On Feb. 10, 2005, Standard & Poor's Ratings Services raised its corporate credit and senior unsecured debt ratings on San Francisco, Calif.-based The Gap Inc. to 'BBB-' from 'BB+'. The outlook is stable. The upgrade reflects The Gap's good operating performance over the past three years, its strengthened balance sheet, and Standard & Poor's expectation that cash flow protection measures will remain solidly characteristic of investment-grade levels. Ratings reflect The Gap's strong business position in casual apparel, as well as its geographic diversity and strong cash flow. These factors are offset, in part, by management's challenge to continue to improve the business position of its three brands in an industry that is intensely competitive. Management's initiatives to improve product quality
