The Great Atlantic & Pacific Tea Company, Inc. Announces Results for the Fourth Quarter and Full Year Ended February 25, 2006
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Company Reports Fiscal 2005 EBITDA, Adjusted for Non-Operating Items, of $127 Million, Up From $113 Million in Prior Year

U.S. sales for the 12 week fourth quarter were $1.6 billion, compared with $1.7 billion in the fourth quarter of fiscal 2004. Fiscal 2004 fourth quarter total sales of $2.6 billion include $853 million related to A&P Canada which was sold in August 2005. U.S. total comparable store sales increased 1.4% vs. year-ago. Net loss for the quarter was $39.1 million or $.95 per diluted share this year versus a loss of $5.7 million or $.15 per diluted share last year.

The results for the fourth quarter of fiscal years 2005 and 2004 include items the Company considers non-operating in nature that management excludes when evaluating the results of the U.S. ongoing business. These items are listed on Schedule 3 of the press release. Excluding these items, adjusted U.S. income from operations was $1.7 million in the fourth quarter of fiscal 2005 versus a loss of $18 million in last year's fourth quarter. Adjusted U.S. ongoing operating EBITDA, which is reconciled to net cash from operating activities on Schedule 4, was $41 million in the fourth quarter of fiscal 2005 versus $28 million in last year's fourth quarter.

U.S. sales for the 52 weeks of fiscal 2005 were $7.0 billion versus $7.3 billion in fiscal 2004. Total sales of $8.7 billion for this year and $10.8 billion for last year include sales of $1.7 billion and $3.5 billion, respectively, related to A&P Canada which was sold in August 2005. U.S. total comparable store sales increased 0.5%. Net income for the year was $393 million or $9.64 per diluted share which included the gain on the sale of Canada, compared with a loss of $188 million or $4.88 per diluted share for fiscal 2004.

Fiscal 2005 and fiscal 2004 results include the non-operating items listed on Schedule 3 of the press release. Excluding these items, adjusted U.S. loss from operations was $65 million in fiscal 2005 versus a loss of $89 million in fiscal 2004. Adjusted U.S. ongoing operating EBITDA, which is reconciled to net cash from operating activities on Schedule 4, was $127 million in fiscal 2005 versus $113 million in fiscal 2004.

Christian Haub, Executive Chairman of The Board of Directors, said, "Our successful strategic divestiture and reorganization initiatives in Fiscal 2005 strengthened our financial position, reduced operating costs and facilitated the launch of dynamic retail strategies to restore profitability and stimulate growth. The sale of A&P Canada transformed our balance sheet and provided a significant financial stake in Metro, Inc., an already successful entity that was further strengthened by the addition of our Canadian store operations.

"In the U.S., our reduction of overheads and improved operating and merchandising execution positively impacted fourth quarter results, and combined with exciting store development plans, set the stage for continuing financial progress through this fiscal year and beyond. In addition, our improved performance and financial resources also present the opportunity to participate in the expected consolidation of our industry," Mr. Haub said.

Eric Claus, President & Chief Executive Officer, said "The dedicated efforts of our new leadership team and hard-working associates generated positive operating trends in the second half of Fiscal 2005. Our mid-year headquarters and field reorganization lowered costs and upgraded retail execution, producing solid improvements in identical store sales and ongoing operating EBITDA in the fourth quarter.

"In executing our new strategic plan, we will accelerate development of the outstanding Fresh and Discount store prototypes we recently launched successfully in the Northeast, and introduce a significantly improved Gourmet format in New York City. In the Midwest, our improving Farmer Jack operations will be further revitalized with a quality and value emphasis refreshing its great tradition in the marketplace; while in New Orleans, our Sav-A-Center team goes forward after its remarkable and successful rebuilding effort in the wake of Hurricane Katrina - an accomplishment that has been a tremendous inspiration to our entire A&P family.

Mr. Claus concluded, "In Fiscal 2006, our team will maintain an unwavering focus on profitable store operations, including both development and strict cost management, as we further intensify the drive toward our goal of profitability in Fiscal 2007, and dynamic growth thereafter."

Founded in 1859, A&P is one of the nation's first supermarket chains. The Company operates 405 stores in 9 states and the District of Columbia under the following trade names: A&P, Waldbaum's, The Food Emporium, Super Foodmart, Super Fresh, Farmer Jack, Sav-A-Center and Food Basics.

The Company invites investors and other interested parties to listen to a live audio Webcast to be held at 11:00 AM Eastern Time today, at which members of the Company's senior management team will discuss the Company's fourth quarter and full year financial results. The Webcast may be accessed through a link on the "Investors" page of the Company's Website, www.aptea.com. Listeners who cannot participate in the live broadcast will be able to hear a recorded replay of the broadcast beginning this afternoon and available until June 6, 2006.

Effective March 28, 2003, the Securities and Exchange Commission ("SEC") adopted new rules related to disclosure of certain financial measures not calculated in accordance with Generally Accepted Accounting Principles ("GAAP"). Such new rules require all public companies to provide certain disclosures in press release and SEC filings related to non-GAAP financial measures. We use the non-GAAP measure "EBITDA" to evaluate the Company's liquidity and it is among the primary measures used by management for planning and forecasting of future periods. EBITDA is defined as earnings before interest, taxes, depreciation, amortization, minority interest, equity in earnings of Metro, Inc., discontinued operations and the gain on the sale of A&P Canada. Ongoing, operating EBITDA is defined as EBITDA adjusted for items the Company considers non-operating in nature that management excludes when evaluating the results of the U.S. ongoing business. The Company believes the presentation of these measures is relevant and useful for investors because it allows investors to view results in a manner similar to the method used by the Company's management and makes it easier to compare the Company's results with other companies that have different financing and capital structures or tax rates. In addition, these measures are also among the primary measures used externally by the Company's investors, analysts and peers in its industry for purposes of valuation and comparing the results of the Company to other companies in its industry. Ongoing, operating EBITDA is reconciled to Net Cash provided by Operating Activities on Schedule 4 of this release.

This release contains forward-looking statements about the future performance of the Company, which are based on Management's assumptions and beliefs in light of the information currently available to it. The Company assumes no obligation to update the information contained herein. These forward-looking statements are subject to uncertainties and other factors that could cause actual results to differ materially from such statements including, but not limited to: competitive practices and pricing in the food industry generally and particularly in the Company's principal markets; the Company's relationships with its employees and the terms of future collective bargaining agreements; the costs and other effects of legal and administrative cases and proceedings; the nature and extent of continued consolidation in the food industry; changes in the financial markets which may affect the Company's cost of capital and the ability of the Company to access capital; supply or quality control problems with the Company's vendors; and changes in economic conditions which affect the buying patterns of the Company's customers.

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Investor Contact:
William J. Moss
Vice President, Treasurer
(201) 571-4019

Press Contact:
Richard P. De Santa
Vice President, Corporate Affairs
(201) 571-4495