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By-laws - SUPERVALU INC - 4-6-1994

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By-laws - SUPERVALU INC - 4-6-1994 Powered By Docstoc
					EXHIBIT 3.2 ALBERTSON'S, INC. BY-LAWS ARTICLE I OFFICES Section 1. The registered office shall be in the City of Wilmington, County of New Castle, State of Delaware. Section 2. The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require. ARTICLE II MEETING OF THE STOCKHOLDERS Section 1. All meetings of the stockholders for the election of directors shall be held in the City of Boise, State of Idaho, at such place as may be fixed from time to time by the Board of Directors, or at such other place either within or without the State of Delaware as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting. Meetings of the stockholders for any other purpose may be held at such time and place, within or without the State of Delaware, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof. Section 2. Annual meetings of stockholders shall be held on the fourth Friday of May, if not a legal holiday and, if a legal holiday, then on the next secular day following, at 10:00 o'clock A.M., or at such other date and time as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting, at which they shall elect by written ballot a Board of Directors, and transact such other business as may be properly brought before the meeting. Section 3. Written notice of the annual meetings, stating the place, date, and hour of the meeting, shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than sixty days before the date of the meeting. Section 4. The officer who has charge of the stock ledger of the Corporation shall prepare and make, or shall cause to be prepared and made, at least ten days before every meeting of stockholders a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be

held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present; provided, however, the failure to do so shall not offset the validity of any meeting. Section 5. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the certificate of incorporation, may be called only (i) by the chairman of the board, vice chairman of the board, or president, or (ii) by the chairman, vice chairman, president, or secretary at the request in writing of a majority of the Board of Directors. Such request shall state the purpose or purposes of the proposed meeting. Section 6. Written notice of a special meeting, stating the place, date and hour of the meeting and the purpose or

held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present; provided, however, the failure to do so shall not offset the validity of any meeting. Section 5. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the certificate of incorporation, may be called only (i) by the chairman of the board, vice chairman of the board, or president, or (ii) by the chairman, vice chairman, president, or secretary at the request in writing of a majority of the Board of Directors. Such request shall state the purpose or purposes of the proposed meeting. Section 6. Written notice of a special meeting, stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote at such meeting. Section 7. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice. Section 8. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time without notice other than announcement at the meeting until a quorum shall be present or represented. Before any proxy is voted, it shall be filed with the secretary. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty days or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjournment shall be given to each stockholder of record entitled to vote at the meeting. Section 9. When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power, present in person or represented by proxy, shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes or of the certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question. Section 10. Each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on or after three years from its date, unless the proxy provides for a longer period.

The voting rights of preferred shares shall be only as provided in the certificate of incorporation, by-laws, resolution of the Board of Directors or by law. Section 11. Whenever the vote of stockholders at a meeting thereof is required or permitted to be taken for or in connection with any corporate action by any provision of the certificate of incorporation or statutes, the meeting and vote of stockholders may be dispensed with if all of the stockholders who would have been entitled to vote upon the action if such meeting were held shall consent in writing to such corporate action being taken, or if the certificate of incorporation authorizes the action to be taken with the written consent of the holders of less than all of the stock who would be have been entitled to vote upon the action if a meeting were held, then on the written consent of the stockholders having not less than such percentage of the number of votes as may be authorized in the certificate of incorporation; provided that in no case shall the written consent be by the holders of stock having less than the minimum percentage of the vote required by statute for the proposed corporate action, and provided that prompt notice must be given to all stockholders of the taking of corporate action without a meeting and by less than unanimous written consent. No corporate action taken by written consent in accordance with this Section 11 shall be valid unless at least 30 days prior to any stockholder signing such written consent a written

The voting rights of preferred shares shall be only as provided in the certificate of incorporation, by-laws, resolution of the Board of Directors or by law. Section 11. Whenever the vote of stockholders at a meeting thereof is required or permitted to be taken for or in connection with any corporate action by any provision of the certificate of incorporation or statutes, the meeting and vote of stockholders may be dispensed with if all of the stockholders who would have been entitled to vote upon the action if such meeting were held shall consent in writing to such corporate action being taken, or if the certificate of incorporation authorizes the action to be taken with the written consent of the holders of less than all of the stock who would be have been entitled to vote upon the action if a meeting were held, then on the written consent of the stockholders having not less than such percentage of the number of votes as may be authorized in the certificate of incorporation; provided that in no case shall the written consent be by the holders of stock having less than the minimum percentage of the vote required by statute for the proposed corporate action, and provided that prompt notice must be given to all stockholders of the taking of corporate action without a meeting and by less than unanimous written consent. No corporate action taken by written consent in accordance with this Section 11 shall be valid unless at least 30 days prior to any stockholder signing such written consent a written notice of such proposed corporate action is delivered to the Secretary of the Corporation at the principal executive offices of the Corporation. Such notice shall contain (i) a copy of the resolution proposed to be adopted by written consent, (ii) the name or names of the stockholders proposing such corporate action and those known by the proposing stockholders to support such proposal (collectively referred to herein as the "Proponents"), and (iii) the number of voting shares held by each Proponent. Section 12. With respect solely to any solicitation of proxies subject to the filing requirements of Regulation 14A or any successor rule promulgated by the Securities and Exchange Commission, no form of proxy distributed by mail to stockholders of record shall have any validity or effectiveness, whether or not it purports to bear a signature, unless such proxy form, prior to mailing to stockholders of record bears a label or imprint, typewritten or otherwise mechanically or electronically applied, legibly setting forth the name and address of the stockholder of record solicited. Section 13. Nominations of persons for election to the Board of Directors of the Corporation shall be made at a meeting of stockholders at which directors are to be elected exclusively in accordance with this Section. Nominations of persons for such elections shall be deemed properly made if (i) set forth in proxy materials prepared for such a meeting by or at the direction of the Board of Directors, (ii) made by a stockholder at such a meeting at the direction of the Board of Directors, or (iii) made by a stockholder at such a meeting (other than at the direction of the Board of Directors) if timely notice has been given to the secretary of the Corporation at the principal executive offices of the Corporation of such

intent to make a nomination. To be timely, such stockholder's notice must be received by the Corporation not less than 50 days nor more than 75 days prior to the stockholder meeting; provided, however, that if less than 60 days' notice or prior public disclosure of the date is given or made to the stockholders by the Corporation, then notice by the stockholder of intent to make a nomination must be received by the Corporation no later than the close of business on the 10th day following the day on which the Corporation mailed the notice of the date of the meeting or public disclosure of such meeting date. Such stockholder's notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election as a director, (i) the name, age, business address and residence address of such person, (ii) the principal occupation or employment of the person, (iii) the class and number of shares of the Corporation which are beneficially owned by such person, if any, and (iv) any other information relating to such person which is required to be disclosed in solicitations for proxies for election of directors pursuant to Regulation 14A under the Securities and Exchange Act of 1934, as amended, or any successor act or Regulation; and (b) as to the stockholder giving the notice (i) the name and record address of the stockholder and (ii) the class and number of shares of the Corporation which are beneficially owned by the stockholder. The Corporation may require any proposed nominee to furnish such other information as may be reasonably required by the Corporation to determine the qualifications of such proposed nominee to serve as a director of the Corporation.

intent to make a nomination. To be timely, such stockholder's notice must be received by the Corporation not less than 50 days nor more than 75 days prior to the stockholder meeting; provided, however, that if less than 60 days' notice or prior public disclosure of the date is given or made to the stockholders by the Corporation, then notice by the stockholder of intent to make a nomination must be received by the Corporation no later than the close of business on the 10th day following the day on which the Corporation mailed the notice of the date of the meeting or public disclosure of such meeting date. Such stockholder's notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election as a director, (i) the name, age, business address and residence address of such person, (ii) the principal occupation or employment of the person, (iii) the class and number of shares of the Corporation which are beneficially owned by such person, if any, and (iv) any other information relating to such person which is required to be disclosed in solicitations for proxies for election of directors pursuant to Regulation 14A under the Securities and Exchange Act of 1934, as amended, or any successor act or Regulation; and (b) as to the stockholder giving the notice (i) the name and record address of the stockholder and (ii) the class and number of shares of the Corporation which are beneficially owned by the stockholder. The Corporation may require any proposed nominee to furnish such other information as may be reasonably required by the Corporation to determine the qualifications of such proposed nominee to serve as a director of the Corporation. No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 13. The chairman of a stockholder meeting may, if the facts warrant, determine and declare to the meeting that a nomination has not been made in accordance with the foregoing procedure and that such defective nomination shall be disregarded. Section 14. At a meeting of stockholders, only such proposals that have been properly brought before the meeting shall be voted upon. A proposal shall be properly brought before the meeting only if (i) such proposal is specified in the notice of the meeting (or any supplement thereto) given by the Corporation to the stockholders, (ii) such proposal is otherwise lawfully brought before the meeting by or at the direction of the Board of Directors of the Corporation, or (iii) such proposal is otherwise lawfully brought before the meeting by a stockholder entitled to vote at such meeting who has given the notice required in this Section 14. A stockholder desiring to make a proposal before the meeting and which is not contained in the notice of the meeting given to stockholders by the Corporation must give timely notice thereof to the secretary of the Corporation at the principal executive offices of the Corporation. To be timely, such stockholder's notice must be received by the Corporation not less than 50 days nor more than 75 days prior to the stockholder meeting; provided, however, that if less than 60 days' notice or prior public disclosure of the date of the meeting is given or made to the stockholders by the Corporation, then notice by the stockholder of intent to make such proposal must be received by the Corporation no later than the close of business on the 10th day following the day on which the Corporation mailed

the notice of the date of the meeting or public disclosure of such meeting date. Such stockholder's notice shall set forth as to each matter the stockholder proposes to bring before the meeting (i) a brief description of the proposal desired to be brought before the meeting and the reasons for making such proposal at the meeting, (ii) the name and record address of the stockholder making such proposal, (iii) the class and number of shares of the Corporation which are beneficially owned by the stockholder, and (iv) any material interest of the stockholder in such proposal. The Chairman of a meeting shall, if the facts warrant, determine and declare to the meeting that a proposal has not been properly brought before the meeting in accordance with the provisions of this Section 14 and that, accordingly, such proposal cannot and shall not be acted upon. ARTICLE III DIRECTORS Section 1. The number of directors which shall constitute the whole Board shall be not less than three nor more than twenty-one. Within the limits above specified, the number of directors shall be determined by resolution of

the notice of the date of the meeting or public disclosure of such meeting date. Such stockholder's notice shall set forth as to each matter the stockholder proposes to bring before the meeting (i) a brief description of the proposal desired to be brought before the meeting and the reasons for making such proposal at the meeting, (ii) the name and record address of the stockholder making such proposal, (iii) the class and number of shares of the Corporation which are beneficially owned by the stockholder, and (iv) any material interest of the stockholder in such proposal. The Chairman of a meeting shall, if the facts warrant, determine and declare to the meeting that a proposal has not been properly brought before the meeting in accordance with the provisions of this Section 14 and that, accordingly, such proposal cannot and shall not be acted upon. ARTICLE III DIRECTORS Section 1. The number of directors which shall constitute the whole Board shall be not less than three nor more than twenty-one. Within the limits above specified, the number of directors shall be determined by resolution of the Board or by the vote at the annual meeting of the holders of at least three-fourths of the outstanding shares of stock then entitled to vote in elections of directors. The Board shall be divided into three classes. Any increase or decrease in the number of directors shall be apportioned among the classes so as to make all classes as nearly equal in number as possible. No decrease in the authorized number of directors shall shorten the term of any incumbent director. Unless and until otherwise determined, the first and third classes shall each consist of five directors, and the second class shall consist of four directors. A separate election shall be held for each class of directors at the 1980 annual meeting of stockholders. At the 1980 annual meeting of stockholders the directors elected to the first class shall hold office for a term of one year and until their respective successors are elected and qualified; the directors elected to the second class shall hold office for a term of two years and until their respective successors are elected and qualified, and the directors elected to the third class shall hold office for a term of three years and until their respective successors are elected and qualified. At each annual meeting thereafter the successors to the class of directors whose term is then expiring shall be elected to hold office for a term of three years and until their respective successors are elected. Directors need not be stockholders. Section 2. Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director. Any director so chosen shall hold office until the next election of the class for which such director has been chosen, and until his successor has been elected, unless sooner displaced. If there are no directors in office, then an election of directors may be held in the manner provided by statute. If at the time of filling any vacancy or any

newly created directorship the directors then in office shall constitute less than a majority of the whole Board (as constituted immediately prior to any such increase), the Court of Chancery may upon application of any stockholder or stockholders holding at least ten percent of the total number of shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office. Section 3. Any director may be removed by a majority of the quorum of the directors at any meeting only for cause. The entire Board of Directors may be removed by the stockholders only for cause. Cause shall mean (i) conviction of a crime involving moral turpitude, (ii) administrative agency determination of conduct involving moral turpitude, or (iii) with respect to removal by the directors, a determination, in good faith, by a majority of the quorum of the Board of Directors after a hearing before a quorum of the Board of Directors, of conduct involving moral turpitude materially adverse to the interests of the Corporation; and with respect to removal by the stockholders, such a determination by a majority of a quorum of the stockholders eligible to vote after a hearing before a quorum of the stockholders. Section 4. The business of the Corporation shall be managed by its Board of Directors which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the certificate of

newly created directorship the directors then in office shall constitute less than a majority of the whole Board (as constituted immediately prior to any such increase), the Court of Chancery may upon application of any stockholder or stockholders holding at least ten percent of the total number of shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office. Section 3. Any director may be removed by a majority of the quorum of the directors at any meeting only for cause. The entire Board of Directors may be removed by the stockholders only for cause. Cause shall mean (i) conviction of a crime involving moral turpitude, (ii) administrative agency determination of conduct involving moral turpitude, or (iii) with respect to removal by the directors, a determination, in good faith, by a majority of the quorum of the Board of Directors after a hearing before a quorum of the Board of Directors, of conduct involving moral turpitude materially adverse to the interests of the Corporation; and with respect to removal by the stockholders, such a determination by a majority of a quorum of the stockholders eligible to vote after a hearing before a quorum of the stockholders. Section 4. The business of the Corporation shall be managed by its Board of Directors which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the certificate of incorporation or by these by-laws directed or required to be exercised or done by the stockholders. Section 5. A. Indemnification (a) The Corporation shall indemnify any person who was or is a party or is threatened with being made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, including all appeals (other than an action, suit or proceeding by or in the right of the Corporation) by reason of the fact that he is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer or employee of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, decrees, fines, penalties and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgement, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not of itself create a presumption that the person did not act in good faith or in a manner which he reasonably believed to be in or not opposed to the best interest of the Corporation or, with respect to any criminal action, suit or proceeding, that he had reasonable cause to believe that his conduct was unlawful.

(b) The Corporation shall indemnify any person who was or is a party or is threatened with being made a party to any threatened, pending or completed action, suit or proceeding, including all appeals, by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer or employee of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action, suit or proceeding. The Corporation shall also indemnify any such person against amounts paid in settlement of such action, suit or proceeding up to the amount that would reasonably have been expended in his defense (determined in the manner provided for in subsection (d)) if such action, suit or proceeding had been prosecuted to a conclusion. However, indemnification under this subsection shall be made only if the person to be indemnified acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation and no such indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been finally adjudged to be liable to the Corporation unless, and only to the extent that, the court or body in or before which such action, suit or proceeding was finally determined, or any court of competent jurisdiction, shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses or other amounts paid as such court shall deem proper.

(b) The Corporation shall indemnify any person who was or is a party or is threatened with being made a party to any threatened, pending or completed action, suit or proceeding, including all appeals, by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer or employee of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action, suit or proceeding. The Corporation shall also indemnify any such person against amounts paid in settlement of such action, suit or proceeding up to the amount that would reasonably have been expended in his defense (determined in the manner provided for in subsection (d)) if such action, suit or proceeding had been prosecuted to a conclusion. However, indemnification under this subsection shall be made only if the person to be indemnified acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation and no such indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been finally adjudged to be liable to the Corporation unless, and only to the extent that, the court or body in or before which such action, suit or proceeding was finally determined, or any court of competent jurisdiction, shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses or other amounts paid as such court shall deem proper. (c) Without limiting the right of any director, officer or employee of the Corporation to indemnification under any other subsection hereof, if such person has been substantially and finally successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b), he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. (d) Except in a situation governed by subsection (c), any indemnification under subsection (a) and (b) (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer or employee is proper in the circumstances because he has met the applicable standard of conduct set forth in subsections (a) and (b). Such determination shall be made (1) by the Board of Directors by a majority vote of a quorum consisting of directors who are not or were not parties to or threatened with such action, suit or proceeding, or any other action, suit or proceeding arising from the same or similar operative facts, or (2) if such a quorum is not obtainable, or even if obtainable, if a majority of such quorum of disinterested directors so directs, by independent legal counsel (compensated by the Corporation) in a written opinion, or (3) if there be no disinterested directors, or if a majority of the disinterested directors, whether or not a quorum, so directs, by vote in person or by proxy of the holders of a majority of the shares entitled to vote in the election of directors. (e) Expenses of each person indemnified hereunder incurred in defending a civil, criminal, administrative or investigative action, suit or

proceeding (including all appeals) or threat thereof, may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding, upon receipt of an undertaking by or on behalf of the director, officer or employee to repay such expenses if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation. (f) The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this Article shall not be deemed exclusive of or in any way to limit any other rights to which any person seeking indemnification or advancement of expenses may become entitled as a matter of law, by the Articles, regulations, agreements, insurance, vote of stockholders or otherwise, with respect to action in his official capacity and with respect to action in another capacity while holding such office. (g) The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall continue as to a person who has ceased to be a director, officer or employee and shall inure to the benefit of the heirs, executors and administrators of such a person. (h) Subsections (a) through (g) of this Article shall apply to such agents of the Corporation as are designated at any time by the Board of Directors.

proceeding (including all appeals) or threat thereof, may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding, upon receipt of an undertaking by or on behalf of the director, officer or employee to repay such expenses if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation. (f) The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this Article shall not be deemed exclusive of or in any way to limit any other rights to which any person seeking indemnification or advancement of expenses may become entitled as a matter of law, by the Articles, regulations, agreements, insurance, vote of stockholders or otherwise, with respect to action in his official capacity and with respect to action in another capacity while holding such office. (g) The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall continue as to a person who has ceased to be a director, officer or employee and shall inure to the benefit of the heirs, executors and administrators of such a person. (h) Subsections (a) through (g) of this Article shall apply to such agents of the Corporation as are designated at any time by the Board of Directors. (i) If any part of this Article shall be found, in any action, suit or proceeding, to be invalid or ineffective, the validity and the effect of the remaining parts shall not be affected. B. Liability Insurance The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or designated agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or designated agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Article or of applicable statutes. Section 6. No director after having attained the age of 70 years shall be allowed to run for re-election or reappointment on the Board of Directors, excepting, however, that such retirement age shall not apply to directors over the age of 65 years who were serving on such board on September 9, 1974. MEETINGS OF THE BOARD OF DIRECTORS Section 7. The Board of Directors of the Corporation may hold meetings, both regular and special, either within or without the State of Delaware. Section 8. The first meeting of each newly elected Board of Directors shall be held at such time and place as shall be fixed by the vote of the

stockholders at the annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present. In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly elected Board of Directors or in the event such meeting is not held at the time and place so fixed by the stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors, or as shall be specified in a written waiver signed by all of the directors. Section 9. Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall be from time to time determined by the Board. Section 10. Special meetings of the Board may be called by the chairman, vice chairman or president on whatever notice he deems reasonable to each director, either personally (oral or written) or by mail or by telegram; special meetings shall be called by the chairman, vice chairman, president or secretary in like manner and on like notice on the written request of two directors.

stockholders at the annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present. In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly elected Board of Directors or in the event such meeting is not held at the time and place so fixed by the stockholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the Board of Directors, or as shall be specified in a written waiver signed by all of the directors. Section 9. Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall be from time to time determined by the Board. Section 10. Special meetings of the Board may be called by the chairman, vice chairman or president on whatever notice he deems reasonable to each director, either personally (oral or written) or by mail or by telegram; special meetings shall be called by the chairman, vice chairman, president or secretary in like manner and on like notice on the written request of two directors. Section 11. At all meetings of the Board not less than a majority of the total number of the Board shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute or by the certificate of incorporation. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 12. Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing and the writing or writings are filed with the minutes of proceedings of the Board or committee. COMMITTEES OF DIRECTORS Section 13. The Board of Directors may from time to time, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of two or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any committee who may replace any absent or disqualified member at any meeting of the committee. Any such committee, to the extent provided in the resolution, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; provided, however, that in the absence or disqualification of any member of such committee or committees, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place

of any such absent or disqualified member. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. Section 14. Each committee shall keep regular minutes of its meetings and proceedings and report them for approval to the Board of Directors at its next regular or special meeting. COMPENSATION OF DIRECTORS Section 15. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings. PRESUMPTION OF ASSENT

of any such absent or disqualified member. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. Section 14. Each committee shall keep regular minutes of its meetings and proceedings and report them for approval to the Board of Directors at its next regular or special meeting. COMPENSATION OF DIRECTORS Section 15. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings. PRESUMPTION OF ASSENT Section 16. A director of the corporation who is present at a meeting of the Board of Directors at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to the secretary of the Corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action. ARTICLE IV NOTICES Section 1. Whenever, under the provisions of the statutes or of the certificate of incorporation or of these bylaws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given orally to any director, or in writing, by mail (postage prepaid) or telegraph, addressed to any director or stockholder, at his address as it appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States Mail. Section 2. Whenever any notice is required to be given under the provisions of the statutes or of the certificate of incorporation or of these by-laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

ARTICLE V OFFICERS Section 1. The following officers of the Corporation shall be chosen by the Board of Directors: a chairman of the board, a chairman of the executive committee, a vice chairman of the board and a president. The Board of Directors shall designate the chairman of the board to be the chief executive officer and the president to be the chief operating officer. The Board of Directors may also choose such other officers as they deem desirable. Any number of offices may be held by the same person, unless the certificate of incorporation or these by-laws otherwise provide. Section 2. The Board of Directors at its first meeting after each annual meeting of stockholders shall choose a chairman of the board, a vice chairman of the board and a president. The chairman of the executive committee shall serve for such term as the Board of Directors shall designate. Section 3. The chief executive officer may appoint any vice presidents, the secretary, the treasurer and such other officers and agents as he shall deem necessary, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the chief executive officer and he

ARTICLE V OFFICERS Section 1. The following officers of the Corporation shall be chosen by the Board of Directors: a chairman of the board, a chairman of the executive committee, a vice chairman of the board and a president. The Board of Directors shall designate the chairman of the board to be the chief executive officer and the president to be the chief operating officer. The Board of Directors may also choose such other officers as they deem desirable. Any number of offices may be held by the same person, unless the certificate of incorporation or these by-laws otherwise provide. Section 2. The Board of Directors at its first meeting after each annual meeting of stockholders shall choose a chairman of the board, a vice chairman of the board and a president. The chairman of the executive committee shall serve for such term as the Board of Directors shall designate. Section 3. The chief executive officer may appoint any vice presidents, the secretary, the treasurer and such other officers and agents as he shall deem necessary, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the chief executive officer and he may remove any such officers from office at any time. Section 4. The salaries of the officers of the Corporation chosen by the Board of Directors shall be fixed by said Board of Directors. Section 5. The officers of the Corporation chosen by the Board of Directors shall hold office until their successors are chosen and qualify. Any officer elected or appointed by the Board of Directors may be removed at any time by the affirmative vote of a majority of the Board of Directors. CHAIRMAN OF THE BOARD Section 6. The chairman of the board shall preside at all meetings of the Board of Directors and shall possess the power to sign all certificates, contracts and other instruments of the Corporation which may be authorized by the Board of Directors. CHAIRMAN OF THE EXECUTIVE COMMITTEE Section 7. The chairman of the executive committee shall preside at all meetings of the executive committee of the Board of Directors, shall be available for advice and consultation as to operations and administrative matters of significance and shall perform such other duties and have such other powers as the Board of Directors may from time to time determine. CHIEF OPERATING OFFICER Section 8. The chief operating officer shall have responsibility for the operations of the Corporation as authorized by the Board of Directors.

VICE CHAIRMAN OF THE BOARD Section 9. The vice chairman of the board shall in the absence of the chairman of the board, preside at meetings of the Board of Directors and shall possess the power to sign all certificates, contracts and other instruments of the Corporation which may be authorized by the Board of Directors. PRESIDENT Section 10. The president shall possess the power to sign all certificates, contracts and other instruments of the Corporation which may be authorized by the Board of Directors.

VICE CHAIRMAN OF THE BOARD Section 9. The vice chairman of the board shall in the absence of the chairman of the board, preside at meetings of the Board of Directors and shall possess the power to sign all certificates, contracts and other instruments of the Corporation which may be authorized by the Board of Directors. PRESIDENT Section 10. The president shall possess the power to sign all certificates, contracts and other instruments of the Corporation which may be authorized by the Board of Directors. CHIEF EXECUTIVE OFFICER Section 11. The chief executive officer shall preside at, or shall designate such other officer of the Corporation to preside at meetings of stockholders. He shall have general and active management of the business affairs of the Corporation, including the right to appoint such officers as provided for in Section 3 hereof, and shall see that all orders and resolutions of the Board of Directors are carried into effect. THE VICE PRESIDENTS Section 12. The executive or senior vice presidents shall be vested with all powers and shall perform all the duties of the president in the absence or the disability of the latter. The Board of Directors may grant to or impose upon any of the executive or senior vice presidents additional powers and duties, including those concurrently exercised by or imposed upon other officers. The executive and senior vice presidents shall perform such other duties and have such other powers as the Board of Directors may from time to time determine. The vice presidents shall be vested with all powers and shall perform all duties granted or imposed upon them by the Board of Directors or by the chief executive officer at the time of their appointment to office or as the Board of Directors or the chief executive officer may from time to time determine. THE SECRETARY AND ASSISTANT SECRETARIES Section 13. The secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders and record all the proceedings of the meetings of the Corporation and of the Board of Directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or chief executive officer, under whose supervision he shall be. He shall have custody of the corporate seal of the Corporation and he, or an assistant secretary, shall have authority to affix the same to any instrument requiring it and, when so affixed, it may be attested by his

signature or by the signature of such assistant secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his signature. Section 14. The assistant secretary or, if there be more than one, the assistant secretaries in the order determined by the Board of Directors (or if there by no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. THE TREASURER AND ASSISTANT TREASURERS Section 15. The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors.

signature or by the signature of such assistant secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his signature. Section 14. The assistant secretary or, if there be more than one, the assistant secretaries in the order determined by the Board of Directors (or if there by no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. THE TREASURER AND ASSISTANT TREASURERS Section 15. The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. Section 16. He shall disburse the funds of the corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements and shall render to the chief executive officer and the Board of Directors at its regular meetings, or when the Board of Directors so requires an account of all his transactions as treasurer and of the financial condition of the Corporation. Section 15. The assistant treasurer or, if there shall be more than one, the assistant treasurers, in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election) shall, in the absence of the treasurer or in the event of his inability or refusal to act, perform the duties and exercise the powers as the Board of Directors may from time to time prescribe. ARTICLE VI CERTIFICATES OF STOCK Section 1. Every holder of stock in the Corporation shall be entitled to have a certificate signed by, or in the name of the Corporation by, the chairman of the board of directors, or the vice chairman of the board, or the president, or the vice president and the treasurer, or an assistant treasurer, or the secretary, or an assistant secretary, of the Corporation certifying the number of shares owned by him in the Corporation. The Corporation shall be authorized to issue more than one class of stock or more than one series of any class, and the designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences or rights shall be set forth in full or summarized on the face or back of the certificate which the Corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in Section 202 of the General Corporation Laws of the State of

Delaware in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate a statement that the Corporation will furnish without charge to each stockholder who so requests the designations, preferences and relative, participating, optional or other specific rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences or rights. Section 2. Where a certificate is countersigned (1) by a transfer agent other than the Corporation or its employee, or (2) by a registrar other than the Corporation or its employee, any other signature on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. The Board of Directors may issue any treasury stock. LOST CERTIFICATES

Delaware in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate a statement that the Corporation will furnish without charge to each stockholder who so requests the designations, preferences and relative, participating, optional or other specific rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences or rights. Section 2. Where a certificate is countersigned (1) by a transfer agent other than the Corporation or its employee, or (2) by a registrar other than the Corporation or its employee, any other signature on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. The Board of Directors may issue any treasury stock. LOST CERTIFICATES Section 3. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed. TRANSFERS OF STOCK Section 4. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. FIXING RECORD DATE Section 5. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any right in respect to any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date which shall not be more than sixty nor less than ten

days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. REGISTERED STOCKHOLDERS Section 6. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and to vote as such owner, and to hold liable for calls and assessments a person registered on it books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware. ARTICLE VII

days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. REGISTERED STOCKHOLDERS Section 6. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and to vote as such owner, and to hold liable for calls and assessments a person registered on it books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware. ARTICLE VII GENERAL PROVISIONS DIVIDENDS Section 1. Dividends upon the capital stock of the Corporation, subject to the provisions of the certificate of incorporation, if any, may be declared by the board of Directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property or in shares of the capital stock, subject to the provisions of the certificate of incorporation. SEAL Section 2. The corporate seal shall have inscribed thereon the name of the Corporation, and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. ELECTION NOT TO BE SUBJECT TO IDAHO BUSINESS COMBINATION LAW Section 3. The Corporation expressly elects not to be subject to the provisions of the Idaho Business Combination Law, codified as Chapter 17 of Title 30 of the Idaho Code. ELECTION NOT TO BE SUBJECT TO IDAHO CONTROL SHARE ACQUISITION LAW Section 4. The Corporation expressly elects not to be subject to the provisions of the Idaho Control Share Acquisition Law, codified as Chapter 16 of Title 30 of the Idaho Code.

ARTICLE VIII AMENDMENTS Section 1. These by-laws may be altered, amended or repealed or new by-laws may be adopted by the stockholders or by the Board of Directors at any regular meeting of the stockholders or of the Board of Directors or at any special meeting of the stockholders or of the Board of Directors if notice of such alteration, amendment, repeal or adoption of new by-laws be contained in the notice of such special meeting. I, Kaye L. O'Riordan, do hereby certify that the foregoing are the By- Laws of the Corporation as of September 1, 1993. KAYE L. O'RIORDAN Kaye L. O'Riordan, Secretary

ARTICLE VIII AMENDMENTS Section 1. These by-laws may be altered, amended or repealed or new by-laws may be adopted by the stockholders or by the Board of Directors at any regular meeting of the stockholders or of the Board of Directors or at any special meeting of the stockholders or of the Board of Directors if notice of such alteration, amendment, repeal or adoption of new by-laws be contained in the notice of such special meeting. I, Kaye L. O'Riordan, do hereby certify that the foregoing are the By- Laws of the Corporation as of September 1, 1993. KAYE L. O'RIORDAN Kaye L. O'Riordan, Secretary 7400N1 16

EXHIBIT 13 Management's Discussion and Analysis of Results of Operations and Financial Condition Results of Operations The Company has reported record sales and earnings for 24 consecutive years. Sales for 1993 (a 53-week year) were $11.3 billion compared to $10.2 billion in 1992 and $8.7 billion in 1991. Sales for 1993 increased 8.8% when compared on a 52-week basis to 1992. Increases in sales are attributable to a number of factors including: identical store sales increases, the purchase of 74 Jewel Osco stores on April 13, 1992, the continued expansion of net square footage from new stores and inflation. Identical store sales, stores that have been in operation for two full fiscal years, increased 2.8% (on a comparable 53-week basis) in 1993, 1.8% in 1992 and 1.1% in 1991. Identical store sales continued to increase through higher average ticket sales per customer. Management estimates that inflation accounted for approximately 0.6% of the 1993 identical store sales increase, compared to 1.7% in 1992 and 0.7% in 1991. During 1993, the Company opened 39 stores (6 of which were acquired), remodeled 42 stores and closed 19 stores for a net square footage increase of 1,246,000 square feet. Net square footage increased 4.1% in 1993 as compared to 23.0% in 1992 and 7.8% in 1991. The following table sets forth certain income statement components expressed as a percent to sales and the yearto-year percentage changes in the amounts of such components:
Percentage change ___________________ 1993 1992 1991 vs. vs. vs. 1993 1992 1991 1992 1991 1990 ________________________________________________________________________________ Sales 100.00% 100.00% 100.00% 10.9% 17.2% 5.6% Gross profit 24.74 24.11 23.98 13.8 17.8 8.1 Operating and administrative expenses 19.16 19.41 19.21 9.4 18.5 7.6 Operating profit 5.58 4.70 4.77 31.8 15.4 10.3 Net interest expense 0.45 0.42 0.27 18.2 86.6 (6.9) Nonrecurring charge 0.26 Earnings before income taxes and cumulative effects of accounting changes 4.89 4.36 4.68 24.5 9.2 11.0 Net earnings 3.01 2.65 2.97 26.2 4.4 10.3 Percent to sales __________________________

Gross profit, as a percent to sales, increased due primarily to the expansion and increased utilization of

EXHIBIT 13 Management's Discussion and Analysis of Results of Operations and Financial Condition Results of Operations The Company has reported record sales and earnings for 24 consecutive years. Sales for 1993 (a 53-week year) were $11.3 billion compared to $10.2 billion in 1992 and $8.7 billion in 1991. Sales for 1993 increased 8.8% when compared on a 52-week basis to 1992. Increases in sales are attributable to a number of factors including: identical store sales increases, the purchase of 74 Jewel Osco stores on April 13, 1992, the continued expansion of net square footage from new stores and inflation. Identical store sales, stores that have been in operation for two full fiscal years, increased 2.8% (on a comparable 53-week basis) in 1993, 1.8% in 1992 and 1.1% in 1991. Identical store sales continued to increase through higher average ticket sales per customer. Management estimates that inflation accounted for approximately 0.6% of the 1993 identical store sales increase, compared to 1.7% in 1992 and 0.7% in 1991. During 1993, the Company opened 39 stores (6 of which were acquired), remodeled 42 stores and closed 19 stores for a net square footage increase of 1,246,000 square feet. Net square footage increased 4.1% in 1993 as compared to 23.0% in 1992 and 7.8% in 1991. The following table sets forth certain income statement components expressed as a percent to sales and the yearto-year percentage changes in the amounts of such components:
Percentage change ___________________ 1993 1992 1991 vs. vs. vs. 1993 1992 1991 1992 1991 1990 ________________________________________________________________________________ Sales 100.00% 100.00% 100.00% 10.9% 17.2% 5.6% Gross profit 24.74 24.11 23.98 13.8 17.8 8.1 Operating and administrative expenses 19.16 19.41 19.21 9.4 18.5 7.6 Operating profit 5.58 4.70 4.77 31.8 15.4 10.3 Net interest expense 0.45 0.42 0.27 18.2 86.6 (6.9) Nonrecurring charge 0.26 Earnings before income taxes and cumulative effects of accounting changes 4.89 4.36 4.68 24.5 9.2 11.0 Net earnings 3.01 2.65 2.97 26.2 4.4 10.3 Percent to sales __________________________

Gross profit, as a percent to sales, increased due primarily to the expansion and increased utilization of Company-operated distribution facilities. During 1993, the Company's distribution system provided 70% of all products purchased by retail stores as compared to 66% in 1992 and 65% in 1991. Utilization of the Company's distribution system has enabled the Company to improve its control over product costs and product distribution. The pre-tax LIFO adjustment, as a percent to sales, reduced gross margin by 0.06% in 1993, 0.12% in 1992 and 0.13% in 1991. The 1992 increase in operating and administrative expenses, as a percent to sales, was due primarily to one-time costs associated with the Jewel Osco Acquisition. The Company continues to emphasize cost containment programs as well as increased productivity in an effort to reduce operating expenses as a percent to sales. In addition, the Company expects to benefit from the enhanced productivity and continued expansion of retail automation systems, such as Time and Attendance, Direct Store Delivery, Electronic Data Capturing, Electronic Mail and Electronic Payment. Net interest expense for 1993 included a reduction of approximately $9.7 million due to the successful resolution of a tax issue for which interest expense had previously been accrued. Excluding this adjustment, net interest expense, as a percent to sales, would have increased to 0.54%. This increase

resulted from borrowings associated with the Company's purchase of its common stock from the estate of J. A. Albertson on March 10, 1993. The 1992 increase in net interest expense resulted from new borrowings associated with the Jewel Osco Acquisition. Net earnings for 1993 included adjustments for a nonrecurring charge to cover the settlement of the Babbitt v. Albertson's lawsuit, an employment discrimination class action lawsuit filed in 1992, and a decrease in interest expense due primarily to the successful resolution of a tax issue, both of which were recognized in the third quarter of 1993. Net earnings for 1992 included certain one-time costs primarily associated with the Jewel Osco Acquisition and two accounting changes, all of which were recognized in the first quarter of 1992. The following comparisons of 1993 and 1992 exclude these adjustments: - Gross margin increased to 24.74% from 24.33%. - Operating and administrative expenses, as a percent to sales, decreased to 19.16% from 19.19%. - Operating profit increased 21.2% to $629.6 million from $519.5 million. - Net earnings increased 14.7% to $352.1 million from $307.1 million. - Net earnings, as a percent to sales, increased to 3.12% from 3.04%. - Earnings per share increased 19.8% to $1.39 from $1.16. In November 1992, the Financial Accounting Standards Board issued SFAS No. 112, "Employers' Accounting for Postemployment Benefits." This new statement is effective for fiscal years beginning after December 15, 1993 and requires an accrual for certain benefits paid to former or inactive employees after employment but before retirement. Based on the Company's evaluation of the Statement's requirements, adoption in the first quarter of 1994 is expected to reduce net earnings by approximately $6.4 million. Liquidity and Capital Resources The Company's operating results continue to enhance its financial position and ability to continue its planned expansion program. Cash provided by operating activities during 1993 was $585 million as compared to $498 million in 1992 and $406 million in 1991. These amounts have enabled the Company to fund its capital expansion program (aside from the 1992 Jewel Osco Acquisition), pay dividends and purchase shares of its common stock on the open market. During 1993, the Company spent $436 million on capital expenditures, $32 million to reduce long-term debt and $90 million for the payment of dividends (which represents 26.4% of current net earnings). The Company also utilizes its commercial paper program to supplement cash requirements resulting from seasonal fluctuations created by the Company's capital expenditure program and changes in working capital. Accordingly, commercial paper borrowings will fluctuate between the Company's quarterly reporting periods. The Company had $79.9 million of commercial paper borrowings outstanding at February 3, 1994 compared to $110 million at January 28, 1993. As of February 3, 1994, the Company had available lines of credit of $235 million, of which $200 million was reserved as alternative funding for the Company's commercial paper program. On March 10, 1993, pursuant to a 1979 agreement, the Company purchased 21,976,320 shares of its common stock from the estate of J. A. Albertson, the Company's founder, at a cost of $518 million or $23.55 per share. This purchase was financed through the reissuance of 10,400,000 shares of treasury stock at $26.25 per share, netting $265 million, and the issuance of $252 million in medium-term notes. The effect of these transactions was to retire the remaining 11,576,320 treasury shares at a net cost to the Company of $21.85 per share. Since 1987, the Board of Directors has continuously adopted or renewed plans under which the Company is authorized, but not required, to purchase shares of its common stock on the open market. The current plan was adopted by the Board on March 7, 1994 and authorizes the Company to purchase up to 2.5 million shares through March 31, 1995. The Company did not purchase any shares during 1993 or 1992 and purchased and retired an equivalent of approximately 4.2 million shares during 1991 under these programs.

The following leverage ratios demonstrate the Company's levels of long-term financing as of the indicated year end:
February 3, 1994 January 28, 1993 January 30, 1992

The following leverage ratios demonstrate the Company's levels of long-term financing as of the indicated year end:
February 3, January 28, January 30, 1994 1993 1992 ______________________________________________________________________________ Long-term debt (including capitalized lease obligations) to equity 47.9% 36.6% 12.6% Long-term debt (including capitalized lease obligations) to total assets 20.2% 17.3% 6.8%

During 1993, the Company changed the classification of its store types to better reflect the store formats the Company is developing today. Consequently, the superstore format has been eliminated and the Company now classifies all stores over 35,000 square feet (except warehouse stores) as combination food-drug stores. During 1993, the Company opened 35 combination food-drug stores, 2 warehouse stores and 2 conventional stores. The average size of these stores, 48,300 square feet, increased the Company's average store size to 46,400 square feet. At February 3, 1994, 91% of the Company's square footage consisted of stores over 35,000 square feet. Square footage has also increased because of the Company's remodel program. In 1993, 8 of the 42 remodeled stores were expanded in size. The Company continues to retain ownership of real estate when possible. During the past five years the Company has invested $295 million (excluding inventory) into its distribution operations and has added 3.6 million square feet of new or expanded facilities. A new 687,000 square-foot fullline distribution center in Tolleson, Arizona, located in the Phoenix metropolitan area, became fully operational in August 1993. The Company also purchased an existing 818,000 square-foot warehouse in Plant City, Florida in February 1993. This center was remodeled and expanded to approximately 954,000 square feet to add frozen and perishable storage areas. It began limited operations in December 1993 and became fully operational in March 1994. With the opening of the Plant City, Florida Distribution Center, the Company now services all of its retail stores from company-owned distribution centers. Capital expenditures for 1994 (excluding amounts anticipated to be financed by operating leases of approximately $29 million) are expected to be approximately $460 million. New stores and remodeling will continue to be the most significant part of planned capital expenditures. The Company is committed to keeping its stores up to date. In the last three years the Company has opened and remodeled 304 stores representing 14.7 million square feet. The following is a summary of capital expenditures excluding operating leases but including the Jewel Osco Acquisition in 1992, capital leases and assets acquired with related debt (in thousands):
1994 (Projected) 1993 1992 1991 1990 ________________________________________________________________________________ New and acquired stores $267,000 $246,052 $466,246 $163,072 $169,170 Remodels 93,000 82,409 74,914 55,803 49,277 Retail replacement equipment and technological upgrades 49,000 20,804 10,793 8,341 8,814 Distribution facilities and equipment 39,000 100,936 81,024 27,465 9,115 Other 12,000 5,963 9,880 18,315 21,200 ____________________________________________________ $460,000 $456,164 $642,857 $272,996 $257,576 ____________________________________________________

Note: Share and per share data adjusted to reflect the two-for-one stock split distributed October 4, 1993.

Consolidated Earnings (In thousands except per share data) 53 Weeks February 3, 52 Weeks January 28, 52 Weeks January 30,

Consolidated Earnings (In thousands except per share data) 53 Weeks 52 Weeks 52 Weeks February 3, January 28, January 30, 1994 1993 1992 _______________________________________________________________________________ Sales $11,283,678 $10,173,676 $8,680,467 Cost of sales 8,492,524 7,720,824 6,598,950 _____________________________________ Gross profit 2,791,154 2,452,852 2,081,517 Operating and administrative expenses 2,161,561 1,975,079 1,667,355 _____________________________________ Operating profit 629,593 477,773 414,162 Other (expenses) income: Interest, net (50,984) (43,124) (23,106) Other, net 3,506 9,072 15,338 Nonrecurring charge (29,900) _____________________________________ Earnings before income taxes and cumulative effects of accounting changes 552,215 443,721 406,394 Income taxes 212,534 167,646 148,600 _____________________________________ Earnings before cumulative effects of accounting changes 339,681 276,075 257,794 Cumulative effects of accounting changes: Postretirement health care benefits (4,093) Accounting for income taxes (2,765) _____________________________________ Net Earnings $ 339,681 $ 269,217 $ 257,794 _____________________________________

Earnings per share before cumulative effects of accounting changes $ 1.34 $ 1.04 $ .97 Cumulative effects of accounting changes: Postretirement health care benefits (0.01) Accounting for income taxes (0.01) _____________________________________ Earnings Per Share $ 1.34 $ 1.02 $ .97 _____________________________________

Average number of shares outstanding

254,227

264,418

266,339

See Notes to Consolidated Financial Statements. </TABLE

<TABEL> Consolidated Cash Flows (In thousands) 53 Weeks 52 Weeks 52 Weeks February 3, January 28, January 30, 1994 1993 1992 _______________________________________________________________________________ Cash Flows From Operating Activities: Net earnings $ 339,681 $ 269,217 $ 257,794 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 196,427 171,724 132,813 Net deferred income taxes (12,016) 8,462 (12,912) Cumulative effects of accounting changes 6,858 Changes in operating assets and liabilities, net of acquisition: Receivables and prepaid expenses (24,194) (36,114) (2,572) Inventories (41,633) (72,955) (50,520) Accounts payable 84,601 104,614 8,572 Other current liabilities 23,836 38,570 17,103

<TABEL> Consolidated Cash Flows (In thousands) 53 Weeks 52 Weeks 52 Weeks February 3, January 28, January 30, 1994 1993 1992 _______________________________________________________________________________ Cash Flows From Operating Activities: Net earnings $ 339,681 $ 269,217 $ 257,794 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 196,427 171,724 132,813 Net deferred income taxes (12,016) 8,462 (12,912) Cumulative effects of accounting changes 6,858 Changes in operating assets and liabilities, net of acquisition: Receivables and prepaid expenses (24,194) (36,114) (2,572) Inventories (41,633) (72,955) (50,520) Accounts payable 84,601 104,614 8,572 Other current liabilities 23,836 38,570 17,103 Self-insurance 10,192 4,788 14,890 Unearned income (609) (7,859) 31,667 Other long-term liabilities 8,230 10,671 8,747 ___________________________________ Net cash provided by operating activities 584,515 497,976 405,582 Cash Flows From Investing Activities: Acquisition of business, net of cash acquired Capital expenditures excluding noncash items Proceeds from disposals of land, buildings and equipment Increase in other assets Net cash used in investing activities Cash Flows From Financing Activities: Net line of credit activity Proceeds from long-term borrowings Payments on long-term borrowings Net commercial paper activity Proceeds from stock options exercised Purchase of treasury shares Net proceeds from issuance of treasury shares Cash dividends paid Stock purchases Net cash (used in) provided by financing activities Net Increase in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year

(428,860) (435,526) (331,160) (268,500)

20,874 18,053 12,696 (3,719) (14,808) (4,618) ___________________________________ (418,371) (756,775) (260,422)

5,000 252,075 (32,158) (30,090) 4,484 (517,526) 264,527 (89,534)

(25,000) 443,000 (43,497) (33,000) 4,390

20,000 (10,403) 8,028

(72,008) (79,806) ___________________________________ (143,222) 263,936 (134,189) ___________________________________ 22,922 5,137 10,971

(81,957)

39,541 34,404 23,433 ___________________________________ $ 62,463 $ 39,541 $ 34,404 ___________________________________

See Notes to Consolidated Financial Statements. </TABLE

Consolidated Balance Sheets (Dollars in thousands)

Consolidated Balance Sheets (Dollars in thousands) February 3, January 28, January 30, 1994 1993 1992 _______________________________________________________________________________ ASSETS Current Assets: Cash and cash equivalents $ 62,463 $ 39,541 $ 34,404 Accounts and notes receivable 114,493 90,945 55,835 Inventories 871,719 830,086 613,233 Prepaid expenses 13,589 12,943 10,602 Deferred income taxes 59,967 39,948 37,212 ____________________________________ Total Current Assets 1,122,231 1,013,463 751,286 Other Assets Land, Buildings and Equipment: Land Buildings Fixtures and equipment Leasehold improvements Capitalized leases 90,810 87,091 72,283

467,392 415,911 289,526 1,097,681 930,883 721,280 1,130,735 1,001,627 835,592 257,566 231,533 180,034 155,798 147,316 139,773 ____________________________________ 3,109,172 2,727,270 2,166,205 1,027,318 882,251 773,527 ____________________________________ 2,081,854 1,845,019 1,392,678 ____________________________________ $3,294,895 $2,945,573 $2,216,247 ____________________________________

Less accumulated depreciation and amortization

See Notes to Consolidated Financial Statements. </TABLE

Consolidated Balance Sheets (Dollars in thousands) February 3, January 28, January 30, 1994 1993 1992 _______________________________________________________________________________ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 600,376 $ 515,775 $ 400,417 Notes payable 10,000 5,000 30,000 Salaries and related liabilities 101,443 95,820 80,719 Taxes other than income taxes 38,095 41,522 37,807 Income taxes 48,622 29,592 9,589 Self-insurance 58,436 51,870 47,238 Unearned income 19,927 15,567 16,429 Other 30,277 26,033 20,826 Current maturities of long-term debt 76,692 25,757 3,588 Current capitalized lease obligations 6,194 6,044 5,634 ____________________________________ Total Current Liabilities 990,062 812,980 652,247 Long-Term Debt Capitalized Lease Obligations Other Long-Term Liabilities and Deferred Credits: Deferred compensation Deferred income taxes Deferred rents payable Self-insurance Unearned income 554,092 110,919 404,476 103,764 52,510 99,159

31,684 28,766 72,251 83,857 10,825

28,016 20,763 69,864 80,231 15,794

24,755 9,219 66,575 80,075 22,791

Consolidated Balance Sheets (Dollars in thousands) February 3, January 28, January 30, 1994 1993 1992 _______________________________________________________________________________ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 600,376 $ 515,775 $ 400,417 Notes payable 10,000 5,000 30,000 Salaries and related liabilities 101,443 95,820 80,719 Taxes other than income taxes 38,095 41,522 37,807 Income taxes 48,622 29,592 9,589 Self-insurance 58,436 51,870 47,238 Unearned income 19,927 15,567 16,429 Other 30,277 26,033 20,826 Current maturities of long-term debt 76,692 25,757 3,588 Current capitalized lease obligations 6,194 6,044 5,634 ____________________________________ Total Current Liabilities 990,062 812,980 652,247 Long-Term Debt Capitalized Lease Obligations Other Long-Term Liabilities and Deferred Credits: Deferred compensation Deferred income taxes Deferred rents payable Self-insurance Unearned income Other 554,092 110,919 404,476 103,764 52,510 99,159

31,684 28,016 24,755 28,766 20,763 9,219 72,251 69,864 66,575 83,857 80,231 80,075 10,825 15,794 22,791 23,060 21,257 9,464 ____________________________________ 250,443 235,925 212,879

Stockholders' Equity: Preferred stock - $1.00 par value; authorized - 10,000,000 shares; issued - none Common stock - $1.00 par value; authorized - 600,000,000 shares; issued - 253,406,983 shares, 132,329,428 shares and 132,130,528 shares, respectively Capital in excess of par value Retained earnings

253,407 132,330 132,131 2,117 4,909 718 1,133,855 1,251,189 1,066,603 ____________________________________ 1,389,379 1,388,428 1,199,452 ____________________________________ $3,294,895 $2,945,573 $2,216,247 ____________________________________

See Notes to Consolidated Financial Statements. </TABLE

Consolidated Stockholders' Equity (In thousands except per share data) Common Capital Stock in Excess $1.00 Par of Par Retained Treasury Value Value Earnings Stock Total _______________________________________________________________________________ Balance at Jan. 31, 1991 $133,820 $ 2,131 $ 951,931 $1,087,882 Exercise of stock options 395 3,097 3,492 Tax benefits related to

Consolidated Stockholders' Equity (In thousands except per share data) Common Capital Stock in Excess $1.00 Par of Par Retained Treasury Value Value Earnings Stock Total _______________________________________________________________________________ Balance at Jan. 31, 1991 $133,820 $ 2,131 $ 951,931 $1,087,882 Exercise of stock options 395 3,097 3,492 Tax benefits related to stock options 4,536 4,536 Cash dividends, $.28 per share (74,446) (74,446) Stock purchases (2,084) (9,046) (68,676) (79,806) Net earnings 257,794 257,794 _____________________________________________________ Balance at Jan. 30, 1992 132,131 718 1,066,603 1,199,452 Exercise of stock options 199 1,475 1,674 Tax benefits related to stock options 2,716 2,716 Cash dividends, $.32 per share (84,631) (84,631) Net earnings 269,217 269,217 _____________________________________________________ Balance at Jan. 28, 1993 132,330 4,909 1,251,189 1,388,428 Exercise of stock options 245 1,700 1,945 Tax benefits related to stock options 2,538 2,538 Purchase treasury shares $(517,526) (517,526) Issue treasury shares 19,615 244,912 264,527 Retire treasury shares (5,788) (25,010) (241,816) 272,614 Two-for-one stock split 126,620 (1,635) (124,985) Other 953 953 Cash dividends, $.36 per share (91,167) (91,167) Net earnings 339,681 339,681 _____________________________________________________ Balance at Feb. 3, 1994 $253,407 $ 2,117 $1,133,855 $1,389,379 _____________________________________________________

See Notes to Consolidated Financial Statements. </TABLE

Notes to Consolidated Financial Statements

Summary of Significant Accounting Policies Fiscal Year End The Company's fiscal year ends on the Thursday nearest to January 31 each year. Unless the context otherwise indicates, reference to a fiscal year of the Company refers to the calendar year in which such fiscal year commences. Consolidation The consolidated financial statements include the results of operations, account balances and cash flows of the Company and its wholly owned subsidiaries. All material intercompany balances have been eliminated. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. Inventories The Company values inventories at the lower of cost or market. Cost of substantially all inventories is determined on a last-in, first-out (LIFO) basis. Cost of remaining inventories is determined on a first-in, first-out (FIFO) basis.

Notes to Consolidated Financial Statements

Summary of Significant Accounting Policies Fiscal Year End The Company's fiscal year ends on the Thursday nearest to January 31 each year. Unless the context otherwise indicates, reference to a fiscal year of the Company refers to the calendar year in which such fiscal year commences. Consolidation The consolidated financial statements include the results of operations, account balances and cash flows of the Company and its wholly owned subsidiaries. All material intercompany balances have been eliminated. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. Inventories The Company values inventories at the lower of cost or market. Cost of substantially all inventories is determined on a last-in, first-out (LIFO) basis. Cost of remaining inventories is determined on a first-in, first-out (FIFO) basis. Capitalization, Depreciation and Amortization Land, buildings and equipment are recorded at cost. Depreciation is provided on the straight-line method over the estimated useful life of the asset. The costs of major remodeling and improvements on leased stores are capitalized as leasehold improvements. Leasehold improvements are amortized on the straight-line method over the shorter of the life of the applicable lease or the useful life of the asset. Capital leases are recorded at the lower of fair market value or the present value of future minimum lease payments. These leases are amortized on the straight-line method over their primary term. 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 date of the acquisition of the lease. Beneficial lease rights are amortized over the lease term using the straight-line method. Lease liabilities are amortized over the lease term using the interest method. Upon disposal of fixed assets, the appropriate property accounts are reduced by the related costs and accumulated depreciation and amortization. The resulting gains and losses are reflected in the consolidated earnings. Store Opening and Closing Costs Noncapital expenditures incurred in opening new stores or remodeling existing stores are expensed in the year in which they are incurred. When a store is closed the remaining investment in fixed assets, net of expected salvage value, is expensed. For properties under lease agreements, the present value of any remaining liability under the lease, net of expected sublease recovery, is also expensed. Self-Insurance The Company is primarily self-insured for property loss, workers' compensation and general liability costs. Self-insurance liabilities are based on claims filed and estimates for claims incurred but not reported. These liabilities are not discounted. Stock Options Proceeds from the sale of newly issued stock to employees under the Company's stock option plans are credited to common stock to the extent of par value and the excess to capital in excess of par value. With respect to nonqualified stock options, the difference between the option exercise price and market value of the stock at date of grant is charged to operations over the vesting period. Income tax benefits attributable to stock options exercised are credited to capital in excess of par value.

Income Taxes The Company provides for deferred income taxes resulting from timing differences in reporting certain income and expense items for income tax and financial accounting purposes. The major timing differences and their net effect are shown in the "Income Taxes" note. The 1993 and 1992 tax provisions were computed in accordance with SFAS No. 109, "Accounting for Income Taxes." The 1991 tax provision was computed in

Income Taxes The Company provides for deferred income taxes resulting from timing differences in reporting certain income and expense items for income tax and financial accounting purposes. The major timing differences and their net effect are shown in the "Income Taxes" note. The 1993 and 1992 tax provisions were computed in accordance with SFAS No. 109, "Accounting for Income Taxes." The 1991 tax provision was computed in accordance with APB Opinion No. 11. Investment tax credits have been deferred and are being amortized over the remaining useful life of the related asset. Earnings Per Share Earnings per share are computed by dividing consolidated net earnings by the weighted average number of shares outstanding. Equivalent shares in the form of stock options are excluded from the calculation since they are not materially dilutive. Stock Split On August 30, 1993, the Board of Directors approved a two-forone stock split, effected in the form of a 100% stock dividend payable to stockholders of record at the close of business on September 17, 1993 and distributed on October 4, 1993. All references in the financial statements to the number of shares (except outstanding shares at year end), related prices and per share amounts have been restated to reflect the split. Reclassifications Certain reclassifications have been made in prior years' financial statements to conform to classifications used in the current year.

Nonrecurring Charge During the third quarter of 1993 a $29.9 million nonrecurring charge was recorded to cover a $29.5 million settlement of the Babbitt v. Albertson's lawsuit, an employment discrimination class action lawsuit filed in 1992. The nonrecurring charge covers the full cost of the settlement including compliance with the consent decree and plaintiffs' attorney fees, as well as all expenses associated with its implementation. This nonrecurring charge does not reflect possible recovery from insurance coverage, which the Company is pursuing in litigation against several carriers. The Company expects to recover a portion of the overall settlement from its insurance carriers, although any recovery amount has not been determined.

Supplemental Cash Flow Information Selected cash payments and noncash activities were as follows (in thousands): 1993 1992 1991 ______________________________________________________________________________ Cash payments for income taxes $202,472 $143,045 $158,377 Cash payments for interest, net of amounts capitalized 36,311 27,819 15,037 Noncash investing and financing activities: Liabilities assumed in connection with business acquisition 12,385 Liabilities assumed in connection with asset acquisitions 5,590 25 Capitalized lease obligations incurred 15,048 12,647 4,471 Capitalized lease obligations terminated 1,656 2,203

Acquisition On April 13, 1992, the Company purchased 74 Jewel Osco combination food-drug stores, a general merchandise warehouse in Ponca City, Oklahoma and related assets, including potential store locations, from American Stores Company (the Acquisition). The Acquisition included stores located in Texas (52

stores), Oklahoma (14 stores), Florida (7 stores) and Arkansas (1 store). The majority of the acquired stores are located in existing operating areas of the Company, and the Company is continuing to operate most of these stores as combination food-drug stores under the Albertson's name. The Acquisition was accounted for using the purchase method of accounting.

stores), Oklahoma (14 stores), Florida (7 stores) and Arkansas (1 store). The majority of the acquired stores are located in existing operating areas of the Company, and the Company is continuing to operate most of these stores as combination food-drug stores under the Albertson's name. The Acquisition was accounted for using the purchase method of accounting. The purchase price, based upon the book value of fixed assets and cost of inventory, was approximately $442 million, including approximately $144 million for inventory. The purchase price included real estate for 41 operating stores and the general merchandise warehouse. The remaining 33 operating stores are subject to leases that have been assumed by the Company. The Acquisition was ultimately financed through proceeds from commercial paper borrowings and offerings of senior unsecured debt securities. The results of operations of the acquired properties have been included in the consolidated financial statements from the date of acquisition.

Accounts and Notes Receivable Accounts and notes receivable consist of the following (in thousands): February 3, January 28, January 30, 1994 1993 1992 _____________________________________________________________________________ Trade accounts receivable $113,335 $86,239 $54,832 Trade notes receivable 2,191 5,813 1,658 Allowance for doubtful accounts (1,033) (1,107) (655) ___________________________________ $114,493 $90,945 $55,835 ___________________________________

Inventories Approximately 96% of the Company's inventories are valued using the last-in, first-out (LIFO) method. If the first-in, first-out (FIFO) method had been used, inventories would have been $191,592,000, $185,150,000 and $172,470,000 higher at the end of 1993, 1992 and 1991, respectively. Net earnings would have been higher by $3,962,000 ($.02 per share) in 1993, $7,964,000 ($.03 per share) in 1992 and $7,354,000 ($.03 per share) in 1991. The replacement cost of inventories valued at LIFO approximates FIFO cost.

Indebtedness Long-term debt includes the following (in thousands): February 3, January 28, January 30, 1994 1993 1992 _____________________________________________________________________________ Unsecured 6.375% notes due May 1995 $150,000 $150,000 Medium-term notes, unsecured: Due May 1993 (4.29% interest) 25,000 Due May 1994 (5.49% interest) 75,000 75,000 Due May 1995 (6.15% interest) 50,000 50,000 Due March 1996 (4.86% interest) 77,000 Due March 1998 (5.68% interest) 85,425 Due March 2000 (6.14% interest) 89,650 Commercial paper 79,910 110,000 Industrial revenue bonds 17,305 18,040 $18,590 Mortgage notes 6,083 1,807 24,252 Other unsecured notes payable 411 386 13,256 ___________________________________ 630,784 430,233 56,098 Less current maturities (76,692) (25,757) (3,588) ___________________________________ $554,092 $404,476 $52,510 ___________________________________

In connection with the Company's purchase of its common stock from the estate of J.A. Albertson, the Company's founder, $252.1 million of mediumterm notes due from 1996 to 2000 were issued under a shelf registration

In connection with the Company's purchase of its common stock from the estate of J.A. Albertson, the Company's founder, $252.1 million of mediumterm notes due from 1996 to 2000 were issued under a shelf registration statement filed with the Securities and Exchange Commission in 1993. Interest on these notes is paid semiannually. In connection with the 1992 Jewel Osco Acquisition and subsequent issuance of the 6.375% notes and medium-term notes due from 1993 to 1995, a shelf registration statement was filed with the Securities and Exchange Commission in 1992 covering debt securities in the amount of $500 million available for issuance from time to time. As of February 3, 1994, $200 million of the debt remained available for issuance in the form of medium-term notes. Interest on the 6.375% notes and medium-term notes is paid semiannually. The Company has in place a $200 million commercial paper program. Interest on the outstanding commercial paper borrowings ranges from 3.10% to 3.17% with an effective weighted average rate of 3.13%. The Company has established the necessary credit facilities, through its revolving credit agreement, to refinance the commercial paper borrowings on a long-term basis. These borrowings have been classified as noncurrent because it is the Company's intent to refinance these obligations on a long-term basis. The industrial revenue bonds are payable in varying annual installments through 2011, with interest paid semiannually at 3.3% to 10.875%. The Company has pledged real estate with a cost of $14,008,000 as collateral for the mortgage notes, which are payable monthly, quarterly and semiannually, including interest at 7.5% to 16.5%. The notes mature from 1994 to 2011. The scheduled maturities of long-term debt outstanding at February 3, 1994 are summarized as follows: $76,692,000 in 1994, $201,146,000 in 1995, $78,281,000 in 1996, $80,942,000 in 1997, $86,560,000 in 1998 and $107,163,000 thereafter. In March 1992, the Company amended its revolving credit agreement with several banks, whereby the Company may borrow principal amounts up to $200 million at varying interest rates any time prior to April 1, 1997. The agreement contains certain covenants, the most restrictive of which requires the Company to maintain consolidated tangible net worth, as defined, of at least $750 million. In addition to amounts available under the revolving credit agreement, the Company had available lines of credit from banks at prevailing interest rates in the amount of $35 million at February 3, 1994. The cash balances maintained at these banks are not legally restricted. Interest expense, net, was as follows (in thousands): 1993 1992 1991 ______________________________________________________________________________ Debt $32,164 $26,862 $10,876 Capitalized leases 12,233 11,560 12,278 Capitalized interest (4,219) (4,617) (5,013) _______________________________ Interest expense 40,178 33,805 18,141 Net bank service charges 10,806 9,319 4,965 _______________________________ Interest expense, net $50,984 $43,124 $23,106 _______________________________ Interest expense, net for 1993 included a reduction of approximately $9.7 million due to the successful resolution of a tax issue for which interest had previously been accrued.

Capital Stock On March 10, 1993, pursuant to a 1979 agreement, the Company purchased 21,976,320 shares of its common stock from the estate of J.A. Albertson, the Company's founder, at a cost of $517.5 million or $23.55 per share. This purchase was financed through the reissuance of 10,400,000 shares of treasury stock at $26.25 per share, netting $264.5 million, and the issuance of $252.1 million in medium-term notes. The remaining 11,576,320 treasury

Capital Stock On March 10, 1993, pursuant to a 1979 agreement, the Company purchased 21,976,320 shares of its common stock from the estate of J.A. Albertson, the Company's founder, at a cost of $517.5 million or $23.55 per share. This purchase was financed through the reissuance of 10,400,000 shares of treasury stock at $26.25 per share, netting $264.5 million, and the issuance of $252.1 million in medium-term notes. The remaining 11,576,320 treasury shares were retired. On March 2, 1987, the Board of Directors adopted a stockholder rights plan, which was amended on August 31, 1987, November 28, 1988 and September 6, 1989. Under the plan, stockholders of record on March 23, 1987 received a dividend distribution of one nonvoting right for each share of common stock. Subject to certain exceptions, one right has been or will be issued with each share of common stock issued after March 23, 1987. The rights are attached to all common stock certificates and no separate rights certificate will be distributed. Each right entitles the holder to purchase one share of the Company's common stock at a price of $32.50. The rights are exercisable for shares of common stock upon the earlier of the tenth business day following (i) the public announcement that a person or group has acquired, or has obtained the right to acquire, beneficial ownership of 20% or more of the outstanding common stock, or (ii) the commencement of, or public announcement of an intention to make, a tender offer or exchange offer if, upon consummation, such person or group would be the beneficial owner of 20% or more of the then outstanding common stock. Additionally, if any person or group becomes the beneficial owner of more than 20% of the outstanding common stock, each right will entitle its holder, other than such person or group, upon payment of the $32.50 exercise price, to purchase common stock with a deemed market value of twice the exercise price. The purchase rights for common stock will not be exercisable if the 20% acquisition is made pursuant to a tender or exchange offer for all outstanding common stock which a majority of certain directors of the Company deem to be in the best interests of the Company and its stockholders. If there is a merger with an acquirer of 20% or more of the Company's common stock and the Company is not the surviving corporation, or more than 50% of the Company's assets or earning power is transferred or sold, each right will entitle its holder, other than the acquirer, to purchase, or in certain instances to receive the cash value of, the acquiring company's common stock with a deemed market value of twice the exercise price. All of the rights may be redeemed by the Board of Directors, and under certain circumstances, with the approval of a majority of the continuing directors (as defined in the plan), at a price of $.00625 per right until the earlier of (i) ten business days after the public announcement that a person or group has acquired beneficial ownership of 20% or more of the outstanding common stock or (ii) the date the stockholder rights plan expires. The rights, which are not entitled to dividends, expire on March 23, 1997. Since 1987, the Board of Directors has continuously adopted or renewed plans under which the Company is authorized, but not required, to purchase shares of its common stock on the open market. The current plan was adopted by the Board on March 7, 1994 and authorizes the Company to purchase up to 2.5 million shares through March 31, 1995. The Company has purchased and retired an equivalent of approximately 12.4 million shares of its common stock for approximately $156.2 million under these plans.

Income Taxes At the beginning of 1992, the Company elected early adoption of the provisions of SFAS No. 109, "Accounting for Income Taxes." This Statement requires that the liability method of accounting for income taxes be used rather than the deferred method previously used. The Company elected not to restate prior years' consolidated financial statements. The cumulative effect of this accounting change was to decrease 1992 net earnings by $2.8 million or $.01 per share.

Deferred tax assets and liabilities consist of the following (in thousands): February 3, January 28, 1994 1993 _______________________________________________________________________________ Deferred tax assets: Nondeductible accruals for: Self-insurance $ 54,811 $ 49,446 Lease accounting 21,626 20,335 Vacations 17,129 14,332 Litigation 11,968 Property valuation 8,828 5,197 Deferred compensation 5,742 5,007 Pension costs 2,133 1,683 Other 5,955 5,652 Income unearned for financial reporting purposes 11,846 11,739 Costs capitalized for tax purposes 10,803 5,808 _______________________ Total deferred tax assets 150,841 119,199 Deferred tax liabilities: Accelerated depreciation for tax purposes Pension costs expensed for tax purposes Other Total deferred tax liabilities

(103,219) (86,441) (13,312) (10,000) (3,109) (3,573) _______________________ (119,640) (100,014) _______________________ $ 31,201 $ 19,185 _______________________

Net deferred tax assets

No valuation allowances were considered necessary in the calculation of deferred tax assets. Income tax expense on continuing operations consists of the following (in thousands): 1993 1992 1991 _______________________________________________________________________________ Current: Federal $191,343 $133,872 $139,793 State 33,580 26,052 22,778 ________________________________ 224,923 159,924 162,571 Deferred: Federal (10,222) 7,193 (11,270) State (1,794) 1,269 (1,642) ________________________________ (12,016) 8,462 (12,912) Amortization of deferred investment tax credits (373) (740) (1,059) ________________________________ $212,534 $167,646 $148,600 ________________________________ Deferred taxes resulted from: Income unearned for financial reporting purposes Accelerated depreciation for tax purposes Self-insurance Litigation Costs capitalized for tax purposes Property valuation Other

(107) $ 1,871 $(13,198) 16,778 9,682 4,834 (5,365) (2,179) (5,457) (11,968) (4,994) (129) (559) (3,631) (152) 836 (2,729) (631) 632 ________________________________ $(12,016) $ 8,462 $(12,912) ________________________________

$

Total tax expense for 1992 was $167,992,000 consisting of taxes on continuing operations of $167,646,000, tax expense of $2,765,000 for the cumulative effect of a change in accounting for income taxes and tax

benefits of $2,419,000 attributed to the cumulative effect of a change in accounting for postretirement health care benefits. The reconciliations between the federal statutory tax rate and the Company's effective tax rates are as follows (in thousands):
1993 % 1992 % 1991 % ________________________________________________________________________________ Taxes computed at statutory rate $193,275 35.0 $150,865 34.0 $138,174 34.0 State income taxes net of federal income tax benefit 20,612 3.8 16,364 3.7 14,047 3.5 Amortization of deferred investment tax credits (373) (0.1) (740) (0.2) (1,059) (0.3) Other (980) (0.2) 1,157 0.3 (2,562) (0.6) ______________________________________________ $212,534 38.5 $167,646 37.8 $148,600 36.6 ______________________________________________

Stock Options The Company has stock options outstanding under plans adopted in 1986, 1982 and 1975. The 1986 plan authorized the granting of options with respect to 8,000,000 shares of the Company's common stock. The 1982 plan expired on February 29, 1992 and the 1975 plan expired on April 6, 1985. Expiration of the 1982 plan and 1975 plan did not affect the rights of optionees for any options outstanding and not exercised in full. The changes in the number of shares reserved for outstanding options under the plans are summarized as follows:
Option Number Price Per Share of Shares ______________________________________________________________________________ Balance at January 31, 1991 $ .88 to $16.56 4,075,800 Granted 16.88 to 22.63 1,480,000 Exercised .88 to 13.56 (792,600) Forfeited 1.88 to 22.63 (371,800) Canceled 22.63 to 22.63 (159,000) _____________________________ Balance at January 30, 1992 .88 to 22.63 4,232,400 Granted 24.31 to 24.31 344,000 Exercised .88 to 6.25 (398,400) Forfeited 2.95 to 16.88 (128,200) _____________________________ Balance at January 28, 1993 1.88 to 24.31 4,049,800 Granted 25.13 to 25.13 479,000 Exercised 1.88 to 8.69 (327,947) Forfeited 2.95 to 24.31 (145,200) Canceled 24.31 to 24.31 (4,000) _____________________________ Balance at February 3, 1994 $ 1.88 to $25.13 4,051,653 _____________________________

Options on 262,053 shares were exercisable at February 3, 1994. In addition, there were 3,942,400 shares of common stock under the 1986 plan reserved for the granting of additional options. Employee Benefit Plans Substantially all employees working over 20 hours per week are covered by retirement plans. Union employees participate in multi-employer retirement plans under collective bargaining agreements. The Company sponsors two funded plans, Albertson's Salaried Employees Pension Plan and Albertson's Employees Corporate Pension Plan, which are defined benefit, noncontributory plans for eligible employees who are 21 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. The

benefits of $2,419,000 attributed to the cumulative effect of a change in accounting for postretirement health care benefits. The reconciliations between the federal statutory tax rate and the Company's effective tax rates are as follows (in thousands):
1993 % 1992 % 1991 % ________________________________________________________________________________ Taxes computed at statutory rate $193,275 35.0 $150,865 34.0 $138,174 34.0 State income taxes net of federal income tax benefit 20,612 3.8 16,364 3.7 14,047 3.5 Amortization of deferred investment tax credits (373) (0.1) (740) (0.2) (1,059) (0.3) Other (980) (0.2) 1,157 0.3 (2,562) (0.6) ______________________________________________ $212,534 38.5 $167,646 37.8 $148,600 36.6 ______________________________________________

Stock Options The Company has stock options outstanding under plans adopted in 1986, 1982 and 1975. The 1986 plan authorized the granting of options with respect to 8,000,000 shares of the Company's common stock. The 1982 plan expired on February 29, 1992 and the 1975 plan expired on April 6, 1985. Expiration of the 1982 plan and 1975 plan did not affect the rights of optionees for any options outstanding and not exercised in full. The changes in the number of shares reserved for outstanding options under the plans are summarized as follows:
Option Number Price Per Share of Shares ______________________________________________________________________________ Balance at January 31, 1991 $ .88 to $16.56 4,075,800 Granted 16.88 to 22.63 1,480,000 Exercised .88 to 13.56 (792,600) Forfeited 1.88 to 22.63 (371,800) Canceled 22.63 to 22.63 (159,000) _____________________________ Balance at January 30, 1992 .88 to 22.63 4,232,400 Granted 24.31 to 24.31 344,000 Exercised .88 to 6.25 (398,400) Forfeited 2.95 to 16.88 (128,200) _____________________________ Balance at January 28, 1993 1.88 to 24.31 4,049,800 Granted 25.13 to 25.13 479,000 Exercised 1.88 to 8.69 (327,947) Forfeited 2.95 to 24.31 (145,200) Canceled 24.31 to 24.31 (4,000) _____________________________ Balance at February 3, 1994 $ 1.88 to $25.13 4,051,653 _____________________________

Options on 262,053 shares were exercisable at February 3, 1994. In addition, there were 3,942,400 shares of common stock under the 1986 plan reserved for the granting of additional options. Employee Benefit Plans Substantially all employees working over 20 hours per week are covered by retirement plans. Union employees participate in multi-employer retirement plans under collective bargaining agreements. The Company sponsors two funded plans, Albertson's Salaried Employees Pension Plan and Albertson's Employees Corporate Pension Plan, which are defined benefit, noncontributory plans for eligible employees who are 21 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. The

Company's funding policy for these plans is to contribute amounts deductible for federal income tax purposes. Assets of the two funded Company plans are invested in directed trusts. Assets in the directed trusts are invested in common stocks (including $28,937,000, $26,802,000 and $21,565,000 of the Company's common stock at February 3, 1994, January 28, 1993 and January 30, 1992, respectively), U.S. Government obligations, corporate bonds, international equity funds, real estate and money market funds. The Company also sponsors an unfunded Executive Pension Makeup Plan. This plan is nonqualified and provides certain key employees defined pension benefits which supplement those provided by the Company's other retirement plans. Net periodic pension cost for the Company plans was as follows (in thousands):
1993 1992 1991 ______________________________________________________________________________ Service cost - benefits earned during the period $ 12,726 $ 10,983 $ 8,560 Interest cost on projected benefit obligations 12,687 10,805 8,956 Actual return on assets (27,696) (15,596) (17,668) Net amortization and deferral 11,515 1,809 6,076 ________________________________ Net periodic pension cost $ 9,232 $ 8,001 $ 5,924 ________________________________

Assumptions used in the computation of net periodic pension cost for all Company-sponsored plans were as follows:
1993 1992 1991 ______________________________________________________________________________ Weighted-average discount rate 7.0% 8.0% 8.5% Annual salary increases 4.5% 4.5% 5.5% Expected long-term rate of return on assets 9.0% 9.0% 9.0%

The following table sets forth the funding status of Albertson's Salaried Employees Pension Plan and Albertson's Employees Corporate Pension Plan and the amounts included in other assets in the Company's consolidated balance sheets (in thousands):
February 3, January 28, January 30, 1994 1993 1992 _______________________________________________________________________________ Plan assets at fair value $218,284 $177,825 $150,603 Actuarial present value of: Vested benefits 155,087 101,858 91,924 Nonvested benefits 15,797 7,581 5,136 ___________________________________ Accumulated benefit obligation 170,884 109,439 97,060 Effect of projected future salary increases 38,508 32,308 25,475 ___________________________________ Projected benefit obligation 209,392 141,747 122,535 ___________________________________ Plan assets in excess of projected benefit obligation 8,892 36,078 28,068 Unrecognized net loss (gain) 19,713 (15,975) (15,077) Unrecognized prior service cost 7,123 7,972 8,154 Unrecognized net transition assets (1,171) (1,358) (1,545) ___________________________________ Prepaid pension cost $ 34,557 $ 26,717 $ 19,600 ___________________________________ </TABLE

The following table sets forth the status of the unfunded Executive Pension

Company's funding policy for these plans is to contribute amounts deductible for federal income tax purposes. Assets of the two funded Company plans are invested in directed trusts. Assets in the directed trusts are invested in common stocks (including $28,937,000, $26,802,000 and $21,565,000 of the Company's common stock at February 3, 1994, January 28, 1993 and January 30, 1992, respectively), U.S. Government obligations, corporate bonds, international equity funds, real estate and money market funds. The Company also sponsors an unfunded Executive Pension Makeup Plan. This plan is nonqualified and provides certain key employees defined pension benefits which supplement those provided by the Company's other retirement plans. Net periodic pension cost for the Company plans was as follows (in thousands):
1993 1992 1991 ______________________________________________________________________________ Service cost - benefits earned during the period $ 12,726 $ 10,983 $ 8,560 Interest cost on projected benefit obligations 12,687 10,805 8,956 Actual return on assets (27,696) (15,596) (17,668) Net amortization and deferral 11,515 1,809 6,076 ________________________________ Net periodic pension cost $ 9,232 $ 8,001 $ 5,924 ________________________________

Assumptions used in the computation of net periodic pension cost for all Company-sponsored plans were as follows:
1993 1992 1991 ______________________________________________________________________________ Weighted-average discount rate 7.0% 8.0% 8.5% Annual salary increases 4.5% 4.5% 5.5% Expected long-term rate of return on assets 9.0% 9.0% 9.0%

The following table sets forth the funding status of Albertson's Salaried Employees Pension Plan and Albertson's Employees Corporate Pension Plan and the amounts included in other assets in the Company's consolidated balance sheets (in thousands):
February 3, January 28, January 30, 1994 1993 1992 _______________________________________________________________________________ Plan assets at fair value $218,284 $177,825 $150,603 Actuarial present value of: Vested benefits 155,087 101,858 91,924 Nonvested benefits 15,797 7,581 5,136 ___________________________________ Accumulated benefit obligation 170,884 109,439 97,060 Effect of projected future salary increases 38,508 32,308 25,475 ___________________________________ Projected benefit obligation 209,392 141,747 122,535 ___________________________________ Plan assets in excess of projected benefit obligation 8,892 36,078 28,068 Unrecognized net loss (gain) 19,713 (15,975) (15,077) Unrecognized prior service cost 7,123 7,972 8,154 Unrecognized net transition assets (1,171) (1,358) (1,545) ___________________________________ Prepaid pension cost $ 34,557 $ 26,717 $ 19,600 ___________________________________ </TABLE

The following table sets forth the status of the unfunded Executive Pension

The following table sets forth the status of the unfunded Executive Pension Makeup Plan and the amounts included in other long-term liabilities in the Company's consolidated balance sheets (in thousands):

February 3, January 28, January 30, 1994 1993 1992 _______________________________________________________________________________ Actuarial present value of: Vested benefits $ 6,493 $ 5,490 $ 4,613 Nonvested benefits 9 1 1 __________________________________ Accumulated benefit obligation 6,502 5,491 4,614 Effect of projected future salary increases 1,861 2,564 2,684 __________________________________ Projected benefit obligation 8,363 8,055 7,298 __________________________________ Actuarial present value of projected benefit obligations in excess of plan assets (8,363) (8,055) (7,298) Unrecognized net (gain) loss (7) 458 458 Unrecognized prior service cost 1,136 1,231 1,326 Unrecognized net transition liability 1,688 1,869 2,050 Additional minimum liability (956) (994) (1,150) __________________________________ Accrued pension cost $(6,502) $(5,491) $(4,614) __________________________________

The Company also contributes to various plans under industrywide collective bargaining agreements which provide for pension benefits. Total contributions to these plans were $16,025,000 for 1993, $19,295,000 for 1992 and $17,705,000 for 1991. The Company has bonus plans for store management personnel and other key management personnel. Amounts charged to earnings under all bonus plans were $53,907,000 for 1993, $52,301,000 for 1992 and $36,205,000 for 1991. Most retired employees of the Company are eligible to remain in its health and life insurance plans. Retirees who elect to remain in the Company- sponsored plans are charged a premium which is equal to the difference between the estimated costs of the benefits for the retiree group and a fixed contribution amount made by the Company. At the beginning of 1992, the Company elected early adoption of the provisions of SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions." In prior years, the Company charged expenses relating to postretirement benefits to earnings under the pay-as-you-go method. The Company elected immediate recognition of a transition obligation equal to the accumulated and vested postretirement benefit obligations to existing retirees and active employees as of the date of adoption. The cumulative effect of this accounting change (net of $2.4 million in tax benefits) was to decrease 1992 net earnings by $4.1 million or $.01 per share. Net periodic postretirement benefit cost was as follows (in thousands):
1993 1992 ______________________________________________________________________________ Service cost $ 574 $ 528 Interest cost 605 549 __________________ Net periodic postretirement benefit cost $1,179 $1,077 __________________

The following table sets forth the Accrued Postretirement Benefit Liabilities included in other long-term liabilities in the Company's consolidated balance sheets (in thousands):

The following table sets forth the Accrued Postretirement Benefit Liabilities included in other long-term liabilities in the Company's consolidated balance sheets (in thousands):
February 3, January 28, 1994 1993 _____________________________________________________________________________ Existing retired employees $1,613 $1,355 Active employees fully eligible 1,800 1,526 Other active employees 5,645 4,354 ___________________ Accumulated Postretirement Benefit Obligation (APBO) 9,058 7,235 Unrecognized net loss and effects of changes in assumptions (963) _____________________ Accrued postretirement benefit liabilities $8,095 $7,235 _____________________ Assumed discount rate 7.0% 8.0%

Annual rates of increases in health care costs are not applicable in the calculation of the APBO because the Company's contribution is a fixed amount. The Company also contributes to various plans under industrywide collective bargaining agreements which provide for health care benefits to both active employees and retirees. Total contributions to these plans were $90,613,000 for 1993 and $83,754,000 for 1992. In November 1992, the Financial Accounting Standards Board issued SFAS No. 112, "Employers' Accounting for Postemployment Benefits." This new statement is effective for fiscal years beginning after December 15, 1993 and requires an accrual for certain benefits paid to former or inactive employees after employment but before retirement. Based on the Company's evaluation of the Statement's requirements, adoption in the first quarter of 1994 is expected to reduce net earnings by approximately $6.4 million. Leases The Company leases a portion of its real estate. The typical lease period is 25 to 30 years and most leases contain renewal options. Exercise of such options is dependent on 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 lease. Contingent rents associated with capitalized leases were $2,716,000 in 1993, $2,428,000 in 1992 and $2,570,000 in 1991. Following is an analysis of the Company's capitalized leases (in thousands):
February 3, January 28, January 30, 1994 1993 1992 _____________________________________________________________________________ Real estate $154,157 $145,548 $138,116 Equipment 1,641 1,768 1,657 ___________________________________ $155,798 $147,316 $139,773 ___________________________________ Accumulated amortization $ 73,074 $ 72,176 $ 70,058 ___________________________________

Future minimum lease payments for capitalized lease obligations at February 3, 1994 are as follows (in thousands):
Real Estate Equipment Total ______________________________________________________________________________

Future minimum lease payments for capitalized lease obligations at February 3, 1994 are as follows (in thousands):
Real Estate Equipment Total ______________________________________________________________________________ 1994 $ 18,232 $ 374 $ 18,606 1995 18,321 367 18,688 1996 18,094 316 18,410 1997 18,196 175 18,371 1998 17,703 12 17,715 Remainder 137,817 137,817 __________________________________ Total minimum obligations 228,363 1,244 229,607 Less interest (112,253) (241) (112,494) __________________________________ Present value of net minimum obligations 116,110 1,003 117,113 Less current portion (5,929) (265) (6,194) __________________________________ Long-term obligations at February 3, 1994 $ 110,181 $ 738 $ 110,919 __________________________________

Minimum obligations have not been reduced by minimum capitalized sublease rentals of $5,327,000 receivable in the future under noncancelable capitalized subleases. Rent expense under operating leases was as follows (in thousands):
1993 1992 1991 _______________________________________________________________________________ Minimum rent Contingent rent $ 66,506 $ 66,130 $ 56,664 4,641 5,003 4,335 ________________________________ 71,147 71,133 60,999 (17,232) (16,511) (14,372) ________________________________ $ 53,915 $ 54,622 $ 46,627 ________________________________

Less sublease rent

Future minimum lease payments for all noncancelable operating leases and related subleases having a remaining term in excess of one year at February 3, 1994 are as follows (in thousands):
Real Estate Subleases _______________________________________________________________________________ 1994 $ 58,634 $ (14,696) 1995 60,228 (14,880) 1996 60,407 (14,354) 1997 61,216 (13,812) 1998 63,603 (13,264) Remainder 607,139 (29,712) _______________________ Total minimum obligations (receivables) $911,227 $(100,718) _______________________

The present value of minimum rent payments under operating leases using an assumed interest rate of 9.5% was approximately $429 million at February 3, 1994. Financial Instruments Financial instruments with off-balance-sheet risk to the Company include lease guarantees whereby the Company is contingently liable as a guarantor of certain leases that were assigned to third parties in connection with various store closures and outstanding letters of credit primarily associated with the Company's self-insurance programs. Minimum rentals guaranteed under assigned leases are $5.1 million in 1994 and aggregate $65.6 million for the

remaining lease terms, which expire at various dates through 2012. The Company believes the likelihood of a significant loss from these agreements is remote because of the wide dispersion among third parties and remedies available to the Company should the primary party fail

to perform under the agreements. As of February 3, 1994, the Company had letters of credit outstanding of $48.7 million. Financial instruments which potentially subject the Company to concentration of credit risk consist principally of cash equivalents and trade receivables. The Company limits the amount of credit exposure to any one financial institution and places its temporary cash into investments of high credit quality. Concentrations of credit risk with respect to trade receivables are limited due to the dispersion of the Company's customer base across different industries and geographies. The estimated fair value of cash and cash equivalents, short-term debt and commercial paper borrowings approximates their carrying amount. The estimated fair value of all long-term debt borrowings as of February 3, 1994 was approximately $645.3 million as compared to its carrying amount of $630.8 million. These fair values were estimated using discounted cash flow analyses, based on the Company's current incremental borrowing rates for similar types of borrowing arrangements, when quoted market values were not available. The Company has not determined the fair value of lease guarantees due to the inherent difficulty in evaluating the credit worthiness of each tenant. Legal Proceedings On March 30, 1992, Super Food Services, Inc. filed a complaint against the Company in Florida state court (Circuit Court of the Ninth Judicial Circuit, Orange County, Florida) originally seeking specific performance of an alleged agreement for the purchase of Super Food's existing Orlando distribution facilities. Super Food also sought an injunction to force the Company to maintain its business relationship with Super Food pending resolution of the litigation. The trial court denied such injunctive relief, and the court's ruling has been upheld on appeal. Super Food filed an amended complaint in January of 1993 and is seeking damages of approximately $97 million for the breach of an alleged oral requirements contract between Super Food and the Company or, in the alternative, approximately $27 million in damages for the Company's breach of an alleged agreement to purchase Super Food's Florida facilities. On March 29, 1994, a final judgment was granted by the trial court in favor of Albertson's on the $97 million claim, which final judgment has essentially the same legal effect as the granting of summary judgment in favor of Albertson's as to that claim. In addition, after a hearing on March 31, 1994, the trial court indicated that Albertson's motion for summary judgment on the $27 million claim will be granted, and an order to that effect will be entered shortly. It is anticipated that Super Food intends to appeal the foregoing judgments. The Company continues to believes it has substantial and meritorious defenses to the claims and will vigorously defend against any appeals that may be taken. The outcome of any appeals cannot be determined at this time. The Company is also involved in other routine litigation incidental to operations. In the opinion of management, the ultimate resolution of the above described lawsuit and other pending legal proceedings will not have a material adverse effect on the Company's financial condition or results of operations.

Responsibility for Financial Reporting The management of Albertson's, Inc. is responsible for the preparation and integrity of the consolidated financial statements of the Company. The accompanying consolidated financial statements have been prepared by the management of the Company, in accordance with generally accepted accounting principles, using management's best estimates and judgment where necessary. Financial information appearing throughout this Annual Report is consistent with that in the consolidated financial statements.

to perform under the agreements. As of February 3, 1994, the Company had letters of credit outstanding of $48.7 million. Financial instruments which potentially subject the Company to concentration of credit risk consist principally of cash equivalents and trade receivables. The Company limits the amount of credit exposure to any one financial institution and places its temporary cash into investments of high credit quality. Concentrations of credit risk with respect to trade receivables are limited due to the dispersion of the Company's customer base across different industries and geographies. The estimated fair value of cash and cash equivalents, short-term debt and commercial paper borrowings approximates their carrying amount. The estimated fair value of all long-term debt borrowings as of February 3, 1994 was approximately $645.3 million as compared to its carrying amount of $630.8 million. These fair values were estimated using discounted cash flow analyses, based on the Company's current incremental borrowing rates for similar types of borrowing arrangements, when quoted market values were not available. The Company has not determined the fair value of lease guarantees due to the inherent difficulty in evaluating the credit worthiness of each tenant. Legal Proceedings On March 30, 1992, Super Food Services, Inc. filed a complaint against the Company in Florida state court (Circuit Court of the Ninth Judicial Circuit, Orange County, Florida) originally seeking specific performance of an alleged agreement for the purchase of Super Food's existing Orlando distribution facilities. Super Food also sought an injunction to force the Company to maintain its business relationship with Super Food pending resolution of the litigation. The trial court denied such injunctive relief, and the court's ruling has been upheld on appeal. Super Food filed an amended complaint in January of 1993 and is seeking damages of approximately $97 million for the breach of an alleged oral requirements contract between Super Food and the Company or, in the alternative, approximately $27 million in damages for the Company's breach of an alleged agreement to purchase Super Food's Florida facilities. On March 29, 1994, a final judgment was granted by the trial court in favor of Albertson's on the $97 million claim, which final judgment has essentially the same legal effect as the granting of summary judgment in favor of Albertson's as to that claim. In addition, after a hearing on March 31, 1994, the trial court indicated that Albertson's motion for summary judgment on the $27 million claim will be granted, and an order to that effect will be entered shortly. It is anticipated that Super Food intends to appeal the foregoing judgments. The Company continues to believes it has substantial and meritorious defenses to the claims and will vigorously defend against any appeals that may be taken. The outcome of any appeals cannot be determined at this time. The Company is also involved in other routine litigation incidental to operations. In the opinion of management, the ultimate resolution of the above described lawsuit and other pending legal proceedings will not have a material adverse effect on the Company's financial condition or results of operations.

Responsibility for Financial Reporting The management of Albertson's, Inc. is responsible for the preparation and integrity of the consolidated financial statements of the Company. The accompanying consolidated financial statements have been prepared by the management of the Company, in accordance with generally accepted accounting principles, using management's best estimates and judgment where necessary. Financial information appearing throughout this Annual Report is consistent with that in the consolidated financial statements.

Responsibility for Financial Reporting The management of Albertson's, Inc. is responsible for the preparation and integrity of the consolidated financial statements of the Company. The accompanying consolidated financial statements have been prepared by the management of the Company, in accordance with generally accepted accounting principles, using management's best estimates and judgment where necessary. Financial information appearing throughout this Annual Report is consistent with that in the consolidated financial statements. To help fulfill its responsibility, management maintains a system of internal controls designed to provide reasonable assurance that assets are safeguarded against loss or unauthorized use and that transactions are executed in accordance with management's authorizations and are reflected accurately in the Company's records. The concept of reasonable assurance is based on the recognition that the cost of maintaining a system of internal accounting controls should not exceed benefits expected to be derived from the system. The Company believes that its long-standing emphasis on the highest standards of conduct and ethics, set forth in comprehensive written policies, serves to reinforce its system of internal controls. Deloitte & Touche, independent auditors, audited the consolidated financial statements in accordance with generally accepted auditing standards to independently assess the fair presentation of the Company's financial position, results of operations and cash flows. The Audit Committee of the Board of Directors, comprised entirely of outside directors, oversees the fulfillment by management of its responsibilities over financial controls and the preparation of financial statements. The Committee meets with internal and external auditors at least three times per year to review audit plans and audit results. This provides internal and external auditors direct access to the Board of Directors. Management recognizes its responsibility to conduct Albertson's business in accordance with high ethical standards. This responsibility is reflected in key policy statements that, among other things, address potentially conflicting outside business interests of Company employees and specify proper conduct of business activities. Ongoing communications and review programs are designed to help ensure compliance with these policies.
Gary G. Michael Chairman of the Board and Chief Executive Officer A. Craig Olson Senior Vice President, Finance and Chief Financial Office

Independent Auditors' Report The Board of Directors and Stockholders of Albertson's, Inc.: We have audited the accompanying consolidated balance sheets of Albertson's, Inc. and subsidiaries as of February 3, 1994, January 28, 1993 and January 30, 1992, and the related consolidated statements of earnings, stockholders' equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. 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. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Albertson's, Inc. and subsidiaries at February 3, 1994, January 28, 1993 and January 30, 1992, and the results of their operations and their cash flows for the years then ended in conformity with generally accepted accounting principles.

Independent Auditors' Report The Board of Directors and Stockholders of Albertson's, Inc.: We have audited the accompanying consolidated balance sheets of Albertson's, Inc. and subsidiaries as of February 3, 1994, January 28, 1993 and January 30, 1992, and the related consolidated statements of earnings, stockholders' equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. 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. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Albertson's, Inc. and subsidiaries at February 3, 1994, January 28, 1993 and January 30, 1992, and the results of their operations and their cash flows for the years then ended in conformity with generally accepted accounting principles. As discussed in the Notes to the Consolidated Financial Statements, in fiscal year 1992 the Company changed its method of accounting for postretirement benefits other than pensions and for income taxes to conform with Statements of Financial Accounting Standards No. 106 and 109. Deloitte & Touche Boise, Idaho March 31, 1994

Five Year Summary of Selected Financial Data (Dollars in thousands except per share data) 53 Weeks 52 Weeks 52 Weeks 52 Weeks 52 Weeks February 3, January 28, January 30, January 31, February 1, 1994 1993 1992 1991 1990 ____________________________________________________________________________________________ Operating Results: Sales $11,283,678 $10,173,676 $8,680,467 $8,218,562 $7,422,663 Gross profit 2,791,154 2,452,852 2,081,517 1,924,681 1,700,627 Interest expense: Debt 27,945 22,245 5,863 9,351 5,257 Capitalized lease obligations 12,233 11,560 12,278 11,786 13,162 Earnings before income taxes and cumulative effects of accounting changes 552,215 443,721 406,394 366,009 309,776 Income taxes 212,534 167,646 148,600 132,235 113,225 Earnings before cumulative effects of accounting changes 339,681 276,075 257,794 233,774 196,551 Cumulative effects of accounting changes (6,858) Net earnings 339,681 269,217 257,794 233,774 196,551 Net earnings as a percent to sales 3.01% 2.65% 2.97% 2.84% 2.65% ________________________________________________________________ Common Stock Data: Earnings per share before cumulative effects of accounting changes $1.34 $1.04 $ .97 $ .87 $ .73 Cumulative effects of accounting changes (.02)

Five Year Summary of Selected Financial Data (Dollars in thousands except per share data) 53 Weeks 52 Weeks 52 Weeks 52 Weeks 52 Weeks February 3, January 28, January 30, January 31, February 1, 1994 1993 1992 1991 1990 ____________________________________________________________________________________________ Operating Results: Sales $11,283,678 $10,173,676 $8,680,467 $8,218,562 $7,422,663 Gross profit 2,791,154 2,452,852 2,081,517 1,924,681 1,700,627 Interest expense: Debt 27,945 22,245 5,863 9,351 5,257 Capitalized lease obligations 12,233 11,560 12,278 11,786 13,162 Earnings before income taxes and cumulative effects of accounting changes 552,215 443,721 406,394 366,009 309,776 Income taxes 212,534 167,646 148,600 132,235 113,225 Earnings before cumulative effects of accounting changes 339,681 276,075 257,794 233,774 196,551 Cumulative effects of accounting changes (6,858) Net earnings 339,681 269,217 257,794 233,774 196,551 Net earnings as a percent to sales 3.01% 2.65% 2.97% 2.84% 2.65% ________________________________________________________________ Common Stock Data: Earnings per share before cumulative effects of accounting changes $1.34 $1.04 $ .97 $ .87 $ .73 Cumulative effects of accounting changes (.02) Earnings per share 1.34 1.02 .97 .87 .73 Cash dividends per share .36 .32 .28 .24 .20 Book value per share 5.48 5.25 4.54 4.06 3.47 ________________________________________________________________ Financial Position: Total assets $3,294,895 $2,945,573 $2,216,247 $2,013,510 $1,862,689 Working capital 132,169 200,483 99,039 91,824 113,122 Long-term debt 554,092 404,476 52,510 56,056 111,503 Capitalized lease obligations 110,919 103,764 99,159 103,039 106,949 Stockholders' equity 1,389,379 1,388,428 1,199,452 1,087,882 929,492 ________________________________________________________________ Other Year End Statistics: Number of stores 676 656 562 531 523 Number of employees: Total 75,000 71,000 60,000 58,000 55,000 Full-time equivalents 58,000 54,000 45,000 44,000 42,000 ________________________________________________________________

Refer to the "Nonrecurring Charge" and "Indebtedness" notes in Notes to Consolidated Financial Statements regarding the 1993 charge to cover the settlement of the Babbitt v. Albertson's lawsuit and the reduction of interest expense due to the successful resolution of a tax issue for which interest expense had previously been accrued. Refer to the "Acquisition" note in Notes to Consolidated Financial Statements regarding the 1992 acquisition from American Stores Company. Refer to the "Income Taxes" and "Employee Benefit Plans" notes in Notes to Consolidated Financial Statements regarding the 1992 adoption of two new accounting standards. Common stock data has been adjusted for the two-for-one stock splits distributed October 4, 1993 and June 29, 1990.

Quarterly Financial Data

Quarterly Financial Data (Dollars in thousands except per share data - Unaudited) First Second Third Fourth Year ____________________________________________________________________________________________ 1993 Sales $2,719,633 $2,768,242 $2,733,773 $3,062,030 $11,283,678 Gross profit 661,487 672,577 668,057 789,033 2,791,154 Net earnings 74,137 75,870 62,712 126,962 339,681 Earnings per share .29 .30 .25 .50 1.34 ___________________________________________________________ 1992 Sales $2,296,848 $2,604,203 $2,585,137 $2,687,488 $10,173,676 Gross profit 534,459 621,392 622,469 674,532 2,452,852 Net earnings 26,053 65,962 71,495 105,707 269,217 Earnings per share .10 .25 .27 .40 1.02 ___________________________________________________________ 1991 Sales $2,160,211 $2,191,815 $2,129,775 $2,198,666 $8,680,467 Gross profit 500,381 518,579 509,501 553,056 2,081,517 Net earnings 58,690 58,652 59,519 80,933 257,794 Earnings per share .22 .22 .22 .31 .97 ___________________________________________________________

The Company estimates the quarterly LIFO reserves which cannot be accurately determined until year end. The LIFO method of valuing inventories increased (decreased) net earnings as follows (in thousands except per share data): First Second Third Fourth Year ____________________________________________________________________________________________ 1993 Net earnings $(6,978) $(6,479) $9,495 $(3,962) Earnings per share (.03) (.03) .04 (.02) ________________________________________________________ 1992 Net earnings $(6,788) $(5,091) $(1,508) $5,423 $(7,964) Earnings per share (.02) (.02) (.01) .02 (.03) ________________________________________________________ 1991 Net earnings $(6,604) $(5,715) $ (381) $5,346 $(7,354) Earnings per share (.03) (.02) .02 (.03) ________________________________________________________

The fourth quarter of 1993 was a 14-week quarter. Net earnings and earnings per share for the third quarter of 1993 were reduced by a net of approximately $12.4 million or $.05 per share for a nonrecurring charge to cover the settlement of the Babbitt v. Albertson's lawsuit and reduced interest expense for the successful resolution of a tax issue for which interest expense had previously been accrued. Refer to the "Nonrecurring Charge" and "Indebtedness" notes in Notes to Consolidated Financial Statements. Net earnings and earnings per share for the first quarter of 1992 were reduced by approximately $37.9 million or $.14 per share for one-time costs primarily associated with the Jewel Osco Acquisition and accounting changes. Refer to the "Income Taxes" and "Employee Benefit Plans" notes in Notes to Consolidated Financial Statements for effects of adopting two new accounting standards. Earnings per share have been adjusted to reflect the two-for-one stock split distributed October 4, 1993.

Stockholders' Information General Information Address ALBERTSON'S, INC.

Stockholders' Information General Information Address ALBERTSON'S, INC. General Offices 250 Parkcenter Boulevard P.O. Box 20 Boise, Idaho 83726 Telephone: 208-385-6200 Auditors Deloitte & Touche Boise, Idaho Stock Transfer Agent and Registrar Chemical Trust Company of California (Chemical Trust) Securityholder Relations Department 50 California Street, 10th Floor San Francisco, California 94111 Co-Transfer Agent and Registrar West One Bank, Idaho Boise, Idaho Stockholders of Record There were 16,000 stockholders of record at March 31, 1994. Annual Meeting The 1994 Annual Meeting of the Stockholders will be held at 10:00 a.m., Mountain Time on Friday, May 27, 1994 in the Eyries Room, Boise Centre on the Grove, 850 Front Street, Boise, Idaho. Information Contact Chemical Trust may be reached toll free at 800-356-2017 between the hours of 8:30 a.m. and 8:30 p.m., Eastern Time. Personnel will perform the following functions over the telephone when a stockholder identifies his or her account by providing a taxpayer identification number, the registration name on the securities and the address of

record: 1. Information regarding stock transfer requirements. 2. Replacement of dividend checks. 3. Duplicate 1099 forms and W-9 tax certification forms 4. Transcripts of stockholder accounts. Requests for information on topics not covered above should be sent in writing to Chemical Trust at the address shown. Stockholders are remided to include a reference to Albertson's, Inc. in the correspondence and that changes of address must be submitted in writing. Form 10-K Available A copy of Form 10-K Annual Report filed with the Securities and Exchange Commission for Albertson's, Inc. fiscal year ended February 3, 1994 is available to stockholders upon request to the Secretary of Albertson's, Inc. Company Stock Information The Company's stock is traded on the New York and Pacific Stock Exchanges under the symbol ABS. An analysis of high and low stock prices by quarter is as follows:
First Second Third Fourth Year _____________________________________________________________________________________________________ High Low High Low High Low High Low High Low _____________________________________________________________________________________________________ 1993 29 23-3/8 29-3/4 25-1/4 29-1/4 24-1/8 28 23-3/8 29-3/4 23-3/8 1992 22-1/2 19-5/8 21-3/4 18-1/2 23-3/4 19-5/8 26-3/4 22-1/8 26-3/4 18-1/2 1991 25-3/4 18-3/8 24-1/4 18-3/4 22-1/4 17-7/8 19-7/8 16-3/8 25-3/4 16-3/8

Cash dividends per share were: First Second Third Fourth Year _____________________________________________________________________________________________________ 1993 $.09 $.09 $.09 $.09 $.36 1992 .08 .08 .08 .08 .32 1991 .07 .07 .07 .07 .28

* Stock prices and dividend information have been adjusted to reflect the two-for-one stock split distributed October 4, 1993. * In March 1994, the Board of Directors increased dividends to an annual rate of $.44 per share, an increase of 22.2% over 1993. The new quarterly rate of $.11 per share will be paid on May 25, 1994 to stockholders of record on May 6, 1994. 25