This excerpt taken from the GPS 8-K filed Feb 28, 2008.
PLANS TO INCREASE DIVIDEND FOR 2008
SAN FRANCISCO FEBRUARY 28, 2008 Gap Inc. (NYSE: GPS) today announced its Board of Directors approved two decisions that underscore the companys financial health: an additional $1 billion share repurchase authorization and a plan to increase the annual dividend per share by six percent, from $0.32 in 2007 to $0.34 in 2008. The dividend is expected to be paid quarterly in April, July, October, and January.
In 2007, we distributed nearly $2 billion dollars to our shareholders in the form of dividends and share repurchases, said Sabrina Simmons, executive vice president and chief financial officer. Todays announcement reinforces our commitment to use the strong cash flow generated by our operations to return excess cash to our shareholders.
In connection with the share repurchase authorization, Gap Inc. also entered into a second set of agreements with individual members of the Fisher family to repurchase shares. The company expects that about $158 million (approximately 16 percent) of the $1 billion share repurchase program will be purchased from these Fisher family members. The shares will be purchased each month at the same weighted average market price that the company is paying for share repurchases in the open market. Please see the companys August 23, 2007 press release for information regarding the first set of agreements with members of the Fisher family.
Multiple Fisher family members and entities own approximately 34 percent of Gap Inc. shares, as publicly reported in the companys 2007 Proxy Statement. The company notes that the overall percentage of the companys stock held by the Fisher family could fluctuate up or down or remain the same with the agreements announced today. Members of the Fisher family have periodically sold stock since the companys initial public offering in 1976 as part of their normal investor diversification. With three seats on the companys Board of Directors, the family remains active supporting the companys long-term objectives.
During the fourth quarter of fiscal year 2007, the company repurchased about 30 million shares for a total of $613 million, thereby completing a $1.5 billion share repurchase program. Todays announcement brings the companys total share repurchase authorizations to $6.75 billion since October 2004.