Gap (GPS)

ANNOUNCES ADDITIONAL $500 MILLION SHARE REPURCHASE PROGRAM

SAN FRANCISCO – February 23, 2006 – Gap Inc. (NYSE: GPS) plans to significantly increase its cash dividend per share by 78 percent in 2006 and the company’s board of directors has authorized an additional $500 million for its share repurchase program.

“This announcement reflects our confidence in the company’s ability to continue generating strong cash flow,” said Gap Inc. President and CEO Paul Pressler. “Looking ahead, we remain committed to delivering shareholder value through earnings growth and cash distributions.”

The company intends to significantly increase the annual dividend per share from $0.18 in fiscal year 2005 to $0.32 for its fiscal year 2006. The dividend is expected to be paid quarterly in April, July, October, and January.

As of February 23, 2006, the company had already successfully completed a $3 billion share repurchase program, repurchasing about 146 million shares since October 2004. With today’s announcement, the share repurchase program totals $3.5 billion.

Under the additional $500 million share repurchase program, shares may be repurchased over the next 24 months. The company expects to repurchase $250 million of this authorization within the first half of fiscal 2006. The company may repurchase shares of its common stock on the open market at times and prices considered appropriate by management. Repurchasing may take place through brokers and dealers or in privately negotiated transactions with nonaffiliated stockholders, and may be made under a Rule 10b5-1 plan.