidated Financial Statements
|
|
|
|
|
|
|
|
|
|
X
|
†
|
Indicates management contract or compensatory plan or arrangement.
|
(P)
|
This Exhibit was originally filed in paper format. Accordingly, a hyperlink has not been provided.
|
|
|
THE GAP, INC.
|
|
|
|
|
|
Date:
|
June 9, 2020
|
By
|
/s/ Sonia Syngal
|
|
|
|
Sonia Syngal
|
|
|
|
Chief Executive Officer
|
|
|
|
|
Date:
|
June 9, 2020
|
By
|
/s/ Katrina O'Connell
|
|
|
|
Katrina O'Connell
|
|
|
|
Executive Vice President and Chief Financial Officer
|
Number of Stock Awards:
|
|
____________________
|
|
|
|
Date of Grant:
|
|
____________________
|
|
|
|
Vesting Date
|
|
Number of Shares
Vesting on Vesting Date
|
First anniversary of the Date of Grant
|
|
100%
|
|
|
|
THE GAP, INC
|
Dated:
|
____________________
|
|
|
|
|
|
[NAME]
[TITLE]
|
•
|
The data controller is the Company; queries or requests regarding the Employee’s Personal Data should be made in writing to the Company’s representative relating to the Plan or Stock Award matters, who may be contacted at: Global_Equity_Administration@Gap.com.
|
•
|
The legal basis for the processing of Personal Data is that the processing is necessary for the performance of a contract to which the Employee is a party (namely, this Agreement);
|
•
|
Personal Data will be held only as long as is necessary to implement, administer and manage Employee’s participation in the Plan;
|
•
|
Employee may, at any time, access his or her Personal Data, request additional information about the storage and processing of Personal Data, require any necessary amendments to Personal Data without cost or exercise any other rights he or she may have in relation to his or her Personal Data under Applicable Laws, including the right to make a complaint to an EU data protection regulator.
|
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 9, 2020
|
|
|
|
|
/s/ Sonia Syngal
|
|
|
Sonia Syngal
|
|
|
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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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 9, 2020
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/s/ Katrina O'Connell
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Katrina O'Connell
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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 9, 2020
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/s/ Sonia Syngal
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Sonia Syngal
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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 9, 2020
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/s/ Katrina O'Connell
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Katrina O'Connell
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Executive Vice President and Chief Financial Officer
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(Principal Financial Officer)
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