Gap (GPS)

Interest Expense

The decrease in interest expense for fiscal 2008 compared with fiscal 2007 was primarily due to the maturity of our $326 million, 6.90 percent notes repaid in September 2007 and the reduction of interest accruals resulting primarily from foreign tax audits occurring in fiscal 2008.

The decrease of $15 million in interest expense for fiscal 2007, compared with fiscal 2006, was primarily due to the maturity of our $326 million, 6.90 percent notes repaid in September 2007 and the reduction of interest accruals resulting from the resolutions of tax audits and outstanding tax contingencies completed in fiscal 2007.

Interest Expense

The decrease in interest expense for fiscal 2008 compared with fiscal 2007 was primarily due to the maturity of our $326
million, 6.90 percent notes repaid in September 2007 and the reduction of interest accruals resulting primarily from foreign tax audits occurring in fiscal 2008.

The
decrease of $15 million in interest expense for fiscal 2007, compared with fiscal 2006, was primarily due to the maturity of our $326 million, 6.90 percent notes repaid in September 2007 and the reduction of interest accruals resulting from the
resolutions of tax audits and outstanding tax contingencies completed in fiscal 2007.

Interest Expense

The company continues to expect fiscal year 2008 interest expense to be about $5 million.

Interest Expense

The company continues to expect fiscal year 2008 interest expense to be about $5 million.

Interest Expense

For the first quarter of fiscal 2008, we recognized a reversal of $15 million interest expense from the reduction of interest expense accruals resulting primarily from foreign tax audit events occurring in the quarter. The remaining decrease in interest expense for the first quarter of fiscal 2008 compared with the prior year comparable period was due to lower debt levels as a result of the maturity of our $326 million, 6.90 percent notes repaid in September 2007. We anticipate that fiscal 2008 interest expense will be approximately $5 million.

Interest Expense

The company now expects fiscal year 2008 interest expense to be about $5 million, compared with its prior guidance of $20 million. The difference is due to a $15 million pre-tax earnings benefit from a reduction of interest expense accruals resulting primarily from foreign tax audit events that occurred in the quarter.

Interest Expense

The decrease of $15 million in interest expense for fiscal 2007, compared with fiscal 2006, was primarily due to the maturity of our $326 million, 6.90 percent notes repaid in September 2007 and reduction of interest accruals resulting from the resolutions of tax audits and outstanding tax contingencies completed in fiscal 2007.

The decrease of $4 million in interest expense for fiscal 2006, compared with fiscal 2005, was primarily due to lower debt levels as a result of our March 2005 redemption of convertible notes.

We anticipate that fiscal 2008 interest expense will be about $20 million.

Interest Expense

Fiscal year 2007 interest expense was $26 million. The company expects fiscal year 2008 interest expense to be about $20 million.

Interest Expense

Interest expense decreased $8 million for the third quarter of fiscal year 2007 compared with the prior year comparable period due primarily to the reduction of interest accruals resulting from the resolutions of tax audits and outstanding tax contingencies completed during the third quarter of fiscal year 2007. We anticipate fiscal year 2007 interest expense will be approximately $28 million.

Interest Expense

The company now expects fiscal year 2007 interest expense to be about $28 million.

Interest Expense

We anticipate fiscal year 2007 interest expense will be approximately $35 million.

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Interest Expense

The company reaffirmed that it expects fiscal year 2007 interest expense to be about $35 million.

Interest Expense

The company reaffirmed that it expects fiscal year 2007 interest expense to be about $35 million.

Interest Expense

The decreases of $4 million and $122 million in interest expense for fiscal 2006 and fiscal 2005, respectively, were primarily due to lower debt levels as a result of our March 2005 redemption of the convertible notes.

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We anticipate that fiscal 2007 interest expense will be about $35 million.

Interest Expense

Fiscal year 2006 interest expense was $41 million. The company expects fiscal year 2007 interest expense to be about $35 million.

Interest Expense

The decrease in interest expense of $8 million during the first thirty-nine weeks of fiscal 2006 compared with fiscal 2005 was primarily due to the lower debt level as a result of our March 2005 redemption of the convertible notes.

For fiscal 2006, we expect interest expense to be about $40 million.

Interest Expense

The company reiterated that it expects fiscal year 2006 interest expense to be about $40 million.

Interest Expense

The decrease of $10 million during the first half of fiscal 2006 was primarily due to the lower debt level as a result of our March 2005 redemption of the convertible notes.

For fiscal 2006, we expect gross interest expense to be about $40 million.

Interest Expense

The company reiterated that it expects fiscal year 2006 gross interest expense to be about $40 million.

Interest Expense

The decrease of $13 million in interest expense during the first quarter of fiscal 2006 compared with the first quarter of fiscal 2005, was primarily due to the lower debt level as a result of our March 2005 redemption of the convertible notes, debt repurchases, and scheduled debt maturity.

For fiscal 2006, we expect gross interest expense to be about $40 million.

Interest Expense

The company still expects fiscal year 2006 gross interest expense to be about $40 million.

Interest Expense

The decrease of $122 million in interest expense for fiscal 2005, compared with fiscal 2004, was primarily due to the lower debt level as a result of our March 2005 redemption of the convertible notes, debt repurchases, and scheduled debt maturity.

The decrease of $67 million in interest expense for fiscal 2004, compared with fiscal 2003, was primarily due to the lower debt balances resulting from our debt repurchases and scheduled debt maturity as well as savings from lower facility fees on our new credit facility.

We anticipate that fiscal 2006 interest expense will be about $40 million.

Interest Expense

Fiscal year 2005 gross interest expense was $45 million. The company expects fiscal year 2006 gross interest expense to be about $40 million.

Interest Expense

The decrease in interest expense of $30 million during the third quarter of fiscal 2005 and the decrease of $96 million during the first thirty-nine weeks of fiscal 2005, was primarily due to the lower debt level as a result of our debt repurchases, scheduled debt maturity and conversion of the Senior Convertible Notes, as well as savings from lower facility fees on our new credit facility.

We anticipate that fiscal 2005 earnings will reflect approximately $120 million in interest expense savings over fiscal 2004 primarily as a result of our March 2005 redemption of the convertible notes and lower debt balances. For fiscal 2005, we expect gross interest expense to be about $50 million.

Interest Expense

The company now expects full year 2005 gross interest expense to be about $50 million, down from its previous guidance of about $55 million.

Interest Expense

The decrease in interest expense of $36 million during the second quarter of fiscal 2005 and the decrease of $65 million during the first half of fiscal 2005, was primarily due to the lower debt level from our debt repurchases, scheduled debt maturity and conversion of the Senior Convertible Notes, as well as savings from lower facility fees on our new credit facility.

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We anticipate that fiscal 2005 earnings will reflect $112 million in interest expense savings over fiscal 2004 primarily as a result of our March 2005 redemption of the convertible notes and lower debt balances. For fiscal 2005, we expect gross interest expense to be about $55 million.

Interest Expense

The company reiterated that it expects full year 2005 gross interest expense to be about $55 million.

Interest Expense

The decrease of $29 million in interest expense during the first quarter of fiscal 2005 compared with the first quarter of fiscal 2004, was primarily due to the lower debt level from our debt repurchases, scheduled debt maturity and conversion of the Senior Convertible Notes, as well as savings from lower facility fees on our new credit facility.

We anticipate that fiscal 2005 earnings will reflect $112 million in interest expense savings over fiscal 2004 primarily as a result of our March 2005 redemption of the convertible notes and lower debt balances. For fiscal 2005, we expect gross interest expense to be about $55 million.

Interest Expense

In part, as a result of the sublease loss reversal, the company now expects full year 2005 gross interest expense to be about $55 million.

Interest Expense

The decrease of $67 million in interest expense for fiscal 2004, compared with fiscal 2003, was primarily due to the lower debt level resulting from our debt repurchases and scheduled debt maturity as well as savings from lower facility fees on our new credit facility.

The decrease of $15 million in interest expense for fiscal 2003, compared with fiscal 2002, was primarily due to lower fees related to a renegotiated three-year secured $750 million revolving credit facility and $1.2 billion letter of credit agreements, and reduced interest expense from the maturity of our $500 million two-year note in May 2003. This decrease was partially offset by a full year of interest expense in fiscal 2003 on our senior convertible notes issued in March 2002, plus a full year of higher coupon interest rates on our outstanding notes maturing in fiscal 2005 and fiscal 2008. The higher coupon interest rates on these notes, which took effect on June 15, 2002, was a result of downgrades in our long-term senior unsecured credit ratings in the first quarter of fiscal 2002.

We anticipate that fiscal 2005 earnings will reflect about $100 million in interest expense savings over fiscal 2004 primarily as a result of our March 2005 redemption of the convertible note and lower debt balances.

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GAP INC. FINANCIALS 2004