Banana Republic 2005 Annual Report Download - page 20

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G A P I N C . F I N A N C I A L S 2 0 0 5
18 gap inc. 2005 annual report
Forward-Looking Statements
This Annual Report contains forward-looking statements within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.
All statements other than those that are purely historical are forward-looking statements. Words such as “expect,” “anticipate,” “believe,” “esti-
mate,” “intend,” “plan,” and similar expressions also identify forward-looking statements. Forward-looking statements include statements regard-
ing: (i) the amount of cash available in the future; (ii) the amount and timing of dividends in fiscal 2006; (iii) our cash balances combined with our cash
flow being sufficient to support our shareholder distributions and strategic growth initiatives; (iv) the number of new store openings and store clos-
ings in fiscal 2006, and weightings by brand; (v) the number of Gap store upgrades in fiscal 2006; (vi) the timing for Banana Republic’s new personal
care line in partnership with Inter Parfums; (vii) operating margin for fiscal 2006; (viii) free cash flow and free cash flow components in fiscal 2006;
(ix) delivering shareholder value through cash distributions and operating performance; (x) pursuing growth strategies, including real estate expansion
and brand extensions, expanding our brands internationally, building our online business and creating new brands; (xi) interest expense in fiscal 2006;
(xii) effective tax rate for fiscal 2006; (xiii) year over year change in inventory per square foot at the end of the first quarter of fiscal 2006 and the
second quarter of fiscal 2006; (xiv) capital expenditures in fiscal 2006, as well as methods for funding capital expenditures; (xv) net square footage
change in fiscal 2006; (xvi) share repurchases in fiscal 2006; (xvii) the transition of certain aspects of our information technology infrastructure to IBM,
and the timing and costs of that transfer; (xviii) our expectations regarding future indemnification liability; (xix) the maximum exposure and cash col-
lateralized balance for reinsurance pool in future periods; (xx) the impact of new accounting pronouncements; (xxi) future lease payments and sub-
lease income; and (xxii) the impact of proceedings, lawsuits, disputes and claims.
Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause our actual results to differ
materially from those in the forward-looking statements. These factors include, without limitation, the following: the risk that we will be unsuccess-
ful in gauging fashion trends and changing consumer preferences; the highly competitive nature of our business in the U.S. and internationally and
our dependence on consumer spending patterns, which are influenced by numerous other factors; the risk that we will be unsuccessful in identifying
and negotiating new store locations effectively; the risk that comparable store sales and margins will experience fluctuations; the risk that we will be
unsuccessful in implementing our strategic, operating and people initiatives; the risk that adverse changes in our credit ratings may have a negative
impact on our financing costs and capital structure in future periods; the risk that trade matters, events causing disruptions in product shipments
from China and other foreign countries, or IT systems changes may disrupt our supply chain or operations; and the risk that we will not be success-
ful in defending various proceedings, lawsuits, disputes, claims, and audits; any of which could impact net sales, costs and expenses, and/or planned
strategies. Additional information regarding factors that could cause results to differ can be found in our Annual Report on Form 10-K for the fiscal
year ended January 28, 2006.
Future economic and industry trends that could potentially impact net sales and profitability are difficult to predict. These forward-looking statements
are based on information as of March 17, 2006 and we assume no obligation to publicly update or revise our forward-looking statements even if
experience or future changes make it clear that any projected results expressed or implied therein will not be realized.