Investment Prospectus for Chihuahua, Inc.

A Comparative Financial Analysis of Whole Foods Market, Inc. vs Safeway Inc.

and Investment Recommendation

March 20, 2009

Prepared by:
Francis Tao, Leah Lundy and Qian Ye
 Table of Contents

Table of Contents---------------------------------------------------------------------------------------------1 i
1.0 Executive Summary ------------------------------------------------------------------------------------ 1
2.0 General Information ------------------------------------------------------------------------------------
2.1 Whole Foods Market, Inc. ------------------------------------------------------------------------
2.2 Safeway Inc. ----------------------------------------------------------------------------------------
3.0 Industry Information ------------------------------------------------------------------------------------
4.0 Company Information and Financial Highlights ----------------------------------------------------
5.0 Comparative Financial Statement Analysis ----------------------------------------------------------
5.1 Trend Analysis (Horizontal Analysis) -----------------------------------------------------------
5.1.1 Whole Foods Market, Inc. -----------------------------------------------------------------
5.1.2 Safeway Inc. ---------------------------------------------------------------------------------
5.1.3 Conclusion from Trend Analysis (Horizontal Analysis) -------------------------------
5.2 Common-Sized Analysis (Vertical Analysis) --------------------------------------------------
5.2.1 Whole Foods Market, Inc. -----------------------------------------------------------------
5.2.2 Safeway Inc. ---------------------------------------------------------------------------------
5.2.3Conclusion from Common-Sized Analysis (Vertical Analysis)------------------------
6.0 Analytical Measures – Solvency and Profitability Analysis --------------------------------------
6.1 Solvency Measures -------------------------------------------------------------------------------
6.1.1 Working Capital -------------------------------------------------------------------------
6.1.2 Current Ratio -----------------------------------------------------------------------------
6.1.3 Quick Ratio -------------------------------------------------------------------------------
6.1.4 Accounts Receivable Turnover --------------------------------------------------------
6.1.5 Number of Days’ in Receivables ------------------------------------------------------
6.1.6 Inventory Turnover ----------------------------------------------------------------------
6.1.7 Number of Days Sales in Inventory ---------------------------------------------------
6.1.8 Ratio of Fixed Assets to Long-term Liabilities ---------------------------------------
6.1.9 Ration of Liabilities to Stockholders’ Equity -----------------------------------------
6.1.10 Number of Times Interest Charges Earned -------------------------------------------
6.2 Profitability Measures -----------------------------------------------------------------------------
6.2.1 Ratio of Net Sales to Assets -------------------------------------------------------------
6.2.2 Rate Earned on Total Assets ------------------------------------------------------------
6.2.3 Rate Earned on Stockholders’ Equity --------------------------------------------------
6.2.4 Rate earned on Common Stockholders’ Equity --------------------------------------
6.2.5 Earnings per Share on Common Stock ------------------------------------------------
6.2.6 Price-Earnings Ratio ---------------------------------------------------------------------
6.2.7 Dividend Yield ----------------------------------------------------------------------------
6.2.8 Dividend Yield ----------------------------------------------------------------------------
7.0 Conclusion and Recommendation ---------------------------------------------------------------------
Appnedix A – Description of Analytical Measures Used -----------------------------------------------
Appendix B – Whole Foods Market, Inc., Comparative Balance Sheet, Horizontal Analysis -----
Appendix C – Whole Foods Market, Inc., Comparative Balance Sheet, Vertical Analysis ---------
Appendix D – Whole Foods Market, Inc., Comparative Income Statement, Horizontal Analysis –
Appendix E – Whole Foods Market, Inc., Comparative Income Statement, Vertical Analysis -----
Appendix F – Safeway, Inc., Comparative Balance Sheet, Horizontal Analysis ---------------------
Appendix G – Safeway, Inc., Comparative Balance Sheet, Vertical Analysis ------------------------
1
Appendix H – Safeway, Inc., Comparative Income Statement, Horizontal Analysis –---------------
Appendix I – Safeway, Inc., Comparative Income Statement, Vertical Analysis -------------------
Appendix J – Common-Sized Balance Sheet Horizontal Analysis -----------------------------------
Appendix K – Common-Sized Balance Sheet Vertical Analysis --------------------------------------
Appendix L – Common-Sized Income Statement Horizontal Analysis -------------------------------
Appendix M – Common-Sized Income Statement Vertical Analysis ---------------------------------
References ---------------------------------------------------------------------------------------------------

6.0 Analytical Measures – Solvency and Profitability Analysis

 Analytical Measures Whole Foods Market, Inc. Safeway Inc. WFMI/SWY
(WFMI) (SWY) Ratios, 2007
2007 2006 2005 2007 2006 2005
Working capital -116,530 114,211 254,146 -1128.9 - -561.5 103.22
Solvency Measures

1035.7
Current ratio 0.85 1.22 1.61 0.78 0.77 0.87 1.09
Quick ratio 0.13 0.17 0.90 0.17 0.15 0.17 0.76
Accounts Receivable 70.37 18.84 17.85 81.39 99.0 111.42 0.86
turnover
Number of days’ sales in 20.90 4.84 5.11 4.48 3.69 3.28 4.67
Receivables
Inventory turnover 17.47 19.27 16.12 11.08 10.58 9.92 1.58
Number of days’ in 20.90 18.94 22.64 32.95 34.51 36.81 0.63
inventory
Ratio of fixed assets to 2.26 143.64 81.55 2.28 1.94 1.62 0.99
long-term liabilities
Ratio of liabilities to 1.20 0.45 0.38 1.63 1.87 2.20 0.74
stockholders’ equity
Number of times interest 73.38 10,617.0 107.67 4.61 4.13 3.11 15.92
charges are earned 3
Ratio of net sales to 2.51 6.83 6.34 6.25 6.11 5.76 0.40
Profitability Measures

assets
Rate earned on total 0.07 0.10 2.76 0.08 0.08 0.06 0.88
assets
Rate earned on 0.13 0.15 4.06 0.14 0.16 0.13 0.93
stockholders’ equity
Rate earned on common 0.15 0.20 6.67 151.79 150.17 96.72 0.00
stockholders’ equity
Earnings per share on 1.29 1.41 0.99 1.99 1.94 1.25 0.65
common stock
Price-earnings ratio 37.1 40.55 63.12 16.98 17.46 18.41 2.18
Dividends per share 0.68 2.47 0.39 0.25 0.22 0.10 2.72
Dividend yield 0.01 0.04 0.01 0.01 0.01 0.00 1.00

Appendix A – Description of Analytical Measures Used

Method of Computation Use

Solvency measures:
Working Capital Current Assets – Current Liabilities To indicate the ability to meet
Current Ratio Current Assets / Current Liabilities currently maturing obligations
Quick Ratio Quick Assets / Current Liabilities To indicate instant debt-paying
Accounts Receivable Net Sales / Average Accounts Receivable To assess the efficiency in
Turnover collecting receivables and in the
Numbers of Days’ Sales Average Accounts Receivable / Average Daily management of credit
in Receivables Sales
Inventory Turnover Cost of Goods Sold / Average Inventory To assess the efficiency in the
Number of Days’ Sales in Average Inventory / Average Daily Cost of management of inventory
Inventory Goods Sold
Ratio of Fixed Assets to Fixed Assets (net) / Long-Term Liabilities To indicate the margin of safety
Long-Term Liabilities to long-term creditors
Ratio of Liabilities to Total Liabilities / Total Stockholders’ Equity To indicate the margin of safety
Stockholders’ Equity to creditors
Number of Times Interest (Income Before Income Tax + Interest Expense) To assess the risk to debtholders
Charges are Earned / Interest Expense in terms of number of times
interest charges were earned
Profitability measures:
Ratio of Net Sales to Net Sales / Average Total Assets (excluding To assess the effectiveness in the
Assets long-term investments) use of assets
Rate Earned on Total (Net Income + Interest Expense) / Average Total To assess the profitability of the
Assets Assets assets
Rate Earned on Net Income / Average Total Stockholders’ To assess the profitability of the
Stockholders’ Equity Equity investment by stockholders
Rate Earned on Common (Net Income – Preferred Dividends) / Average To assess the profitability of the
Stockholders’ Equity Common Stockholders’ Equity investment by common
Earnings per Share on (Net Income – Preferred Dividends) / Shares of stockholders
Common Stock Common Stock Outstanding
Price-Earnings Ratio Market Price per Share of Common Stock / To indicate future earnings
Earnings per Share on Common Stock prospects, based on the
relationship between market
value of common stock and
earnings
Dividends per Share Dividends / Shares of Common Outstanding To indicate the extent to which
earnings are being distributed to
common stockholders
Dividend Yield Dividends per Share of Common Stock / To indicate the rate of return to
Market Price per Share of Common Stock common stockholders in terms
of dividends
 Appendix B - Whole Foods Market, Inc., Comparative Balance Sheet, Horizontal Analysis

W HOLE FOODS MARKET, INC.

Comparative Balance Sheet
(In thousands)
For the Years Ended September 30 and 2007 and September 24, 2006 and September 25, 2005
2006 to 2007 2005 to 2006
Horizontal Analysis 2007 2006 2005 Increase (Decrease) Increase (Decrease)
Amount Amount Amount Amount Percent Amount Percent
Assets
Current assets:
Cash and equivalents $0 $2,252 $308,524 -$2,252 -100.0% -$306,272 -99.3%
Accounts Receivables 105,209 82,137 66,682 23,072 28.1% $15,455 23.2%
Merchandise inventories $288,112 $203,727 $174,848 $84,385 41.4% $28,879 16.5%
Prepaid expenses and other current assets274,665 335,865 122,475 -61,200 -18.2% $213,390 174.2%
Total current assets $667,986 $623,981 $672,529 44,005 7.1% ($48,548) -7.2%
Property:
Property and equipment, net of
accumulated depreciation and 1,666,559 1,236,133 1,054,605 430,426 34.8% $181,528 17.2%
amortization
Goodwill $668,850 $113,494 $112,476 $555,356 489.3% $1,018 0.9%
Other assets $209,733 $69,388 $49,686 $140,345 202.3% $19,702 39.7%
Total assets 3,213,128 2,042,996 1,889,296 1,170,132 57.3% $153,700 8.1%

Liabilities and Stockholder's Equity

Current Liabilities:
Accounts payable 225,728 121,857 103,348 103,871 85.2% 18,509 17.9%
Accrued payroll 181,290 153,014 126,981 28,276 18.5% 26,033 20.5%
Other current liabilities 377,498 234,899 188,054 142,599 60.7% 46,845 24.9%
Total current liabilities 784,516 509,770 418,383 274,746 53.9% 91,387 21.8%
Long-term debt 736,087 8,606 12,932 727,481 8453.2% -4,326 -33.5%
Other long-term debt 233,721 120,477 92,305 113,244 94.0% 28,172 30.5%
Total liabilities 1,754,324 638,853 523,620 1,115,471 174.6% 115,233 22.0%

Stockholders' equity:
Common stock 1,232,845 1,147,872 874,972 84,973 7.4% 272,900 31.2%
Treasury stock at cost -199,961 -99,964 0 -99,997 100.0% -99,964 n/a
Accumulated other comprehensive income 15,722 6,975 4,405 8,747 125.4% 2,570 58.3%
Retained earnings 410,198 349,260 486,299 60,938 17.4% -137,039 -28.2%
Total stockholders' equity 1,458,804 1,404,143 1,365,676 54,661 3.9% 38,467 2.8%
Total liabilities and stockholders' equity 3,213,128 2,042,996 1,889,296 1,170,132 57.3% 153,700 8.1%
 Appendix C - Whole Foods Market, Inc., Comparative Balance Sheet, Vertical Analysis

WHOLE FOODS MARKET, INC.

Comparative Balance Sheet
(in thousand)
For the Years Ended September 30 and 2007 and September 24, 2006 and September 25, 2005

Vertical Analysis 2007 2006 2005

Amount Percent Amount Percent Amount Percent
Assets
Current assets:
Cash and equivalents $0 0.0% $2,252 0.1% $308,524 16.3%
Accounts Receivables 105,209 3.3% 82,137 4.0% 66,682 3.5%
Merchandise inventories 288,112 9.0% 203,727 10.0% 174,848 9.3%
Prepaid expenses and other current assets 274,665 8.5% 335,865 16.4% 122,475 6.5%
Total current assets $667,986 20.8% $623,981 30.5% $672,529 35.6%
Property:
Property and equipment, net of
accumulated depreciation and amortization 1,666,559 51.9% 1,236,133 60.5% 1,054,605 55.8%
Goodwill 668,850 20.8% 113,494 5.6% 112,476 6.0%
Other assets 209,733 6.5% 69,388 3.4% 49,686 2.6%
Total assets 3,213,128 100% 2,042,996 100% 1,889,296 100%

Liabilities and Stockholder's Equity

Current Liabilities:
Accounts payable 225,728 7.0% 121,857 6.0% 103,348 5.5%
Accrued payroll 181,290 5.6% 153,014 7.5% 126,981 6.7%
Other current liabilities 377,498 11.7% 234,899 11.5% 188,054 10.0%
Total current liabilities 784,516 24.4% 509,770 25.0% 418,383 22.1%
Long-term debt 736,087 22.9% 8,606 0.4% 12,932 0.7%
Other long-term debt 233,721 7.3% 120,477 5.9% 92,305 4.9%
Total liabilities 1,754,324 54.6% 638,853 31.3% 523,620 27.7%

Stockholders' equity:
Common stock 1,232,845 38.4% 1,147,872 56.2% 874,972 46.3%
Treasury stock at cost -199,961 -6.2% -99,964 -4.9% 0 0.0%
Accumulated other comprehensive income 15,722 0.5% 6,975 0.3% 4,405 0.2%
Retained earnings 410,198 12.8% 349,260 17.1% 486,299 25.7%
Total stockholders' equity 1,458,804 45.4% 1,404,143 68.7% 1,365,676 72.3%
Total liabilities and stockholders' equity 3,213,128 100% 2,042,996 100% 1,889,296 100%
 Appendix D - Whole Foods Market, Inc., Comparative Income Statement, Horizontal Analysis

W HO LE FOODS MARKET, INC.

Comparative Income Statement
(In thousands)
For the Years Ended September 30 and 2007 and September 24, 2006 and September 25, 2005
2006 to 2007 2005 to 2006
Horizontal Analysis 2007 2006 2005 Increase (-Decrease) Increase (-Decrease)
Amount Amount Amount Amount Percent Amount Percent

Sales and other revenue $6,591,773 $5,607,376 $4,701,289 $984,397 17.6% $906,087 19.3%
Cost of goods sold 4,295,170 3,647,734 3,052,184 647,436 17.75% 595,550 19.5%
Gross profit 2,296,603 1,959,642 1,649,105 336,961 17.2% 310,537 18.8%
Operating and administrative expense
1,999,152 1,640,633 1,419,372 358,519 21.9% 221,261 15.6%
Operating profit 297,451 319,009 229,733 -21,558.0 -6.8% 89,276 38.9%
Interest expense 4,208 32 2,223 4,176 13050.0% -2,191.0 -98.6%
Other income, net 11,324 20,736 9,623 -9,412 -45.4% 11,113 115.5%
Income before income taxes 304,567 339,713 237,133 -35,146.0 -10.3% 102,580 43.3%
Income taxes 121,827 135,885 100,782 -14,058.0 -10.3% 35,103 34.8%
Net income 182,740 203,828 136,351 -21,088.0 -10.3% 67,477 49.5%
Appendix E - Whole Foods Market, Inc., Comparative Income Statement, Vertical Analysis

WHOLE FOODS MARKET, INC.

Comparative Income Statement
(in thousands)
For the Years Ended September 30 and 2007 and September 24, 2006 and September 25, 2005

Vertical Analysis 2007 2006 2005

Amount Percent Amount Pecent Amount Pecent

Sales and other revenue $6,591,773 100.0% $5,607,376 100.0% $4,701,289 100.0%
Cost of goods sold 4,295,170 65.2% 3,647,734 65.1% 3,052,184 64.9%
Gross profit 2,296,603 34.8% 1,959,642 34.9% 1,649,105 35.1%
Operating and administrative expense 1,999,152 30.3% 1,640,633 29.3% 1,419,372 30.2%
Operating profit 297,451 4.5% 319,009 5.7% 229,733 4.9%
Interest expense -4,208 -0.1% -32 0.0% -2,223 0.0%
Other income, net 11,324 0.2% 20,736 0.4% 9,623 0.2%
Income before income taxes 304,567 4.6% 339,713 6.1% 237,133 5.0%
Income taxes 121,827 1.8% 135,885 2.4% 100,782 2.1%
Net income 182,740 2.8% 203,828 3.6% 136,351 2.9%
 Appendix F - Safeway, Inc., Comparative Balance Sheet, Horizontal Analysis

SAFEW AY, INC.

Comparative Balance Sheet
(In millions, except per-share amounts)

Year-end Year-end Year-end 2006 to 2007 2005 to 2006

Horizontal Analysis 2007 2006 2005 Increase (-Decrease)Increase (-Decrease)
Amount Amount Amount Amount Percent Amount Percent
Assets
Current assets:
Cash and equivalents $277.8 $216.6 $373.3 $61.2 28.3% -$156.70 -42.0%
Accounts Receivables 577.9 461.2 350.6 116.7 25.3% 110.6 31.5%
Merchandise inventories 2,797.8 2,642.5 2,766.0 155.3 5.9% -123.5 -4.5%
Prepaid expenses and other current assets 354.0 245.4 212.5 108.6 44.3% 32.9 15.5%
Total current assets 4,007.5 3,565.7 3,702.4 441.8 12.4% -136.7 -3.7%
Property:
Property and equipment, net of
accumulated depreciation and 10,622.0 9,773.3 9,097.1 848.7 8.7% 676.2 7.4%
amortization
Goodwill 2,406.3 2,393.5 2,402.4 12.8 0.5% -8.9 -0.4%
Other assets 615.2 541.3 555.0 73.9 13.7% -13.7 -2.5%
Total assets 17,651.0 16,273.8 15,756.9 1,377.2 8.5% 516.9 3.3%

Liabilities and Stockholder's Equity

Current Liabilities:
Accounts payable 2,825.4 2,464.4 2,151.5 361.0 14.6% 312.90 14.5%
Accrued payroll 506.7 485.8 526.1 20.9 4.3% -40.30 -7.7%
Other current liabilities 1,804.3 1,651.2 1,586.3 153.1 9.3% 64.90 4.1%
Total current liabilities 5,136.4 4,601.4 4,263.9 535.0 11.6% 337.50 7.9%
Long-term debt 4,657.7 5,036.6 5,605.3 -378.9 -7.5% -568.70 -10.1%
Other long-term debt 1,155.1 968.9 968.0 186.2 19.2% 0.90 0.1%
Total liabilities 10,949.2 10,606.9 10,837.2 342.3 3.2% -230.30 -2.1%

Stockholders' equity:
Common stock 5.9 5.8 5.8 0.10 1.7% 0.00 0.0%
Additional paid-in capital 4,038.2 3,811.5 3,445.1 226.70 5.9% 366.40 10.6%
Treasury stock at cost -4,418.00 -4,188.70 -3,875.70 -229.30 5.5% -313.00 8.1%
Accumulated other comprehensive income 246.2 94.8 172.8 151.40 159.7% -78.00 -45.1%
Retained earnings 6,829.5 5,943.5 5,171.7 886.00 14.9% 771.80 14.9%
Total stockholders' equity 6,701.8 5,666.9 4,919.7 1,034.90 18.3% 747.20 15.2%
Total liabilities and stockholders' equity 17,651.0 16,273.8 15,756.9 1,377.20 8.5% 516.90 3.3%
Appendix G - Safeway, Inc., Comparative Balance Sheet, Vertical Analysis

SAFEWAY, INC.
Comparative Balance Sheet
(In millions, except per-share amounts)

Year-end Year-end Year-end

Vertical Analysis 2007 2006 2005
Amount Percent Amount Percent Amount Percent
Assets
Current assets:
Cash and equivalents $277.8 1.6% $216.6 1.3% $373.3 2.4%
Accounts Receivables 577.9 3.3% 461.2 2.8% 350.6 2.2%
Merchandise inventories 2,797.8 15.9% 2,642.5 16.2% 2,766.0 17.6%
Prepaid expenses and other current assets 354.0 2.0% 245.4 1.5% 212.5 1.3%
Total current assets 4,007.5 22.7% 3,565.7 21.9% 3,702.4 23.5%
Property:
Property and equipment, net of
accumulated depreciation and amortization 10,622.0 60.2% 9,773.3 60.1% 9,097.1 57.7%
Goodwill 2,406.3 13.6% 2,393.5 14.7% 2,402.4 15.2%
Other assets 615.2 3.5% 541.3 3.3% 555.0 3.5%
Total assets 17,651.0 100.0% 16,273.8 100.0% 15,756.9 100.0%

Liabilities and Stockholder's Equity

Current Liabilities:
Accounts payable 2,825.4 16.0% 2,464.4 15.14% 2,151.5 13.7%
Accrued payroll 506.7 2.9% 485.8 2.99% 526.1 3.3%
Other current liabilities 1,804.3 10.2% 1,651.2 10.15% 1,586.3 10.1%
Total current liabilities 5,136.4 29.1% 4,601.4 28.27% 4,263.9 27.1%
Long-term debt 4,657.7 26.4% 5,036.6 30.95% 5,605.3 35.6%
Other long-term debt 1,155.1 6.5% 968.9 5.95% 968.0 6.1%
Total liabilities 10,949.2 62.0% 10,606.9 65.18% 10,837.2 68.8%

Stockholders' equity:
Common stock 5.9 0.03% 5.8 0.04% 5.8 0.04%
Additional paid-in capital 4,038.2 22.9% 3,811.5 23.42% 3,445.1 21.9%
Treasury stock at cost -4,418.00 -25.0% -4,188.70 -25.74% -3,875.70 -24.6%
Accumulated other comprehensive income 246.2 1.4% 94.8 0.58% 172.8 1.1%
Retained earnings 6,829.5 38.7% 5,943.5 36.52% 5,171.7 32.8%
Total stockholders' equity 6,701.8 38.0% 5,666.9 34.82% 4,919.7 31.2%
Total liabilities and stockholders' equity 17,651.0 100% 16,273.8 100% 15,756.9 100.0%
 Appendix H - Safeway, Inc., Comparative Income Statement, Horizontal Analysis

SAF EW AY, INC .

Comparative Income Statement
(In millions, except per-share amounts)

52 W eeks 52 W eeks 52 W eeks 2006 to 2007 2005 to 2006

H o rizontal Analysis 2007 2006 2005 Increase (-Decrease) Increase (-D ecrease)
Amount Amount Amount Amount Percent Amount Percent

Sales and other revenue $42,286.0 $40,185.0 $38,416.0 $2,101.0 5.2% $1,769.0 4.6%
Cost of goods sold -30,133.1 -28,604.0 -27,303.1 -1,529.10 5.35% -1,300.90 4.8%
G ross profit 12,152.9 11,581.0 11,112.9 571.90 4.9% 468.10 4.2%
O perating and administrative expense
-10,380.8 -9,981.2 -9,898.2 -399.60 4.0% -83.00 0.8%
O perating profit 1,772.1 1,599.8 1,214.7 172.30 10.8% 385.10 31.7%
Interest expense -388.9 -396.1 -402.6 7.20 -1.8% 6.50 -1.6%
O ther income, net 20.4 36.3 36.9 -15.90 -43.8% -0.60 -1.6%
Income before income taxes 1,403.6 1,240.0 849.0 163.60 13.2% 391.00 46.1%
Income taxes 515.2 369.4 -287.90 145.80 39.5% 657.30 -228.3%
Net income 888.4 870.6 561.1 17.80 2.0% 309.50 55.2%
Appendix I - Safeway, Inc., Comparative Income Statement, Vertical Analysis

SAFEWAY, INC.
Comparative Income Statement
(In millions, except per-share amounts)

52 Weeks 52 Weeks 52 Weeks

Vertical Analysis 2007 2006 2005
Amount Percent Amount Percent Amount Percent

Sales and other revenue $42,286.0 100.0% $40,185.0 100.0% $38,416.0 100.0%
Cost of goods sold -30,133.10 71.3% -28,604.00 71.2% -27,303.10 71.1%
Gross profit 12,152.90 28.7% 11,581.00 28.8% 11,112.90 28.9%
Operating and administrative expense -10,380.80 24.5% -9,981.20 24.8% -9,898.20 25.8%
Operating profit 1,772.10 4.2% 1,599.80 4.0% 1,214.70 3.2%
Interest expense -388.90 0.9% -396.10 1.0% -402.60 1.0%
Other income, net 20.40 0.05% 36.30 0.1% 36.90 0.1%
Income before income taxes 1,403.60 3.3% 1,240.00 3.1% 849.00 2.2%
Income taxes 515.20 1.2% 369.40 0.9% -287.90 0.7%
Net income 888.40 2.1% 870.60 2.2% 561.10 1.5%
Appendix J - Common-Sized Balance Sheet Horizontal Analysis

Whole Foods Market, Inc. and Safeway, Inc.

Common-Sized Balance Sheet
December 31, 2007

2006 to 2007 2005 to 2006

Horizontal Analysis Increase (-Decrease) Increase (-Decrease)
Whole Foods Safeway Whole Foods Safeway
Assets
Current assets:
Cash and equivalents -100.0% 28.3% -99.3% -42.0%
Accounts Receivables 28.1% 25.3% 23.2% 31.5%
Merchandise inventories 41.4% 5.9% 16.5% -4.5%
Prepaid expenses and other current assets -18.2% 44.3% 174.2% 15.5%
Total current assets 7.1% 12.4% -7.2% -3.7%
Property:
Property and equipment, net of accumulated depreciation and amortization
34.8% 8.7% 17.2% 7.4%
Goodwill 489.3% 0.5% 0.9% -0.4%
Other assets 202.3% 13.7% 39.7% -2.5%
Total assets 57.3% 8.5% 8.1% 3.3%

Liabilities and Stockholder's Equity

Current Liabilities:
Accounts payable 85.2% 14.6% 17.9% 14.5%
Accrued payroll 18.5% 4.3% 20.5% -7.7%
Other current liabilities 60.7% 9.3% 24.9% 4.1%
Total current liabilities 53.9% 11.6% 21.8% 7.9%
Long-term debt 8453.2% -7.5% -33.5% -10.1%
Other long-term debt 94.0% 19.2% 30.5% 0.1%
Total liabilities 174.6% 3.2% 22.0% -2.1%

Stockholders' equity:
Common stock 7.4% 1.7% 31.2% 0.00%
Additional paid-in capital n/a 5.9% n/a 10.6%
Treasury stock at cost 100.0% 5.5% n/a 8.1%
Accumulated other comprehensive income 125.4% 159.7% 58.3% -45.1%
Retained earnings 17.4% 14.9% -28.2% 14.9%
Total stockholders' equity 3.9% 18.3% 2.8% 15.2%
Total liabilities and stockholders' equity 57.3% 8.5% 8.1% 3.3%
Appendix K - Common-Sized Balance Sheet Vertical Analysis

Whole Foods Market, Inc. and Safeway, Inc.

Common-Sized Balance Sheet
December 31, 2007

Vertical Analysis 2007 2006 2005

Whole Foods Safeway Whole Foods Safeway Whole Foods Safeway
Assets
Current assets:
Cash and equivalents 0.0% 1.6% 0.1% 0.1% 16.3% 16.3%
Accounts Receivables 3.3% 3.3% 4.0% 4.0% 3.5% 3.5%
Merchandise inventories 9.0% 15.9% 10.0% 10.0% 9.3% 9.3%
Prepaid expenses and other current assets
8.5% 2.0% 16.4% 16.4% 6.5% 6.5%
Total current assets 20.8% 22.7% 30.5% 30.5% 35.6% 35.6%
Property:
Property and equipment, net of accumulated
51.9%depreciation
60.2%and amortization
60.5% 60.5% 55.8% 55.8%
Goodwill 20.8% 13.6% 5.6% 5.6% 6.0% 6.0%
Other assets 6.5% 3.5% 3.4% 3.4% 2.6% 2.6%
Total assets 100% 100% 100% 100% 100% 100%

Liabilities and Stockholder's Equity

Current Liabilities:
Accounts payable 7.0% 16.0% 6.0% 15.14% 5.5% 13.7%
Accrued payroll 5.6% 2.9% 7.5% 2.99% 6.7% 3.3%
Other current liabilities 11.7% 10.2% 11.5% 10.15% 10.0% 10.1%
Total current liabilities 24.3% 29.1% 25.0% 28.27% 22.2% 27.1%
Long-term debt 22.9% 26.4% 0.4% 30.95% 0.7% 35.6%
Other long-term debt 7.3% 6.5% 5.9% 5.95% 4.9% 6.1%
Total liabilities 54.5% 62.0% 31.3% 65.18% 27.8% 68.8%

Stockholders' equity:
Common stock 38.4% 0.03% 56.2% 0.04% 46.3% 0.04%
Additional paid-in capital n/a 22.9% n/a 23.42% n/a 21.9%
Treasury stock at cost -6.2% -25.0% -4.9% -25.74% 0.0% -24.6%
Accumulated other comprehensive income
0.5% 1.4% 0.3% 0.58% 0.2% 1.1%
Retained earnings 12.8% 38.7% 17.1% 36.52% 25.7% 32.8%
Total stockholders' equity 45.5% 38.0% 68.7% 34.82% 72.2% 31.2%
Total liabilities and stockholders' equity 100% 100% 100% 100% 100% 100%
Appendix L - Common-Sized Income Statement, Horizontal Analysis

Whole Foods Market, Inc. and Safeway, Inc.

Common-Sized Income Statement
December 31, 2007

Horizontal Analysis 2006 to 2007 2005 to 2006

Whole Foods Safeway Whole Foods Safeway

Sales and other revenue 17.6% 5.2% 19.3% 4.6%

Cost of goods sold 17.8% 5.35% 19.5% 4.8%
Gross profit 17.2% 4.9% 18.8% 4.2%
Operating and administrative expense 21.9% 4.0% 15.6% 0.8%
Operating profit -6.8% 10.8% 38.9% 31.7%
Interest expense 13050.0% -1.8% -98.6% -1.6%
Other income, net -45.4% -43.8% 115.5% -1.6%
Income before income taxes -10.3% 13.2% 43.3% 46.1%
Income taxes -10.3% 39.5% 34.8% -228.3%

Net income 10.3% 2.0% 49.5% 55.2%

Appendix M - Common-Sized Income Statement Vertical Analysis

Whole Foods Market, Inc. and Safeway, Inc.

Common-Sized Income Statement
December 31, 2007

Vertical Analysis 2007 2006 2005

Whole Foods Safeway Whole Foods Safeway Whole Foods Safeway

Sales and other revenue 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of goods sold 65.2% 71.3% 65.1% 71.2% 64.9% 71.1%
Gross profit 34.8% 28.7% 34.9% 28.8% 35.1% 28.9%
Operating and administrative expense 30.3% 24.5% 29.3% 24.8% 30.2% 25.8%
Operating profit 4.5% 4.2% 5.7% 4.0% 4.9% 3.2%
Interest expense -0.1% 0.9% 0.0% 1.0% 0.0% 1.0%
Other income, net 0.2% 0.05% 0.4% 0.1% 0.2% 0.1%
Income before income taxes 4.6% 3.3% 6.1% 3.1% 5.0% 2.2%
Income taxes 1.8% 1.2% 2.4% 0.9% 2.1% 0.7%

Net income 2.8% 2.1% 3.7% 2.2% 2.9% 1.5%