Banana Republic 2011 Annual Report Download - page 82

Download and view the complete annual report

Please find page 82 of the 2011 Banana Republic annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 100

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100

The Company conducts business globally, and as a result, files income tax returns in the U.S. federal jurisdiction
and various state and foreign jurisdictions. In the normal course of business, we are subject to examination by
taxing authorities throughout the world, including such major jurisdictions as the United States, Canada, France,
Hong Kong, Japan, and the United Kingdom. We are no longer subject to U.S. federal income tax examinations for
fiscal years before 2008, and with few exceptions, we are also no longer subject to U.S. state, local, or non-U.S.
income tax examinations for fiscal years before 2003.
The Company engages in continual discussions with taxing authorities regarding tax matters in the various U.S.
and foreign jurisdictions. As of January 28, 2012, we do not anticipate any significant changes in total gross
unrecognized tax benefits within the next 12 months.
Note 12. Employee Benefit Plans
We have two qualified defined contribution retirement plans, the GapShare 401(k) Plan and the GapShare Puerto
Rico Plan (the “Plans”), which are available to employees who meet the eligibility requirements. The Plans permit
eligible employees to make contributions up to the maximum limits allowable under the Internal Revenue Code.
Under the Plans, we match, in cash, all or a portion of employees’ contributions under a predetermined formula.
Our contributions vest immediately. Our matching contributions to the Plans were $36 million, $36 million, and $35
million in fiscal 2011, 2010, and 2009, respectively.
We maintain the Gap Inc. Deferred Compensation Plan (“DCP”), which allows eligible employees to defer compensation
up to a maximum amount. Plan investments are recorded at market value and are designated for the DCP. The fair value
of the Company’s DCP assets is determined based on quoted market prices. As of January 28, 2012 and January 29, 2011,
the assets related to the DCP were $22 million and $27 million, respectively, and were recorded in other long-term assets
in the Consolidated Balance Sheets. As of January 28, 2012 and January 29, 2011, the corresponding liabilities related to
the DCP were $22 million and $27 million, respectively, and were recorded in lease incentives and other long-term
liabilities in the Consolidated Balance Sheets. We match all or a portion of employees’ contributions under a
predetermined formula. Plan investments are elected by the participants, and investment returns are not guaranteed by
the Company. Our matching contributions to the DCP in fiscal 2011, 2010, and 2009 were not material.
Note 13. Earnings per Share
Weighted-average number of shares used for earnings per share is as follows:
Fiscal Year
(shares in millions) 2011 2010 2009
Weighted-average number of shares—basic ............................................... 529 636 694
Commonstockequivalents .............................................................. 455
Weighted-average number of shares—diluted ............................................. 533 641 699
The above computations of weighted-average number of shares—diluted exclude 12 million, 11 million, and
25 million shares related to stock options and other stock awards for fiscal 2011, 2010, and 2009, respectively, as
their inclusion would have an antidilutive effect on earnings per share.
Note 14. Commitments and Contingencies
Our future purchase obligations and commitments as of January 28, 2012 are as follows:
Payments Due by Period
($ in millions) Less than 1
Year 1-3 Years 3-5 Years More Than 5
Years Total
Purchase obligations and commitments (1) .................. $2,712 $229 $126 $8 $3,075
(1) Represents estimated open purchase orders to purchase inventory as well as commitments for products and services used in the normal
course of business.
68 Gap Inc. Form 10-K