The Gap 2008 Annual Report Download - page 75

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covered in part by insurance. If the outcome of an action is expected to result in a loss that is considered probable
and reasonably estimable, we will record a liability for the estimated loss.
We cannot predict with assurance the outcome of Actions brought against us. Accordingly, adverse developments,
settlements, or resolutions may occur and negatively impact earnings in the quarter of such development,
settlement, or resolution. However, we do not believe that the outcome of any current Action would have a
material adverse effect on our results of operations, cash flows, or financial position taken as a whole.
Note 16. Segment Information
We identify our operating segments according to how our business activities are managed and evaluated. All of
our operating segments are in the business of selling clothing, accessories, and personal care products. Beginning
in the fourth quarter of fiscal 2008, we have two reportable segments:
• Stores – The Stores reportable segment includes the results of our retail stores for each of our brands: Gap, Old
Navy, and Banana Republic. We have aggregated the results of all Stores operating segments into one reportable
segment because we believe that the operating segments have similar economic characteristics in accordance
with SFAS 131, “Disclosures about Segments of an Enterprise and Related Information.”
• Direct – The Direct operating segment includes the results of our online business for each of our web-based
brands: gap.com, oldnavy.com, bananarepublic.com, piperlime.com, and, beginning in September 2008,
athleta.com. The Direct operating segment also includes Athleta’s catalog business. Based on the different
distribution method associated with the Direct operating segment, Direct is considered a reportable segment.
The accounting policies for each of our operating segments are the same as those described in Note 1 Summary of
Significant Accounting Policies.
Net sales by brand, region, and reportable segment are as follows:
($ in millions)
Fiscal Year 2008 Gap Old Navy Banana
Republic Other (3) Total Percentage
of Net Sales
U.S.(1) ........................................... $3,840 $4,840 $2,221 $ — $10,901 75%
Canada .......................................... 329 392 146 — 867 6%
Europe .......................................... 724 — 23 33 780 6%
Asia ............................................. 732 — 101 47 880 6%
OtherRegions .................................... — — — 68 68 —
Total Stores reportable segment ................... 5,625 5,232 2,491 148 13,496 93%
Direct reportable segment (2) ...................... 333 475 145 77 1,030 7%
Total ............................................ $5,958 $5,707 $2,636 $225 $14,526 100%
Fiscal Year 2007 Gap Old Navy Banana
Republic Other (3) Total Percentage
of Net Sales
U.S.(1) ........................................... $4,146 $5,776 $2,351 $ — $12,273 78%
Canada .......................................... 364 461 147 — 972 6%
Europe .......................................... 822 — — 5 827 5%
Asia ............................................. 613 — 89 36 738 5%
OtherRegions .................................... — — — 50 50 —
Total Stores reportable segment ................... 5,945 6,237 2,587 91 14,860 94%
Direct reportable segment (2) ...................... 308 428 136 31 903 6%
Total ............................................ $6,253 $6,665 $2,723 $122 $15,763 100%
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