XML 38 R24.htm IDEA: XBRL DOCUMENT v3.19.1
Commitments and Contingencies
12 Months Ended
Feb. 02, 2019
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
Commitments and Contingencies
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 these 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 Consolidated Financial Statements taken as a whole.
As a multinational company, we are subject to various 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 February 2, 2019, 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 February 2, 2019 and February 3, 2018, 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 February 2, 2019 and February 3, 2018 was not material for any individual Action or in total. Subsequent to February 2, 2019 and through the filing date of March 19, 2019, no information has become available that indicates a change is required that would be material to our Consolidated Financial Statements taken as a whole.
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 Consolidated Financial Statements taken as a whole.

Fire at the Fishkill Distribution Center
On August 29, 2016, a fire occurred in one of the buildings at a Company-owned distribution center campus in Fishkill, New York impacting primarily products held for Gap and Banana Republic. Total insurance proceeds for fiscal 2016 were $174 million. In fiscal 2016, the Company recorded a gain of $73 million in operating expenses on the Consolidated Statement of Income related to insurance proceeds received in excess over the loss on inventory. The insurance receivable balance was $32 million as of January 28, 2017, and was recorded in other current assets on the Consolidated Balance Sheet
In January 2018, the Company agreed upon a final settlement with its insurers. Total insurance proceeds for fiscal 2017 were $193 million, all of which were received by February 3, 2018. A gain of $64 million was recognized in fiscal 2017, primarily related to property and equipment. The remaining settlement was recorded as a reduction to the insurance receivable balance in other current assets on the Consolidated Balance Sheet or cost of goods sold and occupancy expenses or operating expenses on the Consolidated Statement of Income, primarily offsetting fire-related costs incurred during fiscal 2017.
During fiscal 2017, we allocated $66 million of insurance proceeds to the loss on property and equipment, and the amount has been reported as insurance proceeds allocated to loss on property and equipment, a component of cash flows from investing activities, on the Consolidated Statement of Cash Flows.