401KEXHIBIT991




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits as of December 31, 2012 and 2011	2
Statement of Changes in Net Assets Available for Benefits for the year ended December 31, 2012	3
Notes to Financial Statements	4-8
SUPPLEMENTAL SCHEDULES:
Form 5500, Schedule H, Part IV, Line 4: - Schedule of Assets (Held at End of Year) as of December 31, 2012	9-10
All other supplemental schedules not listed above have been omitted because of the absence of conditions under which they are required by Section 2520.103-10 of the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974.

We have audited the accompanying statements of net assets available for benefits of the GapShare 401(k) Plan (the "Plan") as of December 31, 2012 and 2011, and the related statement of changes in net assets available for benefits for the year ended December 31, 2012. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2012 and 2011, and the changes in net assets available for benefits for the year ended December 31, 2012 in conformity with accounting principles generally accepted in the United States of America.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) as of December 31, 2012 is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This schedule is the responsibility of the Plan's management. Such schedule has been subjected to the auditing procedures applied in our audit of the basic 2012 financial statements and, in our opinion, is fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole.



	2012		2011
Participant-Directed Investments, at fair value:
Mutual funds	$	783,239,384	$	641,188,948
Collective trust fund		47,236,280		46,855,321
The Gap, Inc. common stock fund		82,232,150		54,263,138
Total investments at fair value		912,707,814		742,307,407
Receivables:
Participant contributions		2,012,254		493,563
Employer contributions		1,070,554		400,147
Participant notes receivable		32,881,523		30,823,695
Total receivables		35,964,331		31,717,405
NET ASSETS REFLECTING ALL INVESTMENTS AT FAIR VALUE		948,672,145		774,024,812
Adjustment from fair value to contract value for fully benefit-responsive investment contracts		(1,946,987)		(1,634,063)
NET ASSETS AVAILABLE FOR BENEFITS	$	946,725,158	$	772,390,749




	2012
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Net appreciation in fair value of mutual funds	$	87,881,471
Net appreciation in fair value of The Gap, Inc. common stock fund		35,309,322
Dividends		21,364,464
Net investment income		144,555,257

Contributions:
Employer		37,452,634
Participants		60,935,469
Rollovers		5,111,685
Other		357,314
Total contributions		103,857,102
Interest income on participant notes receivable		1,396,435
Total additions		249,808,794

DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid to participants		75,224,163
Administrative expenses and other		250,222
Total deductions		75,474,385
INCREASE IN NET ASSETS		174,334,409
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year		772,390,749
End of year	$	946,725,158

General – The GapShare 401(k) Plan (the “Plan”) is a defined contribution plan which was established to provide a source of retirement savings to participants and to enable participants to defer a portion of their eligible compensation. The following brief description of the Plan is provided for general information purposes only. Participants should refer to the Summary Plan Description and official Plan documents for more complete information. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”).

The Plan is intended to qualify as a profit sharing plan under Section 401(a) of the Internal Revenue Code of 1986, as amended (the “Code”), with a qualified cash or deferred arrangement under Section 401(k) of the Code. Full time and part time employees of The Gap, Inc. (the “Company” or “Plan Sponsor”) and its subsidiaries who have attained the age of 21 are eligible to participate in the Plan upon being credited with at least 1,000 hours of service to the Company during the 12-consecutive month period beginning on the employee’s date of hire by the Company or during any calendar year beginning after the employee’s date of hire.

Contributions – The minimum level of participant contributions is 1% of base salary. Total pre-tax and Roth contributions may not exceed a maximum of 30% of total eligible compensation. Total after-tax contributions may not exceed a maximum of 21% of total eligible compensation. Total pre-tax, Roth and after-tax contributions cannot exceed 51% of total eligible compensation. The maximum allowable pre-tax and Roth 401(k) contributions qualifying for deferral for individual income tax purposes was $17,000 and $16,500 for the years ended December 31, 2012 and 2011. The maximum compensation allowable for Plan allocation purposes was $250,000 and $245,000 for the years ended December 31, 2012 and 2011.

Company contributions are made according to a matching formula established prior to the beginning of each Plan year. For 2012, the formula provided for a 100% matching contribution up to 4% of base pay per pay period of participant contributions on a pre-tax or after-tax basis. A participant’s aggregate annual contribution, which includes participant and Company contributions, could not exceed $50,000 and $49,000 for the years ended December 31, 2012 and 2011. Participants may also contribute amounts representing distributions from other qualified defined contribution plans.

The Plan Sponsor’s common stock may provide the greatest potential for either loss or gain since it relates to the common stock of a single company. When directed by the participant, the Trustee buys shares of the Plan Sponsor’s common stock through the Gap Inc. common stock fund in the open market. Shares are also purchased from Plan participants who transfer their accounts out of this investment option or who take distributions or withdrawals from this investment option in the form of cash. At December 31, 2012 and 2011, the Plan held 3,914,195 shares (market value of $21 per share) and 4,307,385 shares (market value of $12.60 per share), respectively, of the Plan Sponsor’s common stock fund.

Participant Loans – For a fee of $50, participants may apply to receive a loan of up to the lesser of 50% of their vested amounts or $50,000, minus the highest balance of any other loan outstanding in the preceding 12 months. The minimum amount participants may borrow is $1,000. Loans are repaid through payroll deductions for up to a period of five years, unless a loan is for the purchase or construction of a principal residence, in which case terms range from one to fifteen years. If an unpaid loan balance exists at the time a participant leaves the Company and withdraws from the Plan, it must be repaid by the participant or deducted from the participant’s total distribution. The fixed interest rate charged is 1% over the prime rate (as published in The Wall Street Journal) on the last business day of the month preceding the month in which the loan is requested. As of December 31, 2012, there were 12,733 such loans, with interest rates ranging from 4.25% to 10.5%, maturing from 2013 to 2027. As of December 31, 2011, there were 12,781 such loans, with interest rates ranging from 4.25% to 10.5%, maturing from 2012 to 2026.

Automatic Enrollment – The Plan provides for automatic enrollment. Upon completion of the eligibility requirements, individuals are notified of their eligibility and have the opportunity to enroll in the Plan and to make contribution and investment elections. Effective July 2, 2012, if an individual becomes eligible to participate in the Plan before the second anniversary of the individual’s hire date and does not enroll, the individual will be automatically enrolled in the Plan by Gap Inc. on the second anniversary of the individual’s hire date. If the individual becomes eligible to participate in the Plan after the second anniversary of the individual’s hire date and does not enroll, the individual will be automatically enrolled in the Plan by Gap Inc. on the next anniversary of the individual’s hire date. The default percentage for automatic enrollment will be 1% of eligible pay. The contributions for those participants who are automatically enrolled in the Plan will be allocated 100% to an age-based T. Rowe Price Retirement Fund (based on the year the participant turns age 65) unless the participant chooses otherwise. Participants can elect to change or stop contributions to the Plan at any time following enrollment.

Use of Estimates – The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of net assets available for benefits and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of additions to and deductions from net assets available for benefits during the reporting period. Actual results could differ from those estimates.

Risks and Uncertainties – The Plan utilizes various investment instruments including mutual funds, the Company’s common stock fund, and investment contracts. These investments, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term, and such changes could materially affect the amounts reported in the financial statements.

The T. Rowe Price Stable Value Common Trust Fund is a stable value fund comprised of guaranteed investment contracts, synthetic investment contracts, and money market funds. Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value. Contract value represents contributions made to the fund, plus earnings, less participant withdrawals and administrative expenses.

Purchases and sales of mutual funds and collective funds are recorded on a trade-date basis (which is not materially different from a settlement-date basis). Purchases and sales of The Gap, Inc. common stock fund are recorded on a trade-date basis. Interest income is recorded on an accrual basis. Dividends are recorded on the ex-dividend date. Net appreciation and depreciation includes the plan’s gains and losses on investments bought and sold as well as held during the year.

Recent Accounting Pronouncements – The Financial Accounting Standards Board (“FASB”) issued ASU No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS, which amends ASC 820, as of the beginning of the year ended December 31, 2012. ASU 2011-04 is effective for financial statements issued for fiscal years beginning after December 15, 2011 and expands certain disclosures about fair value measurement. The ASU requires the categorization by level for items that are only required to be disclosed at fair value and information about transfers between Level 1 and Level 2. It provides guidance on measuring the fair value of financial instruments managed within a portfolio and the application of premiums and discounts on fair value measurements. The ASU requires additional disclosure for Level 3 measurements regarding the sensitivity of fair value to changes in unobservable inputs and any interrelationships between those inputs. The effect of the adoption of ASU 2011-04 had no impact on the Plan’s statement of net assets available for benefits and statement of changes in net assets available for benefits.

The Plan classifies its investments into Level 1, which refers to securities valued using quoted prices from active markets for identical assets; Level 2, which refers to securities not traded on an active market but for which observable market inputs are readily available; and Level 3, which refers to securities valued based on significant unobservable inputs. Investments are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at December 31, 2012 and 2011.

Mutual Funds – Valued at the quoted market price which represents the net asset value (“NAV”) of shares held by the Plan at year end. Mutual funds held by the Plan are open-ended mutual funds that are registered with the Securities and Exchange Commission. These funds are required to publish the daily net asset value and to transact at that price. The mutual funds held by the Plan are deemed to be actively traded.

Collective Trust Fund – The Collective trust fund includes the T. Rowe Price Stable Value Common Trust Fund. The net asset value as provided by the trustee is used as a practical expedient to estimate fair value. The net asset value is based on the fair value of the underlying investments held by the fund less its liabilities and then adjusted by the issuer to contract value. This practical expedient is not used when it is determined to be probable that the fund will sell the investment for an amount different than the reported net asset value. Participant transactions (purchased and sales) may occur daily. Were the Plan to initiate a full redemption of the collective trust, the investment advisor reserves the right to temporarily delay withdrawal from the trust in order to ensure that securities liquidations will be carried out in an orderly business manner.



			Fair Value at Reporting Date Using
		December 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Other Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Mutual Funds:
Balanced funds	$	647,548,241	$	647,548,241	$		$
Equity funds		87,112,861		87,112,861
Fixed income funds		26,378,186		26,378,186
International equity funds		22,200,096		22,200,096

Total Mutual Funds		783,239,384		783,239,384

The Gap, Inc. common stock fund		82,232,150		82,232,150

Collective trust fund		47,236,280				47,236,280
Total	$	912,707,814	$	865,471,534	$	47,236,280	$



			Fair Value at Reporting Date Using
		December 31, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Other Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Mutual Funds: Balanced funds	$	532,415,685	$	532,415,685	$		$
Equity funds		71,081,462		71,081,462
Fixed income funds		20,068,421		20,068,421
International equity funds		17,623,380		17,623,380

Total Mutual Funds		641,188,948		641,188,948

The Gap, Inc. common stock fund		54,263,138		54,263,138

Collective trust fund		46,855,321				46,855,321
Total	$	742,307,407	$	695,452,086	$	46,855,321	$	-

Transfers Between Levels - Participant and Company contributions are allocated to the funds as elected by the participant. In addition, participants may transfer accumulated account balances between funds at any time and these transfers may generate exchanges between Level 1 and Level 2 investments. The Plan’s policy is to recognize transfers between levels at the end of the reporting period. No significant transfers between Level 1, Level 2, and Level 3 investments were made during 2012 and 2011. There were no purchases, sales, issuances, or settlements related to recurring Level 3 measurements during 2012 and 2011.



	2012		2011

T. Rowe Price Retirement 2035 Fund, 10,263,905 and 9,855,112 shares, respectively	$	137,331,045	$	114,910,611
T. Rowe Price Retirement 2030 Fund, 6,046,745 and 5,847,602 shares, respectively		114,404,423		96,719,331
T. Rowe Price Retirement 2040 Fund, 5,880,298 and 5,448,694 shares, respectively		112,254,882		90,284,852
T. Rowe Price Retirement 2045 Fund, 6,693,474 and 6,029,611 shares, respectively		85,074,057		66,506,605
The Gap, Inc. Common Stock Fund, 3,914,195 and 4,307,385 shares, respectively		82,232,150		54,263,138
T. Rowe Price Retirement 2025 Fund, 5,947,592 and 5,690,927 shares, respectively		78,032,413		65,900,934
T. Rowe Price Stable Value Common Trust Fund, 45,221,259 shares (a)		-		46,855,321

T. Rowe Price Trust Company operates a collective trust fund referred to as the Stable Value Common Trust Fund (the “Fund”). The beneficial interest of each investor is represented by units which are issued and redeemed daily at the Fund’s constant NAV of $1 per unit. Distribution to the Fund’s unit holders is declared daily from the net investment income and automatically reinvested in the Fund on a monthly basis, when paid. It is the Fund’s policy to use its best efforts to maintain a stable NAV of $1 per unit although there is no guarantee that the Fund will be able to maintain this value.

Participants ordinarily may direct the withdrawal or transfer of all or a portion of their investment at contract value. Contract value represents contributions made to the Fund, plus earnings, less participant withdrawals and administrative expenses. The Fund imposes certain restrictions on the Plan, and the Fund itself may be subject to circumstances that impact its ability to transact at contract value, as described in the following paragraphs. Plan management believes that the occurrence of events that would cause the Fund to transact at less than contract value is not probable.

Restrictions on the Plan - Trust units are issued and redeemed only on a valuation date and at the net asset value per unit computed on that date. Trust units may be redeemed on a daily basis to meet benefit payments and other participant-initiated withdrawals permitted by the Plan. Under the terms of the Fund’s Declaration of Trust, Fund investees are required to provide either 12- or 30- month advance written notice to T. Rowe Price (“the trustee”) prior to redemption of trust units; the notice period may be shortened or waived by the trustee in its sole discretion.

Circumstances that Affect the Fund – The Fund invests in guaranteed investment contracts, synthetic investment contracts and money market funds. In addition, the Fund enters into “wrapper” contracts issued by third parties. A wrap contract is an agreement by another party, such as a bank or insurance company to make payments to the Fund under certain circumstances. Wrap contracts are designed to allow a stable value portfolio to maintain a constant NAV and protect the portfolio in extreme circumstances.

The existence of certain conditions can limit the Fund’s ability to transact at contract value with the issuers of its investment contracts. Specifically, any event outside the normal operation of the Fund that causes a withdrawal from an investment contract may result in a negative market value adjustment with respect to such withdrawal. Examples of such events include, but are not limited to, partial or complete legal termination of the Fund or a unitholder, tax disqualification of the Fund or a unitholder, and certain Fund amendments if issuers’ consent is not obtained. In the event that wrap contracts fail to perform as intended, the Fund’s NAV may decline if the market value of the underlying assets decline. The Fund’s ability to receive amounts due pursuant to these wrap contracts is dependent on the third-party issuer’s ability to meet their financial obligations. The wrap issuer’s ability to meet its contractual obligations under the wrap contracts may be affected by future economic and regulatory developments.

The Plan is intended to qualify as a profit sharing plan under Section 401(a) of the Code, with a qualified cash or deferred arrangement under Section 401(k) of the Code. The Plan has obtained a favorable tax determination letter from the Internal Revenue Service (“IRS”) dated May 14, 2008 (reflecting amendments made to the Plan through December 28, 2006), stating that the Plan is qualified under Section 401(a) of the Code, and, accordingly, the Plan’s net investment income is exempt from income taxes.



		As of December 31,
		2012			2011

Net assets available for benefits per financial statements		$	946,725,158	$	772,390,749
Add: Adjustment from fair value to contract value for fully benefit-responsive investment contracts			1,946,987		1,634,063
Less: Deemed distributed loans			(1,394,156)		(1,389,011)

Net assets available for benefits per Form 5500		$	947,277,989	$	772,635,801



Participant notes receivable per financial statements		$	32,881,523	$	30,823,695
Less: Deemed distributed loans			(1,394,156)		(1,389,011)
Participant loans per Form 5500		$	31,487,367	$	29,434,684


	Year Ended December 31,
			2012		2011

Total deductions per financial statements		$	75,474,385	$	68,892,004
Add: Deemed distributions			5,145		7,437
Total deductions per Form 5500		$	75,479,530	$	68,899,441

Effective July 1, 2013, if a participant contributes between 1-9% on a pre-tax basis, Gap Inc. will automatically increase the deferral percentage by 1% of eligible pay each year on the anniversary of the participant’s hire date. The percentage increase will continue until the participant reaches a deferral percentage of 10%. Participants can change or stop their deferral election at any time, and can opt-out of the automatic increase provisions of the Plan.




Identity of Issuer or Borrower	Description of Investment	Fair Value **
Mutual funds:
T. Rowe Price Retirement 2035 Fund	Mutual Fund 10,263,905 shares	$	137,331,045
T. Rowe Price Retirement 2030 Fund	Mutual Fund 6,046,745 shares		114,404,423
T. Rowe Price Retirement 2040 Fund	Mutual Fund 5,880,298 shares		112,254,882
T. Rowe Price Retirement 2045 Fund	Mutual Fund 6,693,474 shares		85,074,057
T. Rowe Price Retirement 2025 Fund	Mutual Fund 5,947,592 shares		78,032,413
T. Rowe Price Retirement 2020 Fund	Mutual Fund 2,520,614 shares		45,068,586
T. Rowe Price Retirement 2050 Fund	Mutual Fund 3,468,297 shares		36,972,042
PIMCO Total Return Fund	Mutual Fund 2,293,036 shares		25,773,719
American Europacific Growth Fund	Mutual Fund 548,421 shares		22,200,096
T. Rowe Price Retirement 2015 Fund	Mutual Fund 1,654,271 shares		21,307,014
Neuberger Berman Genesis Trust	Mutual Fund 416,860 shares		21,126,469
T. Rowe Price New Horizons Fund	Mutual Fund 552,121 shares		18,313,869
Vanguard Institutional Index Fund	Mutual Fund 127,456 shares		16,635,502
Harbor Capital Appreciation Fund	Mutual Fund 312,488 shares		13,111,976
T. Rowe Price Retirement 2010 Fund	Mutual Fund 476,495 shares		7,847,875
T. Rowe Price Retirement 2055 Fund	Mutual Fund 664,369 shares		7,002,451
Small-Cap Value Fund	Mutual Fund 174,989 shares		6,854,301
Vanguard Value Index Inst Fund	Mutual Fund 252,225 shares		5,783,523
NB Socially Responsive Trust	Mutual Fund 177,176 shares		3,270,675
T. Rowe Price Retirement 2005 Fund	Mutual Fund 185,622 shares		2,253,453
T. Rowe Price Retirement Income Fund	Mutual Fund 144,555 shares		2,016,547
Vanguard TTL Bond Index Signal	Mutual Fund 54,506 shares		604,466

Total mutual funds			783,239,384



	Year Ended December 31,

			2012		2011

Total additions per financial statements		$	249,808,794	$	74,117,352
Add: net investment gain (loss) from common/collective trusts			312,924		17,010
Total additions per Form 5500		$	250,121,718	$	74,134,362




Identity of Issuer or Borrower	Description of Investment	Fair Value**
Collective trust funds:
T. Rowe Price Stable Value Common Trust Fund*	Collective trust 45,289,293 shares		47,236,280



The Gap, Inc. Common Stock Fund*	Common Stock 3,914,195 shares		82,232,150
TOTAL		$	912,707,814


(a)	The contract value of T. Rowe Price Stable Value Common Trust Fund is $45,221,259 as of December 31, 2011, for which the adjustment from fair value to contract value was calculated based on the Plan’s proportionate share of ownership in the collective trust funds.



*	Represents party-in-interest transaction.
**	Cost information is not required for participant-directed investments, and therefore, is not included.