Jack Calandra - SVP-Corporate Finance & Investor Relations Arthur L. Peck - Chief Executive Officer & Director Sabrina L. Simmons - Chief Financial Officer & Executive Vice President

Matthew Robert Boss - JPMorgan Securities LLC Richard Jaffe - Stifel, Nicolaus & Co., Inc. Anne-Charlotte Windal - Sanford C. Bernstein & Co. LLC Lorraine Maikis Hutchinson - Bank of America Merrill Lynch Simeon A. Siegel - Nomura Securities International, Inc. Dorothy Senghas Lakner - Topeka Capital Markets Kimberly Conroy Greenberger - Morgan Stanley & Co. LLC Ike Boruchow - Wells Fargo Securities LLC Oliver Chen - Cowen and Comapny Paul Lejuez - Citigroup Global Markets, Inc. (Broker) Betty Chen - Mizuho Securities USA, Inc. Anna Andreeva - Oppenheimer & Co., Inc. (Broker) Edward J. Yruma - KeyBanc Capital Markets, Inc.

Good afternoon, ladies and gentlemen. My name is Amber and I will be your conference operator today. At this time, I would like to welcome everyone to the Gap, Inc. Fourth Quarter 2015 Conference Call. At this time, all participants are in a listen-only mode. As a reminder, please limit your questions to one per participant. I would now like to introduce your host, Jack Calandra, Senior Vice President of Corporate Finance and Investor Relations. Jack Calandra - SVP-Corporate Finance & Investor Relations: Good afternoon, everyone. Welcome to Gap, Inc.'s Fourth Quarter 2015 Earnings Conference Call. Before we begin, I'd like to remind you that the information made available on this webcast and conference call contains forward-looking statements. For information on factors that could cause our actual results to differ materially from the forward-looking statements as well as reconciliations and descriptions of non-GAAP financial measures, please refer to today's earnings press release as well as our most recent annual report on Form 10-K and our subsequent filings with the SEC, all of which are available on gapinc.com. These forward-looking statements are based on information as of February 25, 2016, and we assume no obligation to publicly update or revise our forward-looking statements. Joining me on the call today are CEO, Art Peck; and Executive Vice President and CFO, Sabrina Simmons. Sabrina will be using slides to supplement her remarks which you can view by going to the Investors section at gapinc.com. With that, I'd like to turn the call over to Art. Arthur L. Peck - Chief Executive Officer & Director: Thanks, Jack, and good afternoon to everyone. I'm pleased to be speaking to you as we kick off 2016. We've got 2015 behind us and I want to spend a reasonable amount of time going over my inventory of 2015, some of our accomplishments and some places where I feel like we need to continue to accelerate progress. I've spoken to you about this before and we're on a journey that is going to continue to take time both against our digital priorities as well as our product priorities. And so I want to spend a few minutes speaking to that and then I will focus a little bit on 2016 and where we are. So when I spoke to you a year ago and frankly each quarter that we've had this conversation, I've reiterated the fact that we have three core priorities in this company. The first one is product, and so we are at our core a fashion apparel company and our customers come to us for great, emotional on-trend, on-brand product. And a lot of the work that we have been doing in 2015 is continuing to move our brands forward to get centered on their aesthetic, centered on the right trends, to restore the appropriate quality to our products and really put in place the products in our stores that we know that our customers love. And I am really pleased with the quality of the work and the quantity of the work and the pace of the work that we've been doing across the entire company against our product priorities. And I've spoken to you about my vision of how products is changing in this industry. It's fascinating as you look at how the Fashion Week activities have played out over the last couple of weeks, a lot of articles out there about how brands are now making product available on runway immediately to their consumers. We did that in a small way also in Banana Republic. To me, what that illustrates is the increasing clock speed inside of this business, how fast trend at the high end of the market disseminates down into the mass markets. And it's against that backdrop of increasing clock speed, increasing pace of this business that we've been making very significant changes in our product process. And I'm not going to go into all of those today, but those are changes focused on getting better and better each season at managing buying risk as we build our assortments, an increasingly responsive and short supply chain, using science blended with the arts of creativity, design and merchandising to build the best possible assortments for our brand, and putting in place a very solid commercial planning process that allows us to make sure that we're building a commercial assortment that is on trend, on brand, with the right quality, mapped against delivering and exceeding our budget priorities. That is not all coming to fruition yet, but I'm, again, pleased with the work that we're doing. There are a couple of key components here that I want to call out. I am a true believer in quality, a big believer in quality and I believe that our customers are very sophisticated when it comes to understanding the value that we offer them in our products. And I'm extremely pleased with the quality restoration that I see in Gap's products and in Banana Republic as we look at the spring assortment and the summer assortment going forward. Second issue is, I've talked about responsiveness in our supply chain. This is a journey, and again, I'm not going to tell you what yard line we're on or give you a numerical score, but we are making significant and rapid progress, progress that is reflected in platforming product where we're buying fabrics over multi-season buys, positioning that fabric with key strategic vendors, giving us responsive capabilities, in some cases, to leave Open-to-Buy in season so that we can be back into product in season; in essence, buying what's working rather than guessing what's going to work. The third thing is progress on inventory management. And a big step that we took forward was a couple of years ago where we brought all of our inventory pools across our online and our stores together. We've made further progress this year where we've leveraged our retail DCs to provide direct fulfillment capacity for our online business and we're continuing to take steps to make sure that we're stranding the least amount of inventory and getting every penny of gross margin out of all of our units across the entire business regardless of what store it's in or what channel it was brought to fulfill. Second priority is experience. And on experience, I will call out a number of things that we're doing. We're modernizing our POS. I've talked about that before. We've built a number of omnichannel capabilities. We've virtualized our inventory so that we have access to all of our inventory across all of our demand. The thing that I am really excited about is the accelerating pace of mobile and the mobile experience that we have. Historically, we've operated our websites in two separate platforms. We're in the process of bringing those together on a fully responsively designed website. And most importantly, we're going through a cultural change inside the company of really thinking digital first and mobile first. Historically in this business, the moment of truth was when a customer crossed the leased line into a store. Today, as a company, we are increasingly seeing the moment of truth is when a customer, through their phone, comes into our digital store and we either win or lose their affection, their engagement and ultimately their sales if we win or lose at that moment of truth. And that creates for us both an opportunity, but also an imperative to move as fast as the customer is moving in mobile. This year, the bulk of our traffic will be mobile traffic to our digital space. That represents an opportunity because a great majority of that traffic is incremental, but it also means that we offer the customer an emotional, immersive, holistic, engaging brand experience along with what we have historically done extremely well, which is a very efficient e-commerce transactional experience. The last priority is talent and the entire company sits on a foundation of talent. We've been able to attract and retain exceptional talent and I am committed to making sure that this company has the best talent in the industry lined up in our businesses and our functions. As you all know yet, I've not named a permanent head of our Old Navy brand. When you have a seat like that that is empty which is one of the biggest seats in the business, I want to take my time to make sure that I understand looking forward what's the right profile of leadership for that seat and to understand our talent inside and outside the company in a way where I can make a decision that I feel is the best decision for the brand and the company. Part of what I've spent my time on over the last few months is getting very deep into the Old Navy business, and I'll speak more about that in a moment, to really understand where are the growth opportunities, which are significant, but where are those growth opportunities inside of Old Navy and how do we map a leadership role against the pursuit of those growth opportunities. I knew Old Navy pretty well several months ago. I've been much deeper with the team over there over the last few months. And what I will honestly and directly say to you is, as much as I was bullish about the opportunity in front of Old Navy before, for long-term continuous growth, I'm even that much more bullish today. I see a great brand and a compelling value proposition that I believe has the potential to hunt around the world. And I'm super excited about the growth prospects in front of that business. So let's dive in, in a little bit more into each of the brands and just talk a little bit about my observations of 2015. So just to be clear, and I'll start with Old Navy since I was talking about Old Navy; four years of growth. That is a business that has demonstrated that the brand is strong and that the value proposition for masspirational fashion, on trend, appropriate to the brand with great quality that she perceives and understands for the entire family, that's a compelling value proposition. We hit a bump in the road in Q4 and let me be clear about this. What happened in Q4, we have diagnosed and it was a combination of factors that unfortunately came together. First was we had a couple of style misses. We had a little bit of excess clearance inventory that we carried through. We had an unexpected drop of traffic, which has now for the most part corrected itself. The team is on it. I know we're making the right changes and I expect Old Navy to get back on track and continue to deliver the kind of market share leading performance that we've seen now over the course of the last four years. Let me go to Banana for a moment. I knew it was going to be a rebuilding year from a product and aesthetic standpoint. We took Banana to a place where we were trying to lead on fashion and trend and she does not want Banana to be that. We've diagnosed it, we've fixed it. I've seen the spring product, I've seen the summer product, but we got behind it in 2015 and I'm disappointed with the performance. But here's again what I'm confident about in Banana, which is, we've been doing the right work, I feel we have a very strong team in place right now, we have centered on the classic, appropriate, expected aesthetics of the brand. And I feel much more comfortable that we are on track as we get into spring, summer and then fall this year. So moving quickly to Athleta. We delivered a very strong back half performance in Athleta. We have a business that is very well positioned for our customer. It is right in the sweet spot of lifestyle trend. It is fundamentally omni-channel in that it came from being a catalog and online business with now over 100 stores in the portfolio and I continue to be very bullish about the upside of that business and the growth potential. Just as a sidebar, I would point out that I've been very supportive in them continuing to look for incremental growth opportunities on top of that solid platform. And a few weeks ago, we announced that we are building out an assortment for all the way from a very young girl up to a teenager inside of the Athleta box. We're not putting incremental real estate behind that. Rather, we're putting it in our existing stores and we feel that is a significant opportunity. So, a great business, one I'm super happy to have in our portfolio and I expect that you will continue to hear more news about Athleta going forward. Okay. Last, let me finish as I talk about our brands with Gap brand. And I was kind of starting and ending with Gap brand when we started speaking a year ago. I knew we had a rebuilding year in front of us. It started with new leadership, a new team around that leadership. It worked to get the brand centered back on its casual, optimistic, American aesthetic, and then rebalancing the assortment to assert our rightful share in key categories where Gap has always played. So, the last couple of weeks I've been in stores, I'm always in stores at the beginning of a big seasonal flow with a cross-functional team after our customers have had an opportunity to engage our products. First thing I would highlight is a renewed energy in our stores. It is partly a function of our field team, which is world-class. It is partly a function of the fact that we have product in the stores that lights the stores up. It's optimistic, it's colorful, it's feminine for the women, it's masculine for the men, it's got the right level of sophistication for Gap as a brand and it is much more centered in what the appropriate aesthetic is for the brand. So I see the aesthetic coming through very strong casual, optimistic American. Second thing I see, across key categories, a knits complex that is fully developed to take advantage of share of wallet in knits. We have silhouettes and fabrication that cover a wide range of uses, we have color, we have print, we have pattern, we have neutrals, we have great quality in those knits and I see strong progress forward just by asserting our right to actually play as we should be playing in knits. Third, denim, core category of Gap. It's what the spring campaign has been focused on. Silhouettes, fabrications, wash and novelty, all right in the sweet spot of where denim trend is right now and I'm really optimistic about what I see coming in the denim business across all of our brands, but particularly in Gap brand. And so, again, I could go on and on about this. I could talk about our woven shirts programs, I could talk about intentional outerwear development, but I couldn't be more pleased with the progress that the team has made against their diagnosis a year ago on what needed to happen and how the product now shows up in the stores in front of our customers. One of the things I want to reiterate and just make sure everybody hears it and I'll say this again every time we talk is, I have strong conviction about the long-term growth prospects of this company and the work that we are doing to reestablish our dominance in key categories in our businesses, to reassert appropriate aesthetic expression of our brands, the continued growth across all of our channels and the broad-based geographic growth that we've put a structure in place to achieve. I am committed to that and we will continue to move down that path. Why I spend so much time talking about product is product is the foundation for gaining market share. And so I want to emphasize the fact that our commitment for growth is not just a commitment of building new stores and new geographies, of taking new channels to new places. It's also about moving these brands back to a place where they can gain market share in our core markets. So 2015, a year of rebuilding, a year of focusing on getting our product back on track, reestablishing the path for a couple of our key brands. I'm confident in Old Navy, a bump in the road, but I'm confident in the value proposition and what that brand means to our consumers. What I can assure you is my team and I have a great deal of urgency. I know what this company is capable of at our best. I know what these brands are capable of at their best. And I and my team are focused on not just achieving that for a moment, but achieving that with consistency. I'm looking forward to this coming year, I'm looking forward to seeing these brands start to perform to their potential and I want to thank you for your support. Now I'll turn it over to Sabrina. Sabrina L. Simmons - Chief Financial Officer & Executive Vice President: Thank you, Art. Good afternoon, everyone. Let me begin with our fourth quarter and full year results before turning to our outlook for 2016. It's important to note that our reported results include pre-tax costs related to our previously announced strategic actions totaling $25 million for the quarter and $132 million for the year. That is at the low end of our guidance range of $130 million to $140 million. $98 million of the total full-year charge is operating expense and the remainder hits gross margin. Now, starting with sales. Sales for the fourth quarter were $4.4 billion. Comp sales were down 7%. For the full year, comp sales were down 4%. On a reported basis, 2015 net sales were $15.8 billion. However, excluding the impact of foreign exchange, net sales would have totaled $16.2 billion, down 2%. Moving to gross margins. Fourth quarter gross profit totaled $1.4 billion and gross margin contracted 240 basis points to 32.8%. Merchandise margin was down 140 basis points as reported, but down only 80 basis points excluding the impact of our strategic actions and foreign exchange. Rent and occupancy deleveraged 100 basis points. For the full year, gross profit was $5.7 billion and gross margin was down 210 basis points to 36.2%. Merchandise margin was down 130 basis points as reported, but down only 60 basis points excluding the impact of our strategic actions and foreign exchange. Rent and occupancy deleveraged 80 basis points. Regarding SG&A, for the fourth quarter, total operating expenses were $1.1 billion. Marketing expenses totaled $169 million, $9 million below last year. For the full year, marketing expenses declined $61 million to $578 million. Total operating expenses for the year were $4.2 billion, about flat to last year. Turning to earnings, on a reported basis, fourth quarter earnings per share were $0.53 and full year EPS totaled $2.23. Excluding the impact of our strategic actions, adjusted EPS was $0.57 for the quarter and $2.43 for the year. Additionally, it's important to remember that FX negatively impacted full-year EPS by an estimated $0.14 or about five percentage points of growth. Regarding stores and capital expenditures, on a net basis, we closed five stores in 2015 and our square footage remained about flat. This includes about 150 Gap specialty store closures, broadly in line with our guidance. Store counts and square footage are listed in our press release. Capital expenditures totaled $726 million, which was below our guidance as we prudently reacted to the tougher business performance. Regarding balance sheet and cash flow, as a testament to the cash-generating power of our business, in an otherwise difficult year, free cash flow totaled about $870 million. Consistent with our commitment to distributing excess cash, we paid $377 million in dividends and returned $1 billion through repurchases during the year. We ended the year with $1.4 billion in cash and our ending share count was 397 million shares. Inventory dollars per store were about flat at the end of the fourth quarter, in line with our previous guidance and total inventory was down 1%. And now I'd like to share our outlook for 2016. We expect earnings per share to be in a range of $2.20 to $2.25 and operating margin to be about 9.5%. Embedded in our full-year guidance is a negative impact from foreign exchange of over $120 million in EBIT, which equates to about $0.19 of EPS or eight percentage points of EPS growth off of 2015's $2.43. Let me say more about foreign exchange given its significance. Our largest foreign subsidiaries are in Canada and Japan, with combined sales in these two countries of about $2 billion. 2016 will be the fourth consecutive year with meaningful headwinds from the strong U.S. dollar. Note that our hedges help to delay, but not eliminate the impact of depreciating foreign currencies. To paint the picture of how dramatically currency movements have impacted our results in recent years, I'd like to offer a few metrics. The cumulative impact of weaker foreign currencies to our reported sales results was more than $700 million over the past three years. Absent these headwinds, 2015 net sales would have totaled $16.5 billion, up about $900 million since 2012. The impact to the bottom line is also meaningful. We estimate that the impact to EPS has been about $0.40 since 2012. Here are some additional 2016 guidance metrics. We expect to add 40 net new stores with square footage to remain about flat. In line with our strategy, openings will be focused on China, Outlet and Athleta, while closures will continue to be weighted toward Gap brand. We are reducing capital spending in 2016 to support improvement in return on invested capital. We expect capital expenditures to be about $650 million with a continued focus on mobile and supply chain capabilities. We expect depreciation and amortization to be about $560 million. Given our comp includes both store and online sales, we decided to guide to total inventory in 2016. We expect total inventory to be down in the low single digits at the end of the first quarter. Regarding expenses, it's important to note that SG&A may deleverage against our 2015 reported levels as we potentially restore some categories of expense, such as incentive-based comp. And lastly, we expect our full-year effective tax rate to be about 38%. Finally, underscoring our commitment to returning excess cash to shareholders, we announced a new $1 billion share repurchase authorization. As a reminder, our $400 million term loan matures in 2016. We currently intend to allocate a portion of our cash flow to repay this. Therefore, 2016 repurchases will likely be meaningfully lower than our historic average. In conclusion, 2015 was a challenging year for us and others in our sector. Despite our disappointing performance, it's important to highlight some of our strengths as we enter 2016. First, we believe that our size and portfolio of brands are a competitive advantage in areas such as sourcing, real estate and e-commerce; second, as our track record has demonstrated, we of course plan to maintain our operating discipline; and finally, our reliable cash generation and strong balance sheet allow us to make investments in areas like technology and supply chain needed to win in this evolving retail landscape over the long-term. Thank you, and now I'll turn it back over to Jack. Jack Calandra - SVP-Corporate Finance & Investor Relations: That concludes our prepared remarks. We will now open the call to questions. We'd appreciate limiting your questions to one per person.

Our first question will come from Matthew Boss with JPMorgan. Matthew Robert Boss - JPMorgan Securities LLC: Hey. Good afternoon. So I guess my first question, as you think about your 2016 game plan and the sense of urgency that you spoke to, does the guidance embed positive comps at all three concepts for the year? And then just along those lines, how should we think about same-store sales opportunity in the front-half versus the second half? Just any color around your expectation and the drivers associated with would be really helpful. Sabrina L. Simmons - Chief Financial Officer & Executive Vice President: Hi, Matthew. I'll start and then if Art has anything to add, he can chime in of course. What I'll tell you is our guidance range always includes a range of scenarios, obviously. We prefer – it's our goal to try and return to positive comps this year, so we prefer to drive to our range with positive comps. But it doesn't necessarily require a positive comp to get to our guidance. So, again, it's a primary goal of ours to try and drive revenue growth and positive comps but not necessarily required to meet our range. Arthur L. Peck - Chief Executive Officer & Director: And the only other thing I'll add to that, Matthew, is what I've said now repeatedly, which is I have a strong bias along with my Presidents and Sabrina to make sure that we are tight on inventory, because obviously we've been very promotional. We don't want to be as promotional and a step in that direction is to make sure we're buying tight and then ideally where we can, is to use our inventory responsive capabilities to chase upside if there is upside. Matthew Robert Boss - JPMorgan Securities LLC: Great. And on your comment around the potential for deleverage this year, what is the fixed cost hurdle? And can you lever on a negative comp as it relates to the SG&A that you were speaking to that you said may de-lever? Sabrina L. Simmons - Chief Financial Officer & Executive Vice President: Yes, what I'm suggesting is that if we are meeting all of our goals this year, there's especially two categories which there may be reinvestment in. As you can imagine, coming off of the 2015 year we came off of, incentive comp/bonus was absolutely minimal. We also reported that marketing expenses were down over $60 million year-over-year. So those, for example, are two categories that if we're tracking well to our goals and doing as we hope to do, we would be happy to see reinvestment in, and that may cause some deleverage of expense. Matthew Robert Boss - JPMorgan Securities LLC: Great. Best of luck. Sabrina L. Simmons - Chief Financial Officer & Executive Vice President: Thanks.

As a reminder, please limit your questions to one per participant. Your next question comes from the line of Richard Jaffe with Stifel. Richard Jaffe - Stifel, Nicolaus & Co., Inc.: Thanks very much, guys, and I guess a question following on the comments you made about Old Navy, that the fourth quarter ended on a down note with traffic, but the traffic was back. Could you talk about traffic for each division since Christmas or since the start of the quarter? Sabrina L. Simmons - Chief Financial Officer & Executive Vice President: Yes, at a high-level, Richard, I'll tell you that Banana has actually had the strongest traffic. So consistently, throughout the year and through the fourth quarter, they've had the strongest traffic, which is good news that when the product comes back as we're looking to it to start to come back this month, we're at least getting the footsteps in the door. Gap has had the weakest traffic on the other hand, so the whole year Gap has had the toughest traffic. Now, Old Navy for most of the year had pretty solid traffic, slightly negative, but certainly beating our read of mall traffic. The surprise at Old Navy really came in the month of November and December where it fell off significantly. It did return in January. We're not getting overly excited about that because January is a clearance month, so it's really important to see how we do on traffic in the first quarter. But, again, Banana was the strongest, Gap was the weakest, Old Navy's was pretty good up until November and December. Arthur L. Peck - Chief Executive Officer & Director: And on top of that, one of the most important metrics I look at is what is our sales over traffic spread. And so, that was what was really good. And also what makes me feel good about Old Navy, even though there was a bump in the road, which is for a long time they have had a very attractive sales over traffic spread, which to me really signifies the health of the brand. Richard Jaffe - Stifel, Nicolaus & Co., Inc.: That's helpful. Thank you. Arthur L. Peck - Chief Executive Officer & Director: Yep.

We will go next to Anne-Charlotte Windal with Bernstein. Anne-Charlotte Windal - Sanford C. Bernstein & Co. LLC: Yes. Good afternoon. Thank you for taking my question. A question for you, Art, on the competitive landscape and in particular obviously like Primark entered the U.S. market last year. So I'm sure it's something you're tracking very closely. So what type of impact have you seen from their first store opening, so both at KING OF PRUSSIA and in Boston where I think you have a Gap factory store across the street from Primark. Thank you. Arthur L. Peck - Chief Executive Officer & Director: Yes, something that's absolutely on our landscape. I and my teams are always making sure that we're watching all the competition and certainly a new entrant like Primark, which has had track record of their success and growth very consistently, obviously, that they've had in Europe. I was with the team. In fact, Jack was there with me in the Downtown Crossing store shortly after it opened. We've been looking at it very carefully in the KING OF PRUSSIA store as well and we have our eyes really on it. Probably, the one thing I'll call out is overall two stores in a very large market haven't had a noticeable impact yes. And so if I look across our whole business, too early to call that at the end of the day. Downtown Crossing specifically where you note that we do have a Gap factory store business has remained strong in that store. Traffic is strong in that area. Big grand opening, in fact, with Primark opening as well, but it's very early days and we're on it, we're watching it. My issue there, always with a new competitor, particularly one like Primark, it does come in with very sharp price points with an everyday low pricing policy. Very intrigued to see how the American consumer responds to that against the backdrop of how the whole sector typically prices, which is obviously more promotional pricing. So early days, watching it carefully. Anne-Charlotte Windal - Sanford C. Bernstein & Co. LLC: Thank you.

And we will go next to Lorraine Hutchinson with Bank of America. Lorraine Maikis Hutchinson - Bank of America Merrill Lynch: Thank you. Good afternoon. Sabrina, you cut a significant amount of costs out of the fourth quarter and I was just curious how you're thinking about the sustainability of that. If things don't track towards positive comps, are there more cuts that you could make to stay within your guidance range in 2016? Sabrina L. Simmons - Chief Financial Officer & Executive Vice President: Yes, we have proven year-over-year, Lorraine, that we're very disciplined about our expenses. Partially our structure helps us, right? So we've talked about the fact that over half of our expense base is related to our stores and over half of that is variable to sales. So when we have sales come down as they did in the fourth quarter, we get some natural variability and expenses come down as well. I mentioned in my previous response as well as in my prepared remarks that we obviously paid minimal bonus in 2015, so that was a portion in the fourth quarter as well as throughout the year, but probably especially in the fourth quarter of how we brought down the expenses and then finally marketing as well. So that is actually the very reason why I'm signaling that there may be some deleverage in 2016 as we hopefully are meeting our goals for the year. That said, we're going to continue to manage our expenses very, very tightly, so you can count on us from an absolute perspective to manage them quite tightly, and I think we've proven that we're petty adept at using the levers depending on how business is performing to bring those in line. Lorraine Maikis Hutchinson - Bank of America Merrill Lynch: Thank you.

And we will go next to Simeon Siegel with Nomura Securities. Simeon A. Siegel - Nomura Securities International, Inc.: Hi. Sorry about that. Can you hear me? Arthur L. Peck - Chief Executive Officer & Director: Yes.

We can hear you. Simeon A. Siegel - Nomura Securities International, Inc.: Hey, guys. Sorry. So it's small, Sabrina, but just the other U.S. revenues were down. Is that residual Piperlime anniversarying? And maybe anything you guys can share on just the expected Athleta sales growth and trajectory there? Maybe ultimate store fleet size? Thanks. Sabrina L. Simmons - Chief Financial Officer & Executive Vice President: Yes, no, thank you for asking that question. Yes, the other is mostly made up of Piperlime, which of course we closed in the first quarter of last year, Athleta and INTERMIX. And so, yes, it looks down driven by Piperlime. If you exclude Piperlime, we're actually up a low-double-digit in revenue growth there. Simeon A. Siegel - Nomura Securities International, Inc.: Great. Thanks. And then just given the commentary around the debt pay downs, any color on expected interest expense for the year? Sabrina L. Simmons - Chief Financial Officer & Executive Vice President: No, it's pretty easy to calc. We have the bond outstanding and you guys know that's at a 5.95% interest rate. And then the term loans at LIBOR plus 75 basis points. So it won't fluctuate that much. Simeon A. Siegel - Nomura Securities International, Inc.: Great. All right. Thanks a lot. Best of luck for the year. Sabrina L. Simmons - Chief Financial Officer & Executive Vice President: Thanks.

And we will go next to Dorothy Lakner with Topeka Capital Markets. Dorothy Senghas Lakner - Topeka Capital Markets: Thanks. Two quick things, one just on the style misses at Old Navy for Art, you seem comfortable that that's behind the brand. So just wanted to make sure on that. And then for Sabrina, on the strategic actions, the costs, I know you broke it down between OpEx and gross margin for the year. Just wondering how the $25 million in the fourth quarter breaks down? Arthur L. Peck - Chief Executive Officer & Director: Yes, let me take on the style misses, and so to answer your question, am I comfortable that style misses are behind us? No. We're always going to have some style misses, obviously. Design's job is to push creatively and merchandising's job is to counterbalance that with a commercial orientation. We all across our brands and frankly across the industry, one of the bigger style misses of last year was tops went to a silhouette that was a little bit shorter and a little boxier and many women voted that it wasn't very feminine and wasn't very flattering, and it was a style that was out there, but it was a style that frankly didn't really register with a lot of customers and that's a good learning. The word femininity is one that continues to be one that I'm pushing to the front, whether it's across tops or bottoms. Probably a bigger issue. And then there was a little bit of an issue where we got little bit over-assorted. We got pretty enthusiastic about some sweater styles where there was duplicative choice. And it meant that she came in and she bought – it was an or versus an and. And, again, I'm confident that as Sabrina and I have leaned in with the team and learned about the business and looked at how we bought it in February and March and April, obviously, looking at that and making sure we're re-registering where we need to be from a style count and a trend standpoint. We're always going to have some misses. I mean the whole point of the work we're doing is to minimize the misses, and as I keep saying, guess less, guess better and fix faster. Sabrina? Sabrina L. Simmons - Chief Financial Officer & Executive Vice President: Yes, and then, Dorothy, on your question. In the quarter we had $25 million from the strategic actions. $19 million of that was operating expense and $6 million of that was in gross margin. And just to be helpful I'll say again, that full year was $132 million, $98 million was expense and $34 million was gross margin. Dorothy Senghas Lakner - Topeka Capital Markets: Great. Thanks. Sabrina L. Simmons - Chief Financial Officer & Executive Vice President: Sure.

And we will go next to Kimberly Greenberger with Morgan Stanley. Kimberly Conroy Greenberger - Morgan Stanley & Co. LLC: Great. Thank you so much. Art, you spent a lot of time talking about product initiatives at the beginning of the call. And you sound fairly confident that the various divisions are on the right track for 2016. I'm just wondering, is there some evidence you can put around that? We're just trying to figure out what is it that gives you confidence that the adjustments that are being made at the brand level will resonate with customers and generate the sales growth you're looking for? Thanks so much. Arthur L. Peck - Chief Executive Officer & Director: Yes, it's a lot of things and I continue to ask myself this as well, which is because I'm very impatient on marching against the metrics that I know we need to do. So let me just highlight a bunch of things and, again, I'm not going to go through specific quantitative analysis here. But several of the things that I feel very confident will register with our consumers as they start to fold back into the assortment. So we just had huge quality misses. Literally places where whether it was fits or the quality of the fabrication, it made the product very difficult to wear. I think I've cited this before but blazers in Banana Republic women's assortment where it was extremely difficult for the average woman to actually get her arm into the armhole. So if you just take those out and you get back to common sense quality that our customers expect, that is going to register with our customers. A second place, places where we intentionally underdeveloped the product because of either we assumed it wasn't trending or it was the preference of an individual in a seat or whatever. An example of that is knits in women's knits in Gap brand where we underdeveloped last year, we left market share on the table and this year we have very intentional development across fabrications and silhouettes that we believe play in the relevant wear categories and wear occasions for us. And that's another place where I call it sort of reasserting development to get our fair share of market share. And I've been in the stores now and looked at that and I encourage you to do that. You can see where we actually have a significant knits complex built out. Accessories would be the same. There's a spectacular cinch ballet flat. I think it's in 10 colors it's now in the stores and we do business all day long with that and it wasn't in the stores a year ago and so those are places where again question why we did it, but we've gone back in and said our fair share, we play here, this is where the brand plays. And then the last thing is the more complicated question is around our responsive capabilities. And so again that is a journey right now. But we have in our twill programs in the spring as an example, and I've talked about this before, the ability to be much faster in the product that is selling on our shelves through a combination of owning the fabric, having the fabric positioned approximate to vendors who have the capacity reserved to cut and sew into it. And ideally those vendors, particularly for North America and the Caribbean basin so that we can cut, sew, wash and dye, put it on a boat and have it back in our stores very quickly. All those things to me are kind of obvious that they will give us upside. So the only issue on my mind right now is will these things work and impact? It's just the pace and the timing. Sabrina noted in Gap brand that our traffic has been toughest there frankly in my mind because we've been off-brand for longest there. So the pace and the timing of when the customer comes back, discovers the product, embraces it, tweets about it, posts it on Instagram and Pinterest that's really the unknown right now, but I'm very optimistic. Kimberly Conroy Greenberger - Morgan Stanley & Co. LLC: Thank you.

And we will go next to Ike Boruchow with Wells Fargo. Ike Boruchow - Wells Fargo Securities LLC: Hi, everyone. Thanks for taking my question. I think either Art or Sabrina, I think it was about 175 Gap stores that you guys outlined at your last Analyst Day for closure and I think you did most of those. When you're looking at the fleet right now, if we were to look, you gave us your guidance for footage this year, but if you look three years out, how does that look? Are there fewer stores? Are there similar amount but much smaller boxes? I'm just kind of curious how you think about the business over the next couple years. Arthur L. Peck - Chief Executive Officer & Director: Yes. And I would say right now we feel comfortable with the fleet size. We feel like that sweet spot where we are is a good number. We work it continuously and we're always looking at opportunities to either put a store in place like the Time Square that we announced where there'll be a Gap and an Old Navy going into Times Square. Or a store if it's not delivering or we feel like the real estate is not appropriate for the brand, we will get out of that real estate. But at the moment I'm not ready to call a number different than where we are as we look forward. Second thing, I wouldn't really focus on and I've talked about this is I'm a strong believer in the fact that we can do more business in less real estate in the same location and that is what we're focused on. Obviously you can't flip the fleet overnight into smaller stores, but every opportunity we have, whether it's a lease coming up or a reposition or an opportunity to give some space back and densify, we're going to be taking aggressively advantage of those opportunities. And Gap's got the biggest opportunity there in my view. We tried a store in China. I was in that store a couple weeks ago and super pleased by what I saw. It was a very small store footprint with a full expression of Gap brand and most importantly it worked for the consumer. And so the early days of really thinking aggressively about densifying through fixtures, through folding versus hanging, through how we use the total cube of the store, aisle width, all those kinds of things, I'm very encouraged by the opportunity there. But, again, that's not an overnight flip. Ike Boruchow - Wells Fargo Securities LLC: Thank you.

And we will go next to Oliver Chen with Cowen and Company. Oliver Chen - Cowen and Comapny: Hi, thank you. Art, regarding responsive supply chain, is there an axis we should think about it with respect to store banners, in terms of being – more opportunity to certain banners? And then also the dimension of product category? And as you improve product, I just wanted to get briefed on how you'll sequence in marketing as you have more conviction that product is improving. And just lastly, Sabrina, on the guidance, is our merch margins assumed to be flattish? That would just be helpful. Thank you. Arthur L. Peck - Chief Executive Officer & Director: Yeah, if I think about responsive, and again responsive is a whole bunch of stuff bundled together. But let's just basically talk about one of the things that cuts out many weeks, which is making a multi-season commitment to a fabric, and then having that fabric prepositioned to cut, wash, dye and sew into. That is most powerful as a capability in cotton fabrications. And so that applies to denim, to twill, to knits, et cetera, really consistently across all the brands. If you start getting into synthetics and then obviously wool, silk and those types of things, it's less an issue there because you just can't necessarily platform those fabrics, although you can some of them, not all of them. Importantly, you can also platform yarns for sweaters at the end of the day. So if I think about the least relevant categories, probably accessories, or outerwear. Most relevant would be our core cotton fabrications which we have that are an important part of the business across all of our brands in denim and twill, in knits and fleece, et cetera. So, we wouldn't be pushing on something here if it wasn't meaningful for the entire business. Importantly, it's actually also meaningful for Athleta in wearing (46:52) performance fabrics as well. So, this is something that's largely applicable to the total company. Sabrina L. Simmons - Chief Financial Officer & Executive Vice President: Yeah, and then with regard to merch margins, Oliver, we don't explicitly guide to merch margin, only the operating margin which I gave you. But to be helpful, there is sort of headwinds and tailwinds. So, the tailwinds in merch margin are clearly going to be the fact that we worked really hard for 12 months to put out new assortments this year where we are hopeful that the customer votes in favor of higher product acceptance. Also on the margin I would say, although I don't want to make it any kind of big headline, but on the margin there is certainly some average unit cost tailwind. So, those are the two tailwinds. On the flipside you have foreign exchange, which we've guided is actually growing in 2016. And remember in 2015, it hurt our merchandise margins by 50 basis points, and it's bound to be even bigger in 2016. So underlying basis of course we are hoping to get some merch margin expansion, but you kind of have to weigh that against the headwind of foreign exchange. Oliver Chen - Cowen and Comapny: Okay, great. Both of those frameworks really help. Thank you very much. Arthur L. Peck - Chief Executive Officer & Director: Yep.

We will go next to Paul Lejuez with Citigroup. Paul Lejuez - Citigroup Global Markets, Inc. (Broker): Hey, thanks, guys. Can you talk a little bit about the profitability of China in 2015, what you expect for 2016, and just how you expect that business to grow over the next couple of years? Thanks. Sabrina L. Simmons - Chief Financial Officer & Executive Vice President: Yeah, I'll start and then Art can, I'm sure, talk about it as well. So I think we said a few months back publicly that we expected Gap China to be profitable on a management basis in 2015. And in fact, we achieved that goal. So, we are very pleased with that. We would expect, of course, Gap China to continue to improve its profitability year-over-year as time goes on. So, that's Gap China. If you look at China as a whole, of course, we launched Old Navy recently and as you can imagine, just starting a new brand, that one is not profitable yet. And these things, especially in China, take a few years. But the good news is Gap China met its big milestone of profitability this year, and we expect that to continue going forward. Arthur L. Peck - Chief Executive Officer & Director: Let me talk about Old Navy and just underline that there. So, we opened a handful of stores, and I guess in my mind the sequence here – the responsible sequence, is open some stores across some relatively heterogeneous real estate, and then start getting the four-wall model correct. And that's what we have been working on right now. I am really, really big on making sure that we understand the best four-wall model, what kind of sites that's located in, whether it's a lifestyle center, or a street front store, or a value center or whatever, and also the store size. And then once we are comfortable with that, put the hammer down on opening real estate after we've got the four-wall model done. And with Old Navy, I'm not worried about real estate availability. When that business hunts, it hunts in a big way. And it also is a big traffic draw, and so there's a lot of landlord interest out there. So, the pace to me right now is going to be set by making sure that we've really got the four-wall model correctly, but again as I said before, I'm very bullish on that value proposition around the world. Paul Lejuez - Citigroup Global Markets, Inc. (Broker): Thanks, guys. Good luck. Arthur L. Peck - Chief Executive Officer & Director: Yep.

And we will go next to Betty Chen with Mizuho Securities. Betty Chen - Mizuho Securities USA, Inc.: Hello. Thanks. Good afternoon, everyone. I was wondering, Art, if you can talk a little bit about your initial thoughts having seen the Gap spring product inside the stores, and how it's returned to its heritage. And what are some of the goal posts that you're looking for in order to feel more comfortable investing marketing dollars behind the brand? Thanks. Arthur L. Peck - Chief Executive Officer & Director: Yep. Yeah, again as I said, you can imagine I don't have very long fingernails right now. As the spring product has gotten into the stores and I've been out in the stores a lot. And I've been out in stores a lot on an unannounced basis because I want to see what our customers are seeing versus what's been prepped for a CEO visit, and I went into the – I'll just call one store out right now, went into the store that we have, flagship store on 54th and 5th last week in New York. The product was fully expressed there, spring. We flipped that store. We brought women's down from the second floor down to the first and I walked in and I have to honestly say I'm not sure I've ever felt like that store showed up better as an expression of Gap brand. The color was evident, the femininity was clear. We had strong ownership and it's clear why we're in the business from the standpoint of women's bottoms, whether it's twill, denim, or bistretch bottoms. The accessory statement was very powerful. And so if I think about a from-to of last year, neutral color palette, unfeminine silhouettes, some quality issues in our business, lots of overlapping denim development, et cetera, I feel like the from-to is optimistic print pattern and color, feminine silhouettes, intentional denim development, ownership in the bottoms business, great accessories business. And so, it's a big step in the right direction. The most important metric I look at and I'm not going to go into the detail of this is as we're obviously working our way through product from last year clearance product, et cetera, I want to look at the new product that's current season code and understand how we bought it and then what kind of comp we're running off of it. And those are the most important early leading-edge indicators of whether we're seeing good customer acceptance of the product so that's what I'm looking at right now. And then it'll eventually aggregate obviously, if we're seeing good customer acceptance, we're overselling our buy plan that will aggregate the comp. Betty Chen - Mizuho Securities USA, Inc.: Thank you. Good luck.

We will go next to Anna Andreeva with Oppenheimer. Anna Andreeva - Oppenheimer & Co., Inc. (Broker): Great. Thanks so much. Good afternoon, guys, and thanks for taking our question. We had a question on athletic performance by brand. Hoping, Art, you could talk about Athleta performance during the quarter and also Old Navy, where we think it's been a little bit softer as of late. And we've seen additional promotions there. And with 15 new store openings at Athleta for 2016, I think that's reined in a little bit from historic levels. How do you think about this size of the footprint going forward? Thanks. Arthur L. Peck - Chief Executive Officer & Director: That was a lot of questions embedded in one. You did that artfully. Let me comment on Athleta first. Athleta had and I think we mentioned this and I'll just underline it, a very strong back half and I was really pleased with that. The assortment was in line. They were on trend. The product was well bought and I was really pleased with the numbers. If you look at Old Navy because you raised that specifically, we have had excellent performance out of the full family expression of activewear inside of Old Navy. We had been a little bit more promotional so you are correct on that. But that does not signal anything other than we still have excellent performance out of that business and we're seeing very strong growth. I'm really encouraged, frankly, across the whole company as I look at it right now because if you take Athleta, Old Navy is full family active expression, add to it a young girl to tween expression inside of Athleta and then a full family expression inside of Gap. We are present and accounted for in the mainstream of what is probably the most important ready-to-wear trend that we've seen since skinny denim maybe came on the scene. And so I feel like we're a very well represented there. We have great fabrics, great development and, as a company, we can share assets across the company, across fabric platform and things like that. So it's a powerful place for us to be. If I specifically look at Athleta's growth rates, and again, I've said this before, we are learning every day what the right mix of online catalog and stores is in the Athleta business. It's the opposite of what has happened in mainstream retail where people have gone online from a stores business, where in Athleta we've gone into stores from an online and catalog business. And, our initial expectation as we started to open stores was that it would probably be cannibalizing of our online business. And as we've learned and seen how the store channel and the direct channel interact with each other, we are really pleased to see that the direct business continues to grow even as we open stores, and that as she discovers it in a store, she goes to direct et cetera. So I can't tell you I know what the right fleet size is right now. What I can tell you is that if I can grow this business in a highly accretive way without putting additional CapEx and the fixed expenses of our operating stores into the ground, and continue to see that growth happen to our existing stores and the online channel, that's a very attractive thing to do. So, we are taking it slow and easy right now as we continue to explore the channel dynamics. But I am in no way signaling the fact that we have nothing but anything but very strong growth expectations out of that business. Anna Andreeva - Oppenheimer & Co., Inc. (Broker): Terrific. Thanks so much.

Our last question will come from the line of Ed Yruma with KeyBanc Capital Markets. Edward J. Yruma - KeyBanc Capital Markets, Inc.: Hey guys, thanks for squeezing me in here. I guess just first, on the role of outlet online, I know you've kind of shifted the presence and really developed full-fledged sites. So, I guess, how should we think about the positioning relative to some of your full-priced sites and whether you're intending to see some cannibalization going forward? And then second, Sabrina, it sounds like a number of other chains are able to renegotiate leases with some of the REITs. I know you guys have been very tight with your ROD, but how should we think about ROD for this year? Thanks. Arthur L. Peck - Chief Executive Officer & Director: Let me pick the outlet question up here. We've gone slow into this space. Frankly the reason we've gone there is that's where the customer is, and we've got to go where the customer is right now. The whole outlet business has continued to morph over the last decade. It used to be a business that was highly physically isolated relative to the specialty business, and obviously there's been a collision going on where outlets get closer to specialty, and the suburbs have spread out to where the outlet malls were built. And the online channel is another extension of that at the end of the day. That's where our customer is, and we felt a need to have a presence there. It's early days right now, we are in our early days of having this channel. It's very difficult to identify anything that is cannibalizing anything frankly, versus the fact that it is complementary to the existing outlet channel. But we are watching it very carefully, and we are trying to understand how it interacts number one, with our outlet stores, because that's critical, but then number two, with the specialty business as well. What I will say is when all the businesses are healthy, the channel distinctions, the price distinctions, et cetera, are very clear to the consumer. But we are watching it very carefully. Sabrina L. Simmons - Chief Financial Officer & Executive Vice President: Yeah, with regard to ROD, I would say, look the team is very focused on OEs aggressively negotiating the best deals we can, especially given the size of our fleet, and the size of our brand portfolio. What is happening, and has been happening for the last few years in ROD. We've gotten most of the unproductive stores behind us, right? And when we were closing and downsizing a lot of the unproductive square footage, we were able to leverage very easily, even on negative comps on some years, but that is all behind us now. What is happening now is the international stores actually are a big headwind because as a percent to sales, they are a higher percent to sales. Now within their country, every year we are trying to get them to leverage. But from a mix perspective, they hurt the overall ROD profile. So, where we sit today is it takes sort of a low single-digit comp to leverage ROD. Edward J. Yruma - KeyBanc Capital Markets, Inc.: Great. Thanks so much, guys. Jack Calandra - SVP-Corporate Finance & Investor Relations: I'd like to thank everyone for joining us on the call today. As a reminder, the press release, which is available on gapinc.com, contains a full recap of our fourth quarter results as well as the forward-looking guidance included in our prepared remarks. As always, the Investor Relations team will be available after the call for further questions. Thank you.

Thank you. That does conclude our conference. You may now disconnect.