Gap (GPS)

- Program Since October 2004 Reaches $3.0 Billion -

SAN FRANCISCO — July 20, 2005 — Gap Inc. (NYSE:GPS) today announced the company’s Board of Directors has authorized an additional $500 million for its share repurchase program, effective immediately. Shares may be repurchased over the next 12 months.

Under the now completed $1.5 billion share repurchase program authorized in February 2005, the company has repurchased about 71 million shares. Since October 2004 through July 18, 2005, the company has repurchased a total of about 119 million shares for about $2.5 billion. Taking into account share repurchases through July 18, the company expects fully diluted weighted average shares to be about 910 million for the second quarter of fiscal 2005. The share authorizations since October 2004, totaling $3.0 billion with today’s announcement, underscore the company’s continued confidence in the long-term growth prospects of its business.

“We’re pleased to extend our share repurchase program to $3 billion,” said Gap Inc. President and CEO Paul Pressler. “We remain committed to returning excess cash to shareholders while maintaining a strong balance sheet.”

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.