10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

AMENDMENT NO. 1

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 27, 2012

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-7562

THE GAP, INC.

(Exact name of registrant as specified in its charter)

Delaware	94-1697231
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
Two Folsom Street, San Francisco, California	94105
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code: (415) 427-0100

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes  þ    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files)    Yes  þ    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  þ            Accelerated filer  ¨            Non-accelerated filer  ¨            Smaller reporting company  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  ¨    No  þ

The number of shares of the registrant’s common stock outstanding as of November 27, 2012 was 479,419,352.

Explanatory Note

This Amendment No. 1 to The Gap, Inc.'s Quarterly Report on Form 10-Q for the quarter ended October 27, 2012, is being filed solely to correct the date referenced in the first paragraph in Exhibits 32.1 and 32.2 and to remove the footnote to Exhibit 101 under Item 6. No other changes have been made to the Form 10-Q. This Amendment No. 1 speaks as of the original filing date of the Form 10-Q, does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update in any way disclosures made in the original Form 10-Q.

THE GAP, INC.

TABLE OF CONTENTS

		Page
	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	4
	Condensed Consolidated Balance Sheets as of October 27, 2012, January 28, 2012, and October 29, 2011	4
	Condensed Consolidated Statements of Income for the Thirteen and Thirty-Nine Weeks Ended October 27, 2012 and October 29, 2011	5
	Condensed Consolidated Statements of Comprehensive Income for the Thirteen and Thirty-Nine Weeks Ended October 27, 2012 and October 29, 2011	6
	Condensed Consolidated Statements of Cash Flows for the Thirty-Nine Weeks Ended October 27, 2012 and October 29, 2011	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	27
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 6.	Exhibits	28

3

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

THE GAP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

($ and shares in millions except par value)	October 27, 2012			January 28, 2012			October 29, 2011
ASSETS
Current assets:
Cash and cash equivalents	$	1,720		$	1,885		$	1,392
Short-term investments	50			—			25
Merchandise inventory	2,269			1,615			2,322
Other current assets	794			809			815
Total current assets	4,833			4,309			4,554
Property and equipment, net of accumulated depreciation of $5,355, $5,260, and $5,202	2,559			2,523			2,550
Other long-term assets	615			590			553
Total assets	$	8,007		$	7,422		$	7,657
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of debt	$	2		$	59		$	52
Accounts payable	1,584			1,066			1,472
Accrued expenses and other current liabilities	1,041			998			957
Income taxes payable	1			5			1
Total current liabilities	2,628			2,128			2,482
Long-term liabilities:
Long-term debt	1,246			1,606			1,606
Lease incentives and other long-term liabilities	972			933			910
Total long-term liabilities	2,218			2,539			2,516
Commitments and contingencies (see Note 11)
Stockholders’ equity:
Common stock $0.05 par value
Authorized 2,300 shares and Issued 1,106 shares for all periods presented; Outstanding 480, 485, and 489 shares	55			55			55
Additional paid-in capital	2,844			2,867			2,873
Retained earnings	12,966			12,364			12,201
Accumulated other comprehensive income	219			229			226
Treasury stock at cost (626, 621, and 617 shares)	(12,923		)	(12,760		)	(12,696		)
Total stockholders’ equity	3,161			2,755			2,659
Total liabilities and stockholders’ equity	$	8,007		$	7,422		$	7,657

See Accompanying Notes to Condensed Consolidated Financial Statements

4

THE GAP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	13 Weeks Ended						39 Weeks Ended
($ and shares in millions except per share amounts)	October 27, 2012			October 29, 2011			October 27, 2012			October 29, 2011
Net sales	$	3,864		$	3,585		$	10,926		$	10,266
Cost of goods sold and occupancy expenses	2,271			2,271			6,531			6,397
Gross profit	1,593			1,314			4,395			3,869
Operating expenses	1,073			968			3,055			2,803
Operating income	520			346			1,340			1,066
Interest expense	22			22			67			50
Interest income	(1		)	(1		)	(4		)	(3		)
Income before income taxes	499			325			1,277			1,019
Income taxes	191			132			493			404
Net income	$	308		$	193		$	784		$	615
Weighted-average number of shares - basic	481			503			485			542
Weighted-average number of shares - diluted	488			505			491			547
Earnings per share - basic	$	0.64		$	0.38		$	1.62		$	1.13
Earnings per share - diluted	$	0.63		$	0.38		$	1.60		$	1.12
Cash dividends declared and paid per share	$	0.125		$	0.1125		$	0.375		$	0.3375

See Accompanying Notes to Condensed Consolidated Financial Statements

5

THE GAP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	13 Weeks Ended						39 Weeks Ended
($ in millions)	October 27, 2012			October 29, 2011			October 27, 2012			October 29, 2011
Net income	$	308		$	193		$	784		$	615
Other comprehensive income (loss), net of tax:
Foreign currency translation	(1		)	(8		)	(10		)	39
Change in fair value of derivative financial instruments, net of tax (tax benefit) of $(2), $6, $1, and $(15)	(3		)	10			2			(22		)
Reclassification adjustment for realized (gains) losses on derivative financial instruments, net of tax benefit (tax) of $(1), $7, $(1), and $17	(1		)	10			(2		)	24
Other comprehensive income (loss), net of tax	(5		)	12			(10		)	41
Comprehensive income	$	303		$	205		$	774		$	656

See Accompanying Notes to Condensed Consolidated Financial Statements

6

THE GAP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	39 Weeks Ended
($ in millions)	October 27, 2012			October 29, 2011
Cash flows from operating activities:
Net income	$	784		$	615
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	421			444
Amortization of lease incentives	(58		)	(62		)
Share-based compensation	87			50
Tax benefit from exercise of stock options and vesting of stock units	32			10
Excess tax benefit from exercise of stock options and vesting of stock units	(32		)	(11		)
Non-cash and other items	4			51
Deferred income taxes	(15		)	82
Changes in operating assets and liabilities:
Merchandise inventory	(655		)	(694		)
Other current assets and other long-term assets	(14		)	(78		)
Accounts payable	517			422
Accrued expenses and other current liabilities	31			(87		)
Income taxes payable, net of prepaid and other tax-related items	31			(185		)
Lease incentives and other long-term liabilities	92			81
Net cash provided by operating activities	1,225			638
Cash flows from investing activities:
Purchases of property and equipment	(449		)	(416		)
Purchases of short-term investments	(175		)	(50		)
Maturities of short-term investments	125			125
Changes in other assets	(12		)	(4		)
Net cash used for investing activities	(511		)	(345		)
Cash flows from financing activities:
Proceeds from issuance of short-term debt	—			9
Payments of short-term debt	(17		)	—
Proceeds from issuance of long-term debt	—			1,646
Payments of long-term debt issuance costs	—			(11		)
Payments of long-term debt	(400		)	—
Proceeds from issuances under share-based compensation plans, net of withholding tax payments	159			55
Repurchases of common stock	(467		)	(2,013		)
Excess tax benefit from exercise of stock options and vesting of stock units	32			11
Cash dividends paid	(182		)	(181		)
Net cash used for financing activities	(875		)	(484		)
Effect of foreign exchange rate fluctuations on cash and cash equivalents	(4		)	22
Net decrease in cash and cash equivalents	(165		)	(169		)
Cash and cash equivalents at beginning of period	1,885			1,561
Cash and cash equivalents at end of period	$	1,720		$	1,392
Non-cash investing activities:
Purchases of property and equipment not yet paid at end of period	$	68		$	50
Supplemental disclosure of cash flow information:
Cash paid for interest during the period	$	81		$	42
Cash paid for income taxes during the period	$	445		$	494

See Accompanying Notes to Condensed Consolidated Financial Statements

7

THE GAP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Basis of Presentation

The Condensed Consolidated Balance Sheets as of October 27, 2012 and October 29, 2011, the Condensed Consolidated Statements of Income and the Condensed Consolidated Statements of Comprehensive Income for the thirteen and thirty-nine weeks endedOctober 27, 2012 and October 29, 2011, and the Condensed Consolidated Statements of Cash Flows for the thirty-nine weeks endedOctober 27, 2012 and October 29, 2011 have been prepared by The Gap, Inc. (the “Company,” “we,” and “our”), without audit. In the opinion of management, such statements include all adjustments (which include only normal recurring adjustments) considered necessary to present fairly our financial position, results of operations, and cash flows as of October 27, 2012 and October 29, 2011 and for all periods presented. The Condensed Consolidated Balance Sheet as of January 28, 2012 has been derived from our audited financial statements.

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission. Accordingly, certain information and disclosures normally included in the notes to the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted from these interim financial statements. We suggest that you read these Condensed Consolidated Financial Statements in conjunction with the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 28, 2012.

The results of operations for the thirteen and thirty-nine weeks endedOctober 27, 2012 are not necessarily indicative of the operating results that may be expected for the fifty-three-week period ending February 2, 2013.

We identify our operating segments based on the way we manage and evaluate our business activities. We have two reportable segments: Stores and Direct.

Note 2. Recent Accounting Pronouncements

In July 2012, the Financial Accounting Standards Board issued an accounting standards update (“ASU”) to simplify the manner in which entities test indefinite-lived intangible assets for impairment. The ASU permits an entity to first assess qualitative factors to determine whether events and circumstances indicate that it is more likely than not that the indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform a quantitative impairment test. The ASU is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. We do not expect the adoption of the ASU to have a material impact on our consolidated financial statements.

Note 3. Goodwill and Intangible Assets

Goodwill and intangible assets consist of the following and are included in other long-term assets in the Condensed Consolidated Balance Sheets:

($ in millions)	October 27, 2012			January 28, 2012			October 29, 2011
Goodwill	$	99		$	99		$	99
Trade name	$	54		$	54		$	54
Other indefinite-lived intangible assets	$	6		$	—		$	—
Intangible assets subject to amortization	$	15		$	15		$	15
Less: Accumulated amortization	(15		)	(14		)	(14		)
Intangible assets subject to amortization, net	$	—		$	1		$	1

During the thirteen and thirty-nine weeks endedOctober 27, 2012 and October 29, 2011, there were no changes in the carrying amount of goodwill, which is allocated to the Direct reportable segment. The intangible assets subject to amortization were fully amortized in the thirteen weeks ended April 28, 2012 and as such, there was no amortization expense for intangible assets subject to amortization in the thirteen weeks ended October 27, 2012. There was no material amortization expense for intangible assets subject to amortization for the thirteen weeks ended October 29, 2011. Amortization expense for intangible assets subject to amortization was $1 million and $2 million for the thirty-nine weeks endedOctober 27, 2012 and October 29, 2011, respectively. Amortization expense for intangible assets subject to amortization is recorded in operating expenses in the Condensed Consolidated Statements of Income.

8

Note 4. Debt and Credit Facilities

Long-term debt consists of the following:

($ in millions)	October 27, 2012		January 28, 2012			October 29, 2011
Notes	$	1,246	$	1,246		$	1,246
Term loan	—		400			400
Total long-term debt	1,246		1,646			1,646
Less: Current portion	—		(40		)	(40		)
Total long-term debt, less current portion	$	1,246	$	1,606		$	1,606

As of October 27, 2012, January 28, 2012, and October 29, 2011, the estimated fair value of our $1.25 billion aggregate principal amount of 5.95 percent notes (the "Notes”) due April 2021 was $1.41 billion, $1.19 billion, and $1.18 billion, respectively, and was based on the quoted market price of the Notes (level 1 inputs) as of the last business day of the respective fiscal quarter.

In April 2011, we entered into a $400 million, five-year, unsecured term loan due April 2016. Repayments of $40 million were payable on April 7 of each year, commencing on April 7, 2012, with a final repayment of $240 million due on April 7, 2016. In April 2012, we repaid $40 million on the term loan and in August 2012, we repaid the remaining $360 million reducing the outstanding balance on the term loan to zero. The estimated fair value of the term loan was $400 million as of January 28, 2012, and October 29, 2011. The carrying amount of the term loan approximated its fair value, as the interest rate varied depending on quoted market rates (level 1 inputs) and our credit rating.

We have a $500 million, five-year, unsecured revolving credit facility (the “Facility”), which is scheduled to expire in April 2016. As of October 27, 2012, there were no borrowings under the Facility. The net availability of the Facility, reflecting $66 million of outstanding standby letters of credit, was $434 million as of October 27, 2012.

We also have two separate agreements that make unsecured uncommitted revolving credit facilities available for our operations in China (the “China Facilities”). The 196 million Chinese yuan ($31 million as of October 27, 2012) China Facilities expired during the thirteen weeks ended October 27, 2012 and they were subsequently renewed with an increased availability of 250 million Chinese yuan ($40 million as of October 27, 2012) and no expiration date. As of October 27, 2012, there were borrowings of $2 million (10 million Chinese yuan) at an annual interest rate of approximately 5.04 percent under the China Facilities, which are recorded in current maturities of debt in the Condensed Consolidated Balance Sheet. There were also $4 million in bank guarantees related to store leases under the China Facilities as of October 27, 2012. As of January 28, 2012 and October 29, 2011, current maturities of debt in the Condensed Consolidated Balance Sheets includes borrowings under the China Facilities of $19 million and $12 million, respectively.

As of October 27, 2012, we had a $50 million, two-year, unsecured letter of credit agreement with an expiration date of September 2014. We had no material trade letters of credit issued under the letter of credit agreement as of October 27, 2012.

9

Note 5. Fair Value Measurements

There were no purchases, sales, issuances, or settlements related to recurring level 3 measurements during the thirteen and thirty-nine weeks endedOctober 27, 2012 or October 29, 2011. There were no transfers into or out of level 1 and level 2 during the thirteen and thirty-nine weeks endedOctober 27, 2012 or October 29, 2011.

Financial Assets and Liabilities

Financial assets and liabilities measured at fair value on a recurring basis and cash equivalents and short-term investments held at amortized cost are as follows:

			Fair Value Measurements at Reporting Date Using
($ in millions)	October 27, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	840	$	184	$	656	$	—
Short-term investments	50		—		50		—
Derivative financial instruments	12		—		12		—
Deferred compensation plan assets	27		27		—		—
Total	$	929	$	211	$	718	$	—
Liabilities:
Derivative financial instruments	$	14	$	—	$	14	$	—
			Fair Value Measurements at Reporting Date Using
($ in millions)	January 28, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	1,009	$	224	$	785	$	—
Short-term investments	—		—		—		—
Derivative financial instruments	13		—		13		—
Deferred compensation plan assets	22		22		—		—
Total	$	1,044	$	246	$	798	$	—
Liabilities:
Derivative financial instruments	$	14	$	—	$	14	$	—
			Fair Value Measurements at Reporting Date Using
($ in millions)	October 29, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant  Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	610	$	133	$	477	$	—
Short-term investments	25		—		25		—
Derivative financial instruments	7		—		7		—
Deferred compensation plan assets	23		23		—		—
Total	$	665	$	156	$	509	$	—
Liabilities:
Derivative financial instruments	$	37	$	—	$	37	$	—

We have highly liquid investments classified as cash equivalents and short-term investments, which are placed primarily in money market funds, time deposits, and commercial paper. These investments are classified as held-to-maturity based on our positive intent and ability to hold the securities to maturity. We value these investments at their original purchase prices plus interest that has accrued at the stated rate. Money market funds of $133 million as of October 29, 2011 have been reclassified from cash to cash equivalents and are included as level 1 measurements in the table above. This correction had no impact on the Condensed Consolidated Financial Statements for any period reported.

10

Derivative financial instruments primarily include foreign exchange forward contracts. The principal currencies hedged against changes in the U.S. dollar are the Euro, British pound, Japanese yen, and Canadian dollar. The fair value of the Company’s derivative financial instruments is determined using pricing models based on current market rates. Derivative financial instruments in an asset position are recorded in other current assets or other long-term assets in the Condensed Consolidated Balance Sheets. Derivative financial instruments in a liability position are recorded in accrued expenses and other current liabilities or lease incentives and other long-term liabilities in the Condensed Consolidated Balance Sheets.

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, and the assets are recorded in other long-term assets in the Condensed Consolidated Balance Sheets.

Nonfinancial Assets

We review the carrying amount of long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We review the carrying amount of goodwill and other indefinite-lived intangible assets for impairment annually and whenever events or changes in circumstances indicate that it is more likely than not that the carrying amount may not be recoverable.

There were no impairment charges recorded for goodwill or other indefinite-lived intangible assets for the thirteen and thirty-nine weeks endedOctober 27, 2012 or October 29, 2011. There were no material impairment charges recorded for other long-lived assets for the thirteen and thirty-nine weeks endedOctober 27, 2012 or October 29, 2011.

Note 6. Derivative Financial Instruments

We operate in foreign countries, which exposes us to market risk associated with foreign currency exchange rate fluctuations. Our risk management policy is to hedge a portion of our transactions related to merchandise purchases for foreign operations and certain intercompany transactions using foreign exchange forward contracts. The principal currencies hedged against changes in the U.S. dollar are the Euro, British pound, Japanese yen, and Canadian dollar. We do not enter into derivative financial contracts for trading purposes. Cash flows from derivative financial instruments are classified as cash flows from operating activities in the Condensed Consolidated Statements of Cash Flows.

Cash Flow Hedges

We designate the following foreign exchange forward contracts as cash flow hedges: (1) forward contracts used to hedge forecasted merchandise purchases and related costs denominated primarily in U.S. dollars made by our international subsidiaries whose functional currencies are their local currencies; (2) forward contracts used to hedge forecasted intercompany royalty payments denominated in Japanese yen and Canadian dollars received by entities whose functional currencies are U.S. dollars; and (3) forward contracts used to hedge forecasted intercompany revenue transactions related to merchandise sold from our regional purchasing entity, whose functional currency is the U.S. dollar, to certain international subsidiaries in their local currencies of Euro and British pounds. The foreign exchange forward contracts entered into to hedge forecasted merchandise purchases and related costs, intercompany royalty payments, and intercompany revenue transactions generally have terms of up to 18 months.

During the thirteen weeks ended April 30, 2011, we entered into and settled treasury rate lock agreements in anticipation of issuing the 5.95 percent fixed-rate Notes of $1.25 billion in April 2011. Prior to the issuance of the Notes, we were subject to changes in interest rates, and we therefore locked into fixed-rate coupons to hedge against the interest rate fluctuations. The gain related to the treasury rate lock agreements is reported as a component of other comprehensive income (“OCI”) and is recognized in income over the life of the Notes.

There were no material amounts recorded in the Condensed Consolidated Statements of Income for the thirteen and thirty-nine weeks endedOctober 27, 2012 or October 29, 2011 as a result of hedge ineffectiveness, hedge components excluded from the assessment of effectiveness, or the discontinuance of cash flow hedges because the forecasted transactions were no longer probable.

Net Investment Hedges

We also use foreign exchange forward contracts to hedge the net assets of international subsidiaries to offset the foreign currency translation and economic exposures related to our investment in the subsidiaries.

There were no amounts recorded in the Condensed Consolidated Statements of Income for the thirteen and thirty-nine weeks endedOctober 27, 2012 or October 29, 2011 as a result of hedge ineffectiveness, hedge components excluded from the assessment of effectiveness, or the discontinuance of net investment hedges.

11

Other Derivatives Not Designated as Hedging Instruments

We use foreign exchange forward contracts to hedge our market risk exposure associated with foreign currency exchange rate fluctuations for certain intercompany balances denominated in currencies other than the functional currency of the entity with the intercompany balance. The gain or loss on the derivative financial instruments, as well as the remeasurement of the underlying intercompany balances, is recorded in operating expenses in the Condensed Consolidated Statements of Income in the same period and generally offset. We generally enter into foreign exchange forward contracts as needed to hedge intercompany balances that bear foreign exchange risk.

Outstanding Notional Amounts

As of October 27, 2012, January 28, 2012, and October 29, 2011, we had foreign exchange forward contracts outstanding in the following notional amounts:

(notional amounts in millions)	October 27, 2012		January 28, 2012		October 29, 2011
U.S. dollars (1)	$	1,091	$	873	$	1,042
British pounds	£	9	£	31	£	41
Japanese yen	¥	945	¥	2,564	¥	6,238
Euro	€	26	€	16	€	—

____________________________ 

(1) The principal currencies hedged against changes in the U.S. dollar were the Euro, British pound, Japanese yen, and Canadian dollar.

Contingent Features

We had no derivative financial instruments with credit-risk-related contingent features underlying the agreements as of October 27, 2012, January 28, 2012, or October 29, 2011.

Quantitative Disclosures about Derivative Financial Instruments

The fair values of foreign exchange forward contracts are as follows:

($ in millions)	October 27, 2012		January 28, 2012		October 29, 2011
Derivatives designated as cash flow hedges:
Other current assets	$	9	$	9	$	3
Other long-term assets	$	1	$	1	$	1
Accrued expenses and other current liabilities	$	8	$	10	$	24
Lease incentives and other long-term liabilities	$	3	$	—	$	4
Derivatives designated as net investment hedges:
Other current assets	$	—	$	—	$	1
Other long-term assets	$	—	$	—	$	—
Accrued expenses and other current liabilities	$	—	$	—	$	2
Lease incentives and other long-term liabilities	$	—	$	—	$	—
Derivatives not designated as hedging     instruments:
Other current assets	$	2	$	3	$	2
Other long-term assets	$	—	$	—	$	—
Accrued expenses and other current liabilities	$	3	$	4	$	7
Lease incentives and other long-term liabilities	$	—	$	—	$	—
Total derivatives in an asset position	$	12	$	13	$	7
Total derivatives in a liability position	$	14	$	14	$	37

Substantially all of the unrealized gains and losses from designated cash flow hedges as of October 27, 2012 will be recognized in income within the next 12 months at the then-current values, which may differ from the fair values as of October 27, 2012 shown above.

12

See Note 5 of Notes to Condensed Consolidated Financial Statements for disclosures on the fair value measurements of our derivative financial instruments.

The effective portion of gains and losses on foreign exchange forward contracts in cash flow hedging and net investment hedging relationships recorded in OCI and the Condensed Consolidated Statements of Income, on a pre-tax basis, are as follows:

	13 Weeks Ended						39 Weeks Ended
($ in millions)	October 27, 2012			October 29, 2011			October 27, 2012		October 29, 2011
Derivatives in cash flow hedging relationships:
Gain (loss) recognized in other comprehensive income	$	(5	)	$	16		$	3	$	(38	)
Gain (loss) reclassified into cost of goods sold and      occupancy expenses	$	2		$	(16	)	$	3	$	(37	)
Gain (loss) reclassified into operating expenses	$	—		$	(1	)	$	—	$	(4	)
Derivatives in net investment hedging relationships:
Gain (loss) recognized in other comprehensive income	$	(1	)	$	(1	)	$	2	$	(3	)

For the thirteen and thirty-nine weeks endedOctober 27, 2012 and October 29, 2011, there were no amounts of gain or loss reclassified from OCI into income for derivative financial instruments in net investment hedging relationships, as we did not sell or liquidate (or substantially liquidate) any of our hedged subsidiaries during the periods.

During the thirty-nine weeks endedOctober 29, 2011, there was a gain of $1 million recognized in OCI related to treasury rate lock agreements, which is recognized in income over the life of the 5.95 percent Notes.

Gains and losses on foreign exchange forward contracts not designated as hedging instruments recorded in the Condensed Consolidated Statements of Income, on a pre-tax basis are as follows:

	13 Weeks Ended					39 Weeks Ended
($ in millions)	October 27, 2012			October 29, 2011		October 27, 2012		October 29, 2011
Gain (loss) recognized in operating expenses	$	(3	)	$	6	$	1	$	4

Note 7. Share Repurchases

Share repurchase activity is as follows:

	13 Weeks Ended				39 Weeks Ended
($ and shares in millions except average per share cost)	October 27, 2012		October 29, 2011		October 27, 2012		October 29, 2011
Number of shares repurchased	2.7		39.2		16.5		106.5
Total cost	$	96	$	645	$	463	$	2,013
Average per share cost including commissions	$	35.73	$	16.46	$	28.01	$	18.90

Between August 2010 and November 2011, we announced that the Board of Directors authorized a total of $3.25 billion for share repurchases, of which $443 million under the November 2011 authorization was remaining as of January 28, 2012. In February 2012, we announced that the Board of Directors approved a new $1 billion share repurchase authorization that replaced the November 2011 authorization and cancelled the remaining $441 million under the November 2011 authorization as of February 23, 2012. As of October 27, 2012, there was $539 million remaining under the February 2012 authorization.

All of the share repurchases were paid for as of October 27, 2012 and October 29, 2011. All except $4 million of total share repurchases were paid for as of January 28, 2012.

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Note 8. Share-Based Compensation

Share-based compensation expense recognized in the Condensed Consolidated Statements of Income, primarily in operating expenses, is as follows:

	13 Weeks Ended						39 Weeks Ended
($ in millions)	October 27, 2012			October 29, 2011			October 27, 2012			October 29, 2011
Stock units	$	28		$	11		$	71		$	35
Stock options	5			4			13			12
Employee stock purchase plan	1			1			3			3
Share-based compensation expense	34			16			87			50
Less: Income tax benefit	(13		)	(7		)	(33		)	(20		)
Share-based compensation expense, net of tax	$	21		$	9		$	54		$	30

Note 9. Income Taxes

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, China, Hong Kong, Japan, the United Kingdom, and India. We are no longer subject to U.S. federal income tax examinations for fiscal years before 2009, 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.

As of October 27, 2012, we do not anticipate any significant changes in total gross unrecognized tax benefits within the next 12 months.

Except where required by U.S. tax law, no provision has been made for U.S. income taxes on the undistributed earnings of our foreign subsidiaries when we intend to utilize those earnings in foreign operations for an indefinite period of time.

Note 10. Earnings Per Share

Weighted-average number of shares used for earnings per share is as follows:

	13 Weeks Ended		39 Weeks Ended
(shares in millions)	October 27, 2012	October 29, 2011	October 27, 2012	October 29, 2011
Weighted-average number of shares - basic	481	503	485	542
Common stock equivalents	7	2	6	5
Weighted-average number of shares - diluted	488	505	491	547

There were no material shares with an anti-dilutive effect on earnings per share for the thirteen weeks endedOctober 27, 2012. The above computations of weighted-average number of shares – diluted exclude 16 million shares related to stock options and other stock awards for the thirteen weeks endedOctober 29, 2011 and 2 million and 12 million shares related to stock options and other stock awards for the thirty-nine weeks endedOctober 27, 2012 and October 29, 2011, respectively, as their inclusion would have an anti-dilutive effect on earnings per share.

Note 11. Commitments and Contingencies

As a multinational company, we are subject to various proceedings, lawsuits, disputes, and claims (“Actions”) arising in the ordinary course of our business. Many of these Actions raise complex factual and legal issues and are subject to uncertainties. As of October 27, 2012, Actions filed against us included commercial, intellectual property, customer, employment, and data privacy claims, including class action lawsuits. The plaintiffs in some Actions seek unspecified damages or injunctive relief or both. Actions are in various procedural stages and some are covered in part by insurance. As of October 27, 2012, January 28, 2012, and October 29, 2011, we recorded a liability for an estimated loss if the outcome of an Action is expected to result in a loss that is considered probable and reasonably estimable. The liability recorded as of October 27, 2012, January 28, 2012, and October 29, 2011 was not material for any individual Action or in total. Subsequent to October 27, 2012 and through the filing date of this Quarterly Report on Form 10-Q, no information has become available that indicates a material change to our estimate is required.

We cannot predict with assurance the outcome of Actions brought against us. Accordingly, developments, settlements, or resolutions may occur and impact income 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 effect on our financial position, results of operations, or cash flows taken as a whole.

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We are a party to a variety of contractual agreements under which we may be obligated to indemnify the other party for certain matters. These contracts primarily relate to our commercial contracts, operating leases, trademarks, intellectual property, financial agreements, and various other agreements. Under these contracts, we may provide certain routine indemnifications relating to representations and warranties (e.g., ownership of assets, environmental or tax indemnifications) or personal injury matters. The terms of these indemnifications range in duration and may not be explicitly defined. Generally, the maximum obligation under such indemnifications is not explicitly stated, and as a result, the overall amount of these obligations cannot be reasonably estimated. Historically, we have not made significant payments for such indemnifications. We believe that if we were to incur a loss in any of these matters, the loss would not have a material effect on our financial position, results of operations, or cash flows taken as a whole.

Note 12. Segment Information

We identify our operating segments according to how our business activities are managed and evaluated. All of our operating segments sell a group of similar products – apparel, accessories, and personal care products. We have two reportable segments:

• Stores – The Stores reportable segment includes the results of the retail stores for Gap, Old Navy, and Banana Republic. We have aggregated the results of all Stores operating segments into one reportable segment because the operating segments have similar economic characteristics.

• Direct – The Direct reportable segment includes the results for our online brands, including Piperlime and Athleta.

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Net sales by brand, region, and reportable segment are as follows:

($ in millions)	Gap			Old Navy			Banana Republic			Franchise (3)			Piperlime and Athleta			Total (4)			Percentage of Net Sales
13 Weeks Ended October 27, 2012
U.S. (1)	$	838		$	1,194		$	515		$	—		$	—		$	2,547		66	%
Canada	93			107			55			—			—			255			7
Europe	165			—			15			15			—			195			5
Asia	245			3			35			23			—			306			8
Other regions	—			—			—			52			—			52			1
Total Stores reportable segment	1,341			1,304			620			90			—			3,355			87
Direct reportable segment (2)	146			210			64			—			89			509			13
Total	$	1,487		$	1,514		$	684		$	90		$	89		$	3,864		100	%
Sales growth	5		%	9		%	8		%	11		%	31		%	8		%
($ in millions)	Gap			Old Navy			Banana Republic			Franchise (3)			Piperlime and Athleta			Total (4)			Percentage of Net Sales
13 Weeks Ended October 29, 2011
U.S. (1)	$	819		$	1,105		$	495		$	—		$	—		$	2,419		67	%
Canada	89			100			48			—			—			237			7
Europe	171			—			13			22			—			206			6
Asia	219			—			31			21			—			271			7
Other regions	—			—			—			38			—			38			1
Total Stores reportable segment	1,298			1,205			587			81			—			3,171			88
Direct reportable segment (2)	121			178			47			—			68			414			12
Total	$	1,419		$	1,383		$	634		$	81		$	68		$	3,585		100	%
Sales growth (decline)	(3		)%	(5		)%	2		%	47		%	21		%	(2		)%
($ in millions)	Gap			Old Navy			Banana Republic			Franchise (3)			Piperlime and Athleta			Total (4)			Percentage of Net Sales
39 Weeks Ended October 27, 2012
U.S. (1)	$	2,351		$	3,486		$	1,516		$	—		$	—		$	7,353		68	%
Canada	244			285			147			—			—			676			6
Europe	474			—			47			48			—			569			5
Asia	716			5			104			63			—			888			8
Other regions	—			—			—			137			—			137			1
Total Stores reportable segment	3,785			3,776			1,814			248			—			9,623			88
Direct reportable segment (2)	352			511			162			—			278			1,303			12
Total	$	4,137		$	4,287		$	1,976		$	248		$	278		$	10,926		100	%
Sales growth	4		%	6		%	8		%	21		%	31		%	6		%
($ in millions)	Gap			Old Navy			Banana Republic			Franchise (3)			Piperlime and Athleta			Total (4)			Percentage of Net Sales
39 Weeks Ended October 29, 2011
U.S. (1)	$	2,296		$	3,335		$	1,444		$	—		$	—		$	7,075		69	%
Canada	235			283			134			—			—			652			6
Europe	501			—			37			53			—			591			6
Asia	635			—			90			56			—			781			8
Other regions	—			—			—			96			—			96			1
Total Stores reportable segment	3,667			3,618			1,705			205			—			9,195			90
Direct reportable segment (2)	294			440			125			—			212			1,071			10
Total	$	3,961		$	4,058		$	1,830		$	205		$	212		$	10,266		100	%
Sales growth (decline)	(1		)%	(3		)%	1		%	47		%	20		%	—		%

_____________________________

(1) U.S. includes the United States and Puerto Rico.

(2) Online sales shipped from distribution centers located outside the U.S. were $44 million ($33 million for Canada and $11 million for Europe) and $34 million ($24 million for Canada and $10 million for Europe) for the thirteen weeks endedOctober 27, 2012 and October 29, 2011, respectively. Online sales shipped from distribution centers located outside the U.S. were $108 million ($76 million for Canada and $32 million for Europe) and $84 million ($58 million for Canada and $26 million for Europe) for the thirty-nine weeks endedOctober 27, 2012 and October 29, 2011, respectively.

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(3) Franchise sales were $90 million ($78 million for Gap and $12 million for Banana Republic) and $81 million ($71 million for Gap and $10 million for Banana Republic) for the thirteen weeks endedOctober 27, 2012 and October 29, 2011, respectively. Franchise sales were $248 million ($217 million for Gap and $31 million for Banana Republic) and $205 million ($179 million for Gap and $26 million for Banana Republic) for the thirty-nine weeks endedOctober 27, 2012 and October 29, 2011, respectively.

(4) Net sales outside of the U.S. and Canada (including Direct and franchise) were $564 million and $525 million for the thirteen weeks endedOctober 27, 2012 and October 29, 2011, respectively. Net sales outside of the U.S. and Canada (including Direct and franchise) were $1.6 billion and $1.5 billion for the thirty-nine weeks endedOctober 27, 2012 and October 29, 2011, respectively.

Gap and Banana Republic outlet retail sales are reflected within the respective results of each brand.

Financial Information for Reportable Segments

Operating income is a primary measure of profit we use to make decisions on allocating resources to our operating segments and to assess the operating performance of each operating segment. It is defined as income before interest expense, interest income, and income taxes. Corporate expenses are allocated to each operating segment and recorded in operating income on a rational and systematic basis.

Reportable segment assets presented below include those assets that are directly used in, or allocable to, that segment’s operations. Total assets for the Stores reportable segment primarily consist of merchandise inventory, the net book value of store assets, and prepaid expenses and receivables related to store operations. Total assets for the Direct reportable segment primarily consist of merchandise inventory, the net book value of information technology and distribution center assets, and the net book value of goodwill and trade name as a result of the acquisition of Athleta. We do not allocate corporate assets to our operating segments. Unallocated corporate assets primarily include cash and cash equivalents, short-term investments, the net book value of corporate property and equipment, and tax-related assets.

Selected financial information by reportable segment and reconciliations to our consolidated totals are as follows:

	13 Weeks Ended				39 Weeks Ended
($ in millions)	October 27, 2012		October 29, 2011		October 27, 2012		October 29, 2011
Operating income:
Stores	$	403	$	255	$	1,043	$	836
Direct	117		91		297		230
Operating income	$	520	$	346	$	1,340	$	1,066

($ in millions)	October 27, 2012		January 28, 2012		October 29, 2011
Segment Assets:
Stores	$	3,903	$	3,315	$	4,002
Direct	734		591		639
Unallocated	3,370		3,516		3,016
Total assets	$	8,007	$	7,422	$	7,657

Net sales by region are allocated based on the location in which the sale was originated. Store sales are allocated based on the location of the store and online sales are allocated based on the location of the distribution center from which the products were shipped. Net sales by geographic location are as follows:

	13 Weeks Ended				39 Weeks Ended
($ in millions)	October 27, 2012		October 29, 2011		October 27, 2012		October 29, 2011
U.S. (1)	$	3,012	$	2,799	$	8,548	$	8,062
Canada	288		261		752		710
Total North America	3,300		3,060		9,300		8,772
Other foreign	564		525		1,626		1,494
Total net sales	$	3,864	$	3,585	$	10,926	$	10,266

_____________________________

(1) U.S. includes the United States and Puerto Rico.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q 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,” “estimate,” “intend,” “plan,” “project,” and similar expressions also identify forward-looking statements. Forward-looking statements include, but are not limited to, statements regarding the following:

• the impact of the adoption of the new accounting standards update on our consolidated financial statements;

• changes in total gross unrecognized tax benefits within the next 12 months;

• the outcome of proceedings, lawsuits, disputes, and claims;

• the impact of losses due to indemnification obligations;

• earnings per share for fiscal 2012;

• improving sales with healthy merchandise margins;

• investing in our business while maintaining discipline;

• delivering earnings per share growth;

• returning excess cash to shareholders;

• improving comparable store sales;

• growing revenues;

• opening additional stores, including outlets, in Asia and Canada;

• continuing to open franchise stores worldwide;

• opening additional Athleta stores;

• the net openings of Company-operated store locations in fiscal 2012;

• square footage change in fiscal 2012;

• the number of new franchise stores, net of closures, in fiscal 2012;

• operating margin and deleveraging operating expenses in fiscal 2012;

• the effective tax rate in fiscal 2012;

• current cash balances and cash flows being sufficient to support our business operations, including growth initiatives and planned capital expenditures;

• ability to supplement near-term liquidity, if necessary, with our $500 million revolving credit facility;

• the impact of the seasonality of our operations on certain asset and liability accounts;

• depreciation and amortization expense in fiscal 2012;

• capital expenditures in fiscal 2012; and

• dividend payments in fiscal 2012.

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 adoption of new accounting pronouncements will impact future results;

• the risk that changes in general economic conditions or consumer spending patterns could adversely impact our results of operations;

• the highly competitive nature of our business in the United States and internationally;

• the risk that we or our franchisees will be unsuccessful in gauging apparel trends and changing consumer preferences;

• the risk to our business associated with global sourcing and manufacturing, including sourcing costs, events causing disruptions in product shipment, or an inability to secure sufficient manufacturing capacity;

• the risk that our efforts to expand internationally may not be successful;

• the risk that our franchisees will be unable to successfully open, operate, and grow their franchised stores in a manner consistent with our requirements regarding our brand identities and customer experience standards;

• 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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• the risk that comparable sales and margins will experience fluctuations;

• 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 and our ability to service our debt while maintaining other initiatives;

• 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;

• the risk that updates or changes to our information technology systems may disrupt our operations;

• the risk that actual or anticipated cyber attacks, and other cybersecurity risks, may cause us to incur increasing costs;

• the risk that natural disasters, public health crises, political crises, or other catastrophic events could adversely affect our operations and financial results;

• the risk that acts or omissions by our third-party vendors, including a failure to comply with our code of vendor conduct, could have a negative impact on our reputation or operations;

• the risk that we do not repurchase some or all of the shares we anticipate purchasing pursuant to our share repurchase program;

• the risk that we will not be successful in defending various proceedings, lawsuits, disputes, claims, and audits; and

• the risk that changes in the regulatory or administrative landscape could adversely affect our financial condition, strategies, and results of operations.

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, 2012 and our other filings with the U.S. Securities and Exchange Commission.

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 December 3, 2012, 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.

We suggest that this document be read in conjunction with Management’s Discussion and Analysis included in our Annual Report on Form 10-K for the fiscal year ended January 28, 2012.

OUR BUSINESS

We are a leading global specialty apparel company. We offer apparel, accessories, and personal care products for men, women, children, and babies under the Gap, Old Navy, Banana Republic, Piperlime, and Athleta brands. We have Company-operated stores in the United States, Canada, the United Kingdom, France, Ireland, Japan, China, and Italy. We also have franchise agreements with unaffiliated franchisees to operate Gap and Banana Republic stores in many other countries around the world. Under these agreements, third parties operate, or will operate, stores that sell apparel and related products under our brand names. Our products are also available to customers online in over 80 countries through Company-owned websites and using third parties that provide logistics and fulfillment services. Most of the products sold under our brand names are designed by us and manufactured by independent sources. We also sell products that are designed and manufactured by branded third parties.

We identify our operating segments based on the way we manage and evaluate our business activities. We have two reportable segments: Stores and Direct.

OVERVIEW

Financial highlights for the third quarter of fiscal 2012 are as follows:

• Net sales for the third quarter of fiscal 2012 increased 8 percent to $3.9 billion compared with $3.6 billion for the third quarter of fiscal 2011. Comparable sales for the third quarter of fiscal 2012, which include the associated comparable online sales, increased 6 percent compared with a 5 percent decrease for the third quarter of fiscal 2011.

• Direct net sales for the third quarter of fiscal 2012 increased 23 percent to $509 million compared with $414 million for the third quarter of fiscal 2011. Our Direct reportable segment includes sales for each of our online brands, including Piperlime and Athleta.

• Net sales outside of the U.S. and Canada (including Direct and franchise) increased 7 percent to $564 million for the third quarter of fiscal 2012 compared with $525 million for the third quarter of fiscal 2011.

• Gross profit for the third quarter of fiscal 2012 was $1.6 billion compared with $1.3 billion for the third quarter of fiscal 2011. Gross margin for the third quarter of fiscal 2012 was 41.2 percent compared with 36.7 percent for the third quarter of fiscal 2011.

• Operating expenses for the third quarter of fiscal 2012 were $1.1 billion compared with $968 million for the third quarter of fiscal 2011 and increased 0.8 percent as a percentage of net sales.

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• Net income for the third quarter of fiscal 2012 increased 60 percent to $308 million compared with $193 million for the third quarter of fiscal 2011, and diluted earnings per share increased 66 percent to $0.63 for the third quarter of fiscal 2012 compared with $0.38 for the third quarter of fiscal 2011. For fiscal 2012, we expect diluted earnings per share to be in the range of $2.20 to $2.25.

• During the first three quarters of fiscal 2012, we generated free cash flow of $776 million compared with free cash flow of $222 million for the first three quarters of fiscal 2011. Free cash flow is defined as net cash provided by operating activities less purchases of property and equipment. For a reconciliation of free cash flow, a non-GAAP measure, from a GAAP financial measure, see the Liquidity and Capital Resources section.

Our full year business and financial priorities for fiscal 2012 remain as follows:

• improve sales with healthy merchandise margins;

• invest in our business while maintaining discipline;

• deliver earnings per share growth; and

• return excess cash to shareholders.

As we focus on improving comparable store sales in fiscal 2012, we also plan to grow revenues through the following:

• opening additional stores, many of which will be outlets, in Asia and Canada;

• continuing to open franchise stores worldwide; and

• opening additional Athleta stores.

RESULTS OF OPERATIONS

Net Sales

Net sales primarily consist of retail sales, online sales, and franchise revenues.

See Item 1, Financial Statements, Note 12 of Notes to Condensed Consolidated Financial Statements for net sales by brand, region, and reportable segment.

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Comparable Sales

The percentage change in comparable (“Comp”) sales by brand and region and for total Company, including the associated comparable online sales, as compared with the preceding year, is as follows:

	13 Weeks Ended				39 Weeks Ended
	October 27, 2012		October 29, 2011		October 27, 2012		October 29, 2011
Gap North America	7	%	(6	)%	6	%	(4	)%
Old Navy North America	9	%	(4	)%	6	%	(2	)%
Banana Republic North America	6	%	(1	)%	6	%	(1	)%
International	(3	)%	(10	)%	(4	)%	(7	)%
The Gap, Inc.	6	%	(5	)%	5	%	(3	)%

The percentage change in Comp store sales by brand and region and for total Company, excluding the associated comparable online sales, as compared with the preceding year, is as follows:

	13 Weeks Ended				39 Weeks Ended
	October 27, 2012		October 29, 2011		October 27, 2012		October 29, 2011
Gap North America	4	%	(8	)%	5	%	(6	)%
Old Navy North America	8	%	(8	)%	4	%	(5	)%
Banana Republic North America	3	%	(3	)%	4	%	(3	)%
International	(3	)%	(11	)%	(5	)%	(8	)%
The Gap, Inc.	4	%	(7	)%	3	%	(5	)%

Only Company-operated stores are included in the calculations of Comp sales. Gap and Banana Republic outlet Comp sales are reflected within the respective results of each brand. The calculation of total company Comp sales excludes the results of our franchise business, Piperlime, and Athleta.

A store is included in the Comp sales calculations when it has been open for at least one year and the selling square footage has not changed by 15 percent or more within the past year. A store is included in the Comp sales calculations on the first day it has comparable prior year sales. Stores in which the selling square footage has changed by 15 percent or more as a result of a remodel, expansion, or reduction are excluded from the Comp sales calculations until the first day they have comparable prior year sales.

A store is considered non-comparable (“Non-comp”) when it has been open for less than one year or has changed its selling square footage by 15 percent or more within the past year.

A store is considered “Closed” if it is temporarily closed for three or more full consecutive days or it is permanently closed. When a temporarily closed store reopens, the store will be placed in the Comp/Non-comp status it was in prior to its closure. If a store was in Closed status for three or more days in the prior year, the store will be in Non-comp status for the same days the following year.

Comparable online sales include sales through online channels and are reported based on the location of the distribution center.

Current year foreign exchange rates are applied to both current year and prior year Comp sales to achieve a consistent basis for comparison.

Store Count and Square Footage Information

Net sales per average square foot is as follows:

	13 Weeks Ended				39 Weeks Ended
	October 27, 2012		October 29, 2011		October 27, 2012		October 29, 2011
Net sales per average square foot (1)	$	89	$	82	$	255	$	238

_____________________________

(1) Excludes net sales associated with our online, catalog, and franchise businesses.

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Store count, openings, closings, and square footage for our stores are as follows:

	January 28, 2012	39 Weeks Ended October 27, 2012		October 27, 2012
	Number of Store Locations	Number of Stores Opened	Number of Stores Closed	Number of Store Locations		Square Footage (in millions)
Gap North America	1,043	15	42	1,016		10.5
Gap Europe	193	4	1	196		1.7
Gap Asia	152	26	3	175		1.7
Old Navy North America	1,016	17	20	1,013		17.7
Old Navy Asia	—	1	—	1		—
Banana Republic North America	581	15	7	589		4.9
Banana Republic Asia	31	8	2	37		0.2
Banana Republic Europe	10	—	—	10		0.1
Athleta North America	10	20	—	30		0.1
Piperlime North America	—	1	—	1		—
Company-operated stores total	3,036	107	75	3,068		36.9
Franchise	227	55	11	271		N/A
Total	3,263	162	86	3,339		36.9
Increase (decrease) over prior year				1.9	%	(1.9	)%
	January 29, 2011	39 Weeks Ended October 29, 2011		October 29, 2011
	Number of Store Locations	Number of Stores Opened	Number of Stores Closed	Number of Store Locations		Square Footage (in millions)
Gap North America	1,111	16	41	1,086		11.1
Gap Europe	184	12	5	191		1.7
Gap Asia	135	11	5	141		1.3
Old Navy North America	1,027	21	26	1,022		18.3
Banana Republic North America	576	11	4	583		4.9
Banana Republic Asia	29	1	1	29		0.2
Banana Republic Europe	5	4	—	9		0.1
Athleta North America	1	3	—	4		—
Company-operated stores total	3,068	79	82	3,065		37.6
Franchise	178	36	3	211		N/A
Total	3,246	115	85	3,276		37.6
Increase (decrease) over prior year				0.9	%	(2.1	)%

Gap and Banana Republic outlet stores are reflected in each of the respective brands. We have franchise agreements with unaffiliated franchisees to operate Gap and Banana Republic stores throughout Asia, Australia, Eastern Europe, Latin America, the Middle East, and Africa.

In fiscal 2012, we expect net openings of about 15 Company-operated store locations. We expect square footage for Company-operated stores to decrease about 1 percent at the end of fiscal 2012 compared with the end of fiscal 2011. We expect our franchisees to open about 50 to 75 new franchise stores, net of closures, in fiscal 2012.

Net Sales

Our net sales for the third quarter of fiscal 2012 increased $279 million, or 8 percent, compared with the prior year comparable period due to an increase in net sales of $184 million related to our Stores reportable segment and an increase in net sales of $95 million related to our Direct reportable segment.

• For the Stores reportable segment, our net sales for the third quarter of fiscal 2012 increased $184 million, or 6 percent, compared with the prior year comparable period. The increase was primarily due to an increase in Comp store sales, excluding the associated comparable online sales, for the U.S. and Canada and incremental sales for new international stores.

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• For the Direct reportable segment, our net sales for the third quarter of fiscal 2012 increased $95 million, or 23 percent, compared with the prior year comparable period. The increase was due to growth in our online business across all brands including the incremental sales related to new Athleta stores.

In the third quarter of fiscal 2012, our net sales for the U.S. and Canada (including Direct) were $3.3 billion, an increase of $240 million, or 8 percent, compared with $3.1 billion for the prior year comparable period. In the third quarter of fiscal 2012, our net sales outside of the U.S. and Canada (including Direct and franchise) were $564 million, an increase of $39 million, or 7 percent, compared with $525 million for the prior year comparable period.

Our net sales for the first three quarters of fiscal 2012 increased $660 million, or 6 percent, compared with the prior year comparable period due to an increase in net sales of $428 million related to our Stores reportable segment and an increase in net sales of $232 million related to our Direct reportable segment.

• For the Stores reportable segment, our net sales for the first three quarters of fiscal 2012 increased $428 million, or 5 percent, compared with the prior year comparable period. The increase was primarily due to an increase in Comp store sales, excluding the associated comparable online sales, for the U.S. and Canada, incremental sales for new international stores, and higher franchise net sales; partially offset by the unfavorable impact of foreign exchange of $29 million. The foreign exchange impact is the translation impact if net sales for the first three quarters of fiscal 2011 were translated at exchange rates applicable during the first three quarters of fiscal 2012.

• For the Direct reportable segment, our net sales for the first three quarters of fiscal 2012 increased $232 million, or 22 percent, compared with the prior year comparable period. The increase was due to growth in our online business across all brands and the incremental sales related to new Athleta stores.

During the first three quarters of fiscal 2012, our net sales for the U.S. and Canada (including Direct) were $9.3 billion, an increase of $528 million, or 6 percent, compared with $8.8 billion for the prior year comparable period. During the first three quarters of fiscal 2012, our net sales outside of the U.S. and Canada (including Direct and franchise) were $1.6 billion, an increase of $132 million, or 9 percent, compared with $1.5 billion for the prior year comparable period.

Cost of Goods Sold and Occupancy Expenses

	13 Weeks Ended						39 Weeks Ended
($ in millions)	October 27, 2012			October 29, 2011			October 27, 2012			October 29, 2011
Cost of goods sold and occupancy expenses	$	2,271		$	2,271		$	6,531		$	6,397
Gross profit	$	1,593		$	1,314		$	4,395		$	3,869
Cost of goods sold and occupancy expenses as a percentage of net sales	58.8		%	63.3		%	59.8		%	62.3		%
Gross margin	41.2		%	36.7		%	40.2		%	37.7		%

Cost of goods sold and occupancy expenses as a percentage of net sales decreased 4.5 percent in the third quarter of fiscal 2012 compared with the prior year comparable period.

• Cost of goods sold decreased 3.3 percent as a percentage of net sales in the third quarter of fiscal 2012 compared with the prior year comparable period. The decrease in cost of goods sold as a percentage of net sales was primarily driven by decreased cost of merchandise as a result of lower cotton prices.

• Occupancy expenses decreased 1.2 percent as a percentage of net sales in the third quarter of fiscal 2012 compared with the prior year comparable period. The decrease in occupancy expenses as a percentage of net sales was primarily driven by higher net sales without a corresponding increase in occupancy expenses.

Cost of goods sold and occupancy expenses as a percentage of net sales decreased 2.5 percent during the first three quarters of fiscal 2012 compared with the prior year comparable period.

• Cost of goods sold decreased 1.4 percent as a percentage of net sales during the first three quarters of fiscal 2012 compared with the prior year comparable period. The decrease in cost of goods sold as a percentage of net sales was primarily driven by improved product acceptance resulting in improved average unit selling price.

• Occupancy expenses decreased 1.1 percent as a percentage of net sales during the first three quarters of fiscal 2012 compared with the prior year comparable period. The decrease in occupancy expenses as a percentage of net sales was primarily driven by higher net sales without a corresponding increase in occupancy expenses.

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Operating Expenses

	13 Weeks Ended						39 Weeks Ended
($ in millions)	October 27, 2012			October 29, 2011			October 27, 2012			October 29, 2011
Operating expenses	$	1,073		$	968		$	3,055		$	2,803
Operating expenses as a percentage of net sales	27.8		%	27.0		%	28.0		%	27.3		%
Operating margin	13.5		%	9.7		%	12.3		%	10.4		%

Operating expenses increased $105 million, or 0.8 percent as a percentage of net sales, in the third quarter of fiscal 2012 compared with the prior year comparable period. The increase in operating expenses was primarily due to higher marketing expenses, driven largely by Gap brand marketing investments, higher store payroll expense, and bonus expense.

Operating expenses increased $252 million, or 0.7 percent as a percentage of net sales, during the first three quarters of fiscal 2012 compared with the prior year comparable period. The increase in operating expenses was primarily due to higher marketing expenses, driven largely by investments in Gap brand marketing and customer relationship marketing, higher store payroll expense, and bonus expense.

Given our plans to continue investing in our business, we expect operating expenses to deleverage in the fourth quarter of fiscal 2012.

For fiscal 2012, we expect operating margin to be about 12 percent.

Interest Expense

	13 Weeks Ended				39 Weeks Ended
($ in millions)	October 27, 2012		October 29, 2011		October 27, 2012		October 29, 2011
Interest expense	$	22	$	22	$	67	$	50

Interest expense primarily consists of interest related to our $1.25 billion long-term debt and our $400 million term loan, of which the remaining $360 million balance was repaid during the third quarter of fiscal 2012. The increase in interest expense during the first three quarters of fiscal 2012 compared with the prior year comparable period was primarily due to the issuance of our $1.25 billion long-term debt in April 2011 and the funding of our $400 million term loan in May 2011.

Income Taxes

	13 Weeks Ended						39 Weeks Ended
($ in millions)	October 27, 2012			October 29, 2011			October 27, 2012			October 29, 2011
Income taxes	$	191		$	132		$	493		$	404
Effective tax rate	38.3		%	40.6		%	38.6		%	39.6		%

The decrease in the effective tax rate for the third quarter and the first three quarters of fiscal 2012 compared with the prior year comparable periods was primarily due to increases in income tax credits.

We currently expect the fiscal 2012 effective tax rate to be about 39.0 percent. The actual rate will ultimately depend on several variables, including the mix of income between domestic and international operations, the overall level of income, the potential resolution of outstanding tax contingencies, and changes in tax laws and rates.

LIQUIDITY AND CAPITAL RESOURCES

Our largest source of operating cash flows is cash collections from the sale of our merchandise. Our primary uses of cash include merchandise inventory purchases, occupancy costs, personnel-related expenses, purchases of property and equipment, and payments of taxes.

As of October 27, 2012, cash and cash equivalents and short-term investments were $1.8 billion. As of October 27, 2012, the majority of our cash and cash equivalents was held in the U.S. and is generally accessible without any limitations. We believe that current cash balances and cash flows from our operations will be sufficient to support our business operations, including growth initiatives and planned capital expenditures, for the next 12 months and beyond. We are also able to supplement near-term liquidity, if necessary, with our $500 million revolving credit facility.

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Cash Flows from Operating Activities

Net cash provided by operating activities during the first three quarters of fiscal 2012 increased $587 million compared with the prior year comparable period, primarily due to the following:

• an increase in net income in the first three quarters of fiscal 2012 compared with the first three quarters of fiscal 2011;

• an increase related to income tax payables, net of prepaid income taxes and other tax-related items, for the first three quarters of fiscal 2012 compared with the first three quarters of fiscal 2011 primarily due to the timing of tax payments;

• an increase related to accrued expenses and other current liabilities for the first three quarters of fiscal 2012 compared with the first three quarters of fiscal 2011 primarily due to a higher bonus accrual as of October 27, 2012 compared with the bonus accrual as of October 29, 2011; and

• an increase related to accounts payable for the first three quarters of fiscal 2012 compared with the first three quarters of fiscal 2011 primarily due to the volume and timing of payments.

We fund merchandise inventory expenditures during normal and peak periods through cash flows from operating activities and available cash. Our business follows a seasonal pattern with sales peaking over a total of about eight weeks during the end-of-year holiday period. The seasonality of our operations may lead to significant fluctuations in certain asset and liability accounts between fiscal year-end and subsequent interim periods.

For fiscal 2012, we expect depreciation and amortization expense, net of amortization of lease incentives, to be about $475 million.

Cash Flows from Investing Activities

Our cash outflows from investing activities are primarily for capital expenditures and purchases of investments, while cash inflows are primarily proceeds from maturities of investments. Net cash used for investing activities during the first three quarters of fiscal 2012 increased $166 million compared with the prior year comparable period, primarily due to the following:

• $50 million of net purchases of short-term investments in the first three quarters of fiscal 2012 compared with $75 million of net maturities in the first three quarters of fiscal 2011; and

• $33 million more property and equipment purchases in the first three quarters of fiscal 2012 compared with the first three quarters of fiscal 2011.

For fiscal 2012, we expect capital expenditures to be about $675 million.

Cash Flows from Financing Activities

Our cash outflows from financing activities consist primarily of repurchases of our common stock, dividend payments, and repayments of debt. Cash inflows primarily consist of proceeds from the issuance of debt and proceeds from issuances under share-based compensation plans, net of withholding tax payments. Net cash used for financing activities during the first three quarters of fiscal 2012 increased $391 million compared with the prior year comparable period, primarily due to the following:

• $1.6 billion of proceeds from our issuance of long-term debt in the first three quarters of fiscal 2011; and

• $400 million of payments of long-term debt in the first three quarters of fiscal 2012; partially offset by

• $1.5 billion less repurchases of common stock in the first three quarters of fiscal 2012 compared with the first three quarters of fiscal 2011.

Free Cash Flow

Free cash flow is a non-GAAP financial measure. We believe free cash flow is an important metric because it represents a measure of how much cash a company has available for discretionary and non-discretionary items after the deduction of capital expenditures, as we require regular capital expenditures to build and maintain stores and purchase new equipment to improve our business. We use this metric internally, as we believe our sustained ability to generate free cash flow is an important driver of value creation. However, this non-GAAP financial measure is not intended to supersede or replace our GAAP results.

The following table reconciles free cash flow, a non-GAAP financial measure, from a GAAP financial measure.

	39 Weeks Ended
($ in millions)	October 27, 2012			October 29, 2011
Net cash provided by operating activities	$	1,225		$	638
Less: Purchases of property and equipment	(449		)	(416		)
Free cash flow	$	776		$	222

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Long-Term Debt

Long-term debt as of October 27, 2012 consists of our $1.25 billion aggregate principal amount of 5.95 percent Notes due April 2021.

Credit Facilities

We have a $500 million, five-year, unsecured revolving credit facility, which is scheduled to expire in April 2016. As of October 27, 2012, there were no borrowings under the Facility. The net availability of the Facility, reflecting $66 million of outstanding standby letters of credit, was $434 million as of October 27, 2012.

We also have two separate agreements that make unsecured uncommitted revolving credit facilities available for our operations in China. The 196 million Chinese yuan ($31 million as of October 27, 2012) China Facilities expired in the third quarter of fiscal 2012 and they were subsequently renewed with an increased availability of 250 million Chinese yuan ($40 million as of October 27, 2012) and no expiration date. As of October 27, 2012, there were borrowings of $2 million (10 million Chinese yuan) at an annual interest rate of 5.04 percent under the China Facilities. There were also $4 million in bank guarantees related to store leases under the China Facilities as of October 27, 2012.

As of October 27, 2012, we had a $50 million, two-year, unsecured letter of credit agreement with an expiration date of September 2014. We had no material trade letters of credit issued under the letter of credit agreement as of October 27, 2012.

Dividend Policy

In determining whether and at what level to declare a dividend, we consider a number of factors including sustainability, operating performance, liquidity, and market conditions.

We paid a dividend of $0.375 per share and $0.3375 per share during the first three quarters of fiscal 2012 and fiscal 2011, respectively. Including the dividends paid during the first three quarters of fiscal 2012 and the dividend of $0.125 per share announced on November 12, 2012, we intend to pay an annual dividend per share of $0.50 for fiscal 2012, which is an increase of 11 percent compared with $0.45 for fiscal 2011.

Share Repurchases

Between August 2010 and November 2011, we announced that the Board of Directors authorized a total of $3.25 billion for share repurchases, of which $443 million under the November 2011 authorization was remaining as of January 28, 2012. In February 2012, we announced that the Board of Directors approved a new $1 billion share repurchase authorization that replaced the November 2011 authorization and cancelled the $441 million remaining under the November 2011 authorization as of February 23, 2012. As of October 27, 2012, there was $539 million remaining under the February 2012 authorization.

During the first three quarters of fiscal 2012, we repurchased approximately 16.5 million shares for $463 million, including commissions, at an average price per share of $28.01.

Summary Disclosures about Contractual Cash Obligations and Commercial Commitments

There have been no significant changes to our contractual obligations and commercial commitments as disclosed in our Annual Report on Form 10-K as of January 28, 2012, other than those which occur in the normal course of business. See Item 1, Financial Statements, Note 11 of Notes to Condensed Consolidated Financial Statements for disclosures on commitments and contingencies.

Critical Accounting Policies and Estimates

There have been no significant changes to our critical accounting policies and estimates as discussed in our Annual Report on Form 10-K for the fiscal year ended January 28, 2012.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Our market risk profile as of October 27, 2012 has not significantly changed since January 28, 2012, other than the repayment of our $400 million, five-year unsecured term loan due April 2016 in August 2012. Our market risk profile as of January 28, 2012 is disclosed in our Annual Report on Form 10-K. See Item 1, Financial Statements, Notes 4, 5, and 6 of Notes to Condensed Consolidated Financial Statements for disclosures on our debt, investments, and derivative financial instruments.

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Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

There was no change in the Company’s internal control over financial reporting that occurred during the Company’s third quarter of fiscal 2012 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

As a multinational company, we are subject to various proceedings, lawsuits, disputes, and claims arising in the ordinary course of our business. Many of these Actions raise complex factual and legal issues and are subject to uncertainties. Actions filed against us from time to time include commercial, intellectual property, customer, employment, and data privacy claims, including class action lawsuits. The plaintiffs in some Actions seek unspecified damages or injunctive relief, or both. Actions are in various procedural stages, and some are covered in part by insurance.

We cannot predict with assurance the outcome of Actions brought against us. Accordingly, developments, settlements, or resolutions may occur and impact income 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 effect on our financial results.

Item 1A. Risk Factors.

There have been no material changes in our risk factors from those disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended January 28, 2012.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

The following table presents information with respect to purchases of common stock of the Company made during the thirteen weeks endedOctober 27, 2012 by The Gap, Inc. or any affiliated purchaser, as defined in Exchange Act Rule 10b-18(a)(3):

	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 (July 29 - August 25)	340,700	$	35.20	340,700	$ 623 million
Month #2 (August 26 - September 29)	2,013,600	$	35.69	2,013,600	$ 551 million
Month #3 (September 30 - October 27)	330,400	$	36.54	330,400	$ 539 million
Total	2,684,700	$	35.73	2,684,700

_____________________________

(1) On February 23, 2012, we announced that the Board of Directors approved a new $1 billion share repurchase authorization. This authorization has no expiration date.

Item 6. Exhibits.

10.1*	Agreement with Stefan Larsson dated April 26, 2012, and confirmed on April 27, 2012.
10.2*	Amendment to Agreement with Stefan Larsson dated September 12, 2012, and confirmed on September 17, 2012.
10.3*	Amendment to Agreement with Stefan Larsson dated October 29, 2012, and confirmed on November 6, 2012.
10.4*	Letter Amendment No. 3 to the 3-Year Letter of Credit Agreement with HSBC Bank USA, National Association dated August 24, 2012.
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)
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)
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
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
101*	The following materials from The Gap, Inc.’s Quarterly Report on Form 10-Q for the quarter ended October 27, 2012, 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.

_____________________________

* Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		THE GAP, INC.
Date:	December 3, 2012	By	/s/ Glenn K. Murphy
			Glenn K. Murphy
			Chairman and Chief Executive Officer
Date:	December 3, 2012	By	/s/ Sabrina L. Simmons
			Sabrina L. Simmons
			Executive Vice President and Chief Financial Officer

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Exhibit Index

10.1*	Agreement with Stefan Larsson dated April 26, 2012, and confirmed on April 27, 2012.
10.2*	Amendment to Agreement with Stefan Larsson dated September 12, 2012, and confirmed on September 17, 2012.
10.3*	Amendment to Agreement with Stefan Larsson dated October 29, 2012, and confirmed on November 6, 2012.
10.4*	Letter Amendment No. 3 to the 3-Year Letter of Credit Agreement with HSBC Bank USA, National Association dated August 24, 2012.
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)
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)
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
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
101*	The following materials from The Gap, Inc.’s Quarterly Report on Form 10-Q for the quarter ended October 27, 2012, 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.

_____________________________

* Filed herewith.

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EX-10.1

Exhibit 10.1

[GAP INC. LETTERHEAD]

April 26, 2012

Stefan Larsson

Dear Stefan,

It is our pleasure to offer you a position at Gap Inc. We’re a company driven by passion, innovation and a focus on quality—the same characteristics we look for in our employees. You reflect these values and we feel confident you will find rewarding opportunities with us. We believe this will be both a professionally and personally fulfilling journey for you and your family. We know you’ll make a real difference to our culture, performance and long-term prospects.

This letter (“letter”) sets forth our offer to you to join Gap Inc. as Global President, Old Navy. This position is based in San Francisco. In this position you will report to Glenn Murphy, Chairman & CEO, Gap Inc. You will have responsibility for the management and operation of our Old Navy division in all its locations. This includes responsibility for Old Navy’s P&L, as well as for the design, merchandising, production and other operations of the Old Navy division.

Work Authorization. The Company will sponsor a visa application for you to work in the United States. Included in this application will be a dependent visa that will enable your immediate family to accompany you to live in the United States. You agree to fully cooperate with the Company in the timely filing of the application. The Company will pay for all fees and expenses associated with obtaining your visa and authorization to work for the Company in the United States. Should you wish, the Company will also sponsor you for permanent work authorization (“green card”) in the United States. Once we begin that process, then we will be able to apply for interim work authorization for your spouse. As the Company is not permitted under U.S. law to employ individuals unless they have work authorization, we will need to have that in place before your Start Date. We will work diligently to get that authorization, but of course, we can make no representations regarding the timing or certainty of obtaining valid U.S. work authorizations.

Salary. Your annual salary will be USD $1,000,000 payable every two weeks.

Start Date. Your first day with Gap Inc. (“Start Date”) will be October 29, 2012.

Initial Bonus. You will receive a bonus of $350,000 within 30 calendar days of your Start Date. The amount paid will be treated as supplemental wages for U.S. federal and applicable state income tax withholding purposes. In the event you voluntarily terminate your employment or your employment is terminated for Good Cause or For Cause (both as defined below, and whichever definition is in effect at the time of termination), you will be required to repay within ninety (90) days of your last day of employment 100% of this bonus if the termination occurs within one year of the date you receive this bonus, and 50% of this bonus if termination occurs between one year and two years from the date you receive this bonus.

Annual Bonus. Based on your position, beginning in fiscal 2013 you will be eligible for an Annual Bonus (“Annual Bonus”). You will not be eligible to participate for fiscal 2012. Under the current program, the bonus is based on Gap Inc. and/or Division financial objectives (weighted at 75%) as well as key business goals and individual performance (weighted at 25%); the annual target bonus is 75% of base salary with a maximum opportunity of 150%. Bonus payments are prorated based on active time in position, divisional or country assignment and changes in base salary or incentive target that may occur during the fiscal year. Bonuses for fiscal 2013 are scheduled for payment in March 2014. As with all plan participants, you must be employed by Gap Inc. on the payment date. Management discretion can be used to modify the final award amount.

Stefan Larsson

April 26, 2012

Page 2

Long-Term Incentive Awards. Your offer includes long-term incentive awards, which give you the opportunity to share in Gap Inc.’s success over time.

Stock Options. The Compensation and Management Development Committee of the Board of Directors (“the Committee”) has approved, subject to the provisions of Gap Inc.’s stock plan, a grant of options to you to purchase 200,000 shares of Gap Inc. common stock on your first day of employment (the “date of grant”). The option price shall be determined by the fair market value of the stock on the date of grant. These options will become vested and exercisable as shown in the schedule below, provided you are employed by Gap Inc. on the vesting date. These options must be exercised within ten years from the date of grant or within three months of your employment termination, whichever is earlier, or you will lose your right to do so.

Option to purchase 50,000 shares vesting on the first anniversary of the date of grant.

Option to purchase 50,000 shares vesting on the second anniversary of the date of grant.

Option to purchase 50,000 shares vesting on the third anniversary of the date of grant.

Option to purchase 50,000 shares vesting on the fourth anniversary of the date of grant.

Stock Awards. The Committee has approved, subject to the provisions of Gap Inc.’s stock plan, a grant of stock awards to you covering 200,000 shares of Gap Inc. common stock on your first day of employment (the “date of grant”). Awards are in the form of units that are paid in Gap Inc. stock upon vesting. The award will become vested as shown in the schedule below, provided you are employed by Gap Inc. on the vesting date. Awards are subject to income tax withholding upon delivery to you of shares of Gap Inc. stock in settlement of your award.

Stock Award of 50,000 shares vesting on the first anniversary of the date of grant.

Stock Award of 50,000 shares vesting on the second anniversary of the date of grant.

Stock Award of 50,000 shares vesting on the third anniversary of the date of grant.

Stock Award of 50,000 shares vesting on the fourth anniversary of the date of grant.

Long-Term Growth Program. Based on your position, you will be eligible to participate in the Long-Term Growth Program that rewards achievement of Gap Inc. and/or Division financial objectives over a three year period. You will not be eligible to participate for the current fiscal 2012-2014 performance cycle. Provided you begin your employment prior to November 1, 2013, you are eligible to participate in the program for the fiscal 2013-2015 performance cycle. Under the current program, your target opportunity to earn performance shares is 100% of your base salary. Depending on results, your actual performance shares, if any, may be higher or lower and can reach a maximum of 300% of target shares. Awards are made in the form of performance shares that are paid in Gap Inc. stock upon vesting. The number of earned performance shares will be determined no later than March 2016. Awards are subject to approval by the Committee and the provisions of Gap Inc.’s stock plan. If the financial objectives are achieved, the award will vest 50% on the date the Committee certifies attainment and 50% one year from the certification date provided you are employed by Gap Inc. on the vesting dates. Awards are subject to income tax withholding upon payment.

You will be eligible for future Long-Term Incentive Awards on the same basis as other senior executives of the Company. However, in light of the equity grants above, you will not be eligible for any stock options in the March 2013 focal review process. All the Long-Term Incentive Awards earned will be paid or become exercisable, if applicable, in accordance with the time and form and other provisions of the applicable award agreement and plan document.

Legal and Financial/Tax Advisor Fees. The Company will reimburse you for all reasonable legal and tax/financial advisor fees and expenses incurred in connection with the negotiation, preparation and execution of this letter not to exceed $50,000 in the aggregate. The reimbursement will be made to your attorney within 45 days of your presentation of non-privileged documentation of services rendered. The amount of the reimbursement will be imputed as income to you upon your Start Date.

Stefan Larsson

April 26, 2012

Page 3

Financial Counseling Program. To help you achieve your financial goals, we currently offer a financial counseling program through The Ayco Company, L.P., a Goldman Sachs Company. Ayco’s financial counselors have comprehensive information regarding Gap Inc.’s benefit and compensation plan design. You become eligible to participate in the Ayco financial counseling program upon your Start Date. A financial counselor from Ayco will contact you shortly after your Start Date to provide further details of this benefit, including tax implications.

Benefits. Gap Inc. offers a competitive benefits package that includes medical, dental, vision, life and disability insurance. Gap Inc. also offers an Employee Stock Purchase Plan, a 401(k) plan with a generous dollar for dollar company match up to four percent of your pay (limited as provided in the plan), and employee discounts toward merchandise you purchase in our stores as gifts, or for yourself and your eligible dependents. You will be eligible for paid time off on an “as needed” basis for vacation, illness or personal business, subject to business needs; there is no accrual for paid time off. In addition there are seven company-paid holidays. The Company will provide you a summary of benefit programs.

Relocation Support. Gap Inc. will reimburse you for reasonable relocation expenses related to your move from Stockholm, Sweden to the San Francisco, California region in accordance with the Company’s International One-Way Move Policy (“Move Policy”). We have also provided a Relocation Benefits Summary (“Summary”), which is an overview of key aspects of the Move Policy and includes any exceptions to the Move Policy that have been approved for your relocation. In the event of any conflict between the Summary and the Move Policy, the Summary shall prevail. You will have certain obligations to repay the Company for relocation costs in the event of your termination. A payback agreement provides details, and will need to be signed and returned to the Company before any relocation benefits are provided. Should you have any questions with regard to your relocation or require further information, please contact Global Mobility at (415) 427-6887.

Termination/Severance prior to 18 Months following Start Date.

In the event that your employment is involuntarily terminated by the Company for reasons other than Good Cause (as defined below in this section), or you voluntarily terminate your employment for Good Reason (as defined below in this section) prior to the date that is 18 months following your Start Date (“End Date”), the Company will provide you the following after your “separation from service” (as defined in clause (b) in the section at the end of this letter entitled section 409A), provided you sign a general release of claims and such form is furnished to you by no later than 7 days after the date of separation from service and it becomes effective within 45 calendar days after such separation from service (such 45^th day, the “Release Deadline):

(1) Your then current salary, at regular pay cycle intervals, for eighteen months commencing in the first regular pay cycle following the Release Deadline (the “severance period”). Payments will cease if you accept other employment or professional relationship with a competitor of the Company (defined as another company primarily engaged in the apparel design or apparel retail business or any retailer with apparel sales in excess of $500 million annually), or if you breach your remaining obligations to the Company (e.g., your duty to protect confidential information, agreement not to solicit Company employees). Payments will be reduced by any compensation you receive (as received) during the severance period from other employment or professional relationship with a non-competitor.

(2) Through the end of the period in which you are receiving payments under paragraph (1) above, if you properly elect and maintain COBRA coverage, payment of a portion of your COBRA premium in a method as determined by the Company. This payment shall be treated as taxable income to you and subject to tax withholding. Notwithstanding the foregoing, the Company’s payment of the monthly COBRA premium shall cease immediately if the Company determines in its discretion that paying such monthly COBRA premium would result in the Company being in violation of, or incurring any fine, penalty, or excise tax under, applicable law (including, without limitation, any penalty imposed for violation of the nondiscrimination requirements under the Patient Protection and Affordable Care Act or guidance issued thereunder).

Stefan Larsson

April 26, 2012

Page 4

(3) Through the end of the period in which you are receiving payments under paragraph (1) above, reimbursement for your costs to maintain the same or comparable financial counseling program the Company provides to senior executives in effect at the time of your separation from service.

(4) Prorated Annual Bonus for the fiscal year in which the termination occurs, on the condition that you have worked at least 3 months of the fiscal year in which you are terminated, based on actual financial results and 100% standard for the individual component, provided that such proration shall be on no less favorable a basis than provided to other senior level executives. Such bonus will paid in March of the year following termination at the time Annual Bonuses for the year of termination are paid, but in no event, later than the 15th day of the third month following the later of the end of the Company’s taxable year or the end of the calendar year in which such termination occurs.

(5) Accelerated vesting (but not settlement) of restricted stock units (“RSUs”) (excluding any RSUs with performance conditions) scheduled to vest prior to April 1 following the fiscal year of termination, provided that such acceleration shall be on no less favorable a basis than provided to other senior level executives. Shares of the Company stock in settlement of any vested RSUs under this section will be delivered on the applicable regularly scheduled vesting dates.

The payments in (1) through (5) above are taxable income to you and are subject to tax withholding.

The term “Good Cause” shall mean a good faith determination by the Company that your employment be terminated for any of the following reasons: (1) your conviction of or plea of nolo contendere to any crimes in which you are charged with theft, fraud or moral turpitude; (2) your engaging in willful gross neglect of duties, including willfully failing or willfully refusing to implement or follow reasonable direction of the Company; or (3) your being in material breach of Gap Inc.’s policies and procedures, including but not limited to applicable provisions of the Code of Business Conduct.

The term “Good Reason” shall mean any of the following that occur without your consent: (1) relocation of your primary work location by more than fifty (50) miles from San Francisco; (2) any reduction in your base salary or target annual bonus percentage opportunity; (3) your ceasing to be the sole Global President of Old Navy; (4) your ceasing to report solely and directly to the CEO; (5) the Company’s material breach of this letter; or (6) the failure by the Company, following your written request to the Company’s General Counsel, to procure and deliver to you reasonably satisfactory evidence of the assumption of this letter by any successor. Before “Good Reason” has been deemed to have occurred, you must give the Company written notice detailing why you believe a Good Reason event has occurred and such notice must be provided to the Company within thirty days of your actual knowledge of the initial occurrence of such alleged Good Reason event. The Company shall then have thirty days after its receipt of written notice to cure the item cited in the written notice so that “Good Reason” will have not formally occur with respect to the event in question. If such item is not cured by the end of such period, you must terminate your employment within 90 days after the expiration of such cure period in order to be treated hereunder as terminating your employment for “Good Reason.”

At any time prior to the End Date, if you voluntarily resign your employment from Gap Inc. for other than Good Reason, or your employment is terminated for Good Cause, you will receive no compensation, payment or benefits after your last day of employment; provided, however you shall continue to be entitled to receive: (i) any earned but unpaid base salary through the date of termination, (ii) any amounts owed and due to you pursuant to the terms and conditions of the benefit and bonus plans of Gap Inc., (iii) any expense reimbursements due to you under applicable Gap Inc. policy and (iv) other payments and benefits, including senior level executive benefits, if any, in accordance with applicable plans, programs and arrangements with Gap Inc. to the extent you are eligible (collectively referred to as “Other Payments”). Your continuing entitlements to indemnification shall be as provided below. If your employment terminates for any reason, you will not be entitled to any payments, benefits or compensation other than as provided in this letter.

Stefan Larsson

April 26, 2012

Page 5

Termination/Severance following End Date.

In the event that your employment is involuntarily terminated by the Company for reasons other than For Cause (as defined below) after the End Date and before February 13, 2015, the Company will provide you the following after your Separation from Service, provided you sign a general release of claims and such form is furnished to you by no later than 7 days after the date of your separation from service and it becomes effective by the Release Deadline: the compensation and benefits described in subparagraphs (1) through (3) above under Termination/Severance prior to 18 months following Start Date at such times and under the terms and conditions set forth in such subparagraphs, and additional compensation or benefits, if any, as approved by the Committee that are applicable to you, on a no less favorable basis than compensation and benefits provided to other members of the Executive Leadership Team.

The payments in (1) through (3) above are taxable income to you and are subject to tax withholding.

The term “For Cause” shall mean a good faith determination by the Company that your employment be terminated for any of the following reasons: (1) indictment, conviction or admission of any crimes involving theft, fraud or moral turpitude; (2) engaging in gross neglect of duties, including willfully failing or refusing to implement or follow direction of the Company; or (3) breaching Gap Inc.’s policies and procedures, including but not limited to the Code of Business Conduct.

At any time following the End Date, if you voluntarily resign your employment from Gap Inc. or your employment is terminated For Cause, you will receive no compensation, payment or benefits after your last day of employment; provided, however you shall continue to be entitled to receive any Other Payments. If your employment terminates for any reason, you will not be entitled to any payments, benefits or compensation other than as provided in this letter.

Recoupment Policy. As a Global Brand President, the Company’s recoupment policy will apply to you. Under the current policy applicable to the Company’s senior executives, subject to the discretion and approval of the Board, the Company will, to the extent permitted by governing law, in all appropriate cases as determined by the Board, require reimbursement and/or cancellation of any bonus or other incentive compensation, including stock-based compensation, awarded to an executive officer or other member of the Company’s executive leadership team where all of the following factors are present: (a) the award was predicated upon the achievement of certain financial results that were subsequently the subject of a restatement, (b) in the Board’s view, the executive engaged in fraud or intentional misconduct that was a substantial contributing cause to the need for the restatement, and (c) a lower award would have been made to the executive based upon the restated financial results. In each such instance, the Company will seek to recover the individual executive’s entire annual bonus or award for the relevant period, plus a reasonable rate of interest.

Stock Ownership. Under Company policy, you are required to comply with certain stock ownership requirements as determined by the Board. Under current policy, you are required to own 75,000 shares in a permissible form of ownership within five years of your Start Date. Detailed information on stock ownership requirements is available at www.gapinc.com/content/gapinc/html/investors/governance.

No Conflicts with this Offer/Representations. You represent and warrant that you do not have any agreements, obligations, relationships or commitments to any other person or entity that conflicts with accepting this offer or performing your obligations of this position. You further represent that the credentials and information you provided to Gap Inc. (or its agents) related to your qualifications and ability to perform this position are true and correct.

Proprietary Information or Trade Secrets of Others. You agree that prior to your first day of employment with Gap Inc. you will return all property and confidential information, including trade secrets, belonging to all prior employers. You further agree that you will not disclose to us, or use, or persuade any Gap Inc. employee to use, any proprietary information or trade secrets of another person or entity.

Stefan Larsson

April 26, 2012

Page 6

Abide by Gap Inc. Policies/Protection of Gap Inc. Information. You agree to abide by all Gap Inc. policies including, but not limited to, policies contained in the Code of Business Conduct. You also agree to abide by the Confidentiality and Non-Solicitation terms below during and after your employment with Gap Inc.

Insider Trading Policies. Based on the level of your position, you will be subject to Gap Inc.’s Securities Law Compliance Manual, which among other things places restrictions on your ability to buy and sell Gap Inc. stock and requires you to pre-clear trades. This position will subject you to the requirements of Section 16 of the United States Securities Exchange Act of 1934, as amended. In addition, this position will result in your compensation being publicly disclosed in accordance with United States Securities and Exchange rules. You will receive additional information, including a copy of the Securities Law Compliance Manual, shortly after your first day of employment. If you wish to obtain additional information, or have questions about the compliance manual, you may contact Gap Inc. Global Equity Administration at (415) 427-8478.

Indemnification. The Company shall indemnify you to the maximum extent permitted by applicable law and the Company’s bylaws with respect to your employment hereunder and you shall also be covered under a directors and officers liability insurance policy(ies) paid for by the Company during your employment hereunder. The Company shall maintain directors and officers liability insurance for your benefit on terms and conditions generally applicable to the Company’s other senior executives. The Company’s obligations under this paragraph are only for acts and omissions by you while you are employed by the Company under the terms of this letter but, with respect to such acts and omissions, shall survive termination of your employment and also termination or expiration of this letter.

Confidentiality. You acknowledge that you will be in a relationship of confidence and trust with Gap Inc. As a result, during your employment with Gap Inc., you will acquire “Confidential Information,” which is information (whether in electronic or any other format) that people outside Gap Inc. never see, such as unannounced product information or designs, business or strategic plans, financial information and organizational charts, and other materials. For the sake of clarity, Confidential Information shall not include information that becomes generally known to the public or within the retail apparel industry other than as a result of your violation of this letter.

You agree that you will keep the Confidential Information in strictest confidence and trust. You will not, without the prior written consent of Gap Inc.’s General Counsel, directly or indirectly use or disclose to any person or entity any Confidential Information, during or after your employment, except as is necessary in the ordinary course of performing your duties while employed by Gap Inc., or if required to be disclosed by order of a court of competent jurisdiction, administrative agency or governmental body, or by subpoena, summons or other legal process, provided that prior to such disclosure, Gap Inc. is given reasonable advance notice of such order and an opportunity to object to such disclosure. Anything herein to the contrary notwithstanding, you shall be entitled to retain the following personal items, to the extent such personal items do not contain Confidential Information: (i) papers and other materials of a personal nature, including, but not limited to, photographs, correspondence, personal diaries, calendars and rolodexes, personal files and phone books, (ii) information showing your compensation or relating to reimbursement of expenses, (iii) information that you reasonably believe may be needed for tax purposes, and (iv) copies of plans, programs and agreements relating to your employment, or termination thereof, with Gap Inc.

You agree that in the event your employment terminates for any reason, you will immediately deliver to Gap Inc. all company property, including all documents, materials or property of any description, or any reproduction of such materials, containing or pertaining to any Confidential Information.

Non-Solicitation of Employees. In order to protect Confidential Information, you agree that so long as you are employed by Gap Inc., and for a period of one year thereafter, you will not directly or indirectly, on behalf of yourself, any other person or entity, solicit, call upon, recruit, or attempt to solicit any of Gap Inc.’s employees or in any way encourage any Gap Inc. employee to leave their employment with Gap Inc. For this purpose, advertisements for employment that do not directly or indirectly identify you that are placed in newspapers of general circulation will not be considered solicitation. Gap Inc. agrees that (a) your responding to an unsolicited request from any former employee of Gap Inc. for advice on general employment matters, and (b) your responding to an unsolicited request for an employment reference regarding any former employee of Gap Inc. by providing a general reference setting forth your personal views about such former employee, in and of themselves, shall not be

Stefan Larsson

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Page 7

deemed a violation of this paragraph. Gap Inc. further agrees that it shall not be a violation of this paragraph for any subsequent employer with whom you become affiliated to hire any former employee of Gap Inc. if you are not involved (directly or through contacts with others) in hiring or identifying such former employee as a potential recruit or in assisting in, or counseling others concerning, the recruitment of such former employee. You agree that during your employment and for a period one year thereafter, you will not directly or indirectly, on behalf of yourself, any other person or entity, interfere or attempt to interfere with Gap Inc.’s relationship with any person who was an employee, consultant, customer or vendor or otherwise has or had a business relationship with Gap Inc. during the 12-month period preceding your date of termination; provided, however, nothing in this sentence shall prevent you from becoming employed by a company engaged in the retail clothing business so long as you are otherwise in compliance with the terms of this letter, including but not limited to, the Confidentiality section above.

Non-disparagement. You agree now, and after your employment with the Gap Inc. terminates not to, directly or indirectly, disparage Gap Inc. in any way or to make negative, derogatory or untrue statements about Gap Inc., its business activities, or any of its directors, managers, officers, employees, affiliates, agents or representatives to any person or entity. The foregoing shall not apply to statements you make to members of your immediate family or your legal, tax or financial advisors, provided that such persons must agree not to repeat such statements and agree to be bound by this section. Notwithstanding anything herein to the contrary, nothing in this paragraph shall prevent you from (i) responding publicly and truthfully to statements about you by Gap Inc. or its agents which you reasonably believe to be incorrect, disparaging or derogatory to the extent reasonably necessary to correct or refute such statement or (ii) making any truthful statement to the extent (A) necessary with respect to any litigation, arbitration or mediation involving this letter, including, but not limited to, the enforcement of this letter or (B) required by law or by any court, arbitrator, mediator or administrative or legislative body with apparent jurisdiction to order you to disclose or make accessible such information.

Cooperation. Following termination of your employment for any reason, you shall reasonably cooperate with, assist and provide information to Gap Inc. concerning any matters about which you have knowledge because of your prior employment with Gap Inc. or your prior involvement as an officer or director of Gap Inc. Such assistance and cooperation will be scheduled at times and locations personally convenient for you and not inconsistent with the responsibilities you may have with subsequent employment or rendering of services, except where such scheduling is unreasonable or impracticable (giving the needs of both parties equal weight) under all of the circumstances. Gap Inc. shall pay, or reimburse you, for reasonable, out-of-pocket costs incurred by you in providing such assistance (e.g., reasonable travel costs and reasonable legal fees).

Public Announcement of Employment. Gap Inc. will review with you before its release any press release it issues regarding your agreement to and commencement of employment with Gap Inc.

Section 409A. The parties hereto intend that all payments and benefits to be made or provided to you hereunder and under any Plan (as defined in clause (g) below) either will be exempt from, or will be paid or provided in compliance with, all applicable requirements of Section 409A (as defined in clause (g) below), and the provisions of this letter and of each Plan (to they extent they relate to your entitlements under such Plan) shall be construed and administered in accordance with such intent. In furtherance of the foregoing, the provisions set forth below shall apply notwithstanding any other provision in this letter, or (where applicable) any provision in any Plan, to the contrary. Notwithstanding anything in this letter or elsewhere to the contrary, all taxes, costs and interest imposed under Section 409A are solely your responsibility.

a) All payments to be made to you hereunder or under any Plan, to the extent they constitute a deferral of compensation subject to the requirements of Section 409A (after taking into account all exclusions applicable to such payments under Section 409A), shall be made no later, and shall not be made any earlier, than at the time or times specified herein, or in such Plan, for such payments to be made, except as otherwise permitted or required under Section 409A.

b) The date of your "separation from service", as defined in Section 409A (and as determined by applying the default presumptions in Treas. Reg. §1.409A-1(h)(1)(ii)), shall be treated as the date of your termination

Stefan Larsson

April 26, 2012

Page 8

of employment for purposes of determining the time of payment of any amount that becomes payable to you hereunder and under any Plan upon your termination of employment and that is properly

treated as a deferral of compensation subject to Section 409A after taking into account all exclusions applicable to such payment under Section 409A.

c) To the extent any payment otherwise required to be made to you hereunder or under any Plan on account of your separation from service is properly treated as a deferral of compensation subject to Section 409A after taking into account all exclusions applicable to such payment under Section 409A, and if you are a "specified employee" under Section 409A at the time of your separation from service, then such payment shall not be made prior to the first business day after the earlier of (i) the expiration of six months from the date of your separation from service, or (ii) the date of your death (such first business day, the

“Delayed Payment Date”). On the Delayed Payment Date, there shall be paid to you or, if you have died, to your estate, in a single cash lump sum, an amount equal to the aggregate amount of all payments delayed pursuant to the preceding sentence. All other payments not subject to such delay shall be paid in accordance with their terms determined without regard to this subsection (c).

d) In the case of any amounts payable to you under this letter, or under any Plan, that may be treated as payable in the form of “a series of installment payments”, as defined in Treas. Reg. §1.409A-2(b)(2)(iii), your right to receive such payments shall be treated as a right to receive a series of separate payments for purposes of Treas. Reg. §1.409A-2(b)(2)(iii).

e) To the extent that the reimbursement of any expenses eligible for reimbursement or the provision of any in-kind benefits under any provision of this letter or under any Plan would be considered deferred compensation under Section 409A (after taking into account all exclusions applicable to such reimbursements and benefits under Section 409A): (i) reimbursement of any such expense shall be made by the Company as soon as practicable after such expense has been incurred, but in any event no later than December 31^st of the year following the year in which you incur such expense; (ii) the amount of such expenses eligible for reimbursement, or in-kind benefits to be provided, during any calendar year shall not affect the amount of such expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year; and (iii) the your right to receive such reimbursements or in-kind benefits shall not be subject to liquidation or exchange for any other benefit.

f) The parties will cooperate in good faith to the extent necessary to comply with all applicable requirements of, and to avoid the imposition of any additional tax, interest and penalties under, Section 409A in connection with the benefits and payments to be provided or paid to you hereunder or under such Plan. Without limiting the last sentence of the introductory paragraph under the heading Section 409A (relating to your responsibility for liabilities under Section 409A), any necessary modification of such payments or benefits to comply with Section 409A shall maintain the original intent and economic benefit to you of the applicable provision of this letter or such Plan (except as would materially increase the cost thereof to the Company) to the maximum extent possible without violating any applicable requirement of Section 409A.  Any necessary modification to the terms of any Plan may be made by means of a separate written agreement between the Company and you so as to limit the applicability of such modification to just the payments or benefits to be provided to you under such Plan.

g) For purposes of the subsections (a) through (f) above, the following terms shall have the following meanings:

(1) “Plan” shall mean any plan, program, agreement (other than this letter) or other arrangement maintained by the Company or any of its affiliates that is a “nonqualified deferred compensation plan” within the meaning of Section 409A and under which any payments or benefits are to be made or provided to you, to the extent they constitute a deferral of compensation subject to the

Stefan Larsson

April 26, 2012

Page 9

requirements of Section 409A after taking into account all exclusions applicable to such payments under Section 409A.

(2) “Section 409A” shall mean section 409A of the Internal Revenue Code of 1986, as amended, the regulations issued thereunder and all notices, rulings and other guidance issued by the Internal Revenue Service interpreting same.

Employment Status. You understand that your employment is “at-will”. This means that you do not have a contract of employment for any particular duration or limiting the grounds for your termination in any way. You are free to resign at any time. Similarly, Gap Inc. is free to terminate your employment at any time for any reason. The only way your at-will status can be changed is if you enter into an express written contract with Gap Inc. that contains the words “this is an express contract of employment” and is signed by an officer of Gap Inc.

The Company may from time to time change its compensation and benefit programs. In such instances, you will be eligible for such programs at a level no less favorable than the members of the Executive Leadership Team.

The laws of the State of California shall govern the terms of this letter. In the event of any dispute between the parties regarding this letter, each party shall bear its, or his, own costs, including legal fees, associated with the settlement of the dispute including costs of litigation or arbitration.

Please note that except for those agreements or plans referenced in this letter, this letter contains the entire understanding of the parties with respect to this offer of employment and supersedes any other agreements, representations or understandings (whether oral or written and whether express or implied) with respect to this offer of employment. The invalidity or unenforceability of any provision or provisions of this letter shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect. Anything herein to the contrary notwithstanding, all provisions of this letter necessary to carry out the intention of the parties including, without limitation, those relating to Termination/Severance and Confidentiality, both prior to and following the End Date, shall survive termination of your employment and also termination or expiration of this letter.

Stefan, it is our pleasure to extend this offer. We look forward to working with you.

Yours sincerely,

/s/ Eva Sage-Gavin

_______________________________________

Eva Sage-Gavin

Executive Vice President,

Global Human Resources & Corporate Affairs

Gap Inc.

Agreed on this 27^th day of April, 2012

/s/ Stefan Larsson

_________________________________________

Stefan Larsson            

EX-10.2

Exhibit 10.2

AMENDMENT

Gap Inc. and Stefan Larsson entered into an employment agreement (“Agreement”) dated April 26, 2012. That Agreement is hereby amended to replace the paragraph on page 1 entitled, “Start Date” with the following:

Start Date. Your first day with Gap Inc. (“Start Date”) will be October 1, 2012.

All other provisions of the Agreement will remain in effect.

Agreed:

/s/ Eva Sage-Gavin	9/17/2012
Eva Sage-Gavin	Date
Executive Vice President,
Global Human Resources & Corporate Affairs
Gap Inc.
/s/ Stefan Larsson	9/12/2012
Stefan Larsson	Date

EX-10.3

Exhibit 10.3

[GAP INC. LETTERHEAD]

October 29, 2012

Stefan Larsson

Dear Stefan:

This letter is to summarize changes to your compensation arrangements under Gap Inc.’s Annual Bonus and Long-Term Growth Program. Except as described below, the employment terms of your letter agreement dated April 26, 2012, including any such amendments thereto, will remain in effect.

Annual Bonus.Effective at the beginning of fiscal 2013, your annual target bonus will be 100% of your base salary and will be based on Gap Inc. and/or Division financial objectives. Depending on results, your actual bonus, if any, may be higher or lower and can reach a maximum of 200%. Your annual bonus for fiscal 2013 is scheduled for payment in March 2014. You must be employed by Gap Inc. on the payment date to receive an award. Gap Inc. has the right to modify the program at any time. Management discretion can be used to modify the final award amount. Bonus payments are subject to supplemental income tax withholding.

Long-Term Growth Program.Beginning with the fiscal 2013-2015 performance cycle, your target opportunity to earn performance shares will be 150% of your base salary.

Yours sincerely,

/s/ Eva Sage-Gavin    

Eva Sage-Gavin

Executive Vice President

Global HR & Corporate Affairs

Confirmed this 6^th day of November, 2012

/s/ Stefan Larsson        

Stefan Larsson                        

EX-10.4

Exhibit 10.4

LETTER AMENDMENT NO. 3

Dated as of August 24, 2012

HSBC Bank USA, National Association
452 Fifth Avenue, 8th Floor
New York, NY 10018
Attention: Thomas Foley, Managing Director

Ladies and Gentlemen:

We refer to the 3-Year Letter of Credit Agreement dated as of May 6, 2005 (such 3-Year Letter of Credit Agreement, as heretofore amended, the "Letter of Credit Agreement") among the undersigned and you. Capitalized terms not otherwise defined in this Letter Amendment No. 3 (this "Letter Amendment") have the same meanings as specified in the Letter of Credit Agreement.

It is hereby agreed by you and us that the Letter of Credit Agreement is, effective as of the date of this Letter Amendment, hereby amended as follows:

(a)The definition of "Termination Date" in Section 1.01 is hereby amended to read in its entirety as follows:

"Termination Date" means the first to occur of (i) September 30, 2014, (ii) the date the LC Issuer receives irrevocable written notice from the Company of the termination of its right to request Letters of Credit hereunder, or (iii) the date the obligation of the LC Issuer to issue Letters of Credit is terminated pursuant to Section 7.01 hereof.

(b)The definition of "Facility Amount" in Section 1.01 is hereby amended to read in its entirety as follows:

"Facility Amount" means $50,000,000 as such amount may be reduced or increased from time to time in accordance with this Agreement.

(c)Section 1.01 is amended by adding in appropriate alphabetical order the following definition:

"Amendment No. 3" means the Letter Amendment No. 3 dated as of August 24, 2012 to this Agreement.

(d)Schedule III listing the LC Subsidiaries is hereby amended and replaced in its entirety by Schedule III attached hereto.

(e)In accordance with the terms and conditions of Section 2.16, each LC Subsidiary listed in Schedule III hereby (i) agrees to be bound by all terms and provisions of the Letter of Credit Agreement relating to Letters of Credit to be issued for the account of such Subsidiary and (ii) delivers to the LC Issuer this Letter Amendment, which shall serve as the written consent of the Company assenting to the inclusion of such Subsidiary as an LC Subsidiary.

We hereby represent and warrant to you as follows:

(a)The representations and warranties contained in Section 5.01 of the Letter of Credit Agreement (except for the representation and warranties contained in Sections 5.01(e) and (f) thereof), as amended by this Letter Amendment, are true and correct in all material respects on and as of the date hereof, before and after giving effect to this Letter Amendment, as though made on and as of such date, except to the extent that any such representation or warranty is stated to relate to an earlier date, in which case such representation or warranty shall be true and correct in all material respects on and as of such earlier date;

(b)The Consolidated balance sheets of the Company and its Subsidiaries as of January 30, 2012, and the related Consolidated statements of income and retained earnings of the Company and its Subsidiaries for the Fiscal Year then ended, certified by Deloitte & Touche LLP, when taken as a whole fairly present the Consolidated financial condition of the Company and its Subsidiaries as at such date and the results of the operations of the Company and its Subsidiaries for the period ended on such date, all in accordance with GAAP;

(c)Since January 30, 2012, there has been no Material Adverse Change; and

(d)No event has occurred and is continuing, or would result from entering into this Letter Amendment, which constitutes an Event of Default or Default.

This Letter Amendment shall become effective as of the date first above written when, and only when, you shall have received counterparts of this Letter Amendment executed by the undersigned.

On and after the effectiveness of this Letter Amendment, each reference in the Letter of Credit Agreement to "this Agreement", "hereunder", "hereof" or words of like import referring to the Letter of Credit Agreement, shall mean and be a reference to the Letter of Credit Agreement, as amended by this Letter Amendment.

The Letter of Credit Agreement, as specifically amended by this Letter Amendment, is and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed. The execution, delivery and effectiveness of this Letter Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the LC Issuer under the Letter of Credit Agreement, nor constitute a waiver of any provision of the Letter of Credit Agreement.

If you agree to the terms and provisions hereof, please evidence such agreement by executing and returning at least two counterparts of this Letter Amendment to Jennifer Cho’s attention at 2 Folsom, San Francisco, CA 94105.

This Letter Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Letter Amendment by telecopier or other electronic transmission (i.e., a "pdf" or "tif") shall be effective as delivery of a manually executed counterpart of this Letter Amendment.

[Remainder of Page Intentionally Left Blank]

This Letter Amendment shall be governed by, and construed in accordance with, the laws of the State of New York.

Very truly yours,

THE GAP, INC.

By    /s/ Jennifer Cho        Name: Jennifer Cho    Title: Vice President and Treasurer

BANANA REPUBLIC, LLC

By    /s/ Jennifer Cho        Name: Jennifer Cho    Title: Vice President and Treasurer

GAP (CANADA) INC.

By    /s/ Jennifer Cho        Name: Jennifer Cho    Title: Vice President and Treasurer

GAP (FRANCE) S.A.S.

By    /s/ Lisa D. Mertens        Name: Lisa D. Mertens    Title: President

GAP (JAPAN) K.K.

By    /s/ Jennifer Cho        Name: Jennifer Cho    Title: Director

GAP (NETHERLANDS) B.V.

By    /s/ Lisa D. Mertens        Name: Lisa D. Mertens    Title: Director

GPS CONSUMER DIRECT, INC.

By    /s/ Jennifer Cho        Name: Jennifer Cho    Title: Vice President and Treasurer

GPS (GREAT BRITAIN) LIMITED

By    /s/ Jennifer Cho        Name: Jennifer Cho    Title: Director

OLD NAVY (CANADA) INC.

By    /s/ Jennifer Cho        Name: Jennifer Cho    Title: Vice President and Treasurer

GAP STORES (IRELAND) LIMITED

By    /s/ Lisa D. Mertens        Name: Lisa D. Mertens    Title: Director

GAP EUROPE LIMITED

By    /s/ Jennifer Cho        Name: Jennifer Cho    Title: Director

The entities listed on this page will become LC Subsidiaries upon the execution of this Letter Amendment:

GAP LIMITED
By:	/s/ Jennifer Cho
	Name: Jennifer Cho
	Title: Director

OLD NAVY, LLC
By:	/s/ Jennifer Cho
	Name: Jennifer Cho
	Title: Vice President and Treasurer

GPS STRATEGIC ALLIANCES LLC
By:	/s/ Jennifer Cho
	Name: Jennifer Cho
	Title: Vice President and Treasurer

GAP INTERNATIONAL SALES, INC.
By:	/s/ Jennifer Cho
	Name: Jennifer Cho
	Title: Vice President and Treasurer

ATHLETA, INC.
By:	/s/ Jennifer Cho
	Name: Jennifer Cho
	Title: Vice President and Treasurer

GAP (UK HOLDINGS) LTD.
By:	/s/ Jennifer Cho
	Name: Jennifer Cho
	Title: Director

GAP (SHANGHAI) COMMERCIAL CO., LTD.
By:	/s/ Thomas J. Lima
	Name: Thomas J. Lima
	Title: Director

The entities listed on this page will no longer be LC Subsidiaries upon the execution of this Letter Amendment:

FORTH & TOWNE LLC
By:	/s/ Jennifer Cho
	Name: Jennifer Cho
	Title: Vice President and Treasurer

GAP EUROPE HOLDINGS B.V.
By:	/s/ Lisa D. Mertens
	Name: Lisa D. Mertens
	Title: Managing Director of Gap (RHC) B.V.

Agreed as of the date first above written:

HSBC BANK USA, NATIONAL ASSOCIATION

By    /s/ Thomas Foley         Name: Thomas Foley    Title: Managing Director

SCHEDULE III

LC SUBSIDIARIES

Domestic LC Subsidiaries

	Entity	Jurisdiction	Percentage Wholly-Owned by Gap Inc.
1.	Banana Republic, LLC	Delaware	100%
2.	GPS Consumer Direct, Inc.	California	100%
3.	Old Navy, LLC	Delaware	100%
4.	GPS Strategic Alliances LLC	Delaware	100%
5.	Gap International Sales, Inc.	Delaware	100%
6.	Athleta, Inc.	Delaware	100%

Foreign LC Subsidiaries

	Entity	Jurisdiction	Percentage Wholly-Owned by Gap Inc.
1.	Gap (Canada) Inc.	Canada	100%
2.	Gap (France) S.A.S.	France	100%
3.	Gap (Japan) K.K.	Japan	100%
4.	Gap (Netherlands) B.V.	Netherlands	100%
5.	GPS (Great Britain) Limited	England and Wales	100%
6.	Old Navy (Canada) Inc.	Canada	100%
7.	Gap Stores (Ireland) Limited	Ireland	100%
8.	Gap Europe Limited	England and Wales	100%
9.	Gap Limited	Hong Kong	100%
10.	Gap (UK Holdings) Ltd.	England and Wales	100%
11.	Gap (Shanghai) Commercial Co., Ltd.	China	100%

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Glenn K. Murphy, certify that:

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:	December 3, 2012
/s/ Glenn K. Murphy
Glenn K. Murphy
Chairman and Chief Executive Officer
(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Sabrina L. Simmons, certify that:

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:	December 3, 2012
/s/ Sabrina L. Simmons
Sabrina L. Simmons
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)

EX-32.1

Exhibit 32.1

Certification of the Chief Executive Officer

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of The Gap, Inc. (the “Company”) on Form 10-Q for the period ended October 27, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Glenn Murphy, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	December 3, 2012
/s/ Glenn K. Murphy
Glenn K. Murphy
Chairman and Chief Executive Officer
(Principal Executive Officer)

EX-32.2

Exhibit 32.2

Certification of the Chief Financial Officer

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of The Gap, Inc. (the “Company”) on Form 10-Q for the period ended October 27, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Sabrina L. Simmons, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	December 3, 2012
/s/ Sabrina L. Simmons
Sabrina L. Simmons
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)

XML

Share Repurchase Activity (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 27, 2012	Oct. 29, 2011
Disclosure Share Repurchase Activity [Abstract]
Number of shares repurchased	2.7	39.2	16.5	106.5
Total cost	$ 96	$ 645	$ 463	$ 2,013
Average per share cost including commissions (in dollars per share)	$ 35.73	$ 16.46	$ 28.01	$ 18.90

XML

Segment Information - Selected Financial Information By Reportable Segment and Reconcilliations Of Operating Income (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 27, 2012	Oct. 29, 2011
Segment Reporting Information [Line Items]
Operating income	$ 520	$ 346	$ 1,340	$ 1,066
Stores Reportable Segment
Segment Reporting Information [Line Items]
Operating income	403	255	1,043	836
Direct Reportable Segment
Segment Reporting Information [Line Items]
Operating income	$ 117	$ 91	$ 297	$ 230

XML

Segment Information - Net Sales by Brand, Region, and Reportable Segment (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended				9 Months Ended
	Oct. 27, 2012		Oct. 29, 2011		Oct. 27, 2012		Oct. 29, 2011
Segment Reporting Information [Line Items]
Net sales	$ 3,864	[1]	$ 3,585	[1]	$ 10,926	[1]	$ 10,266	[1]
Percentage of Net Sales	100.00%		100.00%		100.00%		100.00%
Sales growth (decline)	8.00%		(2.00%)		6.00%		0.00%
Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	3,355	[1]	3,171	[1]	9,623	[1]	9,195	[1]
Percentage of Net Sales	87.00%		88.00%		88.00%		90.00%
Direct Reportable Segment
Segment Reporting Information [Line Items]
Net sales	509	[1],[2]	414	[1],[2]	1,303	[1],[2]	1,071	[1],[2]
Percentage of Net Sales	13.00%		12.00%		12.00%		10.00%
U.S.
Segment Reporting Information [Line Items]
Net sales	3,012	[3]	2,799	[3]	8,548	[3]	8,062	[3]
U.S. | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	2,547	[1],[3]	2,419	[1],[3]	7,353	[1],[3]	7,075	[1],[3]
Percentage of Net Sales	66.00%		67.00%		68.00%		69.00%
Canada
Segment Reporting Information [Line Items]
Net sales	288		261		752		710
Canada | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	255	[1]	237	[1]	676	[1]	652	[1]
Percentage of Net Sales	7.00%		7.00%		6.00%		6.00%
Canada | Direct Reportable Segment
Segment Reporting Information [Line Items]
Net sales	33		24		76		58
Europe | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	195	[1]	206	[1]	569	[1]	591	[1]
Percentage of Net Sales	5.00%		6.00%		5.00%		6.00%
Europe | Direct Reportable Segment
Segment Reporting Information [Line Items]
Net sales	11		10		32		26
Asia | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	306	[1]	271	[1]	888	[1]	781	[1]
Percentage of Net Sales	8.00%		7.00%		8.00%		8.00%
Other Regions | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	52	[1]	38	[1]	137	[1]	96	[1]
Percentage of Net Sales	1.00%		1.00%		1.00%		1.00%
Gap
Segment Reporting Information [Line Items]
Net sales	1,487		1,419		4,137		3,961
Sales growth (decline)	5.00%		(3.00%)		4.00%		(1.00%)
Gap | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	1,341		1,298		3,785		3,667
Gap | Direct Reportable Segment
Segment Reporting Information [Line Items]
Net sales	146	[2]	121	[2]	352	[2]	294	[2]
Gap | U.S. | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	838	[3]	819	[3]	2,351	[3]	2,296	[3]
Gap | Canada | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	93		89		244		235
Gap | Europe | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	165		171		474		501
Gap | Asia | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	245		219		716		635
Gap | Other Regions | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	0		0		0		0
Old Navy
Segment Reporting Information [Line Items]
Net sales	1,514		1,383		4,287		4,058
Sales growth (decline)	9.00%		(5.00%)		6.00%		(3.00%)
Old Navy | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	1,304		1,205		3,776		3,618
Old Navy | Direct Reportable Segment
Segment Reporting Information [Line Items]
Net sales	210	[2]	178	[2]	511	[2]	440	[2]
Old Navy | U.S. | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	1,194	[3]	1,105	[3]	3,486	[3]	3,335	[3]
Old Navy | Canada | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	107		100		285		283
Old Navy | Europe | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	0		0		0		0
Old Navy | Asia | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	3		0		5		0
Old Navy | Other Regions | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	0		0		0		0
Banana Republic
Segment Reporting Information [Line Items]
Net sales	684		634		1,976		1,830
Sales growth (decline)	8.00%		2.00%		8.00%		1.00%
Banana Republic | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	620		587		1,814		1,705
Banana Republic | Direct Reportable Segment
Segment Reporting Information [Line Items]
Net sales	64	[2]	47	[2]	162	[2]	125	[2]
Banana Republic | U.S. | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	515	[3]	495	[3]	1,516	[3]	1,444	[3]
Banana Republic | Canada | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	55		48		147		134
Banana Republic | Europe | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	15		13		47		37
Banana Republic | Asia | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	35		31		104		90
Banana Republic | Other Regions | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	0		0		0		0
Franchise
Segment Reporting Information [Line Items]
Net sales	90	[4]	81	[4]	248	[4]	205	[4]
Sales growth (decline)	11.00%		47.00%		21.00%		47.00%
Franchise | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	90	[4]	81	[4]	248	[4]	205	[4]
Franchise | Direct Reportable Segment
Segment Reporting Information [Line Items]
Net sales	0		0		0		0
Franchise | U.S. | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	0		0		0		0
Franchise | Canada | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	0		0		0		0
Franchise | Europe | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	15	[4]	22	[4]	48	[4]	53	[4]
Franchise | Asia | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	23	[4]	21	[4]	63	[4]	56	[4]
Franchise | Other Regions | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	52	[4]	38	[4]	137	[4]	96	[4]
Piperlime And Athleta
Segment Reporting Information [Line Items]
Net sales	89		68		278		212
Sales growth (decline)	31.00%		21.00%		31.00%		20.00%
Piperlime And Athleta | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	0		0		0		0
Piperlime And Athleta | Direct Reportable Segment
Segment Reporting Information [Line Items]
Net sales	89	[2]	68	[2]	278	[2]	212	[2]
Piperlime And Athleta | U.S. | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	0		0		0		0
Piperlime And Athleta | Canada | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	0		0		0		0
Piperlime And Athleta | Europe | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	0		0		0		0
Piperlime And Athleta | Asia | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	0		0		0		0
Piperlime And Athleta | Other Regions | Stores Reportable Segment
Segment Reporting Information [Line Items]
Net sales	$ 0		$ 0		$ 0		$ 0

[1] Net sales outside of the U.S. and Canada (including Direct and franchise) were $564 million and $525 million for the thirteen weeks ended October 27, 2012 and October 29, 2011, respectively. Net sales outside of the U.S. and Canada (including Direct and franchise) were $1.6 billion and $1.5 billion for the thirty-nine weeks ended October 27, 2012 and October 29, 2011, respectively.

[2] Online sales shipped from distribution centers located outside the U.S. were $44 million ($33 million for Canada and $11 million for Europe) and $34 million ($24 million for Canada and $10 million for Europe) for the thirteen weeks ended October 27, 2012 and October 29, 2011, respectively. Online sales shipped from distribution centers located outside the U.S. were $108 million ($76 million for Canada and $32 million for Europe) and $84 million ($58 million for Canada and $26 million for Europe) for the thirty-nine weeks ended October 27, 2012 and October 29, 2011, respectively.

[3] U.S. includes the United States and Puerto Rico.

[4] Franchise sales were $90 million ($78 million for Gap and $12 million for Banana Republic) and $81 million ($71 million for Gap and $10 million for Banana Republic) for the thirteen weeks ended October 27, 2012 and October 29, 2011, respectively. Franchise sales were $248 million ($217 million for Gap and $31 million for Banana Republic) and $205 million ($179 million for Gap and $26 million for Banana Republic) for the thirty-nine weeks ended October 27, 2012 and October 29, 2011, respectively.

XML

Fair Value Measurements - Additional Information (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 27, 2012	Oct. 29, 2011
Fair Value Disclosures [Abstract]
Purchases, sales, issuances, or settlements related to recurring level 3 measurements	$ 0	$ 0	$ 0	$ 0
Transfers into or out of level 1	0	0	0	0
Transfers into or out of level 2	0	0	0	0
Money market funds		133		133
Goodwill impairment charges	0	0	0	0
Other indefinite-lived intangible assets impairment charges	0	0	0	0
Other long-lived asset impairment charges	$ 0	$ 0	$ 0	$ 0

XML

Share-Based Compensation (Tables)

9 Months Ended

Oct. 27, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation Expense

Share-based compensation expense recognized in the Condensed Consolidated Statements of Income, primarily in operating expenses, is as follows:

	13 Weeks Ended						39 Weeks Ended
($ in millions)	October 27, 2012			October 29, 2011			October 27, 2012			October 29, 2011
Stock units	$	28		$	11		$	71		$	35
Stock options	5			4			13			12
Employee stock purchase plan	1			1			3			3
Share-based compensation expense	34			16			87			50
Less: Income tax benefit	(13		)	(7		)	(33		)	(20		)
Share-based compensation expense, net of tax	$	21		$	9		$	54		$	30

XML

Segment Information - Net Sales By Geographic Location (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended				9 Months Ended
	Oct. 27, 2012		Oct. 29, 2011		Oct. 27, 2012		Oct. 29, 2011
Segment Reporting Information [Line Items]
Net sales	$ 3,864	[1]	$ 3,585	[1]	$ 10,926	[1]	$ 10,266	[1]
U.S.
Segment Reporting Information [Line Items]
Net sales	3,012	[2]	2,799	[2]	8,548	[2]	8,062	[2]
Canada
Segment Reporting Information [Line Items]
Net sales	288		261		752		710
Total North America
Segment Reporting Information [Line Items]
Net sales	3,300		3,060		9,300		8,772
Other Foreign
Segment Reporting Information [Line Items]
Net sales	$ 564		$ 525		$ 1,626		$ 1,494

[1] Net sales outside of the U.S. and Canada (including Direct and franchise) were $564 million and $525 million for the thirteen weeks ended October 27, 2012 and October 29, 2011, respectively. Net sales outside of the U.S. and Canada (including Direct and franchise) were $1.6 billion and $1.5 billion for the thirty-nine weeks ended October 27, 2012 and October 29, 2011, respectively.

[2] U.S. includes the United States and Puerto Rico.

XML

Income Taxes - Additional Information (Details) (USD $) In Millions, unless otherwise specified	Oct. 27, 2012
Income Tax Disclosure [Abstract]
Deferred tax liability for U.S. income taxes with respect to foreign operation earnings	$ 0

XML

Derivative Financial Instruments - Fair Values of Asset and Liability Derivative Financial Instruments (Details) (Foreign exchange forward contracts, USD $) In Millions, unless otherwise specified	Oct. 27, 2012	Jan. 28, 2012	Oct. 29, 2011
Derivatives, Fair Value [Line Items]
Total derivative instruments, assets	$ 12	$ 13	$ 7
Total derivative instruments, liabilities	14	14	37
Derivatives in cash flow hedging relationships | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, assets	9	9	3
Derivatives in cash flow hedging relationships | Other Assets [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, assets	1	1	1
Derivatives in cash flow hedging relationships | Accrued Liabilities Current [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, liabilities	8	10	24
Derivatives in cash flow hedging relationships | Lease Incentive And Other Long Term Liabilities [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, liabilities	3	0	4
Derivatives in net investment hedging relationships | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, assets	0	0	1
Derivatives in net investment hedging relationships | Other Assets [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, assets	0	0	0
Derivatives in net investment hedging relationships | Accrued Liabilities Current [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, liabilities	0	0	2
Derivatives in net investment hedging relationships | Lease Incentive And Other Long Term Liabilities [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, liabilities	0	0	0
Derivatives not designated as hedging instruments | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, assets	2	3	2
Derivatives not designated as hedging instruments | Other Assets [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, assets	0	0	0
Derivatives not designated as hedging instruments | Accrued Liabilities Current [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, liabilities	3	4	7
Derivatives not designated as hedging instruments | Lease Incentive And Other Long Term Liabilities [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, liabilities	$ 0	$ 0	$ 0

XML

Segment Information - Net Sales by Brand, Region, and Reportabel Segment (Parenthetical) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended				9 Months Ended
	Oct. 27, 2012		Oct. 29, 2011		Oct. 27, 2012		Oct. 29, 2011
Segment Reporting Information [Line Items]
Net sales	$ 3,864	[1]	$ 3,585	[1]	$ 10,926	[1]	$ 10,266	[1]
Direct Reportable Segment
Segment Reporting Information [Line Items]
Net sales	509	[1],[2]	414	[1],[2]	1,303	[1],[2]	1,071	[1],[2]
Canada And Europe | Direct Reportable Segment
Segment Reporting Information [Line Items]
Net sales	44		34		108		84
Canada
Segment Reporting Information [Line Items]
Net sales	288		261		752		710
Canada | Direct Reportable Segment
Segment Reporting Information [Line Items]
Net sales	33		24		76		58
Europe | Direct Reportable Segment
Segment Reporting Information [Line Items]
Net sales	11		10		32		26
Other Foreign
Segment Reporting Information [Line Items]
Net sales	564		525		1,626		1,494
Gap Franchise
Segment Reporting Information [Line Items]
Net sales	78		71		217		179
Banana Republic Franchise
Segment Reporting Information [Line Items]
Net sales	12		10		31		26
Franchise
Segment Reporting Information [Line Items]
Net sales	90	[3]	81	[3]	248	[3]	205	[3]
Franchise | Direct Reportable Segment
Segment Reporting Information [Line Items]
Net sales	$ 0		$ 0		$ 0		$ 0

[1] Net sales outside of the U.S. and Canada (including Direct and franchise) were $564 million and $525 million for the thirteen weeks ended October 27, 2012 and October 29, 2011, respectively. Net sales outside of the U.S. and Canada (including Direct and franchise) were $1.6 billion and $1.5 billion for the thirty-nine weeks ended October 27, 2012 and October 29, 2011, respectively.

[2] Online sales shipped from distribution centers located outside the U.S. were $44 million ($33 million for Canada and $11 million for Europe) and $34 million ($24 million for Canada and $10 million for Europe) for the thirteen weeks ended October 27, 2012 and October 29, 2011, respectively. Online sales shipped from distribution centers located outside the U.S. were $108 million ($76 million for Canada and $32 million for Europe) and $84 million ($58 million for Canada and $26 million for Europe) for the thirty-nine weeks ended October 27, 2012 and October 29, 2011, respectively.

[3] Franchise sales were $90 million ($78 million for Gap and $12 million for Banana Republic) and $81 million ($71 million for Gap and $10 million for Banana Republic) for the thirteen weeks ended October 27, 2012 and October 29, 2011, respectively. Franchise sales were $248 million ($217 million for Gap and $31 million for Banana Republic) and $205 million ($179 million for Gap and $26 million for Banana Republic) for the thirty-nine weeks ended October 27, 2012 and October 29, 2011, respectively.

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Recent Accounting Pronouncements

9 Months Ended

Oct. 27, 2012

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In July 2012, the Financial Accounting Standards Board issued an accounting standards update (“ASU”) to simplify the manner in which entities test indefinite-lived intangible assets for impairment. The ASU permits an entity to first assess qualitative factors to determine whether events and circumstances indicate that it is more likely than not that the indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform a quantitative impairment test. The ASU is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. We do not expect the adoption of the ASU to have a material impact on our consolidated financial statements.

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Earnings Per Share - Weighted Average Number of Shares (Details) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 27, 2012	Oct. 29, 2011
Earnings Per Share [Abstract]
Weighted-average number of shares - basic (in shares)	481	503	485	542
Common stock equivalents (in shares)	7	2	6	5
Weighted-average number of shares - diluted (in shares)	488	505	491	547

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Goodwill and Intangible Assets (Details) (USD $) In Millions, unless otherwise specified	Oct. 27, 2012	Jan. 28, 2012	Oct. 29, 2011
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 99	$ 99	$ 99
Trade name	54	54	54
Other indefinite-lived intangible assets	6	0	0
Intangible assets subject to amortization	15	15	15
Less: Accumulated amortization	(15)	(14)	(14)
Intangible assets subject to amortization, net	$ 0	$ 1	$ 1

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Basis of Presentation (Details)	9 Months Ended
	Oct. 27, 2012 Segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of reportable segments (in segments)	2

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Earnings Per Share - Additional Information (Details) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 27, 2012	Oct. 29, 2011
Earnings Per Share [Abstract]
Shares excluded from the computations of weighted-average number of shares - diluted	0	16	2	12

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Goodwill and Intangible Assets - Additional Information (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 27, 2012	Oct. 29, 2011
Goodwill and Intangible Assets Disclosure [Abstract]
Changes in the carrying amount of goodwill	$ 0	$ 0	$ 0	$ 0
Amortization of Intangible Assets	$ 0	$ 0	$ 1	$ 2

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Debt and Credit Facilities - Long-Term Debt (Details) (USD $) In Millions, unless otherwise specified	Oct. 27, 2012	Aug. 31, 2012	Jan. 28, 2012	Oct. 29, 2011
Debt Disclosure [Abstract]
Notes	$ 1,246		$ 1,246	$ 1,246
Term loan	0	0	400	400
Total long-term debt	1,246		1,646	1,646
Less: Current portion	0		40	40
Total long-term debt, less current portion	$ 1,246		$ 1,606	$ 1,606

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Basis of Presentation

9 Months Ended

Oct. 27, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The Condensed Consolidated Balance Sheets as of October 27, 2012 and October 29, 2011, the Condensed Consolidated Statements of Income and the Condensed Consolidated Statements of Comprehensive Income for the thirteen and thirty-nine weeks endedOctober 27, 2012 and October 29, 2011, and the Condensed Consolidated Statements of Cash Flows for the thirty-nine weeks endedOctober 27, 2012 and October 29, 2011 have been prepared by The Gap, Inc. (the “Company,” “we,” and “our”), without audit. In the opinion of management, such statements include all adjustments (which include only normal recurring adjustments) considered necessary to present fairly our financial position, results of operations, and cash flows as of October 27, 2012 and October 29, 2011 and for all periods presented. The Condensed Consolidated Balance Sheet as of January 28, 2012 has been derived from our audited financial statements.

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission. Accordingly, certain information and disclosures normally included in the notes to the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted from these interim financial statements. We suggest that you read these Condensed Consolidated Financial Statements in conjunction with the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 28, 2012.

The results of operations for the thirteen and thirty-nine weeks endedOctober 27, 2012 are not necessarily indicative of the operating results that may be expected for the fifty-three-week period ending February 2, 2013.

We identify our operating segments based on the way we manage and evaluate our business activities. We have two reportable segments: Stores and Direct.

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Debt and Credit Facilities - Additional Information (Details) In Millions, unless otherwise specified	9 Months Ended					9 Months Ended			1 Months Ended			9 Months Ended							9 Months Ended
	Oct. 27, 2012 USD ($) Agreement	Oct. 29, 2011 USD ($)	Aug. 31, 2012 USD ($)	Jan. 28, 2012 USD ($)	Oct. 27, 2012 Letter of Credit [Member] USD ($)	Oct. 27, 2012 5.95 Percent Notes Due April 2021 USD ($)	Jan. 28, 2012 5.95 Percent Notes Due April 2021 USD ($)	Oct. 29, 2011 5.95 Percent Notes Due April 2021 USD ($)	Aug. 31, 2012 $400 Million, Five-Year, Unsecured Term Loan Due April 2016 USD ($)	Apr. 30, 2011 $400 Million, Five-Year, Unsecured Term Loan Due April 2016 USD ($)	Oct. 29, 2011 $400 Million, Five-Year, Unsecured Term Loan Due April 2016 USD ($)	Oct. 27, 2012 Five-Year, Unsecured Revolving Credit Facility USD ($)	Oct. 27, 2012 China Facilities USD ($)	Oct. 27, 2012 China Facilities CNY	Jan. 28, 2012 China Facilities USD ($)	Oct. 29, 2011 China Facilities USD ($)	Oct. 27, 2012 Amended China Facilities [Member] [Domain] USD ($)	Oct. 27, 2012 Amended China Facilities [Member] [Domain] CNY	Oct. 27, 2012 Trade Letter Of Credit [Member] USD ($)
Debt Instrument [Line Items]
Aggregate principal amount of notes issued						$ 1,250				$ 400
Notes, interest rate						5.95%
Notes, maturity date						Apr. 12, 2021				Apr. 07, 2016
Estimated fair value						1,410	1,190	1,180			400
Debt instrument maturity term, years										5 years		5 years							2 years
Annual repayment amount of unsecured term loan										40
Final repayment										240
Repayment of unsecured term loan	400	0							360
Term loan	0	400	0	400
Maximum borrowing capacity												500	31	196			40	250	50
Expiration date												Apr. 07, 2016							Sep. 30, 2014
Unsecured committed letter of credit amount												66
Borrowings					0							0	2	10
Remaining borrowing capacity												434
Number of agreements relating to credit facilities	2
Facility interest rate													5.04%	5.04%
Bank guarantees related to store leases													4
Current maturities of debt	$ 2	$ 52		$ 59											$ 19	$ 12

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Share Repurchases - Additional Information (Details) (USD $)	1 Months Ended		3 Months Ended	16 Months Ended
	Feb. 25, 2012	Jan. 28, 2012	Oct. 27, 2012	Nov. 26, 2011	Feb. 23, 2012
Disclosure Share Repurchases Additional Information [Abstract]
Share repurchases, authorized amount	$ 1,000,000,000			$ 3,250,000,000
Share repurchases, amount cancelled					441,000,000
Share repurchases, remaining amount		443,000,000	539,000,000
Total share repurchases, unpaid amount		$ 4,000,000

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Millions, unless otherwise specified	Oct. 27, 2012	Jan. 28, 2012	Oct. 29, 2011
Current assets:
Cash and cash equivalents	$ 1,720	$ 1,885	$ 1,392
Short-term investments	50	0	25
Merchandise inventory	2,269	1,615	2,322
Other current assets	794	809	815
Total current assets	4,833	4,309	4,554
Property and equipment, net of accumulated depreciation of $5,355, $5,260, and $5,202	2,559	2,523	2,550
Other long-term assets	615	590	553
Total assets	8,007	7,422	7,657
Current liabilities:
Current maturities of debt	2	59	52
Accounts payable	1,584	1,066	1,472
Accrued expenses and other current liabilities	1,041	998	957
Income taxes payable	1	5	1
Total current liabilities	2,628	2,128	2,482
Long-term liabilities:
Long-term debt	1,246	1,606	1,606
Lease incentives and other long-term liabilities	972	933	910
Total long-term liabilities	2,218	2,539	2,516
Commitments and contingencies (see Note 11)
Stockholders' equity:
Common stock $0.05 par value Authorized 2,300 shares and Issued 1,106 shares for all periods presented; Outstanding 480, 485, and 489 shares	55	55	55
Additional paid-in capital	2,844	2,867	2,873
Retained earnings	12,966	12,364	12,201
Accumulated other comprehensive income	219	229	226
Treasury stock at cost (626, 621, and 617 shares)	(12,923)	(12,760)	(12,696)
Total stockholders' equity	3,161	2,755	2,659
Total liabilities and stockholders' equity	$ 8,007	$ 7,422	$ 7,657

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Segment Information - Additional Information (Details)	9 Months Ended
	Oct. 27, 2012 Segment
Segment Reporting [Abstract]
Number of reportable segments (in segments)	2

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 27, 2012	Oct. 29, 2011
Change in fair value of derivative financial instruments, tax (tax benefit)	$ (2)	$ 6	$ 1	$ (15)
Reclassification adjustment for realized losses on derivative financial instruments, tax benefit (tax)	$ (1)	$ 7	$ (1)	$ 17

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Derivative Financial Instruments - Additional Information (Details) (USD $) In Millions, unless otherwise specified				3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended
	Oct. 27, 2012	Jan. 28, 2012	Oct. 29, 2011	Oct. 27, 2012 Derivatives in cash flow hedging relationships	Oct. 29, 2011 Derivatives in cash flow hedging relationships	Oct. 27, 2012 Derivatives in cash flow hedging relationships	Oct. 29, 2011 Derivatives in cash flow hedging relationships	Oct. 27, 2012 Derivatives in net investment hedging relationships	Oct. 29, 2011 Derivatives in net investment hedging relationships	Oct. 27, 2012 Derivatives in net investment hedging relationships	Oct. 29, 2011 Derivatives in net investment hedging relationships	Apr. 30, 2011 5.95 Percent Notes Due In April 2021
Derivative [Line Items]
Notes, interest rate												5.95%
Aggregate principal amount of notes issued												$ 1,250
Debt issuance date												2011-04
Amounts recorded as a result of hedge ineffectiveness				0	0	0	0	0	0	0	0
Amounts recorded in net income as a result of discontinuance of cash flow hedges				0	0	0	0
Amounts recorded in net income as a result of hedge components excluded from the assessment of cash flow hedge effectiveness				0	0	0	0
Amounts recorded in net income as a result of discontinuance of net investment hedges								0	0	0	0
Amounts recorded in net income as a result of hedge components excluded from the assessment of net investment hedge effectiveness								0	0	0	0
Derivative financial instruments with credit-risk-related contingent features underlying agreements	0	0	0
Gain or loss reclassified from OCI into income for derivatives in net investment hedging relationships								$ 0	$ 0	$ 0	$ 0

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Fair Value Measurements (Tables)

9 Months Ended

Oct. 27, 2012

Fair Value Disclosures [Abstract]

Financial Assets And Liabilities Measured At Fair Value On Recurring Basis

Financial assets and liabilities measured at fair value on a recurring basis and cash equivalents and short-term investments held at amortized cost are as follows:

			Fair Value Measurements at Reporting Date Using
($ in millions)	October 27, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	840	$	184	$	656	$	—
Short-term investments	50		—		50		—
Derivative financial instruments	12		—		12		—
Deferred compensation plan assets	27		27		—		—
Total	$	929	$	211	$	718	$	—
Liabilities:
Derivative financial instruments	$	14	$	—	$	14	$	—
			Fair Value Measurements at Reporting Date Using
($ in millions)	January 28, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	1,009	$	224	$	785	$	—
Short-term investments	—		—		—		—
Derivative financial instruments	13		—		13		—
Deferred compensation plan assets	22		22		—		—
Total	$	1,044	$	246	$	798	$	—
Liabilities:
Derivative financial instruments	$	14	$	—	$	14	$	—
			Fair Value Measurements at Reporting Date Using
($ in millions)	October 29, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant  Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	610	$	133	$	477	$	—
Short-term investments	25		—		25		—
Derivative financial instruments	7		—		7		—
Deferred compensation plan assets	23		23		—		—
Total	$	665	$	156	$	509	$	—
Liabilities:
Derivative financial instruments	$	37	$	—	$	37	$	—

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Derivative Financial Instruments - Foreign Exchange Contracts Outstanding to Sell Various Currencies (Details) In Millions, unless otherwise specified	Oct. 27, 2012 USD ($)		Oct. 27, 2012 EUR (€)	Oct. 27, 2012 GBP (£)	Oct. 27, 2012 JPY (¥)	Jan. 28, 2012 USD ($)		Jan. 28, 2012 EUR (€)	Jan. 28, 2012 GBP (£)	Jan. 28, 2012 JPY (¥)	Oct. 29, 2011 USD ($)		Oct. 29, 2011 EUR (€)	Oct. 29, 2011 GBP (£)	Oct. 29, 2011 JPY (¥)
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Notional amounts of cash flows hedges	$ 1,091	[1]	€ 26	£ 9	¥ 945	$ 873	[1]	€ 16	£ 31	¥ 2,564	$ 1,042	[1]	€ 0	£ 41	¥ 6,238

[1] The principal currencies hedged against changes in the U.S. dollar were the Euro, British pound, Japanese yen, and Canadian dollar.

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Share Repurchases (Tables)

9 Months Ended

Oct. 27, 2012

Disclosure Share Repurchase Activity [Abstract]

Share Repurchase Activity

Share repurchase activity is as follows:

	13 Weeks Ended				39 Weeks Ended
($ and shares in millions except average per share cost)	October 27, 2012		October 29, 2011		October 27, 2012		October 29, 2011
Number of shares repurchased	2.7		39.2		16.5		106.5
Total cost	$	96	$	645	$	463	$	2,013
Average per share cost including commissions	$	35.73	$	16.46	$	28.01	$	18.90

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Millions, unless otherwise specified	9 Months Ended
	Oct. 27, 2012	Oct. 29, 2011
Cash flows from operating activities:
Net income	$ 784	$ 615
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	421	444
Amortization of lease incentives	(58)	(62)
Share-based compensation	87	50
Tax benefit from exercise of stock options and vesting of stock units	32	10
Excess tax benefit from exercise of stock options and vesting of stock units	(32)	(11)
Non-cash and other items	4	51
Deferred income taxes	(15)	82
Changes in operating assets and liabilities:
Merchandise inventory	(655)	(694)
Other current assets and other long-term assets	(14)	(78)
Accounts payable	517	422
Accrued expenses and other current liabilities	31	(87)
Income taxes payable, net of prepaid and other tax-related items	31	(185)
Lease incentives and other long-term liabilities	92	81
Net cash provided by operating activities	1,225	638
Cash flows from investing activities:
Purchases of property and equipment	(449)	(416)
Purchases of short-term investments	(175)	(50)
Maturities of short-term investments	125	125
Changes in other assets	(12)	(4)
Net cash used for investing activities	(511)	(345)
Cash flows from financing activities:
Proceeds from issuance of short-term debt	0	9
Payments of short-term debt	(17)	0
Proceeds from issuance of long-term debt	0	1,646
Payments of long-term debt issuance costs	0	(11)
Payments of long-term debt	(400)	0
Proceeds from issuances under share-based compensation plans, net of withholding tax payments	159	55
Repurchases of common stock	(467)	(2,013)
Excess tax benefit from exercise of stock options and vesting of stock units	32	11
Cash dividends paid	(182)	(181)
Net cash used for financing activities	(875)	(484)
Effect of foreign exchange rate fluctuations on cash and cash equivalents	(4)	22
Net decrease in cash and cash equivalents	(165)	(169)
Cash and cash equivalents at beginning of period	1,885	1,561
Cash and cash equivalents at end of period	1,720	1,392
Non-cash investing activities:
Purchases of property and equipment not yet paid at end of period	68	50
Supplemental disclosure of cash flow information:
Cash paid for interest during the period	81	42
Cash paid for income taxes during the period	$ 445	$ 494

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Millions, except Per Share data, unless otherwise specified	Oct. 27, 2012	Jan. 28, 2012	Oct. 29, 2011
Property and equipment, accumulated depreciation	$ 5,355	$ 5,260	$ 5,202
Common stock, par value (in dollars per share)	$ 0.05	$ 0.05	$ 0.05
Common stock, shares authorized (in shares)	2,300	2,300	2,300
Common stock, shares issued (in shares)	1,106	1,106	1,106
Common stock, shares outstanding (in shares)	480	485	489
Treasury stock, shares (in shares)	626	621	617

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Earnings Per Share

9 Months Ended

Oct. 27, 2012

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Weighted-average number of shares used for earnings per share is as follows:

	13 Weeks Ended		39 Weeks Ended
(shares in millions)	October 27, 2012	October 29, 2011	October 27, 2012	October 29, 2011
Weighted-average number of shares - basic	481	503	485	542
Common stock equivalents	7	2	6	5
Weighted-average number of shares - diluted	488	505	491	547

There were no material shares with an anti-dilutive effect on earnings per share for the thirteen weeks endedOctober 27, 2012. The above computations of weighted-average number of shares – diluted exclude 16 million shares related to stock options and other stock awards for the thirteen weeks endedOctober 29, 2011 and 2 million and 12 million shares related to stock options and other stock awards for the thirty-nine weeks endedOctober 27, 2012 and October 29, 2011, respectively, as their inclusion would have an anti-dilutive effect on earnings per share.

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Document and Entity Information	9 Months Ended
	Oct. 27, 2012	Nov. 27, 2012
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Oct. 27, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3
Trading Symbol	GPS
Entity Registrant Name	GAP INC
Entity Central Index Key	0000039911
Current Fiscal Year End Date	--02-02
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		479,419,352

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Commitments and Contingencies

9 Months Ended

Oct. 27, 2012

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

As a multinational company, we are subject to various proceedings, lawsuits, disputes, and claims (“Actions”) arising in the ordinary course of our business. Many of these Actions raise complex factual and legal issues and are subject to uncertainties. As of October 27, 2012, Actions filed against us included commercial, intellectual property, customer, employment, and data privacy claims, including class action lawsuits. The plaintiffs in some Actions seek unspecified damages or injunctive relief or both. Actions are in various procedural stages and some are covered in part by insurance. As of October 27, 2012, January 28, 2012, and October 29, 2011, we recorded a liability for an estimated loss if the outcome of an Action is expected to result in a loss that is considered probable and reasonably estimable. The liability recorded as of October 27, 2012, January 28, 2012, and October 29, 2011 was not material for any individual Action or in total. Subsequent to October 27, 2012 and through the filing date of this Quarterly Report on Form 10-Q, no information has become available that indicates a material change to our estimate is required.

We cannot predict with assurance the outcome of Actions brought against us. Accordingly, developments, settlements, or resolutions may occur and impact income 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 effect on our financial position, results of operations, or cash flows taken as a whole.

We are a party to a variety of contractual agreements under which we may be obligated to indemnify the other party for certain matters. These contracts primarily relate to our commercial contracts, operating leases, trademarks, intellectual property, financial agreements, and various other agreements. Under these contracts, we may provide certain routine indemnifications relating to representations and warranties (e.g., ownership of assets, environmental or tax indemnifications) or personal injury matters. The terms of these indemnifications range in duration and may not be explicitly defined. Generally, the maximum obligation under such indemnifications is not explicitly stated, and as a result, the overall amount of these obligations cannot be reasonably estimated. Historically, we have not made significant payments for such indemnifications. We believe that if we were to incur a loss in any of these matters, the loss would not have a material effect on our financial position, results of operations, or cash flows taken as a whole.

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended				9 Months Ended
	Oct. 27, 2012		Oct. 29, 2011		Oct. 27, 2012		Oct. 29, 2011
Net sales	$ 3,864	[1]	$ 3,585	[1]	$ 10,926	[1]	$ 10,266	[1]
Cost of goods sold and occupancy expenses	2,271		2,271		6,531		6,397
Gross profit	1,593		1,314		4,395		3,869
Operating expenses	1,073		968		3,055		2,803
Operating income	520		346		1,340		1,066
Interest expense	22		22		67		50
Interest income	(1)		(1)		(4)		(3)
Income before income taxes	499		325		1,277		1,019
Income taxes	191		132		493		404
Net income	$ 308		$ 193		$ 784		$ 615
Weighted-average number of shares - basic (in shares)	481		503		485		542
Weighted-average number of shares - diluted (in shares)	488		505		491		547
Earnings per share - basic (in dollars per share)	$ 0.64		$ 0.38		$ 1.62		$ 1.13
Earnings per share - diluted (in dollars per share)	$ 0.63		$ 0.38		$ 1.60		$ 1.12
Cash dividends declared and paid per share (in dollars per share)	$ 0.125		$ 0.1125		$ 0.375		$ 0.3375

[1] Net sales outside of the U.S. and Canada (including Direct and franchise) were $564 million and $525 million for the thirteen weeks ended October 27, 2012 and October 29, 2011, respectively. Net sales outside of the U.S. and Canada (including Direct and franchise) were $1.6 billion and $1.5 billion for the thirty-nine weeks ended October 27, 2012 and October 29, 2011, respectively.

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Fair Value Measurements

9 Months Ended

Oct. 27, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

There were no purchases, sales, issuances, or settlements related to recurring level 3 measurements during the thirteen and thirty-nine weeks endedOctober 27, 2012 or October 29, 2011. There were no transfers into or out of level 1 and level 2 during the thirteen and thirty-nine weeks endedOctober 27, 2012 or October 29, 2011.

Financial Assets and Liabilities

Financial assets and liabilities measured at fair value on a recurring basis and cash equivalents and short-term investments held at amortized cost are as follows:

			Fair Value Measurements at Reporting Date Using
($ in millions)	October 27, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	840	$	184	$	656	$	—
Short-term investments	50		—		50		—
Derivative financial instruments	12		—		12		—
Deferred compensation plan assets	27		27		—		—
Total	$	929	$	211	$	718	$	—
Liabilities:
Derivative financial instruments	$	14	$	—	$	14	$	—
			Fair Value Measurements at Reporting Date Using
($ in millions)	January 28, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	1,009	$	224	$	785	$	—
Short-term investments	—		—		—		—
Derivative financial instruments	13		—		13		—
Deferred compensation plan assets	22		22		—		—
Total	$	1,044	$	246	$	798	$	—
Liabilities:
Derivative financial instruments	$	14	$	—	$	14	$	—
			Fair Value Measurements at Reporting Date Using
($ in millions)	October 29, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant  Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	610	$	133	$	477	$	—
Short-term investments	25		—		25		—
Derivative financial instruments	7		—		7		—
Deferred compensation plan assets	23		23		—		—
Total	$	665	$	156	$	509	$	—
Liabilities:
Derivative financial instruments	$	37	$	—	$	37	$	—

We have highly liquid investments classified as cash equivalents and short-term investments, which are placed primarily in money market funds, time deposits, and commercial paper. These investments are classified as held-to-maturity based on our positive intent and ability to hold the securities to maturity. We value these investments at their original purchase prices plus interest that has accrued at the stated rate. Money market funds of $133 million as of October 29, 2011 have been reclassified from cash to cash equivalents and are included as level 1 measurements in the table above. This correction had no impact on the Condensed Consolidated Financial Statements for any period reported.

Derivative financial instruments primarily include foreign exchange forward contracts. The principal currencies hedged against changes in the U.S. dollar are the Euro, British pound, Japanese yen, and Canadian dollar. The fair value of the Company’s derivative financial instruments is determined using pricing models based on current market rates. Derivative financial instruments in an asset position are recorded in other current assets or other long-term assets in the Condensed Consolidated Balance Sheets. Derivative financial instruments in a liability position are recorded in accrued expenses and other current liabilities or lease incentives and other long-term liabilities in the Condensed Consolidated Balance Sheets.

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, and the assets are recorded in other long-term assets in the Condensed Consolidated Balance Sheets.

Nonfinancial Assets

We review the carrying amount of long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We review the carrying amount of goodwill and other indefinite-lived intangible assets for impairment annually and whenever events or changes in circumstances indicate that it is more likely than not that the carrying amount may not be recoverable.

There were no impairment charges recorded for goodwill or other indefinite-lived intangible assets for the thirteen and thirty-nine weeks endedOctober 27, 2012 or October 29, 2011. There were no material impairment charges recorded for other long-lived assets for the thirteen and thirty-nine weeks endedOctober 27, 2012 or October 29, 2011.

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Debt and Credit Facilities

9 Months Ended

Oct. 27, 2012

Debt Disclosure [Abstract]

Debt and Credit Facilities

Debt and Credit Facilities

Long-term debt consists of the following:

($ in millions)	October 27, 2012		January 28, 2012			October 29, 2011
Notes	$	1,246	$	1,246		$	1,246
Term loan	—		400			400
Total long-term debt	1,246		1,646			1,646
Less: Current portion	—		(40		)	(40		)
Total long-term debt, less current portion	$	1,246	$	1,606		$	1,606

As of October 27, 2012, January 28, 2012, and October 29, 2011, the estimated fair value of our $1.25 billion aggregate principal amount of 5.95 percent notes (the "Notes”) due April 2021 was $1.41 billion, $1.19 billion, and $1.18 billion, respectively, and was based on the quoted market price of the Notes (level 1 inputs) as of the last business day of the respective fiscal quarter.

In April 2011, we entered into a $400 million, five-year, unsecured term loan due April 2016. Repayments of $40 million were payable on April 7 of each year, commencing on April 7, 2012, with a final repayment of $240 million due on April 7, 2016. In April 2012, we repaid $40 million on the term loan and in August 2012, we repaid the remaining $360 million reducing the outstanding balance on the term loan to zero. The estimated fair value of the term loan was $400 million as of January 28, 2012, and October 29, 2011. The carrying amount of the term loan approximated its fair value, as the interest rate varied depending on quoted market rates (level 1 inputs) and our credit rating.

We have a $500 million, five-year, unsecured revolving credit facility (the “Facility”), which is scheduled to expire in April 2016. As of October 27, 2012, there were no borrowings under the Facility. The net availability of the Facility, reflecting $66 million of outstanding standby letters of credit, was $434 million as of October 27, 2012.

We also have two separate agreements that make unsecured uncommitted revolving credit facilities available for our operations in China (the “China Facilities”). The 196 million Chinese yuan ($31 million as of October 27, 2012) China Facilities expired during the thirteen weeks ended October 27, 2012 and they were subsequently renewed with an increased availability of 250 million Chinese yuan ($40 million as of October 27, 2012) and no expiration date. As of October 27, 2012, there were borrowings of $2 million (10 million Chinese yuan) at an annual interest rate of approximately 5.04 percent under the China Facilities, which are recorded in current maturities of debt in the Condensed Consolidated Balance Sheet. There were also $4 million in bank guarantees related to store leases under the China Facilities as of October 27, 2012. As of January 28, 2012 and October 29, 2011, current maturities of debt in the Condensed Consolidated Balance Sheets includes borrowings under the China Facilities of $19 million and $12 million, respectively.

As of October 27, 2012, we had a $50 million, two-year, unsecured letter of credit agreement with an expiration date of September 2014. We had no material trade letters of credit issued under the letter of credit agreement as of October 27, 2012.

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Derivative Financial Instruments (Tables)

9 Months Ended

Oct. 27, 2012

Derivative [Line Items]

Foreign Exchange Forward Contracts Outstanding

As of October 27, 2012, January 28, 2012, and October 29, 2011, we had foreign exchange forward contracts outstanding in the following notional amounts:

(notional amounts in millions)	October 27, 2012		January 28, 2012		October 29, 2011
U.S. dollars (1)	$	1,091	$	873	$	1,042
British pounds	£	9	£	31	£	41
Japanese yen	¥	945	¥	2,564	¥	6,238
Euro	€	26	€	16	€	—

____________________________ 

(1) The principal currencies hedged against changes in the U.S. dollar were the Euro, British pound, Japanese yen, and Canadian dollar.

Fair Values of Asset and Liability Derivative Financial Instruments

The fair values of foreign exchange forward contracts are as follows:

($ in millions)	October 27, 2012		January 28, 2012		October 29, 2011
Derivatives designated as cash flow hedges:
Other current assets	$	9	$	9	$	3
Other long-term assets	$	1	$	1	$	1
Accrued expenses and other current liabilities	$	8	$	10	$	24
Lease incentives and other long-term liabilities	$	3	$	—	$	4
Derivatives designated as net investment hedges:
Other current assets	$	—	$	—	$	1
Other long-term assets	$	—	$	—	$	—
Accrued expenses and other current liabilities	$	—	$	—	$	2
Lease incentives and other long-term liabilities	$	—	$	—	$	—
Derivatives not designated as hedging     instruments:
Other current assets	$	2	$	3	$	2
Other long-term assets	$	—	$	—	$	—
Accrued expenses and other current liabilities	$	3	$	4	$	7
Lease incentives and other long-term liabilities	$	—	$	—	$	—
Total derivatives in an asset position	$	12	$	13	$	7
Total derivatives in a liability position	$	14	$	14	$	37

Effects of Derivative Financial Instruments on OCI and Condensed Consolidated Statements of Income

The effective portion of gains and losses on foreign exchange forward contracts in cash flow hedging and net investment hedging relationships recorded in OCI and the Condensed Consolidated Statements of Income, on a pre-tax basis, are as follows:

	13 Weeks Ended						39 Weeks Ended
($ in millions)	October 27, 2012			October 29, 2011			October 27, 2012		October 29, 2011
Derivatives in cash flow hedging relationships:
Gain (loss) recognized in other comprehensive income	$	(5	)	$	16		$	3	$	(38	)
Gain (loss) reclassified into cost of goods sold and      occupancy expenses	$	2		$	(16	)	$	3	$	(37	)
Gain (loss) reclassified into operating expenses	$	—		$	(1	)	$	—	$	(4	)
Derivatives in net investment hedging relationships:
Gain (loss) recognized in other comprehensive income	$	(1	)	$	(1	)	$	2	$	(3	)

Not Designated as Hedging Instrument [Member]

Derivative [Line Items]

Effects of Derivative Financial Instruments on OCI and Condensed Consolidated Statements of Income

Gains and losses on foreign exchange forward contracts not designated as hedging instruments recorded in the Condensed Consolidated Statements of Income, on a pre-tax basis are as follows:

	13 Weeks Ended					39 Weeks Ended
($ in millions)	October 27, 2012			October 29, 2011		October 27, 2012		October 29, 2011
Gain (loss) recognized in operating expenses	$	(3	)	$	6	$	1	$	4

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Segment Information

9 Months Ended

Oct. 27, 2012

Segment Reporting [Abstract]

Segment Information

Segment Information

We identify our operating segments according to how our business activities are managed and evaluated. All of our operating segments sell a group of similar products – apparel, accessories, and personal care products. We have two reportable segments:

• Stores – The Stores reportable segment includes the results of the retail stores for Gap, Old Navy, and Banana Republic. We have aggregated the results of all Stores operating segments into one reportable segment because the operating segments have similar economic characteristics.

• Direct – The Direct reportable segment includes the results for our online brands, including Piperlime and Athleta.

Net sales by brand, region, and reportable segment are as follows:

($ in millions)	Gap			Old Navy			Banana Republic			Franchise (3)			Piperlime and Athleta			Total (4)			Percentage of Net Sales
13 Weeks Ended October 27, 2012
U.S. (1)	$	838		$	1,194		$	515		$	—		$	—		$	2,547		66	%
Canada	93			107			55			—			—			255			7
Europe	165			—			15			15			—			195			5
Asia	245			3			35			23			—			306			8
Other regions	—			—			—			52			—			52			1
Total Stores reportable segment	1,341			1,304			620			90			—			3,355			87
Direct reportable segment (2)	146			210			64			—			89			509			13
Total	$	1,487		$	1,514		$	684		$	90		$	89		$	3,864		100	%
Sales growth	5		%	9		%	8		%	11		%	31		%	8		%
($ in millions)	Gap			Old Navy			Banana Republic			Franchise (3)			Piperlime and Athleta			Total (4)			Percentage of Net Sales
13 Weeks Ended October 29, 2011
U.S. (1)	$	819		$	1,105		$	495		$	—		$	—		$	2,419		67	%
Canada	89			100			48			—			—			237			7
Europe	171			—			13			22			—			206			6
Asia	219			—			31			21			—			271			7
Other regions	—			—			—			38			—			38			1
Total Stores reportable segment	1,298			1,205			587			81			—			3,171			88
Direct reportable segment (2)	121			178			47			—			68			414			12
Total	$	1,419		$	1,383		$	634		$	81		$	68		$	3,585		100	%
Sales growth (decline)	(3		)%	(5		)%	2		%	47		%	21		%	(2		)%
($ in millions)	Gap			Old Navy			Banana Republic			Franchise (3)			Piperlime and Athleta			Total (4)			Percentage of Net Sales
39 Weeks Ended October 27, 2012
U.S. (1)	$	2,351		$	3,486		$	1,516		$	—		$	—		$	7,353		68	%
Canada	244			285			147			—			—			676			6
Europe	474			—			47			48			—			569			5
Asia	716			5			104			63			—			888			8
Other regions	—			—			—			137			—			137			1
Total Stores reportable segment	3,785			3,776			1,814			248			—			9,623			88
Direct reportable segment (2)	352			511			162			—			278			1,303			12
Total	$	4,137		$	4,287		$	1,976		$	248		$	278		$	10,926		100	%
Sales growth	4		%	6		%	8		%	21		%	31		%	6		%
($ in millions)	Gap			Old Navy			Banana Republic			Franchise (3)			Piperlime and Athleta			Total (4)			Percentage of Net Sales
39 Weeks Ended October 29, 2011
U.S. (1)	$	2,296		$	3,335		$	1,444		$	—		$	—		$	7,075		69	%
Canada	235			283			134			—			—			652			6
Europe	501			—			37			53			—			591			6
Asia	635			—			90			56			—			781			8
Other regions	—			—			—			96			—			96			1
Total Stores reportable segment	3,667			3,618			1,705			205			—			9,195			90
Direct reportable segment (2)	294			440			125			—			212			1,071			10
Total	$	3,961		$	4,058		$	1,830		$	205		$	212		$	10,266		100	%
Sales growth (decline)	(1		)%	(3		)%	1		%	47		%	20		%	—		%

_____________________________

(1) U.S. includes the United States and Puerto Rico.

(2) Online sales shipped from distribution centers located outside the U.S. were $44 million ($33 million for Canada and $11 million for Europe) and $34 million ($24 million for Canada and $10 million for Europe) for the thirteen weeks endedOctober 27, 2012 and October 29, 2011, respectively. Online sales shipped from distribution centers located outside the U.S. were $108 million ($76 million for Canada and $32 million for Europe) and $84 million ($58 million for Canada and $26 million for Europe) for the thirty-nine weeks endedOctober 27, 2012 and October 29, 2011, respectively.

(3) Franchise sales were $90 million ($78 million for Gap and $12 million for Banana Republic) and $81 million ($71 million for Gap and $10 million for Banana Republic) for the thirteen weeks endedOctober 27, 2012 and October 29, 2011, respectively. Franchise sales were $248 million ($217 million for Gap and $31 million for Banana Republic) and $205 million ($179 million for Gap and $26 million for Banana Republic) for the thirty-nine weeks endedOctober 27, 2012 and October 29, 2011, respectively.

(4) Net sales outside of the U.S. and Canada (including Direct and franchise) were $564 million and $525 million for the thirteen weeks endedOctober 27, 2012 and October 29, 2011, respectively. Net sales outside of the U.S. and Canada (including Direct and franchise) were $1.6 billion and $1.5 billion for the thirty-nine weeks endedOctober 27, 2012 and October 29, 2011, respectively.

Gap and Banana Republic outlet retail sales are reflected within the respective results of each brand.

Financial Information for Reportable Segments

Operating income is a primary measure of profit we use to make decisions on allocating resources to our operating segments and to assess the operating performance of each operating segment. It is defined as income before interest expense, interest income, and income taxes. Corporate expenses are allocated to each operating segment and recorded in operating income on a rational and systematic basis.

Reportable segment assets presented below include those assets that are directly used in, or allocable to, that segment’s operations. Total assets for the Stores reportable segment primarily consist of merchandise inventory, the net book value of store assets, and prepaid expenses and receivables related to store operations. Total assets for the Direct reportable segment primarily consist of merchandise inventory, the net book value of information technology and distribution center assets, and the net book value of goodwill and trade name as a result of the acquisition of Athleta. We do not allocate corporate assets to our operating segments. Unallocated corporate assets primarily include cash and cash equivalents, short-term investments, the net book value of corporate property and equipment, and tax-related assets.

Selected financial information by reportable segment and reconciliations to our consolidated totals are as follows:

	13 Weeks Ended				39 Weeks Ended
($ in millions)	October 27, 2012		October 29, 2011		October 27, 2012		October 29, 2011
Operating income:
Stores	$	403	$	255	$	1,043	$	836
Direct	117		91		297		230
Operating income	$	520	$	346	$	1,340	$	1,066

($ in millions)	October 27, 2012		January 28, 2012		October 29, 2011
Segment Assets:
Stores	$	3,903	$	3,315	$	4,002
Direct	734		591		639
Unallocated	3,370		3,516		3,016
Total assets	$	8,007	$	7,422	$	7,657

Net sales by region are allocated based on the location in which the sale was originated. Store sales are allocated based on the location of the store and online sales are allocated based on the location of the distribution center from which the products were shipped. Net sales by geographic location are as follows:

	13 Weeks Ended				39 Weeks Ended
($ in millions)	October 27, 2012		October 29, 2011		October 27, 2012		October 29, 2011
U.S. (1)	$	3,012	$	2,799	$	8,548	$	8,062
Canada	288		261		752		710
Total North America	3,300		3,060		9,300		8,772
Other foreign	564		525		1,626		1,494
Total net sales	$	3,864	$	3,585	$	10,926	$	10,266

_____________________________

(1) U.S. includes the United States and Puerto Rico.

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Share-Based Compensation

9 Months Ended

Oct. 27, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation

Share-Based Compensation

Share-based compensation expense recognized in the Condensed Consolidated Statements of Income, primarily in operating expenses, is as follows:

	13 Weeks Ended						39 Weeks Ended
($ in millions)	October 27, 2012			October 29, 2011			October 27, 2012			October 29, 2011
Stock units	$	28		$	11		$	71		$	35
Stock options	5			4			13			12
Employee stock purchase plan	1			1			3			3
Share-based compensation expense	34			16			87			50
Less: Income tax benefit	(13		)	(7		)	(33		)	(20		)
Share-based compensation expense, net of tax	$	21		$	9		$	54		$	30

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Derivative Financial Instruments

9 Months Ended

Oct. 27, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

We operate in foreign countries, which exposes us to market risk associated with foreign currency exchange rate fluctuations. Our risk management policy is to hedge a portion of our transactions related to merchandise purchases for foreign operations and certain intercompany transactions using foreign exchange forward contracts. The principal currencies hedged against changes in the U.S. dollar are the Euro, British pound, Japanese yen, and Canadian dollar. We do not enter into derivative financial contracts for trading purposes. Cash flows from derivative financial instruments are classified as cash flows from operating activities in the Condensed Consolidated Statements of Cash Flows.

Cash Flow Hedges

We designate the following foreign exchange forward contracts as cash flow hedges: (1) forward contracts used to hedge forecasted merchandise purchases and related costs denominated primarily in U.S. dollars made by our international subsidiaries whose functional currencies are their local currencies; (2) forward contracts used to hedge forecasted intercompany royalty payments denominated in Japanese yen and Canadian dollars received by entities whose functional currencies are U.S. dollars; and (3) forward contracts used to hedge forecasted intercompany revenue transactions related to merchandise sold from our regional purchasing entity, whose functional currency is the U.S. dollar, to certain international subsidiaries in their local currencies of Euro and British pounds. The foreign exchange forward contracts entered into to hedge forecasted merchandise purchases and related costs, intercompany royalty payments, and intercompany revenue transactions generally have terms of up to 18 months.

During the thirteen weeks ended April 30, 2011, we entered into and settled treasury rate lock agreements in anticipation of issuing the 5.95 percent fixed-rate Notes of $1.25 billion in April 2011. Prior to the issuance of the Notes, we were subject to changes in interest rates, and we therefore locked into fixed-rate coupons to hedge against the interest rate fluctuations. The gain related to the treasury rate lock agreements is reported as a component of other comprehensive income (“OCI”) and is recognized in income over the life of the Notes.

There were no material amounts recorded in the Condensed Consolidated Statements of Income for the thirteen and thirty-nine weeks endedOctober 27, 2012 or October 29, 2011 as a result of hedge ineffectiveness, hedge components excluded from the assessment of effectiveness, or the discontinuance of cash flow hedges because the forecasted transactions were no longer probable.

Net Investment Hedges

We also use foreign exchange forward contracts to hedge the net assets of international subsidiaries to offset the foreign currency translation and economic exposures related to our investment in the subsidiaries.

There were no amounts recorded in the Condensed Consolidated Statements of Income for the thirteen and thirty-nine weeks endedOctober 27, 2012 or October 29, 2011 as a result of hedge ineffectiveness, hedge components excluded from the assessment of effectiveness, or the discontinuance of net investment hedges.

Other Derivatives Not Designated as Hedging Instruments

We use foreign exchange forward contracts to hedge our market risk exposure associated with foreign currency exchange rate fluctuations for certain intercompany balances denominated in currencies other than the functional currency of the entity with the intercompany balance. The gain or loss on the derivative financial instruments, as well as the remeasurement of the underlying intercompany balances, is recorded in operating expenses in the Condensed Consolidated Statements of Income in the same period and generally offset. We generally enter into foreign exchange forward contracts as needed to hedge intercompany balances that bear foreign exchange risk.

Outstanding Notional Amounts

As of October 27, 2012, January 28, 2012, and October 29, 2011, we had foreign exchange forward contracts outstanding in the following notional amounts:

(notional amounts in millions)	October 27, 2012		January 28, 2012		October 29, 2011
U.S. dollars (1)	$	1,091	$	873	$	1,042
British pounds	£	9	£	31	£	41
Japanese yen	¥	945	¥	2,564	¥	6,238
Euro	€	26	€	16	€	—

____________________________ 

(1) The principal currencies hedged against changes in the U.S. dollar were the Euro, British pound, Japanese yen, and Canadian dollar.

Contingent Features

We had no derivative financial instruments with credit-risk-related contingent features underlying the agreements as of October 27, 2012, January 28, 2012, or October 29, 2011.

Quantitative Disclosures about Derivative Financial Instruments

The fair values of foreign exchange forward contracts are as follows:

($ in millions)	October 27, 2012		January 28, 2012		October 29, 2011
Derivatives designated as cash flow hedges:
Other current assets	$	9	$	9	$	3
Other long-term assets	$	1	$	1	$	1
Accrued expenses and other current liabilities	$	8	$	10	$	24
Lease incentives and other long-term liabilities	$	3	$	—	$	4
Derivatives designated as net investment hedges:
Other current assets	$	—	$	—	$	1
Other long-term assets	$	—	$	—	$	—
Accrued expenses and other current liabilities	$	—	$	—	$	2
Lease incentives and other long-term liabilities	$	—	$	—	$	—
Derivatives not designated as hedging     instruments:
Other current assets	$	2	$	3	$	2
Other long-term assets	$	—	$	—	$	—
Accrued expenses and other current liabilities	$	3	$	4	$	7
Lease incentives and other long-term liabilities	$	—	$	—	$	—
Total derivatives in an asset position	$	12	$	13	$	7
Total derivatives in a liability position	$	14	$	14	$	37

Substantially all of the unrealized gains and losses from designated cash flow hedges as of October 27, 2012 will be recognized in income within the next 12 months at the then-current values, which may differ from the fair values as of October 27, 2012 shown above.

See Note 5 of Notes to Condensed Consolidated Financial Statements for disclosures on the fair value measurements of our derivative financial instruments.

The effective portion of gains and losses on foreign exchange forward contracts in cash flow hedging and net investment hedging relationships recorded in OCI and the Condensed Consolidated Statements of Income, on a pre-tax basis, are as follows:

	13 Weeks Ended						39 Weeks Ended
($ in millions)	October 27, 2012			October 29, 2011			October 27, 2012		October 29, 2011
Derivatives in cash flow hedging relationships:
Gain (loss) recognized in other comprehensive income	$	(5	)	$	16		$	3	$	(38	)
Gain (loss) reclassified into cost of goods sold and      occupancy expenses	$	2		$	(16	)	$	3	$	(37	)
Gain (loss) reclassified into operating expenses	$	—		$	(1	)	$	—	$	(4	)
Derivatives in net investment hedging relationships:
Gain (loss) recognized in other comprehensive income	$	(1	)	$	(1	)	$	2	$	(3	)

For the thirteen and thirty-nine weeks endedOctober 27, 2012 and October 29, 2011, there were no amounts of gain or loss reclassified from OCI into income for derivative financial instruments in net investment hedging relationships, as we did not sell or liquidate (or substantially liquidate) any of our hedged subsidiaries during the periods.

During the thirty-nine weeks endedOctober 29, 2011, there was a gain of $1 million recognized in OCI related to treasury rate lock agreements, which is recognized in income over the life of the 5.95 percent Notes.

Gains and losses on foreign exchange forward contracts not designated as hedging instruments recorded in the Condensed Consolidated Statements of Income, on a pre-tax basis are as follows:

	13 Weeks Ended					39 Weeks Ended
($ in millions)	October 27, 2012			October 29, 2011		October 27, 2012		October 29, 2011
Gain (loss) recognized in operating expenses	$	(3	)	$	6	$	1	$	4

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Share Repurchases

9 Months Ended

Oct. 27, 2012

Disclosure Share Repurchase Activity [Abstract]

Share Repurchases

Share Repurchases

Share repurchase activity is as follows:

	13 Weeks Ended				39 Weeks Ended
($ and shares in millions except average per share cost)	October 27, 2012		October 29, 2011		October 27, 2012		October 29, 2011
Number of shares repurchased	2.7		39.2		16.5		106.5
Total cost	$	96	$	645	$	463	$	2,013
Average per share cost including commissions	$	35.73	$	16.46	$	28.01	$	18.90

Between August 2010 and November 2011, we announced that the Board of Directors authorized a total of $3.25 billion for share repurchases, of which $443 million under the November 2011 authorization was remaining as of January 28, 2012. In February 2012, we announced that the Board of Directors approved a new $1 billion share repurchase authorization that replaced the November 2011 authorization and cancelled the remaining $441 million under the November 2011 authorization as of February 23, 2012. As of October 27, 2012, there was $539 million remaining under the February 2012 authorization.

All of the share repurchases were paid for as of October 27, 2012 and October 29, 2011. All except $4 million of total share repurchases were paid for as of January 28, 2012.

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Income Taxes

9 Months Ended

Oct. 27, 2012

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

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, China, Hong Kong, Japan, the United Kingdom, and India. We are no longer subject to U.S. federal income tax examinations for fiscal years before 2009, 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.

As of October 27, 2012, we do not anticipate any significant changes in total gross unrecognized tax benefits within the next 12 months.

Except where required by U.S. tax law, no provision has been made for U.S. income taxes on the undistributed earnings of our foreign subsidiaries when we intend to utilize those earnings in foreign operations for an indefinite period of time.

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Fair Value Measurements - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) (USD $) In Millions, unless otherwise specified	Oct. 27, 2012	Jan. 28, 2012	Oct. 29, 2011
Assets:
Cash equivalents	$ 840	$ 1,009	$ 610
Short-term investments	50	0	25
Derivative financial instruments	12	13	7
Deferred compensation plan assets	27	22	23
Total	929	1,044	665
Liabilities:
Derivative financial instruments	14	14	37
Fair Value, Inputs, Level 1 [Member]
Assets:
Cash equivalents	184	224	133
Short-term investments	0	0	0
Derivative financial instruments	0	0	0
Deferred compensation plan assets	27	22	23
Total	211	246	156
Liabilities:
Derivative financial instruments	0	0	0
Fair Value, Inputs, Level 2 [Member]
Assets:
Cash equivalents	656	785	477
Short-term investments	50	0	25
Derivative financial instruments	12	13	7
Deferred compensation plan assets	0	0	0
Total	718	798	509
Liabilities:
Derivative financial instruments	14	14	37
Fair Value, Inputs, Level 3 [Member]
Assets:
Cash equivalents	0	0	0
Short-term investments	0	0	0
Derivative financial instruments	0	0	0
Deferred compensation plan assets	0	0	0
Total	0	0	0
Liabilities:
Derivative financial instruments	$ 0	$ 0	$ 0

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Debt and Credit Facilities (Tables)

9 Months Ended

Oct. 27, 2012

Debt Disclosure [Abstract]

Long-Term Debt

Long-term debt consists of the following:

($ in millions)	October 27, 2012		January 28, 2012			October 29, 2011
Notes	$	1,246	$	1,246		$	1,246
Term loan	—		400			400
Total long-term debt	1,246		1,646			1,646
Less: Current portion	—		(40		)	(40		)
Total long-term debt, less current portion	$	1,246	$	1,606		$	1,606

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Earnings Per Share (Tables)

9 Months Ended

Oct. 27, 2012

Earnings Per Share [Abstract]

Weighted-Average Number of Shares

Weighted-average number of shares used for earnings per share is as follows:

	13 Weeks Ended		39 Weeks Ended
(shares in millions)	October 27, 2012	October 29, 2011	October 27, 2012	October 29, 2011
Weighted-average number of shares - basic	481	503	485	542
Common stock equivalents	7	2	6	5
Weighted-average number of shares - diluted	488	505	491	547

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Segment Information - Selected Financial Information By Reportable Segment and Reconcilliations Of Segment Assets (Detail) (USD $) In Millions, unless otherwise specified	Oct. 27, 2012	Jan. 28, 2012	Oct. 29, 2011
Segment Reporting Information [Line Items]
Total assets	$ 8,007	$ 7,422	$ 7,657
Stores Reportable Segment
Segment Reporting Information [Line Items]
Total assets	3,903	3,315	4,002
Direct Reportable Segment
Segment Reporting Information [Line Items]
Total assets	734	591	639
Unallocated Amount to Segment
Segment Reporting Information [Line Items]
Total assets	$ 3,370	$ 3,516	$ 3,016

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Share-Based Compensation Expense (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 27, 2012	Oct. 29, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 34	$ 16	$ 87	$ 50
Less: Income tax benefit	(13)	(7)	(33)	(20)
Share-based compensation expense, net of tax	21	9	54	30
Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options	28	11	71	35
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options	5	4	13	12
Employee stock purchase plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options	$ 1	$ 1	$ 3	$ 3

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 27, 2012	Oct. 29, 2011
Net income	$ 308	$ 193	$ 784	$ 615
Other comprehensive income (loss), net of tax:
Foreign currency translation	(1)	(8)	(10)	39
Change in fair value of derivative financial instruments, net of tax (tax benefit) of $(2), $6, $1, and $(15)	(3)	10	2	(22)
Reclassification adjustment for realized (gains) losses on derivative financial instruments, net of tax benefit (tax) of $(1), $7, $(1), and $17	(1)	10	(2)	24
Other comprehensive income (loss), net of tax	(5)	12	(10)	41
Comprehensive income	$ 303	$ 205	$ 774	$ 656

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Goodwill and Intangible Assets

9 Months Ended

Oct. 27, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill and Intangible Assets

Goodwill and intangible assets consist of the following and are included in other long-term assets in the Condensed Consolidated Balance Sheets:

($ in millions)	October 27, 2012			January 28, 2012			October 29, 2011
Goodwill	$	99		$	99		$	99
Trade name	$	54		$	54		$	54
Other indefinite-lived intangible assets	$	6		$	—		$	—
Intangible assets subject to amortization	$	15		$	15		$	15
Less: Accumulated amortization	(15		)	(14		)	(14		)
Intangible assets subject to amortization, net	$	—		$	1		$	1

During the thirteen and thirty-nine weeks endedOctober 27, 2012 and October 29, 2011, there were no changes in the carrying amount of goodwill, which is allocated to the Direct reportable segment. The intangible assets subject to amortization were fully amortized in the thirteen weeks ended April 28, 2012 and as such, there was no amortization expense for intangible assets subject to amortization in the thirteen weeks ended October 27, 2012. There was no material amortization expense for intangible assets subject to amortization for the thirteen weeks ended October 29, 2011. Amortization expense for intangible assets subject to amortization was $1 million and $2 million for the thirty-nine weeks endedOctober 27, 2012 and October 29, 2011, respectively. Amortization expense for intangible assets subject to amortization is recorded in operating expenses in the Condensed Consolidated Statements of Income.

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Segment Information (Tables)

9 Months Ended

Oct. 27, 2012

Segment Reporting [Abstract]

Net Sales by Brand, Region, and Reportable Segment

Net sales by brand, region, and reportable segment are as follows:

($ in millions)	Gap			Old Navy			Banana Republic			Franchise (3)			Piperlime and Athleta			Total (4)			Percentage of Net Sales
13 Weeks Ended October 27, 2012
U.S. (1)	$	838		$	1,194		$	515		$	—		$	—		$	2,547		66	%
Canada	93			107			55			—			—			255			7
Europe	165			—			15			15			—			195			5
Asia	245			3			35			23			—			306			8
Other regions	—			—			—			52			—			52			1
Total Stores reportable segment	1,341			1,304			620			90			—			3,355			87
Direct reportable segment (2)	146			210			64			—			89			509			13
Total	$	1,487		$	1,514		$	684		$	90		$	89		$	3,864		100	%
Sales growth	5		%	9		%	8		%	11		%	31		%	8		%
($ in millions)	Gap			Old Navy			Banana Republic			Franchise (3)			Piperlime and Athleta			Total (4)			Percentage of Net Sales
13 Weeks Ended October 29, 2011
U.S. (1)	$	819		$	1,105		$	495		$	—		$	—		$	2,419		67	%
Canada	89			100			48			—			—			237			7
Europe	171			—			13			22			—			206			6
Asia	219			—			31			21			—			271			7
Other regions	—			—			—			38			—			38			1
Total Stores reportable segment	1,298			1,205			587			81			—			3,171			88
Direct reportable segment (2)	121			178			47			—			68			414			12
Total	$	1,419		$	1,383		$	634		$	81		$	68		$	3,585		100	%
Sales growth (decline)	(3		)%	(5		)%	2		%	47		%	21		%	(2		)%
($ in millions)	Gap			Old Navy			Banana Republic			Franchise (3)			Piperlime and Athleta			Total (4)			Percentage of Net Sales
39 Weeks Ended October 27, 2012
U.S. (1)	$	2,351		$	3,486		$	1,516		$	—		$	—		$	7,353		68	%
Canada	244			285			147			—			—			676			6
Europe	474			—			47			48			—			569			5
Asia	716			5			104			63			—			888			8
Other regions	—			—			—			137			—			137			1
Total Stores reportable segment	3,785			3,776			1,814			248			—			9,623			88
Direct reportable segment (2)	352			511			162			—			278			1,303			12
Total	$	4,137		$	4,287		$	1,976		$	248		$	278		$	10,926		100	%
Sales growth	4		%	6		%	8		%	21		%	31		%	6		%
($ in millions)	Gap			Old Navy			Banana Republic			Franchise (3)			Piperlime and Athleta			Total (4)			Percentage of Net Sales
39 Weeks Ended October 29, 2011
U.S. (1)	$	2,296		$	3,335		$	1,444		$	—		$	—		$	7,075		69	%
Canada	235			283			134			—			—			652			6
Europe	501			—			37			53			—			591			6
Asia	635			—			90			56			—			781			8
Other regions	—			—			—			96			—			96			1
Total Stores reportable segment	3,667			3,618			1,705			205			—			9,195			90
Direct reportable segment (2)	294			440			125			—			212			1,071			10
Total	$	3,961		$	4,058		$	1,830		$	205		$	212		$	10,266		100	%
Sales growth (decline)	(1		)%	(3		)%	1		%	47		%	20		%	—		%

_____________________________

(1) U.S. includes the United States and Puerto Rico.

(2) Online sales shipped from distribution centers located outside the U.S. were $44 million ($33 million for Canada and $11 million for Europe) and $34 million ($24 million for Canada and $10 million for Europe) for the thirteen weeks endedOctober 27, 2012 and October 29, 2011, respectively. Online sales shipped from distribution centers located outside the U.S. were $108 million ($76 million for Canada and $32 million for Europe) and $84 million ($58 million for Canada and $26 million for Europe) for the thirty-nine weeks endedOctober 27, 2012 and October 29, 2011, respectively.

(3) Franchise sales were $90 million ($78 million for Gap and $12 million for Banana Republic) and $81 million ($71 million for Gap and $10 million for Banana Republic) for the thirteen weeks endedOctober 27, 2012 and October 29, 2011, respectively. Franchise sales were $248 million ($217 million for Gap and $31 million for Banana Republic) and $205 million ($179 million for Gap and $26 million for Banana Republic) for the thirty-nine weeks endedOctober 27, 2012 and October 29, 2011, respectively.

(4) Net sales outside of the U.S. and Canada (including Direct and franchise) were $564 million and $525 million for the thirteen weeks endedOctober 27, 2012 and October 29, 2011, respectively. Net sales outside of the U.S. and Canada (including Direct and franchise) were $1.6 billion and $1.5 billion for the thirty-nine weeks endedOctober 27, 2012 and October 29, 2011, respectively.

Financial Information by Reportable Segment and Reconciliations of Operating Income

Selected financial information by reportable segment and reconciliations to our consolidated totals are as follows:

	13 Weeks Ended				39 Weeks Ended
($ in millions)	October 27, 2012		October 29, 2011		October 27, 2012		October 29, 2011
Operating income:
Stores	$	403	$	255	$	1,043	$	836
Direct	117		91		297		230
Operating income	$	520	$	346	$	1,340	$	1,066

Financial Information by Reportable Segment and Reconciliations of Segment Assets

($ in millions)	October 27, 2012		January 28, 2012		October 29, 2011
Segment Assets:
Stores	$	3,903	$	3,315	$	4,002
Direct	734		591		639
Unallocated	3,370		3,516		3,016
Total assets	$	8,007	$	7,422	$	7,657

Net Sales by Geographic Location

Net sales by geographic location are as follows:

	13 Weeks Ended				39 Weeks Ended
($ in millions)	October 27, 2012		October 29, 2011		October 27, 2012		October 29, 2011
U.S. (1)	$	3,012	$	2,799	$	8,548	$	8,062
Canada	288		261		752		710
Total North America	3,300		3,060		9,300		8,772
Other foreign	564		525		1,626		1,494
Total net sales	$	3,864	$	3,585	$	10,926	$	10,266

_____________________________

(1) U.S. includes the United States and Puerto Rico.

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Derivative Financial Instruments - Effects Of Derivative Financial Instruments On OCI And Condensed Consolidated Statements Of Income (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Oct. 27, 2012	Oct. 29, 2011	Oct. 27, 2012	Oct. 29, 2011
Derivatives in net investment hedging relationships
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) reclassified from accumulated OCI into income, effective portion, net	$ 0	$ 0	$ 0	$ 0
Interest Rate Lock Commitments [Member] | Derivatives in cash flow hedging relationships
Derivative Instruments, Gain (Loss) [Line Items]
Derivative instruments, gain (loss) recognized in OCI, effective portion, net	1
Foreign exchange forward contracts | Derivatives in cash flow hedging relationships
Derivative Instruments, Gain (Loss) [Line Items]
Derivative instruments, gain (loss) recognized in OCI, effective portion, net	(5)	16	3	(38)
Foreign exchange forward contracts | Derivatives in net investment hedging relationships
Derivative Instruments, Gain (Loss) [Line Items]
Derivative instruments, gain (loss) recognized in OCI, effective portion, net	(1)	(1)	2	(3)
Foreign exchange forward contracts | Cost of Goods Sold and Occupancy Expense | Derivatives in cash flow hedging relationships
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) reclassified from accumulated OCI into income, effective portion, net	2	(16)	3	(37)
Foreign exchange forward contracts | Operating expenses | Derivatives not designated as hedging instruments
Derivative Instruments, Gain (Loss) [Line Items]
Amounts of gain (loss) recognized in income on derivatives	(3)	6	1	4
Foreign exchange forward contracts | Operating expenses | Derivatives in cash flow hedging relationships
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) reclassified from accumulated OCI into income, effective portion, net	$ 0	$ (1)	$ 0	$ (4)

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Goodwill and Intangible Assets (Tables)

9 Months Ended

Oct. 27, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill and intangible assets consist of the following and are included in other long-term assets in the Condensed Consolidated Balance Sheets:

($ in millions)	October 27, 2012			January 28, 2012			October 29, 2011
Goodwill	$	99		$	99		$	99
Trade name	$	54		$	54		$	54
Other indefinite-lived intangible assets	$	6		$	—		$	—
Intangible assets subject to amortization	$	15		$	15		$	15
Less: Accumulated amortization	(15		)	(14		)	(14		)
Intangible assets subject to amortization, net	$	—		$	1		$	1