<PAGE>

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q

(MARK ONE)

/X/      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For The Quarterly Period Ended October 28, 1999


/ /      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For The Transition Period from . . . . . . . . to . . . . . . . .


Commission file number 1-8978


                          LONGS DRUG STORES CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)



                Maryland                                    68-0048627
-----------------------------------------               ------------------
     (STATE OR OTHER JURISDICTION OF                     (I.R.S. EMPLOYER
     INCORPORATION OR ORGANIZATION)                     IDENTIFICATION NO.)


          141 North Civic Drive
        Walnut Creek, California                               94596
-----------------------------------------                -----------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                    (ZIP CODE)


Registrant's telephone number, including area code:   (925) 937-1170








Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                        Yes    X        No
                             -----          -----

There were 39,346,281 shares of common stock outstanding as of December 1, 1999.



<PAGE>

                         PART I - FINANCIAL INFORMATION


ITEM 1.            CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


STATEMENTS OF CONDENSED CONSOLIDATED INCOME (UNAUDITED)


<TABLE>
<CAPTION>
                                                        For the                                For the Three
                                                      Quarter Ended                            Quarters Ended

                                          OCTOBER 28,             October 29,           OCTOBER 28,           October 29,
                                             1999                    1998                  1999                  1998
                                          ----------              ----------            ----------            ----------
                                          --------------------------(Thousands Except Per Share)------------------------

<S>                                       <C>                   <C>                   <C>                   <C>
SALES                                      $   866,851           $   808,285           $ 2,620,799           $ 2,347,879


COSTS AND EXPENSES:

     Cost of merchandise sold                  634,914               594,529             1,927,598             1,721,053
     Operating and administrative              211,094               195,215               617,764               560,470
     Interest expense                            1,057                   573                 2,882                 1,131
     Interest income                              (590)                  (16)               (1,435)                 (599)
                                           -----------           -----------           -----------           -----------

INCOME BEFORE TAXES ON INCOME                   20,376                17,984                73,990                65,824

TAXES ON INCOME                                  8,000                 7,000                28,900                25,800
                                           -----------           -----------           -----------           -----------

NET INCOME                                 $    12,376           $    10,984           $    45,090           $    40,024
                                           ===========           ===========           ===========           ===========

NET INCOME PER COMMON SHARE:

     BASIC                                 $       .32           $       .28           $      1.16           $      1.04

     DILUTED                               $       .32           $       .28           $      1.15           $      1.03

     DIVIDENDS                             $       .14           $       .14           $       .42           $       .42

WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING:

     BASIC                                      39,021                38,546                38,955                38,515

     DILUTED                                    39,119                38,728                39,079                38,692

</TABLE>

See NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



                                     - 1 -
<PAGE>


CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
                                                    OCTOBER 28,         October 29,         January 28,
                                                       1999                1998                1999
                                                    ----------          ----------          ----------
                                                    -------------------(Thousands)--------------------
<S>                                               <C>                <C>                   <C>
ASSETS

CURRENT ASSETS:

      Cash and equivalents                          $   29,269          $   18,479          $   14,976
      Pharmacy and other receivables                    84,302              64,063              68,072
      Merchandise inventories                          429,764             386,796             382,248
      Deferred income taxes                             21,135              25,895              25,388
      Other                                              8,392               1,831               1,844
                                                    ----------          ----------          ----------

            Total current assets                       572,862             497,064             492,528
                                                    ----------          ----------          ----------

PROPERTY:

      Land                                              97,207              93,897              95,359
      Buildings and leasehold improvements             416,442             387,475             392,967
      Equipment and fixtures                           360,564             316,730             321,998
      Beverage licenses                                  7,570               7,511               7,569
                                                    ----------          ----------          ----------

            Total property-at cost                     881,783             805,613             817,893

      Less accumulated depreciation                    364,662             337,996             345,995
                                                    ----------          ----------          ----------

            Property-net                               517,121             467,617             471,898
                                                    ----------          ----------          ----------

GOODWILL                                               130,530              42,679              44,209
OTHER ASSETS                                            15,458              16,840              16,495
                                                    ----------          ----------          ----------

                  TOTAL                             $1,235,971          $1,024,200          $1,025,130
                                                    ==========          ==========          ==========


LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

      Accounts payable                             $   234,278          $   197,854           $   184,989
      Short-term borrowings                                  -                    -                10,000
      Employee compensation and benefits                76,340               77,259                72,353
      Taxes payable                                     32,132               31,687                43,700
      Current portion of long-term debt and
            guarantee of Profit Sharing Plan debt        3,027                3,351                 1,758
      Other                                             33,671               27,207                26,183
                                                   -----------          -----------           -----------

            Total current liabilities                  379,448              337,358               338,983
                                                   -----------          -----------           -----------

LONG-TERM DEBT                                         151,422               13,682                14,253

DEFERRED INCOME TAXES AND
OTHER LONG-TERM LIABILITIES                             32,699               64,880                33,055
                                                   -----------          -----------           -----------

STOCKHOLDERS' EQUITY:

      Common stock (39,346,000, 38,947,000,
            and 38,946,000 shares outstanding)          19,673               19,474                19,473
      Additional capital                               133,642              118,887               119,961
      Common stock contribution to Profit
            Sharing Plan                                     -                    -                 9,834
      Guarantee of Profit Sharing Plan debt                  -               (2,677)                 (911)
      Retained earnings                                519,087              472,596               490,482
                                                   -----------          -----------           -----------

            Total stockholders' equity                 672,402              608,280               638,839
                                                   -----------          -----------           -----------

                  TOTAL                            $ 1,235,971          $ 1,024,200           $ 1,025,130
                                                   ===========          ===========           ===========

</TABLE>

See NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.



                                     - 2 -
<PAGE>


STATEMENTS OF CONDENSED CONSOLIDATED CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                    For the Three Quarters Ended
                                                                                    OCTOBER 28,       October 29,
                                                                                      1999              1998
                                                                                    -----------------------------
                                                                                    ---------(Thousands)---------

<S>                                                                               <C>                 <C>
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:

      Net income                                                                    $  45,090           $  40,024
      Adjustments to reconcile net income to net cash
            provided by operating activities:
                Depreciation and amortization                                          40,238              37,642
                Deferred income taxes and other                                         3,896              (3,126)
                Restricted stock awards                                                 2,193               1,941
                Common stock contribution to benefit plan and
                      tax benefits credited to stockholders' equity                       838                 225
                Changes in assets and liabilities:
                      Pharmacy and other receivables                                  (16,230)               (833)
                      Merchandise inventories                                         (28,545)            (16,945)
                      Other current assets                                             (6,548)                276
                      Current liabilities                                              35,563              13,316
                                                                                    ---------           ---------

                            Net cash provided by operating activities               $  76,495           $  72,520
                                                                                    =========           =========

INVESTING ACTIVITIES:

      Payments for property additions, store acquisitions and other assets           (193,920)           (115,872)
      Receipts from property dispositions                                              17,836               1,563
                                                                                    ---------           ---------

            Net cash used in investing activities                                    (176,084)           (114,309)
                                                                                    ---------           ---------

FINANCING ACTIVITIES:

      Dividend payments                                                               (16,489)            (16,330)
      Proceeds from borrowings, net                                                   129,351              31,463
      Sale (repurchase) of common stock to (from) the Profit Sharing Plan               1,020              (3,417)
                                                                                    ---------           ---------

            Net cash provided by financing activities                                 113,882              11,716
                                                                                    ---------           ---------

INCREASE (DECREASE) IN CASH AND EQUIVALENTS                                            14,293             (30,073)

CASH AND EQUIVALENTS AT BEGINNING OF PERIOD                                            14,976              48,552

                                                                                    ---------           ---------

CASH AND EQUIVALENTS AT END OF PERIOD                                               $  29,269           $  18,479
                                                                                    =========           =========


SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING
AND FINANCING ACTIVITIES:

      Assumption of liabilities related to Pacific Northwest acquisition                    -           $  11,161

      Incurred current liabilities related to the 31-store acquisition              $  13,633                   -



</TABLE>

See NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.



                                     - 3 -
<PAGE>


STATEMENTS OF CONDENSED CONSOLIDATED STOCKHOLDERS' EQUITY
For the Year Ended January 28, 1999 and Three Quarters Ended October 28, 1999
<TABLE>
<CAPTION>
                                                                             COMMON STOCK
                                                                             CONTRIBUTIONS  GUARANTEE
                                                 COMMON STOCK                  TO PROFIT    OF PROFIT                  TOTAL
                                               ----------------  ADDITIONAL     SHARING      SHARING     RETAINED    STOCKHOLDERS'
                                               SHARES    AMOUNT    CAPITAL        PLAN      PLAN DEBT    EARNINGS       EQUITY
(Thousands)

<S>                                            <C>     <C>        <C>           <C>          <C>         <C>         <C>

BALANCE AT JANUARY 29, 1998                     38,629  $19,315    $110,466      $9,856       ($4,371)    $448,877    $584,143

Net income                                                                                                  63,358      63,358

Dividends  ($.56 per share)                                                                                (21,783)    (21,783)

Profit Sharing Plan:

   Issuance of stock for FY98 contributions        309      154       9,902      (9,856)                                   200

   Stock portion of FY99 contribution                                             9,834                                  9,834

   Purchase of stock from plan                    (105)     (52)     (3,365)                                            (3,417)

   Reduction of plan debt                                                                       3,460                    3,460

Restricted stock awards, net                       113       56       2,597                                              2,653

Tax benefits related to stock awards                                    361                                                361

Tax benefits related to employee stock plans                                                                    30          30


 BALANCE AT JANUARY 28, 1999                    38,946  $19,473    $119,961      $9,834         ($911)    $490,482    $638,839

UNAUDITED:

Net income                                                                                                  45,090      45,090

Dividends  ($.42 per share)                                                                                (16,489)    (16,489)

Profit Sharing Plan:

   Issuance of stock for FY99 contributions        268      135       9,699      (9,834)                                     0

   Sale of stock to plan                            30       15       1,005                                              1,020

   Reduction of plan debt                                                                         911                      911

Restricted stock awards, net                       102       50       2,143                                              2,193

Tax benefits related to stock awards                                    834                                                834

Tax benefits related to employee stock plans                                                                     4           4


 BALANCE AT OCTOBER 28, 1999                    39,346  $19,673    $133,642      $    0        $    0     $519,087    $672,402

</TABLE>

SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.


                                     - 4 -
<PAGE>
     NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.       The Condensed Consolidated Financial Statements include Longs Drug
         Stores Corporation (Company) and its wholly-owned subsidiary, Longs
         Drug Stores California, Inc. All inter-company accounts and
         transactions have been eliminated. The statements have been prepared on
         a basis consistent with the accounting policies described in the Annual
         Report of the Company previously filed with the Commission on Form 10-K
         for the year ended January 28, 1999, and reflect all adjustments and
         eliminations which are, in management's opinion, necessary for a fair
         statement of the results for the periods. The Condensed Consolidated
         Financial Statements for the periods ended October 28, 1999 and October
         29, 1998 are unaudited. The Condensed Consolidated Balance Sheet at
         January 28, 1999, and Condensed Consolidated Statement of Stockholders'
         Equity for the year then ended, presented herein, have been derived
         from the audited consolidated financial statements of the Company
         included in the Form 10-K for the year ended January 28, 1999.

2.       Certain reclassifications have been made to prior year financial
         statements in order to conform to current financial statement
         presentation.

3.       The financial statements have been prepared using the Last-In-First-Out
         (LIFO) method of accounting for inventories. The excess of specific
         cost inventory over LIFO valuation was $149.3 million at October 28,
         1999, $144.5 million at October 29, 1998, and $146.6 million at January
         28, 1999. A final valuation of inventory under the LIFO method can be
         made only after year-end based on ending inventory levels and inflation
         rates for the year. Interim LIFO calculations are based on management's
         estimates of year-end inventory levels and inflation rates for the
         year.

4.       During third quarter fiscal 2000, the Company replaced its $65
         million unsecured revolving line of credit with a $130 million
         unsecured line of credit at LIBOR-based rates which expires on
         October 14, 2004. Borrowings do not require repayment for 5 years. As
         of the end of third quarter fiscal 2000, there was $95 million
         outstanding under the line of credit with a weighted average interest
         rate of 6.35%. During fourth quarter fiscal 2000, the Company
         completed a long-term private placement financing of $70 million
         which was used to reduce the borrowings on the line of credit.
         These amounts are classified as long-term debt based on estimated
         repayments extending more than one year.

         The line of credit contains quarterly financial covenants which
         require maximum debt to capitalization and minimum fixed charge
         coverage ratios. The Company has complied with restrictions and
         limitations included in the provisions of the line of credit.

5.       During the first quarter of fiscal 2000, the Company completed a
         private placement financing in which $45 million in senior notes were
         issued. The debt consisted of $15 million of 5.85% fully amortized
         notes due through 2006 and $30 million of 6.19% fully amortized notes
         due through 2014. Interest is paid every six months. The note
         agreements include various financial and non-financial covenants,
         including limitations on debt level. The Company has complied with
         restrictions and limitations included in the note agreements.

6.       Subsequent to the end of the third quarter, the Company completed a
         private placement financing in which $70 million in senior notes were
         issued. The debt consists of $33 million of 7.71% interest only notes
         due at maturity in November 2004 and $37 million of 7.85% interest only
         notes due at maturity in November 2006. Interest will be paid every six
         months. The proceeds from these notes will be used to repay short-term
         borrowings and for general corporate purposes. The note agreements
         include various financial covenants, including maximum debt to
         capitalization and adjusted capitalization rates including rents. The
         Company has complied with restrictions and limitations included in the
         note agreements.

7.       Subsequent to the end of the third quarter of fiscal 2000, the Board of
         Directors authorized a plan to repurchase up to two million shares of
         the Company's outstanding common stock. This authorization replaces a
         previous authorization that expired November 1999. There were no
         repurchases of common stock from the open market during fiscal year
         1999 or through third quarter fiscal year 2000.

8.       As of the end of the third quarter fiscal 2000, the Company acquired
         the first 27 Rite Aid stores, of which 19 were opened for business, 7
         were in the conversion process and 1 was closed as


                                     - 5 -
<PAGE>
         planned. Results of operations for the acquired stores were not
         significant and are included with those of the company. When
         completed, the total purchase price of the acquisition will be
         approximately $149 million. The goodwill of $99 million associated
         with this transaction is being amortized over 25 years using the
         straight-line method.

9.       As previously reported, the Company is a defendant in a purported class
         action lawsuit alleging that the Company improperly characterized
         certain employees as managers to avoid the obligation of paying them
         the overtime premium required for non-exempt employees. The Company has
         engaged in discussions with the counsel for the purported class
         representatives about the case and the possible terms on which it could
         be resolved. It is not clear, as a result of these discussions, that
         the case can be resolved short of litigating the substantive and
         procedural matters of the case, which process could extend over many
         months and years. Nonetheless, if the case were to be resolved short of
         completing such litigation, this resolution could occur at virtually
         any time and the Company could incur a charge in the quarter in which
         the resolution occurs. In addition, the Company may be required to
         utilize cash to fund any such resolution. The Company is not able at
         this time to predict the outcome of completed litigation of this matter
         and does intend to vigorously defend itself in this action.




                                     - 6 -
<PAGE>


ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

31-STORE ACQUISITION

In September 1999, the Company reached an agreement with the Rite Aid
Corporation to purchase up to 38 stores located in California. Thirty-two stores
were acquired by the first week of November 1999 and 1 closed as planned,
resulting in a net acquisition of 31 stores. The acquisition of the remaining 6
stores is pending Rite Aid Corporation's ability to resolve outstanding lease
assignments.

As of the end of third quarter fiscal 2000, 19 stores were fully opened for
business and 7 stores were in the conversion process. The acquisition of the
remaining 5 stores took place in the first week of the fourth quarter, netting
the total acquisition to 31 new stores. During the three-day conversion process,
stores were temporarily closed with the exception of the pharmacies to allow for
the installation of the Company's point-of-sale and pharmacy technology systems,
new checkstands, and cleaning and painting, along with remerchandising to the
Company's standards. Up to 3 stores per day opened beginning on October 17,
1999, and all stores were fully opened by November 2, 1999.

The total purchase price of the Rite Aid acquisition will be approximately $149
million. The goodwill of $99 million associated with this transaction is being
amortized over 25 years using the straight-line method.

SALES

Third quarter sales increased 7.3% to $866.9 million and year-to-date sales
increased 11.6% to $2.6 billion. Front-end and total sales growth were slightly
below recent trends due to two factors-the comparison to very strong 60th
anniversary promotional activity in the same quarter of the prior year and fewer
net new stores when compared to prior periods. Excluding the former Rite Aid
stores, the number of new stores increased for the year by 8, with 22 new stores
and 14 store closures. The contribution to sales from the "31-store" acquisition
was minimal, as only 19 of these stores were operating as a Longs store by
quarter end and were acquired in the last two weeks of the third quarter.

Pharmacy sales increased 14.5% for the quarter and 18.4% year-to-date, led by
increases in the average retail price of a prescription and increases in script
volume. Pharmacy represented 40.2% of total sales in the third quarter and 39.8%
for the year, up just over two percentage points from the prior year quarter and
fiscal year. The percentage of pharmacy sales sold through a third party plan
increased to 85.9% for the quarter and 84.6% for the year, compared to 84.1% of
sales for both the prior year quarter and fiscal year. Same store sales
increases for pharmacy were 13.7% in the third quarter and 15.2% year-to-date.

Total same store sales increased 6.0% for the third quarter and 7.9%
year-to-date, reflecting strong same store increases in pharmacy and modest
increases in front-end same store sales. Front-end sales increased 2.9% for the
quarter and 7.5% year-to-date. Sales growth for the quarter was off slightly
from trend due to cycling significant promotional sales relating to Longs' 60th
Anniversary celebration in the third quarter last year. Also, sales from the
Pacific Northwest stores acquired in July 1998 represented significant
incremental sales growth until the acquisition `cycled' with the beginning of
the third quarter fiscal 2000. Offsetting this impact was strong sales growth
for the third quarter in core categories of cosmetics, over-the-counter
medications and photo processing. Same store sales increases in front-end sales
were 1.4% in the third quarter and 3.5% year-to-date.

GROSS MARGINS

Gross margin as a percent of sales (including LIFO) increased to 26.76% from
26.45% in the prior year quarter. Strong front-end margins continue to offset
declining pharmacy percentage margins. Increases in front-end margin in the
third quarter were a result of increasing sales in higher margin core categories
and heavy 60th anniversary promotional sales with lower margins in the prior
year. Also, margin increases



                                     - 7 -


<PAGE>


in the Pacific Northwest stores that were acquired in July 1998 were the
result of increases in sales of higher margin categories introduced to these
stores in the current year. Pharmacy margins as a percent of sales continued
to decline due to the average retail price of a prescription growing at a
greater rate than the gross margin dollars on a per script basis. Also,
increases in sales reimbursed through lower margin third party plans now
represent 85.9% of total pharmacy sales versus 84.1% in the same quarter
prior year. The Company uses the Last-In First-Out (LIFO) method of inventory
valuation. The LIFO provision was $1.8 million for the third quarter compared
to $200 thousand in the prior year. The year-to-date LIFO provision was $2.7
million compared to $5.4 million for the same period last year.

OPERATING AND ADMINISTRATIVE EXPENSES

Operating expenses (excluding net interest) were 24.35% of sales for the third
quarter compared to 24.15% of sales in the same quarter prior year. Year-to-date
operating expenses were 23.57% of sales versus 23.87% of sales prior year. This
year-to-date decrease of 30 basis points is in line with the company goal to
decrease operating expenses 20 basis points year over year.

Third quarter operating expenses as a percentage of sales increased 19 basis
points. Expenses as a percentage of sales would have been more in line with the
prior quarters, however, were offset by the conversion costs associated with the
31-store acquisition that occurred late in the third and early fourth quarters.
With the bulk of this work being done very late in the quarter and only a
minimal sales contribution from these stores, the incremental expenses
negatively impacted expenses as a percentage of sales for the third quarter and
year-to-date.

Included in operating and administrative expenses are costs for the Year 2000
(Y2K) remediation effort. This effort is winding up with $443 thousand expensed
in the third quarter compared to $1.3 million in the same quarter prior year.
Y2K expenses planned for the remainder of the fiscal year will be approximately
$180 thousand, bringing the total to date Y2K project expenditures to $9.5
million.

INCOME BEFORE TAXES/NET INCOME

The Company's effective tax rate for the third quarter was 39.3% compared to
38.9% in the same quarter prior year. The increase in the effective tax rate
reflected loss of the tax deduction for the dividends used to pay down ESOP
debt.

Net income grew 12.7% to $12.4 million for the third quarter. Diluted earnings
per share increased 11.5% to $0.32 per share compared to $0.28 in the same
quarter prior year. Net income as a percent of sales remained consistent with
the prior year quarter at 1.4%.

Year-to-date net income increased 12.7% to $45.1 million. Year-to-date diluted
earnings per share increased 11.5% to $1.15 per share compared to $1.03 in the
same quarter prior year.

LIQUIDITY AND CAPITAL RESOURCES

CASH POSITION

Cash provided by operating activities for the three quarters increased $4.0
million compared to prior year due to improvements in operating results.

Cash used in investing activities for the three quarters increased $61.8 million
compared to the prior year due to completion of several capital projects. The
first 27 stores of the 31-store acquisition from Rite Aid was completed during
the quarter. Investment in new stores is planned next year, including costs for
6 stores opening in fourth quarter fiscal 2000 and 24 stores opening in fiscal
2001. The installation of mailing centers in 70 stores compared with 12 in the
prior year brings the total number of mailing centers to 82 with 70 more planned
for next year. One-hour mini-lab photo processing capability in stores and the
fixture remodels to facilitate the remerchandising of 20 Pacific Northwest
stores were other capital



                                     - 8 -


<PAGE>


projects for third quarter.

The Company opened 27 stores during the third quarter, including 19 former Rite
Aid stores and 2 replacement stores. This increased the number of stores in
operation from 375 to 402 since third quarter last year. In addition to
completing the acquisition of the remaining Rite Aid stores, current plans are
to open 6 more stores in the fourth quarter and the Company expects to end the
year with 414 stores.

Capital expenditures for fiscal year 2000 and other projects are expected to
total $240 million, including the 31-store acquisition, continued investment in
technology and 19 new stores. Estimated capital expenditures for next fiscal
year will be approximately $100 million, including new stores, technology
investment and other projects.

Expenditures for capital projects, dividends, and stock repurchases are expected
to continue to be funded from operations, cash reserves, and additional
short-term borrowings as deemed necessary.

The company completed a $130 million five-year revolving syndicated credit
agreement that was used for the 31-store acquisition and other short-term cash
needs. It replaced a $65 million revolving facility. Bank of America, as agent,
is in the process of syndicating this revolving line and will involve several
other banks with the same terms and conditions. At quarter end, there was $95.0
million outstanding on the $130.0 million five-year unsecured revolving line of
credit. Draw-downs on this line incur interest at a LIBOR-based rate.

In November 1999, a private placement of $70 million Senior Notes, under Longs'
master note purchase agreement, was completed. The proceeds were used to reduce
outstanding amounts under a short-term bridge line of credit. These notes have
terms from three to five years and interest rates from 7.10% to 7.85%.

YEAR 2000 COMPLIANCE

In 1996 the Company established a Year 2000 Project Team, headed by the
Company's Chief Information Officer, to coordinate the Company's year 2000
efforts. The project team is staffed by the Company's Management Information
Services (MIS) personnel and outside consultants on an as-needed basis. The
Chief Information Officer reports regularly on the status of year 2000 to the
Company's senior officers and to the Company's board of directors.

An assessment of the Company's MIS and non-MIS systems was completed to
determine which mission-critical systems are at risk, and a plan was developed
for replacing and remediating both operating systems and business applications
to achieve year 2000 compliance. The implementation of the plan is complete and
the applications and operating systems have been modified or replaced. All
activities with respect to assessment, clean up, remediation, testing and
implementation are 100% complete for MIS and non-MIS systems. All critical and
non-critical systems and applications are year 2000 compliant.

Vendor certification was completed in October with key vendors with direct
connection switches into Point of Sale and Pharmacy, as well as all financial
settlement vendors. Although the Company is assessing the year 2000 status of
outside parties, there is no assurance that outside parties will attain year
2000 compliance on a timely basis; if they do not, year 2000 problems may have a
material impact on the Company's operations.

Management believes that should the Company or any third party with whom the
Company has a business relationship experience a year 2000 related systems
failure, the most likely worst-case scenario would be a possible failure of
third party systems over which the company has no control, such as (but not
limited to) power and telecommunications, supply chain interruption, or
electronic commerce. Such an event could result in a substantial interruption of
business and may have a material impact on the Company's results of operations.

Contingency planning is complete and business disruption and recovery plans are
in place to mitigate risk



                                     - 9 -


<PAGE>


and to ensure that the Company's core business operations are able to continue
in the event of a year 2000 related systems failure.

At the request of the board of directors, an external consulting group conducts
independent reviews of the Company's year 2000 efforts. Three year 2000 project
assessments were conducted-the first in September 1998, the second in March 1999
and the third in July 1999. The results and recommendations were reviewed and
addressed.

The Company expensed $443,000 for year 2000 efforts in the third quarter and
$2.5 million year-to-date. The Company estimates it will incur an additional
$180,000, bringing the total year 2000 project cost to $9.5 million, which
includes the estimated costs of all modifications, testing and consulting fees.

The foregoing discussion of year 2000 compliance contains forward looking
statements about the Company's plans, expectations, costs, and consequences
regarding year 2000 matters. There can be no assurance that the Company's
expectations can be met and that the Company will not be adversely affected in a
way unidentified in the preceding discussion. Factors that could cause the
Company's results to differ from expectations include (but not limited to)
unforeseen problems, greater than anticipated costs, and unexpected difficulties
with outside parties.

FORWARD LOOKING INFORMATION

Certain information in this Form 10-Q, as well as in other public filings, press
releases and oral statements made by our representatives, is forward-looking
information based on current expectations and plans that involve risks and
uncertainties. Forward-looking information includes statements concerning
pharmacy sales trends, prescriptions margins, number of store openings, the
level of capital expenditures and the company's success in addressing year 2000
issues; as well as those that include or are preceded by the words "expects,"
"estimates," "believes" or similar language. For such statements, we claim the
protection of the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. The following factors, in addition to those discussed
elsewhere in this Form 10-Q and in our Annual Reports, could cause results to
differ materially from management expectations as projected in such
forward-looking statements: changes in economic conditions generally or in the
markets served by the company; consumer preferences and spending patterns;
competition from other drugstore chains, supermarkets, other retailers and mail
order companies; changes in state or federal legislation or regulations; the
efforts of third party payors to reduce prescription drug costs; the
availability and cost of real estate and construction; accounting policies and
practices; the company's ability to hire and retain pharmacists and other store
and management personnel; the company's relationships with its suppliers; the
ability of the company, its vendors and others to manage year 2000 issues; the
company's ability to successfully implement new computer systems and technology;
and adverse determinations with respect to litigation or other claims. The
company assumes no obligation to update its forward-looking statements to
reflect subsequent events or circumstances.



                                     - 10 -


<PAGE>


                           PART II - OTHER INFORMATION


ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

            (a)   Reports on Form 8-K

                  There have been no reports on Form 8-K filed during the
                  quarter ended October 28, 1999.



                                     - 11 -


<PAGE>


                              SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.



                                       LONGS DRUG STORES CORPORATION
                                  ----------------------------------------
                                          (REGISTRANT)

<TABLE>

<S>    <C>                        <C>
Date     December 13, 1999           /s/   G. L. White
       ---------------------      ----------------------------------------
                                     G. L. White
                                     Vice President, Controller



                                     /s/   R. A. Plomgren
                                  ----------------------------------------
                                     R. A. Plomgren
                                     Senior Vice President, Development
                                     and Chief Financial Officer and Director
</TABLE>