This excerpt taken from the GPS 8-K filed Feb 24, 2005.
- Plans to Double Dividend -
SAN FRANCISCO Feb. 24, 2005 Gap Inc. (NYSE:GPS) today announced its goal to deliver greater shareholder value through increased dividends and cash distribution. In line with this goal, the companys Board of Directors has authorized an additional $1.5 billion for its share repurchase program, effective immediately. In addition, the companys Board of Directors intends to double the annual dividend.
The share repurchase program, totaling $2.5 billion with todays announcement, underscores the companys continued confidence in the long-term growth prospects of its business. As of January 29, 2005, the company has successfully completed a $1 billion share repurchase program, repurchasing about 48 million shares.
The company intends to increase the annual dividend per share from $0.0888 to $0.18 for the fiscal year 2005. This does not include the previously announced $0.0222 per share dividend paid on February 23, 2005. The dividend is expected to be payable quarterly in late April, July, October and January.
We are committed to delivering superior shareholder value through growth in revenue and earnings, and cash distribution, said Gap Inc. President and CEO Paul Pressler. I am pleased to report that in 2005 we intend to double our annual dividend. With the new share repurchase program, we have now authorized $2.5 billion in share repurchases.
As with the previous share repurchase program, 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. Under the additional $1.5 billion share repurchase program, shares may be repurchased over the next 24 months.
Over the past two years Gap Inc. has made significant progress in strengthening its balance sheet and improving its credit rating. Since May 2003, the company has reduced debt by more than $1 billion.