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This excerpt taken from the GPS 8-K filed May 19, 2005. Headquarter Facilities Needs
In the past the company has recorded sub-lease loss reserves for facilities space on which it is obligated to pay rent but does not occupy. The company recently assessed its future office space needs and in mid-May 2005 management decided that it would occupy one of the properties in San Francisco for which such a reserve had been recorded. As a result, the company will reverse the reserve related to the property it will now occupy and will begin expensing rent. The amount of the reserve reversal is $58 million in pre-tax income, and is a second quarter event. The pre-tax impact to fiscal year 2005 earnings will be approximately $51 million in income, which reflects the amount of the reserve reversal, less additional rent expense and related items including interest.
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