The Gap 2012 Annual Report Download - page 71

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Gains and losses on foreign exchange forward contracts not designated as hedging instruments recorded in the
Consolidated Statements of Income, on a pre-tax basis are as follows:
Fiscal Year
($ in millions) 2012 2011 2010
Gain recognized in operating expenses $ 5 $ 7 $ 8
Note 9. Common Stock
Common and Preferred Stock
The Company is authorized to issue 2.3 billion shares of common stock. We are also authorized to issue 60 million shares
of Class B common stock, which is convertible into shares of common stock on a share-for-share basis. Transfer of the
Class B shares is restricted. In addition, the holders of the Class B common stock have six votes per share on most
matters and are entitled to a lower cash dividend. No Class B shares have been issued as of February 2, 2013.
The Company is authorized to issue 30 million shares of one or more series of preferred stock, which has a par value of
$0.05 per share, and to establish at the time of issuance the issue price, dividend rate, redemption price, liquidation value,
conversion features, and such other terms and conditions of each series (including voting rights) as the Board of Directors
deems appropriate, without further action on the part of the stockholders. No preferred shares have been issued as of
February 2, 2013.
Share Repurchases
Share repurchase activity is as follows:
Fiscal Year
($ and shares in millions except average per share cost) 2012 2011 2010
Number of shares repurchased 34 111 96
Total cost $ 1,026 $ 2,096 $ 1,956
Average per share cost including commissions $ 29.89 $ 18.88 $ 20.44
In November 2009, the Board of Directors authorized $500 million for share repurchases, which was fully utilized by the
end of March 2010. In connection with this authorization, we entered into purchase agreements with individual members
of the Fisher family (related-party transactions). The Fisher family shares were purchased at the same weighted-average
market price that we paid for share repurchases in the open market. During fiscal 2010, approximately 0.5 million shares
were repurchased for $10 million from the Fisher family subject to these agreements.
Between February 2010 and February 2012, the Board of Directors authorized a total of $5.25 billion for share
repurchases, all of which was completed by the end of December 2012. In January 2013, we announced that the Board of
Directors approved a new $1 billion share repurchase authorization, of which $975 million was remaining as of February
2, 2013. We have not entered into purchase agreements with members of the Fisher family in connection with these
authorizations.
All of the share repurchases in fiscal 2012 were paid for as of February 2, 2013. All except $4 million of total share
repurchases in fiscal 2011 were paid for as of January 28, 2012.
Note 10. Share-Based Compensation
Share-based compensation expense is as follows:
Fiscal Year
($ in millions) 2012 2011 2010
Stock units $ 92 $ 39 $ 59
Stock options 17 15 14
Employee stock purchase plan 4 4 4
Share-based compensation expense 113 58 77
Less: Income tax benefit (44) (23) (31)
Share-based compensation expense, net of tax $ 69 $ 35 $ 46
No material share-based compensation expense was capitalized in fiscal 2012, 2011, or 2010.
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