<SUBMISSION>
<ACCESSION-NUMBER>0000891020-06-000071
<TYPE>10-K
<PUBLIC-DOCUMENT-COUNT>8
<PERIOD>20060202
<FILING-DATE>20060329
<DATE-OF-FILING-DATE-CHANGE>20060328
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>ALBERTSONS INC /DE/
<CIK>0000003333
<ASSIGNED-SIC>5411
<IRS-NUMBER>820184434
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>0131
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-K
<ACT>34
<FILE-NUMBER>001-06187
<FILM-NUMBER>06716541
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>250 PARKCENTER BLVD
<STREET2>P O BOX 20
<CITY>BOISE
<STATE>ID
<ZIP>83726
<PHONE>2083956200
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>250 PARKCENTER BLVD
<STREET2>P O BOX 20
<CITY>BOISE
<STATE>ID
<ZIP>83726
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>v18837e10vk.htm
<DESCRIPTION>FORM 10-K
<TEXT>
<HTML>
<HEAD>
<TITLE>e10vk</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>






<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 16%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM 10-K</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 16%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE<BR>
SECURITIES EXCHANGE ACT OF 1934</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-weight: bold">

<TD colspan="3" align="center" valign="top"><DIV style="margin-left:15px; text-indent:-0px">For the fiscal year ended February&nbsp;2, 2006
</DIV></TD>

  </TR>
<TR><td>&nbsp;</td></TR>
<TR valign="bottom" style="font-weight: bold">


<TD colspan="3"  align="center" valign="top"><DIV style="margin-left:15px; text-indent:-0px">Commission
file number 1-6187</div></TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>ALBERTSON&#146;S, INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV style="margin-top: 1px"><FONT style="border-top: 1px solid #000000">(Exact name of Registrant as specified in its Charter) </FONT></DIV></DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">Delaware
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">82-0184434</TD>
</TR>
<TR style="font-size: 1px">
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(State or other jurisdiction<BR>
of incorporation or organization)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(I.R.S. Employer Identification Number)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">250 Parkcenter Blvd., P.O. Box 20, Boise, Idaho
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">83726</TD>
</TR>
<TR style="font-size: 1px">
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(Address of principal executive offices)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Zip Code)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><U>(208)&nbsp;395-6200</U><BR>
(Registrant&#146;s telephone number, including area code)</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">Title of each class
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Name of each exchange on which registered</TD>
</TR>
<TR style="font-size: 1px">
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">Common Stock, $1.00 par value
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">New York Stock Exchange<BR>
Pacific Stock Exchange</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">Mandatory Convertible Security
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">New York Stock Exchange</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule&nbsp;405 of
the Securities Act. Yes <FONT face="Wingdings">&#254;</FONT> No <FONT face="Wingdings">&#111;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark if the registrant is not required to file reports pursuant to Section&nbsp;13 or
Section 15(d) of the Act. Yes <FONT face="Wingdings">&#111;</FONT> No <FONT face="Wingdings">&#254;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the registrant (1)&nbsp;has filed all reports required to be filed by
Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12&nbsp;months (or for
such shorter period that the registrant was required to file such reports) and (2)&nbsp;has been subject
to such filing requirements for the past 90&nbsp;days. Yes <FONT face="Wingdings">&#254;</FONT> No <FONT face="Wingdings">&#111;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark if disclosure of delinquent filers pursuant to Item&nbsp;405 of Regulation&nbsp;S-K
(17 CFR section 405) is not contained herein and will not be contained, to the best of registrant&#146;s
knowledge, in definitive proxy or information statements incorporated by reference in Part&nbsp;III of
this Form&nbsp;10-K or any amendment to this
Form&nbsp;10-K.&nbsp;<FONT face="Wingdings">&#111;</FONT>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filed,
or a non-accelerated filer. See definition of &#147;accelerated filer and large accelerated filer&#148; in
Rule&nbsp;12b-2 of the Exchange Act.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%"></TD>
    <TD width="5%"></TD>
    <TD width="30%"></TD>
    <TD width="5%"></TD>
    <TD width="30%"></TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="left" valign="top">Large Accelerated Filer <FONT face="Wingdings">&#254;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Accelerated Filer <FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">Non-accelerated Filer <FONT face="Wingdings">&#111;</FONT></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the registrant is a shell company (as defined in Rule&nbsp;12b-2 of the
Exchange Act). Yes <FONT face="Wingdings">&#111;</FONT> No <FONT face="Wingdings">&#254;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The aggregate market value of the voting common equity held by non-affiliates of the registrant as
of August&nbsp;4, 2005 (the last business day of the registrant&#146;s most recently completed second fiscal
quarter) was approximately $7.6&nbsp;billion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The number
of shares of the registrant&#146;s common stock, $1.00 par value,
outstanding as of March&nbsp;24,
2006 was 370,992,223.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><U>Documents Incorporated by Reference</U></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Listed hereunder are the documents, any portions of which are incorporated by reference and the
Parts of this Form 10-K into which such portions are incorporated: None.
</DIV>


<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>





<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left">
<!-- TOC -->
</DIV>

<DIV align="left">
<A name="tocpage"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">ALBERTSON&#146;S, INC.<BR>
FORM 10-K<BR>
TABLE OF CONTENTS
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="92%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Item</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Page</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD colspan="3" valign="top" align="center"><A href="#101"><BR><B>PART I</B></A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#102">Cautionary Statement
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#103">1.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#103">Business
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#104">1A.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#104">Risk Factors
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">7</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#105">1B.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#105">Unresolved Staff Comments
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">8</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#106">2.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#106">Properties
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">8</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#107">3.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#107">Legal Proceedings
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#108">3A.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#108">Executive Officers of the Registrant
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">12</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#109">4.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#109">Submission of Matters to a Vote of Security Holders
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">13</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="center"><A href="#110"><BR><B>PART II</B></A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#111">5.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#111">Market for Registrant&#146;s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">14</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#112">6.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#112">Selected Financial Data
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">15</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#113">7.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#113">Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">15</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#114">7A.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#114">Quantitative and Qualitative Disclosures About Market Risk
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">31</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#115">8.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#115">Financial Statements and Supplementary Data
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">32</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#116">9.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#116">Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">67</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#117">9A.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#117">Controls and Procedures
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">67</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#118">9B.
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#118">Other Information
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">68</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD colspan="3" valign="top" align="center"><A href="#119"><BR><B>PART
III</B></A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#120">10.</A>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#120">Directors and Executive Officers of the Registrant
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">72</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#121">11.</A>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#121">Executive
Compensation</A>
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">75</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#122">12.</A>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#122">Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">84</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#123">13.</A>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#123">Certain
Relationships and Related Transactions</A>
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">86</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#124">14.</A>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#124">Principal Accountant Fees and Services
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">87</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD colspan="3" valign="top" align="center"><A href="#125"><BR><B>PART
IV</B></A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#126">15.</A>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#126">Exhibits and Financial Statement Schedules
</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">88</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD colspan="3" valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#127">SIGNATURES
</A></DIV></TD>


    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">89</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="v18837exv2w2.txt">EXHIBIT 2.2</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="v18837exv4w1w4.txt">EXHIBIT 4.1.4</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="v18837exv21.txt">EXHIBIT 21</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="v18837exv23.txt">EXHIBIT 23</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="v18837exv31w1.txt">EXHIBIT 31.1</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="v18837exv31w2.txt">EXHIBIT 31.2</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="v18837exv32.txt">EXHIBIT 32</A></FONT></TD></TR>
</TABLE>
</DIV>

<DIV align="left">
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</DIV>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left">
<A name="101"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>PART I</B></U>
</DIV>

<DIV align="left">
<A name="102"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Cautionary Statement for Purposes of &#147;Safe Harbor Provisions&#148; of the Private Securities Litigation Reform Act of 1995</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All statements other than statements of historical fact contained in this and other documents
disseminated by the Company, including statements regarding the Company&#146;s expected financial
performance, are forward-looking information as defined in the Private Securities Litigation Reform
Act of 1995. In reviewing such information about the future performance of the Company, it should
be kept in mind that actual results may differ materially from those projected or suggested in such
forward-looking information since predictions regarding future results of operations and other
future events are subject to inherent uncertainties. These statements may relate to, among other
things: completion of the pending sale of the Company; statements of expectation regarding the
Company&#146;s future results of operations; investing to increase sales; changes in cash flow;
increases in general liability costs, workers&#146; compensation costs and employee benefit costs;
attainment of cost reduction goals; achieving sales increases and increases in comparable and
identical sales; competing effectively; opening and remodeling stores; and the Company&#146;s five
strategic imperatives. These statements are indicated by words or phrases such as &#147;expects,&#148;
&#147;plans,&#148; &#147;believes,&#148; &#147;estimate&#148; and &#147;goal.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Important assumptions and other important factors that could cause actual results to differ
materially from those set forth in the forward-looking information include the Company&#146;s ability to
complete the pending sale of the Company; changes in consumer spending; actions taken by new or
existing competitors (including nontraditional competitors), particularly those intended to improve
their market share (such as pricing and promotional activities); labor negotiations; adverse
determinations with respect to, or the need to increase reserves for, litigation, taxes or other
claims (including environmental matters); financial difficulties experienced by third-party
insurance providers; employee benefit costs; the Company&#146;s ability to recruit, retain and develop
employees; the Company&#146;s ability to develop new stores or complete remodels as rapidly as planned;
the Company&#146;s ability to implement new technology successfully; stability of product costs; the
Company&#146;s ability to integrate the operations of and realize synergies from acquired or merged
companies; the Company&#146;s ability to execute its restructuring plans; the Company&#146;s ability to
achieve its five strategic imperatives; the factors listed in &#147;Item&nbsp;1A &#150; Risk Factors&#148; in this
Annual Report on Form 10-K; and other factors affecting the Company&#146;s business in or beyond the
Company&#146;s control. These other factors include changes in the rate of inflation; changes in state
or federal legislation or regulation; the cost and stability of energy sources; the continued
safety of the products the Company sells; changes in the general economy; changes in interest
rates; and the occurrence of natural disasters.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Other factors and assumptions not identified above could also cause the actual results to differ
materially from those projected or suggested in the forward-looking information. The Company does
not undertake to update forward-looking information contained herein or elsewhere to reflect actual
results, changes in predictions, assumptions, estimates or changes in other factors affecting such
forward-looking information.
</DIV>

<DIV align="left">
<A name="103"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Item&nbsp;1. Business. </B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>General</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Albertson&#146;s, Inc. (&#147;Albertsons&#148; or the &#147;Company&#148;) is incorporated under the laws of the State of
Delaware and is the successor to a business founded by J. A. Albertson in 1939. The Company&#146;s
general offices are located at 250 Parkcenter Boulevard, Boise, Idaho 83706 and its telephone
number is (208)&nbsp;395-6200. Information about the Company is available on the internet at
<u>www.albertsons.com</u>. Information on the Company&#146;s website is not a part of this Annual Report on
Form 10-K.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Based on sales, the Company is one of the largest retail food and drug chains in the world. As of
February&nbsp;2, 2006, the Company&#146;s divisions and subsidiaries operated 2,471 retail stores in 37
states.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s operations are within a single operating segment, the retail sale of food and drug
merchandise. All of the Company&#146;s operations are within the United States. As of February&nbsp;2, 2006,
the Company&#146;s divisions and subsidiaries operated stores under the banners Albertsons, Acme,
Bristol Farms, Grocery Warehouse, Jewel, Jewel-Osco, Max Foods, Osco Drug, Sav-on Drug, Shaw&#146;s,
Star Market, Super Saver and Lazy Acres. The Company has invested in these brands, their
development and their protection and considers them important assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s fiscal year ends on the Thursday nearest to January&nbsp;31st. As a result, the Company&#146;s
fiscal years include a 53rd week every five to six years. The Company&#146;s fiscal year ended February
2, 2006 (&#147;2005&#148;) contained 52&nbsp;weeks. Fiscal years ended February&nbsp;3, 2005 (&#147;2004&#148;) and January&nbsp;29,
2004 (&#147;2003&#148;) contained 53 and 52&nbsp;weeks, respectively. The Company&#146;s sales, earnings from
continuing operations, net earnings, total assets and long-term debt
and capital lease obligations for the past five fiscal years are
included on page&nbsp;15 of
this Annual Report on Form&nbsp;10-K.
</DIV>


<P align="center" style="font-size: 10pt">3
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All dollar amounts in this Annual Report on Form 10-K are in millions, except per share data and
the compensation information included in Item&nbsp;11 of Part&nbsp;III.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Definitive Agreement to Sell Company</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On January&nbsp;22, 2006, Albertsons entered into a series of agreements (the &#147;Agreements&#148;) providing
for the sale of Albertsons to SUPERVALU INC. (&#147;Supervalu&#148;), CVS Corporation (&#147;CVS&#148;) and a
consortium of investors including Cerberus Capital Management, L.P., Kimco Realty Corporation,
Lubert-Adler Management, Inc., Klaff Realty, L.P. and Schottenstein Stores Corporation (the
&#147;Cerberus Group&#148;). As a result of a series of transactions provided for under the Agreements (the
&#147;Transactions&#148;), Albertsons&#146; shareholders will ultimately be entitled to receive $20.35 in cash
and 0.182 shares of Supervalu common stock for each share of
Albertsons&#146; common stock that they
held before the Transactions. The Transactions are subject to approval by Albertsons&#146; shareholders
and Supervalu&#146;s shareholders as well as antitrust clearance and the satisfaction or waiver of other
customary closing conditions (see &#147;Subsequent Event&#148; in
Item&nbsp;7). The Transactions are currently anticipated to be completed in the
second quarter of calendar year 2006, but the completion of the Transactions could be delayed if,
among other things, all necessary approvals are not obtained by that
time. The Company may be required to pay to Supervalu a termination
fee of $276 if the merger agreement is terminated under certain
specified circumstances.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Retail Formats</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As of February&nbsp;2, 2006, the Company&#146;s retail operations were organized into seven divisions, based
primarily on geographic boundaries, and two independently managed subsidiaries. Division and
subsidiary staff are responsible for day-to-day operations and executing marketing and
merchandising programs. This structure allows the division and subsidiary level employees, who are
closest to the customer, to implement strategies tailored to each of the neighborhoods that the
Company serves.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company identifies each of its stores as one of the following: combination food-drug store,
conventional store (which includes non-Extreme Inc. warehouse stores), stand-alone drugstore,
Bristol Farms store or Extreme Inc. store. The Company also operates fuel centers near existing
stores and online grocery and drugstore websites.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s combination food-drug stores combine grocery and drug stores under one roof. Most of
these stores include a complete grocery offering, prescription drugs and an expanded section of
cosmetics and general merchandise in addition to specialty departments such as service seafood and
meat, bakery, lobby/video, service delicatessen, liquor and floral. Many of these stores also offer
meal centers, party supply centers, coffee bars, in-store banks, photo processing and destination
categories for beverages, snacks, pet care products, paper products and baby care merchandise.
These services and product offerings allow easy, one-stop shopping. Combination
food-drug stores are typically located in neighborhood shopping centers and range in size from
35,000 to 60,000 square feet. As of February&nbsp;2, 2006, the Company&#146;s divisions operated 1,495
combination food-drug stores.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Conventional food stores are less than 35,000 square feet and focus their product and service
offerings primarily on food departments. Conventional stores offer many of the same product and
service offerings as combination food-drug stores, but on a limited basis. As of February&nbsp;2, 2006,
the Company&#146;s divisions operated 237 conventional stores.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s stand-alone drugstores offer convenient shopping and prescription pickup as well as a
wide assortment of general merchandise, health and beauty care products, over-the-counter
medication, greeting cards and photo processing. Many newer stores have expanded their product
offerings to include limited grocery and convenience items requiring freezing or refrigeration. The
Company&#146;s stand-alone drugstores are typically located on corners and in shopping centers and many
offer a drive-thru pharmacy. As of February&nbsp;2, 2006, the Company&#146;s divisions operated 700
stand-alone drugstores.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">During 2004 the Company began an intense focus on format differentiation with the introduction of
Extreme Inc. and the acquisition of Bristol Farms. Extreme Inc. is an independently managed
subsidiary that operates price impact stores in and around Dallas, Texas; Baton Rouge, Louisiana;
Salt Lake City, Utah; and various cities in Florida. These low-price, limited-service stores
feature an innovative new store design coupled with a unique merchandising format tailored to the
individual demands of customers, which often vary by neighborhood. As of February&nbsp;2, 2006, Extreme
Inc. operated 27 stores under the Super Saver banner.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In September&nbsp;2004 the Company acquired Bristol Farms, a gourmet and specialty food retailer. As of
February&nbsp;2, 2006, Bristol Farms (an independently managed subsidiary) operated 12 stores in
Southern California. Bristol Farms stores offer gourmet and natural product assortments in stores
that range in size from 7,200 to 29,700 square feet. In addition, Bristol Farms offers premium
catering services and several stores offer in-store dining.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As of February&nbsp;2, 2006, the Company operated 238 fuel centers in 22 states. Fuel centers are
located in the parking lots of stores operated by the Company&#146;s divisions and subsidiaries. Fuel
centers generally feature three to six fuel pumps and a small building, ranging in size from a
pay-only kiosk to a convenience store.
</DIV>


<P align="center" style="font-size: 10pt">4
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company operates its own grocery delivery websites under the names Albertsons.com and
Acmemarkets.com. As of February&nbsp;2, 2006, Albertsons operated its grocery delivery websites in
parts of Arizona, California, Idaho, Nevada, New Jersey, Oregon, Pennsylvania, Texas, Utah and
Washington. By using its brick-and-mortar stores as fulfillment sites, Albertsons has evolved its
online model to take advantage of its retail grocery expertise, brand recognition and existing
infrastructure. With six years of experience, Albertsons.com and Acmemarkets.com offer a reliable
and proven online service that delivers products direct from our stores to the customer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company also operates its own nationwide online pharmacy service under the name Savon.com.
This website offers new and refill prescriptions, sundry items and consumer health information. It
allows customers across the country the freedom to have new or refilled prescriptions ready for
pickup at any pharmacy operated by the Company, or mailed to their location of preference.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Distribution Centers and Suppliers</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s retail operations are supported by 19 major Company distribution centers. These
distribution centers provide product to stores operated by the Company&#146;s divisions and
subsidiaries.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In an effort to obtain merchandise at the lowest possible cost, the Company also supplies stores
through outside suppliers and directly from manufacturers. The Company believes that it is not
dependent on any one supplier and considers its relations with its suppliers to be satisfactory.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Marketing and Merchandising</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s brand promise is &#147;Working Hard to Make Life Easier for Our Customers.&#148; This is
reinforced to customers through associate education and print and media advertising.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">With the Company&#146;s brand promise in mind, the Company strives to merchandise stores that cater to
the neighborhoods it serves. For example, some stores offer a variety of products in categories
such as Asian, Hispanic and kosher foods.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In addition, a principal component of the Company&#146;s merchandising strategy is to offer a broad
array of products and time-saving services that are part of a solution to today&#146;s lifestyle
demands. The Company&#146;s dual branding initiative is designed to serve this merchandising strategy.
One of Albertsons strategic advantages in today&#146;s marketplace comes from the Company&#146;s unique
expertise in operating food stores and drugstores. Albertsons has decades of experience in
operating these two formats. This unique position in the marketplace has enabled the Company to
bring together separate retail brands, creating dual branded stores that leverage the Company&#146;s
separate food and drug expertise and brand equity and make life easier for customers by providing
one-stop shopping for food and drug needs. The Company began expanding the dual branding concept in
2001 and continued to roll-out the dual branding concept through 2005. The Company expects to
continue to dual brand stores in nearly every market in 2006. As of February&nbsp;2, 2006, 1,167 of the
stores operated by the Company&#146;s divisions were dual branded.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company continues to test additional ways to further the Company&#146;s brand promise by adding to
its stores&#146; natural and organic sections, international food sections, in-store bakeries and
delicatessens, prepared foods sections and gourmet coffee service. Some stores also feature a
selection of prepared foods and daily selections of home meal replacement items, such as rotisserie
chicken, fried chicken, tamales, meat loaf and other dinner entrees as well as sandwiches,
pre-packaged salads and prepared fresh vegetables. The Company is also expanding the bakery in some
stores, offering expanded selections of baked goods and self-service
items. Finally, the
Company has joined forces with other retailers (including Toys R Us<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, Starbucks<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> and Office Depot<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>)
to provide a wider selection of quality merchandise to its customers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All of the
Company&#146;s stores carry a broad range of national brands in
addition to Our Own Brands (or
private label) products in many merchandise categories. During 2003, the Company launched its
premium own brand, <I>essensia</I>&#153; products and in 2004 launched <I>equaline</I>&#153; and <I>HomeLife</I>&#153;, its own brand
products in the health and beauty and general merchandise categories. As of February&nbsp;2, 2006, the
Company offered 253 products under the <I>essensia</I>&#153; brand, 1,286 products under the <I>equaline</I>&#153; brand
and 398 products under the <I>HomeLife</I>&#153; brand. The Company&#146;s stores provide consumer information such
as nutritional signing in the meat and produce departments, freshness code dating, unit pricing,
meal ideas and food information pamphlets.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Associates</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As of February&nbsp;2, 2006, the Company employed approximately 234,000 associates, of which
approximately 52% were covered by collective bargaining agreements, primarily with the United Food
and Commercial Workers and International Brotherhood of
</DIV>
<P align="center" style="font-size: 10pt">5
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Teamsters.
Labor agreements covering approximately 7,000 associates will expire during 2006.
Negotiations with respect to some of these contracts have commenced. There can be no assurances
that the Company will be able to successfully renegotiate its union contracts without work
stoppages or on acceptable terms.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company considers its present relations with associates to be satisfactory. The Company values
its associates and believes that associate loyalty, enthusiasm and commitment are key elements of
its operating performance.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Environmental</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company has identified environmental contamination sites related primarily to underground
petroleum storage tanks and groundwater contamination at various store, warehouse, office and
manufacturing facilities (related to current operations as well as previously disposed of
properties). The Company conducts an ongoing program for the inspection and evaluation of potential
new sites and the remediation and monitoring of contamination at existing and previously owned
sites. Although the ultimate outcome and expense of environmental remediation is uncertain, the
Company believes that the costs of any required remediation and continuing compliance with
environmental laws, in excess of current reserves, will not have a material adverse effect on the
financial condition, results of operations or cash flows of the Company. Environmental remediation
costs were not material in 2005, 2004 or 2003.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Government Regulation</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company is subject to regulation by a variety of government agencies including, but not limited
to, the U.S. Food and Drug Administration, the U.S. Department of Agriculture, the Occupational
Safety and Health Administration, the Environmental Protection Agency and other federal, state and
local agencies. The Company&#146;s stores are also subject to local laws regarding zoning, land use, the
sale of restricted products including tobacco, alcohol and pseudoephedrines, food preparation and
sanitation. In recent years, an increasing number of legislative proposals have been introduced and
passed in Congress and in some state legislatures that could result in major changes in health care
coverage, delivery and reimbursement, both nationally and at the state level. For example,
Congress passed the Medicare Prescription Drug Improvement and Modernization Act of 2003, which
included new prescription drug benefits for Medicare participants. Also, in recent years, both
federal and state authorities have proposed or passed new legislation that imposes on pharmacies
significant additional obligations concerning the protection of confidential patient medical
records and information. The Health Insurance Portability and Accountability Act of 1996, or HIPAA,
imposes certain requirements, including the protection of confidential patient medical records and
other information. The Company believes that its locations comply, in all material respects, with
such laws and regulations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Competition</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Food, drug and general merchandise retailing involves intense competition with numerous
competitors. Direct competition comes from a variety of sources, including supermarket chains,
independent and specialty grocers, specialty retailers and large-scale drug retailers. Increasing
competition also exists from convenience stores, prepared-food retailers and Internet and mail
order retailers. The biggest competitive impact on the food retailing industry, however, has been
the growth of low-price retailers, primarily supercenters and discount stores. The rapid growth of
the low-price format has demonstrated that while convenience, quality, product assortment and customer
service remain important factors in creating a competitive advantage, price is increasingly a
significant driver of consumer choice in the food retailing industry.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Seasonality</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company is subject to effects of seasonality. Sales have historically been higher in the
Company&#146;s fourth quarter than other quarters due to the holiday season and the increase in cold and
flu occurrences.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Available Information</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company makes available its annual reports on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 free of charge through the Company&#146;s website
at www.albertsons.com as soon as reasonably practicable after the Company electronically files such
material with, or furnishes it to, the Securities and Exchange Commission (&#147;SEC&#148;).
</DIV>


<P align="center" style="font-size: 10pt">6
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="104"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Item&nbsp;1A. Risk Factors.</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The
following are certain risk factors that could affect the
Company&#146;s business, results of operations and
financial condition. These risk factors should be considered in connection with evaluating the
forward-looking statements contained in this Annual Report on Form 10-K because these factors could
cause the Company&#146;s actual results or financial condition to differ materially from those projected in the
forward-looking statements. Before investing in the Company, investors should know that making such an
investment involves some risks, including the risks described below. The risks that are described
below are not the only ones the Company faces. If any of the following risks occur, the Company&#146;s
business, results of operations or financial condition could be negatively affected.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B><i>The sale of Albertsons to Supervalu, CVS and the Cerberus Group is subject to certain closing
conditions that, if not satisfied or waived, will result in the Transactions not being
completed, which may cause the market price of Albertsons common
stock to decline.</I></B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The pending sale of Albertsons is subject to customary conditions to closing, including the receipt
of required approvals of the shareholders of Albertsons and Supervalu and regulatory approvals.
Many of the conditions to the closing of the Transactions are outside of the control of Albertsons.
If any condition to the closing of the Transactions is not satisfied or, if permissible, waived,
the Transactions will not be completed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If Albertsons does not complete the Transactions, the market price of Albertsons common stock may
fluctuate to the extent that the current market price reflects a market assumption that the
Transactions will be completed. Albertsons will also be obligated to pay certain investment
banking, financing, legal and accounting fees and related expenses in connection with the
Transactions, whether or not the Transactions are completed. In addition, Albertsons has expended,
and will continue to expend, significant management resources in an effort to complete the
Transactions. If the Transactions are not completed, Albertsons will have incurred significant
costs, including the diversion of management resources, for which they will have received little or
no benefit. Further, Albertsons may be required to pay to Supervalu a termination fee of $276 if the merger agreement is terminated under certain
specified circumstances.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B><I>Whether or not the Transactions are completed, the announcement and pendency of the Transactions
could cause disruptions in the Company&#146;s business, which could have an adverse effect on its
business and financial results.</I></B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Whether or not the Transactions are completed, the announcement and pendency of the Transactions
could cause disruptions in the Company&#146;s business. Specifically:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>current and prospective employees may experience uncertainty about their future roles
with the Company, which might adversely affect the Company&#146;s ability to retain key managers
and other employees; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the attention of management may be directed toward the completion of the Transactions,
rather than toward the execution of existing business plans.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B><I>The Company faces a high level of competition in the retail food business and the competition
the Company encounters may have a negative impact on the prices it may charge for products and
the Company&#146;s revenues and profitability.</I></B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The retail food and drug industries in which the Company competes are extremely competitive. The
number and type of competitors vary by location and include:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>national, regional and local supermarket chains;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>independent and specialty grocers; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;nontraditional&#148; food stores, such as supercenters, club stores, specialty retailers
(such as pet centers and toy stores) and large scale drug retailers.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company also faces increasing competition from convenience stores, prepared food retailers and
Internet and mail-order retailers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s principal competitors compete primarily on the basis of price, quality of products,
product assortment, service and store location. An overall lack of inflation in food prices and
increasingly competitive markets have made it difficult generally for grocery store operators to
achieve comparable store sales gains. Because sales growth has been difficult to attain,
competitors have attempted to maintain market share through increased levels of promotional
activities and discount pricing, creating a more difficult
</DIV>


<P align="center" style="font-size: 10pt">7
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">environment in which to consistently increase year-over-year sales. Price-based competition has
also, from time to time, adversely affected the Company&#146;s operating margins.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company faces increased competitive pressure in its markets from existing competitors and from
the threatened entry by one or more major new competitors. Some of the Company&#146;s &#147;nontraditional&#148;
competitors are not unionized and therefore have lower labor costs, which allows them to take
measures that could adversely affect the Company&#146;s competitive position. The Company&#146;s business,
financial condition or results of operations could be adversely affected by competitive factors,
including product mix and pricing changes that the Company may make in response to competition from
existing or new competitors.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>The Company could experience
labor disputes that could disrupt its business.</I></B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As of February&nbsp;2, 2006, approximately 52% of the Company&#146;s employees were represented by unions and
covered by collective bargaining or similar agreements that are subject to periodic renegotiations.
Although the Company believes that it will successfully negotiate new collective bargaining
agreements as agreements expire, these negotiations:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>may not prove successful;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>may result in a significant increase in the cost of labor; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>may break down and result in the disruption of the
Company&#146;s operations.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The
Company cannot provide assurances that its labor negotiations will conclude successfully or that any
work stoppage or labor disturbances will not occur. Any future work stoppages or labor disturbances
may have a material adverse effect on the Company&#146;s financial condition and results of operations.
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%"><B><I>The
Company is affected by increasing labor costs, which could adversely
affect the Company&#146;s business and
results of operations.</I></B>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s labor costs have increased in the past, partially due to increases in the
contributions Albertsons is required to make under union-sponsored multiemployer pension plans and
health and welfare plans. Contribution amounts are established under collective bargaining
agreements, which are up for renewal at varying times over the next several years. If the pension
plan and health and welfare plan provisions of certain of these collective bargaining agreements
cannot be renegotiated in a manner that reduces the Company&#146;s prospective pension and health and
welfare costs as the Company intends, selling, general and administrative expenses could increase,
possibly significantly, in the future, which could have a material adverse effect on the Company&#146;s
business and results of operation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Additionally, with regard to the multiemployer pension plans under collective bargaining
agreements, primarily for defined benefit pension plans, the Internal Revenue Code and related
regulations establish minimum funding requirements. If any multiemployer defined benefit pension
plan to which the Company makes contributions fails to satisfy these requirements, and the trustees
of such plan have not obtained waivers of the minimum funding requirements from the Internal
Revenue Service, reduced pension benefits to a level where the requirements are satisfied, or made
other adjustments, the Internal Revenue Code imposes an excise tax on all employers participating
in the plan to correct the funding deficiency, which would also cause the Company&#146;s selling,
general and administrative expenses to increase, and any such increase may be significant. Further,
in the event of the Company&#146;s withdrawal from any of the multiemployer defined benefit pension
plans, it could incur withdrawal liability under the Employee Retirement Income Security Act of
1974, and any such liability may be significant.
</DIV>

<DIV align="left">
<A name="105"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Item&nbsp;1B. Unresolved Staff Comments.</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">None.
</DIV>

<DIV align="left">
<A name="106"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Item&nbsp;2. Properties. </B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">During the past ten fiscal years, the Company has built or acquired 1,952 stores. Approximately 83%
of the Company&#146;s retail square footage has been opened, acquired or remodeled during this period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company currently prefers to finance the construction of most new retail store and distribution
facilities internally, thus retaining ownership of its land and buildings. During 2006, the
Company&#146;s internal expansion plans are expected to be financed primarily from cash provided by
operating activities. The Company has and expects to continue to finance a portion of its new
stores through lease transactions when it does not have the opportunity to own the properties.
</DIV>



<P align="center" style="font-size: 10pt">8
</DIV>


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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Retail Stores</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As of February&nbsp;2, 2006, the Company held title to both the land and buildings of approximately 38%
of the Company&#146;s stores and held title to the buildings on leased land of an additional 11% of the
Company&#146;s stores. The Company also holds title to the land and buildings of most of its
administrative offices and distribution facilities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s stores are located in 37 states. The table below is a summary of the Company&#146;s
stores by state and classification as of February&nbsp;2, 2006:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Combination</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Conventional</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Food-Drug</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Stand-Alone</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Food</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Other</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Stores</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Drugstores</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Stores</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Stores <SUP style="font-size: 85%; vertical-align: text-top">(a)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Total</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Fuel Centers <SUP style="font-size: 85%; vertical-align: text-top">(b)</SUP></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Arizona</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">76</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">136</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Arkansas</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">California</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">321</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">338</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">104</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">775</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Colorado</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">58</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Connecticut</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Delaware</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Florida</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">104</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">115</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Idaho</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Illinois</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">166</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">84</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">264</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Indiana</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Iowa</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Kansas</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Louisiana</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Maine</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Maryland</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Massachusetts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">82</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">95</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Michigan</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Minnesota</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Missouri</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Montana</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Nebraska</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Nevada</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">93</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">New Hampshire</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">New Jersey</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">61</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">New Mexico</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">North Dakota</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Oklahoma</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Oregon</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">46</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">55</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pennsylvania</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">53</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Rhode Island</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">South Dakota</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Texas</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">144</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">155</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Utah</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Vermont</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Washington</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">76</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">83</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Wisconsin</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Wyoming</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="23" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,495</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">237</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,471</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">238</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="23" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Retail Square
Footage by Store
Type (000&#146;s)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">81,653</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,490</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,684</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,799</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">102,626</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(b</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="23" nowrap align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(a)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 12 Bristol Farms stores and 27 Extreme Inc. stores.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(b)</TD>
    <TD>&nbsp;</TD>
    <TD>All fuel centers are located adjacent to retail stores, therefore the Company does not count
fuel centers as separate stores. The square footage of fuel centers is included with the
square footage of adjacent stores.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">9
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Distribution Facilities</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">During 2005, approximately 73% of the merchandise purchased for resale in the retail stores
operated by the Company&#146;s divisions and subsidiaries was received from Company distribution
centers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s distribution system consists of 19 major distribution facilities and four smaller
distribution facilities located strategically throughout the Company&#146;s operating markets. The
table below is a summary of the Company&#146;s distribution facilities and the product categories they
support, as of February&nbsp;2, 2006:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="19%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Square</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Frozen</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Meat &#038;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Health &#038;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">General</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Footage</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Major Distribution Facilities</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Grocery</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Food</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Liquor</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Produce</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Deli</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Beauty</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Merchandise</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Pharmaceuticals</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">(000&#146;s)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="37" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Melrose Park, Illinois</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,662</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Lancaster, Pennsylvania</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,413</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Brea, California</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,331</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">La Habra, California</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,203</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fort Worth, Texas</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,131</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Plant City, Florida</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,011</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Irvine, California</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,009</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Elk Grove, Illinois</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">933</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Vacaville, California</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">854</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Portland, Oregon</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">834</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Phoenix, Arizona</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">734</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Salt Lake City, Utah</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">660</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Wells, Maine</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">536</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">San Leandro, California</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">480</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sacramento, California</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">442</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Ponca City, Oklahoma</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">420</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Denver, Colorado</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">388</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Boise, Idaho</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">302</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Methuen, Massachusetts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">291</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Other Distribution Facilities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Northborough, Massachusetts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">93</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Carson, California</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Las Vegas, Nevada</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Indianapolis, Indiana</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><B>X</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR><td>&nbsp;</td></TR>
<TR style="font-size: 1px">
    <TD colspan="37" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total Square Footage -
All Distribution Facilities
(000&#146;s)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,819</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="37" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company has expanded and improved its distribution facilities when opportunities exist to
improve service to the retail stores and generate an adequate return on invested capital. It also
examines opportunities to consolidate distribution facilities when appropriate. On November&nbsp;10,
2005, the Company consummated the sale of its distribution facility in San Leandro, California.
The Company recognized a pre-tax gain of approximately $52 on the sale. Under the terms of the
agreement, the Company has committed to lease the facility from the buyer through August&nbsp;2006 and
has the right to extend the term for an additional period of two months.
</DIV>

<DIV align="left">
<A name="107"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Item&nbsp;3. Legal Proceedings. </B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company is subject to various lawsuits, claims and other legal matters that arise in the
ordinary course of conducting business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In April&nbsp;2000 a class action complaint was filed against Albertsons as well as American Stores
Company, American Drug Stores, Inc., Sav-on Drug Stores, Inc. and Lucky Stores, Inc., wholly owned
subsidiaries of the Company, in the Superior Court for the County of Los Angeles, California
(Gardner, et al. v. American Stores Company, et al.) by assistant managers seeking recovery of
overtime pay based upon plaintiffs&#146; allegation that they were improperly classified as exempt under
California law. In May&nbsp;2001 a class action with respect to Sav-on Drug Stores assistant managers
was certified by the court. A case with very similar claims, involving the Sav-on Drug Stores
assistant managers and operating managers, was also filed in April&nbsp;2000 against the Company&#146;s
subsidiary Sav-on Drug Stores, Inc. in the Superior Court for the County of Los Angeles, California
(Rocher, Dahlin, et al. v. Sav-on Drug Stores, Inc.) and was also certified as a class action. In
April&nbsp;2002 the Court of Appeal of the State of California Second Appellate District reversed the
Rocher class certification, leaving only two plaintiffs. However, on August&nbsp;26, 2004, the
California Supreme Court reversed this decision and remanded the case to the trial court. The
Company continues to believe it has strong defenses against these lawsuits and is
</DIV>


<P align="center" style="font-size: 10pt">10
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">vigorously defending them. Although these lawsuits are subject to the uncertainties inherent in the
litigation process, based on the information presently available to the Company, management does
not expect that the ultimate resolution of these lawsuits will have a material adverse effect on
the Company&#146;s financial condition, results of operations or cash flows.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In September&nbsp;2000 an agreement was reached and court approval granted to settle eight purported
class and/or collective actions which were consolidated in the United States District Court in
Boise, Idaho and which raised various issues including &#147;off-the-clock&#148; work allegations and
allegations regarding certain salaried grocery managers&#146; exempt status. Under the settlement
agreement, current and former employees who met eligibility criteria have been allowed to present
their off-the-clock work claims to a claims administrator. Additionally, current and former
grocery managers employed in the State of California have been allowed to present their exempt
status claims to a claims administrator. The Company mailed notices of the settlement and claims
forms to approximately 70,500 associates and former associates. Approximately 6,000 claim forms
were returned, of which approximately 5,000 were deemed by the claims administrator to be incapable
of valuation, presumed untimely, or both (the &#147;Unvalued Claims&#148;). The claims administrator was able
to assign a value to approximately 1,080 claims although the value of many of those claims is still
subject to challenge by either party. Two other claims processes occurred during 2004. First,
there was a supplemental mailing and in-store posting directed toward a narrow subset of current
and former associates. This process resulted in approximately 260 individuals submitting claims
documents. Second, in response to the Court&#146;s instruction to plaintiffs&#146; counsel to submit
supplemental and/or corrected information for the Unvalued Claims, plaintiffs&#146; counsel submitted
such information for approximately 4,700 of the Unvalued Claims in 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The claims administrator has been assigning values to claims as a result of the 2004 claims
process. The value of these claims will likewise be subject to challenge by either party. The
Company raised certain challenges to the claims process, including the supplemental information
submitted by plaintiffs&#146; counsel in 2005, and valuation protocols; on January&nbsp;4, 2006, the court
granted in part the Company&#146;s motion and directed the claims administrator to value the claims
disregarding certain information. Presently pending before the court is a motion filed by the
plaintiffs making further challenge to the process. The Company is presently unable to determine
the amounts that it may ultimately be required to pay with respect to all claims properly
submitted. Based on the information presently available to the Company, management does not expect
that the satisfaction of valid claims submitted pursuant to the settlement will have a material
adverse effect on the Company&#146;s financial condition, results of operations or cash flows.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On October&nbsp;13, 2000, a complaint was filed in Los Angeles County Superior Court (Joanne Kay Ward et
al. v. Albertsons, Inc. et al.) alleging that Albertsons, Lucky Stores and Sav-on Drug Stores paid
terminating employees their final paychecks in an untimely manner. The lawsuit seeks statutory
penalties. On January&nbsp;4, 2005, the case was certified as a class action. The Company believes that
it has strong defenses against this lawsuit and is vigorously defending it. Although this lawsuit
is subject to the uncertainties inherent in the litigation process, based on the information
presently available to the Company, management does not expect that the ultimate resolution of this
lawsuit will have a material adverse effect on the Company&#146;s financial condition, results of
operations or cash flows.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On February&nbsp;2, 2004, the Attorney General for the State of California filed an action in Los
Angeles federal court (California, ex rel Lockyer v. Safeway, Inc. dba Vons, a Safeway Company,
Albertsons, Inc. and Ralphs Grocery Company, a division of The Kroger Co., United States District
Court Central District of California, Case No.&nbsp;CV04-0687) claiming that certain provisions of the
agreements (the &#147;Labor Dispute Agreements&#148;) between the Company, The Kroger Co. and Safeway Inc.
(the &#147;Retailers&#148;), which provided for &#147;lock-outs&#148; in the event that any Retailer was struck at any
or all of its Southern California facilities during the 2003-2004 labor dispute in Southern
California when the other Retailers were not and contained a provision designed to prevent the
union from placing disproportionate pressure on one or more Retailer by picketing such Retailer(s)
but not the other Retailer(s) during the labor dispute violate Section&nbsp;1 of the Sherman Act. The
lawsuit seeks declarative, injunctive and other legal and equitable relief. The Retailers&#146; motion for summary judgment was
denied on May&nbsp;26, 2005 and the Retailers&#146; appeal of that decision was dismissed on November&nbsp;29,
2005. The Company continues to believe it has strong defenses against this lawsuit and is
vigorously defending it. Although this lawsuit is subject to uncertainties inherent in the
litigation process, based on the information presently available to the Company, management does
not expect that the ultimate resolution of this action will have a material adverse effect on the
Company&#146;s financial condition, results of operations or cash flows.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In March&nbsp;2004 a lawsuit seeking class action status was filed against Albertsons in the Superior
Court of the State of California in and for the County of Alameda, California (Dunbar v.
Albertson&#146;s, Inc.) by a grocery manager seeking recovery including overtime pay based upon
plaintiff&#146;s allegation that he and other grocery managers were improperly classified as exempt
under California law. Class certification was denied in June&nbsp;2005 and plaintiffs have appealed. The
Company continues to believe it has strong defenses against this lawsuit and is vigorously
defending it. Although this lawsuit is subject to the uncertainties inherent in the litigation
process, based on the information presently available to the Company, management does not expect
that the ultimate resolution of this lawsuit will have a material adverse effect on the Company&#146;s
financial condition, results of operations or cash flows.
</DIV>


<P align="center" style="font-size: 10pt">11
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In July&nbsp;2004 a case similar to Dunbar involving salaried drug/merchandise managers was filed in the
same court (Victoria A. Moore, et al. v. Albertson&#146;s, Inc.). In March&nbsp;2005 the parties reached a
tentative settlement. On March&nbsp;10, 2006, the court granted final approval to the settlement. Based on information presently available to the Company, management does not
expect that payments under this settlement will have a material adverse effect on the Company&#146;s
financial condition, results of operations or cash flows.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On January&nbsp;24, 2006, a putative class action complaint was filed in the Fourth Judicial District of
the State of Idaho in and for the County of Ada, naming Albertsons and its directors as defendants.
The action (Christopher Carmona v. Henry Bryant et al., No.&nbsp;CV-OC-0601251), which has been removed
to the United States District Court for the District of Idaho, challenges the merger agreement
entered into in connection with the pending sale of the Company and related transactions.
Specifically, the complaint alleges that Albertsons and its directors violated applicable law by
directly breaching and/or aiding the other defendants&#146; breaches of their fiduciary duties,
including by failing to value Albertsons properly and by ignoring conflicts of interest. Among
other things, the complaint seeks preliminary and permanent injunctive relief to enjoin the
completion of the Transactions. Albertsons believes that the claims asserted in this action are
without merit and intends to defend this suit vigorously. Although this lawsuit is subject to the
uncertainties inherent in the litigation process, based on the information presently available to
the Company, management does not expect that the ultimate resolution of this lawsuit will have a
material adverse effect on the Company&#146;s financial condition, results of operations or cash flows.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company is also involved in routine legal proceedings incidental to its operations. Some of
these routine proceedings involve class allegations, many of which are ultimately dismissed.
Management does not expect that the ultimate resolution of these legal proceedings will have a
material adverse effect on the Company&#146;s financial condition, results of operations or cash flows.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The statements above reflect management&#146;s current expectations based on the information presently
available to the Company. However, predicting the outcomes of claims and litigation and estimating
related costs and exposures involve substantial uncertainties that could cause actual outcomes,
costs and exposures to vary materially from current expectations. In addition, the Company
regularly monitors its exposure to the loss contingencies associated with these matters and may
from time to time change its predictions with respect to outcomes and its estimates with respect to
related costs and exposures. It is possible that material differences in actual outcomes, costs
and exposures relative to current predictions and estimates, or material changes in such
predictions or estimates, could have a material adverse effect on the Company&#146;s financial
condition, results of operations or cash flows.
</DIV>

<DIV align="left">
<A name="108"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Item&nbsp;3A. Executive Officers of the Registrant.</B></U>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="46%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Age as of</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Date First Appointed</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center">Name</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">3/31/06</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Position</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">as an Executive Officer</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="7" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Lawrence R. Johnston</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">57</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chairman of the Board, Chief Executive Officer and President</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">04/23/01</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Romeo R. Cefalo</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">56</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Vice President, New Store Formats and Development</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">03/21/00</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Robert J. Dunst, Jr.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">45</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Vice President,  Technology and Supply Chain</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">11/19/01</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Paul T. Gannon</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">53</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Vice President, Marketing and Food Operations</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">09/13/04</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Kathy J. Herbert</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">52</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Vice President, Human Resources</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">09/17/01</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Duncan C. Mac Naughton</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">43</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Vice President, Merchandising</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">02/04/05</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John R. Sims</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">56</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Vice President and General Counsel</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">03/25/02</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Felicia D. Thornton</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">42</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Vice President and Chief Financial Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">08/22/01</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="top" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Kevin H. Tripp</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">51</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Vice President, Drug Operations and President, Drug Division</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">12/11/00</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Lawrence R. Johnston has served as President since July&nbsp;24, 2003 and Chairman of the Board and
Chief Executive Officer since April&nbsp;23, 2001. Previously, he served as President and Chief
Executive Officer, GE Appliances (maker of major household appliances and a division of General
Electric Company, a diversified industrial corporation) from November&nbsp;1999.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Romeo R. Cefalo became Executive Vice President, Real Estate, Construction, New Store Formats and
Development on February&nbsp;20, 2004. Previously, he served as Executive Vice President, Operations
from March&nbsp;21, 2000.
</DIV>


<P align="center" style="font-size: 10pt">12
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Robert J. Dunst, Jr. became Executive Vice President, Technology and Supply Chain on May&nbsp;6, 2005.
Previously, he served as Executive Vice President and Chief Technology Officer from November&nbsp;19,
2001; and Vice President, Applications Development, Safeway, Inc. (food and drug retailing) from
1998.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Paul T. Gannon became Executive Vice President, Marketing and Food Operations on May&nbsp;6, 2005.
Previously, he served as Executive Vice President and Chief Marketing Officer from September&nbsp;13,
2004; and President and Chief Executive Officer, Shaw&#146;s Division from April&nbsp;2004. Prior to the
Company&#146;s acquisition of Shaw&#146;s Supermarkets, Inc. in April&nbsp;2004, Mr.&nbsp;Gannon served as President and Chief Executive
Officer of Shaw&#146;s Supermarkets, Inc. (food and drug retailing) from November&nbsp;2002; President and
Chief Operating Officer Shaw&#146;s Supermarkets, Inc. from May&nbsp;2002; Chief Operating Officer of Shaw&#146;s
Supermarkets, Inc. from February&nbsp;2001; and Executive Vice President, Real Estate and Marketing of
Shaw&#146;s Supermarkets, Inc. from September&nbsp;1999.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Kathy J. Herbert became Executive Vice President, Human Resources on September&nbsp;17, 2001.
Previously, she served as Vice President, Human Resources, Jewel-Osco Division, American Stores
Company (food and drug retailing) and subsequently Albertsons from April&nbsp;1998.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Duncan C. Mac Naughton became Executive Vice President, Merchandising on April&nbsp;18, 2005, and has
served as an Executive Officer since February&nbsp;4, 2005. Previously he served as Senior Vice
President, Merchandising from June&nbsp;18, 2004; Group Vice President, Grocery Merchandising from
November&nbsp;2003; and Group Vice President, Grocery Merchandising and Own Brand, HEB Grocery Company
(food retailing) from 1998.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">John R. Sims became Executive Vice President and General Counsel on March&nbsp;25, 2002. Previously, he
was Vice President and Deputy General Counsel with Federated Department Stores, Inc. (department
store retailing) from 1990.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Felicia D. Thornton became Executive Vice President and Chief Financial Officer on August&nbsp;22, 2001.
Previously, she was a business consultant for HASC (private real estate holdings) from January&nbsp;2001
and Group Vice President, Retail Operations, The Kroger Co. (food and drug retailing) from March
2000.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Kevin H. Tripp became Executive Vice President, Drugstore Operations and President, Drug Division
on February&nbsp;13, 2005. Previously, he served as Executive Vice President, Company Drugstore
Operations and President, Drug Division from February&nbsp;20, 2004; Executive Vice President,
Operations and Pharmacy from May&nbsp;19, 2002; and Executive Vice President, Drug and General
Merchandise from December&nbsp;11, 2000.
</DIV>

<DIV align="left">
<A name="109"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Item&nbsp;4. Submission of Matters to a Vote of Security Holders. </B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">No matters were submitted during the fourth quarter of 2005 to a vote of security holders through
the solicitation of proxies or otherwise.
</DIV>


<P align="center" style="font-size: 10pt">13
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="110"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>PART II</B></U>
</DIV>

<DIV align="left">
<A name="111"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Item&nbsp;5. Market for Registrant&#146;s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s common stock is traded on both the New York Stock Exchange and the Pacific Stock
Exchange under the symbol ABS. As of March 24, 2006, there were 23,900 holders of record.
The following table sets forth the reported high and low stock prices by quarter as reported by the
New York Stock Exchange consolidated tape and dividends declared:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000">Common Stock Market Price</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Dividends</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">High</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Low</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Declared</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><U>2005</U></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Fourth Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">25.48</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">19.88</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Third Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26.51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Second Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22.39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19.85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">First Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23.53</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19.26</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><U>2004</U></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Fourth Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">25.93</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">22.35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">0.19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Third Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Second Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22.43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">First Quarter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25.33</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21.57</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.19</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company has paid cash dividends on its common stock since 1959. The Company pays these
dividends at the discretion of the Board of Directors. The continuation of these payments, the
amount of such dividends and the form in which the dividends are paid (cash or stock) depend upon
many factors, including the results of operations and the financial condition of the Company.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Issuer Purchases of Equity Securities</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Maximum Number (Or</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Total Number Of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Approximate Dollar</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Shares (Or Units)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Value) Of Shares</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Purchased As Part</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">(Or Units) That May</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Total Number Of</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Of Publicly</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Yet Be Purchased</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Shares (Or Units)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Average Price Paid</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Announced Plans Or</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Under The Plans Or</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">Period</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Purchased</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Per Share (Or Unit)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Programs <SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Programs</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">November 4 &#151; November&nbsp;30, 2005</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2,740</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">24.66</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">December 1 &#151; December&nbsp;31, 2005</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">104,211</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">January 1 &#151; February&nbsp;2, 2006</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">7,994</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22.89</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; margin-top: 3pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>During 2005, the Company did not repurchase any shares of common stock under its Board
authorized repurchase program, which permitted management to purchase and retire up to $500 of
the Company&#146;s common stock. The $500 repurchase program expired on December&nbsp;31, 2005.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Represents shares surrendered or deemed surrendered to the Company to satisfy tax withholding
obligations in connection with the distribution of shares of stock as a result of the exercise
or other settlement of Company equity awards.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">14
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">





<DIV align="left">
<A name="112"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Item&nbsp;6. Selected Financial Data. </B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following data have been derived from the consolidated financial statements of the Company and
should be read in conjunction with those statements.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">52 Weeks</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">53 Weeks</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">52 Weeks</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">52 Weeks</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">52 Weeks</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(Dollars in millions,</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 2,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 3,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">January 29,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">January 30,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">January 31,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">except per share data)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2002</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating Results:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">40,358</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">39,810</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">35,019</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">35,316</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">36,294</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Earnings from continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">462</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">474</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">556</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">866</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">487</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">446</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">444</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">556</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">485</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">501</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net earnings as a percent to sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.11</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.11</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.59</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.38</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.38</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Common Stock Data:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Earnings per share from continuing operations:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2.18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net earnings per share:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash dividends per share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.76</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.76</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.76</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.76</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.76</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Financial Position:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">17,871</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">18,311</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">15,666</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">15,477</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">16,323</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-term debt and capitalized lease obligations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,278</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,649</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,804</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,257</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,336</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other Year End Statistic:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Number of stores</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,471</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,503</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,305</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,287</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,421</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The operating results include restructuring initiatives that were implemented in 2001, 2002, 2004
and 2005 (refer to Note 5 &#147;Discontinued Operations, Restructuring Activities and Closed Stores&#148; in
the notes to the accompanying consolidated financial statements). Although these initiatives were
similar, the adoption of Statement of Financial Accounting Standard (&#147;SFAS&#148;) No.&nbsp;144 &#147;Accounting
for the Impairment or Disposal of Long-Lived Assets&#148; on February&nbsp;1, 2002 required the financial
statement presentation of these actions to be dissimilar beginning with the 2002 initiative. The
Company&#146;s financial statements were restated to classify the results of operations for the 2005
restructuring that resulted in divestiture of seven stores, the 2004 restructuring that resulted in
the divestiture of 28 stores and three non-operating properties and the 2002 restructuring that
resulted in the divestiture of 95 stores and two distribution centers and the elimination of four
division offices, as discontinued operations for all periods. The operating results of the 165
stores divested under the 2001 restructuring are included in continuing operations of the Company&#146;s
financial statements for the periods prior to their sale or closure.
</DIV>

<DIV align="left">
<A name="113"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Item&nbsp;7. Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations. </B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Management&#146;s Overview</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All dollar amounts in this Annual Report on Form 10-K are in millions, except per share data and
the compensation information included in Item&nbsp;11 of Part&nbsp;III.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Albertsons is one of the largest retail food and drug chains in the world, based on sales. As of
February&nbsp;2, 2006, Albertsons, through its subsidiaries and divisions, operated retail stores in 37
states. These stores operate under banners including Albertsons, Acme, Bristol Farms, Grocery
Warehouse, Jewel, Jewel-Osco, Max Foods, Osco Drug, Sav-on Drug, Shaw&#146;s, Star Market, Super Saver
and Lazy Acres. As of February&nbsp;2, 2006, the Company employed a diverse workforce of approximately
234,000 associates. The Company&#146;s operations are within a single operating segment, the retail
sale of food and drug merchandise.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s results of operations, financial position and sources and uses of cash in the current
and future periods reflect management&#146;s focus on five strategic imperatives:
</DIV>


<P align="center" style="font-size: 10pt">15
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Aggressive Cost and Process Control</U>. Each main category of expense, including labor, is
monitored by a member of executive management. The Company committed to achieve annual cost
reductions and cost avoidance of $1,250 by the end of 2006. Through February&nbsp;2, 2006, one year
ahead of schedule, the Company successfully met this goal by eliminating $1,259 of cost. The
Company believes that continued focus on marketing, merchandising and the supply chain, coupled
with savings generated through its Six Sigma program will play a key role in achieving additional
savings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Maximize Return on Invested Capital</U>. The Company has a formal process to review and measure
all significant investments in Company assets. The Company&#146;s goal is to hold a number one or two
market share position in each market in which it operates, or to have a plan of action which
provides a reasonable expectation of achieving this goal in order to continue to maintain an
investment in that market. This process involves a thorough review at the individual asset or store
level and at the market level. As a result of this process, the Company has taken the following
actions:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In 2003, the Company closed 61 underperforming stores.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In 2004, the Company exited two underperforming markets resulting in the sale or closure
of 28 stores and three non-operating properties, and implemented a new organizational
structure in its Intermountain West and Dallas/Ft. Worth Divisions intended to eliminate
layers of management and streamline operations. More importantly, however, the Company began
an intense focus on format differentiation in 2004 and made investments in Bristol Farms, a
premier fresh and specialty retailer in Southern California, and Extreme Inc., an operator
of price impact stores in and around Dallas, Texas; Baton Rouge, Louisiana; Salt Lake City,
Utah and various cities in Florida.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In 2005, the Company exited one underperforming market resulting in the sale of seven
stores and sold a distribution facility in San Leandro, California.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Customer-focused Approach to Growth</U>. The Company intends to invest much of the savings from
its expense and process control programs back into the marketplace in order to drive sales and
earnings growth over time, although potentially at the expense of gross margin in the near term.
The Company&#146;s focus is on the following programs:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Targeted investments in Southern California to enhance customer loyalty and increase
profitability.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Continuation of the &#147;Check the Price&#148; program launched in September&nbsp;2004, under which the
Company has lowered everyday prices on selected products.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Increasing Our Own Brands product penetration through continued introductions in <I>essensia</I>&#153;,
the Company&#146;s premium line, <I>equaline</I>&#153;, the Company&#146;s new brand for health and beauty
products, <I>HomeLife</I>&#153;, the Company&#146;s new line of general merchandise products and the
Company&#146;s other banner product lines.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Continued rollout of the new &#147;Renaissance&#148; drug store format, which provides an expanded
product selection in several key categories and an enhanced shopping experience with the
revitalized look and feel of the store compared to a traditional drugstore.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Company-wide Focus on Technology</U>. Albertsons utilizes technology to better serve customers,
connect with consumers and to improve operating efficiencies. In 2002, Albertsons established an
information technology plan, which called for the replacement or upgrade of over three-quarters of
the Company&#146;s systems by 2007. As the five-year strategy continues to be executed, the
Company is leveraging technology as a strategic asset throughout the Company, from supply chain,
merchandising and customer service to human resources. The Company believes that its investment in
technology systems and processes will help to create an industry leadership position and a
competitive advantage. A robust governance council manages the strategic roadmap, ensuring that
projects are on track and on time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Energized Associates</U>. The Albertsons leadership team is charged with creating an uplifting
atmosphere for associates and inspiring positive attitudes throughout the Company. Albertsons
believes that a team of energized associates who share a positive attitude will help to create a
competitive advantage for the Company. Associates are energized by a culture of lifelong learning,
the ability to participate in career development and advancement opportunities, diversity networks
and affinity groups and a performance management process that requires goal setting, tracking and
measuring. The Company has successfully established a &#147;pay for performance&#148; environment that
rewards associates who consistently achieve or exceed targets and deliver results. Competitive
compensation programs are reviewed on a regular basis to ensure they are meeting the needs of
associates and the Company. Consistent, frequent communication from leaders is well established
through a series of weekly and monthly satellite broadcasts, a weekly online message from the CEO,
and regularly scheduled town hall meetings.
</DIV>


<P align="center" style="font-size: 10pt">16
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s focus on these five strategic imperatives is designed to address the intense
competitive landscape of the retail food and drug industry. Today, direct competition comes from a
variety of sources, including supermarket chains, independent and specialty grocers, specialty
retailers and large-scale drug retailers. Increasing competition also exists from convenience
stores, prepared food retailers, Internet and mail-order retailers. The biggest competitive impact
on the food retailing industry, however, has been the growth of low price retailers, primarily
supercenters and discount stores. The rapid growth of this format has
demonstrated that while convenience,
quality, product assortment and customer service remain important factors in creating a competitive
advantage, price is increasingly a significant driver of consumer choice in the food retailing
industry.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Also impacting the retail food and drug industry is the overall economy of the United States. While
most key economic indicators impact the Company&#146;s operations to some degree, there are higher
correlations to food inflation, fuel prices and consumer confidence. As the low price retail format
continues to grow, the ability of the Company to pass along price increases in times of food
inflation is challenging, which negatively impacts gross margin. Similarly, when fuel prices
increase and consumer confidence remains low, the price sensitivity of the already price-conscious
consumer increases.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Significant Events</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><I>Definitive Agreement to Sell Company</I></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On January&nbsp;22, 2006, Albertsons entered into a series of agreements (the &#147;Agreements&#148;) providing
for the sale of Albertsons to SUPERVALU INC. (&#147;Supervalu&#148;), CVS Corporation (&#147;CVS&#148;) and a
consortium of investors including Cerberus Capital Management, L.P., Kimco Realty Corporation,
Lubert-Adler Management, Inc., Klaff Realty, L.P. and Schottenstein Stores Corporation (the
&#147;Cerberus Group&#148;). As a result of a series of transactions provided for under
the Agreements (the
&#147;Transactions&#148;), Albertsons&#146; shareholders will ultimately be entitled to receive $20.35 in cash and
0.182 shares of Supervalu common stock for each share of Albertsons&#146; common stock that they held
before the Transactions. The Transactions are subject to approval by Albertsons&#146; shareholders and
Supervalu&#146;s shareholders as well as antitrust clearance and the satisfaction or waiver of other
customary closing conditions (see &#147;Subsequent Event&#148; below). The Transactions are currently anticipated to be completed in the
second quarter of calendar year 2006, but the completion of the Transactions could be delayed if,
among other things, all necessary approvals are not obtained by that
time. The Company may be required to pay to Supervalu a termination
fee of $276 if the merger agreement is terminated under certain
specified circumstances.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Early Payment Discounts</I></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">During the fourth quarter of 2005, the Company reviewed its method of accounting for cash discounts
for the early payment of merchandise purchases (&#147;early payment discounts&#148;) and determined that
effective for 2005 it would recognize such discounts as a reduction of inventory and then as a
reduction to cost of sales when the related products are sold. The Company previously recognized
early payment discounts as a financing component of merchandise purchases by reducing cost of sales
when the related product was purchased. If the Company had applied this method when Emerging
Issues Task Force (&#147;EITF&#148;) Issue 02-16, &#147;Accounting by a Customer (Including a Reseller) for
Certain Consideration Received from a Vendor&#148; (&#147;EITF 02-16&#148;), was adopted in 2002, net earnings
would have increased by approximately $0.3, $0.9, and $0.3 for 2005, 2004 and 2003, respectively.
Management concluded that the impact on the Company&#146;s prior years&#146; interim and annual consolidated
financial statements was not material and, therefore, recorded a noncash adjustment of $38 or $23
after-tax ($0.06 per diluted share) in the fourth quarter of 2005 for the total cumulative effect.
This change will have no impact on historical or future cash flows or the amount the Company has
paid or will pay for merchandise.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Sale of San Leandro, California Distribution Facility</I></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On November&nbsp;10, 2005, the Company consummated the sale of its distribution facility in San Leandro,
California. The Company recognized a pre-tax gain of approximately $52 on the sale. Under the
terms of the agreement, the Company has committed to lease the facility from the buyer through
August&nbsp;2006 and has the right to extend the term for an additional period of two months.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Shaw&#146;s
Acquisition</I></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On
April&nbsp;30, 2004, the Company acquired all of the outstanding capital stock of the entity which
conducted J Sainsbury plc&#146;s U.S. retail grocery store business (&#147;Shaw&#146;s&#148;). The results of Shaw&#146;s
operations have been included in the Company&#146;s consolidated financial statements since that date.
The operations acquired consisted of 206 grocery stores in the New England area operated under the
banners of Shaw&#146;s and Star Market. The Company acquired Shaw&#146;s for a variety of reasons, including
attractive market share positions and real estate, the opportunity to realize numerous synergies
and strong historical financial performance.
</DIV>


<P align="center" style="font-size: 10pt">17
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The aggregate purchase price was $2,578, which included $2,134 of cash, $441 of assumed capital
lease obligations and debt and $3 of transaction costs. The Company used a combination of
cash-on-hand and the proceeds of the issuance of $1,603 of commercial paper to finance the
acquisition. The Company used the net proceeds from a subsequent mandatory convertible security
offering (refer to Note 8 &#147;Indebtedness&#148; in the notes to the accompanying consolidated financial
statements) to repay $1,117 of such commercial paper.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Bristol Farms Acquisition</I></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On September&nbsp;21, 2004, the Company acquired New Bristol Farms, Inc. (&#147;Bristol Farms&#148;) for $137 in
cash. The operations acquired consisted of 11 gourmet retail stores in Southern California.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Impact of Hurricanes on Operations</I></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The 2005 and 2004 results of operations were impacted by the hurricanes that struck Florida, Texas
and Louisiana during the Company&#146;s third quarter of 2005 and the hurricanes that struck Florida
during the third quarter of 2004. The Company has a combination of self-insurance and purchased
insurance coverage for natural disasters and incurred approximately $20 and $28 in 2005 and 2004,
respectively, in hurricane-related costs on a pre-tax basis, net of anticipated insurance
reimbursements. Costs incurred primarily relate to inventory spoilage, building and equipment
repair and replacement costs, employee and community relief efforts and increased payroll.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Southern California Labor Dispute</I></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Results of operations for the years ended February&nbsp;3, 2005 and January&nbsp;29, 2004 were unfavorably
impacted by the labor dispute with the Company&#146;s retail union associates in Southern California
that began on October&nbsp;12, 2003 and lasted into the first quarter of 2004 (the &#147;Labor Dispute&#148;). The
Labor Dispute resulted in decreased sales in the Company&#146;s Southern California combination
food-drug and conventional food stores and decreased gross margin as a result of decreased volume,
increased inventory shrink, sales mix changes and increased distribution costs. Additional costs
incurred in connection with the terms of new collective bargaining agreements resulting from the
dispute included funding a one-time contribution to the union health and welfare fund of $36 and
strike ratification bonus payments of $10. These amounts were charged to earnings in 2004.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company, The Kroger Co. and Safeway Inc. (the &#147;Retailers&#148;) engaged in multi-employer bargaining
with the United Food and Commercial Workers (&#147;UFCW&#148;) in connection with the Labor Dispute and, as a
result, the Retailers entered into agreements (&#147;Labor Dispute Agreements&#148;) that, among other
things, were designed to prevent the union from placing disproportionate pressure on one or more
Retailer. The Labor Dispute Agreements provided for payments from any of the Retailers who gained
from such disproportionate pressure to any of the Retailers who suffered from such disproportionate
pressure. Amounts earned by the Company under the terms of the Labor Dispute Agreements totaled $46
in 2003 and $17 in 2004. Amounts earned were recorded as a reduction to selling, general and
administrative expenses in the respective years and all amounts were collected in 2004.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Subsequent Event</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On March&nbsp;13, 2006, the
pre-merger waiting period for the proposed Transactions with Supervalu, CVS and the Cerberus Group expired, indicating that the Federal
Trade Commission (&#147;FTC&#148;) has completed the pre-merger review as required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976. No divestiture of retail stores or other
assets was required and the FTC imposed no conditions or restrictions on the proposed Transactions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The proposed Transactions remain subject to the satisfaction of customary closing conditions,
including approval of the Transactions by both Albertsons and Supervalu shareholders.
</DIV>


<P align="center" style="font-size: 10pt">18
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Results of Operations</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Sales for 2005 (52-week year) were $40,358 compared to $39,810 in 2004 (53-week year) and $35,019
in 2003 (52-week year). The following table sets forth certain components of the Company&#146;s
Consolidated Earnings Statements expressed as a percent to sales and the year-to-year percentage
changes in the amounts of such components:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="44%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>Percentage Change</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000"><B>Percent To Sales</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>Of Dollar Amounts</B></TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2005</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2004</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2005 vs. 2004</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2004 vs. 2003</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100.00</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.38</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">13.68</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gross profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28.05</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28.04</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28.62</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.42</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11.37</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Selling, general and administrative expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24.98</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24.98</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24.88</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.38</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14.13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Restructuring credits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.02</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.03</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">n.m.</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(5.29</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22.01</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Earnings from continuing operations before
income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.77</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.83</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1.89</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(19.69</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Earnings from continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2.46</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(14.83</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Loss from discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(0.04</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(0.07</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">46.43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">n.m.</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Net earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(20.18</TD>
    <TD nowrap>)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD colspan="3">n.m. - not meaningful</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Fiscal Year 2005 Compared to Fiscal Year 2004</I></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Sales for the 52&nbsp;weeks ended February&nbsp;2, 2006 increased $548 or 1.38% as compared to the 53&nbsp;weeks
ended February&nbsp;3, 2005. This increase was primarily due to the addition of 206 stores as a result
of the Shaw&#146;s transaction on April&nbsp;30, 2004 and 11 stores acquired in the Bristol Farms transaction
on September&nbsp;21, 2004 and continued recovery from the Labor Dispute. The increase resulting from
these factors was partially offset by 2005 being a 52-week year compared to 2004 which was a
53-week year. Sales in 2005 were also unfavorably impacted by competitive pressures.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Identical store sales and comparable store sales, calculated on a 52-week basis for both 2005 and
2004 by excluding the first week of 2004 results, increased 0.3% and 0.4%, respectively, as
compared to 2004. Identical stores are defined as stores that have been in operation for both full
fiscal periods. Comparable store sales use the same store base as the identical stores except it
includes replacement stores. The 206 acquired Shaw&#146;s stores and the 11 acquired Bristol Farms
stores are not included in the identical or comparable store sales annual computations and will not
be included in the annual computation until 2006. Increases in identical and comparable store
sales during 2005 were primarily a result of the continued recovery from the Labor Dispute,
partially offset by competitive pressure. During 2006, the Company expects to continue to invest
in pricing, promotion and advertising to capture market share and increase sales in key geographic
markets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Management estimates that overall inflation in products the Company sells was 1.1% in the 12&nbsp;months
ended February&nbsp;2, 2006 as compared to 0.8% in the 12&nbsp;months ended February&nbsp;3, 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">During 2005 the Company opened 22 combination food-drug stores, three conventional food stores, 15
stand-alone drugstores, 16 Extreme Inc. price impact stores and four fuel centers. The Company
closed or sold 49 combination food-drug stores, 24 conventional food stores, five warehouse stores
and 10 stand-alone drugstores. The Company also remodeled 138 stores. Net retail square footage
of continuing operations was 102.6&nbsp;million square feet at the end of 2005 as compared to 104.2
million square feet at the end of 2004.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Gross profit, as a percent to sales, increased one basis point in 2005 as compared to 2004. Gross
profit increased due to enhancements to the Company&#146;s &#147;Check the Price&#148; marketing initiative,
improvements in savings generated from strategic sourcing and consumer demand chain initiatives
including shrink initiatives and increased generic drug utilization. The majority of these
improvements were offset by the effect of the $38 noncash adjustment for early payment discounts
and reduced sales of Our Own Brands products.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Selling, general and administrative (&#147;SG&#038;A&#148;) expenses as a percent to sales were 24.98% for both
2005 and 2004. SG&#038;A expenses were favorably impacted in 2005 by gains of approximately $133
recognized from the disposal of property as well as reduced employee benefit costs and initiatives
that reduced workers&#146; compensation costs. Declines in employee benefit costs were the result of a
one-time contribution to the union health and welfare fund of $36 and strike ratification bonus
payments of $10 in the first quarter of 2004 under the terms of the collective bargaining
agreements in Southern California. Workers&#146; compensation costs were lower when compared with 2004
as a result of Company initiatives to lower accident frequencies and the continuing positive impact
of the California workers&#146; compensation legislation. SG&#038;A expenses were unfavorably impacted in
2005 by long-lived asset impairment charges, costs related to
</DIV>
<P align="center" style="font-size: 10pt">19
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">the Company&#146;s exploration of strategic alternatives and increases in salaries and wages, utilities
costs, rent and depreciation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Net interest expense totaled $529 for the 52-week period ended February&nbsp;2, 2006 as compared with
$499 for the 53-week period ended February&nbsp;3, 2005. This increase was primarily due to an increase
in interest on capital lease obligations from the acquisition of Shaw&#146;s, interest costs on the
issuance of the $1,150 mandatory convertible securities in May&nbsp;2004 used to repay commercial paper
that was used to finance the acquisition of Shaw&#146;s and interest related to previously recorded tax
reserves. The interest associated with tax reserves is related primarily to disputes on items with
the Internal Revenue Service. Interest would then be due for the time period in dispute. The
increase caused by these factors was partially offset by a decrease in interest expense in 2005 due
to a lower amount of outstanding notes payable and the effect of the 52&nbsp;weeks in 2005 versus 53
weeks in the previous year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s effective income tax rate from continuing operations for 2005 was 35.3%, as compared
to 34.9% for 2004. This increase was due primarily to a tax benefit recognized in 2004 which arose
from the resolution of 2003 tax issues with the Internal Revenue Service.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Earnings from continuing operations were $462, or $1.24 per diluted share, in 2005 compared to
$474, or $1.27 per diluted share, in 2004. This decrease was primarily due to the $38 noncash
adjustment for early payment discounts (described above), $22 in costs related to the Company&#146;s
exploration of strategic alternatives, increases in payroll and occupancy related costs and one
less week in 2005 as compared to 2004. The decrease resulting from these factors was partially
offset by pre-tax gains of approximately $133 realized from the disposal of property in addition to
reductions in workers&#146; compensation costs and improvements in employee benefit costs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Net loss from discontinued operations was $16 in 2005, which resulted primarily from the Company&#146;s
decision in April&nbsp;2005 to exit the Jacksonville, Florida market. Net loss from discontinued
operations was $30 in 2004, which resulted primarily from the Company&#146;s decision, announced in June
2004, to sell, close or otherwise dispose of 21 operating stores in Omaha, Nebraska and the
Company&#146;s decision, announced in April&nbsp;2004, to sell, close or otherwise dispose of seven operating
stores and three non-operating properties in New Orleans, Louisiana.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Fiscal Year 2004 Compared to Fiscal Year 2003</I></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Sales for the 53&nbsp;weeks ended February&nbsp;3, 2005 increased $4,791 or 13.7% as compared to the 52&nbsp;weeks
ended January&nbsp;29, 2004. This increase was primarily due to the addition of 206 stores as a result
of the Shaw&#146;s transaction on April&nbsp;30, 2004 and 11 stores acquired in the Bristol Farms transaction
on September&nbsp;21, 2004, lower than normal sales in 2003 as a result of the Labor Dispute and an
extra week in 2004 as compared to 2003. By the fourth quarter of 2004, the Company had recaptured
its 2002 pre-Labor Dispute market share and sales in its Southern California area. However, sales
were unfavorably impacted by competitive pressures in other markets such as Dallas/Ft. Worth and in
certain markets where the Company did not have a number one or number two market share position.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Identical store sales, calculated on a 53-week basis for both 2004 and 2003, decreased 0.3% and
comparable store sales, also calculated on a 53-week basis for both 2004 and 2003, increased 0.2%
as compared to 2003. The first week of 2004 has been used as the 53rd week of 2003. Identical
stores are defined as stores that have been in operation for both full fiscal periods. Comparable
store sales use the same store base as the identical stores except it includes replacement stores.
The 206 acquired Shaw&#146;s stores and the 11 acquired Bristol Farms stores are not included in the
identical or comparable store sales annual computations. Declines in identical store sales and the
slight increase in comparable store sales during 2004 were a result of the soft economy, increased
competition from low-priced retailers such as supercenters, club stores and large-scale drugstore
retailers and heavy promotional activity by traditional competitors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Management estimates that overall inflation in products the Company sells was 0.8% in the 12&nbsp;months
ended February&nbsp;3, 2005 as compared to 0.5% in the 12&nbsp;months ended January&nbsp;29, 2004.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">During 2004 the Company acquired 172 combination food-drug stores, 34 conventional food stores and
11 specialty retail stores as part of the Shaw&#146;s and Bristol Farms acquisitions. The Company also
opened 43 combination food-drug stores, 15 stand-alone drugstores, one conventional food store, 11
Extreme Inc. price impact stores and 13 fuel centers. The Company closed or sold 47 combination
food-drug stores, 15 conventional food stores and 27 stand-alone drugstores. The Company also
remodeled 186 stores. Net retail square footage of continuing operations was 104.2&nbsp;million square
feet at the end of 2004 as compared to 94.0&nbsp;million square feet at the end of 2003.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Gross profit, as a percent to sales, decreased in 2004 as compared to 2003 due to continued planned
investments in pricing, promotion and advertising to drive sales growth and market share. These
investments occurred throughout the Company, especially in Southern California, in an effort to
recapture market share following the resolution of the Labor Dispute. The factors causing a decline
in gross profit, as a percent to sales, were partially offset by savings generated from strategic
sourcing and consumer demand chain initiatives, increased pharmacy gross margins as a result of
benefits from a supply contract and increased Company-sourced generic drugs and
</DIV>
<P align="center" style="font-size: 10pt">20
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">increased sales growth in the Company&#146;s Own Brands.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">SG&#038;A expenses as a percent to sales increased slightly in 2004 as compared to 2003. This increase
was primarily due to higher employee benefit costs, additional legal expense associated with
pending and settled litigation, and higher professional expenses related to information technology
infrastructure improvements and the Company&#146;s consumer demand chain initiatives. The increase was
also attributable to the unplanned and self-insured costs associated with the Southeastern United
States hurricanes, ratification bonuses of $16 associated with the terms of the new collective
bargaining labor agreements in California and Nevada, increased credit and debit card transaction
fees and increased rent expense. In addition, SG&#038;A expenses as a percent to sales in 2003 were
favorably impacted by $46 earned under the Labor Dispute Agreements. Partially offsetting these
factors, SG&#038;A expenses as a percent to sales benefited in 2004 from lower wages and benefits
related to a decrease in bonus expense, increased sales leverage from the acquisition of Shaw&#146;s,
gains recognized on the disposal of property, a reduction in business taxes as a result of
favorable state audit settlements and a reduction in incremental
Labor Dispute costs from those recognized in
the prior year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The increase in employee benefit costs referenced above was a result of a one-time contribution to
a union health and welfare fund of $36 associated with the terms of the new collective bargaining
labor agreement in Southern California and unanticipated payments to two Northern California UFCW
multi-employer health and welfare plans for funding deficits in 2004. Additionally, there was a $36
gain recognized in 2003 associated with the curtailment of postretirement medical benefits. The
impact of these factors was partially offset by lower Company-sponsored health and welfare costs in
2004 due to the restructuring of the Company&#146;s benefit plans in June&nbsp;2004.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Net interest expense during 2004 totaled $499 as compared with $409 in 2003. This increase was due
to interest costs on the issuance of the $1,150 mandatory convertible security in May&nbsp;2004 used to
repay commercial paper that was used to finance the acquisition of Shaw&#146;s (refer to Note 8
&#147;Indebtedness&#148; in the notes to the accompanying consolidated financial statements) and an increase
in interest on capital lease obligations resulting from the acquisition of Shaw&#146;s.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s effective income tax rate from continuing operations for 2004 was 34.9%, as compared
to 38.6% for 2003. This decrease was due primarily to a tax benefit arising from the resolution of
prior year tax issues with the Internal Revenue Service and the implementation and effects of the
Company&#146;s tax savings initiatives which had a favorable impact on the current tax rate and also
resulted in a favorable adjustment upon completion of the prior year tax returns.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Earnings from continuing operations were $474 in 2004 compared to $556 for 2003. This decrease was
due to lower gross margins as a result of increased investments in pricing and promotion, higher
employee benefit expenses in 2004 as a result of a one-time contribution to the union health and
welfare fund of $36 made under new collective bargaining labor agreements, and $46 earned in 2003
under the Labor Dispute Agreements compared to $17 earned in 2004. The 2004 decrease was also
attributable to increased legal expense associated with pending and settled litigation, higher
professional expenses for technology services, increased interest expense, unplanned and
self-insured hurricane costs, increased credit and debit card transaction fees and increased rent
expense. Although sales and market share in Southern California had returned to 2002 pre-Labor
Dispute levels by the fourth quarter of 2004, earnings had not recovered to pre-Labor Dispute
levels as a result of increased investment in pricing and promotion to grow sales and capture
market share. The Company experienced earnings pressure in Northern California and Dallas/Ft. Worth
due to intense competition, which also resulted in higher than anticipated pricing and promotional
investment during 2004, and in certain other markets where the Company did not have a number one or
number two market share position. The decline in earnings was partially offset by earnings from
Shaw&#146;s operations that were acquired in 2004, a reduction in wages and benefits, gains on the
disposal of property and a reduction in the effective tax rate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Net loss from discontinued operations was $30 in 2004 as compared to $0 in 2003. This loss
resulted primarily from the Company&#146;s decision, announced in June&nbsp;2004, to sell, close or otherwise
dispose of 21 operating stores in Omaha, Nebraska and the Company&#146;s decision, announced in April
2004, to sell, close or otherwise dispose of seven operating stores and three non-operating
properties in New Orleans, Louisiana.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Discontinued Operations and Restructuring Activities</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company has a process to review its asset portfolio in an attempt to maximize returns on its
invested capital. As a result of these reviews, in recent years the Company has closed and disposed
of a number of properties through market exits, restructuring activities and on-going store
closures. The Company recognizes lease liability reserves and impairment charges associated with
these transactions. Summarized below are the significant transactions the Company has undertaken
and the related lease accrual activity.
</DIV>


<P align="center" style="font-size: 10pt">21
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Discontinued Operations</I></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In April&nbsp;2005 the Company entered into a definitive agreement to sell its operations in the
Jacksonville, Florida market to a single buyer. The sale was completed on August&nbsp;24, 2005. The
operations consisted of seven operating stores, of which four were owned and three leased. The
three lease agreements were assumed by the buyer. Results of operations for the seven stores have
been reclassified and presented as discontinued operations for 2005, 2004 and 2003.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In June&nbsp;2004 the Company announced its plan to sell, close or otherwise dispose of its operations
in the Omaha, Nebraska market, which consisted of 21 operating stores. Results of operations for
those stores have been reclassified and presented as discontinued operations for 2005, 2004 and
2003. As of February&nbsp;2, 2006 the Company had disposed of 19 properties. The two remaining
properties are subject to operating leases and have no remaining book value.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In April&nbsp;2004 the Company announced its plan to sell, close or otherwise dispose of its operations
in the New Orleans, Louisiana market, which consisted of seven operating stores and three
non-operating properties. Results of operations for those stores and properties have been
reclassified and presented as discontinued operations for 2005, 2004 and 2003. As of February&nbsp;2,
2006, the Company had disposed of six properties. The four remaining properties have a book value
of $14 and are classified as Assets held for sale in the 2005 Consolidated Balance Sheet.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2002 the Company announced its plan to sell, close or otherwise dispose of its operations in
four underperforming markets: Memphis, Tennessee; Nashville, Tennessee; Houston, Texas; and San
Antonio, Texas. This involved the sale or closure of 95 operating stores and two distribution
centers. As of February&nbsp;2, 2006 the Company had disposed of 89 properties. The eight remaining
properties have a book value of $2 and are classified as Assets held for sale in the 2005
Consolidated Balance Sheet.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The results of discontinued operations were as follows:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2003</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR><td>&nbsp;</td></TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">242</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">417</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Loss from operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(5</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(3</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net impairment charges and lease accruals</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(63</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">(Loss) gain on disposal</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(15</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income tax benefit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Loss from discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(16</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(30</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Restructuring Activities</I></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2001 the Company committed to a plan to restructure its operations by 1) closing 165
underperforming stores, 2) closing four division offices, 3) centralizing processing functions to
its store support centers, and 4) reducing overall store support center headcount. As of February
2, 2006, the Company had disposed of or subleased 158 properties. The 11 remaining properties have
no remaining book value.
</DIV>


<P align="center" style="font-size: 10pt">22
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes the accrual activity for future lease obligations related to
discontinued operations, restructuring activities and closed stores:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Balance</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Balance</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 3,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 2,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Additions</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Payments</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Adjustments</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2006</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2004 Discontinued Operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(1</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2002 Discontinued Operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2001 Restructuring Activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Closed Stores</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(13</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">42</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(23</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">35</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Balance</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Balance</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">January 29,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 3,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Additions</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Payments</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Adjustments</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2004 Discontinued Operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(7</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2002 Discontinued Operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2001 Restructuring Activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(5</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Closed Stores</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(7</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(22</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">42</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Balance</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Balance</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">January 30,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">January 29,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Additions</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Payments</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Adjustments</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2002 Discontinued Operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(4</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2001 Restructuring Activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(9</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Closed Stores</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(9</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">69</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(22</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(5</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">47</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Liquidity and Capital Resources</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Net cash provided by operating activities during 2005 was $1,545, compared to $2,114 in 2004 and
$1,526 in 2003. The decrease in cash provided by operating activities in 2005 as compared to 2004
was primarily due to lower cash receipts from receivables as a result of prior year collections of
amounts earned under the Labor Dispute Agreements and a prior year return of a deposit from a
third-party service provider, changes in deferred tax balances arising from tax timing differences,
a large decrease in inventory levels in the prior year, lower unearned income balances and greater
gains on disposal of assets this year. These uses of operating cash were partially offset by an
increase in other long-term liabilities resulting from prior year funding of the Company&#146;s pension
plans and an increase in depreciation and amortization.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The increase in net cash provided by operating activities in 2004 as compared to 2003 was primarily
due to the implementation of initiatives to lower inventories, increases in accounts payable as a
result of lower payable balances in the prior year due to the Labor Dispute, collections of amounts
earned under the Labor Dispute Agreements and return of a deposit from a third-party service
provider. The increase in cash provided by operating activities in 2004 as compared to 2003 was
also attributable to increased noncash charges including depreciation and amortization and charges
related to discontinued operations. The increase in depreciation and amortization was due to the
Shaw&#146;s acquisition and a higher mix of information technology expenditures which have a shorter
useful life compared to store investments. These sources of operating cash were partially offset by
lower earnings from continuing operations, gains on disposal of assets and the cost of funding the
Company&#146;s pension plans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Net cash used in investing activities for 2005 decreased to $604 compared to $3,068 and $901 in
2004 and 2003, respectively. The decrease in cash used in investing activities in 2005 as compared
to 2004 was primarily the result of prior year payments of $2,214, net of cash acquired, to
purchase Shaw&#146;s and Bristol Farms. Also contributing to the decrease were lower capital
expenditures and higher proceeds from the sale of assets in 2005. The decrease in cash used in
investing activities was partially offset by a refundable deposit of
$81 paid to the Internal Revenue Service in the
second quarter of 2005 related to a proposed Internal Revenue Service tax assessment. The deposit was made to suspend
the accrual of interest during the appeals process.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Cash used in financing activities in 2005 was $808 as compared to cash provided by financing
activities of $666 in 2004 and cash used in financing activities of $492 in 2003. The primary
difference in financing cash flows for the last three years was proceeds received in May&nbsp;2004 from
the issuance of the mandatory convertible security offering and commercial paper borrowings used to
acquire Shaw&#146;s
</DIV>
<P align="center" style="font-size: 10pt">23
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">and
Bristol Farms. Other causes of these fluctuations include the paydown of commercial paper in 2005, higher payments
on long-term borrowings in 2004 and purchases of the Company&#146;s common stock in 2003.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Board of Directors, at its March&nbsp;2006 meeting, declared a quarterly cash dividend of $0.19 per
share.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company utilizes its commercial paper and bank line programs primarily to supplement cash
requirements for seasonal fluctuations in working capital and to fund its capital expenditures and,
to a lesser extent, acquisitions. Accordingly, commercial paper and bank line borrowings will
fluctuate between reporting periods.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company had three revolving credit facilities totaling $1,400 during 2005. The first agreement,
a five-year facility with total availability of $900, will expire in June&nbsp;2009. The second
agreement, a five-year facility with total availability of $100, will expire in July&nbsp;2009. The
third agreement, a revolving credit facility with total availability of $400, will expire in June
2010. The Company&#146;s commercial paper program is backed by all three of these credit facilities.
All of the agreements contain two financial covenants: 1) a minimum fixed charge coverage ratio and
2) a maximum consolidated leverage ratio, each as defined in the credit facilities. Under these
facilities, the fixed charge coverage ratio shall not be less than 2.6 to 1 through April&nbsp;30, 2006
and 2.7 to 1 thereafter. The consolidated leverage ratio shall not exceed 4.5 to 1 through April
30, 2006, 4.25 to 1 through April&nbsp;30, 2007, and 4.0 to 1 thereafter. As of February&nbsp;2, 2006, the
Company was in compliance with these requirements. No borrowings were outstanding under the credit
facilities as of February&nbsp;2, 2006 or February&nbsp;3, 2005. The Company had $0 and $349 in commercial
paper borrowings outstanding at February&nbsp;2, 2006 and February&nbsp;3, 2005, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In May&nbsp;2004 the Company completed a public offering registered with the SEC of 40,000,000 of 7.25%
mandatory convertible securities (&#147;Corporate Units&#148;), yielding net proceeds of $971. In June&nbsp;2004
the underwriters purchased an additional 6,000,000 Corporate Units pursuant to an overallotment
option, yielding net proceeds of $146. Each Corporate Unit consists of a purchase contract and,
initially, a 2.5% ownership interest in one of the Company&#146;s senior notes with a principal amount
of one thousand dollars, which corresponds to a twenty-five dollar principal amount of senior
notes. The ownership interest in the senior notes is initially pledged to secure the Corporate Unit
holder&#146;s obligation to purchase Company common stock under the related purchase contract. The
holders of the Corporate Units may elect to substitute the senior notes with zero-coupon U.S.
treasury securities that mature on May&nbsp;15, 2007 having a principal amount at maturity equal to the
aggregate principal amount of the senior notes to secure the purchase contracts. The senior notes
bear an annual interest rate of 3.75%. In the first half of 2007 the aggregate principal amount of
the senior notes will be remarketed, which may result in a change in the interest rate and maturity
date of the senior notes. Proceeds from a successful remarketing would be used to satisfy in full
each Corporate Unit holder&#146;s obligation to purchase common stock under the related purchase
contract. If the senior notes are not successfully remarketed, the holders will have the right to
put the senior notes to the Company to satisfy their obligations under the purchase contract in a
noncash transaction. The purchase contracts yield 3.5% per year on the stated amount of twenty-five
dollars. Subsequent to a successful remarketing, the senior notes will remain outstanding and the
Company will settle its obligations on the maturity date of the senior notes in February&nbsp;2009 or at
a later date if the maturity date is extended in connection with the remarketing of the senior
notes under the terms of the Corporate Units.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company filed a shelf registration statement with the SEC, which became effective on February
13, 2001 (&#147;2001 Shelf Registration&#148;) to authorize the issuance of up to $3,000 in debt securities.
In May&nbsp;2001 the Company issued $600 of term notes under the 2001 Shelf Registration. The term notes
are composed of $200 of principal bearing interest at 7.25% due May&nbsp;1, 2013 and $400 of principal
bearing interest at 8.0% due May&nbsp;1, 2031. Proceeds were used primarily to repay borrowings under
the Company&#146;s commercial paper program. During 2003, 2004 and 2005, no securities were issued
under the 2001 Registration Statement. As of February&nbsp;2, 2006, $2,400 of debt securities remain
available for issuance under the 2001 Registration Statement; however, there can be no assurance
that the Company will be able to issue debt securities under this registration statement at terms
acceptable to the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The
Company did not purchase any shares of its common stock during 2005
or 2004 other than shares surrendered or deemed surrendered to the
Company to satisfy tax withholding obligations in connection with the
distribution of shares of stock as a result of the exercise or other
settlement of Company equity awards. During 2003, the
Company purchased and retired 5.3&nbsp;million shares of its common stock for a total expenditure of
$108 at an average price of $20.26 per share. On December&nbsp;31, 2005, the program authorizing
management, at their discretion, to purchase and retire up to $500 of the Company&#146;s common stock
expired and was not renewed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At February&nbsp;2, 2006, cash flows from operations and available borrowings were adequate to support
planned business operations and capital expenditures. The Company has short-term financing capacity
in the form of commercial paper or bank line borrowings up to $1,400 and long-term capacity under
the 2001 Registration Statement of $2,400.
</DIV>


<P align="center" style="font-size: 10pt">24
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As of February&nbsp;2, 2006, the Company&#146;s credit ratings were as follows:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">S &#038; P</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Moody&#146;s</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Fitch</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-term debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">BBB-</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">Baa3</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">BBB</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Short-term debt</DIV></TD>
    <TD>&nbsp;</TD>

    <TD colspan="3" align="center">&nbsp;&nbsp;&nbsp;&nbsp;A3</TD>

    <TD>&nbsp;</TD>

    <TD colspan="3" align="center">&nbsp;&nbsp;&nbsp;&nbsp;P3</TD>

    <TD>&nbsp;</TD>

    <TD colspan="3" align="center">&nbsp;&nbsp;&nbsp;&nbsp;F2</TD>

</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As a result of the announcement
in September&nbsp;2005 that the Company would explore strategic
alternatives, all of the rating agencies
put the Company&#146;s debt ratings on creditwatch with negative implications. The Company is not
subject to any credit rating downgrade triggers that would accelerate repayment in the Company&#146;s
fixed-term debt portfolio. A downgrade in the Company&#146;s credit ratings should not affect the
Company&#146;s ability to borrow amounts under the revolving credit facilities, however, borrowing costs
would increase. A ratings downgrade would also impact the Company&#146;s ability to borrow under its
commercial paper program by causing increased borrowing costs and shorter durations and could
result in possible access limitations. If needed, the Company could seek alternative sources of
funding, including the issuance of notes up to $2,400 under the 2001 Registration Statement. In
addition, at February&nbsp;2, 2006, up to $1,400 could be drawn upon from the Company&#146;s senior unsecured
credit facilities.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Contractual Obligations, Commercial Commitments and Guarantees</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Contractual Obligations</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company enters into a variety of legally binding obligations and commitments in the normal
course of its business. The table below presents, as of February&nbsp;2, 2006, the Company&#146;s long-term
contractual obligations and commitments which are considered to represent known future cash
payments that the Company will be required to make under existing contractual arrangements. Some
amounts are based on management&#146;s estimates and assumptions and amounts actually paid may vary from
those reflected in the table.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" colspan="4" style="border-bottom: 1px solid #000000">Contractual Obligation</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="18" style="border-bottom: 1px solid #000000">Payments Due By Period</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2011 and</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Total</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2007 - 2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2009 - 2010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Thereafter</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-term debt, including current portion<SUP style="font-size: 85%; vertical-align: text-top"> (1)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,450</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">95</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,860</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,467</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest on long-term debt <SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,501</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">365</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">689</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">633</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,814</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capital lease obligations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,037</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">116</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">232</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">232</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,457</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating leases <SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,856</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">385</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">731</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">647</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,093</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Purchase obligations <SUP style="font-size: 85%; vertical-align: text-top">(4)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Utilities <SUP style="font-size: 85%; vertical-align: text-top">(5)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">137</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">136</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Contracts for purchase of property and
construction of buildings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">258</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">258</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Supply and transportation contracts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,701</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">783</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,344</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">574</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Self-insurance liability</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">967</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">274</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">367</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">155</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">171</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Compensation and benefits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">569</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">58</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">74</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">56</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">381</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other long-term liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total contractual cash obligations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">21,504</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,405</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,536</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,160</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">11,403</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company has medium-term notes and debentures that contain put options that would
require the Company to repay borrowed amounts prior to maturity. Medium-term notes of $30 and
$50 mature in July&nbsp;2027 and April&nbsp;2028, respectively, and have put options exercisable in July
2007 and April&nbsp;2008, respectively. Debentures in the amount of $200 mature in May&nbsp;2037 and
have put options exercisable in May&nbsp;2009. For the purpose of the table above, payments of
these obligations are assumed to occur at maturity.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Amounts include contractual interest payments applicable to the Company&#146;s debt instruments at
February&nbsp;2, 2006.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Represents the minimum rents payable under operating leases, including those associated with
closed stores accrued for under the Company&#146;s restructuring and closed store reserves. Amounts
are offset by expected sublease income.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In addition to the contracts noted in this table, the Company enters into
additional supply contracts to
purchase products for resale in the ordinary course of business.
These contracts cover a broad spectrum of products and sometimes
include volume commitments and specific merchandising obligations in
exchange for vendor allowances. Although there are a significant
number of these contracts, they are generally cancelable upon return
of any unearned allowances and therefore no amounts have been
included in the table above.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company has entered into supply contracts to purchase specified quantities of electricity
and natural gas that have terms through 2007. The amounts included in the table reflect
projected purchases based on historical usage and contracted rates.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">25
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Commercial Commitments</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company had outstanding letters of credit of $124 as of February&nbsp;2, 2006, which were issued
under separate agreements with multiple financial institutions. These agreements are not associated
with the Company&#146;s credit facilities. Of the $124 outstanding at year end, $108 were standby
letters of credit covering workers&#146; compensation and performance obligations. The remaining $16
were commercial letters of credit supporting the Company&#146;s merchandise import program. The Company
paid issuance fees in 2005 averaging 0.45% of the outstanding balance
of the letters of credit.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Guarantees</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company provides guarantees, indemnifications and assurances to others in the ordinary course
of its business. The Company has evaluated its agreements that contain guarantees and
indemnification clauses in accordance with the guidance of Financial Accounting Standards Board
(&#147;FASB&#148;) Interpretation No.&nbsp;45, &#147;Guarantor&#146;s Accounting and Disclosure Requirements for Guarantees,
Including Indirect Guarantees of Indebtedness of Others.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company is contingently liable for certain operating leases that were assigned to third parties
in connection with various store closures and dispositions. If any of these third parties fail to
perform its obligations under one of these leases, the Company could be responsible for the lease
obligations. In 2003 the Company was notified that certain of these third parties had become
insolvent and were seeking bankruptcy protection. At January&nbsp;29, 2004, approximately 26 store
leases for which the Company was contingently liable were subject to the bankruptcy proceedings of
these third parties and 22 of those had been rejected by the applicable third parties. The Company
recorded pre-tax charges of $20 in 2003, which represented the remaining minimum lease payments and
other payment obligations under the 22 rejected leases, less estimated sublease income and
discounted at the Company&#146;s credit-adjusted risk-free interest rate. As of February&nbsp;2, 2006,
approximately 16&nbsp;store leases remained for which the Company is liable. Terminations and payments
of $4 made on these leases in 2005 resulted in a reduction of the Company&#146;s liability to
$8. As of February&nbsp;2, 2006, the Company had remaining guarantees
on approximately 251&nbsp;stores with
leases extending through 2035. Assuming that each respective purchaser became insolvent, an event
the Company believes to be remote because of the wide dispersion among third parties and the
variety of remedies available, the minimum future undiscounted payments, exclusive of any potential
sublease income, total approximately $459.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company enters into a wide range of indemnification arrangements in the ordinary course of
business. These include tort indemnities, tax indemnities, indemnities against third-party claims
arising out of arrangements to provide services to the Company, indemnities in merger and
acquisition agreements and indemnities in agreements related to the sale of Company securities.
Also, governance documents of the Company and substantially all of its subsidiaries provide for the
indemnification of individuals made party to any suit or proceeding by reason of the fact that the
individual was acting as an officer, director or agent of the relevant company or as a fiduciary of
a company-sponsored welfare benefit plan. The Company also provides guarantees and indemnifications
for the benefit of many of its wholly owned subsidiaries for the satisfaction of performance
obligations, including workers&#146; compensation obligations. It is difficult to quantify the maximum
potential liability under these indemnifications; however, at February&nbsp;2, 2006 the Company was not
aware of any material liabilities arising from these indemnification arrangements.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Off-Balance Sheet Arrangements</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At February&nbsp;2, 2006, the Company had no significant investments that were accounted for under the
equity method in accordance with accounting principles generally accepted in the United States.
Investments that were accounted for under the equity method at February&nbsp;2, 2006 had no liabilities
associated with them that were guaranteed by or that would be considered material to Albertsons.
The Company does not have any off-balance sheet arrangements with unconsolidated entities.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Capital Expenditures</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company is committed to keeping its stores up to date. In the last three years, the Company has
opened or remodeled 755 stores, representing 33% of the Company&#146;s retail square footage as of
February&nbsp;2, 2006. The following summary of historical capital expenditures includes capital leases,
excluding the Shaw&#146;s and Bristol Farms acquisitions:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2003</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">New and acquired stores</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">333</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">491</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">371</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Remodels</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">207</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">213</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">345</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Retail replacement equipment, technology and other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">297</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">409</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">387</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Distribution facilities and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">53</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total capital expenditures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">902</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,161</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,156</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Total capital expenditures include capitalized lease obligations incurred of $42 in 2005, $111 in
2004 and $62 in 2003.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s financial position provides the flexibility for the Company to grow through its store
development program and future acquisitions. The Company&#146;s capital expenditure budget for 2006 is
estimated between $900 to $1,000 and includes new capital and operating lease obligations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Related Party Transactions</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">There were no material related party transactions in 2005, 2004 or 2003.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Insurance Contingencies</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company has outstanding workers&#146; compensation and general liability claims with a former
insurance carrier that is experiencing financial difficulties. If the insurer fails to pay any
covered claims that exceed deductible limits, creating &#147;excess claims,&#148; the Company may have the
ability to present these excess claims to guarantee funds in certain states in which the claims
originated. In the state where the Company faces the largest potential exposure, legislation was
enacted that the Company believes increases the likelihood of state guarantee fund protection. The
Company currently cannot estimate the amount of the covered claims in excess of deductible limits
which will not be paid by the insurance carrier or otherwise. As of February&nbsp;2, 2006, the insurance
carrier continues to pay the Company&#146;s claims. Based on information presently available to the
Company, management does not expect that the ultimate resolution of this matter will have a
material adverse effect on the Company&#146;s financial condition, results of operations or cash flows.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Environmental</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company has identified environmental contamination sites related primarily to underground
petroleum storage tanks and groundwater contamination at various store, warehouse, office and
manufacturing facilities (related to current operations as well as previously disposed of
properties). The Company conducts an ongoing program for the inspection and evaluation of potential
new sites and the remediation and monitoring of contamination at existing and previously owned
sites. Although the ultimate outcome and expense of environmental remediation is uncertain, the
Company believes that the costs of any required remediation and continuing compliance with
environmental laws, in excess of current reserves, will not have a material adverse effect on the
financial condition, results of operations or cash flows of the Company. Environmental remediation
costs were not material in 2005, 2004 or 2003.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Pension Plan / Health and Welfare Plan Contingencies</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s funding policy for its defined benefit plans is to contribute the minimum
contribution allowed under the Employee Retirement Income Security Act, with consideration given to
contributing larger amounts in order to be exempt from Pension Benefit Guaranty Corporation
variable rate premiums and/or participant notices of underfunding. The Company determines expected
funding levels annually. Funding of the Company&#146;s defined benefit pension plans is expected to be
$13 for the Company&#146;s year ending February&nbsp;1, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company contributes to various multi-employer pension plans under collective bargaining
agreements, primarily for defined benefit pension plans. These plans generally provide retirement
benefits to participants based on their service to contributing employers. The Company contributed
$130, $115 and $92 to these plans in the years 2005, 2004 and 2003, respectively. Based on
available information, the Company believes that some of the multi-employer plans to which it
contributes are under-funded. Company contributions to these plans are likely to continue to
increase in the near term. However, the amount of any increase or decrease in contributions will
depend on a variety of factors, including the results of the Company&#146;s collective bargaining
efforts, return on the assets held in the plans, actions taken by trustees who manage the plans and
the potential payment of a withdrawal liability if the Company chooses to exit a market or another
employer withdraws from a plan without provision for their share of pension liability. Many
recently completed labor negotiations have positively affected the Company&#146;s future contributions
to these plans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company also makes payments to multi-employer health and welfare plans in amounts representing
mandatory contributions which are based on reserve requirements set forth in the related collective
bargaining agreements. Some of the collective bargaining agreements up for renewal in the next
several years contain reserve requirements that may trigger unanticipated contributions resulting
in increased health care expenses. If these health care provisions cannot be renegotiated in a
manner that reduces the prospective health care cost as the Company intends, the Company&#146;s selling,
general and administrative expenses could increase, possibly significantly, in the future.
</DIV>


<P align="center" style="font-size: 10pt">27
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Critical Accounting Policies</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s discussion and analysis of its financial condition and results of operations are
based upon the Company&#146;s consolidated financial statements, which have been prepared in accordance
with accounting principles generally accepted in the United States. The preparation of these
financial statements requires the Company to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets
and liabilities. On an ongoing basis, the Company evaluates its estimates, including those related
to bad debts, inventories, vendor funds, intangible assets, income taxes, assets held for sale,
impairment of long-lived assets, self-insurance, restructuring, pension and benefit costs,
contingencies, litigation and unearned income. The Company bases its estimates on historical
experience and on various other assumptions and factors that management believes to be reasonable under
the circumstances, the results of which form the basis for making judgments about the carrying
values of assets and liabilities that are not readily apparent from other sources. The Company,
based on its ongoing review, will make adjustments to its judgments
and estimates when facts and
circumstances dictate. Historically, actual results have not significantly deviated from those
determined using the estimates described above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company believes the following critical accounting policies are important to understand the
Company&#146;s financial condition and results of operations and require management&#146;s most difficult,
subjective or complex judgments, often as a result of the need to make estimates about the effect
of matters that are inherently uncertain.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Vendor Funds</I></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company receives funds from many of the vendors whose products the Company buys for resale in
its stores. These vendor funds are provided to increase the sell-through of the related products.
The Company receives vendor funds for a variety of merchandising activities: placement of the
vendors&#146; products in the Company&#146;s advertising; display of the vendors&#146; products in prominent
locations in the Company&#146;s stores; introduction of new products into the Company&#146;s distribution
system and retail stores; exclusivity rights in certain categories that have slower-turning
products; and to compensate for temporary price reductions offered to customers on products held
for sale at retail stores. The Company also receives vendor funds for buying activities such as
volume commitment rebates, credits for purchasing products in advance of their need and cash
discounts for the early payment of merchandise purchases. As of February&nbsp;2, 2006, the terms of the
Company&#146;s vendor funds arrangements varied in length from short-term arrangements that are to be
completed within a quarter to long-term arrangements that are expected to be completed within eight
years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company recognizes vendor funds for merchandising activities as a reduction of cost of sales
when the related products are sold in accordance with EITF 02-16. The amount of vendor funds
reducing the Company&#146;s inventory (&#147;inventory offset&#148;) as of February&nbsp;2, 2006, was $187, an increase
of $61 from the beginning of 2005. The vendor funds inventory offset as of February&nbsp;3, 2005 was
$126, a decrease of $29 from the beginning of 2004. The inventory offset was determined by
estimating the average inventory turnover rates by product category for the Company&#146;s grocery,
general merchandise and lobby departments (these departments received over three-quarters of the
Company&#146;s vendor funds in 2005) and by average inventory turnover rates by department for the
Company&#146;s remaining inventory.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Long-Lived Asset Impairments</I></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company regularly reviews its stores and other long-lived assets and asset groups for
indicators of impairment based on operational performance and the Company&#146;s plans for store
closures. When events or changes in circumstances indicate that the carrying value of an asset or
an asset group may not be recoverable, the asset&#146;s fair value is compared to its carrying value.
Impairment losses are recognized as the amount by which the carrying amounts of the assets exceed
their fair values. For long-lived assets that are classified as Assets held for sale, the Company
recognizes impairment charges for the excess of the carrying value plus estimated costs of disposal
over the estimated fair value. Asset fair values are determined by internal real estate
specialists or by independent valuation experts. These estimates can be
significantly impacted by factors such as changes in real estate market conditions, the economic
environment and inflation. The Company recognized impairment charges related to stores to be held
and used and stores held for sale of $55, $43 and $36 for 2005, 2004 and 2003, respectively. These
charges were recorded in Selling, general and administrative expenses
in the Company&#146;s Consolidated Earnings Statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For properties that have closed and are under long-term lease agreements, the present value of any
remaining liability under the lease, discounted using credit risk-free rates and net of estimated
sublease recovery, is recognized as a liability and charged to operations. The value of any
equipment and leasehold improvements related to a closed store is reduced to reflect net
recoverable values. Internal real estate specialists estimate the subtenant income, future cash
flows and asset recovery values based on their historical experience and knowledge of (1)&nbsp;the
market in which the store to be closed is located, (2)&nbsp;the results of the Company&#146;s previous
efforts to dispose of similar assets and (3)&nbsp;the current economic conditions. The actual cost of
disposition for these leases and related assets is affected by specific factors such as real estate
markets, the economic environment and inflation.
</DIV>


<P align="center" style="font-size: 10pt">28
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Goodwill</I></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">During the
fourth quarters of 2005, 2004 and 2003, the Company completed its annual goodwill
impairment reviews. To determine whether goodwill was impaired, a
combination of internal analyses and estimates of fair value from
independent valuation experts were used. Based on these analyses, the Company determined there was no impairment of goodwill.
The fair value estimates could change in the future depending on internal and external factors,
including the success of strategic sourcing initiatives, labor cost controls and competitive
activity.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Self-Insurance</I></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company is primarily self-insured for property loss, workers&#146; compensation, automobile
liability costs and general liability costs. The Company records its self-insurance liability,
determined actuarially, based on claims filed and an estimate of claims incurred but not yet
reported. Any actuarial projection of ultimate losses is subject to a high degree of variability.
Sources of this variability are numerous and include, but are not limited to, future development of
previous claims, future economic conditions, court decisions and legislative actions. The Company&#146;s
workers&#146; compensation costs were $316, $372 and $361 in 2005,
2004 and 2003, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s workers&#146; compensation liabilities are from claims occurring in various states.
Individual state workers&#146; compensation regulations have received a tremendous amount of attention
from state politicians, insurers, employers and providers, as well as the public in general. Recent
years have seen an escalation in the number of legislative reforms, judicial rulings and social
phenomena affecting workers&#146; compensation. The changes in a state&#146;s political and economic
environment increase the variability in the unpaid claim liabilities. The Company&#146;s workers&#146;
compensation reserves do not contemplate any of these potential developments.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Legal Contingencies</I></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company records reserves for legal contingencies, in accordance with SFAS No.&nbsp;5, &#147;Accounting
for Contingencies,&#148; when the information available to the Company indicates that it is probable
that a liability has been incurred and the amount of the loss can be reasonably estimated.
Predicting the outcomes of claims and litigation and estimating related costs and exposures involve
substantial uncertainties that could cause actual costs to vary materially from estimates. In
addition, the Company regularly monitors its exposure to the loss contingencies associated with
these matters and may from time to time change its predictions with respect to outcomes and its
estimates with respect to related costs and exposures. It is possible that material differences in
actual outcomes, costs and exposures relative to current predictions and estimates, or material
changes in such predictions or estimates, could have a material adverse effect on the Company&#146;s
financial condition, results of operations or cash flows.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Pension Costs</I></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pension benefit obligations and the related effects on operations are dependent on the Company&#146;s
selection of actuarial assumptions, including the discount rate and the expected long-term rate of
return on plan assets. Actual returns on plan assets exceeded return assumptions over an extended
period in the past, which kept pension expense and cash contributions to the plans at modest
levels. Weaker market performance may significantly increase pension expense and cash contributions
in the future. Changes in the interest rates used to determine the discount rate may also cause
volatility in pension expense and cash contributions. Actual results that differ from the Company&#146;s
assumptions are accumulated and amortized over future periods and, therefore, generally affect the
Company&#146;s recognized expense and recorded obligation in such future periods.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For example, in 2005, the discount rate assumption for the Albertsons plans was 5.40% and its
long-term asset return assumption was 8.0%. Using these assumptions, the Company&#146;s 2005 pension
expense for the Albertsons plans was $28. If the Company had decreased its estimated discount rate
to 5.15% and its expected return on plan assets to 7.5%, the Company&#146;s 2005 pension expense for the
Albertsons plans would have been $36 and net earnings would have decreased by approximately $5. If
the Company had increased its discount rate assumption to 5.65% and its expected return on plan
assets to 8.5%, 2005 pension expense for the Albertsons plans would have been $20 and net earnings
would have increased by approximately $5. For the Shaw&#146;s plans, the Company&#146;s 2005 pension expense
was $22 using a discount rate assumption of 5.45% and a long-term asset return assumption of 8.0%.
If the Company had decreased its estimated discount rate to 5.20% and its expected return on plan
assets to 7.5% for the Shaw&#146;s plans, 2005 pension expense would have been $26 and net earnings
would have decreased by approximately $2. If the Company had increased its discount rate assumption
to 5.70% and its expected return on plan assets to 8.5% for the Shaw&#146;s plans, 2005 pension expense
would have been $18 and net earnings would have increased by approximately $2.
</DIV>


<P align="center" style="font-size: 10pt">29
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Recently Issued and Adopted Accounting Standards</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In May&nbsp;2004 the Financial Accounting Standards Board (&#147;FASB&#148;) issued FASB Staff Position (&#147;FSP&#148;)
No.&nbsp;FSP FAS 106-2, &#147;Accounting and Disclosure Requirements Related to the Medicare Prescription
Drug, Improvement and Modernization Act of 2003&#148; (&#147;FSP FAS 106-2&#148;). FSP FAS 106-2 supersedes FSP
FAS 106-1, &#147;Accounting and Disclosure Requirements Related to the Medicare Prescription Drug,
Improvement and Modernization Act of 2003,&#148; and provides guidance on the accounting and disclosure
related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the &#147;Medicare
Act&#148;), which was signed into law in December&nbsp;2003. The Medicare Act and adoption of FSP FAS 106-2
in the Company&#146;s third quarter of 2005 did not have a material effect on the Company&#146;s consolidated
financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In November&nbsp;2004 the FASB issued SFAS No.&nbsp;151, &#147;Inventory Costs, an Amendment of ARB No.&nbsp;43,
Chapter&nbsp;4&#148; (&#147;SFAS No.&nbsp;151&#148;). SFAS No.&nbsp;151 clarifies that inventory costs that are &#147;abnormal&#148; are
required to be charged to expense as incurred as opposed to being capitalized into inventory as a
product cost. SFAS No.&nbsp;151 provides examples of &#147;abnormal&#148; costs to include costs of idle
facilities, excess freight and handling costs, and wasted materials (spoilage). SFAS No.&nbsp;151 is
effective for the year beginning February&nbsp;3, 2006. The impact of SFAS No.&nbsp;151 is not expected to
have a material effect on the Company&#146;s consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In December&nbsp;2004 the FASB issued SFAS No.&nbsp;123 (Revised 2004), &#147;Share-Based Payment&#148; (&#147;SFAS No.
123(R)&#148;). SFAS No.&nbsp;123(R) addresses the accounting for share-based payments to employees,
including grants of employee stock options. Under the new standard, companies will no longer be
able to account for share-based compensation transactions using the intrinsic value method in
accordance with APB Opinion No.&nbsp;25, &#147;Accounting for Stock Issued to Employees.&#148; Instead, companies
will be required to account for such transactions using a fair-value method and recognize the
expense in their consolidated earnings statements. The Company has adopted SFAS No.&nbsp;123(R) using
the &#147;modified prospective&#148; transition method beginning with the first quarter of 2006. Under this
method, awards that are granted, modified or settled on or after February&nbsp;3, 2006 will be measured
and accounted for in accordance with SFAS No.&nbsp;123(R). In addition, in the Company&#146;s first quarter
of 2006, expense must be recognized in the earnings statement for unvested awards that were granted
prior to the start of the first quarter of 2006. The expense will be based on the fair value
determined at grant date under SFAS No.&nbsp;123, &#147;Accounting for Stock-Based Compensation.&#148; The
Company estimates that earnings per share in 2006 will be reduced by approximately $0.04 per
diluted share as a result of the incremental compensation expense to be recognized from
implementing SFAS No.&nbsp;123(R). However, the calculation of compensation cost for share-based
payment transactions after the effective date of SFAS No.&nbsp;123(R) may be different from the
calculation of compensation cost under SFAS No.&nbsp;123, and such differences have not yet been
quantified.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In March&nbsp;2005 the FASB issued FASB Interpretation No.&nbsp;47, &#147;Accounting for Conditional Asset
Retirement Obligations &#150; an Interpretation of FASB Statement No.&nbsp;143&#148; (&#147;FIN 47&#148;). FIN 47 clarifies
that the term &#147;conditional asset retirement obligation&#148; as used in FASB Statement No.&nbsp;143,
&#147;Accounting for Asset Retirement Obligations,&#148; refers to a legal obligation to perform an asset
retirement activity in which the timing and (or)&nbsp;method of settlement are conditional on a future
event that may or may not be within the control of the entity. Accordingly, an entity is required
to recognize a liability for the fair value of a conditional asset retirement obligation if the
fair value of the liability can be reasonably estimated. FIN 47 became effective for the Company
on February&nbsp;2, 2006 and did not have a material effect on the Company&#146;s consolidated financial
statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In May&nbsp;2005 the FASB issued SFAS No.&nbsp;154, &#147;Accounting Changes and Error Corrections &#150; a Replacement
of APB Opinion No.&nbsp;20 and FASB Statement No.&nbsp;3&#148; (&#147;SFAS No.&nbsp;154&#148;). SFAS No.&nbsp;154 requires
retrospective application as the required method for reporting a change in accounting principle,
unless impracticable or unless a pronouncement includes alternative transition provisions. SFAS
No.&nbsp;154 also requires that a change in depreciation, amortization or depletion method for
long-lived, non-financial assets be accounted for as a change in accounting estimate effected by a
change in accounting principle. This statement carries forward the guidance in APB Opinion No.&nbsp;20,
&#147;Accounting Changes,&#148; for the reporting of a correction of an error and a change in accounting
estimate. SFAS No.&nbsp;154 is effective for the year beginning February&nbsp;3, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In June&nbsp;2005 the EITF reached a consensus on EITF Issue No.&nbsp;05-6, &#147;Determining the Amortization
Period for Leasehold Improvements Purchased after Lease Inception or Acquired in a Business
Combination&#148; (&#147;EITF 05-6&#148;). EITF 05-6 requires that leasehold improvements acquired in a business
combination be amortized over the shorter of the useful life of the assets or a term that includes
required lease periods and renewal periods that are deemed to be reasonably assured at the date of
acquisition. EITF 05-6 also requires that leasehold improvements that are placed in service
significantly after and not contemplated at or near the beginning of the lease term be amortized
over the shorter of the useful life of the assets or a term that includes required lease periods
and renewal periods that are deemed to be reasonably assured at the date the leasehold improvements
are purchased. The Company&#146;s historical accounting policies comply with these provisions and,
accordingly, the adoption of EITF 05-6 in the third quarter of 2005 did not have an effect on the
Company&#146;s consolidated financial statements.
</DIV>


<P align="center" style="font-size: 10pt">30
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In October&nbsp;2005 the FASB issued FSP FAS 13-1, &#147;Accounting for Rental Costs Incurred During a
Construction Period&#148; (&#147;FSP FAS 13-1&#148;). FSP FAS 13-1 requires rental costs associated with building
or ground leases incurred during a construction period to be recognized as rental expense. The
Company historically capitalized rental costs incurred during a construction period. In accordance
with the transition provisions of FSP FAS 13-1, the Company elected to early adopt and
prospectively apply the requirement to expense rental costs incurred during a construction period
in the Company&#146;s fourth quarter of 2005. The adoption of FSP FAS 13-1 did not have a material
effect on the Company&#146;s consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In October&nbsp;2005 the FASB issued FSP FAS 123(R)-2, &#147;Practical Accommodation to the Application of
Grant Date as Defined in FASB Statement No.&nbsp;123(R)&#148; (&#147;FSP 123(R)-2&#148;). SFAS No.&nbsp;123(R) requires
companies to estimate the fair value of share-based payment awards when the awards have been
granted. One of the criteria for determining that an award has been granted is that the employer
and its employees have a mutual understanding of the key terms and conditions of the award. Under
FSP 123(R)-2, a mutual understanding is presumed to exist on the date the award is approved by the
Board of Directors or management with relevant authority, assuming certain conditions are met. FSP
123(R)-2 became effective upon the Company&#146;s initial adoption of SFAS 123(R). The Company
continues to evaluate the impact, if any, which FSP FAS 123(R)-2 could have on the Company&#146;s
consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In November&nbsp;2005 the FASB issued FSP FAS 123(R)-3, &#147;Transition Election to Accounting for the Tax
Effects of Share-Based Payment Awards&#148; (&#147;FSP FAS 123(R)-3&#148;). FSP FAS 123(R)-3 provides an
alternative method to SFAS No.&nbsp;123(R) for calculating the additional-paid-in-capital pool of excess
tax benefits available to absorb any tax deficiencies recognized subsequent to the adoption of SFAS
No.&nbsp;123(R). Companies that adopt SFAS No.&nbsp;123(R) using the modified prospective application may
make a one-time election to adopt this alternative method, and the Company may take up to one year
from the initial adoption of SFAS No.&nbsp;123(R) to evaluate its alternatives and whether to make the
one-time election. The Company continues to evaluate its alternatives and the impact, if any,
which the one-time election could have on the Company&#146;s consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In February&nbsp;2006 the FASB issued FSP FAS 123(R)-4, &#147;Classification of Options and Similar
Instruments Issued as Employee Compensation That Allow for Cash Settlement upon the Occurrence of a
Contingent Event&#148; (&#147;FSP FAS 123(R)-4&#148;). FSP FAS 123(R)-4 amends SFAS No.&nbsp;123(R) and addresses the
classification of stock options and similar instruments issued as employee compensation that
require or permit, at the holder&#146;s election, cash settlement upon the occurrence of a contingent
event (such as a change in control). FSP FAS 123(R)-4 clarifies that stock options or similar
instruments that contain such a cash settlement feature should be accounted for as liabilities if
and when the contingent cash settlement event becomes probable. The Company&#146;s stock compensation
plans do not require or permit cash settlement at the holder&#146;s election upon the occurrence of a
contingent event. Accordingly, the adoption of FSP FAS 123(R)-4 is not expected to have a material
effect on the Company&#146;s consolidated financial statements.
</DIV>

<DIV align="left">
<A name="114"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Item&nbsp;7A. Quantitative and Qualitative Disclosures About Market Risk.</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company is exposed to certain market risks inherent in the Company&#146;s financial instruments,
which arise from transactions entered into in the normal course of business. From time to time, the
Company enters into certain derivative transactions to hedge these risks, however the Company does
not enter into derivative financial instruments for trading purposes. Derivatives are primarily
used as cash flow hedges to set interest rates for forecasted debt issuances, such as interest rate
locks.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company is subject to interest rate risk on its fixed and variable interest rate debt
obligations. Generally, the fair value of debt with a fixed interest rate will increase as interest
rates fall and the fair value will decrease as interest rates rise. Commercial paper borrowings are
subject to rollover risk because these borrowings generally have maturities of less than three
months. There were no commercial paper borrowings at February&nbsp;2, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As of February&nbsp;2, 2006, the Company had no foreign exchange exposure and no outstanding derivative
transactions. There have been no material changes in the primary risk exposures or management of
the risks since the prior year. The Company expects to continue to manage risks in accordance with
the current policy.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For debt obligations, the table below presents principal cash flows and related weighted average
interest rates by expected maturity dates:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2007</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2009</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2010</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Thereafter</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Total</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Fair Value</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="33" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fixed rate debt obligations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">79</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,574</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">286</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">3,467</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,450</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,225</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Weighted average interest rate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">5.5</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">6.4</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">6.3</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">4.6</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">8.4</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">7.6</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">6.7</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">31
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="115"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Item&nbsp;8. Financial Statements and Supplementary Data.</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Albertson&#146;s, Inc.<BR>
Index to Consolidated Financial Statements</B>

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="95%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Page</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Number</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#300">Management&#146;s Annual Report on Internal Control Over Financial Reporting</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#301">Report of Independent Registered Public Accounting Firm on Management&#146;s Annual Report on Internal Control Over Financial Reporting</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#302">Report of Independent Registered Public Accounting Firm</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#303">Consolidated Earnings Statements for the fiscal years ended February&nbsp;2, 2006, February&nbsp;3, 2005 and January&nbsp;29, 2004</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#304">Consolidated Balance Sheets as of February&nbsp;2, 2006 and February&nbsp;3, 2005</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#305">Consolidated Cash Flow Statements for the fiscal years ended February&nbsp;2, 2006, February&nbsp;3, 2005 and January&nbsp;29, 2004</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#306">Consolidated Stockholders&#146; Equity Statements for the fiscal years ended February&nbsp;2, 2006, February&nbsp;3, 2005 and January&nbsp;29, 2004</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#307">Notes to Consolidated Financial Statements</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">32
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="300"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Management&#146;s Annual Report on Internal Control Over Financial Reporting</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The
Company&#146;s management is responsible for establishing
and maintaining adequate internal control over financial reporting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s internal control over financial reporting is designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles. The Company&#146;s
internal control over financial reporting includes those policies and procedures that:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">i. pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect
the transactions and dispositions of the assets of the Company;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">ii. provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the Company are being made only in accordance with authorizations of
management and directors of the Company; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">iii. provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Company&#146;s assets that could have a material effect on the
financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">There are inherent limitations in the effectiveness of any internal control, including the
possibility of human error and the circumvention or overriding of controls. Accordingly, even
effective internal control over financial reporting can provide only reasonable assurances with
respect to financial statement preparation. Further, because of changes in conditions, the
effectiveness of internal controls may vary over time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Management assessed the design and effectiveness of the Company&#146;s internal control over financial
reporting as of February&nbsp;2, 2006. In making this assessment, management used the criteria set forth
by the Committee of Sponsoring Organizations of the Treadway Commission in <I>Internal Control -
Integrated Framework</I>. Based on management&#146;s assessment using this framework, management concluded
that, as of February&nbsp;2, 2006, the Company&#146;s internal control over financial reporting was
effective.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Management&#146;s assessment of the effectiveness of the Company&#146;s internal control over financial
reporting as of February&nbsp;2, 2006 has been audited by Deloitte and Touche LLP, an independent
registered public accounting firm whose report appears on page&nbsp;34.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">March&nbsp;28, 2006
</DIV>



<P align="center" style="font-size: 10pt">33
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">





<DIV align="left">
<A name="301"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">To the Board of Directors and Stockholders of Albertson&#146;s, Inc.:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have audited management&#146;s assessment, included in the accompanying Management&#146;s Annual Report on
Internal Control Over Financial Reporting, that Albertson&#146;s, Inc. and subsidiaries (the &#147;Company&#148;)
maintained effective internal control over financial reporting as of February&nbsp;2, 2006, based on
criteria established in <I>Internal Control-Integrated Framework </I>issued by the Committee of Sponsoring
Organizations of the Treadway Commission. The Company&#146;s management is responsible for maintaining
effective internal control over financial reporting and for its assessment of the effectiveness of
internal control over financial reporting. Our responsibility is to express an opinion on
management&#146;s assessment and an opinion on the effectiveness of the Company&#146;s internal control over
financial reporting based on our audit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We conducted our audit in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects. Our audit included obtaining an understanding of internal
control over financial reporting, evaluating management&#146;s assessment, testing and evaluating the
design and operating effectiveness of internal control, and performing such other procedures as we
considered necessary in the circumstances. We believe that our audit provides a reasonable basis
for our opinions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A company&#146;s internal control over financial reporting is a process designed by, or under the
supervision of, the company&#146;s principal executive and principal financial officers, or persons
performing similar functions, and effected by the company&#146;s board of directors, management, and
other personnel to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company&#146;s internal control over financial reporting includes
those policies and procedures that (1)&nbsp;pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (2)&nbsp;provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (3)&nbsp;provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
company&#146;s assets that could have a material effect on the financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Because of the inherent limitations of internal control over financial reporting, including the
possibility of collusion or improper management override of controls, material misstatements due to
error or fraud may not be prevented or detected on a timely basis. Also, projections of any
evaluation of the effectiveness of the internal control over financial reporting to future periods
are subject to the risk that the controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In our opinion, management&#146;s assessment that the Company maintained effective internal control over
financial reporting as of February&nbsp;2, 2006, is fairly stated, in all material respects, based on
the criteria established in <I>Internal Control-Integrated Framework </I>issued by the Committee of
Sponsoring Organizations of the Treadway Commission. Also in our opinion, the Company maintained,
in all material respects, effective internal control over financial reporting as of February&nbsp;2,
2006, based on the criteria established in <I>Internal Control-Integrated Framework </I>issued by the
Committee of Sponsoring Organizations of the Treadway Commission.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have also audited, in accordance with the standards of the Public Company Accounting Oversight
Board (United States), the consolidated financial statements as of
and for the year ended February&nbsp;2, 2006 of the Company and our report dated March&nbsp;28, 2006
expressed an unqualified opinion on those financial statements.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">/s/ Deloitte &#038; Touche LLP<BR>
Boise, Idaho<BR>
March&nbsp;28, 2006

</DIV>

<P align="center" style="font-size: 10pt">34
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="302"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">To the Board of Directors and Stockholders of Albertson&#146;s, Inc.:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have audited the accompanying consolidated balance sheets of Albertson&#146;s, Inc. and subsidiaries
(the &#147;Company&#148;) as of February&nbsp;2, 2006 and February&nbsp;3, 2005, and the related consolidated
statements of earnings, stockholders&#146; equity, and cash flows for each of the three years in the
period ended February&nbsp;2, 2006. These financial statements are the responsibility of the Company&#146;s
management. Our responsibility is to express an opinion on these financial statements based on our
audits.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In our opinion, such consolidated financial statements present fairly, in all material respects,
the financial position of Albertson&#146;s, Inc. and subsidiaries at February&nbsp;2, 2006 and February&nbsp;3,
2005, and the results of their operations and their cash flows for each of the three years in the
period ended February&nbsp;2, 2006, in conformity with accounting principles generally accepted in the
United States of America.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have also audited, in accordance with the standards of the Public Company Accounting Oversight
Board (United States), the effectiveness of the Company&#146;s internal control over financial reporting
as of February&nbsp;2, 2006, based on the criteria established in <I>Internal Control-Integrated Framework</I>
issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report
dated March&nbsp;28, 2006 expressed an unqualified opinion on management&#146;s assessment of the
effectiveness of the Company&#146;s internal control over financial reporting and an unqualified opinion
on the effectiveness of the Company&#146;s internal control over financial reporting.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">/s/ Deloitte &#038; Touche LLP<BR>
Boise, Idaho<BR>
March&nbsp;28, 2006

</DIV>

<P align="center" style="font-size: 10pt">35
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>ALBERTSON&#146;S, INC.</B>
</DIV>

<DIV align="left">
<A name="303"></A>
</DIV>

<DIV align="left" style="font-size: 10pt"><B>CONSOLIDATED EARNINGS STATEMENTS</B></DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>For the 52 weeks ended February 2, 2006 and the</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>53 weeks ended February 3, 2005 and 52 weeks ended January 29, 2004</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>February 2,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>February 3,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>January 29,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>(In millions, except per share data)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2005</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2004</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR><td>&nbsp;</td></TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">40,358</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">39,810</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">35,019</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cost of sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29,038</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28,648</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,997</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gross profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,320</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,162</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,022</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Selling, general and administrative expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,082</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,946</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,714</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Restructuring credits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(10</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(10</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,238</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,226</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,318</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other expenses (income):</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Interest, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">529</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">499</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">409</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(5</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Earnings from continuing operations before income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">714</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">728</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">906</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income tax expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">252</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">254</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">350</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Earnings from continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">462</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">474</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">556</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Loss from discontinued operations, net of tax benefit of $10 and $18</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(16</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(30</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">446</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">444</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">556</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Earnings (loss)&nbsp;per share:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.51</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(0.04</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(0.08</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Net earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.51</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.51</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(0.04</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(0.08</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Net earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.51</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Weighted average common shares outstanding:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">370</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">369</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">368</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">372</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">372</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">368</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">See Notes to Consolidated Financial Statements
</DIV>



<P align="center" style="font-size: 10pt">36
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>


<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>ALBERTSON&#146;S, INC.</B>
</DIV>

<DIV align="left">
<A name="304"></A>
</DIV>

<DIV align="left" style="font-size: 10pt"><B>CONSOLIDATED BALANCE SHEETS</B></DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>February 2,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>February 3,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>(In millions, except par value data)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2005</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR><td>&nbsp;</td></TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>ASSETS</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current Assets:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Cash and cash equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">406</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">273</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accounts and notes receivable, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">723</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">675</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Inventories,
net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,036</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,119</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Assets held for sale</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Prepaid and other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">168</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">185</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total Current Assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,355</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,295</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Land, buildings and equipment, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,903</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,472</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Goodwill</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,269</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,284</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Intangibles, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">844</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">868</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">392</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total Assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">17,871</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">18,311</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>LIABILITIES AND STOCKHOLDERS&#146; EQUITY</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current Liabilities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accounts payable and accrued liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,203</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,250</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Salaries and related liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">743</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">739</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Self-insurance liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">276</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">263</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Current maturities of long-term debt and capital lease obligations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">238</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other current liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">607</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">595</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total Current Liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,880</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,085</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-term debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,422</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,792</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capital lease obligations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">856</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">857</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Self-insurance liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">691</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">632</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other long-term liabilities and deferred credits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,315</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,524</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Commitments and contingencies</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stockholders&#146; Equity:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Preferred stock &#151; $1.00 par value; authorized - 10 shares;
designated - 3 shares of Series&nbsp;A Junior Participating; issued -
none</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Common stock &#151; $1.00 par value; authorized - 1,200 shares; issued
- 370 shares and 368 shares, respectively</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">370</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">368</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Capital in excess of par</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">122</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">66</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accumulated other comprehensive loss</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(83</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(145</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Retained earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,298</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,132</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total Stockholders&#146; Equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,707</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,421</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total Liabilities and Stockholders&#146; Equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">17,871</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">18,311</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">See Notes to Consolidated Financial Statements
</DIV>


<P align="center" style="font-size: 10pt">37
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>ALBERTSON&#146;S, INC.</B>
</DIV>

<DIV align="left">
<A name="305"></A>
</DIV>

<DIV align="left" style="font-size: 10pt"><B>CONSOLIDATED CASH FLOW STATEMENTS</B></DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>For the 52 weeks ended February 2, 2006 and the</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>53 weeks ended February 3, 2005 and 52 weeks ended January 29, 2004</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>February 2,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>February 3,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>January 29,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>(In millions)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2005</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>2004</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash Flows From Operating Activities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">446</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">444</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">556</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Adjustments to reconcile net earnings to net cash provided by operating activities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Depreciation and amortization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,152</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,101</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">969</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Net deferred income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(95</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">103</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">147</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Other noncash charges</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">48</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Stock-based compensation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Gain on curtailment of postretirement benefits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(36</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Net gain on asset sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(133</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(48</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(24</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Restructuring credits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(9</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(8</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Discontinued operations noncash charges</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Changes in operating assets and liabilities, net of the effects of acquisitions:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Receivables and prepaid expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(35</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">159</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(38</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Inventories</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">204</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(62</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Accounts payable and accrued liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(27</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(48</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(236</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Other current liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Self-insurance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">72</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">111</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">120</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Unearned income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(92</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Other long-term liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(71</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Net cash provided by operating activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,545</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,114</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,526</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash Flows From Investing Activities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Business acquisitions, net of cash acquired</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(22</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,214</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Capital expenditures</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(860</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,050</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,094</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds from disposal of land, buildings and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">242</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">137</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">72</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds from disposal of assets held for sale</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">122</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">95</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">119</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Refundable tax deposit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(81</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(5</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(36</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Net cash used in investing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(604</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,068</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(901</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash Flows From Financing Activities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds from mandatory convertible security</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Dividends paid</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(280</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(279</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(279</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Payments on long-term borrowings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(242</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(532</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(120</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Stock purchases and retirements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(108</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Mandatory convertible security financing costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(33</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds from long-term borrowings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds from stock options exercised</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net commercial paper activity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(349</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">349</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Net cash (used in) provided by financing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(808</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">666</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(492</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net Increase (Decrease) in Cash and Cash Equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">133</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(288</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">133</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash and Cash Equivalents at Beginning of Year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">273</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">561</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">428</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash and Cash Equivalents at End of Year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">406</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">273</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">561</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Supplemental Cash Flow Information:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Cash payments for income taxes, net of refunds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">287</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">231</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Cash payments for interest, net of amounts capitalized</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">515</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">509</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">401</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Noncash investing and financing activities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Capitalized lease obligations incurred</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">42</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">111</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">62</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">See Notes to Consolidated Financial Statements
</DIV>


<P align="center" style="font-size: 10pt">38
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>ALBERTSON&#146;S, INC.</B>
</DIV>

<DIV align="left">
<A name="306"></A>
</DIV>

<DIV align="left" style="font-size: 10pt"><B>CONSOLIDATED STOCKHOLDERS&#146; EQUITY STATEMENTS</B></DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>Common</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>Capital</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>Accumulated</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>Stock</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>In Excess</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>Other</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>Total</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>$1.00 Par</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>Of Par</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>Comprehensive</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>Retained</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>Stockholders&#146;</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>Comprehensive</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>(Dollars in millions)</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>Value</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>Value</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>Loss</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>Earnings</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>Equity</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2"><B>Income</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR><td>&nbsp;</td></TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Balance at January&nbsp;30, 2003</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">372</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">128</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">$&nbsp;&nbsp;&nbsp;&nbsp;(96</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,793</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,197</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">556</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">556</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">556</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Exercise of stock options, including tax benefits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Stock purchases and retirements - 5,314,700 shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(5</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(103</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(108</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred stock unit plan</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Directors&#146; stock plan</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dividends</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(279</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(279</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Minimum pension liability adjustment (net of tax of $8)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(13</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(13</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(13</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Balance at January&nbsp;29, 2004</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">368</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">155</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">$&nbsp;&nbsp;&nbsp;&nbsp;(109</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4,967</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,381</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">543</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">444</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">444</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">444</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Exercise of stock options, including tax benefits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred stock unit plan</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Directors&#146; stock plan</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dividends</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(279</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(279</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Minimum pension liability adjustment (net of tax of $21)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(36</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(36</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(36</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Forward purchase liability</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(114</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(114</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred tax adjustment related to stock options</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Balance at February&nbsp;3, 2005</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">368</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">66</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">$&nbsp;&nbsp;&nbsp;&nbsp;(145</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,132</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,421</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">408</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">446</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">446</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">446</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Exercise of stock options, including tax benefits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred stock unit plan</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Directors&#146; stock plan</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dividends</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(280</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(280</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Minimum pension liability adjustment (net of tax of $40)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">63</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Amortization of rate lock agreement (net of tax)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Balance at February&nbsp;2, 2006</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">370</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">122</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">$&nbsp;&nbsp;&nbsp;&nbsp;(83</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,298</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,707</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">508</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">See Notes to Consolidated Financial Statements
</DIV>


<P align="center" style="font-size: 10pt">39
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>ALBERTSON&#146;S, INC.</B>
</DIV>

<DIV align="left">
<A name="307"></A>
</DIV>

<DIV align="left" style="font-size: 10pt"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></DIV>



<DIV align="left" style="font-size: 10pt">(Dollars in millions, except per share data)</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>1. Business Description and Basis of Presentation</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Albertson&#146;s, Inc. (&#147;Albertsons&#148; or the &#147;Company&#148;) is incorporated under the laws of the State of
Delaware and is the successor to a business founded by J.A. Albertson in 1939. Based on sales, the
Company is one of the largest retail food and drug chains in the world.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As of February&nbsp;2, 2006, the Company, through its divisions and subsidiaries, operated 2,471 stores
in 37 states. The Company, through its divisions and subsidiaries, also operated 238 fuel centers
near existing stores. Retail operations are supported by 19 major Company distribution operations,
strategically located in the Company&#146;s operating markets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The consolidated financial statements have been prepared in accordance with accounting principles
generally accepted in the United States and include all entities over which the Company has
control, including its majority-owned subsidiaries. All material intercompany transactions and
balances have been eliminated.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Definitive Agreement to Sell Company: </B>On January&nbsp;22, 2006, Albertsons entered into a series of
agreements (the &#147;Agreements&#148;) providing for the sale of Albertsons to SUPERVALU INC. (&#147;Supervalu&#148;),
CVS Corporation (&#147;CVS&#148;) and a consortium of investors including Cerberus Capital Management, L.P.,
Kimco Realty Corporation, Lubert-Adler Management, Inc., Klaff Realty, L.P. and Schottenstein
Stores Corporation (the &#147;Cerberus Group&#148;). As a result of a series of transactions provided for
under the Agreements (the &#147;Transactions&#148;), Albertsons&#146; shareholders will
ultimately be entitled to receive $20.35 in cash and 0.182 shares of Supervalu common stock for
each share of Albertsons&#146; common stock that they held before the Transactions.
The Transactions are subject to approval by Albertsons&#146; shareholders and
Supervalu&#146;s shareholders as well as antitrust clearance and the satisfaction or waiver of other
customary closing conditions (see Note&nbsp;20 &#147;Subsequent
Event&#148;). The Transactions are currently anticipated to be
completed in the second quarter of calendar year 2006, but the completion of the Transactions could
be delayed if, among other things, all necessary approvals are not
obtained by that time. The
Company may be required to pay to Supervalu a termination fee of $276
if the merger agreement is terminated under specified circumstances.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>2. Summary of Significant Accounting Policies</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Fiscal Year End: </B>The Company&#146;s fiscal year ends on the Thursday nearest to January&nbsp;31. As a result,
the Company&#146;s fiscal year includes a 53rd week every five to six years. The Company&#146;s fiscal year ended
February&nbsp;2, 2006 (&#147;2005&#148;) contained 52&nbsp;weeks. Fiscal years ended February&nbsp;3, 2005 (&#147;2004&#148;) and January&nbsp;29, 2004 (&#147;2003&#148;) contained 53 and 52 weeks, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Use of Estimates: </B>The preparation of the Company&#146;s consolidated financial statements, in conformity
with accounting principles generally accepted in the United States, requires management to make
estimates and assumptions. Some of these estimates require difficult, subjective or complex
judgments about matters that are inherently uncertain. As a result, actual results could differ
from these estimates. These estimates and assumptions affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Segment Information: </B>The Company&#146;s operations are located in the United States and are within a
single operating segment, the retail sale of food and drug merchandise.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Derivatives: </B>From time to time, the Company enters into certain derivative transactions; however,
the Company does not enter into derivative financial instruments for trading purposes. The Company
uses derivatives primarily as cash flow hedges to set interest rates for forecasted debt issuances,
such as interest rate locks. These contracts are with major financial institutions and are very
short-term in nature. The gain or loss on interest rate locks is deferred in accumulated other
comprehensive income and recognized as an adjustment to interest expense over the life of the
related debt instrument.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Cash and Cash Equivalents: </B>The Company considers all highly liquid investments with a maturity of
three months or less at the time of purchase to be cash equivalents. The Company&#146;s banking
arrangements allow the Company to fund outstanding checks when presented to the respective
financial institution for payment. This cash management practice frequently results in a net cash
book overdraft position, which occurs when total issued checks exceed available cash balances at a
single financial institution. The Company has recorded its cash disbursement accounts with a net
cash book overdraft position in Accounts payable in the Company&#146;s Consolidated Balance Sheets, and
the net change in cash book overdrafts in the Accounts payable line item within the Cash Flows from
Operating Activities section of the Company&#146;s Consolidated Cash Flow Statements. At February&nbsp;2,
2006 and February&nbsp;3, 2005, the Company had net cash book overdrafts of $234 and $294,
respectively, classified in Accounts payable.
</DIV>


<P align="center" style="font-size: 10pt">40
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The majority of payments due from banks for third-party credit card, debit card and electronic
benefit transactions (&#147;EBT&#148;) process within 24 to 48 hours, except for transactions occurring on a
Friday, which are generally processed the following Monday. All credit card, debit card and EBT
transactions that process in less than seven days are classified as cash and cash equivalents.
Amounts due from banks for these transactions classified as Cash and cash equivalents in the
Company&#146;s Consolidated Balance Sheets totaled $54 and $61 at February&nbsp;2, 2006 and February&nbsp;3, 2005,
respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Accounts and Notes Receivable: </B>Accounts and notes receivable are recorded net of an allowance for
expected losses. The allowance, recognized in an amount equal to the anticipated future write-offs
based on delinquencies, aging trends, industry risk trends and our historical experience was as
follows:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 2,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 3,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Trade and other accounts receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">720</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">677</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current portion of notes receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Allowance for doubtful accounts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(18</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(19</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">723</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">675</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Inventories: </B>Approximately 94% of the Company&#146;s inventories are valued using the last-in,
first-out (&#147;LIFO&#148;) method. If the first-in, first-out (&#147;FIFO&#148;) method had been used, inventories
would have been $598 and $584 higher at the end of 2005 and 2004, respectively. Net earnings would
have been higher by $8 ($0.02 per diluted share) in 2005, higher by $5 ($0.01 per diluted share) in
2004 and lower by $8 ($0.02 per diluted share) in 2003. The replacement cost of inventories valued
at LIFO approximates FIFO cost.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">During 2005 and 2004, inventory quantities in certain LIFO layers were reduced. These reductions
resulted in a liquidation of LIFO inventory quantities carried at lower costs prevailing in prior
years as compared with the cost of 2005 and 2004 purchases. As a result, cost of sales decreased
by $8 in 2005, $0 in 2004, and $3 in 2003. This increased net earnings by $5 ($0.01 per diluted
share) in 2005, by $0 in 2004, and by $2 ($0.01 per diluted share) in 2003.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Vendor Fund</B>s<B>: </B>The Company receives funds from many of the vendors whose products the Company buys
for resale in its stores. These vendor funds are provided to increase the sell-through of the
related products. The Company receives vendor funds for a variety of merchandising activities:
placement of the vendors&#146; products in the Company&#146;s advertising; display of the vendors&#146; products
in prominent locations in the Company&#146;s stores; introduction of new products into the Company&#146;s
distribution system and retail stores; exclusivity rights in certain categories that have
slower-turning products; and to compensate for temporary price reductions offered to customers on
products held for sale at retail stores. The Company also receives vendor funds for buying
activities such as volume commitment rebates, credits for purchasing products in advance of their
need and cash discounts for the early payment of merchandise purchases (&#147;early payment discounts&#148;).
As of February&nbsp;2, 2006, the terms of the Company&#146;s vendor funds arrangements varied in length from
short-term arrangements that are to be completed within a quarter to long-term arrangements that
are expected to be completed within eight years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company recognizes vendor funds for merchandising activities as a reduction of cost of sales
when the related products are sold in accordance with Emerging Issues Task Force (&#147;EITF&#148;) Issue
02-16, &#147;Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a
Vendor&#148; (&#147;EITF 02-16&#148;). The amount of vendor funds reducing the Company&#146;s inventory (&#147;inventory
offset&#148;) as of February&nbsp;2, 2006, was $187, an increase of $61 from the beginning of 2005. The
vendor funds inventory offset as of February&nbsp;3, 2005 was $126, a decrease of $29 from the beginning
of 2004. The inventory offset was determined by estimating the average inventory turnover rates by
product category for the Company&#146;s grocery, general merchandise and lobby departments (these
departments received over three-quarters of the Company&#146;s vendor funds in 2005) and by average
inventory turnover rates by department for the Company&#146;s remaining inventory.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">During the fourth quarter of 2005, the Company reviewed its method of accounting for early payment
discounts and determined that effective for 2005 it would recognize such discounts as a reduction
of inventory and then as a reduction to cost of sales when the related products are sold. The
Company previously recognized early payment discounts as a financing component of merchandise
purchases by reducing cost of sales when the related product was purchased. If the Company had
applied this method when EITF 02-16 was adopted in 2002, net earnings would have increased by
approximately $0.3, $0.9 and $0.3 for 2005, 2004 and 2003, respectively. Management concluded that
the impact on the Company&#146;s prior years&#146; interim and annual consolidated financial statements was
not material and, therefore, recorded a noncash adjustment of $38 or $23 after-tax ($0.06 per
diluted share) in the fourth quarter of 2005 for the cumulative effect. This change will have no
impact on historical or future cash flows or the amount the Company has paid or will pay for
merchandise.
</DIV>


<P align="center" style="font-size: 10pt">41
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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Capitalization, Depreciation and Amortization: </B>Land, buildings and equipment are recorded at cost.
Depreciation is provided on the straight-line method over the estimated useful lives of the assets.
Estimated useful lives are generally as follows: buildings and improvements-10 to 35&nbsp;years;
leasehold improvements-10 to 25&nbsp;years; assets held under capitalized leases-20 to 30&nbsp;years;
fixtures and equipment-three to eight years; software-three to five years; and intangibles-three to
10&nbsp;years (exclusive of beneficial lease rights which are discussed below).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The costs of major remodeling and improvements on leased stores are capitalized as leasehold
improvements and amortized on the straight-line method over the shorter of the term of the
applicable lease or the useful life of the asset. Assets under capital leases are recorded at the
lower of the fair market value of the asset or the present value of future minimum lease payments
and amortized on the straight-line method over the lease term.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Beneficial lease rights and lease liabilities are recorded on purchased leases based on differences
between contractual rents under the respective lease agreements and prevailing market rents at the
lease acquisition date. Beneficial lease rights are classified as Intangible assets in the
Consolidated Balance Sheets and amortized on a straight-line basis over the greater of the lease
term or 15&nbsp;years. Unfavorable lease liabilities are amortized over the lease term using the
straight-line method.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Goodwill: </B>Goodwill results from business acquisitions and represents the excess of purchase price
over the fair value of assets acquired and liabilities assumed. Goodwill is not amortized but
instead tested annually for impairment, or more frequently if circumstances indicate a potential
impairment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Deferred Charges: </B>Costs incurred to obtain long-term financing are capitalized and amortized as a
component of interest expense on a straight-line basis over the term of the related debt or credit
facility. As of February&nbsp;2, 2006 and February&nbsp;3, 2005 the Company had $35 and $38 of net deferred
charges, respectively, classified as Other assets in the accompanying Consolidated Balance Sheets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Company-Owned Life Insurance: </B>The Company has purchased life insurance policies to fund its
obligations under certain deferred compensation plans for certain current and former officers, key
employees and directors. Cash surrender values of these policies are adjusted for fluctuations in
the market value of underlying investments. The cash surrender value is adjusted each reporting
period and any gain or loss is included with Other income and expense in the Company&#146;s Consolidated
Earnings Statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Impairment of Long-Lived Assets and Closed Store Reserves: </B>The Company regularly reviews its
stores and other long-lived assets and asset groups for indicators of impairment based on
operational performance and the Company&#146;s plans for store closures. When events or changes in
circumstances indicate that the carrying value of an asset or an asset group may not be
recoverable, the asset&#146;s fair value is compared to its carrying value. Impairment losses are
recognized as the amount by which the carrying amounts of the assets exceed their fair values. For
long-lived assets that are classified as Assets held for sale, the Company recognizes impairment
charges for the excess of the carrying value plus estimated costs of disposal over the estimated
fair value. Asset fair values are determined by internal real estate specialists or by independent
valuation experts. These estimates can be significantly impacted by factors such
as changes in real estate market conditions, the economic environment and inflation. The Company
recognized impairment charges related to stores to be held and used and stores held for sale of
$55, $43 and $36 for 2005, 2004 and 2003, respectively. These charges were recorded in Selling,
general and administrative expenses in the Company&#146;s Consolidated Earnings Statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For properties that have closed and are under long-term lease agreements, the present value of any
remaining liability under the lease, discounted using credit risk-free rates and net of estimated
sublease recovery, is recognized as a liability and charged to operations. The value of any
equipment and leasehold improvements related to a closed store is reduced to reflect net
recoverable values. Internal real estate specialists estimate the subtenant income, future cash
flows and asset recovery values based on their historical experience and knowledge of (1)&nbsp;the
market in which the store to be closed is located, (2)&nbsp;the results of the Company&#146;s previous
efforts to dispose of similar assets and (3)&nbsp;the current economic conditions. The actual cost of
disposition for these leases and related assets is affected by specific factors such as real estate
markets, the economic environment and inflation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Self-Insurance: </B>The Company is primarily self-insured for property loss, workers&#146; compensation,
automobile liability costs and general liability costs. Self-insurance liabilities are not
discounted and are determined actuarially based on claims filed and estimates for claims incurred
but not yet reported.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Deferred Rent: </B>The Company recognizes rent holidays, including the period of time the Company has
access prior to taking possession of the property, which typically includes construction and
fixturing activity, and rent escalations on a straight-line basis over the term of the lease. The
deferred rent amount is included in Other current liabilities and Other long-term liabilities and
deferred credits in the Company&#146;s Consolidated Balance Sheets.
</DIV>


<P align="center" style="font-size: 10pt">42
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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Pension Costs: </B>Pension benefit obligations and the related effects on operations are dependent on
the Company&#146;s selection of actuarial assumptions, including the discount rate and the expected
long-term rate of return on plan assets. These assumptions are disclosed in Note 12 &#147;Employee
Benefit Plans and Collective Bargaining Agreements.&#148; Actual results that differ from the Company&#146;s
assumptions are accumulated and amortized over future periods and, therefore, generally affect the
Company&#146;s recognized expense and recorded obligation in future periods.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company also participates in various multi-employer plans for substantially all union
employees. Pension expense for these plans is recognized as contributions are funded.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Legal Contingencies: </B>The Company records reserves for legal contingencies, in accordance with
Statement of Financial Accounting Standards (&#147;SFAS&#148;) No.&nbsp;5, &#147;Accounting for Contingencies,&#148; when
the information available to the Company indicates that it is probable that a liability has been
incurred and the amount of the loss can be reasonably estimated. Predicting the outcomes of claims
and litigation and estimating related costs and exposures involve substantial uncertainties that
could cause actual costs to vary materially from estimates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Revenue
Recognition: </B>Revenue is recognized at the point of sale for
retail sales. Discounts
earned by customers using their preferred loyalty card is recorded by the Company as a reduction to
sales.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Procurement, Distribution and Merchandising Costs: </B>Cost of sales include, among other things,
purchasing, inbound freight costs, product quality testing costs, warehousing costs, internal
transfer costs, advertising, private label program and strategic sourcing program costs. Selling,
general and administrative expenses include, among other things, merchandise planning and
management costs, store-based purchasing and receiving costs and inventory management costs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Store Opening Costs: </B>Noncapital expenditures incurred in opening new stores or remodeling existing
stores are expensed in the period in which they are incurred.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Advertising: </B>Advertising costs are expensed when incurred. Cooperative advertising funds are
accounted for as vendor funds as described above. Gross advertising expenses of $534, $579 and
$472, excluding cooperative advertising money received from vendors, were included in Cost of sales
in the Company&#146;s Consolidated Earnings Statements for 2005, 2004 and 2003, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Stock-Based Compensation: </B>In 2005, 2004 and 2003, the Company accounted for stock-based
compensation using the intrinsic value method prescribed in Accounting Principles Board Opinion
(&#147;APB&#148;) No.&nbsp;25, &#147;Accounting for Stock Issued to Employees,&#148; and related interpretations.
Accordingly, expense associated with stock-based compensation has been measured as the excess, if
any, of the quoted market price of the Company&#146;s stock at the date of the grant over the option
exercise price and is charged to operations over the vesting period. Income tax benefits
attributable to stock options exercised have been credited to capital in excess of par value. SFAS
No.&nbsp;123, &#147;Accounting for Stock-Based Compensation&#148; as amended by SFAS No.&nbsp;148, &#147;Accounting for
Stock-Based Compensation - Transition and Disclosure - An Amendment of FASB Statement No.&nbsp;123&#148;
encourages, but does not require, companies to record compensation cost for stock-based employee
compensation plans at fair value. If the fair value-based accounting method was utilized for
stock-based compensation, the Company&#146;s pro forma net earnings and earnings per share for the
periods presented below would have been as follows:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2003</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net Earnings as reported</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">446</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">444</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">556</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Add: Stock-based compensation
expense included in reported net
earnings, net of related tax
effects</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deduct: Total stock-based
compensation expense determined
under fair value based method for
all awards, net of related tax
effects</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(40</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(39</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(45</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pro Forma Net Earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">423</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">417</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">527</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Basic Earnings Per Share:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">As Reported</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.51</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Pro Forma</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.43</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Diluted Earnings Per Share:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">As Reported</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.51</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Pro Forma</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.43</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">43
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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The pro forma effect on net earnings for the years presented above are not representative of the
pro forma effect on net earnings in future years. For more information on the method and
assumptions used in determining the fair value of stock-based compensation, see Note 11 &#147;Stock
Options and Stock Awards.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Income Taxes: </B>Income taxes are accounted for under the asset and liability method. Deferred income
taxes represent future net tax effects resulting from temporary differences between the financial
statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in
which the differences are expected to be settled or realized. A valuation allowance is recorded for
deferred tax assets considered not likely to be realized. The major temporary differences and their
net effect are shown in Note 10 &#147;Income Taxes.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Comprehensive Income: </B>Comprehensive income refers to net income plus certain other items that are
recorded directly to Stockholders&#146; Equity. Items of comprehensive income other than net earnings
were primarily related to changes in the minimum pension liability of $103 ($63 net of tax), $57
($36 net of tax) and $21 ($13 net of tax) for 2005, 2004 and 2003, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Reclassifications: </B>Prior to the second quarter of 2005, liabilities incurred to acquire or
construct assets were included in Net cash provided by operating activities in the Company&#146;s
Condensed Consolidated Cash Flow Statements. Effective in the second quarter of 2005, these
liabilities were excluded from Net cash provided by operating activities and the related payments
of those liabilities were reflected as capital expenditures within Net cash used in investing
activities in the period in which they were paid. As a result of a reclassification related to the
13&nbsp;week period ended May&nbsp;5, 2005, Net cash provided by operating activities for the year ended
February&nbsp;2, 2006 reflects a $20 increase and Net cash used in investing activities for capital
expenditures reflects a $20 increase. The impact of this change on the Company&#146;s Consolidated Cash
Flow Statement for the years ended February&nbsp;3, 2005 and
January&nbsp;29, 2004 was not significant and
the related amounts were not reclassified.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Certain other reclassifications have been made in prior year financial statements to conform to
classifications used in the current year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Related Parties: </B>There were no related party transactions in 2005. In 2004, the Company leased
one store and one office location ($0.9 of rent, common area maintenance fees and taxes paid) and
leased an aircraft for one business-related flight (insignificant)&nbsp;from entities that have a
relationship with an individual who was a member of the Board of Directors during a portion of
2004. In 2003, the Company leased one store and two office locations ($1.0 of rent, common area
maintenance fees and taxes paid) from entities that have or at the time had a relationship with an
individual who was a member of the Board of Directors during 2003. As of February&nbsp;2, 2006, the
referenced individual was not a member of the Board.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>3. New and Recently Adopted Accounting Standards</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In May&nbsp;2004 the Financial Accounting Standards Board (&#147;FASB&#148;) issued FASB Staff Position (&#147;FSP&#148;)
No.&nbsp;FSP FAS 106-2, &#147;Accounting and Disclosure Requirements Related to the Medicare Prescription
Drug, Improvement and Modernization Act of 2003&#148; (&#147;FSP FAS 106-2&#148;). FSP FAS 106-2 supersedes FSP
FAS 106-1, &#147;Accounting and Disclosure Requirements Related to the Medicare Prescription Drug,
Improvement and Modernization Act of 2003,&#148; and provides guidance on the accounting and disclosure
related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the &#147;Medicare
Act&#148;), which was signed into law in December&nbsp;2003. The Medicare Act and adoption of FSP FAS 106-2
in the Company&#146;s third quarter of 2005 did not have a material effect on the Company&#146;s consolidated
financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In November&nbsp;2004 the FASB issued SFAS No.&nbsp;151, &#147;Inventory Costs, an Amendment of ARB No.&nbsp;43,
Chapter&nbsp;4&#148; (&#147;SFAS No.&nbsp;151&#148;). SFAS No.&nbsp;151 clarifies that inventory costs that are &#147;abnormal&#148; are
required to be charged to expense as incurred as opposed to being capitalized into inventory as a
product cost. SFAS No.&nbsp;151 provides examples of &#147;abnormal&#148; costs to include costs of idle
facilities, excess freight and handling costs, and wasted materials (spoilage). SFAS No.&nbsp;151 is
effective for the year beginning February&nbsp;3, 2006. The impact of SFAS No.&nbsp;151 is not expected to
have a material effect on the Company&#146;s consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In December&nbsp;2004 the FASB issued SFAS No.&nbsp;123 (Revised 2004), &#147;Share-Based Payment&#148; (&#147;SFAS No.
123(R)&#148;). SFAS No.&nbsp;123(R) addresses the accounting for share-based payments to employees,
including grants of employee stock options. Under the new standard, companies will no longer be
able to account for share-based compensation transactions using the intrinsic value method in
accordance with APB Opinion No.&nbsp;25, &#147;Accounting for Stock Issued to Employees.&#148; Instead, companies
will be required to account for such transactions using a fair-value method and recognize the
expense in their consolidated earnings statements. The Company has adopted SFAS No.&nbsp;123(R) using
the &#147;modified prospective&#148; transition method beginning with the first quarter of 2006. Under this
method, awards that are granted, modified or settled on or after February&nbsp;3, 2006 will be measured
and accounted for in accordance with SFAS No.&nbsp;123(R). In addition, in the Company&#146;s first quarter
of 2006, expense must be recognized in the earnings statement for unvested awards that were granted
prior to the start of the first quarter of 2006. The expense will be based on the fair value
determined at grant date under SFAS No.&nbsp;123, &#147;Accounting for Stock-Based Compensation.&#148; The
Company estimates that earnings per share in 2006 will
</DIV>
<P align="center" style="font-size: 10pt">44
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">be reduced by approximately $0.04 per diluted share as a result of the incremental compensation
expense to be recognized from implementing SFAS No.&nbsp;123(R). However, the calculation of
compensation cost for share-based payment transactions after the effective date of SFAS No.&nbsp;123(R)
may be different from the calculation of compensation cost under SFAS No.&nbsp;123, and such differences
have not yet been quantified.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In March&nbsp;2005 the FASB issued FASB Interpretation No.&nbsp;47, &#147;Accounting for Conditional Asset
Retirement Obligations &#150; an Interpretation of FASB Statement No.&nbsp;143&#148; (&#147;FIN 47&#148;). FIN 47 clarifies
that the term &#147;conditional asset retirement obligation&#148; as used in FASB Statement No.&nbsp;143,
&#147;Accounting for Asset Retirement Obligations,&#148; refers to a legal obligation to perform an asset
retirement activity in which the timing and (or)&nbsp;method of settlement are conditional on a future
event that may or may not be within the control of the entity. Accordingly, an entity is required
to recognize a liability for the fair value of a conditional asset retirement obligation if the
fair value of the liability can be reasonably estimated. FIN 47 became effective for the Company
on February&nbsp;2, 2006 and did not have a material effect on the Company&#146;s consolidated financial
statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In May&nbsp;2005 the FASB issued SFAS No.&nbsp;154, &#147;Accounting Changes and Error Corrections &#150; a Replacement
of APB Opinion No.&nbsp;20 and FASB Statement No.&nbsp;3&#148; (&#147;SFAS No.&nbsp;154&#148;). SFAS No.&nbsp;154 requires
retrospective application as the required method for reporting a change in accounting principle,
unless impracticable or unless a pronouncement includes alternative transition provisions. SFAS
No.&nbsp;154 also requires that a change in depreciation, amortization or depletion method for
long-lived, non-financial assets be accounted for as a change in accounting estimate effected by a
change in accounting principle. This statement carries forward the guidance in APB Opinion No.&nbsp;20,
&#147;Accounting Changes,&#148; for the reporting of a correction of an error and a change in accounting
estimate. SFAS No.&nbsp;154 is effective for the year beginning February&nbsp;3, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In June&nbsp;2005 the EITF reached a consensus on EITF Issue No.&nbsp;05-6, &#147;Determining the Amortization
Period for Leasehold Improvements Purchased after Lease Inception or Acquired in a Business
Combination&#148; (&#147;EITF 05-6&#148;). EITF 05-6 requires that leasehold improvements acquired in a business
combination be amortized over the shorter of the useful life of the assets or a term that includes
required lease periods and renewal periods that are deemed to be reasonably assured at the date of
acquisition. EITF 05-6 also requires that leasehold improvements that are placed in service
significantly after and not contemplated at or near the beginning of the lease term be amortized
over the shorter of the useful life of the assets or a term that includes required lease periods
and renewal periods that are deemed to be reasonably assured at the date the leasehold improvements
are purchased. The Company&#146;s historical accounting policies comply with these provisions and,
accordingly, the adoption of EITF 05-6 in the third quarter of 2005 did not have an effect on the
Company&#146;s consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In October&nbsp;2005 the FASB issued FSP FAS 13-1, &#147;Accounting for Rental Costs Incurred During a
Construction Period&#148; (&#147;FSP FAS 13-1&#148;). FSP FAS 13-1 requires rental costs associated with building
or ground leases incurred during a construction period to be recognized as rental expense. The
Company historically capitalized rental costs incurred during a construction period. In accordance
with the transition provisions of FSP FAS 13-1, the Company elected to early adopt and
prospectively apply the requirement to expense rental costs incurred during a construction period
in the Company&#146;s fourth quarter of 2005. The adoption of FSP FAS 13-1 did not have a material
effect on the Company&#146;s consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In October&nbsp;2005 the FASB issued FSP FAS 123(R)-2, &#147;Practical Accommodation to the Application of
Grant Date as Defined in FASB Statement No.&nbsp;123(R)&#148; (&#147;FSP 123(R)-2&#148;). SFAS No.&nbsp;123(R) requires
companies to estimate the fair value of share-based payment awards when the awards have been
granted. One of the criteria for determining that an award has been granted is that the employer
and its employees have a mutual understanding of the key terms and conditions of the award. Under
FSP 123(R)-2, a mutual understanding is presumed to exist on the date the award is approved by the
Board of Directors or management with relevant authority, assuming certain conditions are met. FSP
123(R)-2 became effective upon the Company&#146;s initial adoption of SFAS 123(R). The Company
continues to evaluate the impact, if any, which FSP FAS 123(R)-2 could have on the Company&#146;s
consolidated financial statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In November&nbsp;2005 the FASB issued FSP FAS 123(R)-3, &#147;Transition Election to Accounting for the Tax
Effects of Share-Based Payment Awards&#148; (&#147;FSP FAS 123(R)-3&#148;). FSP FAS 123(R)-3 provides an
alternative method to SFAS No.&nbsp;123(R) for calculating the additional-paid-in-capital pool of excess
tax benefits available to absorb any tax deficiencies recognized subsequent to the adoption of SFAS
No.&nbsp;123(R). Companies that adopt SFAS No.&nbsp;123(R) using the modified prospective application may
make a one-time election to adopt this alternative method, and the Company may take up to one year
from the initial adoption of SFAS No.&nbsp;123(R) to evaluate its alternatives and whether to make the
one-time election. The Company continues to evaluate its alternatives and the impact, if any,
which the one-time election could have on the Company&#146;s consolidated financial statements.
</DIV>


<P align="center" style="font-size: 10pt">45
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In February&nbsp;2006 the FASB issued FSP FAS 123(R)-4, &#147;Classification of Options and Similar
Instruments Issued as Employee Compensation That Allow for Cash Settlement upon the Occurrence of a
Contingent Event&#148; (&#147;FSP FAS 123(R)-4&#148;). FSP FAS 123(R)-4 amends SFAS No.&nbsp;123(R) and addresses the
classification of stock options and similar instruments issued as employee compensation that
require or permit, at the holder&#146;s election, cash settlement upon the occurrence of a contingent
event (such as a change in control). FSP FAS 123(R)-4 clarifies that stock options or similar
instruments that contain such a cash settlement feature should be accounted for as liabilities if
and when the contingent cash settlement event becomes probable. The Company&#146;s stock compensation
plans do not require or permit cash settlement at the holder&#146;s election upon the occurrence of a
contingent event. Accordingly, the adoption of FSP FAS 123(R)-4 is not expected to have a material
effect on the Company&#146;s consolidated financial statements.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>4. Business Acquisitions</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><I>Shaw&#146;s</I></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On April&nbsp;30, 2004, the Company acquired all of the outstanding capital stock of the entity which
conducted J Sainsbury plc&#146;s U.S. retail grocery store business (&#147;Shaw&#146;s&#148;). The results of Shaw&#146;s
operations have been included in the Company&#146;s consolidated financial statements since that date.
The operations acquired consisted of 206 grocery stores in the New England area operated under the
banners of Shaw&#146;s and Star Market. The Company acquired Shaw&#146;s for a variety of reasons, including
attractive market share positions and real estate, the opportunity to realize numerous synergies
and strong historical financial performance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The aggregate purchase price was $2,578, which included $2,134 of cash, $441 of assumed capital
lease obligations and debt and $3 of transaction costs. The Company used a combination of
cash-on-hand and the proceeds of the issuance of $1,603 of commercial paper to finance the
acquisition. The Company used the proceeds from a subsequent mandatory convertible security
offering (see Note 8 &#147;Indebtedness&#148;) to repay $1,117 of such commercial paper.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes the preliminary estimated fair values of the assets acquired and
liabilities assumed at the date of acquisition. The initial purchase price allocations were based
on a combination of third-party valuations and internal analyses and were adjusted during the
allocation period as defined in SFAS No.&nbsp;141, &#147;Business Combinations&#148; and EITF No.&nbsp;93-7,
&#147;Uncertainties Related to Income Taxes in a Purchase Business Combination.&#148;
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Revised</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Initial Purchase</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Purchase Price</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Purchase Price</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Price Allocation</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Adjustments</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Allocation</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">444</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">42</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">486</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Land, buildings and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,378</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(20</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,358</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Goodwill</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">840</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(68</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">772</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Intangible assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">766</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(17</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">749</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total assets acquired</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,451</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(63</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,388</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">417</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">424</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-term debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">441</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">441</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">456</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(70</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">386</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total liabilities assumed</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,314</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(63</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,251</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net assets acquired</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,137</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,137</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Acquired intangible assets include $399 assigned to trade names not subject to amortization, $308
assigned to favorable operating leases (13-year weighted average useful life), $36 assigned to a
customer loyalty program (seven-year useful life), $5 assigned to pharmacy prescriptions
(seven-year useful life), and other assets of $1 (18-year useful life). With the exception of trade
names, the intangible assets are amortized on a straight-line basis over their expected useful
lives.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As part of the purchase price allocation, the fair values of operating leases were calculated, a
portion of which represents favorable operating leases compared with current market conditions and
a portion of which represents unfavorable operating leases compared with current market conditions.
The favorable leases totaled $308 and are included in Intangibles, net in the Company&#146;s
Consolidated Balance Sheets. The unfavorable leases totaled $192, have an estimated weighted
average life of 18&nbsp;years and are included in Other long-term liabilities and deferred credits in
the Company&#146;s Consolidated Balance Sheets.
</DIV>


<P align="center" style="font-size: 10pt">46
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The excess of the purchase price over the fair value of assets acquired and liabilities assumed was
allocated to goodwill. In the fourth quarter of 2005, due to the resolution of an uncertainty that
existed at the acquisition date related to the measurement of deferred income tax amounts, goodwill
was reduced by $31. Of the $772 recorded as goodwill, $95 was deductible for tax purposes and as
of February&nbsp;2, 2006, $72 is deductible through 2017.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Bristol Farms</I></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On September&nbsp;21, 2004, the Company acquired New Bristol Farms, Inc. (&#147;Bristol Farms&#148;) for $137 in
cash. The operations acquired consisted of 11 gourmet retail stores in Southern California. The
purchase price has been allocated to the assets acquired as determined by third-party valuations
and internal analyses. The purchase price was allocated as follows: $53 in assets, $17 in
liabilities, $21 in trade names not subject to amortization and $80 in goodwill.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following unaudited pro forma financial information presents the combined results of operations
of the Company, Shaw&#146;s and Bristol Farms as if the acquisitions had occurred on January&nbsp;31, 2003.
Shaw&#146;s fiscal year ended on February&nbsp;28, 2004, and Bristol Farm&#146;s fiscal year ended on May&nbsp;2, 2004.
The unaudited pro forma financial information uses Shaw&#146;s and Bristol Farm&#146;s data for the periods
corresponding to the Company&#146;s fiscal year. This unaudited pro forma financial information is not
intended to represent or be indicative of what would have occurred if the transactions had taken
place on the dates presented and should not be taken as representative of the Company&#146;s future
consolidated results of operations or financial position. The pro forma information does not
reflect any potential synergies or integration costs.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">53 weeks ended</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">52 weeks ended</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 3,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">January 29,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">41,044</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">39,724</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">468</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">658</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Earnings per share:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.79</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.26</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.79</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><I>Lazy Acres Market</I></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On November&nbsp;7, 2005, the Company acquired all of the outstanding common stock of Lazy Acres Market,
Inc. (&#147;Lazy Acres&#148;) for a purchase price of $22 in cash. The acquisition of Lazy Acres, a gourmet
retail store located in Southern California, complements our acquisition of Bristol Farms in
September&nbsp;2004. The purchase price has been allocated on a preliminary basis to the assets acquired
and the liabilities assumed based on the estimated fair values of each as determined by third-party
valuations and internal analyses. The purchase price was allocated as follows: $9 to assets, $4 to
liabilities and $17 to goodwill.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>5. Discontinued Operations, Restructuring Activities and Closed Stores</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company has a process to review its asset portfolio in an attempt to maximize returns on its
invested capital. As a result of these reviews, in recent years the Company has closed and disposed
of a number of properties through market exits, restructuring activities and on-going store
closures. The Company recognizes lease liability reserves and impairment charges associated with
these transactions. Summarized below are the significant transactions the Company has undertaken
and the related lease accrual activity.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Discontinued Operations</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In April&nbsp;2005 the Company entered into a definitive agreement to sell its operations in the
Jacksonville, Florida market to a single buyer. The sale was completed on August&nbsp;24, 2005. The
operations consisted of seven operating stores, of which four were owned and three leased. The
three lease agreements were assumed by the buyer. Results of operations for the seven stores have
been reclassified and presented as discontinued operations for 2005, 2004 and 2003.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In June&nbsp;2004 the Company announced its plan to sell, close or otherwise dispose of its operations
in the Omaha, Nebraska market, which consisted of 21 operating stores. Results of operations for
those stores have been reclassified and presented as discontinued operations for 2005, 2004 and
2003. As of February&nbsp;2, 2006 the Company had disposed of 19 properties. The two remaining
properties are subject to operating leases and have no book value.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In April&nbsp;2004 the Company announced its plan to sell, close or otherwise dispose of its operations
in the New Orleans, Louisiana market, which consisted of seven operating stores and three
non-operating properties. Results of operations for those stores and properties have been
reclassified and presented as discontinued operations for 2005, 2004 and 2003. As of February&nbsp;2,
2006, the
</DIV>
<P align="center" style="font-size: 10pt">47
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Company had disposed of six properties. The four remaining properties have a book value of $14 and
are classified as Assets held for sale in the 2005 Consolidated Balance Sheet.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2002 the Company announced its plan to sell, close or otherwise dispose of its operations in
four underperforming markets: Memphis, Tennessee; Nashville, Tennessee; Houston, Texas; and San
Antonio, Texas. This involved the sale or closure of 95 operating stores and two distribution
centers. As of February&nbsp;2, 2006 the Company had disposed of 89 properties. The eight remaining
properties have a book value of $2 and are classified as Assets held for sale in the Company&#146;s 2005
Consolidated Balance Sheet.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The results of discontinued operations were as follows:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">52 Weeks Ended</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">53 Weeks Ended</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">52 Weeks Ended</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 2, 2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 3, 2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">January 29, 2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">242</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">417</TD>
    <TD>&nbsp;</TD>
</TR>
<TR><td>&nbsp;</td></TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Loss from operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(5</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(3</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net impairment charges and lease accruals</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(63</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">(Loss) gain on disposal</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(15</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income tax benefit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Loss from discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(16</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(30</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Restructuring Activities</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2001 the Company committed to a plan to restructure its operations by 1) closing 165
underperforming stores, 2)&nbsp;closing four division offices,
3)&nbsp;centralizing processing functions to
its store support centers, and 4)&nbsp;reducing overall store support
center headcount. As of February&nbsp;2, 2006, the Company had
disposed of or subleased 158&nbsp;properties. The 11&nbsp;remaining
properties have no book value.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes the accrual activity for future lease obligations related to
discontinued operations, restructuring activities and closed stores:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Balance</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Balance</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 3,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 2,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Additions</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Payments</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Adjustments</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2006</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2004 Discontinued Operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(1</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2002 Discontinued Operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2001 Restructuring Activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Closed Stores</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(13</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">42</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(23</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">35</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Balance</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Balance</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">January 29,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 3,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Additions</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Payments</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Adjustments</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2004 Discontinued Operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(7</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2002 Discontinued Operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2001 Restructuring Activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(5</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Closed Stores</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(7</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">47</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(22</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">42</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Balance</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Balance</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">January 30,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">January 29,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Additions</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Payments</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Adjustments</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2002 Discontinued Operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(4</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2001 Restructuring Activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(9</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Closed Stores</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(9</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">69</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(22</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(5</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">47</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The reserve balances as of February&nbsp;2, 2006 and February&nbsp;3, 2005 are included in Other current
liabilities and Other long-term liabilities and deferred credits in the Company&#146;s Consolidated
Balance Sheets.
</DIV>


<P align="center" style="font-size: 10pt">48
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>6. Land, Buildings and Equipment</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Land, buildings and equipment, net, consisted of the following:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 2,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 3,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Land</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,935</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2,012</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Buildings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,180</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,203</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fixtures and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,482</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,583</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Leasehold improvements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,499</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,422</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capitalized leases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">917</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">910</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,013</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,130</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accumulated depreciation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(7,944</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(7,514</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accumulated amortization on capital leases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(166</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(144</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">9,903</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">10,472</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Depreciation expense was $1,074, $1,035 and $931 for 2005, 2004 and 2003, respectively.
Amortization expense of capital leases was $46, $38 and $18 for 2005, 2004 and 2003, respectively.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>7. Goodwill and Other Intangible Assets</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">During the
fourth quarters of 2005, 2004 and 2003, the Company completed its annual impairment
reviews of goodwill and indefinite-lived intangible assets. To determine whether goodwill and
indefinite-lived intangible assets were impaired, a combination of internal analyses and estimates
of fair value from independent valuation experts were used. Based on these analyses, the
Company determined there was no impairment of goodwill or indefinite-lived intangible assets. The
fair value estimates could change in the future depending on internal and external factors,
including the success of strategic sourcing initiatives, labor cost controls and competitive
activity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At February&nbsp;3, 2005, the Company had $884 recorded as goodwill resulting from the Shaw&#146;s and
Bristol Farms acquisitions, which was adjusted to $852 in 2005 as
discussed in Note&nbsp;4, &#147;Business
Acquisitions.&#148; In 2005 the Company recorded $17 of goodwill as a result of the acquisition of
Lazy Acres.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The carrying amount of intangible assets was as follows:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 2,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 3,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Amortizing:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Favorable acquired operating leases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">464</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Customer lists and other contracts</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Loyalty card and other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">536</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">567</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accumulated amortization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(152</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(158</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">384</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">409</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-Amortizing:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Trade names</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">422</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">420</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Liquor licenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">460</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">459</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">844</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">868</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Straight line amortization expense for intangibles was $27, $28 and $20 in 2005, 2004 and 2003,
respectively, net of unfavorable lease amortization. Amortizing intangible assets have remaining
useful lives from less than one year to 37&nbsp;years. Projected amortization expense for existing
intangible assets is $22, $21, $20, $18 and $17, for 2006, 2007, 2008, 2009 and 2010, respectively,
net of unfavorable lease amortization.
</DIV>


<P align="center" style="font-size: 10pt">49
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>8. Indebtedness</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Long-term debt consisted of the following (borrowings are unsecured unless indicated):
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 2,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 3,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Commercial Paper, average interest rate of 2.6%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">349</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">3.75% Senior Notes due May&nbsp;16, 2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,150</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,150</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">8.0% Debentures due May&nbsp;1, 2031</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">400</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">400</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">7.25% Notes due May&nbsp;1, 2013</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">200</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">7.5% Notes due February&nbsp;15, 2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">700</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">8.35% Notes due May&nbsp;1, 2010</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">275</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">275</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">8.7% Debentures due May&nbsp;1, 2030</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">225</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">7.45% Debentures due August&nbsp;1, 2029</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">650</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">650</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">6.95% Notes due August&nbsp;1, 2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">350</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">350</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Medium-term Notes, due 2013 through 2028, average interest rate of 6.5%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">317</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">317</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Medium-term Notes, due 2007 through 2027, average interest rate of 6.8%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">200</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">7.75% Debentures due June&nbsp;15, 2026</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">200</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">7.5% Debentures due May&nbsp;1, 2037</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">200</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">8.0% Debentures due June&nbsp;1, 2026</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">272</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">272</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">7.9% Debentures due May&nbsp;1, 2017</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">95</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">95</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">7.4% Notes due May&nbsp;15, 2005</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">200</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Medium-term Notes, due 2008 through 2028, average interest rate of 6.9%</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">145</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">145</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Industrial revenue bonds, average interest rate of 6.0% and 5.9%, respectively due through
December&nbsp;15, 2011</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Secured Mortgage and other Notes, average interest rate of 6.4% and 5.5%, respectively
due 2006 through 2019</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">67</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">73</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,450</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,006</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current maturities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(28</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(214</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,422</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,792</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At February&nbsp;2, 2006, the Company had three revolving credit facilities totaling $1,400. The first
agreement, a five-year facility with total availability of $900, will expire in June&nbsp;2009. The
second agreement, a five-year facility with total availability of $100, will expire in July&nbsp;2009.
The third agreement, a revolving credit facility with total availability of $400, will expire in
June&nbsp;2010. The Company&#146;s commercial paper program is backed by all three of these credit
facilities. All of the agreements contain two financial covenants: 1) a minimum fixed charge
coverage ratio and 2) a maximum consolidated leverage ratio, each as defined in the credit
facilities. Under these facilities, the fixed charge coverage ratio shall not be less than 2.6 to 1
through April&nbsp;30, 2006 and 2.7 to 1 thereafter. The consolidated leverage ratio shall not exceed
4.5 to 1 through April&nbsp;30, 2006, 4.25 to 1 through April&nbsp;30, 2007, and 4.0 to 1 thereafter. As of
February&nbsp;2, 2006, the Company was in compliance with these requirements. No borrowings were
outstanding under the credit facilities as of February&nbsp;2, 2006 or February&nbsp;3, 2005. The Company had
$0 and $349 in commercial paper borrowings outstanding at February&nbsp;2, 2006 and February&nbsp;3, 2005,
respectively.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Mandatory Convertible Security Offering</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In May&nbsp;2004 the Company completed a public offering registered with the SEC of 40,000,000 of 7.25%
mandatory convertible securities (&#147;Corporate Units&#148;), yielding net proceeds of $971. In June&nbsp;2004
the underwriters purchased an additional 6,000,000 Corporate Units pursuant to an over-allotment
option, yielding net proceeds of $146. Each Corporate Unit consists of a purchase contract and,
initially, a 2.5% ownership interest in one of the Company&#146;s senior notes with a principal amount
of one thousand dollars, which corresponds to a twenty-five dollar principal amount of senior
notes. The ownership interest in the senior notes is initially pledged to secure the Corporate Unit
holder&#146;s obligation to purchase Company common stock under the related purchase contract. The
holders of the Corporate Units may elect to substitute the senior notes with zero-coupon U.S.
treasury securities that mature on May&nbsp;15, 2007 having a principal amount at maturity equal to the
aggregate principal amount of the senior notes to secure the purchase contracts. The senior notes
bear an annual interest rate of 3.75%. In the first half of 2007 the aggregate principal amount of
the senior notes will be remarketed, which may result in a change in the interest rate and maturity
date of the senior notes. Proceeds from a successful remarketing would be used to satisfy in full
each Corporate Unit holder&#146;s obligation to purchase common stock under the related purchase
contract. If the senior notes are not successfully remarketed, the holders will have the right to
put the senior notes to the Company to satisfy their obligations under the purchase contract in a
noncash transaction. The purchase contracts yield 3.5% per year on the stated amount of twenty-five
dollars. Subsequent to a successful remarketing, the senior notes will remain outstanding and the
Company will settle its obligations on the maturity date of the senior notes in February&nbsp;2009 or at
a later date if the maturity date is extended in connection with the remarketing of the senior
notes under the terms of the Corporate Units.
</DIV>


<P align="center" style="font-size: 10pt">50
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Each purchase contract obligates the holder to purchase, and the Company to sell, at a purchase
price of twenty-five dollars in cash, shares of the Company&#146;s common stock on or before May&nbsp;16,
2007 (the &#147;Purchase Contract Settlement Date&#148;). Generally, the number of shares each holder of the
Corporate Units is obligated to purchase depends on the average closing price per share of the
Company&#146;s common stock over a 20-day trading period ending on the third trading day immediately
preceding the Purchase Contract Settlement Date (the &#147;Trading Period&#148;), subject to anti-dilution
adjustments. If the average closing price of the Company&#146;s common stock for the Trading Period is
equal to or greater than $28.82 per share, the settlement rate will be 0.8675 shares of common
stock. If the average closing price for the Trading Period is less than $28.82 per share but
greater than $23.06 per share, the settlement rate is equal to twenty-five dollars divided by the
average closing price of the Company&#146;s common stock for the Trading Period. If the average closing
price for the Trading Period is less than or equal to $23.06 per share, the settlement rate will be
1.0841 shares of common stock. Under the terms of the purchase contracts, the Company would be
required to issue a minimum of 39,905,000 shares and a maximum of 49,868,600 shares of its common
stock. If the purchase contracts had been settled as of February&nbsp;2, 2006, the Company would have
issued approximately 48,230,200 shares of its common stock. The holders of Corporate Units have the
option to settle their obligations under the purchase contracts at any time on or prior to the
fifth business day immediately preceding the Purchase Contract Settlement Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As consideration for assuming the downside market risk without participating in all of the
potential appreciation of the Company&#146;s common stock, the holders of the Corporate Units receive a
quarterly purchase contract adjustment payment equal to 3.5% per annum of the value of the
Corporate Units. Upon issuance, a liability for the present value of the aggregate amount of the
purchase contract adjustment payments of $114 was recorded as a reduction of Stockholders&#146; Equity,
with an offsetting increase to Other long-term liabilities and Other current liabilities. The
initial reduction of Stockholders&#146; Equity represents the fair value of the contract adjustment
payments. Subsequent contract adjustment payments will reduce the liabilities, with a portion of
the payments recognized as interest expense for the amortization of the difference between the
aggregate amount of the contract adjustment payments and the present value thereof. Upon settlement
of each purchase contract, the Company will receive the stated amount of twenty-five dollars on the
purchase contract and will issue the requisite number of shares of common stock. The stated amount
received will be recorded as an increase to Stockholders&#146; Equity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Before the issuance of common stock upon settlement of the purchase contracts, the Corporate Units
will be reflected in diluted earnings per share calculations using the treasury stock method as
defined by SFAS No.&nbsp;128, &#147;Earnings Per Share.&#148; Under this method, the number of shares of common
stock used in calculating diluted earnings per share (based on the settlement formula applied at
the end of the reporting period) is deemed to be increased by the excess, if any, of the number of
shares that would be issued upon settlement of the purchase contracts less the number of shares
that could be purchased by the Company in the market at the average market price during the period
using the proceeds to be received upon settlement. Therefore, dilution will occur for periods when
the average market price of the Company&#146;s common stock for the reporting period is above $28.82,
and will potentially occur when the average price of the Company&#146;s common stock for the 20-day
trading period preceding the end of the reporting period is lower than the average price of the
Company&#146;s common stock for the full reporting period. The Corporate Units were not dilutive for
the year ended February&nbsp;2, 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Both the FASB and the EITF continue to study the accounting for financial instruments and
derivative instruments, including instruments such as the Corporate Units. It is possible that the
Company&#146;s accounting for the Corporate Units could be affected by new accounting rules that might
be issued by these groups. Accordingly, there can be no assurance that the method in which the
Corporate Units are reflected in the Company&#146;s diluted earnings per share will not change in the
future if accounting rules or interpretations evolve.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In summary, the Company received $1,150 in cash in 2004 upon issuance of the Corporate Units. In
February&nbsp;2007 (three months prior to the purchase contract settlement date in May&nbsp;2007), the
remarketing agent will attempt to remarket the senior notes on behalf of the holders of the
Corporate Units. If this initial remarketing is unsuccessful, the remarketing agent will attempt to
remarket the senior notes again in May&nbsp;2007 prior to the purchase contract settlement date in a
final remarketing. If the initial remarketing is successful, the cash proceeds will be delivered to
the collateral agent and will be used to purchase U.S. treasury securities maturing on or about the
purchase contract settlement date that will serve as collateral for the obligations under the
purchase contracts until the purchase contract settlement date. If the final remarketing is
required and is successful, the cash proceeds will be delivered to the collateral agent and will
serve as collateral for the obligations under the purchase contracts. In the case of any successful
remarketing, the collateral agent will use the cash in the collateral account to settle the
purchase contracts on the purchase contract settlement date on behalf of the holders of the
Corporate Units. Upon settlement of the purchase contracts, the Company will receive an additional
$1,150 in cash and will issue the requisite number of shares of the Company&#146;s common stock.
Thereafter, the shares of common stock issued will be included in the calculation of basic earnings
per share and the Company also will have an obligation to pay the principal amount of the senior
notes of $1,150 at the maturity date in February&nbsp;2009 or at a later date if the maturity date is
extended in connection with the remarketing of the senior notes under the terms of the Corporate
Units.
</DIV>


<P align="center" style="font-size: 10pt">51
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If the senior notes are not successfully remarketed, the Company will not receive cash from the
holders of the Corporate Units. Rather, the holders may elect to put the senior notes to the
Company on the purchase contract settlement date to satisfy their obligations under the purchase
contracts, and the Company will issue the requisite number of shares of its common stock in a
noncash transaction. Thereafter, the shares of common stock issued will be included in the
calculation of basic earnings per share.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Shelf Registration</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company filed a shelf registration statement with the SEC, which became effective on February
13, 2001 (&#147;2001 Shelf Registration&#148;), to authorize the issuance of up to $3,000 in debt securities.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Other Indebtedness</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company has pledged real estate with a cost of $90 as collateral for mortgage notes which are
payable on various schedules including interest at rates ranging from 5.0% to 10.7%. The notes
mature from 2006 to 2014.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Medium-term notes of $30 due
July&nbsp;2027 contain put options that would require the Company to repay
the notes in July&nbsp;2007 if the holders of the notes so elect by giving the
Company 60-days notice.
Medium-term notes of $50 due April&nbsp;2028 contain put options which would require the Company to
repay the notes in April&nbsp;2008 if the holders of the notes so
elect by giving the Company 60-days
notice. The $200 of 7.5% debentures due 2037 contain put options that would require the Company
to repay the notes in 2009 if the holders of the notes so elect by
giving the Company 60-days notice.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Net interest expense was as follows:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2003</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-term debt</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">427</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">416</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">374</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capitalized leases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">99</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">77</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Capitalized interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(10</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(11</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(16</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">516</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">482</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">394</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bank service charges, net of interest income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">529</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">499</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">409</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The scheduled aggregate maturities of long-term debt outstanding at February&nbsp;2, 2006 are summarized
as follows: $28 in 2006, $16 in 2007, $79 in 2008, $1,574 in 2009, $286 in 2010 and $3,467
thereafter. These amounts do not include the potential accelerations due to put options.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>9. Capital Stock</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On December&nbsp;2, 1996, the Board of Directors adopted a stockholder rights plan, which was amended on
August&nbsp;2, 1998, March&nbsp;16, 1999, September&nbsp;26, 2003 and January&nbsp;22, 2006 under which all
stockholders receive one right for each share of common stock held. Each right will entitle the
holder to purchase, under certain circumstances, one one-thousandth of a share of Series&nbsp;A Junior
Participating Preferred Stock, par value $1.00 per share, of the Company (the &#147;Preferred Stock&#148;) at
a price of $160 per one one-thousandth share. Subject to certain exceptions, the rights will become
exercisable for shares of Preferred Stock upon the earlier of (1)&nbsp;10&nbsp;days following a public
announcement that a person or group of affiliated or associated persons has acquired, or obtained
the right to acquire, beneficial ownership of 15% or more of the outstanding shares of common stock
and (2)&nbsp;10 business days (or such later date as may be determined by the Board of Directors)
following the commencement of a tender offer or exchange offer that would result in a person or
group beneficially owning 15% or more of the outstanding shares of common stock (collectively, the
persons or groups referenced in (1)&nbsp;and (2)&nbsp;are referred to as an &#147;Acquiring Person&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Under the plan, subject to certain exceptions, if any person becomes an Acquiring Person, each
right will then entitle its holder as defined by the plan, other than such Acquiring Person, upon
payment of the $160 per one one-thousandth share exercise price, to purchase common stock (or, in
certain circumstances, cash, property or other securities of the Company) with a value equal to
twice the exercise price. The plan was amended on January&nbsp;22, 2006 to provide that none of the
execution, delivery or performance of an agreement and plan of merger entered into among the
Company, Supervalu, Emerald Acquisition Sub, Inc. (&#147;Acquisition Sub&#148;), New Aloha Corporation (&#147;New
Diamond&#148;) and New Diamond Sub, Inc. in connection with the proposed sale of the Company announced
on January&nbsp;23, 2006 would cause Supervalu, Acquisition Sub, New Diamond or any of their respective
affiliates or associates to become an Acquiring Person.
</DIV>


<P align="center" style="font-size: 10pt">52
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The rights may be redeemed by the Board of Directors at a price of $0.001 per right under certain
circumstances. The rights, which do not vote and are not entitled to dividends, will expire at the
close of business on March&nbsp;21, 2007, unless earlier redeemed or extended by the Board of Directors
of the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">During 2005 and 2004, the Company did not purchase any shares of common stock under a Board
authorized purchase program. During 2003, the Company purchased and retired 5.3&nbsp;million shares for
$108, at an average price of $20.26 per share. As of February&nbsp;2, 2006, the Company does not have a
Board authorized stock purchase program in place.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>10. Income Taxes</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Deferred tax assets and liabilities consist of the following:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 2,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 3,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred tax assets:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Compensation and benefits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">339</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">375</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Self-insurance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">212</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">179</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Basis in fixed assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">194</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">189</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Unearned income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">53</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Net operating losses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Intangibles</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Other, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">78</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">68</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total deferred tax assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">907</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">930</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred tax liabilities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Basis in fixed assets and capitalized leases</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(741</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(670</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Inventories</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(161</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(132</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Compensation and benefits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(26</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(25</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Self-insurance</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(127</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(129</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Intangibles</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(20</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(239</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Other, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(40</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(29</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total deferred tax liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,115</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,224</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net deferred tax liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(208</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(294</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company has federal and state net operating loss carryforwards of $70 and $58, respectively,
which will expire in years 2006 through 2023.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company establishes valuation allowances when necessary to reduce deferred tax assets to
amounts that are more likely than not to be realized. The valuation allowance of $3 as of February
2, 2006 and February&nbsp;3, 2005 relates to certain state operating loss carryforwards, which may
expire without being utilized.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Annual tax provisions include amounts considered sufficient to pay assessments that may result from
examination of prior year tax returns; however, the amount ultimately paid upon resolution of
issues raised may differ materially from the amount accrued. These accrued amounts are classified
in either Other current liabilities or in Other long-term liabilities and deferred credits based on
expected settlement dates.
</DIV>


<P align="center" style="font-size: 10pt">53
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Income tax expense related to continuing operations consists of the following:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2003</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Federal</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">304</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">135</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">159</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">State</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">348</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">154</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">178</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Federal</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(84</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">87</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">154</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">State</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(12</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(96</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">172</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">252</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">254</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">350</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The reconciliations between the federal statutory tax rate and the Company&#146;s effective tax rates
are as follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Percent</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Percent</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Percent</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Taxes computed at statutory rate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">255</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">317</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35.0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">State income taxes net of federal income tax benefit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Audit settlements</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(18</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2.5</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Adjustment of previously recorded reserves</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(22</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3.0</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(8</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1.1</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(15</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2.0</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(0.4</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">252</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">254</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">350</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38.6</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2005, a $22 reduction of previously recorded tax reserves was recognized. Of this reduction, $8
occurred in the first quarter of 2005 and resulted from the adjustment of previously recorded
reserves while $14 of this reduction occurred in the second quarter of 2005 as a result of a change
in estimate of the ultimate resolution of prior year tax issues with the IRS. The second quarter
decrease in tax reserves also resulted in a net $14 increase in related interest expense ($23
interest expense net of $9 tax benefit) such that there was no second quarter impact on net
earnings from this change in tax reserves.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>11. Stock Options and Stock Awards</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At February&nbsp;2, 2006, Albertsons maintained a stock-based incentive plan under which grants could be
made with respect to 66&nbsp;million shares of the Company&#146;s common stock (Albertson&#146;s, Inc. 2004 Equity
and Performance Incentive Plan (the &#147;2004 Plan&#148;)). Under the 2004 Plan, options to purchase the
Company&#146;s common stock, stock-based awards and other performance-based awards may be granted to
officers, key employees, special advisors (as defined in the 2004 Plan) and non-employee members of
the Board of Directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Deferrable and Deferred Stock Units: </B>From time to time, deferred and deferrable stock units with
dividend equivalents paid in cash, if and when dividends are paid to shareholders, are awarded
under the 2004 Plan to key employees of the Company. From time to time, deferred stock units with
reinvested dividend equivalents are awarded to non-employee members of the Board of Directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Grants of 3,001,871 units were made during 2005 to key employees and non-employee directors of the
Company, of which 17,500 units vest at a rate of 20% per year and will be distributed in a manner
elected by the participant on a date after the participant ceases to be an associate of the
Company; 18,000 units fully vest on December&nbsp;31, 2008 and will be distributed in a manner elected
by the participant; 10,500 units vest at a rate of 50% per year and will be distributed in a manner
elected by the participant; 942,200 units vest at a rate of 25% per year and will be distributed in
a manner elected by the participant; 1,986,819 units vest at a rate of 33% per year beginning on
the third anniversary of the date of grant and will be distributed in a manner elected by the
participant; and 26,852 units were fully vested at their grant date and will be distributed in a
manner elected by the participant. The weighted average fair value at date of grant for units
granted during 2005 was $22.41 per unit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Grants of 1,023,530 units were made during 2004 to key employees and non-employee directors of the
Company, of which 635,081 units vest at a rate of 20% per year and will be distributed in a manner
elected by the participant on a date after the participant ceases to be an associate of the
Company; 4,358 units fully vest at the first anniversary of the grant date and will be distributed
in a manner elected by the participant; 63,438 units vest at a rate of 50% per year and will be
distributed in a manner elected by the participant; 301,207 units vest at a rate of 20% per year
and will be distributed in a manner elected by the participant; and 19,446 units were fully vested
at their grant date and will be distributed in a manner elected by the participant. The weighted
average fair value at date of grant for units granted during 2004 was $23.48 per unit.
</DIV>


<P align="center" style="font-size: 10pt">54
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Grants of 1,672,398 units were made during 2003 to key employees and non-employee directors of the
Company, of which 1,046,548 vest at a rate of 33% per year beginning on the third anniversary of
the date of grant and will be distributed in a manner elected by the participant on a date after
the participant ceases to be an associate of the Company; 356,885 units vest at a rate of 20% per
year and will be distributed in a manner elected by the participant on a date after the participant
ceases to be an associate of the Company; 253,500 units vest at a rate of 20% per year and will be
distributed in a manner elected by the participant; and 15,465 units were fully vested at their
grant date and will be distributed in a manner elected by the participant. The weighted average
fair value at date of grant for units granted during 2003 was $19.58 per unit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">With the exception of stock units granted to non-employee directors (which are fully vested on the
date of grant) and 942,200 stock units granted in January&nbsp;2006, all outstanding stock units vest on
a &#147;Change in Control&#148; (as defined in the associated award agreement and plan) of the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Compensation expense for deferred stock units of $27, $19 and $25 was recorded in Selling, general
and administrative expenses in 2005, 2004 and 2003, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Stock Options: </B>Generally, options are granted with an exercise price at not less than 100% of the
closing market price on the date of the grant. The Company&#146;s options generally become exercisable
in installments of 20% per year on each of the first through fifth anniversaries of the grant date
or vest 100% on the third anniversary of the grant date and have a maximum term of seven to 10
years. With the exception of stock options granted to non-employee directors (which are fully
vested on the date of grant), all outstanding stock options vest on a &#147;Change in Control&#148; (as
defined in the associated award agreement and plan) of the Company. A summary of shares reserved
for outstanding options as of year end, changes during the year and related weighted average
exercise price is presented below (shares in thousands):
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">February 2, 2006</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">February 3, 2005</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">January 29, 2004</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Shares</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Price</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Shares</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Price</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Shares</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Price</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Outstanding at beginning of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38,488</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">28.16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,164</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">29.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30,245</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">31.41</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Granted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">98</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21.63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,119</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23.44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,169</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20.35</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Exercised</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,472</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21.60</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(530</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21.71</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(295</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21.72</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Forfeited</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,719</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29.82</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,265</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30.06</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,955</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">32.14</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Outstanding at end of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34,395</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">28.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38,488</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">28.16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,164</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">29.20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Options exercisable at end of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,559</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">31.15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,117</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">32.80</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,626</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">34.08</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="25" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As of February&nbsp;2, 2006, 12.5&nbsp;million shares of the Company&#146;s common stock were reserved for future
grants of stock options and stock awards.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table summarizes options outstanding and options exercisable as of February&nbsp;2, 2006
and the related weighted average remaining contractual life (years)&nbsp;and weighted average exercise
price (shares in thousands):
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000">Options Outstanding</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="9" style="border-bottom: 1px solid #000000">Options Exercisable</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Shares</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Remaining</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Average</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Shares</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Average</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Option Price Per Share</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Outstanding</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Life</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Price</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Exercisable</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Price</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">$19.10 - $22.52</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,142</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">21.13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,859</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">21.47</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;&nbsp;22.88
- &nbsp;&nbsp;34.87</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,369</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28.28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,816</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">30.70</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">

<TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;&nbsp;35.00
- &nbsp;&nbsp;45.94</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,540</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40.02</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,540</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40.02</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;&nbsp;47.00
- &nbsp;&nbsp;51.19</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,344</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">51.13</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,344</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">51.13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">$19.10 - $51.19</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34,395</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">28.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,559</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">31.15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
 </TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The weighted average fair value at date of grant for Albertsons options granted during 2005, 2004
and 2003 was $6.15, $6.85 and $6.44 per option, respectively. The fair value of options at date of
grant was estimated using the Black-Scholes model with the following weighted average assumptions:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2003</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Expected life (years)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.7</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.7</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Risk-free interest rate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.99</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.80</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.56</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Volatility</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">37.3</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">37.3</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">39.4</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Dividend yield</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.51</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.24</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.74</TD>
    <TD nowrap>%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">55
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>12. Employee Benefit Plans and Collective Bargaining Agreements</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Employee Benefit Plans: </B>Substantially all employees working over 20 hours per week are covered by
retirement plans. The Company sponsors both defined benefit and defined contribution pension plans.
Union employees participate in multi-employer retirement plans under collective bargaining
agreements, unless the collective bargaining agreement provides for participation in
Company-sponsored plans. The Company also offers health and life insurance to retirees under
postretirement benefit plans, and short-term and long-term disability benefits to former and
inactive employees prior to retirement under post employment benefit plans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The benefit obligation, fair value of plan assets and funded status of the Company-sponsored
defined pension plans and other postretirement benefit plans are as follows:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">Defined Benefit Pension Plans</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">Other Postretirement Plans</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 2,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 3,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 2,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 3,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Change in benefit obligation</B><SUP style="font-size: 85%; vertical-align: text-top"><B>(1)</B></SUP><B>:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Benefit obligation at beginning of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,234</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,074</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">38</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">32</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Service cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Interest cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">66</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">58</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Plan participants&#146; contributions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Actuarial (gain)&nbsp;loss</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(41</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">102</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(8</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Benefits paid</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(29</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(27</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(15</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(16</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Benefit obligation at end of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,267</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,234</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Change in plan assets:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Fair value of plan assets at beginning of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">893</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">758</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Actual return on plan assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">117</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">76</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Employer contributions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">86</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Plan participants&#146; contributions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Benefits paid</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(29</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(27</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(15</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(16</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fair value of plan assets at end of year</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">999</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">893</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Funded status</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(268</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(341</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(28</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(38</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Unrecognized net actuarial loss (gain)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">209</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">319</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(16</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(9</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Unrecognized prior service benefit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(38</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(44</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net amount recognized</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(97</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(66</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(44</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(47</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




<DIV style="margin-top: 3pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>For the defined benefit pension plans, the benefit obligation is the projected benefit
obligation. For other postretirement benefits, the benefit obligation is the accumulated
postretirement benefit obligation.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Amounts recognized in the Consolidated Balance Sheets consist of the following:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">Defined Benefit Pension Plans</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">Other Postretirement Benefits</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 2,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 3,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 2,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 3,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accrued benefit liability</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(236</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(308</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(44</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(47</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accumulated other comprehensive loss, net of taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">85</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">148</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">54</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">94</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net amount recognized</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(97</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(66</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(44</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(47</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="17" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The estimated future benefit payments to be paid from the Company&#146;s defined benefit pension plans
and other postretirement benefit plans, which reflect expected future service, are as follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Other Postretirement</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Pension Benefits</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Benefits</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2006</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2007</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2010</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Years
2011-2015</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">334</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">56
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Defined Benefit Pension Plans</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As of February&nbsp;2, 2006, the Company sponsors the following defined benefit pension plans:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">- Albertsons Employees Corporate Pension Plan
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">- Executive Pension Makeup Plan
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">- Shaw&#146;s Supplemental Executive Retirement Plan
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">- Shaw&#146;s Retirement Account Plan
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">- Shaw&#146;s Pension Plan for Union Employees
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Albertsons Salaried Employees Pension Plan was merged with the Albertsons Employees Corporate
Pension Plan as of December&nbsp;31, 2004. The combined Albertsons Employees Corporate Pension Plan is a
funded, qualified, defined benefit, noncontributory plan for eligible Albertsons employees who are
at least 21&nbsp;years of age with one or more years of service and (with certain exceptions) are not
covered by collective bargaining agreements. Benefits paid to retirees are based upon age at
retirement, years of credited service and average compensation. In 1999, in conjunction with the
authorization of ASRE (described later), the Company-sponsored defined benefit plans were amended
to close the plans to future new entrants, with the exception of certain union employees based on
current contracts. Future accruals for participants in the defined benefit plans are offset by the
value of Company profit sharing contributions to the new defined contribution plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Shaw&#146;s Retirement Account Plan and the Shaw&#146;s Pension Plan for Union Employees are funded,
qualified, defined benefit, noncontributory plans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Executive Pension Makeup Plan, the Shaw&#146;s Supplemental Executive Retirement Plan, a
supplemental executive retirement benefit plan for the Company&#146;s Chief Executive Officer and
certain other plans are unfunded, nonqualified plans which provide certain key employees retirement
benefits that supplement those provided by the Company&#146;s other retirement plans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The accumulated benefit obligation for all defined benefit pension plans was $1,230 and $1,201 at
February&nbsp;2, 2006 and February&nbsp;3, 2005, respectively. At February&nbsp;2, 2006, February&nbsp;3, 2005 and
January&nbsp;29, 2004, the accumulated benefit obligation for all defined benefit pension plans exceeded
the fair value of plan assets. The Company therefore recognized a decrease in the additional
minimum pension liability of $103 ($63 net of tax) in 2005 and increases of $57 ($36 net of tax)
and $21 ($13 net of tax) in 2004 and 2003, respectively. These adjustments are included in
Accumulated other comprehensive loss in the Consolidated Stockholders&#146; Equity Statements.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Net Periodic Benefit Expense</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Net periodic benefit expense for defined benefit pension plans consisted of the following:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2003</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Service cost
- benefits earned during the period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">37</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest cost on projected benefit obligations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">66</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">58</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Expected return on assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(71</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(57</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(32</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Amortization of prior service benefit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Recognized net actuarial loss</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Curtailment gain</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(7</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net periodic benefit expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">50</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">38</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">30</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">57
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Weighted average assumptions used for the defined benefit pension plans consist of the following:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2003</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Weighted average assumptions used to determine benefit obligations <SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP>:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Discount rate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">5.75</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD nowrap align="right">5.40-5.45</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">5.80</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Rate of compensation increase</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">2.98-3.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">3.00-3.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">3.45-4.50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Weighted average assumptions used to determine net periodic benefit cost
<SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP>:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Discount rate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">5.40-5.45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">5.80-6.15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Rate of compensation increase</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">2.98-3.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">3.00-3.75</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">3.45-4.50</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Expected long-term return on plan assets <SUP style="font-size: 85%; vertical-align: text-top">(3)</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8.00</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>


<DIV style="margin-top: 3pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Benefit obligations and the fair value of plan assets are measured as of the Company&#146;s
fiscal year-end.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Net periodic benefit expense is measured using weighted average assumptions as of the
beginning of each year.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Expected long-term return on plan assets is estimated by asset class and is generally based
on historical returns, volatilities and risk premiums. Based upon an individual plan&#146;s asset
allocation, composite return percentiles are developed upon which the plan&#146;s expected
long-term return is based.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Contributions</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company expects to contribute $13 to its pension plans in 2006. The Company&#146;s funding policy
for the defined benefit pension plans is to contribute the minimum contribution allowed under the
Employee Retirement Income Security Act (&#147;ERISA&#148;), with consideration given to contributing larger
amounts in order to be exempt from Pension Benefit Guaranty Corporation (&#147;PBGC&#148;) variable rate
premiums and/or participant notices of under-funding. The Company will recognize contributions in
accordance with applicable regulations, with consideration given to recognition for the earliest
plan year permitted.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Plan Assets</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Assets of the defined benefit pension plans are invested in directed trusts as follows:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 2,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 3,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Domestic equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">52</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">53</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fixed income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">27</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">International equity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Real estate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Investments in the pension trusts are overseen by the Investment Management Subcommittee which is
composed of officers of the Company and outside experts. The Shaw&#146;s Retirement Account Plan and
Shaw&#146;s Pension Plan for Union Employees are invested primarily in institutional mutual funds. The
Albertsons Employees Corporate Pension Plan is invested both in institutional mutual funds and
separate investment manager portfolios. The Albertsons pension plan investment guidelines consist
of the following:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>-</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Categorical restrictions such as no commodities, no short sales, and no margin purchases;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>-</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Portfolio restrictions that address such things as proxy voting, brokerage arrangements and
restrictions on the purchase of Company securities;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>-</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Asset class restrictions that address such things as single security or sector
concentration, capitalization limits and minimum quality standards; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>-</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A provision for specific exemptions from the above guidelines upon approval by the
Investment Management Subcommittee.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>-</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Futures and options must be used for hedging purposes only and not for speculative
purposes. Long futures positions may be used in place of cash market securities (e.g.,
treasury futures purchased in place of buying long treasury bonds).</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">58
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>


<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The overall investment strategy and policy has been developed based on the need to satisfy the
long-term liabilities of the defined benefit pension plans. Risk management is accomplished through
diversification across asset classes, multiple investment manager portfolios, commingled pools and
both general and portfolio-specific investment guidelines. Managers are expected to generate a
total return consistent with their philosophy, offer protection in down markets and meet or exceed
certain return targets. The asset allocation guidelines are as follows:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Minimum</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Maximum</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Exposure</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Target</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Exposure</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Domestic Equities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Large</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD nowrap align="right">22-40</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD nowrap align="right">25-50</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD nowrap align="right">29-60</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Small</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">5-18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">10-19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">15-22</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fixed Income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">20-32</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">25-33</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">30-44</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Non-U.S. Equities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">8-10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">14-15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">14-20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Real Estate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">0-8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">0-8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">0-9</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Other Postretirement Benefits</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company offers health and life insurance to retirees under multiple programs. The terms of
these plans vary based on employment history and date of retirement. For certain pre-1991 retirees,
the Company provides coverage at little or no cost to the retirees. For other current retirees, the
Company provides a fixed dollar contribution and retirees pay contributions to fund the remaining
cost. On December&nbsp;5, 2003, the Board of Directors approved a curtailment of retirement medical
benefits for all non-retired employees. For retirees after June&nbsp;1, 2004, the fixed dollar employer
contribution was eliminated and retiree contributions fund the entire benefit.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The net periodic postretirement benefit cost was as follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2003</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Service cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Amortization of unrecognized gain</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net periodic postretirement benefit cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The discount rate used to determine the Company&#146;s obligation with respect to Company-sponsored
postretirement benefit plans was 4.96%, 4.00% to 4.10% and 3.55% as of the end of 2005, 2004 and
2003, respectively. As a result of a plan curtailment of the Albertsons plans in 2003, there are no
expected employer paid benefit payments for any employees who participate in those plans and who
retire after June&nbsp;1, 2004. Therefore, in 2003, the duration of the expected employer paid benefit
payments for the Albertsons plans was reduced. As a result of a plan curtailment of the Shaw&#146;s
plan in 2005, there are no expected employer paid benefit payments for any employees who
participate in that plan and who retire after June&nbsp;1, 2006. Therefore, in 2005, the duration of
the expected employer paid benefit payments for the Shaw&#146;s plan was reduced. Discount rates are
based on the expected timing and amounts of the future employer paid benefits.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The expected employer benefit payments for certain pre-1991 retirees were measured using an annual
medical trend in the age-specific per capita cost of covered health care benefits. For 2005, the
medical trend used for non-prescription claims was 6% and the trend for prescription claims was
15%, reducing 2% each future year until reaching an ultimate trend of 6% for years thereafter. The
medical trend does not affect the expected employer benefit payments for other retirees. With the
exception of the plans covering certain grandfathered retirees, all postretirement plans are
contributory, with participants&#146; contributions adjusted periodically. The accounting for the health
care plans anticipates that the Company will not increase its contribution for health care benefits
for non-grandfathered retirees in future years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Since the subsidy levels for the Albertsons and the former defined dollar plans are fixed and the
number of certain grandfathered retirees is small, a 1% health care cost trend increase or decrease
would have no material impact on the accumulated postretirement benefit obligation or the
postretirement benefit expense.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In December&nbsp;2003 the Medicare Act was signed into law, which established a prescription drug
benefit under Medicare Part&nbsp;D and a federal subsidy to sponsors of retiree health benefit plans
that provide a benefit that is at least actuarially equivalent to Medicare Part&nbsp;D. In 2004, the
Company elected not to recognize any of the potential accounting effects of the Medicare Act
because the actuarial equivalence of our retiree medical plans was undeterminable. In 2005, the
Company completed its analysis of the Medicare Act and concluded that its plans are at least
&#147;actuarially equivalent&#148; to the Medicare Part&nbsp;D plan and that it is eligible for the subsidy. The
effects of the Medicare Act and the subsidy were not significant. The subsidy reduced the net
periodic postretirement benefit cost by
</DIV>
<P align="center" style="font-size: 10pt">59
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">less than $1 and caused a $7 reduction to the 2005 accumulated postretirement benefit obligation in
accordance with the provisions of FSP FAS 106-2.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Defined Contribution Plans</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company sponsors the Albertsons Savings and Retirement Estates (&#147;ASRE&#148;) Plan and the Executive
ASRE Makeup Plan, which are defined contribution retirement plans. ASRE is a profit sharing plan
with a salary deferral feature pursuant to Section 401(k) of the Internal Revenue Code. Most
participants in ASRE are eligible to receive a profit sharing contribution (Company contribution
based on employee compensation). In addition, the Company provides a matching contribution based on
the amount of eligible compensation contributed by the associate. The Executive ASRE Makeup Plan
provides certain key employees retirement benefits that supplement those provided by the Company&#146;s
other retirement plans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company sponsored a tax-deferred savings plan that was also a salary deferral plan pursuant to
Section 401(k) of the Internal Revenue Code, which was merged with ASRE during 2004. In addition,
the Company sponsors the Shaw&#146;s 401(k) Plan. The plan covers non-union employees as well as certain
employees represented by a labor union, who meet age and service eligibility requirements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All Company contributions to ASRE and to the Shaw&#146;s 401(k) Plan are made at the discretion of the
Board of Directors. The total amount contributed by the Company is included with the ASRE defined
contribution plan expense. Total contribution expenses for these plans were $137, $156 and $143
for 2005, 2004 and 2003, respectively.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Post-Employment Benefits</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company recognizes an obligation for benefits provided to former or inactive employees after
employment but before retirement. The Company is self-insured for certain of its employees&#146;
short-term and long-term disability plans, which are the primary benefits paid to inactive
employees prior to retirement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Following is a summary of the obligation for post-employment benefits included in the Company&#146;s
Consolidated Balance Sheets:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 2, 2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 3, 2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Included with Salaries and related liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">33</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">35</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Included with Other long-term liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">63</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">69</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">96</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">104</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Multi-Employer Plans</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company contributes to various multi-employer pension plans under industry-wide collective
bargaining agreements, primarily for defined benefit pension plans. These plans generally provide
retirement benefits to participants based on their service to contributing employers. The Company
contributed $130, $115 and $92 to these plans in the years 2005, 2004 and 2003, respectively.
Based on available information, the Company believes that some of the multi-employer plans to which
it contributes are under-funded. Company contributions to these plans are likely to continue to
increase in the near term. However, the amount of any increase or decrease in contributions will
depend on a variety of factors, including the results of the Company&#146;s collective bargaining
efforts, return on the assets held in the plans, actions taken by trustees who manage the plans and
the potential payment of a withdrawal liability if the Company chooses to exit a market or another
employer withdraws from a plan without provision for their share of pension liability. Many
recently completed labor negotiations have positively affected the Company&#146;s future contributions
to these plans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company also makes payments to multi-employer health and welfare plans in amounts representing
mandatory contributions which are based on reserve requirements set forth in the related collective
bargaining agreements. Some of the collective bargaining agreements up for renewal in the next
several years contain reserve requirements that may trigger unanticipated contributions resulting
in increased health care expenses. If these health care provisions cannot be renegotiated in a
manner that reduces the prospective health care cost as the Company intends, the Company&#146;s selling,
general and administrative expenses could increase, possibly significantly, in the future. Total
contributions to these plans were $483, $520 and $416 for 2005, 2004 and 2003, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Collective Bargaining Agreements: </B>As of February&nbsp;2, 2006, the Company employed approximately
234,000 associates, of which approximately 52% were covered by collective bargaining agreements,
primarily with the United Food and Commercial Workers and International Brotherhood of Teamsters.
Labor agreements covering approximately 7,000 associates expire during 2006.
</DIV>


<P align="center" style="font-size: 10pt">60
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>13. Employment Contracts and Change in Control Agreements</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company has entered into a ten-year employment agreement with its Chairman of the Board, Chief
Executive Officer and President (the &#147;CEO Agreement&#148;), which provides this executive with a minimum
base salary, the opportunity to receive annual bonus payments and stock awards, a supplemental
retirement benefit, certain fringe benefits, the right to certain guaranteed payments and vesting
of stock awards upon his termination or departure from the Company and other benefits. The Company
has also entered into a three-year employment agreement with its Executive Vice President,
Marketing and Food Operations (the &#147;EVP Agreement&#148;). The EVP Agreement provides the executive with
a minimum base salary, certain fringe benefits and the right to certain guaranteed payments upon
his termination or departure from the Company. The Company also has agreements with other executive
officers which provide the executive with a minimum base salary and, upon termination or departure
from the Company, certain guaranteed payments and the vesting of stock awards.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company has entered into change-in-control (&#147;CIC&#148;) severance agreements with certain executives
to provide them with stated severance compensation should their employment with the Company be
terminated under certain defined circumstances prior to or following a CIC. The CIC severance
agreements have varying terms and provisions depending upon the executive&#146;s level within the
organization and other considerations, including up to three times base salary and current target
bonus, payable in a lump sum for the most senior executives and, for these executives, a tax gross-up
payment to make the executive whole for any excise taxes incurred due to Section&nbsp;280G of the
Internal Revenue Code (a &#147;tax gross up&#148;). The Company does not have a separate CIC agreement with
the CEO. Rather, the CEO Agreement contains CIC termination provisions applicable during the CEO
Agreement&#146;s full term that are comparable to those provided to the Company&#146;s other most senior
executives, including a tax gross up. Unlike the CIC agreements, however, the CEO Agreement
provides the CEO with the ability to terminate his employment for any reason during the seventh
month following a CIC and receive the stated CIC severance benefits.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The CIC agreements expire on December&nbsp;31, 2005. However, beginning on January&nbsp;1, 2004 and each
January 1st thereafter, the term of the agreement will automatically be extended for an additional
year unless the Company or the executive gives notice by September&nbsp;30th of the preceding year that
the Company or the executive does not wish to extend the agreement. No such notices were given in
2005. In the event that a CIC occurs during the term of the agreements, the agreements provide for
a two-year protection period (referred to as the severance period) during which time the executive
will receive the stated benefits upon an involuntary termination (other than for &#147;Cause&#148; (as
defined in the agreements)) or resignation for &#147;Good Reason&#148; (as defined in the agreements).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The CIC agreements are considered to be &#147;double trigger&#148; arrangements wherein the payment of
severance compensation following a CIC is predicated upon the occurrence of two triggering events:
(1)&nbsp;the occurrence of a CIC as defined in the agreements; and (2)&nbsp;the involuntary termination of
the executive (other than for Cause) or the executive&#146;s termination of employment with the Company
for Good Reason.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In consideration for the severance protection afforded by such agreements, the senior executives
(including the CEO in the CEO Agreement) have agreed to certain non-compete and non-solicitation
provisions.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>14. Leases</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company leases a portion of its real estate. The typical lease period is 15 to 20&nbsp;years and
most leases contain renewal options. Exercise of such options is dependent on a variety of factors,
including the level of business conducted at the location. In addition, the Company leases certain
equipment. Some leases contain contingent rental provisions based on sales volume at retail stores
or miles traveled for trucks. Capitalized leases are calculated using interest rates appropriate
at the inception of each respective lease.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Following is a summary of the Company&#146;s assets under capitalized leases.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 2,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 3,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Real estate and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">917</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">910</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accumulated amortization</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(166</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(144</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">751</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">766</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">61
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Future minimum lease payments for noncancelable operating leases (which exclude the amortization of
acquisition-related fair value adjustments), related subleases and capital leases at February&nbsp;2,
2006, are as follows:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Operating</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Capital</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Leases</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Subleases</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Leases</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2006</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">437</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(52</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">116</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2007</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">425</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(50</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">117</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2008</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">389</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(33</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">115</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2009</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">356</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(22</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">117</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">2010</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">330</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(17</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">115</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Thereafter</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,133</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(40</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,457</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total minimum obligations (receivables)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,070</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(214</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,037</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,158</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Present value of net minimum obligations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">879</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Current portion</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(23</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Long-term obligations at February&nbsp;2, 2006</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">856</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Rent expense under operating leases was as follows:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2003</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Minimum rent</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">497</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">469</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">392</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Contingent rent</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">512</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">487</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">410</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sublease rent</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(62</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(60</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(45</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">450</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">427</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">365</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="13" align="left" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>15. Financial Instruments</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Financial instruments which potentially
subject the Company to concentration of credit risk consist
principally of cash equivalents and receivables. The Company limits the amount of credit exposure
to each individual financial institution and places its temporary cash into investments of high
credit quality. Concentrations of credit risk with respect to receivables are limited due to their
dispersion across various companies and geographies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The estimated fair values of cash and
cash equivalents, accounts receivable, accounts payable,
short-term debt and bank line borrowings approximate their carrying
amounts. The estimated fair value of outstanding debt (excluding bank
borrowings) was estimated using current market prices as follows:
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 2,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">February 3,</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2006</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">2005</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="9" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fair value</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">5,225</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,767</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Carrying amount</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,450</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,006</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>16. Legal Proceedings</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company is subject to various lawsuits, claims and other legal matters that arise in the
ordinary course of conducting business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In April&nbsp;2000 a class action complaint was filed against Albertsons as well as American Stores
Company, American Drug Stores, Inc., Sav-on Drug Stores, Inc. and Lucky Stores, Inc., wholly owned
subsidiaries of the Company, in the Superior Court for the County of Los Angeles, California
(Gardner, et al. v. American Stores Company, et al.) by assistant managers seeking recovery of
overtime pay based upon plaintiffs&#146; allegation that they were improperly classified as exempt under
California law. In May&nbsp;2001 a class action with respect to Sav-on Drug Stores assistant managers
was certified by the court. A case with very similar claims, involving the Sav-on Drug Stores
assistant managers and operating managers, was also filed in April&nbsp;2000 against the Company&#146;s
subsidiary Sav-on Drug Stores, Inc. in the Superior Court for the County of Los Angeles, California
(Rocher, Dahlin, et al. v. Sav-on Drug Stores, Inc.) and was also certified as a class action. In
April&nbsp;2002 the Court of Appeal of the State of California Second Appellate District reversed the
Rocher class certification, leaving only two plaintiffs. However, on August&nbsp;26, 2004, the
California Supreme Court reversed this decision and remanded the case to the trial court. The
Company continues to believe it has strong defenses against these lawsuits and is vigorously
defending them. Although these lawsuits are subject to the uncertainties inherent in the litigation
process, based on the information presently available to the Company, management does not expect
that the ultimate resolution of these lawsuits will have a
</DIV>
<P align="center" style="font-size: 10pt">62
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">material adverse effect on the Company&#146;s financial condition, results of operations or cash flows.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In September&nbsp;2000 an agreement was reached and court approval granted to settle eight purported
class and/or collective actions which were consolidated in the United States District Court in
Boise, Idaho and which raised various issues including &#147;off-the-clock&#148; work allegations and
allegations regarding certain salaried grocery managers&#146; exempt status. Under the settlement
agreement, current and former employees who met eligibility criteria have been allowed to present
their off-the-clock work claims to a claims administrator. Additionally, current and former
grocery managers employed in the State of California have been allowed to present their exempt
status claims to a claims administrator. The Company mailed notices of the settlement and claims
forms to approximately 70,500 associates and former associates. Approximately 6,000 claim forms
were returned, of which approximately 5,000 were deemed by the claims administrator to be incapable
of valuation, presumed untimely, or both (the &#147;Unvalued Claims&#148;). The claims administrator was able
to assign a value to approximately 1,080 claims although the value of many of those claims is still
subject to challenge by either party. Two other claims processes occurred during 2004. First,
there was a supplemental mailing and in-store posting directed toward a narrow subset of current
and former associates. This process resulted in approximately 260 individuals submitting claims
documents. Second, in response to the Court&#146;s instruction to plaintiffs&#146; counsel to submit
supplemental and/or corrected information for the Unvalued Claims, plaintiffs&#146; counsel submitted
such information for approximately 4,700 of the Unvalued Claims in 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The claims administrator has been assigning values to claims as a result of the 2004 claims
process. The value of these claims will likewise be subject to challenge by either party. The
Company raised certain challenges to the claims process, including the supplemental information
submitted by plaintiffs&#146; counsel in 2005, and valuation protocols; on January&nbsp;4, 2006, the court
granted in part the Company&#146;s motion and directed the claims administrator to value the claims
disregarding certain information. Presently pending before the court is a motion filed by the
plaintiffs making further challenge to the process. The Company is presently unable to determine
the amounts that it may ultimately be required to pay with respect to all claims properly
submitted. Based on the information presently available to the Company, management does not expect
that the satisfaction of valid claims submitted pursuant to the settlement will have a material
adverse effect on the Company&#146;s financial condition, results of operations or cash flows.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On October&nbsp;13, 2000, a complaint was filed in Los Angeles County Superior Court (Joanne Kay Ward et
al. v. Albertsons, Inc. et al.) alleging that Albertsons, Lucky Stores and Sav-on Drug Stores paid
terminating employees their final paychecks in an untimely manner. The lawsuit seeks statutory
penalties. On January&nbsp;4, 2005, the case was certified as a class action. The Company believes that
it has strong defenses against this lawsuit and is vigorously defending it. Although this lawsuit
is subject to the uncertainties inherent in the litigation process, based on the information
presently available to the Company, management does not expect that the ultimate resolution of this
lawsuit will have a material adverse effect on the Company&#146;s financial condition, results of
operations or cash flows.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On February&nbsp;2, 2004, the Attorney General for the State of California filed an action in Los
Angeles federal court (California, ex rel Lockyer v. Safeway, Inc. dba Vons, a Safeway Company,
Albertsons, Inc. and Ralphs Grocery Company, a division of The Kroger Co., United States District
Court Central District of California, Case No.&nbsp;CV04-0687) claiming that certain provisions of the
agreements (the &#147;Labor Dispute Agreements&#148;) between the Company, The Kroger Co. and Safeway Inc.
(the &#147;Retailers&#148;), which provided for &#147;lock-outs&#148; in the event that any Retailer was struck at any
or all of its Southern California facilities during the 2003-2004 labor dispute in Southern
California when the other Retailers were not and contained a provision designed to prevent the
union from placing disproportionate pressure on one or more Retailer by picketing such Retailer(s)
but not the other Retailer(s) during the labor dispute violate Section&nbsp;1 of the Sherman Act. The
lawsuit seeks declarative, injunctive and other legal and equitable
relief. The Retailers&#146; motion for summary judgment was
denied on May&nbsp;26, 2005 and the Retailers&#146; appeal of that decision was dismissed on November&nbsp;29,
2005. The Company continues to believe it has strong defenses against this lawsuit and is
vigorously defending it. Although this lawsuit is subject to uncertainties inherent in the
litigation process, based on the information presently available to the Company, management does
not expect that the ultimate resolution of this action will have a material adverse effect on the
Company&#146;s financial condition, results of operations or cash flows.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In March&nbsp;2004 a lawsuit seeking class action status was filed against Albertsons in the Superior
Court of the State of California in and for the County of Alameda, California (Dunbar v.
Albertson&#146;s, Inc.) by a grocery manager seeking recovery including overtime pay based upon
plaintiff&#146;s allegation that he and other grocery managers were improperly classified as exempt
under California law. Class certification was denied in June&nbsp;2005 and plaintiffs have appealed. The
Company continues to believe it has strong defenses against this lawsuit and is vigorously
defending it. Although this lawsuit is subject to the uncertainties inherent in the litigation
process, based on the information presently available to the Company, management does not expect
that the ultimate resolution of this lawsuit will have a material adverse effect on the Company&#146;s
financial condition, results of operations or cash flows.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In July&nbsp;2004 a case similar to Dunbar involving salaried drug/merchandise managers was filed in the
same court (Victoria A. Moore, et al. v. Albertson&#146;s, Inc.). In March&nbsp;2005 the parties reached a
tentative settlement. On March&nbsp;10, 2006, the court granted final approval to the settlement.
</DIV>
<P align="center" style="font-size: 10pt">63
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Based on information presently available to the Company, management does not expect
that payments under this settlement will have a material adverse effect on the Company&#146;s financial
condition, results of operations or cash flows.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On January&nbsp;24, 2006, a putative class action complaint was filed in the Fourth Judicial District of
the State of Idaho in and for the County of Ada, naming Albertsons and its directors as defendants.
The action (Christopher Carmona v. Henry Bryant et al., No.&nbsp;CV-OC-0601251), which has been removed
to the United States District Court for the District of Idaho, challenges the merger agreement
entered into in connection with the pending sale of the Company and related transactions.
Specifically, the complaint alleges that Albertsons and its directors violated applicable law by
directly breaching and/or aiding the other defendants&#146; breaches of their fiduciary duties,
including by failing to value Albertsons properly and by ignoring conflicts of interest. Among
other things, the complaint seeks preliminary and permanent injunctive relief to enjoin the
completion of the Transactions. Albertsons believes that the claims asserted in this action are
without merit and intends to defend this suit vigorously. Although this lawsuit is subject to the
uncertainties inherent in the litigation process, based on the information presently available to
the Company, management does not expect that the ultimate resolution of this lawsuit will have a
material adverse effect on the Company&#146;s financial condition, results of operations or cash flows.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company is also involved in routine legal proceedings incidental to its operations. Some of
these routine proceedings involve class allegations, many of which are ultimately dismissed.
Management does not expect that the ultimate resolution of these legal proceedings will have a
material adverse effect on the Company&#146;s financial condition, results of operations or cash flows.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The statements above reflect management&#146;s current expectations based on the information presently
available to the Company. However, predicting the outcomes of claims and litigation and estimating
related costs and exposures involve substantial uncertainties that could cause actual outcomes,
costs and exposures to vary materially from current expectations. In addition, the Company
regularly monitors its exposure to the loss contingencies associated with these matters and may
from time to time change its predictions with respect to outcomes and its estimates with respect to
related costs and exposures. It is possible that material differences in actual outcomes, costs
and exposures relative to current predictions and estimates, or material changes in such
predictions or estimates, could have a material adverse effect on the Company&#146;s financial
condition, results of operations or cash flows.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>17. Commercial Commitments and Guarantees</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Commercial Commitments</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company had outstanding letters of credit of $124 as of February&nbsp;2, 2006, which were issued
under separate agreements with multiple financial institutions. These agreements are not associated
with the Company&#146;s credit facilities. Of the $124 outstanding at year end, $108 were standby
letters of credit covering workers&#146; compensation and performance obligations. The remaining $16
were commercial letters of credit supporting the Company&#146;s merchandise import program. The Company
paid issuance fees in 2005 averaging 0.45% of the outstanding balance
of the letters of credit.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Guarantees</U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company provides guarantees, indemnifications and assurances to others in the ordinary course
of its business. The Company has evaluated its agreements that contain guarantees and
indemnification clauses in accordance with the guidance of FASB Interpretation No.&nbsp;45, &#147;Guarantor&#146;s
Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company is contingently liable for certain operating leases that were assigned to third parties
in connection with various store closures and dispositions. If any of these third parties fail to
perform its obligations under one of these leases, the Company could be responsible for the lease
obligations. In 2003 the Company was notified that certain of these third parties had become
insolvent and were seeking bankruptcy protection. At January&nbsp;29, 2004, approximately 26 store
leases for which the Company was contingently liable were subject to the bankruptcy proceedings of
these third parties and 22 of those had been rejected by the applicable third parties. The Company
recorded pre-tax charges of $20 in 2003, which represented the remaining minimum lease payments and
other payment obligations under the 22 rejected leases, less estimated sublease income and
discounted at the Company&#146;s credit-adjusted risk-free interest rate. As of February&nbsp;2, 2006,
approximately 16 store leases remained for which the Company is liable. Terminations and payments
of $4 made on these leases in 2005 resulted in a reduction of the Company&#146;s liability to
$8. As of February&nbsp;2, 2006, the Company had remaining guarantees
on approximately 251&nbsp;stores with
leases extending through 2035. Assuming that each respective purchaser became insolvent, an event
the Company believes to be remote because of the wide dispersion among third parties and the
variety of remedies available, the minimum future undiscounted payments, exclusive of any potential
sublease income, total approximately $459.
</DIV>


<P align="center" style="font-size: 10pt">64
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company enters into a wide range of indemnification arrangements in the ordinary course of
business. These include tort indemnities, tax indemnities, indemnities against third party claims
arising out of arrangements to provide services to the Company, indemnities in merger and
acquisition agreements and indemnities in agreements related to the sale of Company securities.
Also, governance documents of the Company and substantially all of its subsidiaries provide for the
indemnification of individuals made party to any suit or proceeding by reason of the fact that the
individual was acting as an officer, director or agent of the relevant company or as a fiduciary of
a company-sponsored welfare benefit plan. The Company also provides guarantees and indemnifications
for the benefit of many of its wholly owned subsidiaries for the satisfaction of performance
obligations, including workers&#146; compensation obligations. It is difficult to quantify the maximum
potential liability under these indemnifications; however at February&nbsp;2, 2006 the Company was not
aware of any material liabilities arising from these indemnification arrangements.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>18. Computation of Earnings Per Share</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000">2003</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2" style="border-bottom: 1px solid #000000">Diluted</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2" style="border-bottom: 1px solid #000000">Basic</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2" style="border-bottom: 1px solid #000000">Diluted</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2" style="border-bottom: 1px solid #000000">Basic</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2" style="border-bottom: 1px solid #000000">Diluted</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2" style="border-bottom: 1px solid #000000">Basic</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Earnings (loss)&nbsp;from:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">462</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">462</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">474</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">474</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">556</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">556</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(16</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(16</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(30</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(30</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Net earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">446</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">446</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">444</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">444</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">556</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">556</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Weighted average common shares outstanding</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">370</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">370</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">369</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">369</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">368</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">368</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Potential common share equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Weighted average shares outstanding</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">372</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">372</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">368</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Earnings (loss)&nbsp;per common share and common share
equivalents:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.25</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.51</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(0.04</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(0.04</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(0.08</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(0.08</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Net earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.19</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.51</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.51</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Calculation of potential common share equivalents:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Potential common shares assumed issued from
exercise of the Corporate Units</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Options to purchase potential common shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Potential common shares assumed purchased with
potential proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(18</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(49</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(11</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Potential common share equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Calculation of potential common shares assumed
purchased with potential proceeds:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Potential proceeds from assumed exercise of the
Corporate Units</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">572</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Potential proceeds from exercise of options to
purchase common shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">410</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">605</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">221</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Total assumed proceeds from exercise</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">410</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,177</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">221</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Common stock price used under treasury stock method</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">22.23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">23.86</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">20.33</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Potential common shares assumed purchased with
potential proceeds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Outstanding options excluded in 2005, 2004
and 2003 (option price exceeded the average market price
during the period) amounted to 22.5&nbsp;million shares,
17.0&nbsp;million shares and 29.4&nbsp;million shares,
respectively.
</DIV>


<P align="center" style="font-size: 10pt">65
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>19. Quarterly Financial Data (Unaudited)</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">(Dollars in millions, except per share data)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">First</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Second</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Third</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Fourth</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" colspan="2">Year</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>2005</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">9,993</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">10,188</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">9,950</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">10,227</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">40,358</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gross profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,810</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,856</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,798</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,856</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,320</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">293</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">303</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">254</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">388</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,238</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Earnings from continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">107</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">110</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">81</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">164</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">462</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Loss from discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(7</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(4</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(16</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">107</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">77</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">162</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">446</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Earnings per
share*:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.27</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.21</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>2004</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sales</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8,612</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">10,169</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">9,974</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">11,055</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">39,810</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gross profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,428</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,872</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,786</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,076</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,162</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Operating profit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">192</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">331</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">281</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">422</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,226</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Earnings from continuing operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">56</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">125</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">107</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">186</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">474</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">(Loss) earnings from discontinued operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(20</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(21</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(30</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net earnings</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">104</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">110</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">194</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">444</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Earnings per
share*:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.53</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.28</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.52</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">*&nbsp;&nbsp;May
not sum due to rounding differences.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Amounts for all quarters presented prior to first quarter of 2005 have been restated to separately
present discontinued operations that occurred in 2005. See Note&nbsp;5 &#147;Discontinued Operations,
Restructuring Activities and Closed Stores.&#148;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>20. Subsequent Event</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On March&nbsp;13, 2006, the pre-merger
waiting period for the proposed Transactions (see Note&nbsp;1, &#147;Business Description and Basis of
Presentation&#148;) with Supervalu, CVS and the Cerberus Group expired, indicating that the Federal
Trade Commission (&#147;FTC&#148;) has completed the pre-merger review as required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976. No divestiture of retail stores or other
assets was required and the FTC imposed no conditions or restrictions
on the proposed Transactions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The proposed Transactions remain subject to the satisfaction of customary closing conditions,
including approval of the Transactions by both Albertsons and Supervalu shareholders.
</DIV>


<P align="center" style="font-size: 10pt">66
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="116"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Item&nbsp;9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">None.
</DIV>

<DIV align="left">
<A name="117"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Item&nbsp;9A. Controls and Procedures.</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Management of the Company, including the Chief Executive Officer and Chief Financial Officer of the
Company, have evaluated the effectiveness of the Company&#146;s disclosure controls and procedures (as
defined in Rule&nbsp;13a-15(e) of the Securities Exchange Act of 1934) as of February&nbsp;2, 2006. Based on
this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the
Company&#146;s disclosure controls and procedures were effective as of February&nbsp;2, 2006 to provide
reasonable assurance that information required to be disclosed by the Company in the reports that
it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized
and reported within the time periods specified by the SEC&#145;s rules and forms.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Management&#146;s annual report on internal control over financial reporting and the attestation report
of the Company&#146;s independent registered public accounting firm are set forth on pages 33 and 34 of
this Annual Report on Form&nbsp;10-K.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In November&nbsp;2004, the Company began the implementation of the PeopleSoft Human Capital Management
system. Implementation was completed at the corporate store support center and three divisions
during 2004 and 2005, and the Company plans to continue the roll-out through 2006. Based on
management&#146;s evaluation, the necessary steps have been taken to monitor and maintain appropriate
internal control over financial reporting during this period of change.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Other than as described above, there were no changes in the Company&#146;s internal control over
financial reporting that occurred during the Company&#146;s most recently completed quarter that have
materially affected, or are reasonably likely to materially affect, the Company&#146;s internal control
over financial reporting.
</DIV>


<P align="center" style="font-size: 10pt">67
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="118"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Item&nbsp;9B. Other Information.</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company maintains a stockholder rights plan pursuant to which all stockholders receive one
right for each share of common stock held. Subject to certain exceptions, the rights will become
exercisable for shares of preferred stock upon the earlier of (1)&nbsp;10&nbsp;days following a public
announcement that a person or group of affiliated or associated persons has acquired, or obtained
the right to acquire, beneficial ownership of 15% or more of the outstanding shares of common stock
and (2)&nbsp;10 business days (or such later date as may be determined by the Board of Directors)
following the commencement of a tender offer or exchange offer that would result in a person or
group beneficially owning 15% or more of the outstanding shares of common stock (collectively, the
persons or groups referenced in (1)&nbsp;and (2)&nbsp;are referred to as an &#147;Acquiring Person&#148;). The plan
was amended on January&nbsp;22, 2006 to provide that none of the execution, delivery or performance of
an agreement and plan of merger entered into among the Company, Supervalu, Emerald Acquisition Sub,
Inc. (&#147;Acquisition Sub&#148;), New Aloha Corporation (&#147;New Diamond&#148;) and New Diamond Sub, Inc. in
connection with the proposed sale of the Company announced on January&nbsp;23, 2006 would cause
Supervalu, Acquisition Sub, New Diamond or any of their respective affiliates or associates to
become an Acquiring Person. A copy of the amendment is attached to this Annual Report
on Form&nbsp;10-K
as Exhibit&nbsp;4.1.4 and is incorporated herein by reference.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On March&nbsp;24, 2006, the Management Development/Compensation Committee (the &#147;Committee&#148;) of the Board
of Directors authorized amendments to certain of the Company&#146;s compensation and benefit plans,
including the following:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">1. Amendments to Non-qualified Plans <B>&#151; </B>The Committee authorized the amendment of the following
non-qualified plans:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Albertson&#146;s, Inc. 2005 Deferred Compensation Plan</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Albertson&#146;s, Inc. 2000 Deferred Compensation Plan</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Albertsons&#146;, Inc. Executive Deferred Compensation Plan</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Albertsons&#146;, Inc. 1990 Deferred Compensation Plan</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Albertson&#146;s, Inc. Senior Executive Deferred Compensation Plan</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Albertson&#146;s, Inc. Executive Pension Makeup Plan</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Albertsons&#146;, Inc. Non-Employee Directors&#146; Deferred Compensation Plan</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>American Stores Company Supplemental Executive Retirement Plan</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>ASRE Make-Up Plan</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Shaw&#146;s Supermarkets, Inc. Deferred Compensation Plan</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Shaw&#146;s Supermarkets, Inc. Supplemental Savings Plan</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In each case, the amendment allows plan participants to elect to receive a lump sum distribution in
cash (payable from an applicable trust or general corporate assets) of such participant&#146;s vested
account balance under the plan as of the date of the distribution, payable as soon as practicable
on or after (but no later than 30&nbsp;days after) January&nbsp;1, 2007, or, if later, the effective date of
a Change in Control (as defined in the relevant plan) of the Company. The Transactions would
constitute a Change in Control under each plan. For purposes of the Albertson&#146;s, Inc. Executive
Pension Makeup Plan and Shaw&#146;s Supermarkets, Inc. Supplemental
Savings Plan, which are non-account
balance plans, and certain other non-material non-account balance plans, the amendment also provides
that the amount of the lump sum payment will be determined as of the date of the distribution
using, in lieu of any actuarial factors applicable to the plan for calculating a lump sum or any
other purpose, the following actuarial factors: an interest rate equal to the average yield to
maturity for 30-year U.S. Government Bonds as of the date of the distribution, and unloaded 94 GAR
mortality rates, blended 50% male and 50% female, projected to 2002. As of February&nbsp;28, 2006, total
non-qualified plan assets were approximately $269 while total non-qualified plan liabilities were
approximately $232. The amendments also provide for the associated plans&#146; operation in accordance
with Internal Revenue Code Section&nbsp;409A.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In the case of the ASRE Make-Up Plan, the authorized amendment also allows for an interim Company
contribution on pay and matching contribution for plan year 2006 to plan participants employed by
the Company on the effective date (if it occurs) of the Transactions. The amount of the
contribution cannot exceed $2.5.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This summary of the material provisions of the amendments is qualified in its entirety by the terms
and provisions of the actual plan amendments.
</DIV>




<P align="center" style="font-size: 10pt">68
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">2. Amendments to Existing Non-qualified Plan Trusts <B>&#151; </B>As of the date hereof, the Company maintains
several trusts in support of its non-qualified plans, including the following (the following trusts
referenced herein as the &#147;Trusts&#148;):
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Albertson&#146;s, Inc. 2000 Deferred Compensation Trust</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Albertson&#146;s Inc. Executive Pension MakeUp Trust Agreement (the &#147;Executive Pension MakeUp Trust&#148;)</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Albertson&#146;s Inc. 1990 Deferred Compensation Trust</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Albertson&#146;s, Inc. Executive Deferred Compensation Trust (the &#147;Executive Deferred Compensation Trust&#148;)</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Shaw&#146;s Supermarkets, Inc. Master Deferred Compensation Trust</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Shaws Supermarkets, Inc. Supplemental Executive Retirement Plan Trust</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Trusts are funded with a combination of liquid assets (including life insurance policies) and,
in the case of the Executive Pension MakeUp Trust and Executive Deferred Compensation Trust, real
estate. The Committee authorized amendments to the Trusts to provide that effective as of a date prior to the occurrence
of any Change in Control (as defined in each Trust), each Trust (as well as certain other
non-material trusts) that is not presently irrevocable would be
revoked according to its terms, and its assets combined with the
aggregate assets of all other revoked trusts to provide for a single, master trust (the &#147;Master
Trust&#148;). The Committee also resolved that any trust supporting a non-qualified plan that by its
terms is presently irrevocable, would be merged into the Master Trust (if it is established). The
Transactions (if consummated) would constitute a Change in Control for these purposes. The
Committee also authorized the entrance into the Master Trust, the terms of which are not materially
different from those of the existing Trusts. The Committee also authorized the Company to take
appropriate actions with respect to the Executive Pension MakeUp Trust and Executive Deferred
Compensation Trust, prior to a Change in Control (as defined in each Trust), to exchange for cash,
cash equivalents or other assets any insurance contracts or real estate held by such Trusts in
accordance with the terms of the Trusts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This summary of the material provisions of the Trust amendments and Master Trust is qualified in
its entirety by the terms and provisions of the actual Trust amendments and Master Trust.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">3. Restricted Stock Units <B>&#151; </B>The Committee authorized holders of all outstanding deferred or
deferrable restricted stock units (&#147;RSUs&#148;) (other than with respect to RSUs granted in January
2006) and all outstanding Non-Employee Director deferred stock units (together with the RSUs, the
&#147;Units&#148;) to accelerate their current election with respect to the payout of vested Units. The
action entitles Unit-holders to elect to receive a payout of vested Units as soon as practicable on
or after (but no later than 30&nbsp;days after) the earlier of (a)&nbsp;the time that the Units would be paid
pursuant to the terms of the existing Unit agreement and any related deferral election and (b)
January&nbsp;1, 2007, or, if later, the effective date of a Change in Control (as defined in the
relevant Unit agreement) of the Company. The Transactions would constitute a Change in Control
under each Unit agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Committee also authorized the creation of a trust (the &#147;RSU Trust&#148;) to fund the payout of
outstanding Units (other than with respect to RSUs granted in January&nbsp;2006) following the
consummation of the Transactions. The RSU Trust becomes operable only if the Transactions are
consummated and becomes irrevocable upon the consummation of the Transactions until all trust
assets are depleted or, if earlier, the date that all obligations due participants and
beneficiaries of the RSU Trust are satisfied.
</DIV>




<P align="center" style="font-size: 10pt">69
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This summary of the material provisions of the Unit amendments and the RSU Trust is qualified in
its entirety by the terms and provisions of the actual Unit amendments and RSU Trust.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">4. Amendments to Officer Change of Control Severance Agreements <B>&#151; </B>The Committee authorized
amendments to the following change in control severance agreements:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Albertsons Change of Control Severance Agreement for Executive Vice Presidents</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Albertsons Change of Control Severance Agreement for Senior Vice Presidents and Group Vice Presidents</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Albertsons Change of Control Severance Agreement for Vice Presidents</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">See &#147;Part&nbsp;III. Item&nbsp;11. Directors and Executive Officers of the Registrant, Agreements with Named
Executive Officers,&#148; for a complete description of the Albertsons Change of Control Severance
Agreement for Executive Vice Presidents. The amendments have the
following effects: (1)&nbsp;clarifying
that the Company&#146;s annual incentive program (but not its long-term incentive bonus program) is
included in the severance benefit calculation (which is a multiple of salary plus annual bonus) and
that, with respect to Executive Vice Presidents, references to bonus throughout the agreement do
not intend to refer to the maximum incentive compensation award
payable under the Company&#146;s bonus
plan for its five most highly compensated officers, but rather to the Company&#146;s annual incentive
program, (2)&nbsp;providing that outplacement benefits contemplated by the agreements must be completed
by December&nbsp;31<SUP style="font-size: 85%; vertical-align: text-top">st</SUP> of the second calendar year following the calendar year in which the
termination date occurs, (3)&nbsp;providing that relocation benefits contemplated by the agreements will
be paid in a lump sum in an agreed upon amount, and (4)&nbsp;providing that if the welfare benefits
continuation contemplated by the agreements would result in negative tax consequences to the
participant, the Company may satisfy its obligation to provide the benefits through payment of a
lump sum or, in the case of health plan coverage, the provision of medical benefits continuation
through insurance coverage obtained on the participant&#146;s behalf. The amendments also provide for
the agreements&#146; operation in accordance with Internal Revenue Code Section&nbsp;409A and allow for
interest earnings, in a specified amount, on severance benefits that cannot be paid immediately
upon an officer&#146;s termination because of Internal Revenue Code
Section&nbsp;409A. This summary of the material provisions of the amendments is qualified in its entirety by the terms and
provisions of the actual amendments.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">5. Amendment to Officer Change of Control Severance Benefit Trust &#151; The Committee authorized an
amendment to the Albertsons Inc. Change of Control Severance Benefit Trust (the &#147;Severance Benefit
Trust&#148;) to delay the funding and irrevocability of the Severance Benefit Trust until the occurrence
of a Change in Control (as defined in the Severance Benefit Trust) and to provide for an initial
funding of $50 to the Severance Benefit Trust within 30&nbsp;days of a Change in Control (provided that,
if the Company or its successor makes any payments satisfying change in control severance
obligations following a Change in Control of the Company from assets outside of the Severance
Benefit Trust, the $50 funding obligation will be reduced by the lesser of the amount of any
payments made outside the Severance Benefit Trust and $35). In addition, the Committee authorized
an amendment to the Severance Benefit Trust to provide that if, following any distribution from the
Severance Benefit Trust, the total value of the trust fund is less than the &#147;minimum funding
obligation,&#148; the Company or its successor will be obligated to promptly contribute additional cash
to the Severance Benefit Trust such that the value of the trust fund is at no time less than the
minimum funding obligation. For this purpose, the &#147;minimum funding obligation&#148; is the lesser of
(1) $15 or (2)&nbsp;1.3 times the then value of the total accrued benefits relating to the Change in
Control severance obligations of the Company or its successor. The authorized amendments also
provide that the Severance Benefit Trust will terminate upon the earliest of (1)&nbsp;the payment of all
amounts due to participants as severance obligations following a Change in Control, (2)&nbsp;the
administrator of the Severance Benefit Trust providing its express written consent to termination
and (3)&nbsp;the later of (a)&nbsp;the first date on which the minimum funding obligation does not exceed $1
and (b)&nbsp;the sixth anniversary of the Change in Control. The Transactions would constitute a Change
in Control for these purposes. This summary of the material provisions of the amendment is
qualified in its entirety by the terms and provisions of the actual amendment.
</DIV>


<P align="center" style="font-size: 10pt">70
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">6. Amendment to Mr.&nbsp;Johnston&#146;s Employment Agreement <B>&#151; </B>The Committee authorized an amendment to Mr.
Johnston&#146;s employment agreement that addresses several items (the &#147;Employment Agreement
Amendment&#148;). See &#147;Part&nbsp;III. Item&nbsp;11. Directors and Executive Officers of the Registrant, Agreements
with Named Executive Officers,&#148; for a complete description of Mr.&nbsp;Johnston&#146;s employment agreement.
The Employment Agreement Amendment allows Mr.&nbsp;Johnston to receive a lump sum payment equal to the
present value of his supplemental retirement benefit accrued through the date of payment upon the
later of the effective time of a Change of Control (as defined in the employment agreement) of the
Company or January&nbsp;1, 2007. The Transactions (if consummated) would constitute a Change in Control
for this purpose. The Employment Agreement Amendment also provides that if Mr.&nbsp;Johnston receives
his supplemental retirement benefit at a time other than following his termination of employment,
he will be entitled to an additional cash payment upon the termination of his employment (or at
such other time as required to comply with Internal Revenue Code Section&nbsp;409A) equal to the excess
of (i)&nbsp;the present value of the supplemental retirement benefit at the time of such termination of
employment (assuming Mr.&nbsp;Johnston had not received the prior payment) over (ii)&nbsp;the amount of the
payment previously made (increased by interest at a rate of 2.75% (the PBGC rate for immediate
annuities in March&nbsp;2006)) from the date of the initial payment until termination of employment. The
Employment Agreement Amendment also (1)&nbsp;provides that if the benefits continuation contemplated by
the employment agreement would result in negative tax consequences to Mr.&nbsp;Johnston, the Company may
satisfy its obligation to provide the benefits through payment of a lump sum or, in the case of
health plan coverage, the provision of medical benefits continuation through insurance coverage
obtained on his behalf, (2)&nbsp;provides for the agreement&#146;s operation in accordance with Internal
Revenue Code Section&nbsp;409A and (3)&nbsp;allows for interest earnings, in a specified amount, on severance
benefits that cannot be paid immediately upon Mr.&nbsp;Johnston&#146;s termination of employment because of
Internal Revenue Code Section&nbsp;409A. This summary of the material provisions of the Employment
Agreement Amendment is qualified in its entirety by the terms and provisions of the actual
Employment Agreement Amendment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">7.
Amendment to Long-term Incentive Plan&nbsp;&#151;&nbsp;The Committee authorized an amendment to the Company&#146;s
Long-term Incentive Plan (the &#147;LTIP&#148;). The LTIP amendment provides that if a participant&#146;s
employment with the Company is terminated without &#147;Cause&#148; or for &#147;Good Reason&#148; (as such terms are
defined in the individual&#146;s change in control severance agreement) during the two-year period
following a Change in Control (as defined in the LTIP), the participant will be entitled to receive
payment of a long-term incentive compensation award for all award periods in effect at the time of
such termination of service, prorated based on the number of weeks of the relevant performance
period(s) that elapsed until the occurrence of the Change in Control. If a participant remains
employed with the Company until the end of the fiscal year in which a Change in Control occurs, the
minimum long-term incentive award for any such participant for any award period ending at the close of the fiscal
year in which the Change in Control occurs will be no less than such participant&#146;s target award
under the LTIP for such award period, prorated based on the number of weeks of the relevant
performance period(s) that elapsed until the occurrence of the Change in Control. The Transactions
(if consummated) would constitute a Change in Control for these purposes. The authorized
amendment also provides for the operation of the LTIP in accordance with Internal Revenue Code
Section&nbsp;409A. This summary of the material provisions of the amendment is qualified in its entirety
by the terms and provisions of the actual amendment.
</DIV>

<P align="center" style="font-size: 10pt">71
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<!-- link1 " PART III" -->

<DIV align="left">
<A name="119"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>PART III</B></U>
</DIV>

<!-- link2 "Item&nbsp;10. Directors and Executive Officers of the Registrant" -->

<DIV align="left">
<A name="120"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Item&nbsp;10. Directors and Executive Officers of the Registrant.</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Executive Officers of the Registrant.</B></U>

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Information about the Company&#146;s executive officers is included as Item&nbsp;3A in Part&nbsp;I of this Annual
Report on Form 10-K and is incorporated herein by reference.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Directors of the Registrant. </B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company&#146;s Board of Directors is divided into three classes. Each year, the directors in one
class stand for election. They are elected to three-year terms.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Age as of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Class / Expiration</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Director</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>3/31/06</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>of Current Term</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Other Information</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Since</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">A. Gary Ames
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">61</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Class&nbsp;II / 2006
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President and Chief
Executive Officer,
MediaOne
International
(formerly U S West
International), a
telecommunications
company, from 1995
until retirement in
2000. Mr.&nbsp;Ames is a
director of F5
Networks, Inc.,
iPass, Inc.,
Tektronix, Inc. and
Seattle Pacific
University.
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1988</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Pamela G. Bailey
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">57</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Class&nbsp;III / 2007
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President and Chief
Executive Officer
of the Cosmetic,
Toiletry and
Fragrance
Association, the
global trade
association for the
personal care
products industry,
since April&nbsp;2005.
President and Chief
Executive Officer
of AdvaMed, a
worldwide medical
technology trade
association, from
June&nbsp;1999 to April
2005. Chief
Executive Officer
and President of
The Healthcare
Leadership Council
from 1990 to 1999.
President of the
National Committee
for Quality Health
Care from 1987 to
1997. Ms.&nbsp;Bailey is
a director of
Greatbatch, Inc.
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1999</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Teresa Beck
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">51</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Class&nbsp;III / 2007
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President of
American Stores
Company, a food and
drug retailer, from
March&nbsp;1998 to June
1999 and Chief
Financial Officer
from March&nbsp;1995 to
March&nbsp;1998. Ms.
Beck is a director
of ICOS Corp.,
Lexmark
International,
Inc., Questar
Corp., the David
Eccles School of
Business of the
University of Utah,
Intermountain
Health Care, The
Nature Conservancy
and the Nature
Conservancy of
Utah, and a member
of the University
of Utah National
Advisory Council.
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1999</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Henry I. Bryant
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">63</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Class&nbsp;I / 2008
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Managing Director
in the Corporate
Finance Unit of
J.P. Morgan &#038; Co.
Incorporated, an
investment banking
firm, from February
1987 until
retirement in
February&nbsp;1998. Mr.
Bryant is a
director of Alsco
Inc.
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1999</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Paul I. Corddry
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">69</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Class&nbsp;II / 2006
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Vice
President, Europe,
of H.J. Heinz
Company, a
worldwide provider
of processed food
products and
services, until
retirement in 1992.
Mr.&nbsp;Corddry is a
director of the
American University
in Cairo, Corcoran
Museum and School
of Art, the Naples
Philharmonic Center
for the Arts and
Swarthmore College.
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1987</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Bonnie G. Hill
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">64</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Class&nbsp;I / 2008
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President of B.
Hill Enterprises,
LLC, a consulting
firm specializing
in corporate
governance and
board
organizational and
public policy
issues, since July
2001 and
Co-Founder, Icon
Blue, Incorporated,
a provider of
custom marketing
promotional
solutions.
President and Chief
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2002</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">72
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Age as of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Class / Expiration</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Director</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>3/31/06</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>of Current Term</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Other Information</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Since</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Officer
of The Times Mirror
Foundation, a
philanthropic
foundation, from
1997 to July&nbsp;2001.
Senior Vice
President,
Communications and
Public Affairs of
the Los Angeles
Times, a news
publication, from
1998 to 2001. Ms.
Hill is a director
of AK Steel Holding
Corp., California
Water Service
Group, The Hershey
Co., The Home
Depot, Inc., Yum!
Brands, Inc.,
Goodwill Industries
of Greater Los
Angeles, Los
Angeles Urban
League, NASD
Investor Education
Foundation and the
Police Assessment
Resource Center.</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Lawrence R. Johnston
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">57</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Class&nbsp;I / 2008
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chairman of the
Board of Directors
and Chief Executive
Officer of the
Company since April
2001 and President
since July&nbsp;2003.
President and Chief
Executive Officer
of GE Appliances, a
maker of major
household
appliances and a
division of General
Electric Company, a
diversified
industrial
corporation, from
November&nbsp;1999 to
April&nbsp;2001. Mr.
Johnston is a
director of The
Home Depot, Inc.,
the Food Marketing
Institute and CIES
- The Food Business
Forum.
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2001</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Jon C. Madonna
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">62</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Class&nbsp;II / 2006
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chairman of the
Board of
DigitalThink, Inc.,
an e-commerce
company, from April
2002 through May
2004. Chairman of
the Board and Chief
Executive Officer
of KPMG Peat
Marwick, an
accounting firm,
from 1990 through
1996. Mr.&nbsp;Madonna
is a director of
AT&#038;T Corp., Phelps
Dodge Corp. and
Tidewater, Inc.
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2003</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The Board has
determined that Mr.
Madonna, an
independent
director, is an
&#147;audit committee
financial expert&#148;
as that term is
defined under Item
401(h) of
Regulation&nbsp;S-K.
Shareholders should
understand that
this designation is
a disclosure
requirement of the
SEC related to Mr.
Madonna&#146;s
experience and
understanding with
respect to certain
accounting and
auditing matters.
The designation
does not impose
upon Mr.&nbsp;Madonna
any duties,
obligations or
liabilities that are
greater than those
that are generally
imposed on him as a
member of the
Audit/Finance
Committee and the
Board, and his
designation as an
&#147;audit committee
financial expert&#148;
does not affect the
duties, obligations
or liabilities of any
other member of the
Audit/Finance
Committee or the
Board.</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Beth M. Pritchard
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">59</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Class&nbsp;III / 2007
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President and Chief
Executive Officer
of Organized
Living,
Incorporated, a
retailer of home
and office storage
and organization
products, from
January&nbsp;2004 until
May&nbsp;2005.
Organized Living
filed for Chapter
11 bankruptcy
protection in May
2005. President and
Chief Executive
Officer of Bath &#038;
Body Works,
Incorporated, a
retailer of
personal care
products, from 1993
to January&nbsp;2003.
Ms.&nbsp;Pritchard is a
director of Borders
Group, Inc., Ecolab
Inc. and the
Columbus
Association for
Performing Arts.
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2004</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Beatriz Rivera
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">55</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Class&nbsp;II / 2006
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Member of Energy
Resource
Associates, LLC, an
energy consulting
firm, since January
2003. Cabinet
Secretary of the
Energy, Minerals
and Natural
Resources
Department of the
State of New Mexico
from February&nbsp;2002
to December&nbsp;2002.
Member of Energy
Resource
Associates, LLC, a
consulting firm,
from May&nbsp;1999 to
February&nbsp;2002. Ms.
Rivera is a member
of the
International
Women&#146;s Forum and New
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1995</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">73
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Age as of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Class / Expiration</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Director</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>3/31/06</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>of Current Term</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Other Information</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Since</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Mexico Women&#146;s
Forum. Ms.&nbsp;Rivera
is also a licensed
attorney in
California and New
Mexico.</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Wayne C. Sales
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">56</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Class&nbsp;II / 2006
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President and Chief
Executive Officer
of Canadian Tire
Corporation,
Limited, an
inter-related
network of
businesses engaged
in retail,
financial services
and petroleum,
since August&nbsp;2000.
Mr.&nbsp;Sales is a
director of Tim
Hortons Inc.,
Canadian Tire
Corporation, Ltd.
and Ryerson
University&#146;s School
of Retail
Management.
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2005</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Kathi P. Seifert
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">57</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Class&nbsp;I / 2008
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chairperson of
Pinnacle
Perspectives, LLC,
a personal business
consulting company,
since July&nbsp;2004.
Executive Vice
President of
Kimberly-Clark
Corporation, a
global health and
hygiene product
manufacturing
company, from
November&nbsp;1999 until
retirement in June
2004. Ms.&nbsp;Seifert
is a director of
Appleton Papers
Inc., Eli Lilly &#038;
Co., Revlon, Inc.,
the U.S. Fund for
UNICEF and the
Wisconsin
Commission on Arts
Education, Co-Chair
of New North, Inc.,
Chairman of Fox
Cities Performing
Arts Center and a
member of the
Wisconsin
International Trade
Council.
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2004</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Board of Directors maintains a standing Audit/Finance Committee. As of the date hereof, Ms.
Bailey, Ms.&nbsp;Beck, Mr.&nbsp;Bryant, Mr.&nbsp;Madonna and Ms.&nbsp;Pritchard comprise the membership of the
Audit/Finance Committee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company has adopted a code of ethics that applies to its Chief Executive Officer, Chief
Financial Officer and Controller. This code of ethics is available on the Company&#146;s website at
www.albertsons.com. If the Company makes any amendments to this code other than technical,
administrative or other non-substantive amendments, or grants any waivers, including implicit
waivers, from a provision of this code to the Company&#146;s Chief Executive Officer, Chief Financial
Officer or Controller, the Company will disclose the nature of the amendment or waiver, its
effective date and to whom it applies on its website, www.albertsons.com.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Section&nbsp;16(a) Beneficial Ownership Reporting Compliance</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Section&nbsp;16(a) of the Securities Exchange Act of 1934 requires that the Company&#146;s directors and
certain officers and persons who own more than ten percent of a registered class of the Company&#146;s
equity securities file with the SEC and the New York Stock Exchange reports of ownership and
changes in beneficial ownership of the Company&#146;s common stock. These directors, officers and
greater than ten percent owners are required to furnish the Company with copies of all Section
16(a) forms they file. Based solely on a review of copies of these reports furnished to the Company
or written representations that no other reports were required, we believe that during fiscal year
2005 all filing requirements were timely met with the exception of three late Forms 4 for each of
Mr.&nbsp;Romeo Cefalo and Mr.&nbsp;Kevin Tripp. In each case the late filing was due to administrative
error by the executive's broker in connection with the reinvestment of cash dividends on Company common stock held in each
executive officers&#146; personal brokerage account.
</DIV>


<P align="center" style="font-size: 10pt">74
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<!-- link2 "Item&nbsp;11. Executive Compensation" -->

<DIV align="left">
<A name="121"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Item&nbsp;11. Executive Compensation.</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table sets forth the compensation paid for each of the Company&#146;s last three fiscal
years to the Chief Executive Officer of the Company and the four other most highly compensated
executive officers of the Company serving as of the end of the last completed fiscal year
(collectively, the &#147;named executive officers&#148;).
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Summary Compensation Table</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="23%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7">Long-Term Compensation</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000">Awards</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>

<TD nowrap align="center" colspan="11" style="border-bottom: 0px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Restricted</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Securities</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">All Other</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="11" style="border-bottom: 1px solid #000000">Annual Compensation</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Stock</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Underlying</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Compen-</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Other Annual</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Awards</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Options /</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">sation</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">Name and</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Fiscal</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Salary (1)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Bonus (1)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Compensation (2)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">(3)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">SARs</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">(4)</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Principal Position</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Year</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">($)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Lawrence R. Johnston</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,460,575</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD colspan="1" align="right">1,357,926</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">225,147</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">13,047,720</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">355,230</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Chairman of the</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,405,386</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">300,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">104,041</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,752,871</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">750,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">514,689</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Board, Chief</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,300,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,950,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">105,335</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,148,585</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">750,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">365,706</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Executive
Officer<BR>
and President</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Robert J. Dunst</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">575,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">430,620</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,209</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,385,494</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">79,133</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Executive Vice</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">472,019</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">67,008</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,628</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">920,459</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">99,424</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">President,
Technology</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">385,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">400,271</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,265</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">934,181</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">80,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">59,533</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">and Supply Chain</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Paul T. Gannon (5)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">658,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">280,073</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,556,149</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">133,878</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Executive Vice</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">463,231</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">571,890</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,214,127</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">115,573</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,328</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">President, Marketing<br>
and Food Operations</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John R. Sims</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">526,923</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">354,058</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,509</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,105,003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">73,182</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Executive Vice</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">501,346</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">71,185</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,689</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">575,299</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">75,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">108,706</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">President and General</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">457,403</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">449,653</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">955,543</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">70,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">51,480</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Counsel</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Felicia D. Thornton</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">615,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="right">420,438</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,769</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,243,645</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">85,362</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Executive Vice</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">591,289</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">83,947</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,427</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">719,118</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">126,926</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">President and Chief</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">570,001</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">535,522</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">913,249</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">72,581</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Financial Officer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes amounts deferred by certain of the named executive officers pursuant to the
Company&#146;s deferred compensation programs. For 2005, bonus for all named individuals includes
amounts paid under the Company&#146;s annual bonus plan and Long-Term Incentive Plan (&#147;LTIP&#148;). The
Management Development/Compensation Committee of the Board of Directors implemented the LTIP in
2005 and at that time adopted three performance cycles. To phase in the program, the initial
performance period (2005)&nbsp;was set for one year and the amounts earned for this one-year period are
included above in the &#147;Bonus&#148; column. The performance cycle payable in 2006 measures Company
performance over the two-year period of 2005 and 2006 and the performance cycle payable in 2007
measures Company performance over the three-year period of 2005 through 2007. See &#147;Long-Term
Incentive Plans &#150; Awards in Last Fiscal Year&#148;.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>The amounts indicated in fiscal 2005 include, for
Mr.&nbsp;Johnston, $187,985 for the value of
personal use of corporate aircraft. The amounts indicated for fiscal 2004 include, for Mr.
Johnston, $76,832 for the value of personal use of corporate aircraft. The amounts indicated in
fiscal 2003 include, for Mr.&nbsp;Johnston, $70,975 for the value of personal use of corporate aircraft
and $28,267 for financial planning.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">75
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">





<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes the dollar value (as of the award dates, based on the closing market price of
Albertsons common stock on the award dates) of deferrable restricted stock units and deferred
restricted stock units granted under the Amended and Restated 1995 Stock-Based Incentive Plan and
2004 Equity and Performance Incentive Plan, with cash dividend equivalents paid quarterly. Mr.
Johnston was granted 282,300 deferrable units in January&nbsp;2006 that vest over four years and 280,952
deferrable units in June&nbsp;2005 that vest over three years commencing in June&nbsp;2008. Mr.&nbsp;Johnston was
granted deferrable units in December&nbsp;2004 and December&nbsp;2003 that vest over five years. Mr.&nbsp;Dunst
was granted 53,000 deferrable units in January&nbsp;2006 that vest over four years and 97,143 deferrable
units in June&nbsp;2005 that vest over three years commencing in June&nbsp;2008. Mr.&nbsp;Dunst was granted
39,252 deferred units in December&nbsp;2004 and 27,040 deferred units in December&nbsp;2003 that vest over five years and
20,052 deferred units in June&nbsp;2003 that vest over three years commencing in June&nbsp;2006. Mr.&nbsp;Gannon
was granted 10,000 deferrable units in January&nbsp;2006 that vest over four years and 109,286
deferrable units in June&nbsp;2005 that vest over three years commencing in June&nbsp;2008. Mr.&nbsp;Gannon was
granted 30,666 deferred units in December&nbsp;2004 that vest over five years, 55,338 deferrable units
in May&nbsp;2004 that vest over two years and 9,804 deferrable units in May&nbsp;2004 that vest over five
years. Mr.&nbsp;Sims was granted 50,000 deferrable units in January&nbsp;2006 that vest over four years and
87,429 deferrable units in June&nbsp;2005 that vest over three years commencing in June&nbsp;2008. Mr.&nbsp;Sims
was granted 24,533 deferred units in December&nbsp;2004 and 23,660
deferred units in December&nbsp;2003 that vest over five
years and 24,740 deferred units in June&nbsp;2003 that vest over three years commencing in June&nbsp;2006.
Ms.&nbsp;Thornton was granted 44,000 deferrable units in January&nbsp;2006 that vest over four years and
101,190 deferrable units in June&nbsp;2005 that vest over three years commencing in June&nbsp;2008. Ms.
Thornton was granted 30,666 deferred units in December&nbsp;2004 and
16,900 deferred units in December&nbsp;2003 that vest
over five years and 29,688 deferred units in June&nbsp;2003 that vest over three years commencing in
June&nbsp;2006. The number and value of the aggregate restricted stock units held at fiscal year end
(calculated using the closing price of Albertsons common stock on the New York Stock Exchange
composite tape on February&nbsp;2, 2006) was 1,864,666 shares valued
at $46,914,997 for Mr.&nbsp;Johnston;
269,291 shares valued at $6,775,362 for Mr.&nbsp;Dunst; 198,134 shares valued at $4,985,051 for Mr.&nbsp;Gannon;
255,032 shares valued at $6,416,605 for Mr.&nbsp;Sims; and 303,114 shares valued at $7,626,348 for Ms.
Thornton.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>The amounts indicated include, in fiscal 2005, 2004 and 2003, premiums paid by the Company for
term life insurance for Mr.&nbsp;Johnston in the amounts of $19,480 in each year. The amounts indicated
also include, in fiscal 2005, 2004 and 2003, Company contributions under the Albertsons Savings and
Retirement Estates (&#147;ASRE&#148;) and ASRE Makeup Plan defined contribution plans in the following
amounts: for Mr.&nbsp;Johnston, $309,590, $470,680 and $329,508; for Mr.&nbsp;Dunst, $76,760, $97,255 and
$59,533; for Mr.&nbsp;Gannon, $133,878, $4,328 and not applicable; for Mr.&nbsp;Sims, $71,460, $106,812 and
$50,527; and for Ms.&nbsp;Thornton, $85,362, $126,926 and $72,581. The remaining amounts consist of
interest accrued at above-market rates (as defined by the rules of the SEC) on compensation
deferred pursuant to the Company&#146;s nonqualified deferred compensation programs.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(5)</TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Gannon became an executive officer of Albertsons on September&nbsp;13, 2004. From April through
September&nbsp;2004, Mr.&nbsp;Gannon served as President, Shaw&#146;s Division. The 2004 bonus amount for Mr.
Gannon includes $40,736 awarded under the Albertson&#146;s, Inc. Executive Officers&#146; Annual Incentive
Compensation Plan for his service as an executive officer of Albertsons during fiscal 2004. The
remaining bonus amount reflects amounts to which Mr.&nbsp;Gannon was entitled as a result of his service
as President, Shaw&#146;s Division for a portion of fiscal 2004.</TD>
</TR>

</TABLE>



<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Options / SAR Grants in Last Fiscal Year</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company did not grant any options to the named executive officers during fiscal 2005.
</DIV>


<P align="center" style="font-size: 10pt">76
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7">Number of Securities</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7">Value of Unexercised</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7">Underlying Unexercised</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7">in-the-Money</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 0px solid #000000">Shares</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" nowrap align="center" style="border-bottom: 0px solid #000000">Options at Fiscal</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" nowrap align="center" style="border-bottom: 0px solid #000000">Options at Fiscal</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Acquired on</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Value</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" nowrap align="center" style="border-bottom: 1px solid #000000">Year-End</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" nowrap align="center" style="border-bottom: 1px solid #000000">Year-End</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Exercise</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Realized</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Exercisable</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Unexercisable</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Exercisable</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Unexercisable</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Name</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">(#)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">($)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">($)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Lawrence R. Johnston</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,172,701</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,230,679</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,711,500</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">3,208,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Robert J. Dunst</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">147,556</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">121,890</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">283,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">363,600</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Paul T. Gannon</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,114</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">92,459</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47,957</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">191,834</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John R. Sims</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">128,797</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">159,199</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">256,550</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">369,700</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Felicia D. Thornton</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">311,658</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">138,853</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">202,788</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">251,650</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 12pt"><B>Long-Term Incentive Plans &#150; Awards in Last Fiscal Year</B>

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Performance</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10"></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">or other period</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" nowrap align="center" style="border-bottom: 0px solid #000000">Estimated future payouts under non-stock price-</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Number of shares,</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">until</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" nowrap align="center" style="border-bottom: 1px solid #000000">based plans (2)</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">units or other</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">maturation or</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Threshold</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Target</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Maximum</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Name</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">rights ($)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">payout (1)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">($ or #)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">($ or #)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">($ or #)</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Lawrence R. Johnston</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"></TD>
    <TD align="center">$516,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">2 years</TD>
    <TD>&nbsp;</TD>
    <TD align="left"></TD>
    <TD align="center">$0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">516,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,032,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"> </TD>
    <TD align="center">$516,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">3 years</TD>
    <TD>&nbsp;</TD>
    <TD align="left"> </TD>
    <TD align="center">$0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">516,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,032,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Robert J. Dunst</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"> </TD>
    <TD align="center">$150,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">2 years</TD>
    <TD>&nbsp;</TD>
    <TD align="left"> </TD>
    <TD align="center">$0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">150,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">300,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"> </TD>
    <TD align="center">$150,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">3 years</TD>
    <TD>&nbsp;</TD>
    <TD align="left"> </TD>
    <TD align="center">$0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">150,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">300,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Paul T. Gannon</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"> </TD>
    <TD align="center">$168,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">2 years</TD>
    <TD>&nbsp;</TD>
    <TD align="left"> </TD>
    <TD align="center">$0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">168,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">337,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"> </TD>
    <TD align="center">$168,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">3 years</TD>
    <TD>&nbsp;</TD>
    <TD align="left"> </TD>
    <TD align="center">$0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">168,750</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">337,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John R. Sims</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"> </TD>
    <TD align="center">$135,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">2 years</TD>
    <TD>&nbsp;</TD>
    <TD align="left"> </TD>
    <TD align="center">$0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">135,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">270,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"> </TD>
    <TD align="center">$135,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">3 years</TD>
    <TD>&nbsp;</TD>
    <TD align="left"> </TD>
    <TD align="center">$0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">135,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">270,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Felicia D. Thornton</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"> </TD>
    <TD align="center">$156,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">2 years</TD>
    <TD>&nbsp;</TD>
    <TD align="left"> </TD>
    <TD align="center">$0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">156,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">312,500</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left"> </TD>
    <TD align="center">$156,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center">3 years</TD>
    <TD>&nbsp;</TD>
    <TD align="left"> </TD>
    <TD align="center">$0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">156,250</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">312,500</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Under the Company&#146;s LTIP, participants are eligible to receive an award, payable in cash,
based on the Company&#146;s achievement relative to financial targets. The two-year performance period
awards are potentially payable in 2006 and will be based on fiscal 2005 and fiscal 2006 cumulative
earnings per share (&#147;EPS&#148;) and average return on invested capital (&#147;ROIC&#148;) results. The three-year
performance period awards are potentially payable in 2007 and will be based on fiscal 2005 through
fiscal 2007 cumulative EPS and average ROIC results. In each case, the EPS and ROIC targets have
been approved by the Company&#146;s Management Development/Compensation Committee.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>There is no minimum award. Target bonus is equal to 25% or, in the case of Mr.&nbsp;Johnston, 35%
of the participant&#146;s annual base salary at the end of the performance period. For purposes of this
disclosure, target is based on participant salaries at February&nbsp;2, 2006. The maximum award payable
is 200% of the participant&#146;s target bonus.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">77
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Retirement Benefits</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company adopted a 401(k) defined contribution plan, ASRE, effective September&nbsp;26, 1999, which
is the Company&#146;s primary retirement plan. To offset the loss of retirement benefits associated with
tax law limitations, the Company also adopted the nonqualified ASRE Makeup Plan on September&nbsp;26,
1999. Benefits are provided under the ASRE Makeup Plan for key employees equal to those that would
otherwise be lost by qualified plan tax limitations. The contributions made by the Company to ASRE
and the ASRE Makeup Plan for the benefit of the named executive officers are included in the
figures in the Summary Compensation Table.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Compensation of Directors</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Albertsons believes that compensation for non-employee directors should be competitive. During
fiscal 2005, each non-employee director received:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>$10,000 per quarter in cash as an annual retainer. The final quarterly payment was made
contingent upon the director&#146;s attendance at 75% of the total meetings of the Board and
the committees on which he or she served during the year;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>an annual award of $80,000 in Albertsons common stock. Each director was provided the
right to choose to receive his or her award in stock, deferred stock equivalents or
options to purchase four shares for every share of stock to which the director would be
entitled on the date of the award; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>$1,500 for each Board and committee meeting attended when his or her attendance was
required.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In addition, the chairs of the Nominating/Corporate Governance Committee and the Management
Development/ Compensation Committee received a lump sum cash payment of $10,000 and the chair of
the Audit/Finance Committee received a lump sum cash payment of $15,000. The Lead Director
received a lump sum cash payment of $50,000. The compensation program incorporates these
additional sums in recognition of the additional time and commitment associated with serving as a
committee chair or the Lead Director. The Lead Director was given the opportunity to choose to
receive his additional cash payment in stock, deferred stock equivalents or stock options at the
four to one ratio described above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Each non-employee director could elect to defer payment of his or her cash compensation into the
Company&#146;s nonqualified deferred compensation plan for non-employee directors. Albertsons executive
officers do not receive additional compensation if they serve as directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company also pays travel and accommodation expenses of directors and, when requested by the
Company, their spouses to attend Board meetings, conduct store visits, attend continuing director
education courses and participate in other corporate functions. The Company also pays the
attendance fee for one continuing director education program per year.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Agreements with Named Executive Officers</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>Agreement with Lawrence R. Johnston</I>

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company entered into an employment agreement with Lawrence R. Johnston effective April&nbsp;23, 2001
and amended July&nbsp;19, 2001 (the &#147;CEO employment agreement&#148;). An amendment to the agreement was
approved by the Management Development/Compensation Committee of the Board of Directors (the
&#147;Committee&#148;) on March&nbsp;24, 2006 (&#147;Amendment No.&nbsp;2&#148;). Mr.&nbsp;Johnston has not yet executed Amendment
No.&nbsp;2.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The CEO employment agreement retains Mr.&nbsp;Johnston as Chairman of the Board and Chief Executive
Officer of the Company until the tenth anniversary of the commencement date of the agreement. The
CEO employment agreement also permits the Board to assign additional duties to Mr.&nbsp;Johnston. The
Board of Directors approved the CEO employment agreement after an extensive search had been
conducted by the Board with the assistance of an executive search firm. In negotiating the terms of
the CEO employment agreement, the Board sought advice from outside legal counsel and independent
compensation consultants, and considered such factors as the competitive
</DIV>


<P align="center" style="font-size: 10pt">78
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">levels of Chief Executive Officer compensation at other companies of comparable industry and size,
the Company&#146;s internal executive compensation practices and the level of compensation deemed
necessary to induce Mr.&nbsp;Johnston to accept the Company&#146;s offer of employment and restore amounts
forfeited by him upon leaving his former employer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mr.&nbsp;Johnston&#146;s ongoing compensation arrangement provides for an annual base salary of not less than
$1,250,000, an annual target bonus of not less than 100% of base salary (and a maximum annual bonus
not to exceed 200% of base salary) and an annual stock option award with a Black-Scholes present
value at grant of not less than 285% of the sum of his initial base salary and initial target bonus
(which totals $7,125,000). A portion of this award may be in the form of a deferrable restricted
stock unit award with equivalent value.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The CEO employment agreement also provides Mr.&nbsp;Johnston with certain severance benefits. If Mr.
Johnston&#146;s employment is terminated by reason of death, he will be entitled to all compensation and
benefits accrued but not paid as of the termination date, as well as a supplemental retirement
benefit (as described below). In addition, all of his outstanding stock option awards will become
fully vested and exercisable for a period of two years following the date of death (or the
remaining exercise period of the awards, if earlier). Also, all of his outstanding restricted stock
unit awards will become vested as to the next two successive vesting dates following the date of
death.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If Mr.&nbsp;Johnston&#146;s employment is terminated by (A)&nbsp;the Company other than (1)&nbsp;for &#147;Cause&#148; (as
defined in the CEO employment agreement) or (2)&nbsp;due to Mr.&nbsp;Johnston&#146;s death, or (B)&nbsp;Mr.&nbsp;Johnston
for &#147;Good Reason&#146;&#146; (as defined in the CEO employment
agreement and which includes, but is not limited to, his decision to
terminate for any reason during the seventh month following a &#147;Change of Control&#146;&#146; (as defined in
the CEO employment agreement) of the Company), Mr.&nbsp;Johnston will be entitled to the following
benefits:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>within 30&nbsp;days of the date of his termination, a cash payment equal to three times the
sum of his then current base salary plus the greater of the most recent annual bonus paid
or the most recent target bonus payable;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a cash payment equal to the pro rata portion of the annual bonus payable to Mr.&nbsp;Johnston
for the fiscal year in which the termination occurs;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>continued participation in Albertsons welfare benefit plans, fringe benefit plans and
employee perquisites for the three-year period following Mr.&nbsp;Johnston&#146;s termination of
employment; provided that Amendment No.&nbsp;2 provides that these benefits may be satisfied by
the payment to Mr.&nbsp;Johnston of a lump sum payment in lieu of
continuation of benefits or, in the case of health plan coverage, the provision of medical
benefits continuation through insurance coverage obtained on
Mr.&nbsp;Johnston&#146;s behalf, instead of under
Albertsons&#146; self-insured medical benefits plan;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Mr.&nbsp;Johnston&#146;s outstanding unvested options to purchase Albertsons common stock will
vest and all outstanding options held by him will remain exercisable until the earlier of
five years from the date of his termination or the date of expiration of the full stated
term of the option;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Mr.&nbsp;Johnston&#146;s restricted stock unit awards that are unvested will vest and become nonforfeitable;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Mr.&nbsp;Johnston&#146;s benefits under the Albertsons nonqualified benefit plans will become fully vested; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>gross-up payments in the event that Mr.&nbsp;Johnston is subject to excise taxes under
Section&nbsp;4999 of the Internal Revenue Code (the &#147;Code&#148;) as a result of any amounts paid or
distributed to him pursuant to the employment agreement and all other plans and programs of
Albertsons.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In addition, if Mr.&nbsp;Johnston&#146;s employment is terminated for any reason, he is entitled to the
following benefits:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>within 30&nbsp;days of the date of termination, any earned, but unpaid, base salary; any
earned, but unpaid bonus for any fiscal year that ended prior to the fiscal year in which
termination occurs; and the cash equivalent of any accrued, but unused, vacation;</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">79
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any accrued employee benefits, subject to the terms of the applicable employee benefit
plans; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the right to require the company to purchase his primary residence in Boise, Idaho for
his initial investment plus the cost of all improvements (with the company bearing any
closing costs) if he is unable, notwithstanding his reasonable efforts, to sell the
residence on his own. Mr.&nbsp;Johnston&#146;s &#147;reasonable efforts&#148; must include the listing of the
residence for at least six months with a qualified real estate broker.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Amendment No.&nbsp;2 provides that if any payment to be made under the CEO employment agreement would
occur at a time that does not qualify the payment as a short-term deferral under Section&nbsp;409A of
the Code, Mr.&nbsp;Johnston would receive payment upon the earlier of six months following his
&#147;separation from service&#148; (as defined in the Code) or his death, and be entitled to interest earnings,
in a specified amount, on these payments.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The severance benefits described above are subject to Mr.&nbsp;Johnston&#146;s execution of a release of
claims. In addition, Mr.&nbsp;Johnston has agreed not to compete with, nor solicit customers, employees
or suppliers of, Albertsons or its subsidiaries or affiliates during the one-year period following
termination of his employment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Under the terms of the CEO employment agreement, Mr.&nbsp;Johnston is also entitled to a life annuity
payable at age 62 (or earlier upon any termination of Mr.&nbsp;Johnston&#146;s employment) equal to 50% of
the average of the sum of his base salary and actual bonus from the highest three consecutive years
during the ten years prior to his termination of employment (but not less than his initial base
salary and initial target bonus, each of which is $1,250,000) offset by the amount of qualified and
nonqualified pension benefits payable from the Albertsons plans and the plans of Mr.&nbsp;Johnston&#146;s
former employers, and subject to certain reductions if Mr.&nbsp;Johnston&#146;s employment is voluntarily
terminated by him without Good Reason, by Albertsons for Cause, or by reason of death. The annuity
is generally reduced by 4% for each year of early commencement if he begins receiving payments
prior to age 62. However, if termination of employment follows a Change of Control (as defined in the CEO employment agreement),
which the
Transactions (if consummated) will constitute, the 4% reduction will not apply. Amendment No.&nbsp;2 provides Mr.&nbsp;Johnston with the
right to elect to receive a lump sum payment of the then-actuarial value of this life annuity upon
the later of the effective time of a Change of Control or January&nbsp;1,
2007. If Mr.&nbsp;Johnston elects a lump sum payment but is still employed on the date he receives this
benefit, he will be entitled to an additional payment at termination of employment equal to the
excess of (1)&nbsp;the present value of the life annuity at the time of his termination of employment
assuming that he had not received the prior payment over (2)&nbsp;the amount of the payment made
pursuant to his election, increased by an interest factor at an annual rate of 2.75% from the date
of the initial payment to the date of his termination of employment.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Agreement with Robert J. Dunst</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mr.&nbsp;Dunst and the Company are parties to a letter agreement that provides that upon termination of
Mr.&nbsp;Dunst&#146;s employment with the Company for any reason other than cause, he will be entitled to
receive a lump sum severance payment equal to $595,000. Mr.&nbsp;Dunst is also a party to a change in
control severance agreement with the Company (described below). To the extent that any severance
benefits became payable to Mr.&nbsp;Dunst under the letter agreement and were not greater than the
benefits payable under the change in control severance agreement, Mr.&nbsp;Dunst&#146;s severance
compensation would be governed by the change in control severance agreement and not the letter
agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Agreement with Felicia D. Thornton</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ms.&nbsp;Thornton and the Company are parties to a letter agreement that provides that upon termination
of Ms.&nbsp;Thornton&#146;s employment with the Company for any reason she will be entitled to all
compensation and benefits accrued but not paid as of the termination date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In addition, if Ms.&nbsp;Thornton&#146;s employment is terminated by the Company other than for &#147;Cause&#146;&#146; (as
defined in the letter agreement), or she terminates her employment for &#147;Good Reason&#146;&#146; (as defined
in the letter agreement), she will receive a lump sum payment equal to the sum of her base salary
and target bonus and a payment (at the time of bonus payments to other senior executives) of a
pro-rata portion of the amount due to Ms.&nbsp;Thornton under the Company&#146;s annual incentive plan for
the fiscal year in which the date of termination occurs. In this situation,
</DIV>


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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ms. Thornton is also entitled to one year of continued vesting of stock options and restricted stock
and one year of continued participation in the Company&#146;s welfare benefit plans, fringe benefits and
employee perquisites (which period will be concurrent with any health care continuation benefits
under COBRA). She is also entitled to gross-up payments in the event she is subject to excise taxes under Section&nbsp;4999 of the Code as a result of any
amounts paid to her pursuant to the letter agreement or otherwise.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ms.&nbsp;Thornton is also a party to a change in control severance agreement with the Company (described
below). To the extent that any severance benefits became payable to Ms.&nbsp;Thornton under the letter
agreement and were not greater than the benefits payable under the change in control severance
agreement, Ms.&nbsp;Thornton&#146;s severance compensation would be governed by the change in control
severance agreement and not the letter agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Agreement with Paul T. Gannon</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mr.&nbsp;Gannon and the Company are parties to an employment agreement, effective as of December&nbsp;15,
2004, as approved by the Committee. The Committee received advice from legal counsel and
independent compensation consultants, and considered such factors as the level of compensation
deemed necessary to induce Mr.&nbsp;Gannon to accept the Company&#146;s offer of employment and restore
amounts forfeited by him under an agreement in place with Shaw&#146;s Supermarkets, Inc., of which Mr.&nbsp;Gannon
had been President and Chief Executive Officer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The employment agreement provides for an initial term of three years and may be extended by the
Company upon notice to Mr.&nbsp;Gannon within 60&nbsp;days of either December&nbsp;15, 2006 or the second
anniversary of any renewal term, as the case may be. In lieu of renewing the employment agreement,
the Company can release Mr.&nbsp;Gannon from his duties during the remaining term of the employment
agreement and pay Mr.&nbsp;Gannon the severance payments described below as if he had been terminated by
the Company without &#147;Cause&#148; (as defined in the employment agreement). If the parties do not renew
the employment agreement but Mr.&nbsp;Gannon continues on in the employ of the Company following the
expiration of the employment agreement&#146;s term, he will be an &#147;at-will&#148; employee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The employment agreement provides Mr.&nbsp;Gannon with a minimum base salary of $610,000 during its
term, which amount may be proportionally decreased in connection with a general decrease applicable
to all senior executives. The employment agreement also provides Mr.&nbsp;Gannon the right to
participate in annual and/or long-term bonus plans and benefit plans generally provided or made
available to all employees at the Executive Vice President level and the right to receive all
perquisites generally provided or made available to all employees at the Executive Vice President
level.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Upon termination of Mr.&nbsp;Gannon&#146;s employment with the Company for &#147;Cause&#148; (as defined in the
agreement), or termination by Mr.&nbsp;Gannon, Mr.&nbsp;Gannon is entitled to receive all base salary and
vacation accrued but not paid as of the termination date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If Mr.&nbsp;Gannon&#146;s separation from the Company is due to his death or permanent disability, he will be
entitled to receive, as soon as practicable, (1)&nbsp;all base salary and vacation accrued but not paid
as of the termination date, (2)&nbsp;his target bonus for the fiscal year in which the death or
disability occurs, prorated for the actual period of service for that fiscal year, and (3)&nbsp;all
death or disability benefits Mr.&nbsp;Gannon may be entitled to under the Company&#146;s employee benefit or
compensation plans generally.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If Mr.&nbsp;Gannon&#146;s employment with the Company terminates for any reason not described above, Mr.
Gannon will be entitled to (1)&nbsp;all base salary and vacation accrued but not paid as of the
termination date, payable as soon as practicable, (2)&nbsp;two times his base salary (at the rate in
effect at the time of termination) payable in equal monthly installments over a 24-month period,
(3)&nbsp;his target bonus for the fiscal year in which the termination occurs, prorated for the actual
period of service for that fiscal year, (4)&nbsp;outplacement services in an amount up to $50,000, and
(5)&nbsp;continuation of group medical insurance benefits for up to 24&nbsp;months.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mr.&nbsp;Gannon is also a party to a change in control severance agreement with the Company (described
below). To the extent that any severance benefits became payable to Mr.&nbsp;Gannon under the
employment agreement and were not
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">greater than the benefits payable under the change in control severance agreement, Mr.&nbsp;Gannon&#146;s
severance compensation would be governed by the change in control severance agreement and not the
employment agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In consideration for these provisions, Mr.&nbsp;Gannon has agreed to certain non-competition and
non-solicitation provisions.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><I>Change in Control Agreements</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The
Company entered into change of control (&#147;CIC&#146;&#146;)
severance agreements with Messrs.&nbsp;Dunst, Gannon and Sims
and Ms.&nbsp;Thornton (the &#147;Covered Officers&#148;) to provide them with stated severance compensation should
their employment with the Company be terminated under certain defined circumstances following a
CIC. Mr.&nbsp;Johnston is not a party to a CIC agreement, as he has been provided protection in the
event of a CIC pursuant to the CEO employment agreement, which is described above. An amendment to
the CIC agreements was approved by the Committee on March&nbsp;24, 2006 (the &#147;CIC Amendment&#148;). None of the
Covered Officers has yet executed the CIC Amendment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The CIC agreements had a stated expiration of December&nbsp;31, 2005, subject to an automatic renewal
provision. Under the provision, the CIC agreements automatically renew for a one-year period each
January 1st unless the Company or the Covered Officer gives notice by September&nbsp;30th of the
preceding year that it, he or she does not wish to extend the agreement. No termination notice was
given in 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Under the terms of the CIC agreements, within five business days of a CIC (which would include the
Transactions), each Covered Officer will receive a lump sum payment of such executive&#146;s prorated
annual bonus for the fiscal year that includes the date on which the CIC occurs. The payment will
be determined by multiplying the executive&#146;s target bonus award percentage by the executive&#146;s base pay,
prorated for the portion of the fiscal year elapsing prior to the
CIC. The CIC Amendment clarifies the calculation of target bonus for
this purpose. See &#147;Item&nbsp;9B. Other Information.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Additionally, if, during the two-year period following the CIC (or prior to the CIC, but in
connection with the CIC or at the request of a party attempting to effect a change of control of
the Company), a Covered Officer&#146;s employment is terminated other than for death, disability or
&#147;Cause&#148; (as defined in the CIC agreements), or if, during that period, the executive terminates
employment for &#147;Good Reason&#148; (as defined in the CIC agreements) and in either case, the executive
executes a release of claims in connection with the executive&#146;s termination of employment, the CIC
agreements entitle the executive to the following benefits:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>within five business days of the executive&#146;s termination, a lump sum cash payment equal
to three times the sum of (1)&nbsp;the executive&#146;s annual base salary (at the highest rate in
effect for any period within the three years prior to the executive&#146;s termination of
employment) and (2)&nbsp;the executive&#146;s incentive pay (not including amounts received under any
Albertsons equity or long-term incentive compensation plans) calculated by multiplying the
target award percentage under the applicable plan as in effect prior
to the termination by base
salary;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>continuation for 36&nbsp;months following the executive&#146;s termination of employment of
welfare benefits that are substantially similar to those the
executive was receiving or entitled to receive immediately prior to the executive&#146;s termination of employment and continuation of COBRA
benefits for an additional 18&nbsp;months, reduced to the extent that comparable welfare
benefits are actually received by the executive during the continuation period from another
employer. The CIC Amendment provides that these benefits may be satisfied by
the payment of a lump sum payment in lieu of continuation of benefits
or in the case of health plan coverage, the provision of
medical benefits continuation through insurance coverage obtained on
an executive&#146;s behalf instead of under Albertsons&#146;
self-insured medical benefits plan;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>active service credit for the 36-month continuation period for purposes of determining
the executive&#146;s eligibility for retiree medical or life insurance benefits;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>outplacement services up to $50,000, which the CIC Amendment
requires be completed by December&nbsp;31<sup>
st</SUP> of the second calendar
year following the calendar year in which the termination date occurs;</TD>
</TR>

</TABLE>
</DIV>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>within five business days of the executive&#146;s
termination, a lump sum payment for relocation
in an amount set by the CIC Amendment at $100,000, if the executive was relocated while actively employed
(including as a result of initial hire) within five years of the executive&#146;s termination
date; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>gross-up payments in the event that the executive is subject to excise taxes under
Section&nbsp;4999 of the Code as a result of any amounts paid or distributed to him or her
pursuant to the change of control severance agreement or otherwise.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The CIC Amendment provides that if any payment to be made under the agreement would occur at a time
that does not qualify the payment as a short-term deferral under Section&nbsp;409A of the Code, the
Covered Officer would receive payment upon the earlier of six months following his or her
&#147;separation from service&#148; (as defined in the Code) or his
or her death and be entitled to interest earnings, in a specified
amount, on these payments.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The executives have agreed, pursuant to the CIC agreements, if they have received or are receiving
benefits under the agreements, not to engage in any activity that is competitive to Albertsons or
its divisions or affiliates and not to solicit any employees of Albertsons or any of its
subsidiaries for the one-year period following termination of employment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Upon a
change of control of Albertsons, Albertsons is required to fund a &#147;rabbi&#148; trust to secure
payments required to be made under certain change of control arrangements, including Mr.&nbsp;Johnston&#146;s
employment agreement and the change of control severance agreements.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Compensation Committee Interlocks and Insider Participation</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">During 2005, the members of the Management Development/Compensation Committee were A. Gary Ames,
Pamela G. Bailey, Paul I. Corddry, Bonnie G. Hill (until June&nbsp;2005), Beth M. Pritchard, Beatriz
Rivera, Wayne C. Sales (since June&nbsp;2005) and Kathi P. Seifert. During 2005, no current or former
Albertsons executive officer served on the compensation committee (or equivalent), or the board of
directors, of another entity whose executive officer(s) served on Albertsons Management Development
/ Compensation Committee or Board of Directors.
</DIV>



<P align="center" style="font-size: 10pt">83
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<!-- link2 "Item&nbsp;12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" -->

<DIV align="left">
<A name="122"></A>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Item&nbsp;12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table shows the persons (including any group deemed a &#147;person&#148; under Section&nbsp;13(d)(3)
of the Securities Exchange Act of 1934) known to the Company to beneficially own more than 5% of
the Company&#146;s common stock. It also shows beneficial ownership of the Company&#146;s common stock for
each director, for each executive officer named in the Summary Compensation Table included under
Item&nbsp;11 of Part&nbsp;III of this Annual Report on Form 10-K, and for the current executive officers and
directors as a group.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Shares Beneficially Owned as of March&nbsp;3, 2006<BR>
(unless otherwise indicated below)</B><SUP style="font-size: 85%; vertical-align: text-top"><B>1</B></SUP>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="60%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center">Name (and Address for Beneficial</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">Number of Shares</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Owners over 5%)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Beneficially Owned</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Percent of Class</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Brandes Investment Partners, L.P. (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">47,683,497</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">12.9%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">11988 El
Camino Real, Suite&nbsp;500<BR>
San Diego, CA 92130
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">
Markus Stiftung (3)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">29,152,800</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">7.9%</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">Timmasper
Weg<BR>
2353 Nortorf<BR>
Federal Republic of Germany
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">
Capital Research and Management Company (4)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">25,050,710</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">6.8%</TD>
</TR>


<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:0px; text-indent:-0px">333 South
Hope Street,
55<SUP style="font-size: 85%; vertical-align: text-top">th</SUP>
Floor<BR>
Los Angeles, CA 90071
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">
Hotchkis and Wiley Capital Management, LLC
(5)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">24,012,088</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">6.5%</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:0px; text-indent:-0px">725 S.
Figueroa Street,
39<SUP style="font-size: 85%; vertical-align: text-top">th</SUP>
Floor<BR>
Los Angeles, CA 90017</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Directors:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">A. Gary Ames (6)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">55,818</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">*</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Pamela G. Bailey (6)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">42,496</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">*</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Teresa Beck (6)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">39,071</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">*</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Henry I. Bryant (6)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">27,548</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">*</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Paul I. Corddry (6)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">56,129</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">*</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Bonnie G. Hill (6)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">18,253</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">*</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Lawrence R. Johnston (7)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">2,330,626</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">*</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Jon C. Madonna (6)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">11,755</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">*</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Beth M. Pritchard (6)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">7,361</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">*</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Beatriz Rivera (6)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">35,477</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">*</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Wayne C. Sales (6)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">*</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Kathi P. Seifert (6)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">8,130</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">*</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Officers:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom"><B><I>*</I></B></TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Robert J. Dunst, Jr. (7)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">201,664</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">*</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Paul T. Gannon (7)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">40,712</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">*</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John R. Sims (7)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">198,168</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">*</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Felicia D. Thornton (7)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">396,953</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">*</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD nowrap><DIV style="margin-left:15px; text-indent:-15px"><B>All directors and current executive officers
as a group </B>(20 individuals) (8)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">4,545,606</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">1.2%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Indicates that the percentage of shares beneficially owned does not exceed one percent of the
Company&#146;s outstanding common stock.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">1</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Beneficial ownership is determined in accordance with Rule&nbsp;13d-3 under the
Securities Exchange Act of 1934. Shares are considered to be beneficially owned if the person has
the sole or shared power to vote or direct the voting</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">84
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>of the securities or the sole or shared power to dispose of or direct the disposition of the
securities. A person is also considered to be the beneficial owner of shares if that person has the
right to acquire beneficial ownership of the shares within 60&nbsp;days following March&nbsp;3, 2006.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">2</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Share ownership is as of December&nbsp;31, 2005 as set forth in an amendment to a
Schedule&nbsp;13G filed with the SEC on February&nbsp;14, 2006. According to that filing, Brandes Investment
Partners, L.P., an investment adviser registered under the Investment Advisers Act of 1940, has
shared voting power with respect to 39,909,825 shares, shared dispositive power with respect to
47,683,497 shares and is deemed to be the beneficial owner of the shares, together with its control
persons and its holding company.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">3</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>According to a Schedule&nbsp;13D filed with the SEC on or about January&nbsp;18, 1990, Mr.
Theo Albrecht is also a beneficial owner of these shares. Mr.&nbsp;Albrecht&#146;s address is the same as
that of Markus Stiftung.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">4</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Share ownership is as of December&nbsp;31, 2005 as set forth in an amendment to a
Schedule&nbsp;13G filed with the SEC on February&nbsp;14, 2006. According to that filing, Capital Research
and Management Company, an investment adviser registered under Section&nbsp;203 of the Investment
Advisers Act of 1940, is deemed to be a beneficial owner of the shares as the result of acting as
investment adviser to various investment companies registered under Section&nbsp;8 of the Investment
Company Act of 1940. Shares reported by Capital Research and Management Company include 3,360,710
shares it has the right to acquire pursuant to the stock purchase contracts contained in 3,100,000
of the Company&#146;s 7.25% corporate units.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">5</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Share ownership is as of December&nbsp;31, 2005 as set forth in a Schedule&nbsp;13G filed
with the SEC on February&nbsp;14, 2006. According to that filing, Hotchkis and Wiley Capital Management,
LLC (&#147;HWCM&#148;) is an investment adviser in accordance with Rule&nbsp;13d-1(b)(1)(ii)(E) of the Securities
Exchange Act of 1934 and made the filing in its capacity as an investment adviser. According to
the filing, HWCM&#146;s clients have the right to receive, or the power to direct the receipt of,
dividends from, or the proceeds from the sale of, such shares. No such account is known to HWCM to
own more than 5% of the shares outstanding.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">6</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes, as applicable, the following shares that could have been acquired within
60&nbsp;days after March&nbsp;3, 2006 pursuant to stock options awarded under the 1995 Stock Option Plan for
Non-Employee Directors, under the Amended and Restated 1995 Stock-Based Incentive Plan and under
options converted from American Stores Company option plans: 33,364 shares for Mr.&nbsp;Ames; 28,876
shares for Ms.&nbsp;Bailey; 1,512 shares for Mr.&nbsp;Bryant; 45,736 shares for Mr.&nbsp;Corddry; 7,248 shares for
Ms.&nbsp;Hill; and 24,116 shares for Ms.&nbsp;Rivera. Also includes, as applicable, the following shares that
could have been acquired within 60&nbsp;days after March&nbsp;3, 2006 pursuant to deferred stock units
awarded under the Amended and Restated 1995 Stock-Based Incentive Plan and 2004 Equity and
Performance Incentive Plan: 7,361 shares for Mr.&nbsp;Ames; 155 shares for Ms.&nbsp;Beck; 11,426 shares for
Mr.&nbsp;Bryant; 393 shares for Mr.&nbsp;Corddry; 10,755 shares for Ms.&nbsp;Hill; 10,755 shares for Mr.&nbsp;Madonna;
7,361 shares for Ms.&nbsp;Pritchard; 7,361 shares for Ms.&nbsp;Rivera; and 3,930 shares for Ms.&nbsp;Seifert.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">7</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes, as applicable, the following shares that could have been acquired within
60&nbsp;days after March&nbsp;3, 2006 pursuant to stock options awarded under the Amended and Restated 1995
Stock-Based Incentive Plan: 1,302,919 shares for Mr.&nbsp;Johnston; 147,556 shares for Mr.&nbsp;Dunst; 23,114
shares for Mr.&nbsp;Gannon; 147,396 shares for Mr.&nbsp;Sims; and 311,658 shares for Ms.&nbsp;Thornton. Also
includes, as applicable, the following shares that could have been acquired within 60&nbsp;days after
March&nbsp;3, 2006 pursuant to deferred and deferrable restricted stock units awarded under the Amended
and Restated 1995 Stock-Based Incentive Plan and the 2004 Equity and Performance Incentive Plan:
728,670 shares for Mr.&nbsp;Johnston; 33,546 shares for Mr.&nbsp;Dunst; 6,133 shares for Mr.&nbsp;Gannon; 34,772
shares for Mr.&nbsp;Sims; and 85,295 shares for Ms.&nbsp;Thornton.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">8</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes 1,006,264 shares that could have been acquired within 60&nbsp;days after March
3, 2006 by executive officers other than those listed individually pursuant to stock options and
deferred and deferrable restricted stock units awarded under the Amended and Restated 1995
Stock-Based Incentive Plan, the 2004 Equity and Performance Incentive Plan and options converted
from American Stores Company option plans. Also includes shares credited to ASRE accounts of
certain of these other executive officers, measured as of fiscal year end.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">85
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Information set forth under Item&nbsp;1 of Part&nbsp;I of this Annual Report on Form 10-K under the heading
&#147;Definitive Agreement to Sell Company&#148; is incorporated herein by reference.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Equity Compensation Plan Information</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table sets forth certain information with respect to the Company&#146;s equity
compensation plans in effect as of February&nbsp;2, 2006 that provide for the award of securities or the
grant of options, warrants or rights to purchase securities to employees of the Company or its
subsidiaries or to any other person.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="64%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" colspan="3">(c)</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Number of securities</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">(a)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">(b)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">remaining available for</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Number of securities to</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">Weighted-average</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">future issuance under</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">be issued upon exercise</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">exercise price of</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">equity compensation plans</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">of outstanding options,</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">outstanding options,</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">(excluding securities</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Plan Category</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">warrants and rights (1)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">warrants and rights (2)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">reflected in column (a)) (3)</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Equity compensation
plans approved by
security holders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,617,374</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">28.11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,544,101</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Equity compensation
plans not approved
by security holders
(4)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">700,433</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">37.18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">41,317,807</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">28.30</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,544,101</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">1</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes 6,922,968 deferrable restricted stock units, deferred restricted stock
units and dividend equivalents.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">2</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Does not take into consideration the deferrable restricted stock units, deferred
restricted stock units or dividend equivalents referenced in footnote (1).</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">3</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Shares remaining available for future issuance under equity compensation plans
approved by security holders represents the remaining share authorization of the Company&#146;s 2004
Equity and Performance Incentive Plan (the &#147;2004 Plan&#148;), which authorizes the grant of incentive
stock options, non-qualified stock options, stock appreciation rights, deferred stock, restricted
stock, performance shares, performance units and other securities. The maximum number of shares
that may be issued under the 2004 Plan as awards other than options or stock appreciation rights is
one-quarter of the shares authorized under the 2004 Plan. As of February&nbsp;2, 2006, 645,461 shares
remained available for grant under 2004 Plan as awards other than options or stock appreciation
rights.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">4</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Represents stock options granted by American Stores Company under three option
plans that were approved by the shareholders of American Stores Company. American Stores Company
was acquired by the Company in 1999. The options were granted during 1997 and 1998 and entitle the
holders to purchase shares of the Company&#146;s common stock at prices ranging from $35.7143 to
$39.4841. At fiscal year end, all of the options were exercisable. No additional options may be
granted under the plans that govern these options.</TD>
</TR>

</TABLE>


<!-- link2 "Item&nbsp;13. Certain Relationships and Related Transactions" -->

<DIV align="left">
<A name="123"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Item&nbsp;13. Certain Relationships and Related Transactions.</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">None.
</DIV>

<P align="center" style="font-size: 10pt">86
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link2 "Item&nbsp;14. Principal Accountant Fees and Services" -->

<DIV align="left">
<A name="124"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Item&nbsp;14. Principal Accountant Fees and Services.</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Audit Fees</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The aggregate fees for professional services rendered by Deloitte &#038; Touche LLP (&#147;Deloitte&#148;), the
member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively, the
&#147;Deloitte Entities&#148;), in connection with their audit of the Company&#146;s consolidated financial
statements included in this Annual Report on Form 10-K, their reviews of the consolidated financial
statements included in the Company&#146;s Quarterly Reports on Form 10-Q, their audit of internal
control over financial reporting and their attestation services for matters such as comfort letters
and consents related to SEC registration statements were approximately $3.21 for fiscal year 2005
and $3.58 for fiscal year 2004.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Audit-Related Fees</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The fees for attestation services rendered for matters such as audits of employee benefits plans,
advisory service for the implementation of Section&nbsp;404 of the Sarbanes-Oxley Act of 2002 and merger
and acquisition due diligence services were approximately $0.73 in fiscal year 2005 and $1.26 in
fiscal year 2004.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Tax Fees</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Fees related to tax compliance, tax advice and tax planning services were approximately $0.35 in
fiscal 2005 and $0.30 in fiscal year 2004.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>All Other Fees</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Deloitte Entities did not provide the Company any significant services in fiscal 2005 or 2004
that would properly be categorized as &#147;All Other Fees.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Pre-Approval Policies and Procedures</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Audit/Finance Committee has adopted a formal policy for the pre-approval of non-prohibited,
non-audit services to be performed by the Company&#146;s external financial statement auditor, currently
Deloitte. Under this policy, management prepares a list of certain services that are expected to be
performed by the external auditor. The pre-approved non-prohibited, non-audit services include
activities that are allowed by the provisions of the Sarbanes-Oxley Act of 2002 and either (1)&nbsp;have
been performed by Deloitte in the past with satisfactory quality or (2)&nbsp;are an appropriate
extension of the services performed by Deloitte. The list is approved by the Audit/Finance
Committee. The following process is followed for the pre-approval of non-prohibited, non-audit
services that are not included in the initial approval:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Chair of the Audit/Finance Committee is contacted to discuss (1)&nbsp;the nature of the
allowed non-prohibited, non-audit service and (2)&nbsp;management&#146;s conclusion that Deloitte is
the best firm to provide the service. Management will also provide to the Chair of the
Audit/Finance Committee a copy of a final, unsigned engagement letter from Deloitte for the
service, which will include a description of the services to be performed, a proposed
professional fee for the service, and a statement from Deloitte that, to the best of their
knowledge, the service is allowed under the Sarbanes-Oxley Act.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Following this discussion, the Chair of the Audit/Finance Committee, if he or she
believes it is in the best interest of the Company and its shareholders, will be allowed to
provide approval to management to proceed with the engagement of Deloitte to perform the
service.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Chair of the Audit/Finance Committee may choose to seek input and counsel from other
members of the Audit/Finance Committee or the Board of Directors when considering
management&#146;s recommendation.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>At each regularly scheduled meeting of the Company&#146;s Audit/Finance Committee, management
will report to the full Audit/Finance Committee the services that Deloitte has performed
since the last meeting, highlighting those services that were approved by the Chair of the
Committee since the last full Audit/ Finance Committee meeting.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>At any time the Audit/Finance Committee or Board of Directors may review the allowed
non-audit services that are performed by Deloitte and may direct management to reduce the
scope of the services performed by Deloitte.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">87
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Sarbanes-Oxley Act allows a <I>de minimis </I>exception from pre-approval of non-prohibited, non-audit
services in certain circumstances. The Audit/Finance Committee&#146;s formal policy regarding the
approval of unapproved, non-prohibited, non-audit services that fall within the exception follows
the same process noted above. However, if the Chair of the Audit/Finance Committee believes that
the best interest of the Company and its shareholders is to terminate this service from Deloitte,
management will follow the directions of the Chair of the Audit/Finance Committee and terminate
such service. The Chair of the Audit/Finance Committee may also choose to defer a decision on
approval of such services until the next meeting of the Audit/Finance Committee, at which time the
Chair will discuss the services with the full Audit/Finance Committee and seek a determination from
the Committee as to the acceptability of engaging Deloitte to perform such services. If the Chair
of the Audit/Finance Committee chooses to defer approval of
unapproved, non-prohibited, non-audit
services, management and Deloitte will be responsible for verifying that the services continue to
meet the <I>de minimis </I>exception criteria. During fiscal year 2005, none of the fees noted under the
headings &#147;Audit-Related Fees&#148; or &#147;Tax Fees&#148; were approved by the Audit/Finance Committee pursuant
to the <I>de minimis </I>exception.
</DIV>
<!-- link1 "PART IV" -->

<DIV align="left">
<A name="125"></A>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>PART IV</B></U>
</DIV>

<!-- link2 "Item&nbsp;15. Exhibits and Financial Statement Schedules." -->
<DIV align="left">
<A name="126"></A>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U><B>Item&nbsp;15. Exhibits and Financial Statement Schedules.</B></U>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(a)The following documents are filed as part of this report:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Consolidated Financial Statements: See Index to Consolidated Financial Statements at
Item&nbsp;8 on page&nbsp;32 of this report.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Financial Statement Schedules: No schedules are required.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Exhibits are incorporated herein by reference or are filed with this report as set
forth in the Index to Exhibits on pages 91 through 99 hereof.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt">88
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>
<!-- link1 "Signatures" -->

<DIV align="left">
<A name="127"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>Signatures</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to the requirements of Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">ALBERTSON&#146;S, INC.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>By: /s/ Felicia D. Thornton&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>
Felicia D. Thornton<BR>
(Executive Vice President<BR>
and Chief Financial Officer)

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Date:
March&nbsp;28, 2006
</DIV>

<P align="center" style="font-size: 10pt">89
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the Registrant and in the capacities indicated as of
March&nbsp;28, 2006.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="45%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Lawrence R. Johnston
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">/s/ Felicia D. Thornton</TD>
</TR>
<TR style="font-size: 1px">
    <TD align="center" valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">Lawrence R. Johnston</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Felicia D. Thornton</TD>
</TR>
<TR valign="bottom">

<TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">(Chairman
of the Board, Chief<BR>
Executive Officer, President and
Director)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Executive Vice President<BR>
and Chief Financial Officer)</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Adrian J. Downes
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">/s/ A. Gary Ames</TD>
</TR>
<TR style="font-size: 1px">
    <TD align="center" valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">Adrian J. Downes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">A. Gary Ames</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">(Group Vice President
and Controller)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Director)</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px"><I>(Principal Accounting Officer)</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Pamela G. Bailey
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">/s/ Teresa Beck</TD>
</TR>
<TR style="font-size: 1px">
    <TD align="center" valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">Pamela G. Bailey
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Teresa Beck</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">(Director)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Director)</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Henry I. Bryant</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD align="center" valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">Henry I. Bryant
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Paul I. Corddry</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">(Director)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Director)</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Bonnie G. Hill
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">/s/ Jon C. Madonna</TD>
</TR>
<TR style="font-size: 1px">
    <TD align="center" valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">Bonnie G. Hill
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Jon C. Madonna</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">(Director)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Director)</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Beth M. Pritchard
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">/s/ Beatriz Rivera</TD>
</TR>
<TR style="font-size: 1px">
    <TD align="center" valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">Beth M. Pritchard
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Beatriz Rivera</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">(Director)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Director)</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Wayne C. Sales
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">/s/ Kathi P. Seifert</TD>
</TR>
<TR style="font-size: 1px">
    <TD align="center" valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">Wayne C. Sales
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Kathi P. Seifert</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">(Director)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Director)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">90
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<!-- link1 " Index to Exhibits" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Index to Exhibits<BR>
Filed with the Annual Report<BR>
on Form&nbsp;10-K for the<BR>
Year Ended February&nbsp;2, 2006<br>
Commission File&nbsp;No.&nbsp;1-6187
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="89%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Number</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Description</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Agreement and Plan of Merger, among Albertson&#146;s, Inc., New Aloha Corporation,
New Diamond Sub, Inc., SUPERVALU INC., and Emerald Acquisition Sub, Inc., dated
as of January&nbsp;22, 2006, is incorporated herein by reference to Exhibit&nbsp;2.01 of
Form&nbsp;8-K filed with the SEC on January&nbsp;24, 2006.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Purchase and Separation Agreement, by and among Albertson&#146;s, Inc., New Aloha
Corporation, SUPERVALU INC. and AB Acquisition LLC, dated as of January&nbsp;22,
2006.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Asset Purchase Agreement, among CVS Corporation, CVS Pharmacy, Inc.,
Albertson&#146;s, Inc., SUPERVALU INC., New Aloha Corporation, and the other sellers
thereto, dated as of January&nbsp;22, 2006, is incorporated herein by reference to
Exhibit&nbsp;2.03 of Form&nbsp;8-K filed with the SEC on January&nbsp;24, 2006.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Restated Certificate of Incorporation (as amended) is incorporated herein by
reference to Exhibit&nbsp;3.1 of Form&nbsp;10-Q for the quarter ended April&nbsp;30, 1998.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.1.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certificate of Designation, Preferences and Rights of Series&nbsp;A Junior
Participating Preferred Stock is incorporated herein by reference to Exhibit
3.1.1 of Form&nbsp;10-K for the year ended January&nbsp;30, 1997.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.1.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Certificate of Designation, Preferences and Rights of Series&nbsp;A
Junior Participating Preferred Stock is incorporated herein by reference to
Exhibit&nbsp;3.1.2 of Form&nbsp;10-K for the year ended January&nbsp;28, 1999.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By-Laws amended on March&nbsp;15, 2001 and December&nbsp;5, 2003 is incorporated herein by
reference to Exhibit&nbsp;3.2 of Form&nbsp;10-K for the year ended January&nbsp;29, 2004.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stockholder Rights Plan Agreement is incorporated herein by reference to Exhibit
1 of Form&nbsp;8-A Registration Statement filed with the SEC on March&nbsp;4, 1997.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment No.&nbsp;One to Stockholder Rights Plan Agreement (dated August&nbsp;2, 1998) is
incorporated herein by reference to Exhibit&nbsp;4.1(b) of Amendment to Form&nbsp;8-A
Registration Statement filed with the SEC on August&nbsp;6, 1998.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment No.&nbsp;Two to Stockholder Rights Plan Agreement (dated March&nbsp;16, 1999) is
incorporated herein by reference to Exhibit&nbsp;3 of Amendment to Form&nbsp;8-A
Registration Statement filed with the SEC on March&nbsp;25, 1999.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment No.&nbsp;Three to Stockholder Rights Plan Agreement (dated September&nbsp;26,
2003) is incorporated herein by reference to Exhibit&nbsp;6 of Amendment to Form&nbsp;8-A
Registration Statement filed with the SEC on September&nbsp;30, 2003.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment No.&nbsp;Four to Stockholder Rights Plan Agreement (dated January&nbsp;22, 2006).</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Indenture, dated as of May&nbsp;1, 1992, between Albertson&#146;s, Inc. and Morgan
Guaranty Trust Company of New York as Trustee (the &#147;1992 Indenture&#148;) is
incorporated herein by reference to Exhibit&nbsp;4.1 of Form&nbsp;S-3 (Reg. No.&nbsp;333-41793)
filed with the SEC on December&nbsp;9, 1997. <SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Indenture dated May&nbsp;1, 1995, between American Stores Company and the
First National Bank of Chicago, as Trustee, is incorporated herein by reference
to Exhibit&nbsp;4.1 of Form&nbsp;10-Q filed by American Stores Company (Commission File
Number <FONT style="white-space: NOWRAP">1-5392)</FONT> on June&nbsp;12, 1995. <SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">91
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="89%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Number</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Description</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.3.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Supplemental Indenture No.&nbsp;1, dated as of January&nbsp;23, 2004, between American
Stores Company, LLC (f/k/a American Stores Company) and J.P. Morgan Trust
Company, National Association, as successor trustee, is incorporated herein by
reference to Exhibit&nbsp;4.3.2 of Form&nbsp;10-Q for the quarter ended November&nbsp;3, 2005.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.3.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Supplement Indenture No.&nbsp;2, dated as of July&nbsp;6, 2005, between American Stores
Company, LLC and J.P. Morgan Trust Company, National Association, as successor
trustee (including the form of guarantee), is incorporated herein by reference
to Exhibit&nbsp;4.1 of Form&nbsp;8-K filed with the SEC on July&nbsp;12, 2005.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Corporate Unit is incorporated herein by reference to Exhibit&nbsp;4.3 of
Registration Statement on Form&nbsp;S-3/A (Reg. No.&nbsp;333-113995) filed with the SEC on
April&nbsp;28, 2004.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Treasury Unit is incorporated herein by reference to Exhibit&nbsp;4.4 of
Registration Statement on Form&nbsp;S-3/A (Reg. No.&nbsp;333-113995) filed with the SEC on
April&nbsp;28, 2004.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.6
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Senior Note is incorporated herein by reference to Exhibit&nbsp;4.5 of
Registration Statement on Form&nbsp;S-3/A (Reg. No.&nbsp;333-113995) filed with the SEC on
April&nbsp;28, 2004.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.7
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Supplemental Indenture to the 1992 Indenture is incorporated herein by
reference to Exhibit&nbsp;4.6 of Registration Statement on Form&nbsp;S-3/A (Reg. No.
333-113995) filed with the SEC on April&nbsp;28, 2004.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.8
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Purchase Contract Agreement is incorporated herein by reference to
Exhibit&nbsp;4.7 of Registration Statement on Form
<FONT style="white-space: NOWRAP">S-3/A</FONT> (Reg. No.&nbsp;333-113995) filed
with the SEC on April&nbsp;28, 2004.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.9
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Pledge Agreement is incorporated herein by reference to Exhibit&nbsp;4.8 of
Registration Statement on Form&nbsp;S-3/A (Reg. No.&nbsp;333-113995) filed with the SEC on
April&nbsp;28, 2004.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.10
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Remarketing Agreement is incorporated herein by reference to Exhibit&nbsp;4.9
of Registration Statement on Form&nbsp;S-3/A (Reg. No.&nbsp;333-113995) filed with the SEC
on April&nbsp;28, 2004.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">J. A. and Kathryn Albertson Foundation Inc. Stock Agreement (dated May&nbsp;21, 1997)
is incorporated herein by reference to Exhibit&nbsp;10.1 of Form&nbsp;10-Q for the quarter
ended May&nbsp;1, 1997.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.1.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Waiver regarding Alscott Limited Partnership #1 Stock Agreement (dated May&nbsp;21,
1997) is incorporated herein by reference to Exhibit&nbsp;10.1.1 of Form&nbsp;10-Q for the
quarter ended May&nbsp;1, 1997.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.1.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Waiver regarding Kathryn Albertson Stock Agreement (dated May&nbsp;21, 1997) is
incorporated herein by reference to Exhibit&nbsp;10.1.2 of Form&nbsp;10-Q for the quarter
ended May&nbsp;1, 1997.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Agreement between the Company and Gary G. Michael dated December&nbsp;22, 2000 is
incorporated herein by reference to Exhibit&nbsp;10.2 of Form&nbsp;10-K for the year ended
February&nbsp;1, 2001.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Award of Deferred Stock Units is incorporated herein by reference to
Exhibit&nbsp;10.3 of Form&nbsp;10-K for the year ended February&nbsp;1, 2001.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Agreement between the Company and Lawrence R. Johnston dated April
23, 2001 is incorporated herein by reference to Exhibit&nbsp;10.4 of Form&nbsp;8-K filed
on April&nbsp;26, 2001.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Employment Agreement between the Company and Lawrence R. Johnston
dated July&nbsp;19, 2001 is incorporated herein by reference to Exhibit&nbsp;10.4.1 of
Form&nbsp;10-K for the year ended January&nbsp;31, 2002.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Beneficiary Agreement for Key Executive Life Insurance is incorporated
herein by reference to Exhibit&nbsp;10.5.1 of Form&nbsp;10-K for the year ended January
30, 1986.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.6
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Deferred Compensation Plan (amended and restated February&nbsp;1, 1989) is
incorporated herein</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">92
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="89%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Number</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Description</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">by reference to Exhibit&nbsp;10.6 of Form&nbsp;10-K for the year ended
February&nbsp;2, 1989.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.6.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Executive Deferred Compensation Plan (dated December&nbsp;4, 1989) is
incorporated herein by reference to Exhibit&nbsp;10.6.1 of Form&nbsp;10-Q for the quarter
ended November&nbsp;2, 1989.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.6.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Executive Deferred Compensation Plan (dated December&nbsp;15, 1998) is
incorporated herein by reference to Exhibit&nbsp;10.6.2 of Form&nbsp;10-K for the year
ended February&nbsp;3, 2000.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.6.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Executive Deferred Compensation Plan (dated March&nbsp;15, 2001) is
incorporated herein by reference to Exhibit&nbsp;10.6.3 of Form&nbsp;10-K for the year
ended February&nbsp;1, 2001.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.6.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Executive Deferred Compensation Plan (dated May&nbsp;1, 2001) is
incorporated herein by reference to Exhibit&nbsp;10.6.4 of Form&nbsp;10-K for the year
ended January&nbsp;30, 2003.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.7
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&#091;Intentionally left blank&#093;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.8
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&#091;Intentionally left blank&#093;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.9
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Albertson&#146;s, Inc. Executive Officers&#146; Annual Incentive Compensation Plan is
incorporated herein by reference to Exhibit&nbsp;10.42 of Form&nbsp;10-Q for the quarter
ended May&nbsp;2, 2002.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.10
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2000 Deferred Compensation Plan (dated January&nbsp;1, 2000) is incorporated by
reference to Exhibit&nbsp;10.10 of Form&nbsp;10-K for the year ended February&nbsp;3, 2000.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">First Amendment to the 2000 Deferred Compensation Plan (dated May&nbsp;25, 2001) is
incorporated herein by reference to Exhibit&nbsp;10.10.1 of Form&nbsp;10-K for the year
ended January&nbsp;30, 2003.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.10.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Second Amendment to the 2000 Deferred Compensation Plan (dated July&nbsp;18, 2001) is
incorporated herein by reference to Exhibit&nbsp;10.10.2 of Form&nbsp;10-K for the year
ended January&nbsp;30, 2003.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.10.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Third Amendment to the 2000 Deferred Compensation Plan (dated December&nbsp;31, 2001)
is incorporated herein by reference to Exhibit&nbsp;10.10.3 of Form&nbsp;10-K for the year
ended January&nbsp;30, 2003.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.10.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Fourth Amendment to Deferred Compensation Plan (dated December&nbsp;22, 2003) is
incorporated herein by reference to Exhibit&nbsp;10.10.4 of Form&nbsp;10-K for the year
ended January&nbsp;29, 2004.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.11
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&#091;Intentionally left blank&#093;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.12
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Letter Agreement between the Company and Robert J. Dunst, Jr. dated November&nbsp;16,
2001 is incorporated herein by reference to Exhibit&nbsp;10.42 to Form&nbsp;10-Q for the
quarter ended November&nbsp;1, 2001.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.13
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Pension Makeup Plan (amended and restated February&nbsp;1, 1989) is
incorporated herein by reference to Exhibit&nbsp;10.13 of Form&nbsp;10-K for the year
ended February&nbsp;2, 1989.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.13.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">First Amendment to Executive Pension Makeup Plan (dated June&nbsp;8, 1989) is
incorporated herein by reference to Exhibit&nbsp;10.13.1 of Form&nbsp;10-Q for the quarter
ended May&nbsp;4, 1989.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.13.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Second Amendment to Executive Pension Makeup Plan (dated January&nbsp;12, 1990) is
incorporated herein by reference to Exhibit&nbsp;10.13.2 of Form&nbsp;10-K for the year
ended February&nbsp;1, 1990.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.13.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Third Amendment to Executive Pension Makeup Plan (dated January&nbsp;31, 1990) is
incorporated herein by reference to Exhibit&nbsp;10.13.3 of Form&nbsp;10-Q for the quarter
ended August&nbsp;2, 1990.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.13.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Fourth Amendment to Executive Pension Makeup Plan (effective January&nbsp;1, 1995) is
incorporated herein by reference to Exhibit&nbsp;10.13.4 of Form&nbsp;10-K for the year
ended February&nbsp;2, 1995.*</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">93
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="89%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Number</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Description</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.13.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Executive Pension Makeup Plan (retroactive to January&nbsp;1, 1990) is
incorporated herein by reference to Exhibit&nbsp;10.13.5 of Form&nbsp;10-K for the year
ended February&nbsp;1, 1996.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.13.6
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Executive Pension Makeup Plan (retroactive to October&nbsp;1, 1999) is
incorporated herein by reference to Exhibit&nbsp;10.13.6 of Form&nbsp;10-K for the year
ended February&nbsp;3, 2000.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.13.7
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Executive Pension Makeup Plan (dated June&nbsp;1, 2001) is incorporated
herein by reference to Exhibit&nbsp;10.13.7 of Form&nbsp;10-K for the year ended January
30, 2003.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.14
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive ASRE Makeup Plan (dated September&nbsp;26, 1999) is incorporated herein by
reference to Exhibit&nbsp;10.14 of Form&nbsp;10-K for the year ended February&nbsp;3, 2000.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.14.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">First Amendment to the Executive ASRE Makeup Plan (dated May&nbsp;25, 2001) is
incorporated herein by reference to Exhibit&nbsp;10.14.1 of Form&nbsp;10-K for the year
ended January&nbsp;30, 2003.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.14.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Second Amendment to the Executive ASRE Makeup Plan (dated December&nbsp;31, 2001) is
incorporated herein by reference to Exhibit&nbsp;10.14.2 of Form&nbsp;10-K for the year
ended January&nbsp;30, 2003.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.15
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Executive Deferred Compensation Plan (amended and restated February&nbsp;1,
1989) is incorporated herein by reference to Exhibit&nbsp;10.15 of Form&nbsp;10-K for the
year ended February&nbsp;2, 1989.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.15.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Senior Executive Deferred Compensation Plan (dated December&nbsp;4,
1989) is incorporated herein by reference to Exhibit&nbsp;10.15.1 of Form&nbsp;10-Q for
quarter ended November&nbsp;2, 1989.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.15.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Senior Executive Deferred Compensation Plan (dated December&nbsp;15,
1998) is incorporated herein by reference to Exhibit&nbsp;10.7.1 of Form&nbsp;10-K for the
year ended February&nbsp;3, 2000.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.15.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Senior Executive Deferred Compensation Plan (dated May&nbsp;1, 2001) is
incorporated herein by reference to Exhibit&nbsp;10.15.3 of Form&nbsp;10-K for the year
ended January&nbsp;30, 2003.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.16
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&#091;Intentionally left blank&#093;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.17
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&#091;Intentionally left blank&#093;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.18
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Pension Makeup Trust (dated February&nbsp;1, 1989) is incorporated herein
by reference to Exhibit&nbsp;10.18 of Form&nbsp;10-K for the year ended February&nbsp;2, 1989.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.18.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Executive Pension Makeup Trust (dated July&nbsp;24, 1998) is
incorporated herein by reference to Exhibit&nbsp;10.18.1 of Form&nbsp;10-K for the year
ended February&nbsp;3, 2000.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.18.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Executive Pension Makeup Trust (dated December&nbsp;1, 1998) is
incorporated herein by reference to Exhibit&nbsp;10.18.1 of Form&nbsp;10-Q for quarter
ended October&nbsp;29, 1998.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.18.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Executive Pension Makeup Trust (dated December&nbsp;1, 1999) is
incorporated herein by reference to Exhibit&nbsp;10.18.3 of Form&nbsp;10-K for year ended
February&nbsp;3, 2000.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.18.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Executive Pension Makeup Trust (dated March&nbsp;31, 2000) is
incorporated herein by reference to Exhibit&nbsp;10.18.4 of Form&nbsp;10-K for year ended
February&nbsp;1, 2001.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.19
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Deferred Compensation Trust (dated February&nbsp;1, 1989) is incorporated
herein by reference to Exhibit&nbsp;10.19 of Form&nbsp;10-K for year ended February&nbsp;2,
1989.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.19.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Executive Deferred Compensation Trust (dated July&nbsp;24, 1998) is
incorporated herein by reference to Exhibit&nbsp;10.19.1 of Form&nbsp;10-K for year ended
February&nbsp;3, 2000.*</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">94
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="89%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Number</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Description</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.19.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Executive Deferred Compensation Trust (dated December&nbsp;1, 1998) is
incorporated herein by reference to Exhibit&nbsp;10.19.1 of Form&nbsp;10-Q for quarter
ended October&nbsp;29, 1998.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.19.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Executive Deferred Compensation Trust (dated December&nbsp;1, 1999) is
incorporated herein by reference to Exhibit&nbsp;10.19.3 of Form&nbsp;10-K for year ended
February&nbsp;3, 2000.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.19.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Executive Deferred Compensation Trust (dated March&nbsp;31, 2000) is
incorporated herein by reference to Exhibit&nbsp;10.19.4 of Form&nbsp;10-K for year ended
February&nbsp;1, 2001.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.20
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1990 Deferred Compensation Plan is incorporated herein by reference to Exhibit
10.20 of Form&nbsp;10-K for year ended January&nbsp;31, 1991.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.20.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to 1990 Deferred Compensation Plan (dated April&nbsp;12, 1994) is
incorporated herein by reference to Exhibit&nbsp;10.20.1 of Form&nbsp;10-Q for the quarter
ended August&nbsp;4, 1994.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.20.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to 1990 Deferred Compensation Plan (dated November&nbsp;5, 1997) is
incorporated herein by reference to Exhibit&nbsp;10.20.2 of Form&nbsp;10-K for the year
ended January&nbsp;29, 1998.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.20.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to 1990 Deferred Compensation Plan (dated November&nbsp;1, 1998) is
incorporated herein by reference to Exhibit&nbsp;10.20.3 of Form&nbsp;10-Q for the quarter
ended October&nbsp;29, 1998.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.20.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Termination of 1990 Deferred Compensation Plan (dated December&nbsp;31, 1999) is
incorporated herein by reference to Exhibit&nbsp;10.20.4 of Form&nbsp;10-K for the year
ended January&nbsp;30, 2003.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.20.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to 1990 Deferred Compensation Plan (dated May&nbsp;1, 2001) is incorporated
herein by reference to Exhibit&nbsp;10.20.5 of Form&nbsp;10-K for the year ended January
30, 2003.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.20.6
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to 1990 Deferred Compensation Plan (dated December&nbsp;31, 2001 to be
effective May&nbsp;1, 2001) is incorporated herein by reference to Exhibit&nbsp;10.20.6 of
Form&nbsp;10-K for the year ended January&nbsp;30, 2003.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.21
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Non-Employee Directors&#146; Deferred Compensation Plan is incorporated herein by
reference to Exhibit&nbsp;10.21 of Form&nbsp;10-K for the year ended January&nbsp;31, 1991.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.21.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Non-Employee Directors&#146; Deferred Compensation Plan (dated December
15, 1998) is incorporated herein by reference to Exhibit&nbsp;10.21.1 of Form&nbsp;10-K
for year ended February&nbsp;3, 2000.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.21.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Non-Employee Directors&#146; Deferred Compensation Plan (dated March&nbsp;15,
2001) is incorporated herein by reference to Exhibit&nbsp;10.21.2 of Form&nbsp;10-K for
the year ended February&nbsp;1, 2001.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.21.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Non-Employee Directors&#146; Deferred Compensation Plan (dated May&nbsp;1,
2001) is incorporated herein by reference to Exhibit&nbsp;10.21.3 of Form&nbsp;10-K for
the year ended January&nbsp;30, 2003.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.21.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Non-Employee Directors&#146; Deferred Compensation Plan (dated December
22, 2003) is incorporated herein by reference to Exhibit&nbsp;10.21.4 of Form&nbsp;10-K
for the year ended January&nbsp;29, 2004.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.22
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1990 Deferred Compensation Trust (dated November&nbsp;20, 1990) is incorporated
herein by reference to Exhibit&nbsp;10.22 of Form&nbsp;10-K for year ended January&nbsp;31,
1991.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.22.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to 1990 Deferred Compensation Trust (dated July&nbsp;24, 1998) is
incorporated herein by reference to Exhibit&nbsp;10.22.1 of Form&nbsp;10-K for year ended
February&nbsp;3, 2000.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.22.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to 1990 Deferred Compensation Trust (dated December&nbsp;1, 1998) is
incorporated herein by reference to Exhibit&nbsp;10.22.1 of Form&nbsp;10-Q for quarter
ended October&nbsp;29, 1998.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.22.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to 1990 Deferred Compensation Trust (dated December&nbsp;1, 1999) is
incorporated herein by</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">95
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="89%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Number</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Description</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">reference to Exhibit&nbsp;10.22.3 of Form&nbsp;10-K for year ended
February&nbsp;3, 2000.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.22.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to 1990 Deferred Compensation Trust (dated March&nbsp;31, 2000) is
incorporated herein by reference to Exhibit&nbsp;10.22.4 of Form&nbsp;10-K for year ended
February&nbsp;1, 2001.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.23
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2000 Deferred Compensation Trust (dated January&nbsp;1, 2000) is incorporated herein
by reference to Exhibit&nbsp;10.23 of Form&nbsp;10-K for year ended February&nbsp;3, 2000.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to the 2000 Deferred Compensation Trust (dated March&nbsp;31, 2000) is
incorporated herein by reference to Exhibit&nbsp;10.23.1 of Form&nbsp;10-K for year ended
February&nbsp;1, 2001.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.24
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1995 Stock-Based Incentive Plan (dated May&nbsp;26, 1995) is incorporated herein by
reference to Exhibit&nbsp;10.24 of Form&nbsp;10-Q for the quarter ended May&nbsp;4, 1995.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.24.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of 1995 Stock-Based Incentive Plan Stock Option Agreement is incorporated
herein by reference to Exhibit&nbsp;10.24.1 of Form&nbsp;10-K for the year ended February
1, 1996.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.25
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">1995 Stock Option Plan for Non-Employee Directors is incorporated herein by
reference to Exhibit&nbsp;10.25 of Form&nbsp;10-Q for the quarter ended May&nbsp;4, 1995.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.25.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of 1995 Stock Option Plan for Non-Employee Directors Agreement is
incorporated herein by reference to Exhibit&nbsp;10.25.1 of Form&nbsp;10-Q for the quarter
ended May&nbsp;4, 1995.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.25.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to 1995 Stock Option Plan for Non-Employee Directors (dated March&nbsp;15,
2001) is incorporated herein by reference to Exhibit&nbsp;10.25.2 of Form&nbsp;10-K for
the year ended February&nbsp;1, 2001.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.26
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Amended and Restated 1995 Stock-Based Incentive Plan (dated March
15, 2001) is incorporated herein by reference to Exhibit&nbsp;10.26.1 of Form&nbsp;10-K
for the year ended February&nbsp;1, 2001.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.27
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&#091;Intentionally left blank&#093;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.28
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&#091;Intentionally left blank&#093;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.29
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&#091;Intentionally left blank&#093;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.30
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">American Stores Company Supplemental Executive Retirement Plan 1998 Restatement
is incorporated herein by reference to Exhibit&nbsp;4.1 of Form&nbsp;S-8 filed by American
Stores Company (Commission File Number 1-5392) on July&nbsp;13, 1998.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.30.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to American Stores Company Supplemental Executive Retirement Plan 1998
Restatement, dated as of September&nbsp;15, 1998, is incorporated herein by reference
to Exhibit&nbsp;10.4 of Form&nbsp;10-Q filed by American Stores Company (Commission File
Number 1-5392) on December&nbsp;11, 1998.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.31
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">American Stores Company 1997 Stock Option and Stock Award Plan is incorporated
herein by reference to Exhibit&nbsp;B of the 1997 Proxy Statement filed by American
Stores Company (Commission File Number 1-5392) on May&nbsp;2, 1997.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.31.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to American Stores Company 1997 Stock Option and Stock Award Plan,
dated as of October&nbsp;8, 1998, is incorporated herein by reference to Exhibit&nbsp;10.1
of Form&nbsp;10-Q filed by American Stores Company (Commission File Number 1-5392) on
December&nbsp;11, 1998.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.31.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to American Stores Company 1997 Stock Plan for Non-Employee Directors
(dated March&nbsp;15, 2001) is incorporated by reference to Exhibit&nbsp;10.31.2 of Form
10-K for the year ended February&nbsp;1, 2001.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.32
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">American Stores Company 1997A Stock Option and Stock Award Plan, dated as of
March&nbsp;27, 1997, is</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">96
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="89%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Number</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Description</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">incorporated herein by reference to Exhibit&nbsp;4.11 of the S-8
Registration Statement (Reg. No.&nbsp;333-82157) filed by Albertson&#146;s, Inc. on July
2, 1999.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.33
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">American Stores Company 1997 Stock Plan for Non-Employee Directors is
incorporated herein by reference to Exhibit&nbsp;C of the 1997 Proxy Statement filed
by American Stores Company (Commission File Number 1-5392) on May&nbsp;2, 1997.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.34
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">American Stores Company Amended and Restated 1989 Stock Option and Stock Award
Plan is incorporated herein by reference to Exhibit&nbsp;4.13 of the S-8 Registration
Statement (Reg. No.&nbsp;333-82157) filed by Albertson&#146;s, Inc. on July&nbsp;2, 1999.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.35
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&#091;Intentionally left blank&#093;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.36
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&#091;Intentionally left blank&#093;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.37
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&#091;Intentionally left blank&#093;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.38
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&#091;Intentionally left blank&#093;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.39
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&#091;Intentionally left blank&#093;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.40
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Letter Agreement between the Company and Felicia D. Thornton dated August&nbsp;6,
2001 is incorporated herein by reference to Exhibit&nbsp;10.40 to Form&nbsp;10-Q for the
quarter ended August&nbsp;2, 2001.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.41
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Albertson&#146;s Amended and Restated 1995 Stock-Based Incentive Plan is incorporated
herein by reference to Exhibit&nbsp;10.41 to Form&nbsp;10-Q for the quarter ended November
1, 2001.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.41.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of 1995 Amended and Restated Stock-Based Incentive Plan Stock Option
Agreement is incorporated herein by reference to Exhibit&nbsp;10.41.1 to Form&nbsp;10-Q
for the quarter ended November&nbsp;1, 2001.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.42
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Albertsons Severance Plan for Officers, amended and restated as of June&nbsp;1, 2005,
is incorporated by reference to Exhibit&nbsp;10.42 of Form&nbsp;10-Q for the quarter ended
November&nbsp;3, 2005.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.43
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Albertsons Change of Control Severance Agreement for Chief Operating Officer and
Executive Vice Presidents effective November&nbsp;1, 2002 is incorporated by
reference to Exhibit&nbsp;10.43 of Form&nbsp;10-Q for the quarter ended October&nbsp;31, 2002.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.44
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Albertsons Change of Control Severance Agreement for Senior Vice Presidents and
Group Vice Presidents effective November&nbsp;1, 2002 is incorporated by reference to
Exhibit&nbsp;10.44 of Form&nbsp;10-Q for the quarter ended October&nbsp;31, 2002.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.45
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Albertsons Change of Control Severance Agreement for Vice Presidents effective
November&nbsp;1, 2002 is incorporated by reference to Exhibit&nbsp;10.45 of Form&nbsp;10-Q for
the quarter ended October&nbsp;31, 2002.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.46
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Albertsons Amended and Restated 1995 Stock-Based Incentive Plan as amended
effective December&nbsp;9, 2002 is incorporated by reference to Exhibit&nbsp;10.46 of Form
10-Q for the quarter ended October&nbsp;31, 2002.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.46.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Award of Stock Option (Amended and Restated 1995 Stock-Based Plan) is
incorporated by reference to Exhibit&nbsp;10.46.1 of Form&nbsp;10-Q for the quarter ended
October&nbsp;31, 2002.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.46.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Award of Deferred Stock Units (Amended and Restated 1995 Stock-Based
Plan) is incorporated by reference to Exhibit&nbsp;10.46.2 of Form&nbsp;10-Q for the
quarter ended October&nbsp;31, 2002.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.47
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Long-term Incentive Plan (effective as of February&nbsp;1, 2003) is incorporated by
reference to Exhibit&nbsp;10.47</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">97
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="89%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Number</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Description</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">of Form&nbsp;10-Q for the quarter ended May&nbsp;1, 2003.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.48
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Director Indemnification Agreement is incorporated herein by reference
to Exhibit&nbsp;10.47 of Form&nbsp;10-Q for the quarter ended October&nbsp;30, 2003.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.49
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&#091;Intentionally left blank&#093;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.50
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Albertson&#146;s, Inc. 2004 Equity and Performance Incentive Plan is incorporated
herein by reference to Exhibit&nbsp;10.50 of Form
<FONT style="white-space: NOWRAP">10-Q</FONT> for the quarter ended July&nbsp;29,
2004.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.51
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Credit Agreement (364-day) (dated June&nbsp;16, 2005) is incorporated herein by
reference to Exhibit&nbsp;10.51 of Form&nbsp;10-Q for the quarter ended August&nbsp;4, 2005.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.52
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Credit Agreement (5-year) (dated June&nbsp;17, 2004) is incorporated herein by
reference to Exhibit&nbsp;10.52 of Form&nbsp;10-Q for the quarter ended July&nbsp;29, 2004.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.53
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Credit Agreement (5-year) (dated July&nbsp;8, 2004) is incorporated herein by
reference to Exhibit&nbsp;10.53 of Form&nbsp;10-Q for the quarter ended July&nbsp;29, 2004.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.54
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Agreement between Albertson&#146;s, Inc. and Paul Gannon, dated as of
December&nbsp;15, 2004 is incorporated herein by reference to Exhibit&nbsp;10.54 of Form
8-K filed with the SEC on December&nbsp;20, 2004.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.55
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Award of Deferred Restricted Stock Units (Amended and Restated 1995
Stock-Based Plan) is incorporated herein by reference to Exhibit&nbsp;10.57 to Form
8-K filed with the SEC on December&nbsp;20, 2004.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.56
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Award of Deferred Restricted Stock Units (2004 Equity and Performance
Incentive Plan) is incorporated herein by reference to Exhibit&nbsp;10.58 to Form&nbsp;8-K
filed with the SEC on December&nbsp;20, 2004.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.57
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Award of Deferrable Restricted Stock Units (Amended and Restated 1995
Stock-Based Plan) is incorporated herein by reference to Exhibit&nbsp;10.59 to Form
8-K filed with the SEC on December&nbsp;20, 2004.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.58
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Non-Employee Director Deferred Share Units Agreement (Albertson&#146;s, Inc.
2004 Equity and Performance Incentive Plan) is incorporated herein by reference
to Exhibit&nbsp;10.58 to Form&nbsp;10-Q for the quarter ended May&nbsp;5, 2005.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.59
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Letter Agreement between the Company and Clarence J. Gabriel, Jr., dated as of
May&nbsp;9, 2005, is incorporated herein by reference to Exhibit&nbsp;10.59 to Form&nbsp;10-Q
for the quarter ended May&nbsp;5, 2005.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.59.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to May&nbsp;9, 2005 Letter Agreement between the Company and Clarence J.
Gabriel, Jr. dated as of November&nbsp;1, 2005 is incorporated herein by reference to
Exhibit&nbsp;10.59.1 to Form&nbsp;10-Q for the quarter ended November&nbsp;3, 2005.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.60
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Award of Deferrable Restricted Stock Units (Albertson&#146;s, Inc. 2004
Equity and Performance Incentive Plan) is incorporated herein by reference to
Exhibit&nbsp;10.60 to Form&nbsp;10-Q for the quarter ended May&nbsp;5, 2005.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.61
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Non-Qualified Stock Option Award Agreement (Albertson&#146;s, Inc. 2004
Equity and Performance Incentive Plan) is incorporated herein by reference to
Exhibit&nbsp;10.61 to Form&nbsp;10-Q for the quarter ended August&nbsp;4, 2005.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.62
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Albertsons Inc. Change in Control Severance Benefit Trust dated as of August&nbsp;1,
2004 by and between Albertson&#146;s, Inc. and Atlantic Trust Company, N.A. is
incorporated herein by reference to Exhibit&nbsp;10.62</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">98
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="89%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Number</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Description</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">to Form&nbsp;10-Q for the quarter
ended November&nbsp;3, 2005.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.63
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Award of Deferrable Restricted Stock Units (Albertson&#146;s, Inc. 2004
Equity and Performance Incentive Plan) is incorporated herein by reference to
Exhibit&nbsp;10.62 to Form&nbsp;8-K filed with the SEC on January&nbsp;31, 2006.*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">21
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Subsidiaries of the Registrant.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Independent Registered Public Accounting Firm &#151; Deloitte &#038; Touche LLP.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification of the Chief Executive Officer pursuant to Section&nbsp;302 of the
Sarbanes-Oxley Act of 2002.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification of the Chief Financial Officer pursuant to Section&nbsp;302 of the
Sarbanes-Oxley Act of 2002.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">32
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification pursuant to Section&nbsp;906 of the Sarbanes-Oxley Act of 2002.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Identifies management contracts or
compensatory plans or arrangements
required to be filed as an exhibit
hereto.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(1) </SUP></TD>
    <TD>&nbsp;</TD>
    <TD>In reliance upon Item&nbsp;601(b)(4)(iii)(A)
of Regulation&nbsp;S-K, various other
instruments defining the rights of
holders of long-term debt of the
Registrant and its subsidiaries are not
being filed herewith, because the total
amount of securities authorized under
each such instrument does not exceed 10%
of the total assets of the Registrant and
its subsidiaries on a consolidated basis.
The Registrant hereby agrees to furnish a
copy of any such instrument to the SEC
upon request.</TD>
</TR>

</TABLE>




<P align="center" style="font-size: 10pt">99
</DIV>


</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2.2
<SEQUENCE>2
<FILENAME>v18837exv2w2.txt
<DESCRIPTION>EXHIBIT 2.2
<TEXT>
<PAGE>

                                                                     Exhibit 2.2

                        PURCHASE AND SEPARATION AGREEMENT

                                  by and among

                               ALBERTSON'S, INC.,

                             NEW ALOHA CORPORATION,

                                 SUPERVALU INC.

                                       and

                               AB ACQUISITION LLC

                          Dated as of January 22, 2006

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
ARTICLE I          DEFINITIONS...........................................     2
   Section 1.1     General...............................................     2

ARTICLE II         TRANSFER OF NEW DIAMOND ASSETS AND NEW DIAMOND
                   LIABILITIES; PURCHASE AND SALE OF THE COMPANY AND THE
                   RETAINED ENTITIES' STOCK..............................    17
   Section 2.1     Transfer of New Diamond Assets and New Diamond
                   Entities..............................................    17
   Section 2.2     Transfer and Assumption of New Diamond Liabilities....    18
   Section 2.3     Purchase and Sale of the Company's and the Retained
                   Entities' Stock; Retained Assets and Retained
                   Liabilities...........................................    18
   Section 2.4     Reorganization; Consummation of the Mergers and New
                   Diamond Liability Transfer; Retained Business Price...    19
   Section 2.5     The Closing...........................................    19
   Section 2.6     Certain Indebtedness of the Company; Succession and
                   Release; Indemnification..............................    20
   Section 2.7     Current Accounts......................................    22
   Section 2.8     Retained Business Price Allocation; Retained Property
                   Proceeds..............................................    22
   Section 2.9.    Insurance Proceeds....................................    23

ARTICLE III        REPRESENTATIONS AND WARRANTIES........................    24
   Section 3.1     Representations and Warranties of Onyx................    24
   Section 3.2     Representations and Warranties of the Company.........    28
   Section 3.3     Representations and Warranties of SV..................    28

ARTICLE IV         TAX MATTERS...........................................    30
   Section 4.1.    Liability for Taxes...................................    30
   Section 4.2.    Filing Responsibility.................................    33
   Section 4.3.    Cooperation and Exchange of Information...............    34
   Section 4.4.    Tax Proceedings.......................................    35
   Section 4.5.    Tax Sharing Agreements................................    37
   Section 4.6.    Tax Benefits..........................................    37
   Section 4.7.    Transfer Taxes........................................    38
   Section 4.8.    Taxes Governed by Article IV..........................    38
   Section 4.9     Survival..............................................    38
</TABLE>


                                       i

<PAGE>

<TABLE>
<S>                                                                          <C>
   Section 4.10.   Post-Closing Dispositions.............................    38
   Section 4.11.   Reorganization Treatment..............................    38
   Section 4.12.   [Intentionally Omitted]...............................    39
   Section 4.13.   Tax Treatment of Payments.............................    39

ARTICLE V          INDEMNIFICATION.......................................    39
   Section 5.1     SV's and New Diamond's Agreement to Indemnify.........    39
   Section 5.2     Onyx's and the Company's Agreement to Indemnify.......    39
   Section 5.3     Reduction of Indemnifiable Losses for Insurance
                   Benefits Received.....................................    39
   Section 5.4     Procedure for Indemnification.........................    40
   Section 5.5     Pending Litigation; New Litigation....................    41
   Section 5.6     Remedies Exclusive....................................    42
   Section 5.7     Retained Business Price Adjustment....................    42
   Section 5.8     Exclusion of Tax Indemnities..........................    42

ARTICLE VI         CERTAIN ADDITIONAL MATTERS............................    42
   Section 6.1     Further Assurances; Subsequent Transfers..............    42
   Section 6.2     Use of Names; Cross-License...........................    45
   Section 6.3     Settlement of Intercompany Accounts...................    46
   Section 6.4     Merger Agreement Provisions...........................    46
   Section 6.5     Further Action; Reasonable Best Efforts...............    49
   Section 6.6     Ancillary Agreements..................................    50
   Section 6.7     Sharing of Certain Payments...........................    51
   Section 6.8     Certain Restrictions Pending the Closing..............    51
   Section 6.9     Payments by Onyx to the Exchange Fund.................    52
   Section 6.10    Settlement of Appraisal Proceedings...................    52
   Section 6.11    Certain Standalone Drug Sale Matters..................    52
   Section 6.12    Proxy Statement.......................................    53
   Section 6.13    Merger Agreement Termination Fee......................    53

ARTICLE VII        ACCESS TO INFORMATION AND SERVICES....................    54
   Section 7.1     Access to Information.................................    54
   Section 7.2     Litigation Cooperation................................    54
   Section 7.3     Retention of Records..................................    55
   Section 7.4     Confidentiality.......................................    55
   Section 7.5     Publicity.............................................    55
</TABLE>


                                       ii

<PAGE>

<TABLE>
<S>                                                                          <C>
ARTICLE VIII       EMPLOYEE BENEFITS; LABOR MATTERS......................    55
   Section 8.1     Locus of Employees and Company Plans..................    55
   Section 8.2     Employee Benefits.....................................    56
   Section 8.3     Other Liabilities and Obligations.....................    56
   Section 8.4     Welfare Plans.........................................    57
   Section 8.5     Retirement Plans; Savings Plans.......................    57
   Section 8.6     Preservation of Rights to Amend or Terminate Plans....    58
   Section 8.7     Reimbursement; Indemnification........................    58
   Section 8.8     Change In Control.....................................    58

ARTICLE IX         MISCELLANEOUS.........................................    58
   Section 9.1     Conditions to Closing.................................    58
   Section 9.2     Termination Prior to the Closing......................    61
   Section 9.3     Effect of Termination.................................    61
   Section 9.4     No Survival...........................................    62
   Section 9.5     Entire Agreement; Third Party Beneficiaries...........    62
   Section 9.6     Fees and Expenses.....................................    62
   Section 9.7     No Waiver.............................................    62
   Section 9.8     Amendments............................................    62
   Section 9.9.    Governing Law.........................................    63
   Section 9.10    Notices...............................................    63
   Section 9.11    Interpretation........................................    64
   Section 9.12    Counterparts..........................................    65
   Section 9.13    Specific Performance..................................    65
   Section 9.14    Successors and Assigns................................    65
   Section 9.15    Severability..........................................    66
   Section 9.16    Jurisdiction; Venue; Consent to Service of Process....    66
   Section 9.17    Waiver of Jury Trial..................................    67
   Section 9.18    Company Disclosure Letter.............................    67
</TABLE>


                                      iii

<PAGE>

                                    SCHEDULES

Schedule 1.1 - Structure Steps
Schedule 1.2 - New Diamond Assets
Schedule 1.3 - [Intentionally Omitted]
Schedule 1.4 - [Intentionally Omitted]
Schedule 1.5 - New Diamond Entities

Schedule 1.6 - New Diamond Scheduled Liabilities
Schedule 1.7 - Retained Assets
Schedule 1.8 - Retained Employees
Schedule 1.9 - [Intentionally Omitted]
Schedule 1.10 - Retained Scheduled Liabilities
Schedule 1.11 - Specified Standalone Drug Liabilities
Schedule 1.12 - Retained Actions
Schedule 1.13 - New Diamond Actions
Schedule 1.14 - Retained Names

EXHIBITS

Exhibit A - Financing Commitment
Exhibit B - Form of Transition Services Agreement
Exhibit C - Onyx Disclosure Letter
Exhibit D - Company Disclosure Letter
Exhibit E - SV Disclosure Letter


                                       iv
<PAGE>

          THIS PURCHASE AND SEPARATION AGREEMENT (this "Separation Agreement"),
dated as of January 22, 2006, is entered into by and between Albertson's, Inc.,
a Delaware corporation (the "Company"), New Aloha Corporation, a Delaware
corporation and wholly owned subsidiary of the Company ("New Diamond"),
SUPERVALU INC., a Delaware corporation ("SV"), and AB Acquisition LLC, a
Delaware limited liability company ("Onyx").

          WHEREAS, concurrently with the execution of this Separation Agreement,
the Company has entered into an Agreement and Plan of Merger (the "Merger
Agreement"), dated as of the date hereof, by and among the Company, New Diamond,
New Diamond Sub, Inc., a Delaware corporation and wholly-owned subsidiary of New
Diamond, SV, and Emerald Acquisition Sub, Inc., a Delaware corporation and
wholly-owned subsidiary of SV, pursuant to which, among other things (1) the
Company shall merge with New Diamond Sub Inc., with the Company surviving (the
"Diamond Merger"), and (2) New Diamond shall merge with Emerald Acquisition Sub
Inc., with New Diamond surviving (the "Emerald Merger," and together with the
Diamond Merger, the "Mergers"), in each case, in accordance with the General
Corporation Law of the State of Delaware (the "DGCL");

          WHEREAS, upon the terms and subject to the conditions set forth herein
(including as contemplated by the Reorganization (as defined herein)), (1)
pursuant to the Diamond Merger, New Diamond shall acquire all of the issued and
outstanding Equity Interests (as defined herein) of the Company for stock of New
Diamond, (2) the Company shall immediately thereafter convert into a Delaware
limited liability company, (3) the Company shall thereafter consummate the
distribution and transfer of all the New Diamond Assets (as defined herein) to
New Diamond, subject to the assumption by New Diamond of the New Diamond
Liabilities (as defined herein), (4) thereafter the Company and its Subsidiaries
shall consummate the Standalone Drug Sale (as defined herein), upon the terms
and subject to the conditions set forth in the Standalone Drug Sale Agreement,
(5) Onyx shall immediately thereafter acquire all of the issued and outstanding
Equity Interests of the Company from New Diamond for the Retained Business Price
(as defined below) and (6) thereafter the Emerald Merger shall be consummated;
and

          WHEREAS, concurrently with the execution of this Separation Agreement,
and as a condition to the willingness of each of the Company and SV to enter
into this Separation Agreement, Cerberus Capital Management, L.P., on behalf of
one or more affiliated funds or managed accounts to be designated by it (the
"Sponsor"), has provided a financing commitment pursuant to which the Sponsor
has committed, subject to the terms and conditions set forth therein, to invest
the amount set forth therein to purchase Equity Interests of Onyx and to provide
debt financing to the Retained Business (as defined herein), in the form
attached hereto as Exhibit A (the "Financing Commitment").

          NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

          Section 1.1 General. As used in this Separation Agreement, the
following terms shall have the following meanings:

          "338(h)(10) Election Subsidiaries" has the meaning set forth in
Section 4.1(c).

          "338(h)(10) Elections" has the meaning set forth in Section 4.1(c).

          "ABS Indenture" has the meaning set forth in the definition of Company
Indentures.

          "Accountant" has the meaning set forth in Section 2.8(a).

          "Action" means any claim, action, suit, proceeding or investigation by
or before any Authority.

          "Affected Party" has the meaning set forth in Section 4.2(d).

          "Affiliate" means, with respect to any specified person, any other
person that directly, or indirectly through one or more intermediaries,
Controls, is Controlled by, or is under common Control with, such specified
person.

          "Affiliated Group" means the consolidated group for Income Tax
purposes of which New Diamond or the Company is or was the common parent, which
group terminates as a result of the Mergers.

          "Albertson's Inc. Guarantee" has the meaning set forth in Section
2.6(b).

          "American Stores" has the meaning set forth in the definition of
Company Indentures.

          "Ancillary Agreements" means (i) the Transition Services Agreement
substantially in the form attached as Exhibit B and (ii) the Cross-License
Agreement.

          "ASC Indenture" has the meaning set forth in the definition of Company
Indentures.

          "Asset" means, with respect to any person, except as otherwise
provided herein, any and all of its right, title and interest in and to all of
the rights, properties, assets, inventories, claims, contracts and businesses of
every kind, character and description, whether real, personal or mixed, tangible
and intangible, whether accrued, contingent or otherwise, of every kind and
description and wherever located, owned or used by such person (including in the
possession of owners or third parties or elsewhere), including (i) all cash,
cash equivalents, notes and accounts receivable (whether current or
non-current), deposit accounts, securities accounts and other banks accounts;
(ii) all certificates of deposit, banker's acceptances and other investment


                                       2

<PAGE>

securities; (iii) all patents, patent rights, trade dress, trademarks, service
marks, trademark and service mark rights, trade names, trade name rights, domain
names, copyrights, banners, logos, data rights, privacy rights, publicity
rights, registrations or applications for any of the foregoing, trade secrets,
works of authorship, technology and know-how (including all data bases, customer
lists, confidential information, discoveries, inventions and improvements), and
other proprietary rights and information; (iv) all rights existing under leases,
contracts, licenses, service agreements, sales and purchase agreements, other
agreements and business arrangements and all policies of insurance and proceeds,
benefits and rights to coverage under insurance policies; (v) all real estate
and all buildings and other improvements thereon; (vi) all leasehold
improvements and all equipment (including all office equipment), fixtures, trade
fixtures and furniture; (vii) all office supplies, other miscellaneous supplies
and other tangible property of any kind; (viii) all computer hardware, software,
computer programs and systems and documentation relating thereto, including all
databases and reference and resource materials; (ix) all prepayments or prepaid
expenses; (x) all claims, causes of action, rights of recovery, rights to sue
for past, present and future infringement of any intellectual property rights
and rights of set-off of any kind; (xi) the right to receive mail, accounts
receivable payments and other communications; (xii) all customer lists and
records pertaining to customers and accounts, personnel records, all lists and
records pertaining to suppliers and agents, and all books, ledgers, files and
business records of every kind and all minute books, stock ledgers and other
corporate books and records; (xiii) all advertising materials and all other
printed or written materials; (xiv) all permits, waivers, licenses, approvals
and authorizations of governmental authorities or third parties relating to the
ownership, possession or operation of the Assets; (xv) all goodwill as a going
concern and all other intangible properties; and (xvi) all employee contracts,
including the right thereunder to restrict the employee from competing in
certain respects.

          "Assumed Benefit Plans" means any (i) Company Plan maintained by the
Retained Entities solely for the benefit of current and former employees of the
Retained Business (including, for the avoidance of doubt, any such plan in which
New Diamond Employees participate by virtue of past service to the Retained
Business), and (ii) any Company Plan that is an employment, change-of-control,
severance or similar individual agreement between the Company, a New Diamond
Entity or one of their respective Affiliates and any Retained Employee, other
than any such agreement providing for equity or equity-based compensation. For
purposes of the preceding sentence, any award (whether a cash, restricted stock
unit, or retention award) made pursuant to Section 6.1(a)(ii) of the Company
Disclosure Letter to the Merger Agreement and made to a Retained Employee (and
any agreement in respect of such award) shall not be considered an award and/or
agreement providing for equity or equity-based compensation and shall be
considered an Assumed Benefit Plan for all purposes of this Agreement.

          "Authority" means any court, arbitrator, administrative or other
governmental authority, agency, commission, tribunal, authority or
instrumentality, domestic (including federal, state or local) or foreign or any
other authority, which has authority or jurisdiction over any party hereto or
any of their respective properties or assets.

          "Business Day" means any day that is not a Saturday, a Sunday or other
day that is a statutory holiday under the federal Laws of the United States.


                                       3

<PAGE>

          "Business Description Presentation" has the meaning set forth in the
definition of New Diamond Business.

          "Buyer Tax Indemnitee" has the meaning set forth in Section 4.1(a).

          "Casualty" has the meaning set forth in Section 2.9(a).

          "Closing" has the meaning set forth in Section 2.5(a).

          "Closing Date" means the date on which the Closing occurs.

          "Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.

          "Company" has the meaning set forth in the Preamble.

          "Company Disclosure Letter" has the meaning set forth in Section 3.2.

          "Company Form 10-K" has the meaning set forth in Section 3.2.

          "Company Headquarters" has the meaning set forth in the definition of
New Diamond Business.

          "Company Indemnitees" has the meaning set forth in Section 5.1.

          "Company Indentures" mean (i) that certain Indenture, dated as of May
1, 1992, by and between Albertson's, Inc. and Morgan Guaranty Trust Company of
New York, as trustee (the "ABS Indenture") and (ii) that certain Indenture,
dated as of May 1, 1995 (as supplemented), by and between American Stores
Company, LLC ("American Stores") and J.P. Morgan Trust Company, National
Association, as successor trustee (the "ASC Indenture").

          "Company Material Adverse Effect" means any effect that is materially
adverse to the business, financial condition or results of operations of the
Company and the Company Subsidiaries taken as a whole in relation to the current
and expected performance and value of the Retained Business, Retained Assets and
Retained Liabilities, other than any effect to the extent resulting proximately
from (i) general economic conditions or developments or changes therein, (ii)
conditions in the industries in which the Company and the Company Subsidiaries
operate or developments or changes therein, except to the extent that such
conditions, developments or changes impact the Company in a materially
disproportionate adverse manner relative to similarly situated competitors of
the Company, (iii) conditions in the stock markets or other capital markets or
developments or changes therein, (iv) the announcement of the Transaction
Agreements or the Transactions (each as defined in the Merger Agreement), (v)
the performance by the Company of its obligations pursuant to the Transaction
Agreements (except the obligations of the Company to obtain the consents
contemplated by Section 4.3 and Section 4.4 of the Merger Agreement as
incorporated by reference mutatis mutandis into this Separation Agreement
pursuant to Section 3.2 hereof), (vi) the announcement, consummation,
termination or abandonment of the Standalone Drug Sale, (vii) any actions taken
or omitted to be taken by or at the request or with the written consent of the
other parties hereto, (viii) any changes in any


                                       4

<PAGE>

Laws or any accounting regulations or principles, (ix) any union organizing
activities, labor disputes, strikes, work stoppages or similar labor unrests or
disruption, or (x) any acts of God, war or terrorism, except to the extent that
such acts impact the Company in a materially disproportionate manner relative to
similarly situated competitors of the Company. A failure by the Company to meet
any projections, estimates or budgets for any period prior to, on or after the
date of this Separation Agreement shall not in itself constitute a Company
Material Adverse Effect. The parties hereto acknowledge their awareness of the
matters set forth in Section 4.9 of the Company Disclosure Letter with respect
to decline in business and financial performance.

          "Company Percentage" means 15%.

          "Company Plans" has the meaning set forth in the Merger Agreement, but
determined without application of any materiality standard under Section 4.13(a)
of the Merger Agreement.

          "Company Subsidiaries" means the Subsidiaries of the Company.

          "Condemnation" has the meaning set forth in Section 2.9(a).

          "Confidentiality Agreement" means that certain Confidentiality
Agreement, dated August 15, 2005, by and between Sponsor and the Company.

          "Control" (including the terms "Controlled by" and "under common
Control with"), with respect to the relationship between or among two or more
persons, means the possession, directly or indirectly, of the power to direct or
cause the direction of the affairs or management of a person, whether through
the ownership of voting securities, by contract or otherwise, including the
ownership, directly or indirectly, of securities having the power to elect a
majority of the board of directors or similar body governing the affairs of such
person.

          "Controlling Party" has the meaning set forth in Section 4.4(b).

          "Coordination Agreement" means that certain Coordination Agreement by
and among the Company, SV, Onyx, and CVS, dated as of the date hereof.

          "Cross-Licensing Agreement" has the meaning set forth in Section
6.2(b).

          "Cub Sale Agreement" means that certain Asset Purchase Agreement,
dated as of the date hereof, by and between Hawk Acquisition LLC and SV.

          "CVS" has the meaning set forth in the definition of Standalone Drug
Sale Agreement.

          "Designated Affiliate" means, with respect to any specified person, an
Affiliate of such person that (i) has been designated by such person for
purposes of the appropriate section of this Separation Agreement (with such
designation subject to the prior written consent of Onyx, in the case of a New
Diamond Designated Affiliate, or SV, in the case of an Onyx Designated
Affiliate, which consent shall not be unreasonably withheld) and (ii) has agreed
in writing for the benefit of the other parties hereto to be bound by the terms
of this Separation Agreement as if a


                                       5

<PAGE>

party hereto; provided, however, any such designation by any person hereto
shall not relieve such person of any of its obligations or agreements hereunder.

          "Determination" has the meaning set forth in Section 2.8(a).

          "DGCL" has the meaning set forth in the Recitals.

          "Diamond LLC Conversion" has the meaning set forth in Section 2.1(a).

          "Diamond Merger" has the meaning set forth in the Recitals.

          "Disregarded Entity" has the meaning set forth in Section 4.1(c).

          "Disregarded Entity Treatment" has the meaning set forth in Section
4.1(c).

          "DOJ" means the Antitrust Division of the U.S. Department of Justice.

          "Effective Time" has the meaning provided for such term in the Merger
Agreement.

          "Emerald Merger" has the meaning set forth in the Recitals.

          "Equity Interest" means (i) with respect to a corporation, any and all
classes or series of shares of capital stock, (ii) with respect to a
partnership, limited liability company, trust or similar person, any and all
classes or series of partnership, limited liability company, trust or similar
interests or units, and (iii) with respect to any other person, any other
security representing any direct equity ownership or participation in such
person.

          "ERISA" means Employee Retirement Income Security Act of 1974.

          "Excess Dissenting Shares Liability" has the meaning set forth in the
definition of Shared Transaction Litigation Liabilities.

          "Exchange Act" means the Securities Exchange Act of 1934 and the rules
and regulations promulgated thereunder.

          "Exchange Fund" has the meaning set forth in Section 6.9.

          "Exclusive Diamond Proceedings" has the meaning set forth in Section
4.4(b)(i).

          "Exclusive Onyx Proceedings" has the meaning set forth in Section
4.4(b)(ii).

          "Exclusive Tax Proceedings" has the meaning set forth in Section
4.4(b)(ii).

          "Financing" has the meaning set forth in Section 3.1(g).

          "Financing Commitment" has the meaning set forth in Section 3.1(g).

          "Form S-4" has the meaning set forth in the Merger Agreement.


                                       6

<PAGE>

          "Former Retained Employees" means individuals who are Retained
Employees by application of clause (iii) of the definition of Retained
Employees.

          "FTC" means the U.S. Federal Trade Commission.

          "Future Debt Financing" has the meaning set forth in Section 6.4(d).

          "Grantee" has the meaning set forth in Section 6.1(d).

          "Grantor" has the meaning set forth in Section 6.1(d).

          "Guarantee Release Date" has the meaning set forth in Section 2.6(b).

          "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.

          "Income Taxes" means U.S. federal, state or local Taxes based upon or
measured by net income or capital gain (but not any gross income Taxes and not
any withholding Taxes or payroll, employment or employee Taxes).

          "Indemnifiable Losses" means any and all losses, Liabilities, claims,
damages, obligations, payments, costs and expenses (including the Liabilities,
costs and expenses of any and all Actions, demands, assessments, Judgments,
settlements and compromises relating thereto and reasonable attorneys' fees and
expenses in connection therewith) suffered or incurred by an Indemnitee;
provided, that the foregoing does not include any losses, Liabilities, claims,
damages, obligations, payments, costs, fees or expenses arising out of or
relating to any claim for loss of profits or earnings, diminution in value or
incidental, indirect, special or consequential damages unless awarded against
any Indemnitee in a Third Party Claim.

          "Indemnified Amounts" has the meaning set forth in Section 6.1(d)(2).

          "Indemnified Directors or Officers" has the meaning set forth in the
Merger Agreement.

          "Indemnifying Party" means any party or other person who is required
to indemnify any other person pursuant to any indemnification provisions
contained in this Separation Agreement.

          "Indemnitee" means any party or other person who is entitled to
receive indemnification from an Indemnifying Party pursuant to any
indemnification provisions contained in this Separation Agreement.

          "Information" has the meaning set forth in Section 7.1(a)(1).

          "Intercompany Accounts" has meaning set forth in Section 6.3.

          "IRS" has the meaning set forth in Section 2.8(a).


                                       7

<PAGE>

          "Judgments" means any and all judgments, orders, writs, directives,
rulings, decisions, injunctions, decrees, assessments, settlement agreements
(other than settlement agreements under which there are no continuing
obligations) or awards of any Authority.

          "Laws" means any and all applicable (i) federal, territorial, state,
local and foreign laws, ordinances and regulations, (ii) codes, standards,
rules, requirements, orders and criteria issued under any federal, territorial,
state, local or foreign laws, ordinances or regulations, (iii) rules, guidelines
or published interpretations of any Authority and (iv) Judgments.

          "Liabilities" means, with respect to any person, any and all
liabilities and obligations of such person, whether absolute, accrued,
contingent, reflected on a balance sheet (or in the notes thereto) or otherwise,
including those arising under any Law or Action, and those arising under any
contract, commitment or undertaking.

          "Lien" means any lien, encumbrance, pledge, mortgage, security
interest, claim under bailment, or storage contract.

          "Lucky Delaware" has the meaning set forth in Section 4.1(c).

          "Lucky Proprietary Name Rights" has the meaning set forth in Section
6.2(b).

          "Merger Agreement" has the meaning set forth in the Recitals.

          "Mergers" has the meaning set forth in the Recitals.

          "New Diamond" has the meaning set forth in the Preamble.

          "New Diamond Action" has the meaning set forth in Section 5.5(b).

          "New Diamond Asset Transfer" has the meaning set forth in Section
2.1(b).

          "New Diamond Assets" means (i) all the Assets of the Company and its
Subsidiaries primarily related to the New Diamond Business, (ii) Assets set
forth on Schedule 1.2 of this Separation Agreement whether or not any such Asset
would fall within any category of Retained Assets as set forth in the definition
thereof and (iii) all cash and cash equivalents of the Company and its
Subsidiaries, other than cash and cash equivalents included in clause (iii) of
the definition of Retained Assets.

          "New Diamond Assumption Price" means an amount of cash equal to the
difference between (i) $625,000,000 in respect of certain Liabilities to be
assumed by New Diamond including Liabilities that, but for such assumption,
would be Retained Liabilities and (ii) the Option Adjustment Amount.

          "New Diamond Business" means (i) the business of the Company reflected
as the "Core Food" business of the Company and its Subsidiaries as reflected in
that certain Presentation, dated September 2005 (the "Business Description
Presentation"), by The Blackstone Group L.P. and Goldman Sachs & Co. (which
presentation describes the Company's "Core Food", "Standalone Drug" and
"Underperforming Metro Areas" (or "Non-Core")


                                       8

<PAGE>

businesses), and (ii) the Company's headquarters in Boise, Idaho, Phoenix,
Arizona (the Scottsdale and Glendale facilities) and Salt Lake City, Utah
(collectively, the "Company Headquarters"); provided, that the New Diamond
Business shall not include the Springfield Stores.

          "New Diamond Employees" means:

               (i) all employees of the New Diamond Business as of immediately
     prior to the Separation;

               (ii) all employees of the Company Headquarters other than those
     set forth on Schedule 1.8 of this Separation Agreement; and

               (iii) all former employees of the New Diamond Business (other
     than Standalone Drug Employees) who were, immediately prior to termination
     of employment (with such termination occurring prior to the Closing),
     employed primarily in connection with the New Diamond Business;

          "New Diamond Entities" means each of the entities set forth on
Schedule 1.5 of this Separation Agreement.

          "New Diamond Indemnitees" has the meaning set forth in Section 5.2.

          "New Diamond Liabilities" means, without duplication:

               (i) the obligations of New Diamond to perform and comply with its
     covenants and agreements contained in this Separation Agreement and
     Liabilities arising from or relating to any breach by New Diamond of such
     covenants and agreements;

               (ii) all of the Liabilities of the Company and the New Diamond
     Entities primarily related to the New Diamond Business; provided, however,
     that Liabilities primarily related to the Company Headquarters shall be
     deemed to be only Liabilities that relate directly to the assets physically
     located there;

               (iii) all Liabilities directly relating to all New Diamond
     Actions;

               (iv) all obligations for dividends declared by the Company after
     the date hereof but not paid prior to the Effective Time;

               (v) all Liabilities of Shaw's Supermarkets, Inc., Star Markets
     Company, Inc., Shaw Equipment Corporation, Clifford W. Perham, Inc., Shaw's
     Realty Co., Gorham Markets LLC, Shaw's Realty Trust., Acme Markets, Inc,
     Jewel Food Stores, Inc., Jetco Properties, Inc., Bristol Farms Inc., Lazy
     Acres Market, Inc., U.S. Satellite Corporation, Lucky Stores, Inc. (NV),
     Scolari's Stores Inc., Food Basket Inc., Albertson's Liquors, Inc.,
     American Procurement and Logistics Co., APLC Procurement, Inc., Brockton
     Corporation, Jewel Companies, Inc., JOAH, Inc., Meadowlane, Inc.,
     MFC-Livonia Properties, Inc., SSM Holdings Company, Star Markets Holdings,
     Inc.,


                                       9

<PAGE>

     Shaw's North Attleboro, Corp., Shaw's Securities Corporation I, and Shaw's
     Securities Corporation II;

               (vi) 85% of Unallocated Liabilities;

               (vii) New Diamond Scheduled Liabilities;

               (viii) 50% of the Shared Transaction Liabilities;

               (ix) 85% of the Shared Transaction Litigation Liabilities;

               (x) all of the Specified Standalone Drug Liabilities;

               (xi) Liabilities that arise from or relate to the Company
     Indentures and Liabilities in respect of commercial paper, revolving credit
     debt and long-term debt for borrowed money (other than mortgages for
     borrowed money secured by real estate and all capital leases and industrial
     revenue bonds to the extent, in each case, such matters relate to the
     Retained Assets) of the Company or its Subsidiaries, including any costs
     associated with the defeasance or prepayment of debt and release of
     collateral directly related thereto;

               (xii) all Liabilities for Actions to the extent arising from or
     relating to information supplied by SV or its Affiliates specified for
     inclusion (or incorporation by reference) in the Proxy Statement/Prospectus
     (as defined in the Merger Agreement);

               (xiii) all Liabilities that are express post-Closing obligations
     of SV, New Diamond or their Affiliates under the Standalone Drug Sale
     Agreement; and

               (xiv) Liabilities that arise from or relate to the conduct of the
     New Diamond Business following the Closing.

          "New Diamond Liability Transfer" has the meaning set forth in Section
2.2.

          "New Diamond Merger" has the meaning set forth in the Recitals.

          "New Diamond Names" has the meaning set forth in Section 6.2(a).

          "New Diamond Percentage" means 85%.

          "New Diamond Proprietary Name Rights" has the meaning set forth in
Section 6.2(a).

          "New Diamond Scheduled Liabilities" means the Liabilities set forth on
Schedule 1.6 of this Separation Agreement (it being understood that such
Liabilities shall be deemed to be New Diamond Liabilities and not Retained
Liabilities irrespective of whether or not any such Liabilities would fall
within any category of Retained Liabilities as set forth in the definition
thereof).


                                       10

<PAGE>

          "New Diamond Seller Group" means New Diamond or any New Diamond
Entity.

          "New Welfare Plans" has the meaning set forth in Section 8.4.

          "Non-Controlling Party" has the meaning set forth in Section 4.4(b).

          "Non-Income Tax" means any Tax that is not an Income Tax.

          "NYSE" means the New York Stock Exchange.

          "Objection" has the meaning set forth in Section 6.5(d).

          "Old Welfare Plans" has the meaning set forth in Section 8.4.

          "Onyx" has the meaning set forth in the Preamble.

          "Onyx Disclosure Letter" has the meaning set forth in Section 3.1.

          "Onyx Real Estate Dropdowns" shall mean the transfer by a Retained
Entity to a wholly-owned subsidiary (treated as a disregarded entity within the
meaning of Treasury Regulatory Section 301.7701-3) of such Retained Entity of
any real estate ground lease in which the Retained Entity is the lessee and any
real property owned by the Retained Entity, in each case, associated with the
Retained Business.

          "Onyx Termination Fee" has the meaning set forth in Section 9.3(b).

          "Option Adjustment Amount" means, in the event that the fair market
value of the Per Share Merger Consideration (as defined in the Merger
Agreement), valuing the Stock Consideration (as defined in the Merger Agreement)
at the Average Closing Price (as defined in the Merger Agreement), is less than
$24.71, an amount equal to 40% of the aggregate reduction of the Per Share
Merger Consideration payable to holders of Options and Stock Units (each as
defined in the Merger Agreement) as a result of the Per Share Merger
Consideration being less than $24.71 per share (as compared to being $24.71 per
share).

          "Parent Board Recommendation" has the meaning set forth in the Merger
Agreement.

          "Parent Material Adverse Effect" has the meaning set forth in the
Merger Agreement.

          "PCX" means the Pacific Stock Exchange.

          "Post-Closing Period" has the meaning set forth in Section 4.1(a)(7).

          "Post-Standalone Drug Sale Cash Sweep" has the meaning set forth in
Section 2.1.

          "Pre-Closing Period" has the meaning set forth in Section 4.1(a)(3).


                                       11

<PAGE>

          "Pre-Existing Title Policy" has the meaning set forth in Section
6.1(d)(2).

          "Prior Transferors" has the meaning set forth in Section 6.1(d)(2).

          "Proxy Statement/Prospectus" has the meaning set forth in the Merger
Agreement.

          "Reorganization" means the Separation and the Retained Business
Purchase pursuant to a series of transaction steps, substantially as reflected
on Schedule 1.1 of this Separation Agreement, that are intended to further the
parties' efforts to accomplish the Separation and the Retained Business
Purchase, in the manner contemplated by Section 2.4(a).

          "Representatives" has the meaning set forth in Section 5.1.

          "Retained Action" has the meaning set forth in Section 5.5(a).

          "Retained Assets" means, following the consummation of the Standalone
Drug Sale, (i) all of the Assets of the Company and its Subsidiaries, other than
the New Diamond Assets, (ii) Assets set forth on Schedule 1.7 of this Separation
Agreement whether or not any such Asset would fall within any category of New
Diamond Assets as set forth in the definition thereof and (iii) cash and cash
equivalents held directly at the store level by stores included in the Retained
Business.

          "Retained Assets Transfer" has the meaning set forth in Section
2.3(b).

          "Retained Business" means all present and past businesses of the
Company and its Subsidiaries (and their respective predecessors) other than (i)
the Standalone Drug Business and (ii) the New Diamond Business, and specifically
includes the Springfield Stores.

          "Retained Business Allocation" has the meaning set forth in Section
2.8(a).

          "Retained Business Entities" means Onyx, the Retained Entities and any
Designated Affiliates of Onyx.

          "Retained Business Price" means (i) $350,000,000 plus (ii) the New
Diamond Assumption Price minus (iii) the Retained Property Proceeds.

          "Retained Business Purchase" has the meaning set forth in Section
2.3(b).

          "Retained Employees" means:

               (i) employees of the Retained Business as of immediately prior to
     the Separation, other than the New Diamond Employees;

               (ii) the individuals listed on Schedule 1.8 of this Separation
     Agreement; and

               (iii) all former employees of the Company and its Subsidiaries
     (other than Standalone Drug Employees) who were, immediately prior to
     termination of


                                       12

<PAGE>

     employment (with such termination occurring prior to the Closing), employed
     primarily in connection with the Retained Business.

          "Retained Entities" means the Company and all of the direct and
indirect Subsidiaries of the Company, excluding New Diamond and the New Diamond
Entities.

          "Retained Entities Transfer" has the meaning set forth in Section
2.3(a).

          "Retained Liabilities" means, without duplication:

               (i) the obligations of the Company to perform and comply with its
     respective covenants and agreements contained in this Separation Agreement
     and the Transition Services Agreement and Liabilities arising from or
     relating to any breach by the Company of such covenants and agreements;

               (ii) all Liabilities of the Company and its Subsidiaries
     (including Liabilities that arise from or relate to mortgages for borrowed
     money secured by real estate and all capital leases and industrial revenue
     bonds to the extent that, in each case, such matters relate to the Retained
     Assets, including the Springfield Stores) other than the New Diamond
     Liabilities;

               (iii) all Liabilities directly relating to all Retained Actions;

               (iv) 15% of Unallocated Liabilities;

               (v) Retained Scheduled Liabilities;

               (vi) 50% of the Shared Transaction Liabilities;

               (vii) 15% of the Shared Transaction Litigation Liabilities;

               (viii) all Liabilities for Actions to the extent arising from or
     relating to information supplied by Onyx or its Affiliates specified for
     inclusion (or incorporation by reference) in the Proxy Statement/Prospectus
     (as defined in the Merger Agreement);

               (ix) all Liabilities that are express post-Closing obligations of
     the Company or its Affiliates under the Standalone Drug Sale Agreement; and

               (x) Liabilities that arise from or relate to the conduct of the
     Retained Business following the Closing.

          "Retained Names" has the meaning set forth in Section 6.2(a)(2).

          "Retained Property Proceeds" has the meaning set forth in Section
2.8(b).

          "Retained Proprietary Name Rights" has the meaning set forth in
Section 6.2(a)(2).


                                       13

<PAGE>

          "Retained Scheduled Liabilities" means the Liabilities set forth on
Schedule 1.10 of this Separation Agreement (it being understood that such
Liabilities shall be deemed to be Retained Liabilities and not New Diamond
Liabilities irrespective of whether or not any such Liabilities would fall
within any category of New Diamond Liabilities set forth in the definition
thereof).

          "Return Preparer" has the meaning set forth in Section 4.2(d).

          "Section 4.6 Liability" means:

               (i) any New Diamond Scheduled Liability;

               (ii) any Liability under Company Plans that are not Assumed
     Benefit Plans and any Liability that New Diamond is responsible for under
     Section 8.4 (other than any Liability under the Transition Services
     Agreement);

               (iii) any obligation to make payments with respect to Options and
     Stock Units issued by the Company or New Diamond, in each case, to the
     extent set forth in the Merger Agreement; and

               (iv) any Tax Liability set forth in Section 4.1(a)(4).

          "Seller Tax Indemnitee" has the meaning set forth in Section 4.1(b).

          "Separation" has the meaning set forth in Section 2.2.

          "Separation Agreement" has the meaning set forth in the Preamble.

          "Shared Non-Income Taxes" means Non-Income Taxes for any Pre-Closing
Period attributable to neither the New Diamond Business, the New Diamond Assets,
the Retained Business, the Retained Assets, the Standalone Drug Business nor the
Standalone Drug Assets.

          "Shared Transaction Liabilities" means, without duplication,
Liabilities incurred by the Company and its Subsidiaries for fees and expenses
of investment bankers, attorneys, accountants and other consultants and advisors
and their out-of-pocket costs and expenses, in each case, to the extent incurred
in connection with the transactions contemplated by this Separation Agreement,
the Merger Agreement and the Standalone Drug Sale that are incurred on or prior
to Closing or arise from or relate to arrangements, agreements or commitments
entered into or made by the Company or its Subsidiaries prior to the Effective
Time, including Liabilities for filing fees and printing and mailing costs and
other expenses incurred in connection with the Proxy Statement/Prospectus and
other out-of-pocket costs and expenses incurred in connection with the Company's
and its Subsidiaries' efforts to comply with the pre-closing covenants and
agreements contained in the Merger Agreement.

          "Shared Transaction Litigation Liabilities" means Liabilities incurred
by the Company and its Subsidiaries and arising from or relating to any Actions
that arise from or relate to the execution of this Separation Agreement, the
Merger Agreement or the Standalone Drug


                                       14

<PAGE>

Sale Agreement, or the consummation of the transactions contemplated hereby and
thereby, whether brought before or after the Closing and whether brought by
current or former stockholders or option holders of the Company or New Diamond,
any Authority or third parties, including any obligation of the Company or New
Diamond to make payments to any of its dissenting stockholders (but only to the
extent such Liabilities to dissenting stockholders are in excess (such excess
amount, the "Excess Dissenting Shares Liability") of the amount of Per Share
Merger Consideration that would have been payable in respect of the Dissenting
Shares (as defined in the Merger Agreement) held by such dissenting stockholders
at the Effective Time if such appraisal proceeding had not been brought).
Notwithstanding anything to the contrary in this Separation Agreement, "Shared
Transaction Litigation Liabilities" shall not include Liabilities for Actions to
the extent arising from or relating to information supplied by Onyx or New
Diamond specifically for inclusion (or incorporation by reference) in the Proxy
Statement/Prospectus.

          "Solvent" has the meaning set forth in Section 3.1(h).

          "Specified Standalone Drug Liabilities" means the Liabilities set
forth on Schedule 1.11 of this Separation Agreement (it being understood that
such Liabilities shall be deemed New Diamond Liabilities irrespective of whether
or not any such Liabilities would fall under any category of Retained
Liabilities set forth in the definition thereof), to the extent not paid or
assumed by CVS pursuant to the Standalone Drug Sale Agreement.

          "Sponsor" has the meaning set forth in the Recitals.

          "Springfield Stores" means the Jewel-Osco stores of the Company
located at (i) 1903 West Monroe, Springfield, Illinois (Company store number
3031), and (ii) 277 South 6th Street, Springfield, Illinois (Company store
number 3180).

          "Springfield Stores Date" has the meaning set forth in Section 6.14.

          "Standalone Drug Assets" means the Purchased Assets (as defined in the
Standalone Drug Sale Agreement).

          "Standalone Drug Business" has the meaning set forth in the Standalone
Drug Sale Agreement.

          "Standalone Drug Employees" means all employees of Standalone Drug at
the time of the Standalone Drug Sale and all former employees of Standalone
Drug.

          "Standalone Drug Sale" means the purchase and sale of the Standalone
Drug Business, on the terms and subject to the conditions set forth in the
Standalone Drug Sale Agreement.

          "Standalone Drug Sale Agreement" means that certain Asset Purchase
Agreement, dated as of the date hereof, by and among the Company, New Diamond,
SV, and CVS Corporation ("CVS") and certain other Sellers (as defined in the
Standalone Drug Sale Agreement).


                                       15
<PAGE>

          "Straddle Period" has the meaning set forth in Section 4.1(a).

          "Subsidiary" of a person means any and all corporations, partnerships,
limited liability companies, trusts and other entities, whether incorporated or
unincorporated, with respect to which such person, directly or indirectly,
legally or beneficially, owns (i) a right to a majority of the profits of such
entity or (ii) securities having the power to elect a majority of the board of
directors or similar body governing the affairs of such entity.

          "SV" has the meaning set forth in the Preamble.

          "SV Disclosure Letter" has the meaning set forth in Section 3.3.

          "Tax" means all (i) taxes imposed by any U.S. federal, state or local,
foreign or other governmental entity or political subdivision thereof, including
all income, gross receipts, gains, profits, windfall profits, gift, severance,
ad valorem, capital, social security, unemployment disability, premium,
recapture, credit, excise, property, sales, use, occupation, service, service
use, leasing, leasing use, value added, transfer, payroll, employment,
withholding, estimated, license, stamp, franchise or other taxes of any kind
whatsoever, including interest, penalties or additions thereto and (ii)
liabilities of a person for the payment of any amounts pursuant to any
tax-sharing, tax allocation or similar agreement.

          "Tax Authority" means, with respect to any Tax, the governmental
entity or political subdivision thereof that imposes such Tax, and the agency
(if any) charged with the collection of such Tax for such entity or subdivision.

          "Tax Benefit" means the Tax effect of any item of loss, deduction or
credit or any other item which decreases Taxes paid or payable or increases Tax
basis.

          "Tax Detriment" means the Tax effect of any item of income or gain or
other item that increases Taxes paid or payable or decreases Tax basis.

          "Tax Item" means any item of income, gain, loss, deduction, credit,
recapture of credit or any other item which increases or decreases Taxes paid or
payable, including an adjustment under Section 481 of the Code resulting from a
change in accounting method.

          "Tax Proceeding" means any Tax audit, contest, litigation, defense or
other proceeding with or against any Tax Authority.

          "Tax Return" or "Return" means any report, return, documents,
declaration or other information (and any supporting schedules or attachments
thereto) required to be supplied to any Tax Authority or jurisdiction with
respect to Taxes (including any returns or reports filed on a consolidated,
unitary, or combined basis, amended returns and claims for refund).

          "Termination Date" has the meaning set forth in the Merger Agreement.

          "Third Party Claim" has the meaning set forth in Section 5.4(a).


                                       16

<PAGE>

          "Transactions" means the Mergers, the Standalone Drug Sale and the
transactions contemplated by this Separation Agreement.

          "Transfer Document" has the meaning set forth in Section 6.1(d)(1).

          "Transfer Taxes" has the meaning set forth in Section 4.7.

          "Transferred Real Property" means all real property Assets (including
any fee or leasehold) to be transferred or assigned pursuant to the Separation
Agreement, to New Diamond, the New Diamond Entities, Onyx or the Retained
Entities, and/or one or more of the respective Designated Affiliates.

          "Unallocated Action" has the meaning set forth in Section 5.5(b).

          "Unallocated Liabilities" means, without duplication:

               (i) Unallocated Actions;

               (ii) any Liabilities incurred by the Company and/or SV under
     Section 6.8(a) of the Merger Agreement in respect of the Company; and

               (iii) Liabilities of the Company arising out of the operation of
     the Standalone Drug Business prior to the Closing (other than Specified
     Standalone Drug Liabilities and any such Liabilities to the extent paid or
     assumed by CVS pursuant to the Standalone Drug Sale Agreement);

               (iv) other Liabilities of the Company to the extent such
     Liabilities are not (a) Liabilities of the type described in any clause of
     the definition of New Diamond Liabilities (other than clause (vi) thereof)
     or (b) Liabilities of the type described in any clause of the definition of
     Retained Liabilities (other than clause (iv) thereof).

          "Welfare Plans" has the meaning set forth in Section 8.4.

                                   ARTICLE II

           TRANSFER OF NEW DIAMOND ASSETS AND NEW DIAMOND LIABILITIES;
        PURCHASE AND SALE OF THE COMPANY AND THE RETAINED ENTITIES' STOCK

          Section 2.1 Transfer of New Diamond Assets and New Diamond Entities.
(a) Subject to the terms and conditions of this Separation Agreement, each of
the Company, Onyx, SV and New Diamond and their respective Affiliates shall
consummate, or cause to be consummated immediately following the satisfaction or
waiver of the conditions to the consummation of this Separation Agreement as set
forth in Section 9.1 (excluding conditions that, by their terms, cannot be
satisfied until the Closing), (i) the acquisition by New Diamond of all of the
capital stock of the Company in exchange for stock of New Diamond in accordance
with the Merger Agreement, followed immediately by (ii) the conversion of the
Company into a limited liability company (the "Diamond LLC Conversion").


                                       17

<PAGE>

          (b) Immediately thereafter, (1) the Company shall (i) convey, assign,
transfer and deliver, directly or indirectly, to New Diamond and/or one or more
of its Designated Affiliates, subject to all Liens, all of the Company's right,
title and interest in and to all the New Diamond Assets of the Company and (ii)
deliver, directly or indirectly, to New Diamond and/or one or more of its
Designated Affiliates legal and beneficial ownership of all of the Equity
Interests of the New Diamond Entities, and (2) New Diamond and/or one or more of
its Designated Affiliates shall (i) acquire and accept from the Company, subject
to all Liens in place with respect to such Assets immediately prior to the
Closing Date, all of the Company's right, title and interest in and to all the
New Diamond Assets of the Company and (ii) acquire and accept from the Company
legal and beneficial ownership of all of the Equity Interests of the New Diamond
Entities directly transferred to New Diamond (such transactions, the "New
Diamond Asset Transfer"). In addition to the foregoing, immediately following
the consummation of the Standalone Drug Sale, the Company shall, and shall cause
each of its Subsidiaries to, convey, assign, transfer or otherwise distribute
all of the cash proceeds from the Standalone Drug Sale to New Diamond (the
"Post-Standalone Drug Sale Cash Sweep"). By virtue of the New Diamond Asset
Transfer and the Post-Standalone Drug Sale Cash Sweep, pursuant to this
Separation Agreement, after the Closing, New Diamond will directly or indirectly
own all of the capital stock of the New Diamond Entities and the Assets of such
entities (other than the Retained Assets) as well as other Assets, including the
New Diamond Proprietary Name Rights, and such Assets of the New Diamond Entities
will be considered New Diamond Assets for purposes of this Separation Agreement.

          Section 2.2 Transfer and Assumption of New Diamond Liabilities.
Subject to the terms and conditions of this Separation Agreement, concurrently
with the New Diamond Asset Transfer, (a) the Company shall convey, assign and
transfer, directly or indirectly, to New Diamond and/or one or more of its
Designated Affiliates, all of the New Diamond Liabilities of the Company and (b)
New Diamond and/or one or more of its Designated Affiliates shall assume and
agree to pay, perform and discharge when due, or cause to be assumed, paid,
performed and discharged, in due course, all of the New Diamond Liabilities of
the Company and the New Diamond Entities (the "New Diamond Liability Transfer,"
and together with the New Diamond Asset Transfer, the "Separation").

          Section 2.3 Purchase and Sale of the Company's and the Retained
Entities' Stock; Retained Assets and Retained Liabilities. (a) Subject to the
terms and conditions of this Separation Agreement, at the Closing and following
the Separation and the Standalone Drug Sale, New Diamond shall (or shall cause
one or more of its Subsidiaries to) sell and deliver, directly or indirectly, to
Onyx and/or one or more of its Designated Affiliates, and Onyx and/or one or
more of its Designated Affiliates shall (1) purchase, acquire and accept from
New Diamond, or the applicable Subsidiary or Subsidiaries of New Diamond, legal
and beneficial ownership of all of the Equity Interests of the Company (such
purchase, the "Retained Entities Transfer") and (2) assume and agree to pay,
perform and discharge when due, or cause to be assumed, paid, performed and
discharged, in due course, all of the Retained Liabilities. By virtue of the
Company's retained ownership of all of the capital stock of the other Retained
Entities after the Closing, the Company will indirectly own all of the Assets
owned by such Retained Entities (other than the New Diamond Assets), including
the capital stock and the Assets of such entities and such Assets will be
considered Retained Assets for purposes of this Separation Agreement


                                       18

<PAGE>

               (b) Immediately following the Retained Entities Transfer, New
Diamond shall (or shall cause one or more of the New Diamond Entities to) sell,
convey, assign, transfer and deliver, directly or indirectly, to Onyx and/or one
or more of its Designated Affiliates, subject to all Liens, all of New Diamond's
(or the New Diamond Entities', as applicable) right, title and interest in and
to all the Retained Assets of New Diamond or the New Diamond Entities, as
applicable and Onyx and/or one or more of its Designated Affiliates shall
purchase, acquire and accept from New Diamond (or the New Diamond Entities, as
applicable) subject to all Liens in place with respect to such Asset immediately
prior to the Closing Date, all of New Diamond's (or the New Diamond Entities',
as applicable) right, title and interest in and to all the Retained Assets of
New Diamond or the New Diamond Entities, as applicable (such transactions, the
"Retained Assets Transfer" and together with the Retained Entities Transfer, the
"Retained Business Purchase").

          Section 2.4 Reorganization; Consummation of the Mergers and New
Diamond Liability Transfer; Retained Business Price. (a) Subject to the terms
and conditions of this Separation Agreement and in furtherance of Sections 2.1,
2.2 and 2.3 hereof, and in furtherance of the parties' mutual desire and intent
to transfer, directly or indirectly, the Retained Entities to Onyx and/or one or
more of its Designated Affiliates in a transaction treated for federal income
Tax purposes as a sale of assets (except with respect to the purchase of Lucky
Delaware, which the parties mutually desire and intend to be treated as a sale
of stock for federal income Tax purposes), each of the Company, Onyx, SV and New
Diamond and their respective Affiliates shall consummate, or cause to be
consummated, the transactions contemplated by the Reorganization, substantially
as provided in Schedule 1.1 and in a manner consistent with Section 4.1(c) of
this Separation Agreement.

               (b) Subject to the terms and conditions of this Separation
Agreement, in consideration of the New Diamond Asset Transfer, each of the
Company and New Diamond shall consummate, or cause to be consummated, the New
Diamond Liability Transfer.

               (c) Subject to the terms and conditions of this Separation
Agreement, in consideration of the Retained Business Purchase, Onyx and/or one
or more of its Designated Affiliates shall (1) pay to New Diamond (or such New
Diamond Entity as New Diamond may designate) an amount of cash equal to the
Retained Business Price and (2) assume and agree to pay, perform and discharge
when due, or cause to be assumed, paid, performed and discharged, in due course,
all of the Retained Liabilities assumed by Onyx and/or one or more of its
Designated Affiliates pursuant to Section 2.3.

          Section 2.5 The Closing. (a) Subject to the satisfaction or waiver of
the conditions set forth in Section 9.1 of this Separation Agreement, each of
the Diamond LLC Conversion, the Separation, the Standalone Drug Sale and the
Retained Business Purchase shall take place in succession as contemplated by the
Coordination Agreement, in each case, at the offices of Jones Day, 222 West 41st
Street, New York, New York 10017 (the "Closing"). The parties hereto agree that
(i) the sale, conveyance, assignment and transfer of the New Diamond Assets and
New Diamond Entities or the Retained Assets and Retained Entities, as
applicable, shall be effected at the Closing by delivery by each of the parties
(A) with respect to those Assets and Equity Interests which are evidenced by
capital stock certificates or similar instruments, certificates duly endorsed in
blank or accompanied by stock powers or other instruments of


                                       19

<PAGE>

assignment executed in blank and (B) with respect to all other Assets, such good
and sufficient instruments of transfer and delivery as shall be necessary to
vest in New Diamond or Onyx or their respective Designated Affiliates, as the
case may be, all of the right, title and interest of the Company in and to such
Assets, and (ii) the assumption of Liabilities shall be effected by delivery by
New Diamond or Onyx or their respective Designated Affiliates, as applicable, to
the appropriate counterparty of such good and sufficient instruments of
assumption, as shall be necessary for the assumption by New Diamond or Onyx or
their respective Designated Affiliates, as applicable, of the Liabilities to be
assumed pursuant to this Separation Agreement. All of the foregoing transfer or
assumption instruments or other documents shall be in such form as are
reasonably satisfactory to the parties hereto.

               (b) The parties hereto will cooperate with one another and with
CVS in causing the Closing, the "Closing" contemplated by the Standalone Drug
Sale Agreement and the "Closing" contemplated by the Merger Agreement to occur
and be effected as promptly as practicable but in no event later than two (2)
Business Days after the Initial Closing Date (as defined in the Merger
Agreement).

          Section 2.6 Certain Indebtedness of the Company; Succession and
Release; Indemnification. In connection with the transactions contemplated
hereby, the parties agree that:

               (a) In connection with the Separation and substantially
concurrent with the New Diamond Asset Transfer, with respect to the ABS
Indenture, each of the Company and New Diamond shall take, or cause to be taken,
all those actions specified under the ABS Indenture to (1) cause New Diamond to
assume all obligations thereunder, including executing and delivering one or
more supplemental indentures in accordance with the terms thereof and (2) to
cause the Company to be released and discharged from any and all obligations
thereunder. Following the Closing, New Diamond shall, or shall cause one of its
Affiliates to, pay, perform and discharge all obligation, covenants and
agreements under the ABS Indenture pursuant to the terms thereof. Any
Liabilities of the Retained Entities on account of the foregoing shall be deemed
Indemnifiable Losses of the Company Indemnitees under Article V of this
Separation Agreement.

               (b) Following the Closing, New Diamond shall, or shall cause one
of its Affiliates to, pay, perform and discharge all obligations, covenants and
agreements under the ASC Indenture pursuant to the terms thereof, subject only
to the provisions in this Section 2.6(b) relating to the Albertson's Inc.
Guarantee. All Liabilities incurred by the Retained Entities on account of the
foregoing shall be deemed Indemnifiable Losses of the Company Indemnitees under
Article V of this Separation Agreement. Following the Closing and until the
fifth (5th) anniversary of the Closing Date (such date, the "Guarantee Release
Date"), (i) Onyx shall cause the Company to be duly organized, validly existing
and in good standing under the laws of the State of Delaware and (ii) each of
Onyx and the Company shall cause to remain outstanding and in full force and
effect the guarantee entered pursuant to that certain Supplemental Indenture No.
2, dated as of July 6, 2005 (the "Albertson's Inc. Guarantee"), whereby the
Company guaranteed all of the obligations under the ASC Indenture. On or prior
to the Guarantee Release Date, New Diamond shall, or shall cause one of its
Affiliates to, cause the Company to be released and discharged from the
Albertson's Inc. Guarantee (and the Company shall, and shall cause the other
Retained Entities to, cooperate at New Diamond's expense in seeking such release
and


                                       20

<PAGE>

discharge). Any Liabilities of the Company or any other Retained Entities on
account of any payments that are required to be made under the Albertson's Inc.
Guarantee (other than Liabilities arising out of a breach by Onyx or the Company
of this Section 2.6(b) or the Albertson's Inc. Guarantee) shall be deemed
Indemnifiable Losses of the Company under Article V of this Separation
Agreement.

               (c) Without limiting the generality of the foregoing, following
the Closing, (1) with respect to any other New Diamond Liabilities that
constitute obligations for money borrowed, New Diamond shall use its reasonable
best efforts to cause the Company and the other Retained Entities and their
respective Equity Interests, properties and assets to be released and discharged
from any and all Liabilities, Liens, guarantees, and the like under such
indebtedness (and Onyx and/or one of its Designated Affiliates shall, and shall
cause the Company and the other Retained Entities to, cooperate in seeking such
release and discharge), and New Diamond shall, or shall cause a New Diamond
Entity to, (to the extent permitted by the terms of New Diamond's financing)
pay, perform and discharge such indebtedness pursuant to the terms thereof, and
perform and abide by all other obligations, covenants and agreements therein, in
each case, pending such release and discharge and (2) with respect to any
Retained Liabilities that constitute obligations for money borrowed, Onyx and/or
one of its Designated Affiliates shall, and shall cause the Company and the
other Retained Entities to, use its reasonable best efforts to cause New Diamond
and the New Diamond Entities and their respective Equity Interests, properties
and assets to be released and discharged from any and all Liabilities, Liens,
guarantees and the like under such indebtedness (and New Diamond shall, and
shall cause the New Diamond Entities to, cooperate in seeking such release and
discharge), and Onyx and/or one of its Designated Affiliates shall, and shall
cause the Company and the other Retained Entities to (to the extent permitted by
the terms of Onyx's financing), pay, perform and discharge such indebtedness
pursuant to the terms thereof, and perform and abide by all other obligations,
covenants and agreements therein, in each case, pending such release and
discharge; provided, that each of Onyx and New Diamond shall use commercially
reasonable efforts to obtain necessary approvals from their respective financing
sources to permit such performance; and

               (d) Following the Closing, (1) if the Company or any other
Retained Entity is a party to or bound by any agreement or instrument governing
any New Diamond Liabilities contemplated by clause (c) above that constitute
obligations for money borrowed or any related guaranty, security agreement or
pledge, each of Onyx and/or one of its Designated Affiliates shall, or shall
cause the Company or such Retained Entity to (to the extent permitted by the
terms of Onyx's financing), at the expense of New Diamond and/or one of its
Designated Affiliates, perform and abide by all obligations, covenants and
agreements contained therein pending the release and discharge contemplated by
clause (c)(1) above and (2) if any New Diamond Entity is a party to or bound by
any agreement or instrument governing any Retained Liabilities contemplated by
clause (c) above that constitute obligations for money borrowed or any related
guaranty, security agreement or pledge, New Diamond and/or one of its Designated
Affiliates shall, or shall cause such New Diamond Entity to (to the extent
permitted by the terms of New Diamond's financing), at the expense of the
Company and/or one of its Designated Affiliates, perform and abide by all
obligations, covenants and agreements contained therein pending the release and
discharge contemplated by clause (c)(2) above; provided, that each of Onyx and
New Diamond shall use commercially reasonable efforts to obtain necessary
approvals


                                       21

<PAGE>

from their respective financing sources to permit such performance. Any expenses
(including reasonable attorneys fees, administrative costs and amounts paid to
third parties) incurred in connection with this Section 2.6(d) for the account
of New Diamond and/or its Designated Affiliates, on the one hand, and the
Company and/or its Designated Affiliates on the other hand, shall be deemed
Indemnifiable Losses of the Company and New Diamond, respectively, under Article
V of this Separation Agreement.

          Section 2.7 Current Accounts. After the date hereof and prior to the
Closing, (a) the Company shall continue its general practices and policies
relating to (1) the payment and collection, as the case may be, of accounts
payable and accounts receivable, (2) subject to the provisions of Section 6.1 of
the Merger Agreement, the defense and settlement of Actions and (3) maintenance
of inventory of a quantity (accounting for seasonal variations), quality and
mix, in each case, in the ordinary course and consistent with past practice for
the New Diamond Business and the Retained Business and (b) no party hereto
shall, nor shall any party permit any of its Subsidiaries or Affiliates to,
materially influence or otherwise alter such practices and policies.

          Section 2.8 Retained Business Price Allocation; Retained Property
Proceeds. (a) Within sixty (60) days following the Closing Date, Onyx shall
deliver to New Diamond for its review and approval a proposed allocation of the
Retained Business Price (including any adjustments made thereto) and any
liabilities assumed, for Tax purposes, which shall be prepared in a manner
consistent with fair market value and, as applicable, Sections 338 and 1060 of
the Code and the Treasury Regulations promulgated thereunder (such allocation,
as agreed by Onyx and New Diamond or as resolved by the Accountant, the
"Retained Business Allocation"). In the event that Onyx and New Diamond are
unable to reach an agreement on the Retained Business Allocation within fifty
(50) days of such delivery, Onyx and New Diamond shall each set forth in writing
their positions regarding any remaining disagreed items and such positions shall
be submitted to a nationally recognized public accounting firm mutually
acceptable to both Onyx and New Diamond (the "Accountant") for resolution in the
next forty-five (45) days. The Accountant shall be instructed to resolve such
disputed items so that the Retained Business Allocation is consistent with fair
market value and, as applicable, Sections 338 and 1060 of the Code and the
Treasury Regulations promulgated thereunder. Each of Onyx and New Diamond shall
bear all fees and costs incurred by it in connection with such dispute, except
that each of Onyx and New Diamond shall pay one-half (50%) of the fees and
expenses of the Accountant. The parties agree to use the Retained Business
Allocation for all Tax purposes and in all filings, declarations and reports
with the Internal Revenue Service (the "IRS") in respect thereof, including any
reports required to be filed under Sections 1060 and 338 of the Code. The
parties shall timely file, or cause to be timely filed, IRS Form 8594 (or any
comparable form under state, local, or foreign Tax law) and any required
attachments thereto in accordance with the Retained Business Allocation. On any
Tax Return and in any Tax Proceeding, none of (x) Onyx, the Company, their
Designated Affiliates and the other Retained Entities nor (y) SV, New Diamond,
their Designated Affiliates and the New Diamond Entities shall take any position
inconsistent with or represent that the Retained Business Allocation is not
correct, unless otherwise required to do so as a result of a determination (as
defined in Section 1313(a) of the Code or any similar state or local tax
provision) (a "Determination").


                                       22

<PAGE>

               (b) (i) No less than five Business Days after each monthly
anniversary of the first month end after date hereof through no later than two
Business Days prior to the Closing Date and (ii) on the date that is two
Business Days prior to the Closing Date, the Company shall deliver to Onyx in
writing a statement providing in reasonable detail the aggregate net cash
proceeds (after Tax, any reasonable transaction costs and assumption of
Liabilities) actually received by the Company or any of its Subsidiaries during
the time period from and after the date hereof through the most recent month end
prior to the date such statement is delivered (or, in the case of the statement
delivered pursuant to clause (ii), from the date hereof through the date of such
statement) directly related to dispositions by the Company or any of its
Subsidiaries after the date hereof (the "Retained Property Proceeds") of
"Non-Core" stores (as described in the Business Description Presentation) (or
all or substantially all of the Assets located in any store in a liquidation of
such store) or any underlying real property or any non-operating real property
(including, without limitation, proceeds resulting from the exercise of any
right of recapture by a landlord with respect to any real property lease) that,
if not disposed, would qualify as Retained Assets; provided, however, that the
Company shall not be required to deliver a report pursuant to clause (i) of this
sentence if the amount of Retained Property Proceeds that would be set forth in
such report would be less than $100,000 more than the amount of Retained
Property Proceeds set forth in the most recently delivered previous report;
provided, further, that nothing in this Separation Agreement shall prohibit the
Company from selling or otherwise transferring to a third party (other than SV)
the Springfield Stores and in no event shall any proceeds from such sale or
transfer of the Springfield Stores be considered Retained Property Proceeds;
provided, further, that if the Company shall sell or otherwise transfer to a
third party (other than SV) the Springfield Stores at the Closing, it shall use
commercially reasonable best efforts to give 30 days' prior notice of such sale
to Onyx (or such shorter period of notice as may be practicable).

          Section 2.9 Insurance Proceeds. (a) In the event that, after the
execution of this Agreement, but prior to the Closing Date, any New Diamond
Asset or Retained Asset is subject to loss, destruction or damage to the
building or other improvements thereon (a "Casualty") or the exercise of eminent
domain by a governmental authority (a "Condemnation"):

               (i) Subject to Section 2.9(a)(ii), at the Closing the Company
          shall (A) retain, or shall transfer and convey to New Diamond or one
          or more of Onyx's Designated Affiliates, as applicable, all net
          proceeds the Company or any of its Subsidiaries have received from any
          third party insurance claims, condemnation awards, compensation or
          other reimbursements relating to such Casualty or Condemnation (except
          as to proceeds of business interruption, rental and lost profits
          insurance for periods up to and including the Effective Time, whenever
          received, to the extent that such proceeds have not already been used
          by the Company or any of its Subsidiaries to repair any such loss,
          destruction or damage) and except to the extent such proceeds are used
          or intended to be used to reimburse the Company or such Subsidiaries
          for any out-of-pocket costs, expenses, damages or losses suffered or
          incurred by the Company or its Subsidiaries during the period up to
          and including the Effective Time) and (B) to the extent such proceeds
          have not already been used by the Company or its Subsidiaries to
          repair any such loss, destruction or damage, assign to New Diamond (in
          the case of a Casualty relating to a New Diamond Asset) or to one or


                                       23

<PAGE>

          more of Onyx's Designated Affiliates (in the case of a Casualty
          relating to a Retained Asset) the right to receive any future proceeds
          of such Casualty or Condemnation receivable after the Effective Time,
          including as to business interruption insurance, rental and lost
          profits insurance for any period after the Effective Time).

               (ii) If any such Casualty is not covered under the Company's or
          any of its Subsidiaries' third party insurance policies and in the
          event of a store that has suffered a Casualty where the landlord is
          responsible for such repairs, loss or destruction pursuant to the
          terms of the relevant Lease, the applicable the Company or its
          Subsidiary, as applicable, shall assign the applicable lease to New
          Diamond or one or more of Onyx's Designated Affiliates, as applicable,
          and, without any additional payment from New Diamond or such Onyx
          Designated Affiliate(s), the Company or such Subsidiary shall assign
          to New Diamond or such Onyx Designated Affiliate(s) any claim they
          have under such lease with respect thereto.

          (b) Any party receiving a notice of Casualty or Condemnation shall
     notify all other parties in accordance with Section 9.10. Notwithstanding
     anything to the contrary contained in this Separation Agreement, in no
     event will any Casualty or Condemnation constitute the breach of any
     representation, warranty or covenant of the Company contained in this
     Separation Agreement.

          (c) Notwithstanding anything to the contrary in this Separation
     Agreement, under no circumstances shall (1) the Company, New Diamond or any
     of their respective Affiliates be responsible for any retention or
     deductible payable with respect to any Casualty or Condemnation and (2) any
     payments on account of a Casualty or Condemnation or any other loss be
     required after the Closing Date from Beryl American Corporation, or any
     other Subsidiary or Affiliate of SV or the Company that has underwritten an
     insurance policy with respect to any New Diamond Asset or Retained Asset.

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

          Section 3.1 Representations and Warranties of Onyx. Except as set
forth on the corresponding sections of the disclosure letter delivered by Onyx
to the Company and SV on or prior to the execution of this Separation Agreement
(the "Onyx Disclosure Letter"), Onyx hereby, jointly and severally with each of
its Designated Affiliates, represents and warrants to the Company and SV that:

               (a) Organization and Standing. Each of Onyx and its Designated
Affiliates is duly organized, validly existing and in good standing under the
laws of its respective jurisdiction of organization, and has the requisite
corporate or similar power and authority to own its properties and to carry on
its business as presently conducted and is duly qualified to do business and is
in good standing (where such concept exists) as a foreign corporation in each


                                       24

<PAGE>

jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification necessary. Complete and correct copies
of the certificate of incorporation and by-laws (or equivalent organizational
documents) of Onyx and its Designated Affiliates (if and to the extend actually
designated), as currently in effect, have been made available to the Company,
and as so made available, are in full force and effect and no other
organizational documents are applicable to or binding upon Onyx and its
Designated Affiliates.

               (b) Authority; Enforceability. Each of Onyx and its Designated
Affiliates has the corporate or other power and authority to execute and deliver
this Separation Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery by
each of Onyx and its Designated Affiliates of this Separation Agreement and the
consummation by each of Onyx and its Designated Affiliates of the transactions
contemplated hereunder have been duly authorized by all necessary action on the
part of each of Onyx and its Designated Affiliates and the holders of any Equity
Interests thereof and no other corporate or similar proceeding on the part of
Onyx or its Designated Affiliates are necessary pursuant to its governing
documents or applicable Law to authorize this Separation Agreement or to
consummate the transactions contemplated hereby. This Separation Agreement has
been duly executed and delivered by each of Onyx and, if and when applicable,
its Designated Affiliates and, assuming due authorization, execution and
delivery by the other parties hereto, constitutes a legal, valid and binding
agreement of each of Onyx and its Designated Affiliates, enforceable against
each of them in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
Laws relating to or affecting creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at law).

               (c) Non-Contravention. The execution, delivery and performance of
this Separation Agreement by each of Onyx and its Designated Affiliates does not
and will not (1) conflict with or violate its certificate of incorporation or
by-laws or comparable governing documents, (2) assuming that all consents,
approvals and authorizations contemplated by Section 3.1(d) have been obtained
and all filings described therein have been made, conflict with or violate any
Law applicable to Onyx, its Designated Affiliates or any of their Subsidiaries
or by which it or any of its properties are bound or (3) result in any breach or
violation of or constitute a default (or an event which with notice or lapse of
time or both would become a default) or result in the loss of a benefit under,
or give rise to any right of termination, cancellation, recapture, amendment or
acceleration of, or performance under, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit or other instrument or obligation to
which Onyx, its Designated Affiliates or any of their Subsidiaries is a party or
by which Onyx, its Designated Affiliates or any of their Subsidiaries or its or
any of their properties are bound, except, in the case of clauses (2) and (3) of
this Section 3.1(c), for any such conflict, violation, breach, default, loss,
right or other occurrence which would not, individually or in the aggregate,
prevent or materially delay the consummation of the transactions contemplated
hereby.

               (d) Governmental Consents. The execution, delivery and
performance of this Separation Agreement by each of Onyx and its Designated
Affiliates and the consummation by each of Onyx and its Designated Affiliates of
the transactions contemplated hereby do not and will not require any consent,
approval, authorization or permit of, action by, filing with or notification to,
any Governmental Authority, except as required under or pursuant


                                       25

<PAGE>

to (1) the HSR Act, (2) the Exchange Act, (3) state securities, takeover and
"blue sky" Laws, (4) the rules and regulations of the NYSE and the PCX, (5) the
DGCL, (6) the applicable requirements of antitrust or other competition Laws of
other jurisdictions or investment Laws relating to foreign ownership, and (7)
any other consent, approval, authorization, permit, action, filing or
notification the failure of which to be made or obtained would not, individually
or in the aggregate, prevent or materially delay the consummation of the
transactions contemplated hereby and by the Merger Agreement.

               (e) Capitalization. Section 3.1(e) of the Onyx Disclosure Letter
sets forth the authorized, outstanding equity of Onyx as of the date hereof.
There is no agreement, contract, commitment or arrangement pursuant to which
Onyx or any Subsidiary of Onyx is or may become obligated to repurchase or
redeem any shares of capital stock or voting securities of Onyx or any
securities or obligations convertible or exchangeable into or exercisable for,
any shares of capital stock or voting securities of Onyx. Onyx does not have
outstanding any bonds, debentures, notes or other obligations the holders of
which have the right to vote (or which are convertible, exchangeable or
exercisable for or into securities having the right to vote) with the members of
Onyx on any matter.

               (f) Litigation. There are no Actions pending or, to the knowledge
of Onyx, threatened against Onyx or its Designated Affiliates or, to the
knowledge of Onyx, any officer, director or employee of Onyx or its Designated
Affiliates in such capacity, which would, individually or in the aggregate,
prevent or materially delay Onyx or its Designated Affiliates from performing
its obligations under this Separation Agreement in any material respect. Neither
Onyx nor its Designated Affiliates is a party or subject to or in default under
the order of any Authority which would prevent or materially delay Onyx or its
Designated Affiliates from performing its obligations under this Separation
Agreement in any material respect.

               (g) Financing. Attached hereto as Exhibit A is a true and
complete copy of the Financing Commitment (the "Financing Commitment"), pursuant
to which the Sponsor thereto has committed, subject to the terms and conditions
set forth therein, to invest the amounts set forth therein to purchase Equity
Interests of Onyx and to provide debt financing to Onyx and its Designated
Affiliates (the "Financing"). The Financing Commitment has not been amended or
modified prior to the date of this Separation Agreement, no such amendment or
modification is contemplated, and the commitment contained in the Financing
Commitment has not been withdrawn or rescinded in any respect. The Financing
Commitment is in full force and effect and is the valid, binding and enforceable
obligation of the parties thereto. There are no conditions precedent or other
contingencies related to the funding of the full amount of the Financing, other
than as set forth in or contemplated by the Financing Commitment. No event has
occurred which, with or without notice, lapse of time or both, would constitute
a default on the part of Onyx or its Designated Affiliates under the Financing
Commitment, and Onyx has no reason to believe that any of the conditions to the
Financing contemplated by the Financing Commitment will not be satisfied or that
the Financing will not be made available to Onyx on the Closing Date. Onyx and
its Designated Affiliates will have at and after the Closing funds sufficient to
pay the aggregate Retained Business Price and any other amounts required to be
paid in connection with the consummation of the transactions contemplated
hereby, and to pay all related fees and expenses.


                                       26

<PAGE>

               (h) Solvency. Assuming satisfaction of the conditions to this
Separation Agreement and the Merger Agreement (other than the consummation of
the transactions contemplated hereby), and after giving effect to the
transactions contemplated hereby and thereby, including the Financing and Future
Debt Financing, any alternative financing and the payment of the aggregate Per
Share Merger Consideration, the Reorganization, the assumption or retention (as
applicable) of the Retained Liabilities by the Company, Onyx and its Designated
Affiliates, the assumption or retention (as applicable) of the New Diamond
Liabilities by New Diamond and its Designated Affiliates, payment of all amounts
required to be paid in connection with the consummation of the transactions
contemplated hereby and thereby, and payment of all related fees and expenses,
each of the Company, Onyx and its Designated Affiliates will be Solvent as of
the Effective Time and immediately after the consummation of the transactions
contemplated hereby and thereby. For the purposes of this Separation Agreement
the term "Solvent" when used with respect to any person, means that, as of any
date of determination, (1) the amount of the "fair saleable value" of the assets
of such person will, as of such date, exceed (i) the value of all "liabilities
of such person, including contingent and other liabilities," as of such date, as
such quoted terms are generally determined in accordance with applicable federal
laws governing determinations of the insolvency of debtors, and (ii) the amount
that will be required to pay the probable liabilities of such person on its
existing debts (including contingent liabilities) as such debts become absolute
and matured, (2) such person will not have, as of such date, an unreasonably
small amount of capital for the operation of the businesses in which it is
engaged or proposed to be engaged following such date, and (3) such person will
be able to pay its liabilities, including contingent and other liabilities, as
they mature. For purposes of this definition, "not have an unreasonably small
amount of capital for the operation of the businesses in which it is engaged or
proposed to be engaged" and "able to pay its liabilities, including contingent
and other liabilities, as they mature" means that such person will be able to
generate enough cash from operations, asset dispositions or refinancing, or a
combination thereof, to meet its obligations as they become due.

               (i) Brokers. No agent, broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Separation Agreement based upon
arrangements made by or on behalf of Onyx or its Designated Affiliates for which
any party other than Onyx or its Designated Affiliates could have any liability.

               (j) Company Stock. Neither Onyx nor any of its Designated
Affiliates is, and at no time during the last three years has either Onyx or any
of its Designated Affiliates been, an "interested stockholder" of the Company as
defined in Section 203 of the DGCL. Neither Onyx nor any of its Designated
Affiliates owns (directly or indirectly, beneficially or of record), or is a
party to any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of, any shares of capital stock of the
Company (other than as contemplated by this Separation Agreement).

               (k) Onyx Designated Affiliates. Each of the Designated Affiliates
of Onyx was formed or will be formed, as the case may be, solely for the purpose
of engaging in the transactions contemplated hereby, has engaged in no other
business activities and has conducted its operations only as contemplated by
this Separation Agreement.


                                       27

<PAGE>

          Section 3.2 Representations and Warranties of the Company. Except as
set forth in the corresponding sections of the disclosure letter (subject to the
provisions of Section 9.18) delivered by the Company to Onyx on or prior to the
execution of this Separation Agreement (the "Company Disclosure Letter") and
except as disclosed in the Form 10-K of the Company for the fiscal period ended
February 3, 2005, as amended through the date hereof (as amended, the "Company
Form 10-K"), the Proxy Statement for the Company's 2005 Annual Meeting of
Shareholders, and the Form 10-Qs and Form 8-Ks filed or furnished from the date
of the filing of the Company Form 10-K to the date of this Separation Agreement
(and any amendments to any such filings which amendments are filed with the SEC
prior to the date hereof) to the extent such qualifications are reasonably
apparent (and which in no event shall include risk factors or other factors
identified in general cautionary statements regarding reliance on forward
looking statements in either case included in the Company SEC Reports), the
Company hereby represents and warrants to Onyx and its Designated Affiliates
that the representations and warranties of the Company set forth in Article IV
of the Merger Agreement are true and correct; provided, however, that (1) the
representations and warranties contained in Article IV of the Merger Agreement
are made herein by the Company (mutatis mutandis) for the benefit of Onyx and
its Designated Affiliates, (2) except for purposes of the representations and
warranties contained in Section 4.1 (Organization), Section 4.2(a) and (c)
(Authority; Enforceability), Section 4.5 (Capitalization of the Company),
Section 4.7 (SEC Reports; Financial Information), Section 4.10(a)(iv), (x) and
(xi) (Contracts), Section 4.13 (Employee Compensation and Benefit Plans; ERISA),
Section 4.14 (Labor Matters), Section 4.19 (Tax) and Section 4.20 (Insurance),
of the Merger Agreement, all references to the "Company" or to the "Company
Subsidiaries" contained in Article IV of the Merger Agreement shall be deemed to
refer to the Company and its Subsidiaries in respect of the Retained Business,
Retained Assets and Retained Liabilities, (3) for the avoidance of doubt, all
reference to "Company Material Adverse Effect" therein shall be deemed to refer
to "Company Material Adverse Effect" as defined in this Separation Agreement and
(4) all references to "Parent" contained in Article IV of the Merger Agreement
shall be deemed to refer to Onyx.

          Section 3.3 Representations and Warranties of SV. Except as set forth
on the corresponding sections of the disclosure letter delivered by SV to the
Company and Onyx on or prior to the execution of this Separation Agreement (the
"SV Disclosure Letter"), SV hereby, jointly and severally with each of their
respective Designated Affiliates, represents and warrants to the Company and
Onyx that:

               (a) Organization. Each of SV and its Designated Affiliates is
duly organized, validly existing and in good standing under the laws of its
respective jurisdiction of organization, and has the requisite corporate or
similar power and authority to own its properties and to carry on its business
as presently conducted and is duly qualified to do business and is in good
standing (where such concept exists) as a foreign corporation in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification necessary. Complete and correct copies
of the certificate of incorporation and by-laws (or equivalent organizational
documents) of SV and its Designated Affiliates (if and to the extend actually
designated) as currently in effect, have been made available to each of the
Company and Onyx, and as so made available, are in full force and effect and no
other organizational documents are applicable to or binding upon SV.


                                       28

<PAGE>

               (b) Authority; Enforceability. Each of SV and its Designated
Affiliates has the corporate or other power and authority to execute and deliver
this Separation Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery by
each of SV and its Designated Affiliates of this Separation Agreement and the
consummation by each of SV and its Designated Affiliates of the transactions
contemplated hereunder have been duly authorized by all necessary action on the
part of each of SV and its Designated Affiliates and no other corporate
proceedings on the part of each of SV and its Designated Affiliates are
necessary pursuant to its governing documents or the DGCL to authorize this
Separation Agreement or to consummate the transactions contemplated hereby. The
boards of directors of each of SV and its Designated Affiliates have determined
that it is in the best interests of SV to enter into this Separation Agreement,
and have approved this Separation Agreement. This Separation Agreement has been
duly executed and delivered by each of SV and its Designated Affiliates and,
assuming due authorization, execution and delivery by the other parties hereto,
constitutes a legal, valid and binding agreement of each of SV and its
Designated Affiliates, enforceable against each of them in accordance with its
terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar Laws relating to or affecting
creditors' rights generally and general equitable principles (whether considered
in a proceeding in equity or at law).

               (c) Non-Contravention. The execution, delivery and performance of
this Separation Agreement by each of SV and its Designated Affiliates does not
and will not (1) conflict with or violate its certificate of incorporation or
by-laws or comparable governing documents, (2) conflict with or violate the
governing documents of any other Subsidiary of SV, (3) assuming that all
consents, approvals and authorizations contemplated by Section 3.3(d) have been
obtained and all filings described therein have been made, conflict with or
violate any Law applicable to each of SV and its Designated Affiliates or any of
their Subsidiaries or by which it or any of its properties are bound or (4)
result in any breach or violation of or constitute a default (or an event which
with notice or lapse of time or both would become a default) or result in the
loss of a benefit under, or give rise to any right of termination, cancellation,
recapture, amendment or acceleration of, or performance under, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit or other
instrument or obligation to which SV and its Designated Affiliates or any of
their Subsidiaries is a party or by which SV and its Designated Affiliates or
any of their Subsidiaries or its or any of their properties are bound, except,
in the case of clauses (2), (3), and (4) of this Section 3.3(c) for any such
conflict, violation, breach, default, loss, right or other occurrence which
would not (i) prevent or materially delay SV or its Designated Affiliates from
performing its obligations under this Separation Agreement in any material
respect or (ii) reasonably be expected to have, individually or in the
aggregate, a Parent Material Adverse Effect.

               (d) Governmental Consents. The execution, delivery and
performance of this Separation Agreement by each of SV and its Designated
Affiliates and the consummation by each of SV and its Designated Affiliates of
the Transactions do not and will not require any consent, approval,
authorization or permit of, action by, filing with or notification to, any
Governmental Authority, except as required under or pursuant to (1) the HSR Act,
(2) the Exchange Act, (3) state securities, takeover and "blue sky" Laws, (4)
the rules and regulations of the NYSE and the PCX, (4) the DGCL, (5) the
applicable requirements of antitrust or other competition Laws of other
jurisdictions or investment Laws relating to foreign ownership, and


                                       29

<PAGE>

(6) any other consent, approval, authorization, permit, action, filing or
notification the failure of which to be made or obtained would not reasonably be
expected to have, individually or in the aggregate, a Parent Material Adverse
Effect.

               (e) Solvency. Assuming satisfaction of the conditions to this
Separation Agreement and the Merger Agreement (other than the consummation of
the transactions contemplated hereby), and after giving effect to the
transactions contemplated hereby and thereby, the Reorganization, the assumption
or retention (as applicable) of the Retained Liabilities by the Company, Onyx
and its Designated Affiliates, the assumption or retention (as applicable) of
the New Diamond Liabilities by New Diamond and its Designated Affiliates,
payment of all amounts required to be paid in connection with the consummation
of the transactions contemplated hereby and thereby, and payment of all related
fees and expenses, each of SV, New Diamond and its Designated Affiliates will be
Solvent as of the Effective Time and immediately after the consummation of the
transactions contemplated hereby and thereby.

               (f) Brokers. No agent, broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Separation Agreement based upon
arrangements made by or on behalf of SV for which the Company or Onyx could have
any liability.

                                   ARTICLE IV

                                   TAX MATTERS

          Section 4.1 Liability for Taxes. (a) New Diamond and SV shall (and New
Diamond shall cause the New Diamond Entities to) be responsible for, pay or
cause to be paid, and shall (and New Diamond shall cause the New Diamond
Entities to) indemnify Onyx, its Designated Affiliates and each of its
Subsidiaries and Affiliates (including the Retained Entities after the Closing
Date) (each a "Buyer Tax Indemnitee") and hold each Buyer Tax Indemnitee
harmless from and against any and all of the following (including reasonable
fees and expenses in connection therewith):

               (1) any and all Taxes of New Diamond and each New Diamond Entity
          ((i) other than any Non-Income Taxes attributable to the Retained
          Business or the Retained Assets and (ii) limited, in the case of
          Shared Non-Income Taxes, to the New Diamond Percentage of such
          Non-Income Taxes);

               (2) the New Diamond Percentage of any Shared Non-Income Taxes
          imposed on any Retained Entity;

               (3) any and all United States federal Income Taxes for any
          taxable period (or portion thereof) that ends on or prior to the
          Closing Date (such a period, a "Pre-Closing Period") of the Affiliated
          Group;

               (4) any and all state, local and foreign Income Taxes for all
          Pre-Closing Periods of each Retained Entity;


                                       30
<PAGE>

               (5) any and all liability for Taxes of the Affiliated Group
          imposed on the Retained Entities as a result of the application of
          Treasury Regulation Section 1.1502-6 (or any similar provision of
          state, local or foreign law);

               (6) any and all Non-Income Taxes for Pre-Closing Periods of,
          imposed upon, or relating or attributable to the New Diamond Business,
          the New Diamond Assets or the Standalone Drug Business (regardless of
          whether such Taxes are imposed on any New Diamond Entity or any
          Retained Entity); and

               (7) any and all Taxes for any taxable period (or portion thereof)
          that begins after the Closing Date (such a period, a "Post-Closing
          Period") of, imposed upon or relating or attributable to the New
          Diamond Entities, the New Diamond Business or the New Diamond Assets.

          If, for any state, local or foreign Income Tax purposes, any Taxable
period of any Retained Entity includes but does not end on the Closing Date (any
such period, a "Straddle Period"), Income Taxes, if any, attributable to such
Straddle Period shall be allocated to (A) New Diamond and SV for the portion of
such Straddle Period up to and including the Closing Date, and (B) Onyx for the
portion of such Straddle Period subsequent to the Closing Date. For purposes of
the preceding sentence, Income Taxes for the portion of each Straddle Period up
to and including the Closing Date and for the portion of such Straddle Period
subsequent to the Closing Date shall be determined on the basis of an interim
closing of the books as of the close of business on the Closing Date as if such
Straddle Period consisted of one Taxable period ending on the Closing Date
followed by a Taxable period beginning on the day following the Closing Date,
and exemptions, allowances or deductions that are calculated on an annual basis,
such as the deduction for depreciation, shall be apportioned on a daily basis.

          New Diamond and SV shall be entitled to any refund of (or credit of or
against) Taxes to the extent that such refund (or credit) relates to a Tax that
is the responsibility of New Diamond or SV under this Section 4.1(a) and shall
be entitled to any refund or credit to which New Diamond or SV is entitled under
Section 4.6. For the avoidance of doubt, New Diamond and SV shall be entitled to
any deposits of Income Taxes with the Internal Revenue Service made by New
Diamond, SV, any New Diamond Entity or, prior to the Closing, the Company or any
Retained Entity.

               (b) Each of Onyx and the Company shall (and shall cause each of
the Retained Entities to), be responsible for, pay or cause to be paid, and
shall (and shall cause each of the Retained Entities to) indemnify New Diamond
and its Subsidiaries and Affiliates (other than the Retained Entities) (each a
"Seller Tax Indemnitee") and hold each Seller Tax Indemnitee harmless from and
against any and all of the following (including reasonable fees and expenses in
connection therewith):

                    (1) any and all Non-Income Taxes of each Retained Entity
     ((i) other than any Non-Income Taxes attributable to the New Diamond
     Business, the New Diamond Assets or the Standalone Drug Business and (ii)
     limited, in the case of Shared Non-Income Taxes, to the Company Percentage
     of such Non-Income Taxes);


                                       31

<PAGE>

                    (2) the Company Percentage of any Shared Non-Income Taxes
     imposed on New Diamond or a New Diamond Entity;

                    (3) any and all Non-Income Taxes for Pre-Closing Periods of,
     imposed upon, or relating or attributable to the Retained Business or the
     Retained Assets (regardless of whether such Non-Income Taxes are imposed on
     any Retained Entity or New Diamond or any New Diamond Entity);

                    (4) any and all Taxes for any Post-Closing Period of,
     imposed upon, or relating or attributable to the Retained Entities, the
     Retained Business or the Retained Assets and any and all Taxes of Onyx (or
     any Affiliate of Onyx that purchases a Retained Entity or Retained Asset
     pursuant hereto); and

                    (5) notwithstanding Section 4.1(a), any Taxes resulting from
     any extraordinary transaction taken by or with respect to the Retained
     Entities, the Retained Business or the Retained Assets on the Closing Date
     but after the Retained Business Purchase and any and all Taxes resulting
     from any Onyx Real Estate Dropdowns (or of any wholly-owned subsidiary
     referred to in the definition thereof), the Financing or any Future Debt
     Financing (and New Diamond and SV shall not be responsible for such Taxes
     described in this clause (5)).

          Each of Onyx, its Designated Affiliates and the Company shall be
entitled to any refund of (or credit of or against) Taxes to the extent that
such refund (or credit) relates to a Tax that is the responsibility of Onyx, its
Designated Affiliates, any Retained Entity or the Company under this Section
4.1(b), except for refunds (or credits) to which New Diamond may be entitled
under Section 4.1(a).

               (c) The parties acknowledge and agree that they desire and intend
to treat (x) the Retained Business Purchase (other than the purchase of Lucky
Stores, Inc., a Delaware corporation ("Lucky Delaware"), and its Subsidiaries)
as a purchase of assets for federal income Tax purposes, (y) the purchase of
Lucky Delaware as a purchase of stock for federal income Tax purposes and (z)
the Separation as a transaction that does not result in any gain, including any
deferred intercompany gain, for federal income Tax purposes (other than with
respect to the distribution of certain New Diamond Assets from Lucky Delaware
and its Subsidiaries pursuant to this Separation Agreement). In furtherance of
the parties' desire and intention, at the option of SV: New Diamond and Onyx
shall (i) jointly make timely and irrevocable elections under Section 338(h)(10)
of the Code (and any corresponding elections under state or local tax law) (the
"338(h)(10) Elections") with respect to any Retained Entities designated by New
Diamond (such entities, the "338(h)(10) Election Subsidiaries") (provided that
this clause (i) shall not be available with respect to any Retained Entity
designated by Onyx in writing no later than 60 days after the execution of this
Separation Agreement as a Retained Entity to be purchased by an entity that is
not a corporation for federal income Tax purposes), (ii) jointly cause any
Retained Entities designated by New Diamond (such entities, the "Disregarded
Entities") to be treated as "disregarded" entities within the meaning of
Treasury Regulation Section 301.7701-3, including by way of conversion of such
Retained Entities into Delaware limited liability companies on or prior to the
Closing Date (such treatment, the "Disregarded Entity Treatment"), and (iii)
take such other actions as may be necessary or appropriate to further


                                       32

<PAGE>

such desire and intention while transferring directly or indirectly the Retained
Entities to Onyx and/or its Designated Affiliates. New Diamond and Onyx shall,
and shall cause their respective Subsidiaries and Affiliates to, (i) treat the
338(h)(10) Elections and Disregarded Entity Treatment as valid, (ii) file all
Tax Returns in a manner consistent with such 338(h)(10) Elections and
Disregarded Entity Treatment and (iii) take no position or action contrary
thereto, except to the extent required to do otherwise pursuant to a
Determination. New Diamond and Onyx shall jointly prepare or cause to be
prepared, in a manner consistent with the Retained Business Allocation, any form
or document required to effect a valid and timely 338(h)(10) Election or
Disregarded Entity Treatment. New Diamond and Onyx and any of their respective
Subsidiaries and Affiliates shall take any and all actions reasonably necessary
to effectuate the 338(h)(10) Elections and Disregarded Entity Treatment. Except
as may be required by a Determination, consistent with the provisions above in
this Section 4.1(c), New Diamond, Onyx and their respective Subsidiaries and
Affiliates shall file, or cause to be filed, all Tax Returns in a manner
consistent with the 338(h)(10) Elections and Disregarded Entity Treatment and
shall treat the Retained Business Purchase (other than the purchase of Lucky
Delaware and its Subsidiaries) as a purchase of assets for federal income Tax
purposes, the purchase of Lucky Delaware as a purchase of stock for federal
income Tax purposes and the Separation as a transaction that does not result in
any gain, including any deferred intercompany gain, for federal income Tax
purposes (other than with respect to the distribution of certain New Diamond
Assets from Lucky Delaware and its Subsidiaries pursuant to this Separation
Agreement) (and take no position or action contrary thereto). The parties agree
that no election other than the 338(h)(10) Elections with respect to the
338(h)(10) Subsidiaries shall be made under Section 338 of the Code with respect
to the purchase of any of the Retained Entities pursuant to this Agreement.

          Section 4.2 Filing Responsibility. (a) New Diamond shall prepare and
file, or cause to be prepared and filed, when due: (1) all United States
consolidated federal Income Tax Returns for the Affiliated Group or the
affiliated group of which SV is the common parent, (2) any Tax Return (whether
filed on a consolidated, combined, unitary, separate or other basis) of, or
which includes, New Diamond or any other New Diamond Entity, and (3) any Income
Tax Return of any Retained Entity for any Pre-Closing Period or a Straddle
Period.

               (b) Onyx, its Designated Affiliates or the Company shall, except
to the extent that filing such Tax Returns are the responsibility of New Diamond
under Section 4.2(a), prepare and file, or cause to be prepared and filed, all
Tax Returns with respect to each Retained Entity.

               (c) The parties agree to prepare and file, or cause to be
prepared and filed, all Pre-Closing Period Tax Returns of the Company and its
Subsidiaries in a manner consistent with past practices of the Company and its
Subsidiaries, except as otherwise required by Law or a Determination.

               (d) In the case of any Straddle Period Income Tax Return of a
Retained Entity or Non-Income Tax Return of a New Diamond Entity or a Retained
Entity, in each case, on which are reportable Taxes for which both SV and New
Diamond, on the one hand, and Onyx and the Company, on the other hand, are
responsible under Section 4.1 (or any Non-Income Tax Return of a Retained Entity
on which are reportable only Taxes that are the responsibility of New Diamond
and SV under Section 4.1(a) or any Non-Income Tax Return of a


                                       33

<PAGE>

New Diamond Entity on which are reportable only Taxes that are the
responsibility of Onyx and the Company under Section 4.1(b)), the party that is
responsible for preparing such Tax Return under this Section 4.2 (the "Return
Preparer") shall furnish such Tax Return required to be filed by the Return
Preparer (together with making available any associated workpapers prepared in
connection with such Tax Return) to the other party (the "Affected Party") for
its review and approval (which approval shall not be unreasonably delayed or
withheld) at least 30 days prior to the due date for filing such Tax Return
(taking into account valid extensions) and (y) the Affected Party shall provide
any good faith comments it may have on such Return to the Return Preparer within
15 days of the Affected Party's receipt of such draft Tax Return from the Return
Preparer (such comments to be limited to confirming that the Tax Return is
consistent with past practice as set forth in Section 4.2(c) and with the Tax
treatments specified in this Separation Agreement); provided, however, that in
the event that such Tax Return is required to be filed (taking into account
valid extensions) within four (4) months after the Closing Date, then such time
periods shall be reasonably reduced and the parties shall act expeditiously so
that such Tax Return may be filed on a timely basis; provided, further, however,
that to the extent that the Return Preparer does not agree with the Affected
Party's comments, the Return Preparer and the Affected Party shall endeavor in
good faith to resolve such disagreement. In the event that the Return Preparer
and the Affected Party are unable to resolve such disagreement, and to the
extent that the Affected Party objects that the Return Preparer has not prepared
the Tax Return in question in accordance with past practices as set forth in
Section 4.2(c) or consistent with the Tax treatments specified in this
Separation Agreement, the Accountant shall resolve such dispute in accordance
with past practices as set forth in Section 4.2(c) and consistent with the Tax
treatments specified in this Separation Agreement. In such case, the Return
Preparer and the Affected Party shall each bear one-half (50%) of the fees and
expenses attributable to the Accountant's resolution of such dispute. Any Tax
Return that is furnished to an Affected Party pursuant to this Section 4.2(d)
shall be accompanied by a statement setting forth the portion of the Tax due in
connection with filing such Tax Return that is allocable to the Affected Party
pursuant to Section 4.1, which statement will specify in reasonable detail the
calculation of the portion of such Tax so allocable. The Affected Party shall
pay to the Return Preparer the portion of such Tax so allocable no later than
one Business Day prior to the date such Tax Return is to be filed.

          Section 4.3 Cooperation and Exchange of Information. (a) As soon as
practicable, from and after the Closing Date, SV, New Diamond and its
Subsidiaries, on the one hand, and Onyx, its Designated Affiliates, the Retained
Entities and their respective Subsidiaries, on the other hand, shall provide
each other with such cooperation and shall deliver to each other such
information and data and make available such knowledgeable employees as Onyx,
its Designated Affiliates, the Retained Entities and their respective
Subsidiaries, on the one hand, and New Diamond and its Subsidiaries, on the
other hand, may reasonably request in order to complete and file all Tax Returns
which they may be required to file or to respond to audits by any Tax
Authorities, and to otherwise enable them or their Affiliates to satisfy their
respective accounting, Tax and other legitimate requirements. Each of SV, New
Diamond, the New Diamond Entities, Onyx, its Designated Affiliates and the
Retained Entities shall make their employees and facilities available on a
mutually convenient basis to provide explanation of any documents or information
provided hereunder. Onyx shall, and shall cause its Designated Affiliates, the
Retained Entities and their respective Subsidiaries to, take all actions
reasonably necessary to facilitate New Diamond's and SV's exercise of their
rights under this Article IV in


                                       34

<PAGE>

respect of the Retained Entities, including preparing and filing Tax Returns,
and conducting Tax Proceedings. New Diamond shall, and shall cause the New
Diamond Entities to, take all actions reasonably necessary to facilitate Onyx's
and the Company's exercise of their rights under this Article IV in respect of
the New Diamond Entities, including conducting Tax Proceedings.

               (b) For a period of ten (10) years after the Closing Date, New
Diamond, Onyx, its Designated Affiliates and the Retained Entities shall retain
all Tax Returns, books and records of, or with respect to, the Retained
Entities, the Retained Assets or the Retained Business for all taxable periods
ending on or prior to the Closing Date to the extent such items are in such
person's possession after the Closing. Thereafter, neither New Diamond, Onyx,
any of its Designated Affiliates nor any of the Retained Entities shall dispose
of any such Tax Returns, books or records unless it first offers such Tax
Returns, books and records to New Diamond or Onyx, as applicable and New Diamond
or Onyx, as applicable fails to accept such offer within 60 days of its being
made.

               (c) SV, New Diamond, Onyx, its Designated Affiliates and the
Retained Entities shall, and shall cause their respective Subsidiaries to,
cooperate in the preparation of all Tax Returns relating in whole or in part to
taxable periods ending on or before the Closing Date that are required to be
filed after such date and all Tax Returns for Straddle Periods.

          Section 4.4 Tax Proceedings. (a) Each of SV, New Diamond and its
Subsidiaries, on the one hand, and Onyx, its Designated Affiliates, the Retained
Entities and their respective Subsidiaries, on the other hand, shall provide
prompt notice to the other party of any claim, assessment or dispute of which it
becomes aware related to Taxes for which it is indemnified by the other party
under Section 4.1. Such notice shall attach copies of the pertinent portion of
any written communication from a Tax Authority and contain factual information
(to the extent known) describing any asserted Tax liability in reasonable detail
and shall be accompanied by copies of any notice and other documents received
from any Tax Authority in respect of any such matters.

               (b) In the case of any Tax Proceeding, the Controlling Party
shall have the sole right to control, contest, resolve and defend the Tax
Proceeding (including having the right to determine whether and when to settle
the Tax Proceeding); provided, however, that, except in the case of Exclusive
Tax Proceedings, in the case of any Tax Proceeding relating to any Pre-Closing
Period or Straddle Period in which the outcome would reasonably be expected to
result in an increase in liability for Taxes with respect to which the
Non-Controlling Party or any Affiliate thereof is liable under this Separation
Agreement or with respect to which such Non-Controlling Party or Affiliate is
liable at law and with respect to which such Non-Controlling Party or Affiliate
is not entitled to indemnification under this Separation Agreement, (i) the
Controlling Party shall provide the Non-Controlling Party with a timely and
reasonably detailed account of each phase of such Tax Proceeding, (ii) the
Non-Controlling Party shall be entitled to receive copies of all correspondence
and documents related to such Tax Proceeding, (iii) the Controlling Party shall
consult with the Non-Controlling Party before taking any significant action in
connection with such Tax Proceeding, (iv) the Controlling Party shall consult
with the Non-Controlling Party and offer the Non-Controlling Party an
opportunity to comment before submitting any written materials prepared or
furnished in connection with such


                                       35

<PAGE>

Tax Proceeding, (v) the Controlling Party shall defend such Tax Proceeding
diligently and in good faith as if it were the only party in interest in
connection with such Tax Proceeding, (vi) except in the case of a Tax Proceeding
in respect of a Tax Return of a Retained Entity on which are reportable Taxes
for which only SV and New Diamond are responsible under Section 4.1, the
Non-Controlling Party shall be entitled to participate in (but not control) such
Tax Proceeding, at its own expense, and (vii) the Controlling Party shall not
settle such Tax Proceeding without the consent of the Non-Controlling Party
which shall not be unreasonably withheld.

For purposes of this Section 4.4(b):

          (i) New Diamond shall be the "Controlling Party" with respect to any
     Tax Proceeding in respect of (A) a Tax Return referred to in Section 4.4(c)
     (and any adjustment to a state or local Income Tax Return required as a
     result of the outcome of any Tax Proceeding with respect to such a Tax
     Return), (B) (except in the case of a Non-Income Tax Return on which Taxes
     for which Onyx is responsible under Section 4.1 are reportable) any Tax
     Return of New Diamond or a New Diamond Entity (such Tax Proceedings
     described in clauses (A) or (B), collectively, the "Exclusive Diamond
     Proceedings") and there shall be no "Non-Controlling Party" in respect of
     such a Tax Proceeding,

          (ii) Onyx shall be the "Controlling Party" with respect to any Tax
     Proceeding in respect of a Tax Return referred to in Section 4.4(d) (the
     "Exclusive Onyx Proceedings," and, together with the Exclusive Diamond
     Proceedings, the "Exclusive Tax Proceedings") and there shall be no
     "Non-Controlling Party" in respect of such a Tax Proceeding,

          (iii) except in the case of Exclusive Tax Proceedings, in the case of
     any Tax Proceeding in respect of (A) any Income Tax Return of a Retained
     Entity for a Straddle Period, (B) any Tax Return of a Retained Entity on
     which are reportable only Taxes for which SV and New Diamond are
     responsible under Section 4.1 or (C) a Non-Income Tax Return on which are
     reportable Non-Income Taxes for which both SV and New Diamond, on the one
     hand, and Onyx and the Company, on the other hand, are responsible under
     this Separation Agreement, if Onyx and the Company are responsible under
     this Separation Agreement for more than half the Taxes reported on the Tax
     Return, then Onyx shall be the "Controlling Party" and New Diamond shall be
     the "Non-Controlling Party"; otherwise New Diamond shall be the
     "Controlling Party" and Onyx the "Non-Controlling Party" with respect to
     such Tax Proceeding,

          (c) Notwithstanding any other provision of this Separation Agreement,
neither Onyx, its Designated Affiliates, the Retained Entities nor any of their
respective Subsidiaries or Affiliates shall be entitled to participate in any
Tax Proceeding with respect to any Tax Return of the Affiliated Group or any
United States consolidated federal Income Tax Return which includes New Diamond
or SV or any other consolidated, combined or unitary Tax Return which includes
New Diamond, any New Diamond Entity or any member of the New Diamond Seller
Group, nor shall Onyx, its Designated Affiliates, the Retained Entities nor any
of their respective Subsidiaries or Affiliates be entitled to any information
(except to the extent relating solely to


                                       36

<PAGE>

any Retained Entity, the Retained Business, or any Retained Asset, which may
include pro forma information relating solely to the Retained Entities, the
Retained Business or a Retained Asset) regarding any such Tax Return (or any Tax
Returns of New Diamond).

          (d) Notwithstanding any other provision of this Separation Agreement,
neither SV, New Diamond, any New Diamond Entity nor any of their respective
Subsidiaries or Affiliates shall be entitled to participate in any Tax
Proceeding with respect to any Tax Return of any Retained Entity for a
Post-Closing Period other than a Straddle Period (or any consolidated, combined
or unitary Tax Return for a Post-Closing Period, other than a Straddle Period,
which includes any Retained Entity), unless such Tax Return includes New Diamond
or a New Diamond Entity, nor shall SV, New Diamond, any New Diamond Entity nor
any of their respective Subsidiaries or Affiliates be entitled to any
information (except to the extent relating solely to any Retained Entity, the
Retained Business or any Retained Asset which may include pro forma information
relating solely to the Retained Entities, the Retained Business, or a Retained
Asset) regarding any such Tax Return.

          Section 4.5 Tax Sharing Agreements. Anything in any other agreement to
the contrary notwithstanding, all liabilities and obligations between New
Diamond, any New Diamond Entity or any member of the New Diamond Seller Group,
on the one hand, and the Retained Entities, on the other hand, under any Tax
allocation or Tax sharing agreement in effect prior to the Closing Date (other
than this Separation Agreement) shall cease and terminate as of the Closing
Date.

          Section 4.6 Tax Benefits. New Diamond and SV shall be entitled to any
Tax Benefit arising from any deduction that results from any payment, loss,
obligation, Tax or Liability arising from a Section 4.6 Liability. Neither Onyx,
its Designated Affiliates, the Company nor any of their respective Subsidiaries
shall claim any such deduction in respect of a Section 4.6 Liability on any Tax
Return that Onyx, its Designated Affiliates or the Company are responsible for
preparing under Section 4.2(b); provided, however, that if any deduction arising
in respect of a payment, loss, obligation, Tax or Liability arising from a
Section 4.6 Liability is not permitted by law or administrative practice to be
reported on a Tax Return for which New Diamond has filing responsibility under
Section 4.2(a) (or another Pre-Closing Period Tax Return) and is permitted by
law or administrative practice to be reported on a Tax Return for which Onyx,
its Designated Affiliates or the Company has filing responsibility under Section
4.2(b), then, at New Diamond's request, Onyx, its Designated Affiliates, the
Retained Entities or their respective Subsidiaries shall claim such deduction
and pay to New Diamond the amount of any Tax Benefit actually realized in cash
from such deduction (less any Tax Detriment that results from such deduction) no
later than thirty (30) days after the Tax Return in which such Tax Benefit is
realized or utilized is filed; provided, however, that New Diamond shall repay
such amount to the extent that subsequent events occur that result in the loss
or reduction of such Tax Benefit no later than thirty (30) days after Onyx
notifies New Diamond, in writing as provided below, of the loss or reduction of
such Tax Benefit. For purposes of this Section 4.6, such subsequent events
include, but are not limited to, audit adjustments, realization of any Tax
Detriment, and the recognition of a net operating loss that could have been
carried over to offset income in the absence of the deduction that results from
the payment, loss, obligation, Tax or Liability arising from a Section 4.6
Liability. For purposes of this Section 4.6, an increase (or reduction) in Taxes
as a result of any Tax Benefit or Tax Detriment shall be deemed to be


                                       37

<PAGE>

realized by a party to the extent the Tax liability of such party exceeds (or is
less than) the Tax liability such party would have incurred without taking into
account any Tax Item relating to such Tax Benefit or Tax Detriment. Any payment
in respect of a net Tax Benefit or notice of a loss or reduction of such Tax
Benefit shall be accompanied by a schedule prepared by Onyx in good faith
setting forth in reasonable detail the amount of such Tax Benefit or such loss
or reduction of Tax Benefit and the calculation of that amount. Nothing in this
Section 4.6 shall require Onyx or any Retained Entity to disclose to any person
any Tax Return filed by it or any material information Onyx or such Retained
Entity otherwise deems confidential.

          Section 4.7 Transfer Taxes. Notwithstanding anything to the contrary
in this Separation Agreement, other than with respect to the Standalone Drug
Sale, New Diamond and Onyx agree that New Diamond shall bear 50% of all
documentary, sales, use, registration, value added, transfer, recordation stamp
and similar Taxes (collectively, "Transfer Taxes") imposed on the Reorganization
or the transactions set forth in Section 2.1(a), and Onyx shall bear 50% of any
such Transfer Taxes. New Diamond and Onyx, and their respective Subsidiaries and
Affiliates, agree to timely sign and deliver any affidavits, certificates or
forms as may be necessary or appropriate to establish an exemption from (or
otherwise reduce), or file Tax Returns or any other documents with respect to,
such Transfer Taxes. Any party shall have the right to seek a refund of any and
all Transfer Taxes paid by it for which it is responsible pursuant to this
Section 4.7 at its own expense. If so requested, the other party shall use
reasonable efforts to cooperate with the party seeking such refund.

          Section 4.8 Taxes Governed by Article IV. Claims for indemnification
with respect to Taxes shall be governed by this Article IV and Section 5.8 but
not by any other provision of Article V or Article VI. For the absence of doubt,
any obligations to make indemnification payments with respect to Taxes imposed
under Section 4999 of the Code shall be governed by the provisions of Article
VIII addressing allocation of Liabilities under Company Plans.

          Section 4.9 Survival. All rights and obligations under this Article IV
shall survive the Closing Date and continue until 60 days after the expiration
of all applicable statutes of limitation (including all periods of extension,
whether automatic or permissive).

          Section 4.10 Post-Closing Dispositions. For the avoidance of doubt,
the covenants of Onyx, its Designated Affiliates and the Retained Entities set
forth in this Article IV shall apply to Onyx, its Designated Affiliates and the
Retained Entities regardless of any post-Closing disposition of the Retained
Entities by Onyx, its Designated Affiliates or any of their respective
Subsidiaries or Affiliates.

          Section 4.11 Reorganization Treatment. The parties agree (a) to treat
the acquisition by New Diamond of all of the issued and outstanding Equity
Interests of the Company for stock of New Diamond and the subsequent conversion
of the Company into a Delaware limited liability company, taken together, as a
mere change in identity or form of the Company qualifying as a reorganization
under Section 368(a)(1)(F) of the Code and (b) to treat the Company as a
"disregarded" entity within the meaning of Treasury Regulation Section
301.7701-3 for the period from and after the time of the conversion of the
Company into a Delaware limited liability company and for so long as the Company
is wholly owned by New


                                       38

<PAGE>

Diamond, in each case, for all Tax purposes, unless required to do otherwise as
a result of a Determination. The parties agree not to take any position on any
Tax Return or in any Tax Proceeding inconsistent with such treatment described
in the immediately preceding sentence.

          Section 4.12 [Intentionally Omitted]

          Section 4.13 Tax Treatment of Payments. The parties agree to treat any
indemnity payments pursuant to this Article IV, for Tax purposes, as an
adjustment to the Retained Business Price or as payments that are deductible by
the payor, as appropriate, unless otherwise required by applicable Tax Law.

                                    ARTICLE V

                                 INDEMNIFICATION

          Section 5.1 SV's and New Diamond's Agreement to Indemnify. In addition
to any other indemnification provided hereunder, subject to the terms and
conditions set forth in this Separation Agreement, from and after the Closing
Date, each of SV and New Diamond shall, and New Diamond shall cause each of the
New Diamond Entities to, indemnify, defend and hold harmless Onyx, the Company,
the other Retained Entities and each of their respective directors, officers,
partners, members, employees and other representatives, advisors and agents
(collectively, "Representatives"), Subsidiaries and Affiliates (collectively,
the "Company Indemnitees") from and against any and all Indemnifiable Losses of
the Company Indemnitees arising out of or resulting from, directly or
indirectly, the New Diamond Liabilities and the matters contemplated as being
Indemnifiable Losses by Section 2.6 of this Separation Agreement.

          Section 5.2 Onyx's and the Company's Agreement to Indemnify. In
addition to any other indemnification provided hereunder, subject to the terms
and conditions set forth in this Separation Agreement, from and after the
Closing Date, each of Onyx and the Company shall, and shall cause each of the
Retained Entities to, indemnify, defend and hold harmless SV, New Diamond and
the New Diamond Entities, and each of their respective Representatives,
Subsidiaries and Affiliates (collectively, the "New Diamond Indemnitees") from
and against any and all Indemnifiable Losses of the New Diamond Indemnitees
arising out of or resulting from, directly or indirectly, the Retained
Liabilities and the matters contemplated as being Indemnifiable Losses by
Section 2.6 of this Separation Agreement.

          Section 5.3 Reduction of Indemnifiable Losses for Insurance Benefits
Received. For purposes of this Article V, Section 8.2 and Section 8.7, the
calculation of any Indemnifiable Loss will reflect the amount of any insurance
proceeds or indemnification payments received by the Indemnitee in respect of
such Indemnifiable Loss (net of all reasonable costs and expenses incurred by
the Indemnitee in recovering such insurance proceeds). Each Indemnitee shall use
its commercially reasonable efforts to recover from its insurers or other
sources of reimbursement or recovery the maximum portion of any Indemnifiable
Loss that is recoverable from such sources.


                                       39

<PAGE>

          Section 5.4 Procedure for Indemnification. (a) If an Indemnitee shall
receive notice of the assertion by a person who is not a party to this
Separation Agreement of any claim or of the commencement by any such person of
any Action (a "Third Party Claim") with respect to which an Indemnifying Party
may be obligated to provide indemnification under Section 5.1 or Section 5.2,
such Indemnitee shall give such Indemnifying Party prompt notice thereof after
becoming aware of such Third Party Claim; provided, that the failure of any
Indemnitee to give notice as provided in this Section 5.4 shall not relieve the
related Indemnifying Party of its obligations under this Article V, except to
the extent that such Indemnifying Party is actually and materially prejudiced by
such failure to give notice. Such notice shall describe the Third Party Claim in
reasonable detail, and, if practicable, shall indicate the estimated amount of
the Indemnifiable Loss that has been or may be sustained or asserted by such
Indemnitee.

               (b) If an Indemnitee gives notice of a Third Party Claim to an
Indemnifying Party, the Indemnifying Party shall have 30 days after receipt of
notice to elect, at its option, to take responsibility for resolving, and assume
and control the defense of, at its own expense and by its own counsel, any such
Third Party Claim and shall be entitled to assert any and all defenses available
to the Indemnitee to the fullest extent permitted by Law. If the Indemnifying
Party shall undertake to defend and resolve any such Third Party Claim, it shall
promptly notify the Indemnitee of its intention to do so, and the Indemnitee
agrees to cooperate as reasonably requested by the Indemnifying Party and its
counsel in the resolution of, or defense against, any such Third Party Claim;
provided, however, that the Indemnifying Party shall not admit any liability
with respect to such Third Party Claim without the prior written consent of the
Indemnitee, and shall not resolve, settle, compromise or discharge any such
Third Party Claim without the prior written consent of the Indemnitee (which
consent will not be unreasonably withheld or delayed) unless the relief consists
solely of the payment of money and includes a provision whereby the plaintiff or
claimant in the matter releases the Indemnitees from all liability with respect
thereto. Notwithstanding the foregoing, the Indemnitee shall have the right to
defend (but not admit liability, compromise, settle or otherwise resolve such
Third Party Claim without the prior written consent of the Indemnifying Party)
any Third Party Claim as to itself by its own separate counsel, and the
Indemnifying Party shall pay the reasonable fees, costs and expenses of such
separate counsel, as incurred, if the Indemnitee shall have determined in good
faith that an actual or potential conflict of interest makes representation by
the same counsel or the counsel selected by the Indemnifying Party
inappropriate. Further, the Indemnitee shall have the right to employ separate
counsel and to participate in the defense of any Third Party Claim (though such
separate counsel shall not appear of record), at the expense of the Indemnitee
(unless the Indemnifying Party agrees to pay the fees and expenses of such
separate counsel). In any event, the Indemnitee and Indemnifying Party and their
counsel shall cooperate in the defense of any Third Party Claim and keep such
persons informed of all developments relating to any such Third Party Claim, and
provide copies of all relevant correspondence and documentation relating thereto
consistent with applicable rules of privilege and legal ethics. All costs and
expenses incurred in connection with the Indemnitee's cooperation shall be paid
by the Indemnifying Party, as incurred. If the Indemnifying Party receiving a
notice of Third Party Claim does not elect timely to take responsibility for
resolving, and defend, such Third Party Claim or does not defend such Third
Party Claim in good faith, the Indemnitee shall have the right, in addition to
any other right or remedy it may have hereunder, at the Indemnifying Party's
expense, to defend such Third Party Claim; provided, however, that (1) the
Indemnitee shall not have any obligation to participate in the defense of, or
defend, any such Third Party Claim; (2)


                                       40

<PAGE>

the Indemnitee's defense of or participation in the defense of any such claim
shall not in any way diminish or lessen the obligations of the Indemnifying
Party under this Article V; and (3) the Indemnitee shall not resolve, settle,
compromise or discharge any such Third Party Claim without the prior written
consent of the Indemnifying Party.

          Section 5.5 Pending Litigation; New Litigation. Following the Closing
Date, (a) Onyx and/or one or more if its Designated Affiliates shall have
exclusive authority and control over the investigation, prosecution, defense and
appeal of (1) all Actions brought against the Company or its Subsidiaries listed
on Schedule 1.12 of this Separation Agreement and all pending Actions brought
against the Company or its Subsidiaries exclusively relating to the Retained
Business and (2) all Actions brought against the Company or its Subsidiaries
brought after the date hereof that primarily relate to the Retained Business
(the Actions described in the foregoing clauses (1) and (2) each, a "Retained
Action"), and may settle or compromise, or consent to the entry of any Judgment
with respect to, any such Action without the consent of any other party,
provided, that in the event that such Retained Action involves the potential
indemnification of an Indemnified Director or Officer, Onyx or one or more of
its Designated Affiliates, as applicable, shall not settle, compromise or
consent to the entry of any judgment in any actual or threatened claim, demand,
action, suit, proceeding, inquiry or investigation in connection with a Retained
Action in respect of which indemnification has been or could be sought by such
Indemnified Director or Officer under the Transaction Agreements unless such
settlement, compromise or judgment includes an unconditional release of such
Indemnified Director or Officer from all liability arising out of such claim,
demand, action, suit, proceeding, inquiry or investigation or such Indemnified
Director or Officer otherwise consents thereto, and (b) New Diamond and/or one
or more of its Designated Affiliates shall have exclusive authority and control
over the investigation, prosecution, defense and appeal of (1) all pending
Actions brought against the Company or its Subsidiaries listed on Schedule 1.13
of this Separation Agreement, (2) all of the Actions brought against the Company
or its Subsidiaries as of the date hereof that are not Retained Actions (the
Actions described in the foregoing clauses (1) and (2) each, a "New Diamond
Action") (3) all Shared Transaction Litigation Liabilities, (4) all Unallocated
Actions (as defined below) and (5) all Actions that constitute Specified
Standalone Drug Liabilities, and may settle or compromise, or consent to the
entry of any Judgment with respect to, any such Action without the consent of
any other party; provided, that, notwithstanding anything to the contrary,
neither Onyx nor New Diamond (nor any of their respective Subsidiaries or
Affiliates) may settle or compromise, or consent to the entry of any Judgment
with respect to, any Retained Action, New Diamond Action, Unallocated Action,
Shared Transaction Litigation Liability or any Action that constitutes a
Specified Standalone Drug Liability, without the prior written consent of the
other party if such settlement, compromise or consent to such Judgment (i)
includes any form of relief binding upon such other party or its Affiliates or
their respective businesses or assets, (ii) does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such other party (and
any Affiliate of such other party subject to such Action) of a full and final
release from all Liability in respect of such claim or litigation or (iii) in
the case of a Shared Transaction Litigation Liability, requires any cash payment
for damages or otherwise by any party to this Separation Agreement other than
the settling party. If, after the date hereof, any Action other than those
Retained Actions, New Diamond Actions and Shared Transaction Litigation
Liabilities as described above shall be brought against the Company or any of
its Subsidiaries, such Action


                                       41

<PAGE>

shall be deemed to be "Unallocated Actions" for purposes of this Separation
Agreement unless such Action shall constitute a Specified Standalone Drug
Liability.

          Section 5.6 Remedies Exclusive. From and after the Closing and except
as otherwise specifically provided herein (including Articles IV and VIII), the
rights to indemnification provided in this Article V shall be the exclusive
monetary remedy for any New Diamond Liabilities or Retained Liabilities;
provided that nothing herein shall preclude assertion by any Indemnitee of any
other rights or the seeking of any and all other remedies against any
Indemnifying Party in the event of fraud or in the event of an Indemnifying
Party's failure to comply with its indemnification obligations hereunder.

          Section 5.7 Retained Business Price Adjustment. The parties agree to
treat any indemnity payments pursuant to this Separation Agreement for Tax
purposes, as an adjustment to the Retained Business Price, as applicable, or as
payments that are deductible by the payor, as appropriate, unless otherwise
required by applicable Tax Law.

          Section 5.8 Exclusion of Tax Indemnities. Notwithstanding anything to
the contrary in this Article V or in Article VI, the provisions of Article V and
Article VI shall not apply to Tax indemnification matters and indemnification
shall not be provided under Article V or Article VI for Taxes, all such matters
and any such indemnification being governed by Article IV.

                                   ARTICLE VI

                           CERTAIN ADDITIONAL MATTERS

          Section 6.1 Further Assurances; Subsequent Transfers. (a) Each of the
parties hereto will execute and deliver such further instruments of transfer,
distribution and assumption and will take such other actions as the other
parties hereto may reasonably request in order to effectuate the purposes of
this Separation Agreement and to carry out the terms hereof. Without limiting
the generality of the foregoing, at any time and from time to time after
Closing, at the request of any party the other party will execute and deliver
such other instruments of transfer and distribution, and take such action as the
requesting party may reasonably deem necessary or desirable in order to more
effectively transfer, convey and assign to such requesting party (or any of its
Subsidiaries and/or Designated Affiliates) and to confirm such requesting
party's (or any of its Subsidiaries and/or Designated Affiliates, as the case
may be) right, title to or interest in, all of the New Diamond Assets or Equity
Interests in the New Diamond Entities, the Retained Assets or Equity Interests
in the Retained Entities, as applicable, to put the requesting party (or any of
its Subsidiaries and/or Designated Affiliates, as the case may be) in actual
possession and operating control thereof and to permit the requesting party (or
any of its Subsidiaries and/or Designated Affiliates, as the case may be) to
exercise all rights with respect thereto (including rights under contracts and
other arrangements as to which the consent of any third party to the transfer
thereof shall not have previously been obtained) and to properly assume and
discharge the related New Diamond Liabilities, or the Retained Liabilities, as
applicable.

               (b) In furtherance of the foregoing, in the event and to the
extent that a transferring party is unable to obtain any consents required to
transfer and assign to the other


                                       42

<PAGE>

party (or such other party's Designated Affiliate), and a release of a
transferor from, any agreements, licenses and other rights included in the New
Diamond Assets or Retained Assets, as applicable, such transferor (1) shall
continue to be bound thereby pending assignment to the other party or its
Designated Affiliate and (2) shall, at the direction and expense of the other
party, pay, perform and discharge fully all of its obligations thereunder from
and after the Closing and prior to assignment to the other party or its
Designated Affiliate, and the other party will indemnify the transferor for any
Liabilities of the transferor arising out of such Assets or its compliance with
the documentation and agreement relating to, any reasonable out-of-pocket
expenses associated with any attempt to transfer or failure to transfer such
Asset or any Liabilities arising out of or resulting from the transferor's
actions taken in accordance with any such directions of the other party or its
Designated Affiliate. The transferor shall, without further consideration
therefor, pay, assign and remit to the other party or its Designated Affiliate
promptly all monies, rights and other consideration received in respect of such
agreements. Following the Closing, the transferor shall exercise or exploit its
rights and options under all such agreements, leases, licenses and other rights
and commitments referred to in this Section 6.1(b) when and only as reasonably
directed by, and at the expense of, the other party or its Designated Affiliate.
If and when any such consent shall be obtained or such agreement, lease, license
or other right shall otherwise become assignable, the transferor shall promptly
assign all its rights and obligations thereunder to the other party or its
Designated Affiliate without payment of further consideration and the other
party or its Designated Affiliate shall, without the payment of any further
consideration therefor, assume such rights and obligations. Notwithstanding the
foregoing, if the arrangement described in this Section 6.1(b) is impracticable
or will cause (or is likely to cause) a default under any real estate lease
(whether due to the intended change of the store brand under which such property
will be operated or for other reasons), then the parties will work in good faith
to establish a mutually satisfactory arrangement for the operation of such
leased real property during the period subsequent to the Closing and pending
receipt of the required consent, including a fair and equitable arrangement
(under the applicable circumstances) for allocating income and expenses with
respect to such property during such period.

               (c) In the event that, subsequent to the Closing Date, the
Company or Onyx shall either (1) receive written notice from New Diamond that
certain specified Assets of the Company or any Subsidiary of the Company which
properly constitute New Diamond Assets were not transferred to New Diamond on or
prior to the Closing Date or (2) determine that certain Assets of the Company or
any Subsidiary of the Company which properly constitute New Diamond Assets were
not transferred to New Diamond on or prior to the Closing Date, then (assuming
the accuracy of such notice or demand) as promptly as practicable thereafter,
the Company or Onyx, as appropriate, shall take all steps reasonably necessary
to transfer and deliver any and all of such Assets to New Diamond without the
payment by New Diamond of any further consideration therefor. In the event that,
subsequent to the Closing Date, New Diamond shall either (i) receive written
notice from the Company or Onyx that certain specified Assets which properly
constitute Retained Assets were transferred to New Diamond or included with the
New Diamond Entities or (ii) determine that certain Assets of New Diamond which
properly constitute Retained Assets were transferred to New Diamond or included
with the New Diamond Entities, then (assuming the accuracy of such notice or
demand) as promptly as practicable thereafter, New Diamond shall, and shall
cause its Subsidiaries to, take all steps reasonably necessary to transfer and
deliver any and all of such Assets to the Company or its


                                       43

<PAGE>

Subsidiaries in each case without the payment by Onyx, the Company of any
further consideration therefor.

               (d) Without limiting the provisions of this Section 6.1 or any
other provision of this Separation Agreement, each of the parties for itself and
its respective Subsidiaries and Affiliates, as appropriate, agrees to execute,
acknowledge and deliver all documents and to take all actions reasonably
necessary to effectuate the following:

                    (1) Each Transferred Real Property shall be conveyed by
     means of a warranty deed and/or assignment of lease with warranties, in
     recordable form (as modified as appropriate in the particular jurisdiction
     in which the real property is located (each a "Transfer Document"), and

                    (2) Each Transfer Document executed by a party transferring
     or otherwise assigning Transferred Real Property that conveys Transferred
     Real Property to any other party shall state on the face thereof the
     following:

                         (i) In the case of any breach of any transferor (each,
          a "Grantor") warranties herein contained, whether expressed or
          implied, the liability of Grantor shall be limited to its interest in
          the real property hereby conveyed and all amounts (collectively,
          "Indemnified Amounts") which are recovered from the prior
          non-affiliated transferors in the chain of title ("Prior Transferors")
          or pursuant to any real property title policies existing prior to the
          date of this instrument ("Pre-Existing Title Policy").

                         (ii) Grantor irrevocably assigns to each transferee
          (each, a "Grantee") all of Grantor's right, title and interest in and
          to all Indemnity Amounts including without limitation all claims,
          actions, rights of recovery and indemnity, losses, damages, expenses
          and fees (including reasonable attorneys' fees and court costs), at
          law, in equity or by contract, which Grantor may now or hereafter have
          against any and all Prior Transferors or under any Pre-Existing Title
          Policy, and Grantor hereby irrevocably designates and appoints the
          transferee its attorney in fact, coupled with an interest, with
          respect to all Indemnity Amounts.

                         (iii) The warranties and covenants contained herein
          shall be solely for the benefit of and enforceable by Grantee
          hereunder and for no other party including heirs, successors and
          assigns of Grantee and under no circumstances shall such warranties
          and covenants be deemed to run with the real property conveyed by this
          instrument.

                         (iv) Without limiting the foregoing provisions of this
          Section 6.1(d), if any claim is made by Grantee against Grantor as the
          result of any alleged breach of any covenants or warranties in any
          Transfer Document, upon Grantee's written notice Grantor shall either
          (A) make and diligently pursue all claims against the Prior
          Transferors, and against any title insurance company under any
          applicable Pre-Existing Title Policy, or (B) permit Grantee, in the
          name of Grantor, to make any or all such claims, in all cases at the
          sole cost and expense of Grantee, including counsel selected and
          retained by Grantee as is


                                       44

<PAGE>

          reasonably acceptable to Grantor. If Grantor shall be named by any
          third-party in any proceeding in connection with any such claim,
          Grantee (at Grantee's sole cost) shall with counsel reasonably
          acceptable to Grantor defend and procure the dismissal of Grantor
          (subject to the requirements of law in connection with pursuing the
          claims against the Prior Transferors and the title insurance company,
          as applicable).

          Section 6.2 Use of Names; Cross-License. (a) Following the Closing
Date, the Company and the other Retained Entities shall have the sole and
exclusive ownership of and right to use, as between the Company and the other
Retained Entities, on the one hand, and New Diamond and its Subsidiaries, on the
other hand, each of the names that are (1) set forth in Schedule 1.14 of this
Separation Agreement or (2) used solely in connection with the Retained Business
(the "Retained Names"), and each of the trade marks, trade names, trade dress,
service marks, banners, logos and other proprietary rights related to such
Retained Names (the "Retained Proprietary Name Rights"). Following the Closing
Date, New Diamond and its Subsidiaries shall have the sole and exclusive
ownership of and right to use, as between New Diamond and its Subsidiaries, on
the one hand, and the Company and the other Retained Entities, on the other
hand, all names used by the Company and its Subsidiaries other than the Retained
Names (the "New Diamond Names"), and all other trade marks, trade names, trade
dress, service marks, banners, logos and other proprietary rights related to
such New Diamond Names (the "New Diamond Proprietary Name Rights"). In
connection with the Separation, the Company shall use its reasonable best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable to vest New Diamond and it
Subsidiaries with full and undivided ownership in the New Diamond Proprietary
Name Rights. Notwithstanding the foregoing, following the Closing, neither the
Company and the other Retained Entities, nor New Diamond and its Subsidiaries,
shall use any names that are confusingly similar to the Retained Names or the
New Diamond Names, as applicable, without the prior written consent of the other
party, provided that the parties agree that none of the names set forth on
Schedule 1.14, on the one hand, and the New Diamond Names, on the other hand,
shall be deemed to be "confusingly similar." As promptly as practicable
following the Closing Date but in no event later than one hundred eighty (180)
days following the Closing Date, the parties hereto shall, and shall cause their
respective Subsidiaries and other Affiliates to, take all action necessary to
cease using, and change (including by amending any charter documents), any
corporate or other names which are the same as or confusingly similar to any of
the New Diamond Names and the New Diamond Proprietary Name Rights or the
Retained Names and the Retained Proprietary Name Rights, as the case may be.

               (b) Notwithstanding the foregoing, on the Closing Date, the
Company and New Diamond shall enter into a Cross-Licensing Agreement (the
"Cross-Licensing Agreement"), reasonably acceptable to both parties, which shall
provide for, among other things, the grant of a limited, royalty-free
cross-license to each of the Company and its Subsidiaries, on the one hand and
to each of New Diamond and its Subsidiaries, on the other hand, to use certain
Retained Proprietary Name Rights and New Diamond Proprietary Name Rights, in
each case, for so long as and to the extent that each of the Company and its
Subsidiaries, on the one hand, and New Diamond and its Subsidiaries, on the
other hand, own the Retained Assets or the New Diamond Assets, respectively. The
Cross-Licensing Agreement shall also provide for the grant of a limited,
royalty-free, license to the Company and its Subsidiaries of the Lucky New


                                       45
<PAGE>

Diamond Proprietary Name Rights set forth on Schedule 1.16 of this Separation
Agreement (collectively, the "Lucky Proprietary Name Rights") for use in
Northern California and Nevada for a period of three years from the Closing
Date. The exclusive right of the Company and its Subsidiaries to use the Lucky
Proprietary Name Rights in Northern California and Nevada shall continue and
shall become perpetual if the Company or its Subsidiaries (or their transferees)
use any of the Lucky Proprietary Name Rights in Northern California and Nevada
during such three-year period. If the Company or its Subsidiaries (or their
transferees) do not use any of the Lucky Proprietary Name Rights in Northern
California and Nevada during any portion of such three-year period, the license
to use the Lucky Proprietary Name Rights shall cease and all right, title and
interest in and to the Lucky Proprietary Name Rights shall revert to New Diamond
and its Subsidiaries. The Cross-Licensing Agreement shall further provide that,
except as provided above with respect to the Lucky Proprietary Name Rights if
such rights are used during the three-year period from the Closing Date, in the
event that Retained Assets or the New Diamond Assets, as the case may be, are
transferred or assigned to a third party, such third party shall obtain the
benefit of the license contained therein for up to one hundred eighty (180) days
following the transfer of such Assets to such third party; provided, however,
that if such third party is a national competitor of the New Diamond Business
the expiration of such license for such third party's benefit shall expire no
later than ninety (90) days following the transfer of such Assets to such third
party.

          Section 6.3 Settlement of Intercompany Accounts. All intercompany
leases, receivables, payables, loans and other accounts (collectively,
"Intercompany Accounts") in existence immediately prior to the Separation
between the Company or the other Retained Entities, on the one hand, and New
Diamond or the New Diamond Entities, on the other hand, shall be contributed,
distributed or otherwise transferred or assumed at or prior to the Closing such
that, as of the Closing, there are no Intercompany Accounts outstanding between
New Diamond or any New Diamond Entity, on the one hand, and any Retained Entity,
on the other hand.

          Section 6.4 Merger Agreement Provisions. (a) Each of the parties
hereto that is also a party to the Merger Agreement shall provide Onyx with as
much prior written notice as is reasonably practicable (which, if the
circumstances permit, shall be not less than two Business Days' notice) of any
proposed agreement or consent by any or all of them to any modifications of the
terms and conditions of, or proposed delivery by both or either of them of any
consent or waiver or any exercise of any right of termination under, the Merger
Agreement. Each of the parties hereto that is also a party to the Merger
Agreement shall (1) allow Onyx to participate directly in any negotiations or
discussions relating to any such proposed modification, consent, waiver or
termination unless such action would not reasonably be expected to have a
material adverse effect on the Retained Business, Retained Assets or Retained
Liabilities and (2) keep Onyx reasonably informed of the status and any
developments with respect to any such proposed modification, consent, waiver or
termination. None of the parties hereto that is also a party to the Merger
Agreement shall, without the prior written consent of Onyx, terminate the Merger
Agreement pursuant to Section 8.1(a) thereof or agree to any modification of any
of the terms or conditions of, or give any consent or waiver under, any
provision of the Merger Agreement if such modification, consent or waiver would
reasonably be expected to have an adverse effect on the Retained Business,
Retained Assets or Retained Liabilities. SV shall not, without the prior written
consent of Onyx, terminate the Merger Agreement pursuant to Section
8.1(e)(2)(B).


                                       46

<PAGE>

               (b) Prior to the Closing, each party hereto will promptly notify
each other party hereto in the event that such party becomes aware of (1) the
occurrence or nonoccurrence of any event the occurrence or nonoccurrence of
which could reasonably be expected to cause (i) any representation or warranty
of any party to the Merger Agreement to be untrue or inaccurate or (ii) any
covenant, condition or agreement of any party to the Merger Agreement contained
in the Merger Agreement to not be complied with or satisfied and (2) any failure
of any party to the Merger Agreement to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it under the Merger
Agreement.

               (c) During the period from the date of this Separation Agreement
through the earlier of the termination of this Separation Agreement pursuant to
its terms and the Closing Date, the Company shall, and shall cause each Company
Subsidiary to, subject to reasonable restrictions imposed from time to time upon
advice of counsel respecting applicable Law or the Confidentiality Agreement,
afford representatives of Onyx and its Designated Affiliates, following notice
from Onyx to the Company in accordance with this Section 6.4(c), reasonable
access during normal business hours to all properties, offices, books,
contracts, commitments and records and such financial (including all working
papers) and operating data of the Company and the Company Subsidiaries and all
other information concerning its business, properties, personnel, vendors,
landlords/sublandlords, tenants, licensees and franchisees as Onyx or its
Designated Affiliates may reasonably request, including access to distribution
centers and stores to conduct field audits at Onyx's expense, and shall instruct
the employees, counsel, financial advisors and auditors of the Company to
cooperate with Onyx in connection with the foregoing. Onyx shall schedule and
coordinate all inspections with the Company and shall give the Company at least
two Business Days prior notice thereof, setting forth the inspection or
materials that Onyx or its representatives intend to conduct. The Company shall
be entitled to have representatives present at all times during any such
inspection. Notwithstanding the foregoing, neither Onyx nor any of its
representatives shall (i) contact or have any discussions with any of the
Company's employees below the level of division vice president (or, if no such
position exists with respect to any particular area of the Company, division
leader or its equivalent), agents, or representatives, unless in each case Onyx
obtains the prior written consent of the Company, which shall not be
unreasonably withheld, conditioned or delayed, (ii) contact or have any
discussions with any of the vendors, licensees or franchisees of the Company or
the Company Subsidiaries, unless in each case Onyx obtains the prior written
consent of the Company, which shall not be unreasonably withheld, conditioned or
delayed, (iii) contact or have any discussions with any of the
landlord/sublandlords, tenants/subtenants of the Company or the Company
Subsidiaries if, within two Business Days after receipt of notice from Onyx of
its intention to have such a discussion, the Company shall raise a reasonable
objection to such contact or discussion, (iv) damage any property or any portion
thereof, or (v) perform any onsite procedure or investigation (including any
onsite environmental investigation or study) that involves physical disturbance
or damage to any property or any portion thereof. Within ten (10) Business Days
after the date hereof, the Company shall appoint a representative for the
purpose of coordination of inspections and providing approvals of contact with
employees, vendors, landlords/sublandlords, tenants/subtenants, licensees or
franchisees of the Company or its Subsidiaries. Notwithstanding the foregoing,
neither the Company nor any Company Subsidiary shall be required to provide
access to or to disclose information where such access or disclosure would
jeopardize the attorney-client privilege of the Company or any Company
Subsidiary or contravene any Law or binding


                                       47

<PAGE>

agreement entered into prior to the date of this Separation Agreement. All
information obtained pursuant to this Section 6.4(c) shall continue to be
governed by the Confidentiality Agreement.

               (d) Onyx shall use its commercially reasonable efforts to obtain
the Financing pursuant to the terms and conditions set forth in the Financing
Commitment. Onyx shall notify the Company if at any time prior to the Closing
Date the Financing Commitment shall expire or be terminated, modified or amended
for any reason. The Company shall (i) provide and shall cause the Company
Subsidiaries to, and use commercially reasonable efforts to cause the respective
officers, employees and Representatives, including legal and accounting, of the
Company and its Subsidiaries to provide, all cooperation reasonably requested by
Onyx in connection with any debt financing that Onyx may determine to arrange
(any such debt financing, a "Future Debt Financing"), including providing such
access and documentation and taking such action as is customary for transactions
such as the Financing or Future Debt Financing and facilitating the production
of any due diligence items that the prospective lenders may reasonably request,
including current Phase I Environmental Site Assessments, field audits,
appraisals and title insurance with respect to the real property, and (ii)
satisfy the conditions in the Financing Commitment or Future Debt Financing that
require action by the Company. Onyx shall promptly, upon request by the Company,
reimburse the Company for all reasonable out-of-pocket third party costs
incurred by the Company or any of the Company Subsidiaries in connection with
such cooperation.

               (e) During the period from the date of this Separation Agreement
through the earlier of the termination of this Separation Agreement pursuant to
its terms and the Closing Date, Onyx shall, and shall cause each Subsidiary of
Onyx to, subject to reasonable restrictions imposed from time to time upon
advice of counsel respecting applicable Law or the Confidentiality Agreement,
afford representatives of the Company and its Subsidiaries such information as
they may reasonably require concerning the capitalization, liquidity and
financial resources of Onyx and its Subsidiaries after giving effect to the
transactions contemplated by this Separation Agreement. Notwithstanding the
foregoing, neither Onyx nor any Onyx Subsidiary shall be required to provide
access to or to disclose information where such access or disclosure would
jeopardize the attorney-client privilege of Onyx or any Subsidiary of Onyx or
contravene any Law or binding agreement entered into prior to the date of this
Separation Agreement. The Company shall hold, and shall cause its officers,
employees, agents, consultants, advisors and other Representatives to hold, in
strict confidence, unless compelled to disclose by judicial or administrative
process or at the direction of any Authority or, in the opinion of its counsel,
by other requirements of Law, all non-public information concerning Onyx
furnished it pursuant to this Section 6.4(e) or its Representatives or otherwise
in its possession (except to the extent that such information can be shown to
have been (x) in the public domain through no fault of the party to which it was
furnished or (y) later lawfully acquired on a nonconfidential basis from other
sources by the party to which it was furnished), and the Company shall not,
without the prior written consent of the party that furnished such information,
release or disclose such information to any other person, except its auditors,
attorneys, financial advisors, financing sources, bankers and other consultants,
advisors and other representatives who have a need to know such information and
who agree to be bound by the provisions of this sentence. The Company shall be
deemed to have satisfied its obligation to hold confidential information
concerning or supplied by any other party if it exercises the same care as it
takes to preserve confidentiality for its own similar confidential information.


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<PAGE>

          Section 6.5 Further Action; Reasonable Best Efforts. (a) Subject to
the terms and conditions of this Separation Agreement, each of the parties
hereto will use its reasonable best efforts to take, or cause to be taken, all
actions and to do, or cause to be done, and assist and cooperate with the other
parties in doing, all things necessary, or desirable under applicable Law and
regulations to consummate, in the most expeditious manner practicable, the
transactions contemplated by this Separation Agreement. In furtherance of the
foregoing, from the date hereof until Closing (and except as contemplated by the
Cub Sale Agreement), Onyx agrees, and shall cause each of its Affiliates and
each holder of its Equity Interests, not to enter into any transaction which
would impair or delay the parties' ability to receive approval of the
transactions contemplated hereby under the HSR Act, including, without
limitation, any acquisition of or merger with any entity that derived revenues
in the following NAICS Codes: 44561, 44611 and any NAIC codes that begin with
44511 or 44611. Onyx hereby represents that no person that is the ultimate
parent entity of Onyx derives any revenues in such NAICS Codes, otherwise than
as a result of the Cub Sale Agreement.

               (b) The Company and Onyx will use reasonable best efforts to: (i)
prepare, as soon as practicable, all filings and other presentations in
connection with seeking any regulatory approval, exemption or other
authorization from any Authority necessary to consummate the transactions
contemplated hereby; (ii) prosecute such filings and other presentations with
diligence; and (iii) oppose any objections to, appeals from or petitions to
reconsider or reopen any such approval by persons not party to this Agreement.
The Company and Onyx will use reasonable best efforts to facilitate obtaining
any final order or orders approving such transactions, consistent with this
Separation Agreement and/or to remove any impediment to the consummation of the
transactions contemplated hereby. The Company and Onyx will use reasonable best
efforts to furnish all information in connection with the approvals of or
filings with any Authority and will promptly cooperate with and furnish
information in connection with any such requirements imposed upon Onyx or any of
its Affiliates in connection with this Agreement and the transactions
contemplated hereby. Subject to Sections 6.5(c) and 6.5(d), Onyx will use
reasonable best efforts to obtain any consent, authorization, order or approval
of, or any exemption by, and to remove any impediment imposed by any Authority
to allow the consummation of the transactions contemplated hereby. Onyx and the
Company will each advise the other party promptly of any material communication
received by such party or any of its Affiliates from the FTC, DOJ, any state
attorney general or any other Authority regarding any of the transactions
contemplated hereby, and of any understandings, undertakings or agreements (oral
or written) such party proposes to make or enter into with the FTC, DOJ, any
state attorney general or any other Authority in connection with the
transactions contemplated hereby. Onyx and the Company will each consult with
the other in advance of any material meetings with the FTC.

               (c) In furtherance and not in limitation of Sections 6.5(a) and
(b), each of Onyx and the Company shall make an appropriate filing of a
Notification and Report Form pursuant to the HSR Act with respect to the
transactions contemplated hereby as promptly as practicable and thereafter make
any other required submissions with respect to the transactions contemplated
hereby under the HSR Act and shall take all other actions reasonably necessary,
proper or advisable to cause the expiration or termination of the applicable
waiting periods under the HSR Act as soon as practicable.


                                       49

<PAGE>

               (d) In furtherance and not in limitation of Sections 6.5(a) and
(b), Onyx shall, in order to consummate the Retained Business Purchase
contemplated by this Separation Agreement, use its reasonable best efforts (i)
to secure the expiration or termination of any applicable waiting period under
the HSR Act, (ii) to resolve any objections asserted with respect to the
Retained Business Purchase contemplated hereby under any antitrust law or the
Federal Trade Commission Act raised by any governmental authority
("Objections"), and (iii) to prevent the entry of, and to have vacated, lifted,
reversed or overturned, any decree, judgment, injunction or other order that
would prevent, prohibit, restrict or delay Closing. For purposes of this Section
6.5(d), "reasonable best efforts" include (A) executing settlements,
undertakings, consent decrees, stipulations or other agreements, (B) selling,
divesting or otherwise conveying particular assets or categories of assets or
businesses of Onyx, (C) agreeing to sell, divest or otherwise convey any
particular assets or categories of assets or businesses of the Company
contemporaneously with or subsequent to the Closing, and (D) permitting the
Company to sell, divest or otherwise convey any particular assets or categories
of assets or businesses of the Company prior to the Closing; provided, that in
no event shall Onyx be required (or shall the Company be permitted pursuant to
this Section 6.5(d)) to take any actions pursuant to this Section 6.5(d) that,
individually or when aggregated with all other actions taken pursuant to this
Section 6.5(d), could reasonably be expected to have a material adverse effect
on Onyx and the Company, taken as a whole, after giving effect to the
consummation of the Retained Business Purchase. No actions taken pursuant to
this Section 6.5(d) shall be considered for purposes of determining whether a
Company Material Adverse Effect has occurred. Onyx shall respond to and seek to
resolve any Objection as promptly as practicable after such Objection is raised.

               (e) Subject to the terms and conditions of the Merger Agreement,
each of the Company and SV shall comply with their obligations under Section
6.6(a)-(d) of the Merger Agreement.

               (f) Notwithstanding the foregoing or any other provision of this
Separation Agreement, nothing in this Section 6.5 shall limit a party's right to
terminate this Separation Agreement pursuant to Section 9.2 so long as such
party has up to then complied in all material respects with its obligations
under this Section 6.5.

          Section 6.6 Ancillary Agreements. On the Closing Date, the parties
shall execute (and/or cause their respective Subsidiaries party thereto to
execute) the Ancillary Agreements; it being agreed that (i) Onyx may request
that the schedules to the Transition Services Agreement include any service that
the Company Headquarters currently provides to the Retained Business and (ii)
prior to the Closing Date, SV and Onyx shall review and negotiate in good faith
to agree upon the appropriate service levels to be set forth in the Transition
Services Agreement with respect to services to be provided under the Transition
Services Agreement to Onyx after the Closing Date. Notwithstanding anything to
the contrary contained in this Separation Agreement, (i) the nonperformance by
any party with the agreements and covenants set forth in Section 6.2(b) or this
Section 6.6 (including any related failure of any party to certify as to the
performance thereof) shall not constitute a failure of any condition to the
obligation of any party to consummate the transactions contemplated by this
Separation Agreement to be satisfied or grounds for any party to terminate this
Separation Agreement and (ii) if and to the extent of a conflict between the
terms and provisions of this Separation Agreement and any Ancillary Agreement,
the terms of the Ancillary Agreement shall govern.


                                       50

<PAGE>

          Section 6.7 Sharing of Certain Payments. In the event that SV receives
a Company Termination Fee (as defined in the Merger Agreement), SV and Onyx
shall share in such fee (a) first, in an amount equal to each party's actual
out-of-pocket third party expenses incurred in connection with this Separation
Agreement and the Merger Agreement and (b) second, on a 85%/15% basis. Such
amount shall be paid within five (5) Business Days of the receipt by SV of such
Company Termination Fee.

          Section 6.8 Certain Restrictions Pending the Closing. (a) Each of Onyx
and SV agrees that, from and after the date hereof and prior to the Closing,
except (1) as otherwise expressly permitted by this Separation Agreement or the
Merger Agreement, (2) for any action that constitutes an exercise of their
respective rights under Section 6.4, Section 9.1 or Section 9.2 or (3) as agreed
in writing by the other parties hereto, each of Onyx and SV shall not, and shall
not permit any of its Subsidiaries to, take or agree, in writing or otherwise,
to take any action which could reasonably be expected to materially impair its
ability to perform its obligations under this Separation Agreement or to
prevent, impede or materially delay the consummation of the transactions
contemplated under this Separation Agreement or result in the failure to satisfy
any condition to the consummation of the transactions hereunder.

               (b) The Company agrees that, from and after the date hereof and
prior to the Closing, except (1) as otherwise expressly permitted by this
Separation Agreement or the Merger Agreement, (2) for any action that
constitutes an exercise of the Company's rights under Section 9.1 or Section 9.2
of this Separation Agreement or (3) as agreed in writing by the other parties
hereto, the Company shall not, and shall not permit any of its Subsidiaries to,
take or agree, in writing or otherwise, to take any action which could
reasonably be expected to materially impair the Company's ability to perform its
obligations under this Separation Agreement or to prevent, impede or materially
delay the consummation of the transactions contemplated under this Separation
Agreement or result in the failure to satisfy any condition to the consummation
of the transactions hereunder.

               (c) In furtherance, and not limitation of the foregoing, Section
6.1(a) (Conduct of Business Prior to the Closing) of the Merger Agreement is
incorporated herein by reference (mutatis mutandis); provided, however, for
purposes of this Section 6.8(c) of the Separation Agreement (1) "Onyx" shall be
substituted for any reference to "Parent" contained in such section, (2) "this
Separation Agreement" shall be substituted for any reference to "this Agreement"
in such section, (3) the references to "(in each case, with respect to the New
Diamond Business or to the extent affecting New Diamond and/or the New Diamond
Entities in a non-de minimis respect)" shall be deemed to read "(in each case,
in relation to the Retained Business, the Retained Assets and the Retained
Liabilities)," (4) Section 6.1(a)(v)(D)(2) shall be deemed to read "any Real
Property Lease (other than any amendment or termination in connection with the
disposition of the Springfield Stores) which provides for monthly base rental
payments over the primary term of the lease in excess of $10,000, on average or
which provides for a term in excess of two years,", (5) Section 6.1(a)(v)(E)
shall be deemed to read "vary capital expenditures upward or downward in any
material respect from the capital expenditure budget insofar as it relates to
the Retained Business as set forth on Section 6.8(c) of the Company Disclosure
Letter authorize, or enter into, any new capital expenditures which are in the
aggregate, in excess of the Company's capital expenditure budget insofar as it
relates to the Retained Business or authorize, or enter into any commitment to
make any capital expenditures


                                       51

<PAGE>

that related to the Retained Business which are, individually, in excess of
$2,500,000.", and (6) the following shall be inserted at the end of Section
6.1(a)(vi) as a new number (9): "(9) hire (except in the case of replacing a
departing executive or employee) any executive officer (as defined by Rule 3b-7
of the Exchange Act) or other employee earning annual compensation in excess of
$250,000, or terminate more than two such executive officers or employees
earning in excess of $250,000 in any 6 month period, other than termination for
cause."

          Section 6.9 Payments by Onyx to the Exchange Fund. Under the Merger
Agreement, SV has agreed to deposit in trust (the "Exchange Fund") with the
Paying Agent (as defined in the Merger Agreement) any amounts payable under
Article III of the Merger Agreement. In furtherance of the foregoing and Onyx's
obligations under Section 2.4(c) of this Separation Agreement, Onyx and/or one
or more of its Designated Affiliates shall pay, or cause to be paid, by wire
transfer of immediately available funds to the account designated by the Paying
Agent as the Exchange Fund, an amount without duplication equal to the Retained
Business Price (which amount New Diamond intends to treat as having been loaned
from New Diamond to SV).

          Section 6.10 Settlement of Appraisal Proceedings. In the event any
appraisal proceeding brought under Section 262 of the DGCL results in the
payment of an amount per share in respect of shares of the Common Stock (as
defined in the Merger Agreement) of the Company outstanding prior to the
Effective Time that is less than the Per Share Merger Consideration (after
taking into account the costs and expenses of defending such Action), the
difference between the amount of such payment and the Per Share Merger
Consideration shall be split between the Company and New Diamond on a 15%/85%
basis. Each of Onyx and SV shall, or shall cause the Company or New Diamond,
respectively, to make such payments when and if due.

          Section 6.11 Certain Standalone Drug Sale Matters. (a) The Company
shall not, without the prior written consent of the other parties hereto,
voluntarily terminate the Standalone Drug Sale Agreement or agree to any
modification of any of the terms or conditions of, or give any consent or waiver
under, or enter into any settlement of any Action or dispute under any provision
of the Standalone Drug Sale Agreement, if such modification, consent, waiver,
settlement or termination would reasonably by expected to adversely affect, or
impose any cost or liability on, Onyx or its Subsidiaries (including their
interests following the consummation of the transactions contemplated by the
Standalone Drug Sale Agreement) or adversely affect the ability to consummate
the transactions contemplated hereby in a timely manner. The Company shall
comply with the terms of the Standalone Drug Sale Agreement in all material
respects. The Company will use reasonable best efforts to cause the conditions
to the consummation of the Standalone Drug Sale Agreement to be satisfied (or
waived by the other party thereto).

               (b) Prior to the Closing, the Company will promptly notify each
other party hereto in the event that the Company becomes aware of (1) the
occurrence or nonoccurrence of any event the occurrence or nonoccurrence of
which could reasonably be expected to cause (i) any representation or warranty
of any party to the Standalone Drug Sale Agreement to be untrue or inaccurate or
(ii) any covenant, condition or agreement of any party to the Standalone Drug
Sale Agreement contained in the Standalone Drug Sale Agreement to not be


                                       52

<PAGE>

complied with or satisfied or (2) any failure of any party to the Standalone
Drug Sale Agreement to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it under the Standalone Drug Sale
Agreement, in each case, to the extent that any of the foregoing matters would
reasonably be expected to result in the failure of a closing condition to the
Standalone Drug Sale Agreement.

          Section 6.12 Proxy Statement. Onyx will cooperate with SV and the
Company in the preparation of the Proxy Statement/Prospectus and Form S-4. Each
of Parent and the Company will provide Onyx with a reasonable opportunity to
review drafts of, and revisions to, the Proxy Statement/Prospectus and Form S-4
prepared by such party, and Onyx shall use its reasonable best efforts to
furnish to SV and the Company information relating to it and its affiliates as
necessary to prepare the Proxy Statement/Prospectus and Form S-4. Onyx agrees
that none of the information supplied or to be supplied by it for inclusion or
incorporation by reference in the Proxy Statement/Prospectus or the Form S-4
will, at the date such document is first mailed to the stockholders of the
relevant party and at the time of such party's meeting of stockholders relating
to the Merger, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they are
made, not misleading. For purposes of the foregoing, it is understood and agreed
that information concerning or related to Onyx or any of its Designated
Subsidiaries will be deemed to have been supplied by Onyx.

          Section 6.13 Merger Agreement Termination Fee. In the event that (i)
SV is required to make a payment to the Company pursuant to Section 8.2(d)(i) of
the Merger Agreement or (ii)(A) SV is required to make a payment to the Company
pursuant to Section 8.2(d)(ii) of the Merger Agreement and (B) the board of
directors of SV shall have failed to include or make or shall have publicly
withdrawn, modified or changed, in a manner adverse to the Company, the Parent
Board Recommendation for reasons primarily related to antitrust concerns, Onyx
shall be responsible for the payment to the Company of (or shall reimburse SV
for) an amount equal to $70,000,000 of such $250,000,000 payment.

          Section 6.14 Springfield Stores Sale.

               (a) Onyx shall act in good faith and use its reasonable best
efforts to sell the Springfield Stores to a third party (other than SV) prior to
the date that is the one year anniversary of the Closing Date (the "Springfield
Stores Date") and shall consider in good faith any prospective purchaser of the
Springfield Stores proposed to Onyx by SV; provided, that such one year
limitation shall be extended if Onyx is in discussions with any third party to
sell the Springfield Stores on the Springfield Stores Date until such
discussions have terminated in good faith.

               (b) To the extent Onyx shall have entered into an agreement to
sell one or both of the Springfield Stores within the timeline contemplated by
paragraph (a) above, it shall, upon the closing of such sale, pay to Jewel Food
Stores, Inc. eighty per cent (80%), and shall be entitled to keep twenty percent
(20%), of the consideration (net of tax and costs of sale) for such store or
stores. Any such payment to Jewel Food Stores, Inc. shall be allocable to the
Springfield Stores.


                                       53

<PAGE>

               (c) SV shall be entitled to see, at its request, all
documentation with respect to the sales or prospective sales contemplated by
this Section 6.14.

                                   ARTICLE VII

                       ACCESS TO INFORMATION AND SERVICES

          Section 7.1 Access to Information. From and after the Closing (a) each
of the parties hereto shall (1) afford to the other parties and their respective
authorized accountants, counsel and other designated Representatives reasonable
access (including using reasonable efforts to give access to persons or firms
possessing Information) and duplicating rights during normal business hours and
upon reasonable advance notice to all records, books, contracts, instruments,
computer data and other data and information (collectively, "Information")
within the each other party's possession insofar as such access is reasonably
required by Onyx or SV, as the case may be, or their respective Designated
Affiliates and (2) at the request and expense of Onyx, SV or their respective
Designated Affiliates, as applicable, use its reasonable efforts to cooperate
with the other parties and their respective accountants and other
Representatives in connection with the preparation of any audits (and related
financial statement preparation) and with the transition of the Retained
Business and the New Diamond Business to "stand-alone" businesses following the
Closing, including by assisting in connection with any efforts to obtain
insurance coverage for the Retained Business and the New Diamond Business, as
applicable. Information may be requested under this Section 7.1 for, without
limitation, audit, accounting, claims, litigation and tax purposes, as well as
for purposes of fulfilling disclosure and reporting obligations.

          Section 7.2 Litigation Cooperation. Following the Closing, with
respect to any Action that involves any of the parties to this Separation
Agreement or any of the Retained Entities or New Diamond Entities and relates to
(a) the transactions contemplated by this Separation Agreement or the Merger
Agreement or (b) the Company or any current or former Subsidiary of the Company
or any Liabilities or current or former Assets, employees or businesses thereof,
whether or not such Action is subject to indemnification hereunder, each of the
parties hereto shall, upon written request by any other party hereto, and at the
expense of the requesting party (subject to the indemnification and
expense-sharing provisions of this Separation Agreement, to the extent
applicable), provide all cooperation and assistance, and shall furnish such
records and information, as may be reasonably requested by the other in
connection therewith, including, by using reasonable efforts to make available
to the other, its officers, directors, employees and agents as witnesses and to
attend such conferences, discovery proceedings, hearings, trials and appeals as
may be reasonably requested by the other in connection therewith. With respect
to (1) any such Action involving Shared Transaction Liabilities or (2) any
Action initiated by any Authority or private party pursuant to the HSR Act or
any similar Law and relating to the transactions contemplated by this Separation
Agreement or the Merger Agreement, the parties agree, consistent with applicable
rules of privilege and legal ethics, to provide each other with timely and
reasonably detailed updates with respect to all material developments, consult
with each other before taking any significant actions in connection therewith
and offer each other the opportunity to comment before submitting to any
Authority or adverse party any written materials prepared or furnished in
connection with such Action.


                                       54

<PAGE>

          Section 7.3 Retention of Records. Except as otherwise required by Law
or agreed to in writing, the parties hereto and/or one or more of their
Designated Affiliates shall each retain, for a period of at least seven years
following the Closing Date, all Information in their possession relating to (a)
in the case of New Diamond and its Affiliates, the Retained Assets, the Retained
Entities and the Retained Business, the Retained Liabilities, and (b) in the
case of the Company and its Affiliates, the New Diamond Assets, the New Diamond
Entities, the New Diamond Business and the New Diamond Liabilities.
Notwithstanding the foregoing, except as otherwise required by Law, any party
may destroy or otherwise dispose of any of such Information at any time,
provided, that prior to such destruction or disposal, (1) such party provides no
less than 90 or more than 120 days' prior written notice to the other parties,
specifying the Information proposed to be destroyed or disposed of and (2) if
the other party shall request in writing prior to the scheduled date for such
destruction or disposal that any of the Information proposed to be destroyed or
disposed of be delivered to such party, the responsive party shall promptly
arrange for the delivery of such of the Information as was requested, at the
expense of the requesting party.

          Section 7.4 Confidentiality. From and after the Closing, each party
shall hold, and shall cause its officers, employees, agents, consultants,
advisors and other Representatives to hold, in strict confidence, unless
compelled to disclose by judicial or administrative process or at the direction
of any Authority or, in the opinion of its counsel, by other requirements of
Law, all non-public Information concerning the other parties furnished it by any
such other party or its representatives or otherwise in its possession (except
to the extent that such Information can be shown to have been (a) in the public
domain through no fault of the party to which it was furnished or (b) later
lawfully acquired on a nonconfidential basis from other sources by the party to
which it was furnished), and each party shall not, without the prior written
consent of the party that furnished such Information, release or disclose such
Information to any other person, except its auditors, attorneys, financial
advisors, financing sources, bankers and other consultants, advisors and other
representatives who have a need to know such Information and who agree to be
bound by the provisions of this Section 7.4. Each party shall be deemed to have
satisfied its obligation to hold confidential Information concerning or supplied
by any other party if it exercises the same care as it takes to preserve
confidentiality for its own similar confidential Information.

          Section 7.5 Publicity. The parties shall consult with each other
before issuing any press release or otherwise making any public statements with
respect to this Separation Agreement or the transactions contemplated hereby,
except to the extent public disclosure is required by applicable Law or the
requirements of the NYSE or the PCX, in which case the issuing party shall use
its reasonable best efforts to consult with the other party before issuing any
such release or making any such public statement.

                                  ARTICLE VIII

                        EMPLOYEE BENEFITS; LABOR MATTERS

          Section 8.1 Locus of Employees and Company Plans. No later than
immediately prior to the Separation, the employment of any New Diamond Employees
who are employed by a Retained Entity shall be transferred to a New Diamond
Entity, and the


                                       55

<PAGE>

employment of any Retained Employees who are employed by a New Diamond Entity
shall be transferred to a Retained Entity. The New Diamond Employees who are
employed by a New Diamond Entity immediately prior to the Separation shall be
retained as employees of such entity, and the Retained Employees who are
employed by a Retained Entity immediately prior to the Separation shall be
retained as employees of such entity. Prior to the Separation the Company shall
cause the real estate leases and real property assets associated with the
Retained Business held in trust in a Company Plan to be removed from such trust.
Concurrently with the Separation, New Diamond shall assume or retain sponsorship
of all Company Plans (other than Assumed Benefit Plans), all assets held in
trust (other than such real estate leases and real property assets) to fund such
plans and all insurance policies funding such plans shall be New Diamond Assets,
and the Retained Entities and Retained Employees shall cease to actively
participate in such plans as of the Closing Date (it being understood that
Retained Employees shall still be eligible for benefits in accordance with the
terms of such plans, provided that no additional rights or benefits shall accrue
under any such plans in respect of service of the Retained Employees subsequent
to the Closing Date), and, except to the extent provided elsewhere herein, New
Diamond shall assume and be solely responsible for all Liabilities and
obligations whatsoever in respect of such plans. Without limiting the generality
of Section 9.5, nothing in this Article VIII, express or implied, is intended to
or shall confer upon any current or former employee or service provider of New
Diamond, the Company, and their respective Affiliates any right, benefit or
remedy of any nature whatsoever.

          Section 8.2 Employee Benefits. After the Closing, each of the Company,
Onyx and/or one or more of its Designated Affiliates shall, and shall cause each
Retained Entity to, as the case may be, take such action as may be necessary to
honor the applicable obligations under the last sentence of Section 6.8(c) and
Section 6.13(a), (c), (d) and (e) of the Merger Agreement with respect to the
Retained Employees (other than Former Retained Employees) as if the "Surviving
Corporation" as referenced therein was the Company and "Parent" as referenced
therein was Onyx, and including without limitation an obligation to establish
and maintain as of the Effective Time such plans, policies and arrangements in
such form as Onyx may determine to provide such benefits. For purposes of this
Section 8.2, the last sentence of Section 6.13(a) of the Merger Agreement shall
be deemed to read: "For purposes of this Section 6.13 only, the term "Company
Employee" shall be deemed to refer to any current employee, officer, consultant,
independent contractor or director of the Company or any Subsidiary of the
Company after giving effect to the Standalone Drug Sale and the Separation."

          Section 8.3 Other Liabilities and Obligations. As of the Closing Date,
with respect to claims relating to any employee Liability or obligations not
otherwise allocated in this Separation Agreement, (a) New Diamond shall assume,
and be solely responsible for, all Liabilities and obligations whatsoever of the
Company and its Affiliates for such claims made by all New Diamond Employees and
(b) the Company shall retain or assume, and be solely responsible for, all
Liabilities and obligations whatsoever for claims made by all Retained Employees
whether arising out of events, occurrences or services performed before or
following the Closing Date. As of the Closing Date, the Company shall assume
(subject to the definition of Shared Transaction Litigation Liabilities) and be
solely responsible for all Liabilities and obligations whatsoever in respect of
Assumed Benefit Plans, and all assets held in trust to fund such plans and all
insurance policies funding such plans shall be Retained Assets. Without limiting
the generality of the foregoing, as of the Closing Date, New Diamond shall
assume and


                                       56

<PAGE>

be solely responsible for any collective bargaining agreement or obligation
covering New Diamond Employees as of the Closing Date and the Company shall
retain or assume and be solely responsible for any collective bargaining
agreement or obligation covering Retained Employees as of the Closing Date.

          Section 8.4 Welfare Plans. Effective as of the Closing Date, Retained
Employees shall cease to participate in plans providing for the type of benefits
described in Section 3(1) of ERISA (other than retiree medical plans under which
Former Retained Employees shall continue to participate (but not to actively
accrue credit for service) following the Closing Date) ("Welfare Plans") that
are sponsored by the New Diamond Entities ("Old Welfare Plans") and shall
commence participation in Welfare Plans sponsored by Retained Entities ("New
Welfare Plans"). New Diamond will provide administrative services and support to
the New Welfare Plans following the Closing Date, as set forth in the Transition
Services Agreement. Effective as of the Closing Date, the Company shall assume
all responsibility for, and all Liabilities in respect of, accrued but unused
vacation days of Retained Employees, and New Diamond shall assume all
responsibility for, and all Liabilities in respect of, accrued but unused
vacation days of New Diamond Employees. As of the Closing Date, (a) New Diamond
shall assume or retain liability for all workman's compensation claims with
respect to New Diamond Employees and Retained Employees that arose directly out
of injuries or illness that occurred prior to the Closing Date and disability
claims with respect to New Diamond Employees and Retained Employees that arose
prior to the Closing Date, (b) New Diamond shall assume or retain liability for
all workman's compensation claims with respect to New Diamond Employees that
arise out of injuries or illness that arise on or after the Closing Date and
disability claims with respect to New Diamond Employees that arise on or after
the Closing Date and (c) the Company shall assume or retain liability for all
workman's compensation claims with respect to Retained Employees that arise
directly out of injuries or illness that arise on or after the Closing Date and
disability claims with respect to Retained Employees that arise on or after the
Closing Date. For purposes of the preceding sentence, under no circumstances
will a workman's compensation claim be deemed to have arisen out of an injury
occurring prior to the Closing Date or will a claim for disability benefits be
deemed to have arisen prior to the Closing Date, in each case, if the applicable
claim is not filed prior to, or within 180 days following, the Closing Date.

          Section 8.5 Retirement Plans; Savings Plans. (a) At Closing New
Diamond and its Affiliates shall assume or retain sponsorship of, and
responsibility for all Liabilities in respect of, Company Plans (other than
Assumed Benefit Plans) that are qualified or nonqualified retirement, retiree
medical, or deferred compensation plans, whether with respect to New Diamond
Employees, Retained Employees or Standalone Drug Employees. All assets held in
trust to fund such plans (other than the real estate leases and real property
assets associated with the Retained Business which shall be removed from any
such trust prior to the Separation and shall be Retained Assets) and all
insurance policies funding such plans shall be New Diamond Assets.

               (b) As soon as practicable after the Closing Date, New Diamond
shall cause the account balances of all employees of the Company (other than New
Diamond Employees and Former Retained Employees) in the Company Plans that are
account balance plans qualified under Section 401(a) of the Code to be available
for distribution in accordance


                                       57

<PAGE>

with the terms of such plans, and the Company shall permit Retained Employees
(other than Former Retained Employees) who are participants in such plans to
rollover such distributions (including a rollover of outstanding participant
loans) into a defined contribution plan established by the Company that
satisfies the qualification requirements of Section 401(a) of the Code.

          Section 8.6 Preservation of Rights to Amend or Terminate Plans. No
provision of this Separation Agreement shall be construed as a limitation on the
right of the Company or New Diamond to amend any plan or terminate its
participation therein which the Company or New Diamond would otherwise have
under the terms of such plan or otherwise, and no provision of this Separation
Agreement shall be construed to create a right in any employee or beneficiary of
such employee under a plan that such employee or beneficiary would not otherwise
have under the terms of such plan itself.

          Section 8.7 Reimbursement; Indemnification. New Diamond and the
Company acknowledge that the Company, on the one hand, and New Diamond, on the
other hand, and their respective Subsidiaries, may incur costs and expenses
(including contributions to plans and the payment of insurance premiums)
pursuant to any of the employee benefit or compensation plans, programs or
arrangements which are, as set forth in this Separation Agreement, the
responsibility of the other. Accordingly, the Company and New Diamond agree to
reimburse each other, as soon as practicable but in any event within five
Business Days of receipt from the other party of appropriate verification, for
all such costs and expenses reduced by the amount of any Tax reduction or
recovery of Tax benefit realized by the Company or New Diamond or any such
Subsidiary, as the case may be, in respect of the corresponding payment made by
it. Liabilities retained, assumed or indemnified by New Diamond pursuant to this
Article VIII shall in each case be deemed to be New Diamond Liabilities, and
Liabilities retained, assumed or indemnified by the Company pursuant to this
Article VIII shall in each case be deemed to be Retained Liabilities, and, in
each case, shall be subject to the indemnification provisions set forth in
Article V.

          Section 8.8 Change In Control. The parties hereto will treat the
consummation of the Transactions, both individually and collectively, and
regardless of the order in which they actually occur, as a "change in control,"
"change of control" or similar event under each of the Company Plans (to the
extent such Company Plans contain provisions relating to "change in control,"
"change of control" or similar event).

                                   ARTICLE IX

                                  MISCELLANEOUS

          Section 9.1 Conditions to Closing.

               (a) Mutual Conditions to Consummate the Separation Agreement. The
respective obligations of each party to consummate the transactions contemplated
by this Separation Agreement shall be subject to the satisfaction or waiver at
or prior to the Closing of the following conditions:


                                       58

<PAGE>

                    (1) each of the conditions to the Merger, as set forth in
     Article VII of the Merger Agreement (other than the condition that the
     Standalone Drug Sale, the Separation and the Retained Business Purchase
     shall have occurred), and each of the conditions of the Standalone Drug
     Sale, as set forth in Article IX of the Standalone Drug Sale Agreement,
     shall have been satisfied or waived (excluding conditions of the Merger
     Agreement and the Standalone Drug Sale Agreement that, by their terms,
     cannot be satisfied until the closing of the Merger Agreement or the
     Standalone Drug Sale Agreement, as applicable);

                    (2) the waiting period (and any extension thereof)
     applicable to the transactions contemplated by this Separation Agreement
     under the HSR Act shall have been terminated or shall have expired; and

                    (3) no Law, temporary restraining order, preliminary or
     permanent injunction or other legal restraint shall have been enacted,
     entered, promulgated or enforced and no action or decision shall have been
     taken and remain in effect by any Authority which prohibits, restrains or
     enjoins the consummation of the transactions contemplated by this
     Separation Agreement.

               (b) Conditions to Obligations of Onyx. The obligations of Onyx to
consummate the transactions contemplated hereby shall be further subject to the
satisfaction or waiver at or prior to the Closing of the following conditions:

                    (1) The representations and warranties of the Company
     contained in Section 3.2(a) of this Separation Agreement (disregarding any
     Company Material Adverse Effect, materiality or similar qualifiers therein)
     shall be true and correct as of the date hereof and the Closing Date as
     though made on and as of such date (unless any such representation or
     warranty is made only as of a specific date, in which event such
     representation and warranty shall be true and correct as of such specified
     date), except where any failure of any such representation or warranty to
     be so true and correct has not had and would not reasonably be expected to
     have a Company Material Adverse Effect, provided, however, that the
     representations and warranties of the Company in Section 4.2 of the Merger
     Agreement (Authority, Enforceability), as modified pursuant to Section
     3.2(a) of this Separation Agreement, shall be true in all but de minimis
     respects;

                    (2) The Company shall have performed in all material
     respects the obligations, and complied in all material respects with the
     agreements and covenants, required to be performed by or complied with by
     it under this Separation Agreement at or prior to the Closing;

                    (3) The representations and warranties of SV and its
     Designated Affiliates set forth in this Separation Agreement (disregarding
     any Parent Material Adverse Effect, materiality or similar qualifiers
     therein) shall be true and correct as of the date hereof and the Closing
     Date as though made on and as of such date (unless any such representation
     or warranty is made only as of a specific date, in which event such
     representation and warranty shall be true and correct as of such specified
     date),


                                       59

<PAGE>

     except where any failure of such representation or warranty to be so true
     and correct has not had and would not reasonably be expected to have a
     Parent Material Adverse Effect;

                    (4) Each of SV and its Designated Affiliates shall have
     performed in all material respects the material obligations, and complied
     in all material respects with the material agreements and covenants,
     required to be performed by or complied with by it under this Separation
     Agreement at or prior to the Closing; and

                    (5) Onyx shall have received a certificate of an executive
     officer of (i) the Company, certifying that the conditions set forth in
     Sections 9.1(b)(1) and (2) have been satisfied and (ii) SV, certifying that
     the conditions set forth in Section 9.1(b)(3) and (4) have been satisfied.

                    (6) Notwithstanding the foregoing, Onyx shall not, without
     the prior written consent of SV, amend, modify or waive any provision of
     this Separation Agreement if such amendment, modification or waiver would
     reasonably be expected to have an adverse effect on the New Diamond
     Business, New Diamond Assets or New Diamond Liabilities.

               (c) Conditions to the Obligations of the Company and SV. The
obligations of each of the Company and SV to consummate the transactions
contemplated hereby shall be further subject to the satisfaction or waiver at or
prior to the Closing of the following conditions:

                    (1) The representations and warranties of Onyx and its
     Designated Affiliates set forth in this Separation Agreement shall be true
     and correct in all material respects, in each case as of the date hereof
     and the Closing Date as though made on and as of such date (unless any such
     representation or warranty is made only as of a specific date, in which
     event such representation and warranty shall be true and correct in all
     material respects as of such specified date);

                    (2) Each of Onyx and its Designated Affiliates shall have
     performed in all material respects the material obligations, and complied
     in all material respects with the material agreements and covenants,
     required to be performed by or complied with by it under this Separation
     Agreement at or prior to the Closing;

                    (3) Each of the Company and SV shall have received a
     certificate of an executive officer of Onyx, certifying that the conditions
     set forth in Sections 9.1(c)(1) and (2) have been satisfied.

               (d) Additional Conditions to the Obligation of the Company. The
obligations of the Company to consummate the transactions contemplated hereby
shall be further subject to the Company having received, at Onyx's expense, an
opinion in form and substance reasonably acceptable to the Company, of a
nationally recognized independent valuation firm reasonably acceptable to the
Company, addressed to the Company's Board of Directors and dated as of the
Closing Date, to the effect that immediately after giving effect to the
transactions contemplated by this Separation Agreement, the Standalone Drug Sale
Agreement and the Merger Agreement, including the Financing, any alternative
financing, any other repayment or


                                       60
<PAGE>

refinancing of debt contemplated in this Separation Agreement, payment of all
amounts required to be paid in connection with the consummation of the
transactions contemplated by the Separation Agreement, the Standalone Drug Sale
Agreement and the Merger Agreement, and payment of all related fees and
expenses, each of Onyx and the Company are Solvent.

          Section 9.2 Termination Prior to the Closing. (a) Termination by
Mutual Consent. This Separation Agreement may be terminated at any time prior to
the Closing upon the mutual written consent of the Company, SV and Onyx.

               (b) Automatic Termination. This Separation Agreement shall
terminate automatically upon any termination of the Merger Agreement or the
Standalone Drug Sale Agreement in accordance with the terms thereof.

               (c) Termination by Onyx. This Separation Agreement may be
terminated at any time prior to the Closing by written notice from Onyx to each
other party if the Closing shall not have been consummated by the Termination
Date (as defined in the Merger Agreement).

               (d) Termination by Any Party. This Separation Agreement may be
terminated at any time prior to the Closing by written notice from any party to
each other party if (1) any Authority of competent jurisdiction shall have
issued a final order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the consummation of the
transactions contemplated by this Separation Agreement and such order, decree or
ruling or other action shall have become final and nonappealable or (2) there
shall have been a material failure of any representation or warranty of any
other party to be true or a material breach of any covenant or agreement of
another party contained in this Separation Agreement such that the conditions
set forth in Section 9.1(b) or (c) would not be satisfied, and such breach or
failure to be true is not cured (if curable) prior to the earlier of (i) 20
Business Days following notice of such breach (it being understood that such 20
Business Day period shall not be applicable to covenants or agreements that by
their terms are intended to be satisfied at Closing) and (ii) the Termination
Date; provided that the right to terminate this Separation Agreement pursuant to
this Section 9.2(d)(2) shall not be available to the party seeking to terminate
if any action of such party or the failure of such party to perform any of its
obligations under this Separation Agreement required to be performed at or prior
to the Closing has been the cause of, or resulted in, the failure of the Closing
to occur on or before the Termination Date and such action or failure to perform
constitutes a breach of this Separation Agreement.

          Section 9.3 Effect of Termination. (a) Except as provided below, in
the event of the termination of this Separation Agreement pursuant to Section
9.2, this Separation Agreement shall forthwith become void and there shall be no
liability or obligation on the part of any party hereto, except with respect to
this Article IX and Section 6.7, which shall survive such termination; provided,
however, that nothing herein shall relieve any party from liability for any
willful or intentional material breach of this Separation Agreement.

               (b) Onyx agrees that, if the Company, New Diamond or SV shall
terminate this Separation Agreement pursuant to Section 9.2(d)(2) on account of
a breach of this Separation Agreement by Onyx then Onyx shall be liable for
damages equal in the aggregate to


                                       61

<PAGE>

$100,000,000 (one hundred million dollars) (the "Onyx Termination Fee"),
two-thirds of which shall be paid to the Company and one-third of which shall be
paid to SV. The Onyx Termination Fee shall be paid promptly in immediately
available funds no later than two Business Days after such termination by the
Company, New Diamond or SV. Subject to the rights of the Company and SV as
third-party beneficiaries under the Financing Commitment in respect of the Onyx
Termination Fee, the obligation of Onyx to make such payment to SV and the
Company shall be the sole remedy and recourse of the Company, New Diamond or SV
arising out of such breach by Onyx of this Separation Agreement. The Company and
SV agree that any claim that SV has or may have against Onyx or the Sponsor
relating to the Onyx Termination Fee or otherwise under the Financing Commitment
shall be subordinated in right of payment to the payment in full of any claim
that the Company has or may have against Onyx or the Sponsor under the Financing
Commitment relating to the payment of the Onyx Termination Fee.

          Section 9.4 No Survival. None of the representations and warranties in
this Separation Agreement or in any instrument delivered pursuant to this
Separation Agreement, and the other agreements and documents contemplated to be
delivered in connection herewith, including any rights arising out of any breach
of such representations and warranties shall, in the event Closing occurs,
survive the Effective Time.

          Section 9.5 Entire Agreement; Third Party Beneficiaries. This
Separation Agreement (together with the documents and instruments referred to
herein, including the Merger Agreement, the Ancillary Agreements, including the
Transition Services Agreement) (a) constitutes the entire agreement and
supersedes all other prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof, and (b) is not
intended to confer upon any person other than the parties hereto and thereto any
rights or remedies; provided, however, that the Indemnified Directors or
Officers and the Indemnitees are intended to be third party beneficiaries of the
provisions of Articles IV and V and each of such persons shall have the right to
enforce such provisions as if they were parties hereto.

          Section 9.6 Fees and Expenses. Except as otherwise specifically
provided in this Separation Agreement, all costs, expenses incurred by the
parties hereto in connection with this Separation Agreement, the Merger
Agreement and the transactions contemplated hereunder and thereunder shall be
paid by the party hereto or thereto incurring such costs or expenses.

          Section 9.7 No Waiver. No waiver by any party hereto of any breach of
any covenant, agreement, representation or warranty hereunder shall be deemed a
waiver of any preceding or succeeding breach of the same. The exercise of any
right granted to any party in this Separation Agreement shall not operate as a
waiver of any default or breach on the part of the other parties hereto. Each
and all of the several rights and remedies of any party hereto under this
Separation Agreement shall be construed as cumulative and no one right as
exclusive of the others.

          Section 9.8 Amendments. No change, modification, alteration, amendment
or agreement to discharge in whole or in part, or waiver of, any of the terms
and conditions of this Separation Agreement, shall be binding upon any party,
unless the same shall be made by a written instrument signed and executed by the
authorized representatives of each party, with the same formality as the
execution of this Separation Agreement.


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<PAGE>

          Section 9.9 Governing Law. This Separation Agreement shall be governed
by, and construed in accordance with, the laws of the State of Delaware (without
giving effect to choice of law principles thereof).

          Section 9.10 Notices. (a) All notices, requests and demands to or upon
the respective parties hereto, and all statements and accountings given or
required to be given hereunder, shall be made by personal service, or sent by
certified mail, return receipt requested, postage prepaid, or by facsimile
addressed as follows, or to such other address as may hereafter be designated in
writing by the respective parties hereto, and shall be deemed received when
delivered to the designated address (and only if confirmed if delivered by
facsimile):

               (1)  if to the Company, to

                    Albertson's, Inc.
                    250 East Parkcenter Boulevard
                    Boise, ID 83706
                    Attn: Corporate Secretary
                    Facsimile: (208) 395-6349

                    with a copy to

                    Jones Day
                    North Point
                    901 Lakeside Avenue
                    Cleveland, OH 44114
                    Attn: Lyle G. Ganske, Esq.
                    Facsimile: (216) 579-0212

                    and

                    Jones Day
                    2727 North Harwood Street
                    Dallas, TX 75201
                    Attn: Mark E. Betzen, Esq.
                    Facsimile: (214) 969-5100

                    and

               (2)  if to Onyx, to

                    AB Acquisition LLC
                    c/o Cerberus Capital Management, L.P.
                    299 Park Avenue
                    New York, NY 10171
                    Attn: Lenard Tessler
                    Facsimile: (212) 755-3009


                                       63

<PAGE>

                    with a copy to

                    Schulte Roth & Zabel LLP
                    919 Third Avenue
                    New York, NY 10022
                    Attn: Stuart D. Freedman, Esq.
                    Facsimile: (212) 593-5955

                    and

               (3)  if to SV, to

                    SUPERVALU, Inc.
                    11840 Valley View Road
                    Eden Prairie, MN 55344
                    Attn: Corporate Secretary
                    Facsimile: (952) 828-8900

                    with a copy to

                    Wachtell, Lipton, Rosen & Katz
                    51 West 52nd Street
                    New York, NY 10019
                    Attn: Andrew R. Brownstein, Esq.
                          Igor Kirman, Esq.
                    Facsimile: (212) 403-2393

               (b) To the extent not otherwise to be provided under the Merger
Agreement, each of SV and the Company agrees to deliver to each of Onyx and New
Diamond copies of all notices, requests and demands to or from the parties to
the Merger Agreement, and all certificates, statements and accountings delivered
or given or required to be delivered or given under the Merger Agreement, each
such delivery to be made in accordance with the procedures set forth in Section
9.10(a); provided, however, that if SV or the Company elects to deliver any such
notice, request, demand or certificate, statement or accounting by certified
mail as permitted by Section 9.10(a), a copy thereof will also be delivered to
each of Onyx and New Diamond by personal service or by confirmed facsimile in
accordance with Section 9.10(a).

          Section 9.11 Interpretation. The headings contained in this Separation
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Separation Agreement. In this Separation
Agreement, unless a contrary intention appears, (a) the words "herein," "hereof"
and "hereunder" and other words of similar import refer to this Separation
Agreement as a whole and not to any particular Article, Section, Schedule,
Exhibit or other subdivision, (b) whenever the words "include," "includes" or
"including" are used in this Separation Agreement, they shall be deemed to be
followed by the words "without limitation," (c) reference to any Article,
Section, Schedule or Exhibit is reference to such Article or Section of, or
Schedule or Exhibit to, this Separation Agreement, (d) "days" means calendar
days, (e) all defined terms in this Separation Agreement have the defined
meaning when used in any certificate or other document made or delivered
pursuant to this


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<PAGE>

Separation Agreement, unless otherwise indicated therein, (f) all defined terms
in this Separation Agreement are applicable to the singular as well as the
plural forms of such terms and to the masculine as well as to the feminine and
neuter genders of such term, and in each case, vice versa, (g) references in
this Separation Agreement to specific Laws (such as the Code, HSR Act and ERISA)
or to specific provisions of Laws include all rules and regulations promulgated
thereunder, (h) "person" means any natural person or any corporation,
association, partnership, joint venture, limited liability, joint stock or other
company or trust, (i) references to the "Company and each of its Subsidiaries,"
the "Subsidiaries of the Company," and other similar phrases, with respect to
any time prior to the Closing, shall be deemed to include reference to each of
the Subsidiaries of the Company without giving effect to the transfer of
ownership of the New Diamond Entities at Closing, (j) items listed or included
within a definition are so listed or included without duplication, (k) any
statute defined or referred to herein or in any agreement or instrument referred
to herein means such statute as from time to time amended, modified or
supplemented, including by succession of comparable successor statutes, and (l)
if and to the extent any party designates a Designated Affiliate pursuant to the
terms hereof, such Designated Affiliate shall be deemed to be a party to this
Separation Agreement and to have made any representations and warranties
contained in this Separation Agreement as of the time of such designation, and
any action or undertaking required of such Designated Affiliate pursuant to the
terms of this Separation Agreement shall become an obligation of such Designated
Affiliate as of the time of such designation. No provisions of this Separation
Agreement shall be interpreted or construed against any party hereto solely
because such party or its legal representative drafted such provision.

          Section 9.12 Counterparts. This Separation Agreement may be executed
simultaneously in any number of counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.

          Section 9.13 Specific Performance. The parties agree that if for any
reason any of the provisions of this Separation Agreement are not performed in
accordance with their specific terms or are otherwise breached, immediate and
irreparable harm or injury would be caused for which money damages would not be
an adequate remedy. Accordingly, each party agrees that, in addition to any
other available remedy at law or equity, each party shall be entitled to an
injunction restraining any violation or threatened violation of the provisions
of this Separation Agreement without the necessity of posting a bond or other
form of security. In the event that any Action should be brought in equity to
enforce the provisions of this Separation Agreement, no party will allege, and
each party hereby waives the defense, that there is an adequate remedy at law.

          Section 9.14 Successors and Assigns. (a) This Separation Agreement
shall inure to the benefit of and be binding upon the respective successors and
permitted assigns of the parties hereto, but any such assignment by any party
hereto shall not relieve such assigning party of any of its obligations or
agreements hereunder unless expressly agreed to in writing by each other party
hereto in its sole discretion; provided, however, that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Separation Agreement without the consent of each other party hereto, except that
from and after the Closing Date this Separation Agreement may be assigned to a
lender of a party as collateral for indebtedness, provided that the party making
such assignment shall not be released from its obligations hereunder and the


                                       65

<PAGE>

non-assigning party shall have no obligation to pursue remedies against any
assignee before proceeding against assignor for any breach of any of its
obligations hereunder; provided, further, that nothing contained in this Section
9.14(a) shall prevent Onyx, New Diamond, SV or the Company (but, in the case of
the Company, only after the Effective Time) from assigning from transferring or
assigning this Separation Agreement or its rights and obligations hereunder to a
Designated Affiliate, in either case, so long as such assignment or transfer
does not purport to relieve the assignee of its obligations hereunder. Any
attempted assignment in violation of the foregoing shall be null and void.

               (b) To the extent that the Company, Onyx and/or one of more its
Designated Affiliates or any of their respective Subsidiaries, directly or
indirectly, whether by merger, transfer of assets, transfer of stock, operation
of law, license or otherwise, transfers, licenses or otherwise disposes of, in
one or more transactions, to any other person all or substantially all of the
Retained Assets each owns immediately after the Closing or the Retained
Business, Onyx or such Designated Affiliate or such Subsidiary will cause the
transferee of such Retained Assets to assume specifically such transferor's and
the Company's obligations under this Separation Agreement with respect thereto.
Such assumption will not relieve the transferor of its obligations in respect
thereof. To the extent that New Diamond and/or one or more of their Designated
Affiliates or any of their respective Subsidiaries, directly or indirectly,
whether by merger, transfer of assets, transfer of stock, operation of law,
license or otherwise, transfers, licenses or otherwise disposes of, in one or
more transactions, to any other person all or substantially all of the New
Diamond Assets or the New Diamond Business, the transferor will cause the
transferee of such New Diamond Assets or New Diamond Business to assume
specifically its obligations under this Separation Agreement with respect
thereto. Such assumption will not relieve the transferor of its obligations in
respect thereof. The parties agree that such transferee may exercise all of the
transferring party's rights hereunder, as the case may be, with respect to such
Assets or businesses.

          Section 9.15 Severability. If any term or other provision of this
Separation Agreement is determined by a court of competent jurisdiction to be
invalid, illegal or incapable of being enforced, all other terms and provisions
of this Separation Agreement shall nevertheless remain in full force and effect.
Upon such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith to
modify this Separation Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner.

          Section 9.16 Jurisdiction; Venue; Consent to Service of Process. (a)
Except as otherwise provided in Section 2.7, 2.8 or 4.9, each of the parties
hereto (a) consents to submit itself to the exclusive personal jurisdiction of
the Delaware Court of Chancery and any Federal court located in the State of
Delaware in the event of any Action arising out of or relating to this
Separation Agreement or any of the transactions contemplated by this Separation
Agreement, (b) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court, and (c)
agrees that it will not bring any Action arising out of or relating to this
Separation Agreement or any of the transactions contemplated by this Separation
Agreement in any court other than the Delaware Court of Chancery or a Federal
court sitting in the State of Delaware. In any Action arising out of or relating
to this Separation Agreement or any of the transactions contemplated by this
Separation Agreement, each party


                                       66

<PAGE>

irrevocably and unconditionally waives and agrees not to assert by way of
motion, as a defense or otherwise any claims that it is not subject to the
jurisdiction of the above courts, that such Action is brought in an inconvenient
forum or that the venue of such Action is improper. Each of the parties also
hereby agrees that any final and unappealable Judgment against a party in
connection with any such Action shall be conclusive and binding on such party
and that such award or Judgment may be enforced in any court of competent
jurisdiction, either within or outside of the United States. A certified or
exemplified copy of such Judgment shall be conclusive evidence of the fact and
amount of such Judgment.

               (b) Each party hereto irrevocably consents to service of process
in the manner provided for the giving of notices pursuant to Section 9.10 of
this Separation Agreement. Nothing in this Section 9.16 shall affect the right
of any party to serve process in any other manner permitted by applicable Law.

          Section 9.17 Waiver of Jury Trial. To the fullest extent permitted by
Law, each of the parties irrevocably waives all right to trial by jury in any
Action or counterclaim arising out of or relating to this Separation Agreement
or any of the transactions contemplated by this Separation Agreement.

          Section 9.18 Company Disclosure Letter. There may have been included
in the Company Disclosure Letter and may be included elsewhere in this
Separation Agreement items which are not "material," and such inclusion shall
not be deemed to be an acknowledgment or agreement by the Company that such
items are "material" or to affect the interpretation of such term for purposes
of this Separation Agreement. Disclosures included in any Section of the Company
Disclosure Letter shall be considered to be made for purposes of all other
Sections of the Company Disclosure Letter to the extent that the relevance of
any such disclosure to any other Section of the Company Disclosure Letter is
reasonably apparent from the text of such disclosure. The inclusion of any items
or information in the Company Disclosure Letter shall not be construed as an
admission that such item or information (or any non-disclosed item or
information of comparable or greater significance) is material or otherwise
required to be scheduled as an exception from any representation, warranty or
covenant. Matters reflected in the Company Disclosure Letter are not necessarily
limited to matters required by the Agreement to be disclosed in the Company
Disclosure Letter.


                                       67

<PAGE>

          IN WITNESS WHEREOF, the parties have caused this Separation Agreement
to be signed by their respective officers thereunto duly authorized as of the
date first written above.

                                        ALBERTSON'S, INC.


                                        By: /s/ JOHN R. SIMS
                                            ------------------------------------
                                        Name: John R. Sims
                                        Title: Executive Vice President and
                                               General Counsel


                                        NEW ALOHA CORPORATION


                                        By: /s/ PAUL G. ROWAN
                                            ------------------------------------
                                        Name: Paul G. Rowan
                                        Title: President


                                        SUPERVALU, INC.


                                        By: /s/ JEFF NODDLE
                                            ------------------------------------
                                        Name: Jeff Noddle
                                        Title: Chairman & CEO


                                        AB ACQUISITION LLC


                                        By: /s/ LEN TESSLER
                                            ------------------------------------
                                        Name: Len Tessler
                                        Title: Authorized Signatory
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.1.4
<SEQUENCE>3
<FILENAME>v18837exv4w1w4.txt
<DESCRIPTION>EXHIBIT 4.1.4
<TEXT>
<PAGE>

                                                                   EXHIBIT 4.1.4

                    FOURTH AMENDMENT TO THE RIGHTS AGREEMENT
                                     BETWEEN
                                ALBERTSON'S, INC.
                                       AND
                     AMERICAN STOCK TRANSFER & TRUST COMPANY

     This agreement, made this 22nd day of January, 2006 (this "Amendment"),
between Albertson's, Inc. ("Albertson's") and American Stock Transfer & Trust
Company ("AST&TC") (successor to ChaseMellon Shareholder Services, L.L.C.
("CMSS")), as rights agent, amends the Rights Agreement, dated as of December 9,
1996, between Albertson's and CMSS (the "Rights Agreement"), as heretofore
amended.

     WHEREAS, the Board of Directors of Albertson's believes it is in the best
interests of the shareholders of Albertson's to amend the Rights Agreement as
set forth below; and

     WHEREAS, under the present circumstances, Section 27 of the Rights
Agreement permits the amendment of the Rights Agreement; and

     WHEREAS, Albertson's has directed AST&TC to enter into this Amendment;

     NOW THEREFORE, intending to be legally bound, Albertson's and AST&TC hereby
agree that the Rights Agreement and the exhibits thereto shall be amended as set
forth below.

     1. Section 1(n) of the Rights Agreement is hereby amended by adding the
following new Section 1(nn) immediately thereafter:

          "(nn) "Merger Agreement" means the Agreement and Plan of Merger, dated
          as of January 22, 2006, among the Company, SUPERVALU INC. ("Parent"),
          Emerald Acquisition Sub, Inc. ("Acquisition Sub"), New Aloha
          Corporation ("New Diamond") and Diamond Sub, Inc. ("Merger Sub")"

     2. Section 1 of the Rights Agreement is hereby amended by adding the
following paragraph at the end of such Section:

          "Notwithstanding anything in this Agreement to the contrary, (i) none
          of the execution, delivery or performance of the Merger Agreement nor
          the consummation of the transactions contemplated thereby will (x)
          cause the Rights to become exercisable, (y) cause Parent, Acquisition
          Sub, New Diamond, or any of their respective Affiliates or Associates
          to become an Acquiring Person or (z) give rise to a Stock Acquisition
          Date or a Distribution Date."

     3. Section 7(a) of the Rights Agreement is hereby amended in its entirety
to read as follows:

          "(a) Subject to Section 7(e) hereof, at any time after the
          Distribution Date the registered holder of any Rights Certificate may
          exercise the Rights evidenced

<PAGE>

          thereby (except as otherwise provided herein including, without
          limitation, the restrictions on exercisability set forth in Section
          9(c), Section 11(a)(iii) and Section 23(a) hereof) in whole or in part
          upon surrender of the Rights Certificate, with the form of election to
          purchase and the certificate on the reverse side thereof duly
          executed, to the Rights Agent at the principal office or offices of
          the Rights Agent designated for such purpose, together with payment of
          the aggregate Purchase Price with respect to the total number of one
          one-thousandths of a share (or other securities, cash or other assets,
          as the case may be) as to which such surrendered Rights are then
          exercisable, at or prior to the earliest of (i) the close of business
          on March 21, 2007 (the "Final Expiration Date"), (ii) the time at
          which the Rights are redeemed as provided in Section 23 hereof, (iii)
          the time at which the Rights are exchanged pursuant to Section 24
          hereof, or (iv) immediately prior to the Initial Effective Time (as
          defined in the Merger Agreement) (the earliest of (i), (ii), (iii) and
          (iv) being herein referred to as the "Expiration Date").

     4. Exhibits A, B, and C to the Rights Agreement shall be deemed to be
amended in a manner consistent with this Amendment.

     5. The term "Agreement" as used in the Rights Agreement shall be deemed to
refer to the Rights Agreement as heretofore amended and as amended hereby, and
all references to the Rights Agreement shall be deemed to include this Amendment
and all prior amendments.

     6. This Amendment shall be deemed to be a contract made under the laws of
the State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts made and to be
performed entirely within such State.

     7. This agreement shall be effective as of, and immediately prior to, the
execution and delivery of the Merger Agreement.

     8. Except as set forth herein, the Rights Agreement shall remain in full
force and effect and otherwise shall be unaffected hereby.

     9. This agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.


                                       -2-

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
duly executed as of the day and year first above written.

Attest:                                 ALBERTSON'S, INC.


/s/ COLLEEN R. BATCHELER                By: /s/ JOHN R. SIMS
-------------------------------------       ------------------------------------
Name: Colleen R. Batcheler              Name: John R. Sims
Title: Vice President and               Title: Executive Vice President and
       Corporate Secretary                     General Counsel


Attest:                                 AMERICAN STOCK TRANSFER & TRUST COMPANY


/s/ ANTHONY FOTI                        By: /s/ JOSEPH F. WOLF
-------------------------------------       ------------------------------------
Name: Anthony Foti                      Name: Joseph F. Wolf
Title: Account Manager                  Title: Vice President


                                       -3-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>4
<FILENAME>v18837exv21.txt
<DESCRIPTION>EXHIBIT 21
<TEXT>
<PAGE>



                                                                      EXHIBIT 21

14 NORTH MAIN STREET LLC

Incorporated State:   Massachusetts

18 NMS LLC

Incorporated State:   Massachusetts

ABS FINANCE CO., INC.

Incorporated State:   Delaware

ABS INSURANCE LTD.

Incorporated State:   Bermuda

ABS PROCUREMENT CO.

Incorporated State:   Grand Cayman

ACME MARKETS, INC.

Incorporated State:   Delaware

ADRIAN REALTY TRUST

Incorporated State:   Massachusetts

ADVANTAGE STORES, INC.

Incorporated State:   California

ALBERTSON'S LIQUORS, INC.

Incorporated State:   Wyoming

ALBERTSON'S REALTY, INC.

Incorporated State:   Idaho

ALBERTSONS ASSIST, INC.

                                     Page 1
<PAGE>


Incorporated State:   Idaho

ALBERTSONS STORES CHARITABLE FOUNDATION, INC.

Incorporated State:   Idaho

AMERICAN DRUG STORES, INC.

Incorporated State:   Illinois

AMERICAN FOOD AND DRUG, INC.

Incorporated State:   Delaware

AMERICAN PARTNERS, L.P.

Incorporated State:   Indiana

AMERICAN PROCUREMENT AND LOGISTICS COMPANY

Incorporated State:   Delaware

AMERICAN STORES CHARITABLE FOUNDATION

Incorporated State:   Utah

AMERICAN STORES COMPANY, LLC

Incorporated State:   Delaware

AMERICAN STORES PROPERTIES, INC.

Incorporated State:   Delaware

AMERICAN STORES PROPERTIES, INC. - ONE

Incorporated State:   Delaware

AMERICAN STORES REALTY COMPANY, LLC

Incorporated State:   Delaware

APLC PROCUREMENT, INC.

Incorporated State:   Utah

ARLES, LLC

Incorporated State:   New Hampshire


                                     Page 2
<PAGE>


ASC MEDIA SERVICES, INC.

Incorporated State:   Utah

ASC PHARMACY, INC.

Incorporated State:   Delaware

BERYL AMERICAN CORPORATION

Incorporated State:   Vermont

BP REALTY, LLC

Incorporated State:   Massachusetts

BRISTOL FARMS

Incorporated State:   California

BROCKTON CORPORATION

Incorporated State:   Vermont

CAL-PHARM, INC.

Incorporated State:   California

CAMBRIDGE CHARTER REALTY I LLC

Incorporated State:   Massachusetts

CH PROJECT LLC

Incorporated State:   Massachusetts

CLIFFORD W. PERHAM, INC.

Incorporated State:   Maine

DARTMOUTH CHARTER LLC

Incorporated State:   Massachusetts

EAST HAMPTON REALTY, LLC

Incorporated State:   Massachusetts

EAST HIGH STREET LLC

Incorporated State:   Massachusetts


                                     Page 3
<PAGE>


EXTREME INC.

Incorporated State:   Delaware

FOOD BASKET

Incorporated State:   California

FRESH HOLDINGS, INC.

Incorporated State:   Delaware

GOLDSTAR PARTNERS, LLC (THE)

Incorporated State:   Massachusetts

GOOD SPIRITS, INC.

Incorporated State:   Texas

GORHAM MARKETS, LLC

Incorporated State:   New Hampshire

GRETNA PROPERTIES, INC.

Incorporated State:   Louisiana

HEALTH 'N' HOME CORPORATION

Incorporated State:   Delaware

HODISCO, INC.

Incorporated State:   Texas

HOOKSETT PROJECT, LLC

Incorporated State:   Massachusetts

HOOKSETT REALTY SSI LLC

Incorporated State:   Massachusetts

JETCO PROPERTIES, INC.

                                     Page 4
<PAGE>


Incorporated State:   Delaware

JEWEL COMPANIES, INC., A 1985 DELAWARE CORPORATION

Incorporated State:   Delaware

JEWEL FOOD STORES, INC.

Incorporated State:   New York

JEWEL OSCO SOUTHWEST, INC.

Incorporated State:   Illinois

JIM DANDY MARKETS

Incorporated State:   California

JOAH, INC.

Incorporated State:   Delaware

KASCO AUTOMOTIVE PRODUCTS

Incorporated State:   California

LAZY ACRES MARKET INC.

Incorporated State:   California

LS HOLDINGS, INC.

Incorporated State:   Delaware

LUCKY STORES PROPERTIES, INC.

Incorporated State:   Delaware

LUCKY STORES, INC. (DE)

Incorporated State:   Delaware

LUCKY STORES, INC. (FL)

Incorporated State:   Florida

LUCKY STORES, INC. (NV)

Incorporated State:   Nevada

MEADOWLANE, INC.

                                     Page 5
<PAGE>


Incorporated State:   Massachusetts

MFC-LIVONIA PROPERTIES, INC.

Incorporated State:   Delaware

MICHAELS REALTY TRUST

NEW ALOHA CORPORATION

Incorporated State:   Delaware

NEW BRISTOL FARMS, INC.

Incorporated State:   Delaware

NEW DIAMOND SUB, INC.

Incorporated State:   Delaware

NEWCO INVESTMENTS, LLC

Incorporated State:   Delaware

NHI INVESTMENT PARTNERS, LP

Incorporated State:   Delaware

NHI SPIRITS, LLC

Incorporated State:   Texas

NMS REALTY, LLC

Incorporated State:   Massachusetts

NP REALTY LLC

Incorporated State:   New York

                                     Page 6
<PAGE>


OAKBROOK BEVERAGE CENTERS, INC.

Incorporated State:   Illinois

ORDISCO, INC.

Incorporated State:   California

OSCO DRUG OF MASSACHUSETTS, INC.

Incorporated State:   Massachusetts

OSCO DRUG OF TEXAS, INC.

Incorporated State:   Delaware

PP REALTY LLC

Incorporated State:   Massachusetts

SAV-ON REALTY, INC.

Incorporated State:   Delaware

SCOLARI'S STORES, INC.

Incorporated State:   California

SEESSEL HOLDINGS, INC.

Incorporated State:   Tennessee

SHAW EQUIPMENT CORPORATION

Incorporated State:   Massachusetts

SHAW'S NORTH ATTLEBORO CORP.

Incorporated State:   Massachusetts

                                     Page 7
<PAGE>


SHAW'S REALTY CO.

Incorporated State:   Maine

SHAW'S REALTY TRUST

Incorporated State:   Massachusetts

SHAW'S SECURITIES CORPORATION I

Incorporated State:   Massachusetts

SHAW'S SECURITIES CORPORATION II

Incorporated State:   Massachusetts

SHAW'S SUPERMARKETS, INC.

Incorporated State:   Massachusetts

SHORTCO, INC.

Incorporated State:   Texas

SMITTY'S SUPER MARKETS, INC.

Incorporated State:   Missouri

SNH REALTY, LLC

Incorporated State:   Massachusetts

SRA REALTY LLC

Incorporated State:   Massachusetts

SSM HOLDINGS COMPANY

Incorporated State:   Delaware

STAR MARKETS COMPANY, INC.

Incorporated State:   Massachusetts

STAR MARKETS HOLDINGS, INC.

Incorporated State:   Massachusetts

SUNRICH MERCANTILE CORP.

Incorporated State:   California

THE JAMES A. MARTIN, IV TRUST

THE MATTHEW JIM MARTIN TRUST

                                     Page 8
<PAGE>


THE ROBERT C. MARTIN TRUST

THE RONALD M. KOLOZIE TRUST

U.S. SATELLITE CORPORATION

Incorporated State:   Utah

WHP REALTY, LLC

Incorporated State:   Connecticut


                                     Page 9
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>5
<FILENAME>v18837exv23.txt
<DESCRIPTION>EXHIBIT 23
<TEXT>
<PAGE>

                                                                      EXHIBIT 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement Nos.
33-54998 and 333-113995 on Form S-3 and Nos. 2-80776, 33-2139, 33-7901,
33-15062, 33-43635, 33-62799, 33-59803, 333-82157, 333-82161, 333-87773,
333-73194, 333-63019 and 333-121020 on Form S-8 of our reports dated March 28,
2006, relating to the consolidated financial statements of Albertson's, Inc. and
subsidiaries, and management's report on the effectiveness of internal control
over financial reporting appearing in the Annual Report on Form 10-K of
Albertson's, Inc. and subsidiaries for the year ended February 2, 2006.


/s/ Deloitte & Touche LLP

Boise, Idaho
March 28, 2006

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>6
<FILENAME>v18837exv31w1.txt
<DESCRIPTION>EXHIBIT 31.1
<TEXT>
<PAGE>

                                                                    EXHIBIT 31.1

                                ALBERTSON'S, INC.
                    CERTIFICATIONS PURSUANT TO SECTION 302 OF
                         THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

I, Lawrence R. Johnston, certify that:

1.   I have reviewed this annual report on Form 10-K of Albertson's, Inc.;

2.   Based on my knowledge, this annual report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
     financial reporting (as defined in Exchange Act Rules 13a-15(f) and
     15d-15(f)) for the registrant and have:

     a)   Designed such disclosure controls and procedures, or caused such
          disclosure controls and procedures to be designed under our
          supervision, to ensure that material information relating to the
          registrant, including its consolidated subsidiaries, is made known to
          us by others within those entities, particularly during the period in
          which this report is being prepared;

     b)   Designed such internal control over financial reporting, or caused
          such internal control over financial reporting to be designed under
          our supervision, to provide reasonable assurance regarding the
          reliability of financial reporting and the preparation of financial
          statements for external purposes in accordance with generally accepted
          accounting principles;

     c)   Evaluated the effectiveness of the registrant's disclosure controls
          and procedures and presented in this report our conclusions about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     d)   Disclosed in this report any change in the registrant's internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's fourth fiscal quarter in
          the case of an annual report) that has materially affected, or is
          reasonably likely to materially affect, the registrant's internal
          control over financial reporting; and

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

     a)   All significant deficiencies and material weaknesses in the design or
          operation of internal control over financial reporting which are
          reasonably likely to adversely affect the registrant's ability to
          record, process, summarize and report financial information; and

     b)   Any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          control over financial reporting.


Date: March 28, 2006                    /s/ Lawrence R. Johnston
                                        ----------------------------------------
                                        Lawrence R. Johnston
                                        Chairman of the Board, Chief
                                        Executive Officer and President
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>7
<FILENAME>v18837exv31w2.txt
<DESCRIPTION>EXHIBIT 31.2
<TEXT>
<PAGE>

                                                                    EXHIBIT 31.2

                                ALBERTSON'S, INC.
                    CERTIFICATIONS PURSUANT TO SECTION 302 OF
                         THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

I, Felicia D. Thornton, certify that:

1.   I have reviewed this annual report on Form 10-K of Albertson's, Inc.;

2.   Based on my knowledge, this annual report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
     financial reporting (as defined in Exchange Act Rules 13a-15(f) and
     15d-15(f)) for the registrant and have:

     a)   Designed such disclosure controls and procedures, or caused such
          disclosure controls and procedures to be designed under our
          supervision, to ensure that material information relating to the
          registrant, including its consolidated subsidiaries, is made known to
          us by others within those entities, particularly during the period in
          which this report is being prepared;

     b)   Designed such internal control over financial reporting, or caused
          such internal control over financial reporting to be designed under
          our supervision, to provide reasonable assurance regarding the
          reliability of financial reporting and the preparation of financial
          statements for external purposes in accordance with generally accepted
          accounting principles;

     c)   Evaluated the effectiveness of the registrant's disclosure controls
          and procedures and presented in this report our conclusions about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     d)   Disclosed in this report any change in the registrant's internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's fourth fiscal quarter in
          the case of an annual report) that has materially affected, or is
          reasonably likely to materially affect, the registrant's internal
          control over financial reporting; and

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

     a)   All significant deficiencies and material weaknesses in the design or
          operation of internal control over financial reporting which are
          reasonably likely to adversely affect the registrant's ability to
          record, process, summarize and report financial information; and

     b)   Any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          control over financial reporting.


Date: March 28, 2006                    /s/ Felicia D. Thornton
                                        ----------------------------------------
                                        Felicia D. Thornton
                                        Executive Vice President
                                        and Chief Financial Officer
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>8
<FILENAME>v18837exv32.txt
<DESCRIPTION>EXHIBIT 32
<TEXT>
<PAGE>

                                                                      EXHIBIT 32

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of Albertson's, Inc. (the
"Company") for the period ended February 2, 2006 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), we, Lawrence R.
Johnston and Felicia D. Thornton, Chief Executive Officer and Chief Financial
Officer, respectively, of the Company, certify, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that
to our knowledge:

     (1)  The Report fully complies with the requirements of section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     (2)  The information contained in the Report fairly presents, in all
          material respects, the financial condition and results of operations
          of the Company as of the dates and for the periods expressed in the
          Report.

March 28, 2006


/s/ Lawrence R. Johnston
-------------------------------------
Lawrence R. Johnston
Chief Executive Officer


/s/ Felicia D. Thornton
-------------------------------------
Felicia D. Thornton
Chief Financial Officer
</TEXT>
</DOCUMENT>
</SUBMISSION>
