Investor Conference

December 13, 2007

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*

*

*

*

*

*

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Exhibit 99.2

2

Reconciliation_InvestorConf2007

Reconciliation of GAAP Cash Flow

Measure to Free Cash Flow

$ Millions

*Excludes cash flow related to Blackhawk’s gift card payables and receivables

$639.0

$814.6

$1,156.1

$567.5

$427.2

$400.0-

$600.0

$500.0-

$700.0

Free cash flow

-

-

-

-

49.5

-

-

Cash used for

acquisitions, net of

tax benefits

-

-

-

-

(62.6)

-

-

Interest earned on

favorable income

tax settlement, net

of tax

(1,395.7)

(795.0)

(1,070.3)

(1,313.5)

(1,734.7)

(1,600.0)-

(1,700.0)

(1,650.0)-

(1,720.0)

Net cash flow used

by investing

activities

$2,034.7

$1,609.6

$2,226.4

$1,881.0

$2,175.0

$2,100.0-

2,200.00

$2,220.0-

2,350.0

Net cash flow from

operating activities

2002

2003

2004

2005

2006

2007

Guidance*

2008

Forecast*

3

Reconciliation_InvestorConf2007

$Millions

7.4x

$1,981.2

8.9

(10.5)

-

-

-

20.9

35.2

6.9

728.0

268.5

336.1

$587.2

Add (subtract):

-

-

-

-

9.0

Dividend received from unconsolidated

affiliates

1,288.0

729.1

-

-

-

Goodwill impairment charges

700.0

-

-

-

-

Cumulative effect of accounting change

0.2

7.1

(12.6)

(15.8)

(21.1)

Equity in (earnings) losses of  

unconsolidated affiliates

$3,335.1

$2,537.5

$2,111.3

$2,306.9

$2,707.0

Total Adjusted EBITDA

-

10.6

-

-

-

Miscellaneous equity investment      

impairment charge

213.1

344.9

39.4

78.9

39.2

Property impairment charges

888.3

863.6

894.6

932.7

991.4

Depreciation

(17.6)

(1.3)

(15.2)

(0.2)

1.2

LIFO expense (income)

-

-

-

59.7

51.2

Stock option expense

7.7x

5.7x

5.1x

5.7x

6.8x

Adjusted EBITDA as a multiple of interest

expense

430.8

442.4

411.2

402.6

396.1

Interest expense

660.4

310.9

233.7

287.9

369.4

Income taxes

$(828.1)

$(169.8)

$560.2

$561.1

$870.6

Net income (loss)

2002

2003

2004

2005

2006

Reconciliation of Net Income to Adjusted                  

EBITDA (Interest Coverage)

36 Wks Ended           

Sept. 8, 2007

4

Reconciliation_InvestorConf2007

Reconciliation of Net Cash Flow from Operating

Activities to Adjusted EBITDA

$Millions

32.0

12.1

15.1

18.1

29.2

23.5

Contribution to pension plans

$1,981.2

(8.9)

144.1

19.4

0.6

(50.1)

-

268.5

336.1

$1,248.0

$3,335.1

$2,537.5

$2,111.3

$2,306.9

$2,707.0

Total adjusted EBITDA

(7.8)

(8.2)

(14.5)

(14.4)

(4.1)

Other

310.5

263.0

(538.2)

(310.9)

(181.4)

Changes in working capital items

(19.3)

13.4

(20.6)

(13.6)

17.8

Gain (loss) on property retirements  

and lease exit activities, net

(11.0)

(52.7)

(118.1)

(44.1)

(10.8)

Accrued claims and other liabilities

Add (subtract):

430.8

442.4

411.2

402.6

396.1

Interest expense

(30.3)

(130.9)

(112.9)

(115.6)

(83.1)

Net pension expense

(64.9)

77.9

29.2

215.9

(1.1)

Deferred income taxes  

660.4

310.9

233.7

287.9

369.4

Income taxes

$2,034.7

$1,609.6

$2,226.4

$1,881.0

$2,175.0

Net cash flow from operating

activities

2002

2003

2004

2005

2006

36 Weeks

Ended           

Sept. 8, 2007

5

Reconciliation_InvestorConf2007

Reconciliation of Gross Margin

BP Change

Excluding Fuel and Unusual Items

14

-

-

6

8

37

(26)

17

15

25

Basis point change in gross margin,

excluding fuel and unusual items

41

-

-

-

-

Impact of Vons strike

-

-

-

-

-

Impact of inventory adjustment

40

39

28

28

30

Fuel

(44)

(65)

(11)

(13)

(5)

Basis point change in gross margin

2004

2005

2006

Low

High

Basis point increase (decrease) over prior year:

36 Weeks

Ended           

Sept. 8, 2007

2007 Guidance

6

Reconciliation_InvestorConf2007

Excluding Fuel and Unusual Items

(10)

7

-

-

-

-

-

(17)

38

39

32

13

20

19

Fuel

(29)

(22)

-

-

-

-

Vons strike

(9)

-

(7)

15

-

-

Labor buyout and health and welfare

contributions

-

-

(15)

-

-

-

Stock option expense

98

87

(59)

(36)

(5)

(15)

Basis point change in operating and 

administrative expense, excluding

fuel and unusual items

(30)

77

13

-

-

-

Impairment charges (incl.

Dominick’s)

-

-

(29)

29

-

-

Texas store closures

Unusual items:

128

(7)

(53)

(93)

(25)

(34)

Basis point change in operating and

administrative expense

2003

2004

2005

2006

Low

High

Reconciliation of Operating & Administrative

Expense BP Change

Basis point increase (decrease) over prior year:

2007 Guidance

36 Weeks

Ended           

Sept. 8, 2007

7

Reconciliation_InvestorConf2007

Reconciliation of Operating Profit Margin

Basis Point Change Excluding Fuel

2008 Guidance

35

15

Operating Profit Margin

Excluding Fuel

5

5

Fuel Impact

30

10

Operating Profit Margin

High

Low

Basis point increase over prior year:

8

Reconciliation_InvestorConf2007

EPS History

As Adjusted for Unusual Items

*Adjusted for a two-for-one stock split effected February 25, 1998 and a two-for-one stock split effected January 30, 1996.

2006

$1.94

($0.10)

($0.12)

$1.72

22.9%

*

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

EPS as reported

$0.09

$0.25

$0.49

$0.67

$0.97

$1.12

$1.59

$1.88

$2.13

$2.44

($1.77)

($0.38)

$1.25

$1.25

Adjustments:

Extraordinary loss

$0.06

$0.02

$0.13

Cumulative effect of accounting change

$0.06

Dominick's impairment/closures/tax adj.

$2.73

$1.05

$0.06

Randall's impairment

$1.72

$1.00

Randall's store closures

$0.15

Furrs/Homeland lease write-offs

$0.05

Future Beef write-off

$0.06

Restructuring & transition charges

$0.03

$0.02

$0.09

$0.04

Labor buyouts/unusual contributions

$0.06

$0.03

$0.08

Accrual for rent holidays

$0.02

Miscellaneous investment write-offs

$0.04

$0.01

Inventory adjustments

$0.10

Stock option expense

($0.01)

($0.01)

($0.01)

($0.01)

($0.01)

($0.01)

($0.03)

($0.03)

($0.06)

($0.08)

($0.11)

($0.12)

($0.10)

Certain tax adjustments

($0.11)

($0.08)

Tax settlement

EPS as adjusted

$0.23

$0.32

$0.50

$0.66

$0.96

$1.24

$1.56

$1.85

$2.07

$2.51

$2.66

$1.70

$1.15

$1.40

% change

39.1%

56.3%

32.0%

45.5%

29.2%

25.8%

18.6%

11.9%

21.3%

6.0%

-36.1%

-32.4%

21.7%

9

Reconciliation_InvestorConf2007

Non-Fuel ID Sales

3.3%

3.6% -

3.8%

3.7%

Gross Margin

15 -

25 BPs

15 -

25 BPs

14 BPs

Improvement (X Fuel)

O&A Improvement

5 -

15 BPs

5 -

15 BPs

10 BPs

(X Fuel)

Free Cash Flow*

$400 -

$600

$400 -

$600

EPS

$1.90 -

$2.00

$1.95 -

$2.00

2007 Investor Guidance

Original

Revised

Q3 YTD 

Actual

*Excludes Blackhawk Gift Card payables, net of receivables

See Website for reconciliation

10

Reconciliation_InvestorConf2007

Financial Guidance For 2008

EPS (53 wks)

$2.25 -

$2.35

(52 wks)

$2.21 -

$2.31

Non fuel ID sales

3.0% -

3.2%

Operating

profit

margin

change

1

15 -

35 bps

Cash capital spending

$1.70 -

$1.75B

Free

cash

flow

2

$500 -

$700M

1

Excludes Fuel, see website for reconciliation

2

Excludes BHN Gift Card payables, net of receivables

11

Reconciliation_InvestorConf2007

Long Term Outlook

ID Sales X-Fuel

3.0% -

4.0%

NC

Operating profit margin X-Fuel

5.5% -

6.0%

6.0% -

6.5%

Depreciation

2.5%

NC

Annual EPS Growth

12.0% -

15.0%

NC

Current

Revised

12

Reconciliation_InvestorConf2007

1.5 - 1.7

1.4 - 1.6

1.2 - 1.4

0.6 - 0.7

0.5 - 0.7

0.4 - 0.6

0.4

0.6

2005

2006

2007G

2008G

2009E

2010E

2011E

2012E

Free Cash Flow

$ Billions

1.4

1.7

1.7

1.7

1.8

1.4

1.4

1.4

Capital Spending

See website for reconciliation

13

Reconciliation_InvestorConf2007

Rollout of Lifestyle Stores

1

8

26

43

59

75

90

'03

'04

'05

'06

'07E

'08E

'09E

% of Stores Completed

20

144

458

751

1,024

1,298

1,568

14

Reconciliation_InvestorConf2007

Current ID Results for Lifestyle Stores

100

32

32

29

15

1st Yr

2nd Yr

3rd Yr

4th Yr

Non-LS

Store Count

ID Contribution*

Lifestyle

Non-Lifestyle

Lifestyle Sales Change by Year

47%

53%

89%

11%

* IDs are based on first 36 weeks of 2007

Indexed

Adj. for competitive openings

Yr 1 sales vs. Proforma

Base, Yr 2 -

Yr 4 Prior Year

Yr 2 -

Yr 4 excluding Grand opening Promo Period

Data Incl

thru week 44, 2007

*

*

*

*

*

*

*

*

*

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