Analyzing and Interpreting Lease Footnote Disclosures The GAP Inc. discloses the following schedule to its fiscal 2015 (ended January 30, 2016) 10-K report relating to its leasing activities.

The aggregate minimum noncancelable annual lease payments under leases in effect on January 30, 2016, are as follows:

Fiscal Year ($ millions)

2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,135 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,098 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 946 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 821 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 682 Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . 2,118 Total minimum lease commitments . . . . . $6,800

a. Compute the present value of GAP’s operating leases using a 6% discount rate and round the remaining lease term to the nearest whole year.

b. What types of adjustments might we consider to GAP’s balance sheet and income statement for analysis purposes?