GPS » Topics » NOTE 4. DEBT

These excerpts taken from the GPS 10-K filed Mar 27, 2009.

Debt

The following discussion should be read in conjunction with Note 5 of Notes to the Consolidated Financial Statements.

Our $50 million notes payable with a fixed interest rate of 6.25 percent per annum was classified as current maturities of long-term debt in the Consolidated Balance Sheet as of January 31, 2009 and was repaid in March 2009. In connection with this debt, we had a cross-currency interest rate swap to swap the interest and principal payable of $50 million debt of our Japanese subsidiary, Gap (Japan) KK, from a fixed interest rate of 6.25 percent, payable in U.S. dollars, to 6.1 billion Japanese yen with a fixed interest rate of 2.43 percent. We also settled the cross-currency interest rate swap in March 2009 and in connection with this settlement, we received, subsequent to January 31, 2009, $19 million as a return of collateral, which was classified as restricted cash in the Consolidated Balance Sheet as of January 31, 2009.

In December 2008, we paid the remaining $138 million related to the maturity of our 8.80 percent notes payable and in September 2007, we paid $326 million related to the maturity of our 6.90 percent notes payable.

Debt

STYLE="margin-top:3px;margin-bottom:0px">The following discussion should be read in conjunction with Note 5 of Notes to the Consolidated Financial Statements.

STYLE="margin-top:9px;margin-bottom:0px">Our $50 million notes payable with a fixed interest rate of 6.25 percent per annum was classified as current maturities of long-term debt in the Consolidated Balance Sheet as of
January 31, 2009 and was repaid in March 2009. In connection with this debt, we had a cross-currency interest rate swap to swap the interest and principal payable of $50 million debt of our Japanese subsidiary, Gap (Japan) KK, from a fixed
interest rate of 6.25 percent, payable in U.S. dollars, to 6.1 billion Japanese yen with a fixed interest rate of 2.43 percent. We also settled the cross-currency interest rate swap in March 2009 and in connection with this settlement, we received,
subsequent to January 31, 2009, $19 million as a return of collateral, which was classified as restricted cash in the Consolidated Balance Sheet as of January 31, 2009.

FACE="ARIAL" SIZE="2">In December 2008, we paid the remaining $138 million related to the maturity of our 8.80 percent notes payable and in September 2007, we paid $326 million related to the maturity of our 6.90 percent notes payable.


Note 5. Debt

In September 2007, we paid $326 million related to the maturity of our 6.90 percent notes payable. In December 2008, we paid $138 million related to the maturity of our 8.80 percent notes payable. The remaining $50 million notes payable with a fixed interest rate of 6.25 percent per annum was classified as current maturities of long-term debt in the Consolidated Balance Sheet as of January 31, 2009 and was repaid in March 2009. See Note 8 for information on the cross-currency interest rate swap used in connection with this debt. The fair value of the debt was $49 million and $51 million as of January 31, 2009 and February 2, 2008, respectively.

This excerpt taken from the GPS 10-Q filed Dec 9, 2008.

Debt

In September 2007, we paid $326 million related to the maturity of our 6.90 percent notes payable. The remaining balance of our 8.80 percent notes payable of $138 million due December 2008 (“2008 Notes”) was classified as current maturities of long-term debt in our condensed consolidated balance sheets as of November 1, 2008 and February 2, 2008, and is subject to an increasing or decreasing rate of interest based on credit rating fluctuations. As a result of changes to our long-term senior unsecured credit ratings in prior periods, the interest rate on the 2008 Notes was 10.05 percent per annum as of November 1, 2008.

We also have $50 million notes payable due March 2009 with a fixed interest rate of 6.25 percent per annum, which was classified as current maturities of long-term debt in our condensed consolidated balance sheet as of November 1, 2008. In connection with this debt, we have a cross-currency interest rate swap to swap the interest and principal payable of $50 million debt securities of our Japanese subsidiary, Gap (Japan) KK, from a fixed interest rate of 6.25 percent, payable in U.S. dollars, to 6.1 billion Japanese yen with a fixed interest rate of 2.43 percent.

This excerpt taken from the GPS 10-Q filed Sep 9, 2008.

Debt

In September 2007, we paid $326 million related to the maturity of our 6.90 percent notes payable. The remaining balance of our 8.80 percent notes payable of $138 million due December 2008 (“2008 Notes”) was classified as current maturities of long-term debt in our condensed consolidated balance sheets as of August 2, 2008 and February 2, 2008, and is subject to an increasing or decreasing rate of interest based on credit rating fluctuations. As a result of changes to our long-term senior unsecured credit ratings in prior periods, the interest rate on the 2008 Notes was 10.05 percent per annum as of August 2, 2008.

We also have $50 million notes payable due March 2009 with a fixed interest rate of 6.25 percent per annum, which was classified as current maturities of long-term debt in our condensed consolidated balance sheet as of August 2, 2008. In connection with this debt, we have a cross-currency interest rate swap to swap the interest and principal payable of $50 million debt securities of our Japanese subsidiary, Gap (Japan) KK, from a fixed interest rate of 6.25 percent, payable in U.S. dollars, to 6.1 billion Japanese yen with a fixed interest rate of 2.43 percent.

This excerpt taken from the GPS 10-Q filed Jun 10, 2008.

Debt

In September 2007, we paid $326 million related to the maturity of our 6.90 percent notes payable. The remaining balance of our 8.80 percent notes payable of $138 million due December 2008 (“2008 Notes”) is classified as current maturities of long-term debt in our condensed consolidated balance sheets as of May 3, 2008 and February 2, 2008, and is subject to an increasing or decreasing rate of interest based on credit rating fluctuations. As a result of changes to our long-term senior unsecured credit ratings in prior periods, the interest rate on the 2008 Notes was 10.05 percent per annum as of May 3, 2008.

We also have $50 million notes payable due March 2009 with a fixed interest rate of 6.25 percent per annum, which was reclassified into current maturities of long-term debt in our condensed consolidated balance sheet as of May 3, 2008. In connection with this debt, we have a cross-currency interest rate swap to swap the interest and principal payable of $50 million debt securities of our Japanese subsidiary, Gap (Japan) KK, from a fixed interest rate of 6.25 percent, payable in U.S. dollars, to 6.1 billion Japanese yen with a fixed interest rate of 2.43 percent.

These excerpts taken from the GPS 10-K filed Mar 28, 2008.

NOTE 4. DEBT

In September 2007, we paid $326 million related to the maturity of our 6.90 percent notes payable. The remaining balance of our 8.80 percent notes payable of $138 million, due December 2008 (“2008 Notes”) is classified as current maturities of long-term debt in our Consolidated Balance Sheet as of February 2, 2008. The interest rate payable on the 2008 Notes is subject to increase (decrease) by 0.25 percent for each rating downgrade (upgrade) by the rating agencies. In no event will the interest rate be reduced below the original interest rate on the notes. As a result of changes to our long-term senior unsecured credit ratings in the current and prior periods, the interest rate on the 2008 Notes was 10.05 percent per annum as of February 2, 2008. The fair value of the 2008 Notes was $144 million and $147 million as of February 2, 2008 and February 3, 2007, respectively.

Long-term debt as of February 2, 2008 consists of $50 million notes payable due March 2009 with a fixed interest rate of 6.25 percent per annum. See Note 7 for information on the cross-currency interest rate swaps used in connection with this debt. The fair value of the long-term debt was $51 million and $50 million as of February 2, 2008 and February 3, 2007, respectively.

In March 2005, we called for the full redemption of our outstanding $1.4 billion, 5.75 percent senior convertible notes due March 15, 2009. As of March 31, 2005, $1.4 billion of principal was converted into 85 million shares of The Gap, Inc. common stock and approximately $0.5 million was paid in cash redemption.

NOTE 4. DEBT

SIZE="2">In September 2007, we paid $326 million related to the maturity of our 6.90 percent notes payable. The remaining balance of our 8.80 percent notes payable of $138 million, due December 2008 (“2008 Notes”) is classified as current
maturities of long-term debt in our Consolidated Balance Sheet as of February 2, 2008. The interest rate payable on the 2008 Notes is subject to increase (decrease) by 0.25 percent for each rating downgrade (upgrade) by the rating agencies. In
no event will the interest rate be reduced below the original interest rate on the notes. As a result of changes to our long-term senior unsecured credit ratings in the current and prior periods, the interest rate on the 2008 Notes was 10.05 percent
per annum as of February 2, 2008. The fair value of the 2008 Notes was $144 million and $147 million as of February 2, 2008 and February 3, 2007, respectively.

FACE="ARIAL" SIZE="2">Long-term debt as of February 2, 2008 consists of $50 million notes payable due March 2009 with a fixed interest rate of 6.25 percent per annum. See Note 7 for information on the cross-currency interest rate swaps used in
connection with this debt. The fair value of the long-term debt was $51 million and $50 million as of February 2, 2008 and February 3, 2007, respectively.

SIZE="2">In March 2005, we called for the full redemption of our outstanding $1.4 billion, 5.75 percent senior convertible notes due March 15, 2009. As of March 31, 2005, $1.4 billion of principal was converted into 85 million shares
of The Gap, Inc. common stock and approximately $0.5 million was paid in cash redemption.

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