## UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

|(Mark One)                                                    |                                                                                         
|------------------------------------------------------------- | ----------------------------------------------------------------------------------------
|ý                                                             | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|For the fiscal quarter ended October 29, 2005                
|or                                                           
|o                                                             | 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 1-05287

PATHMARK STORES, INC.(Exact name of registrant as specified in its charter)

Delaware(State or other jurisdiction of
incorporation or organization)

22-2879612(I.R.S. Employer
Identification No.)200 Milik Street
Carteret, New Jersey(Address of principal executive office)

07008(Zip Code)(732) 499-3000(Registrants telephone number, including area code)


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 (the Exchange Act) 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 the filing requirements for at least the past 90 days.

Yes ý                        No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes ý                        No o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o                        No ý

As of November 25, 2005, 51,572,592 shares of Common Stock were outstanding.





### Part I. Financial Information

#### Item 1. Financial Statements.

#### Pathmark Stores, Inc.
Consolidated Statements of Operations (Unaudited)
(in millions, except per share data)

|                                                                  | 13 Weeks Ended |  | 39 Weeks Ended
|----------------------------------------------------------------- | -------------- |  | --------------
|
|Sales                                                             |                |  | $             
|Cost of goods sold                                                |                |  |               
|                                                                  |                |  |               
|Gross profit                                                      |                |  |               
|Selling, general and administrative expenses                      |                |  |               
|Depreciation and amortization                                     |                |  |               
|                                                                  |                |  |               
|Operating earnings (loss)                                         |                |  |               
|Interest expense, net                                             |                |  |               
|                                                                  |                |  |               
|Loss before income taxes                                          |                |  |               
|Income tax benefit                                                |                |  |               
|                                                                  |                |  |               
|Net loss                                                          |                |  | $             
|                                                                  |                |  |               
|Weighted average number of shares outstanding  basic and diluted |                |  |               
|                                                                  |                |  |               
|Net loss per share  basic and diluted                            |                |  | $             
|                                                                  |                |  |               

See notes to consolidated financial statements.

2

#### Pathmark Stores, Inc.
Consolidated Balance Sheets (Unaudited)
(in millions, except share and per share amounts)

|                                                                                                                                 | October 29,2005 |  | January 29,2005
|-------------------------------------------------------------------------------------------------------------------------------- | --------------- |  | ---------------
|ASSETS                                                                                                                           |                 |  |                
|Current assets                                                                                                                   |                 | 
|Cash and cash equivalents                                                                                                        |                 |  | $              
|Marketable securities                                                                                                            |                 |  |                
|Accounts receivable, net                                                                                                         |                 |  |                
|Merchandise inventories                                                                                                          |                 |  |                
|Due from suppliers                                                                                                               |                 |  |                
|Other current assets                                                                                                             |                 |  |                
|                                                                                                                                 |                 |  |                
|Total current assets                                                                                                             |                 |  |                
|Property and equipment, net                                                                                                      |                 |  |                
|Goodwill                                                                                                                         |                 |  |                
|Other noncurrent assets                                                                                                          |                 |  |                
|                                                                                                                                 |                 |  |                
|Total assets                                                                                                                     |                 |  | $              
|                                                                                                                                 |                 |  |                
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                             |                 | 
|Current liabilities                                                                                                              |                 | 
|Accounts payable                                                                                                                 |                 |  | $              
|Current maturities of long-term debt                                                                                             |                 |  |                
|Current portion of lease obligations                                                                                             |                 |  |                
|Accrued expenses and other current liabilities                                                                                   |                 |  |                
|                                                                                                                                 |                 |  |                
|Total current liabilities                                                                                                        |                 |  |                
|Long-term debt                                                                                                                   |                 |  |                
|Long-term lease obligations                                                                                                      |                 |  |                
|Deferred income taxes                                                                                                            |                 |  |                
|Other noncurrent liabilities                                                                                                     |                 |  |                
|                                                                                                                                 |                 |  |                
|Total liabilities                                                                                                                |                 |  |                
|                                                                                                                                 |                 |  |                
|Stockholders' equity                                                                                                             |                 | 
|Preferred stock                                                                                                                  |                 |  |                
|Authorized: 5,000,000 shares; no shares issued                                                                                   |                 | 
|Common stock, par value $0.01 per share                                                                                          |                 |  |                
|Authorized: 100,000,000 shares; issued: 51,466,893 shares at
         October 29, 2005 and 30,099,510 shares at January 29, 2005 |                 | 
|Common stock warrants                                                                                                            |                 |  |                
|Paid-in capital                                                                                                                  |                 |  |                
|Accumulated deficit                                                                                                              |                 |  |                
|Accumulated other comprehensive loss                                                                                             |                 |  |                
|Unearned restricted stock compensation                                                                                           |                 |  |                
|Treasury stock, at cost: 28,318 shares at January 29, 2005                                                                       |                 |  |                
|                                                                                                                                 |                 |  |                
|Total stockholders' equity                                                                                                       |                 |  |                
|                                                                                                                                 |                 |  |                
|Total liabilities and stockholders' equity                                                                                       |                 |  | $              
|                                                                                                                                 |                 |  |                

See notes to consolidated financial statements.

3

#### Pathmark Stores, Inc.
Consolidated Statements of Cash Flows (Unaudited)
(in millions)

|                                                                                  | 39 Weeks Ended
|--------------------------------------------------------------------------------- | --------------
|
|Operating Activities                                                              |               
|Net loss                                                                          |               
|Adjustments to reconcile the net loss to cash provided by operating activities:   |               
|Depreciation and amortization                                                     |               
|Amortization and write off of deferred financing costs                            |               
|Amortization of unearned restricted stock compensation                            |               
|Deferred income tax benefit                                                       |               
|Tax benefit related to stock-based compensation                                   |               
|Loss on mortgage debt extinguishment                                              |               
|Gain on sale of real estate                                                       |               
|Cash provided by (used for) operating assets and liabilities:                     |               
|Accounts receivable, net                                                          |               
|Merchandise inventories                                                           |               
|Due from suppliers                                                                |               
|Other current assets                                                              |               
|Noncurrent assets                                                                 |               
|Accounts payable                                                                  |               
|Accrued expenses and other current liabilities                                    |               
|Noncurrent liabilities                                                            |               
|                                                                                  |               
|Cash provided by operating activities                                             |               
|                                                                                  |               
|Investing Activities                                                              |               
|Cash capital expenditures, including technology investments                       |               
|Purchases of marketable securities                                                |               
|Proceeds from the sale of real estate                                             |               
|Acquisition of Community Supermarket Corporation                                  |               
|                                                                                  |               
|Cash used for investing activities                                                |               
|                                                                                  |               
|Financing Activities                                                              |               
|Proceeds from issuance of common stock and common stock warrants, net of expenses |               
|Borrowings under (repayments of) the working capital facility, net                |               
|Mortgage debt repayments and extinguishment                                       |               
|Repayments of capital lease obligations                                           |               
|Proceeds from exercise of stock options                                           |               
|Borrowings (repayments) of other debt, net                                        |               
|Deferred financing costs                                                          |               
|Borrowings under the term loan, net                                               |               
|                                                                                  |               
|Cash provided by financing activities                                             |               
|                                                                                  |               
|Increase in cash and cash equivalents                                             |               
|Cash and cash equivalents at beginning of period                                  |               
|                                                                                  |               
|Cash and cash equivalents at end of period                                        |               
|                                                                                  |               
|Supplemental Disclosures of Cash Flow Information                                 |               
|Interest paid                                                                     |               
|                                                                                  |               
|Income taxes paid                                                                 |               
|                                                                                  |               
|Non-Cash Investing Activity                                                       |               
|Capital lease obligations incurred                                                |               
|                                                                                  |               

See notes to consolidated financial statements.

4

#### Pathmark Stores, Inc.
Consolidated Statements of Stockholders Equity (Unaudited)
(in millions)

|                                | PreferredStock |  | CommonStock |   | CommonStock Warrants |   | Paid-inCapital |  | AccumulatedDeficit |      | AccumulatedOtherComprehensiveLoss |   | UnearnedRestrictedStockCompensation |  | TreasuryStock |        | TotalStockholdersEquity
|------------------------------- | -------------- |  | ----------- | - | -------------------- | - | -------------- |  | ------------------ | ---- | --------------------------------- | - | ----------------------------------- |  | ------------- | ------ | ------------------------
|Balance, January 29, 2005       |                |  | $           |  |                      | $ | 0.3            |  | $                  | 60.0 |                                   | $ | 607.9                               |  | $             | (598.3 | )                       
|Net loss and comprehensive loss |                |  |             |  |                      |   |               |  |                    |     |                                   |   |                                    |  |               | (25.5  | )                       
|Issuance of common stock        |                | 
|and common stock                |                | 
|warrants, net of expenses       |                |  |             |  |                      |   | 0.2            |  |                    | 9.7  |                                   |   | 127.6                               |  |               |       |                         
|Exercise of stock options       |                |  |             |  |                      |   |               |  |                    |     |                                   |   | 3.8                                 |  |               |       |                         
|Tax benefit related to          |                | 
|stock-based    compensation     |                |  |             |  |                      |   |               |  |                    |     |                                   |   | 2.0                                 |  |               |       |                         
|Issuance of restricted          |                | 
|common stock and units          |                |  |             |  |                      |   |               |  |                    |     |                                   |   | 7.0                                 |  |               |       |                         
|Amortization of unearned        |                | 
|restricted stock                |                | 
|compensation                    |                |  |             |  |                      |   |               |  |                    |     |                                   |   |                                    |  |               |       |                         
|                                |                |  |             |   |                      |   |                |  |                    |      |                                   |   |                                     |  |               |        |                         
|Balance, October 29, 2005       |                |  | $           |  |                      | $ | 0.5            |  | $                  | 69.7 |                                   | $ | 748.3                               |  | $             | (623.8 | )                       
|                                |                |  |             |   |                      |   |                |  |                    |      |                                   |   |                                     |  |               |        |                         

See notes to consolidated financial statements.

5

#### Pathmark Stores, Inc.
Notes to Consolidated Financial Statements (Unaudited)

##### Note 1. Significant Accounting Policies

Business.
Pathmark  Stores,  Inc. (the "Company" or "Pathmark")  operated 142  supermarkets  as of October 29,
2005, primarily in the New York-New Jersey and Philadelphia metropolitan areas.

Basis of
Presentation. The unaudited consolidated financial statements included herein have
been prepared by the Company pursuant to the rules and regulations of the Securities and
Exchange Commission. In the opinion of management, the consolidated
financial statements included herein reflect all adjustments which are of a normal and
recurring nature and are necessary to present fairly the results of operations and
financial position of the Company. This report should be read in conjunction with the
audited financial statements and notes thereto included in the Companys Annual
Report on Form 10-K for the year ended January 29, 2005.

Principles of
Consolidation. The consolidated financial statements include the accounts of the
Company and its subsidiaries, all of which are 100% owned. All significant intercompany transactions
have been eliminated in consolidation.

##### Note 2. Yucaipa Investment

On June 9, 2005, the
Company, pursuant to a securities purchase agreement dated as of March 23, 2005 (the
Purchase Agreement), among the Company, the Yucaipa Companies LLC
(Yucaipa) and certain investment funds affiliated with Yucaipa (the
Investors), issued to the Investors: (i) 20,000,000 shares (the
Shares) of the common stock, par value $0.01 per share, of Pathmark (the
Common Stock), (ii) Series A warrants (the Series A Warrants) to
purchase 10,060,000 shares of Common Stock at an exercise price of $8.50 per share, and
(iii) Series B warrants (the Series B Warrants) to purchase 15,046,350 shares
of Common Stock at an exercise price of $15.00 per share (the Shares, the Series A
Warrants and the Series B Warrants are collectively referred to as the Purchased
Securities) for an aggregate purchase price of $150 million in cash. When issued,
the shares represented 39.8% of the outstanding Common Stock. Upon issuance, the Series A
Warrants and the Series B Warrants will represent approximately 9.9% and 10.0%,
respectively, of the outstanding Common Stock.

The Company received $137.5
million for the Purchased Securities, net of $12.5 million of costs directly attributable
to the offering, including a closing fee and transaction expenses of $6.2 million paid to
Yucaipa. At closing, the Company used $40.3 million of the net proceeds to pay down its
working capital facility borrowings and subsequently used $23.3 million to defease its
mortgage borrowings, including a redemption premium of $2.3 million. The remaining net
proceeds were invested in short-term investments and are being used for general
corporate purposes, including capital expenditures.

##### Note 3. Related-Party Transaction

Concurrently with the
execution of the Purchase Agreement, the Company and Yucaipa entered into a Management
Services Agreement (the MSA). The MSA became effective on June 9, 2005 upon
the closing of the Purchase Agreement. Pursuant to the MSA, Yucaipa will provide certain
business and financial advice and management services to the Company in connection with
the operation of its business. For such services, the Company will pay Yucaipa an annual
fee of $3.0 million, payable monthly, and reimburse Yucaipa for expenses of up to $0.5
million per annum. Michael Duckworth and Ira Tochner, two directors of the Company,
are partners at Yucaipa.

6

#### Pathmark Stores, Inc.
Notes to Consolidated Financial Statements (Unaudited)  (Continued)

##### Note 4. Stock-Based Compensation

Pro forma Stock-Based
Compensation.The Company accounts for stock-based compensation plans using the
intrinsic value recognition and measurement principles of Accounting Principles Board (APB) Opinion No. 25. Since the
exercise price of all stock options granted under the Companys stock-based
compensation plans was equal to the market price of the underlying common stock on the
grant date, no stock-based compensation expense is recognized in the Companys
operating results.

The following pro forma
disclosure illustrates the effect on the net loss and net loss per share as if the Company
had applied the fair value recognition provisions of the Financial Accounting Standards
Board (the FASB) Statement of Financial Accounting Standards
(SFAS) No. 123, as amended by SFAS No. 148 (in millions, except per share
amounts):

|                                                                                | 13 Weeks Ended |  | 39 Weeks Ended
|------------------------------------------------------------------------------- | -------------- |  | --------------
|
|Net loss, as reported                                                           |                |  | $             
|Add: stock-based employee compensation expense included                         |                | 
|in reported net loss, net of related tax effect                                 |                |  |               
|Less: pro forma stock-based compensation expense, net of     related tax effect |                |  |               
|                                                                                |                |  |               
|Net loss, pro forma                                                             |                |  | $             
|                                                                                |                |  |               
|Weighted average number of shares outstanding  basic and diluted               |                |  |               
|                                                                                |                |  |               
|Net loss per share  basic and diluted, as reported                             |                |  | $             
|Add: stock-based employee compensation expense included                         |                | 
|in reported net loss, net of related tax effect                                 |                |  |               
|Less: pro forma stock-based compensation expense, net of                        |                | 
|related tax effect                                                              |                |  |               
|                                                                                |                |  |               
|Net loss per share  basic and diluted, pro forma                               |                |  | $             
|                                                                                |                |  |               

For purposes of the
pro forma disclosures, the estimated fair value of the options issued is assumed to be
expensed over the options vesting period. Due to the Yucaipa Investment (see Note
2), the Investors own 39.8% of the outstanding Common Stock. Under the terms of both the
2000 Employee Equity Plan (the EEP) and the 2000 Non-Employee Directors
Equity Plan (the DEP), the purchase by the Investors of the Shares constituted
a change in control (Change in Control), whereby all unvested awards in the
form of stock options became vested immediately prior to the Change in Control. The net
pro forma stock-based compensation expense of $3.8 million for the 39 weeks ended October
29, 2005 includes a net pro forma charge of $2.5 million due to the Change in Control on
June 9, 2005. In December 2004, the FASB
issued SFAS No. 123 (revised 2004), Share-Based Payment, which
replaced SFAS No. 123, Accounting for Stock-Based Compensation, and
superseded APB Opinion No. 25, Accounting for Stock Issued to
Employees. This statement requires compensation costs relating to
share-based payment transactions, including grants of employee stock options, be
recognized in the financial statements based on their fair values. The pro forma
disclosure previously permitted under SFAS No. 123 will no longer be an
acceptable alternative to recognition of expenses in the financial statements.
The effective date of this statement was deferred until the beginning of the
annual reporting period that begins after June 15, 2005, i.e., for the
Companys first quarterly reporting period ending April 29, 2006. As a
result, the Company will adopt this statement in fiscal 2006. The Company
currently measures compensation costs related to share-based payments under APB Opinion
No. 25, as allowed by SFAS No. 123, and provides the required disclosure in the
notes to financial statements. This statement provides for two transition
alternatives: modified-prospective transition or modified-retrospective
transition. The Company is currently evaluating the transition alternatives and
the impact on the Companys financial statements.

7

#### Pathmark Stores, Inc.
Notes to Consolidated Financial Statements (Unaudited)  (Continued)

##### Note 4. Stock-Based Compensation  (Continued)

Stock-Based Grants.On June 9, 2005, the Company granted 229,000 nonqualified stock options and 171,850
restricted stock units payable in shares of Common Stock to various officers and other
employees pursuant to the EEP. The stock options have an exercise price of $8.60 per share
(the fair value of the shares on the date of grant), have a term of ten years and vest pro
rata over a four-year period commencing on the first anniversary of the grant date. The
fair value of the restricted stock units on the date of grant approximated $1.5 million,
which was charged to stockholders equity as unearned restricted stock compensation
and is being amortized as compensation expense over the four-year vesting period. Neither
the stock options nor the restricted stock units awarded on June 9, 2005 were subject to
immediate vesting in connection with the Change in Control. Pursuant to the separation
agreement (see Notes 10 and 14) with the Companys former Chief Executive Officer, her 8,000
restricted stock units and 40,000 stock options, which were granted on June 9, 2005, vested on September 3, 2005.

On August 23, 2005, John T.
Standley and the Company entered into an employment agreement (the Employment
Agreement) pursuant to which Mr. Standley will serve as Chief Executive Officer of
the Company for an initial period of three years, beginning on August 29, 2005 (the
Effective Date), and will renew automatically for successive one-year periods
unless either party gives notice of non-renewal at least 180 days before the end of the
then term. As required under the Employment Agreement, the Company granted Mr. Standley
(1) on August 23, 2005, an option to purchase an aggregate of 1.5 million shares of the
Companys common stock at an exercise price of $10.39, the fair value of the shares
on the date of grant, and (2) on the Effective Date, an award of restricted stock
consisting of 500,000 shares of the Companys common stock. The option will vest and
become exercisable in three annual installments beginning on the first anniversary of the
Effective Date. The fair value of the restricted stock on date of grant approximated $5.5
million, which was charged to stockholders equity as unearned restricted stock
compensation and is being amortized as compensation expense ratably over the three-year
vesting period. The restricted stock will vest in 12 quarterly installments beginning
three months after the Effective Date.

##### Note 5. Cash and Cash Equivalents

Cash and cash equivalents
are comprised of the following (in millions):

|                          | October 29,2005 |  | January 29,2005
|------------------------- | --------------- |  | ---------------
|Cash                      |                 |  | $              
|Cash equivalents          |                 |  |                
|                          |                 |  |                
|Cash and cash equivalents |                 |  | $              
|                          |                 |  |                

Cash equivalents represent
highly liquid investments with a maturity of three months or less when purchased. At
October 29, 2005 and January 29, 2005, net book overdrafts of $20.5 million and $20.6
million, respectively, were classified as accounts payable and not a reduction of cash and
cash equivalents since the Company does not have a right of offset related to its
depository and disbursing accounts.

##### Note 6. Restated Consolidated Statement of Cash Flows (Unaudited)

Subsequent to the issuance
of the Companys financial statements for the 39 weeks ended October 30,
2004, the Company determined that
it should have reported cash flows associated with book overdrafts as operating
activities and should not have netted these book overdrafts in the balance
reported as cash in its consolidated statement of cash flows for the 39 weeks
ended October 30, 2004 because
it no longer had the right
of offset between its disbursing cash accounts and accounts payable due to the
transfer of the Companys depository accounts in the third quarter of
fiscal 2004 to a new financial institution. In addition, the Company
also determined that accounts payable incurred in connection with
capital expenditures represented a non-cash investing activity that should not
have been reflected in its consolidated statement of cash flows until payment of
the liability had been made. As a result, the accompanying consolidated
statement of cash flows for the 39 weeks ended October 29, 2004 has been
restated from the amounts previously reported to correct the presentation of
these items. A summary of the significant effects of the restatement is as
follows (in millions):

8

#### Pathmark Stores, Inc.
Notes to Consolidated Financial Statements (Unaudited)  (Continued)

##### Note 6. Restated Consolidated Statement of Cash Flows (Unaudited)   (Continued)

|                                                            | Consolidated Statement of Cash Flows (Unaudited)For the 39 Weeks Ended October 30, 2004
|----------------------------------------------------------- | ---------------------------------------------------------------------------------------
|
|Operating Activities                                       
|Accounts payable                                            |                                                                                        
|Cash provided by operating activities                       |                                                                                        
|Investing Activities                                       
|Cash capital expenditures, including technology investments |                                                                                        
|Cash used in investing activities                           |                                                                                        
|Cash at beginning of period                                 |                                                                                        
|Cash at end of period                                       |                                                                                        

Book overdrafts had been appropriately presented in the Companys consolidated
statements of cash flows for periods subsequent to October 30, 2004.

##### Note 7. Marketable Securities

Marketable securities
consist of auction-rate securities, which are securities earning interest income at a rate
that is periodically reset, typically within 35 days. These securities are classified as
available-for-sale securities under the provisions of SFAS No. 115,
Accounting for Certain Investments in Debt and Equity Securities. Accordingly,
these securities are recorded at fair value, with any unrealized gain or loss included as
a separate component of stockholders equity, net of tax. Realized gains and losses
and interest income are included in earnings. At October 29, 2005, the auction-rate
securities had maturities ranging from July 2032 through July 2043 and are classified as
marketable securities in current assets since they will be utilized in operations within
one year of the balance sheet date.

##### Note 8. Long-Term Debt

Long-term debt is comprised
of the following (in millions):

|                                                          | October 29,2005 |  | January 29,2005
|--------------------------------------------------------- | --------------- |  | ---------------
|Senior subordinated notes                                 |                 |  | $              
|Term loan                                                 |                 |  |                
|Working capital facility                                  |                 |  |                
|Mortgages                                                 |                 |  |                
|Other debt                                                |                 |  |                
|                                                          |                 |  |                
|Total debt                                                |                 |  |                
|Less: current maturities and the working capital facility |                 |  |                
|                                                          |                 |  |                
|Long-term debt                                            |                 |  | $              
|                                                          |                 |  |                

The Company has outstanding $350
million aggregate principal amount of 8.75% Senior Subordinated Notes, due 2012 (the
Senior Subordinated Notes), including $150 million issued at a premium, which
pay cash interest semi-annually on February 1 and August 1. The indenture relating to the
Senior Subordinated Notes (the Indenture) contains a number of restrictive
covenants, including a restriction on the Companys ability to declare cash dividends on Common
Stock. The Company was in compliance with all related covenants as of October 29, 2005.

On October 1, 2004, the
Company entered into an amended and restated $250 million senior secured credit facility
(the Secured Facility) with a group of lenders led by Fleet Retail Group, a
Bank of America company. During the second quarter of fiscal 2005, the Company entered
into a first amendment (the First Amendment) to the Secured Facility and
during the third quarter of fiscal 2005, the Company entered into a second amendment (the
Second Amendment) (the Secured Facility, the First Amendment and the Second
Amendment are hereinafter collectively referred to as the Credit Agreement).
The Credit Agreement expires on October 1, 2009 and consists of a $180 million revolving
working capital facility, including letters of credit (the Working Capital
Facility) and a $70 million term loan (the Term Loan).

9

#### Pathmark Stores, Inc.
Notes to Consolidated Financial Statements (Unaudited)  (Continued)

##### Note 8. Long-Term Debt  (Continued)

The Credit Agreement
contains certain covenants which, among other things, place limits on the
incurrence of additional indebtedness, issuance of cash-pay preferred stock,
repurchase of Company stock, incurrence of liens, sale-leaseback transactions,
hedging activities, sale or discount of receivables, investments, loans,
advances, guarantees with affiliates, asset sales, acquisitions, mergers and
consolidations, changing lines of business, repayments of other indebtedness,
amendments to organizational documents and other matters customarily restricted
in such agreements. The Credit Agreement also contains provisions permitting the
Company to increase the size of the Working Capital Facility by $25 million and
to repay and subsequently reborrow any portion of the Term Loan, in each
instance subject to certain conditions. The Credit Agreement further provides
that the Company must maintain a minimum inventory level of $150 million, that
the maximum annual cash capital expenditures in a fiscal year are limited to the
lesser of $150 million or an amount equal to the Companys Consolidated
EBITDA (as defined in the Credit Agreement) for the immediately preceding fiscal
year plus any unused cash capital expenditures in the immediately preceding
fiscal year up to a maximum of $20 million, and that the Company must maintain a
ratio of Credit Extensions to Consolidated EBITDA (the Senior Leverage
Ratio) at or below 1.9:1.0 (calculated on a trailing four-fiscal quarters
basis). As used in the Credit Agreement, Credit Extensions mean the sum of the
principal balance of all outstanding borrowings thereunder and the amount of
outstanding letters of credit ($80.0 million as of October 29, 2005). Based on
the Senior Leverage Ratio at the end of the third quarter of fiscal 2005, the
Companys availability under the Working Capital Facility after giving
effect to Credit Extensions is $86.0 million. Also, the Credit Agreement
prohibits the payment of cash dividends. The Credit Agreement contains customary
events of default, including without limitation, payment defaults, material
breaches of representations, warranties and covenants, certain events of
bankruptcy and insolvency and a change of control (excluding the purchase by the
Investors of the Purchased Securities). The Company was in compliance with all
Credit Agreement covenants as of October 29, 2005.

Interest on borrowings
under the Credit Agreement bear interest at floating rates equal to LIBOR plus a premium
that ranges between 1.50% to 2.25%, depending on the average availability under the Credit
Agreement, and at October 29, 2005, was at LIBOR plus 1.75%.

There are no credit agency
ratings-related triggers in either the Indenture or the Credit Agreement that would
adversely impact the cost of borrowings, annual amortization of principal or related debt
maturities.

The Company used a portion
of the net proceeds from the issuance of the Purchased Securities to pay down its Working
Capital Facility borrowings and defease its mortgage borrowings.

##### Note 9. Merchandising and Store Initiative

During the third quarter of fiscal 2005, the
Company implemented a merchandising and store initiative (the
Initiative) in all of its stores to increase same-store sales by
enhancing the customers shopping experience. The Initiative, which was
substantially completed in all stores by the end of the third quarter, was
designed to:

- Expand the selection and variety in all of the Companys  perishable
departments, especially produce, meat and deli,
- Better utilize key merchandising areas for value concepts, such as party
goods, kitchen items, dollar merchandise and toys, and
- Make the Companys stores easier to shop by eliminating clutter.

In connection with the
Initiative, in the third quarter of fiscal 2005 the Company incurred incremental
costs of $4.2 million and capital expenditures of $7.5 million. The incremental
costs attributable to the Initiative of $4.2 million are reflected in the
Companys statement of operations for the third quarter and the first nine
months of fiscal 2005 and are comprised of additional store labor expenses of
$2.0 million and supply and maintenance expenses of $2.2 million. In the third
quarter of fiscal 2005, inventory shrink in the perishable departments increased
$4.9 million over the prior year's third quarter.

10

#### Pathmark Stores, Inc.
Notes to Consolidated Financial Statements (Unaudited)  (Continued)

##### Note 10. Selling, General and Administrative Expenses (SG&A)

In additional to the
aforementioned $4.2 million charge related to the Initiative, SG&A in the third
quarter and the first nine months of fiscal 2005 included a $3.6 million charge related to
the Companys store labor buyout initiative to reduce store labor costs, which was
commenced and completed in the third quarter of fiscal 2005, and a $1.6 million charge
related to a separation agreement with the Companys former Chief Executive Officer.
As of October 29, 2005, $2.8 million of benefits related to the store labor buyout
initiative and $1.3 million related the separation agreement remain to be paid out over time.
SG&A in the third quarter of fiscal 2005 also included a $0.5 million charge
related to the amortization of unearned restricted stock compensation. SG&A
in the first nine months of fiscal 2005 also included a $1.1 million charge
related to the Companys review of strategic alternatives and a $0.6
million charge related to the amortization of unearned restricted stock
compensation. SG&A in the first nine months of fiscal 2004 included a $1.5
million gain from the sale of real estate.

##### Note 11. Interest Expense, Net

Interest expense, net is
comprised of the following (in millions):

|                                          | 13 Weeks Ended |  | 39 Weeks Ended
|----------------------------------------- | -------------- |  | --------------
|
|Senior subordinated notes                 |                |  | $             
|Term loan                                 |                |  |               
|Working capital facility                  |                |  |               
|Mortgages                                 |                |  |               
|Mortgage debt extinguishment (a)          |                |  |               
|Lease obligations                         |                |  |               
|Amortization of deferred financing costs  |                |  |               
|Write off of deferred financing costs (b) |                |  |               
|Interest income                           |                |  |               
|Capitalized interest                      |                |  |               
|Other                                     |                |  |               
|                                          |                |  |               
|Interest expense, net                     |                |  | $             
|                                          |                |  |               

---

|(a) | The mortgage debt  extinguishment  of $2.8 million  included a redemption  premium of $2.3
million and the write off of  financing costs of $0.5 million.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | The write off of deferred  financing  costs of $1.5 million related to the early
extinguishment  on October 1, 2004 of  the Company's credit agreement dated September 9,
2000 (the  "2000 Credit Agreement").
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

##### Note 12. Income Taxes

In the third
quarter of fiscal 2005, the Company recorded a $2.0 million charge to increase
the valuation allowance related to state operating loss carryforwards that are
no longer considered more likely than not of being realized, resulting in an
effective tax rate in the third quarter and the first nine months of fiscal 2005
of 35.5% and 39.8%, respectively. In the third quarter of fiscal 2004, the Work
Opportunity Credit was reinstated, retroactive to the beginning of 2004,
resulting in an effective tax rate in the third quarter and the first nine
months of fiscal 2004 of 57.1% and 49.2%, respectively.

11

#### Pathmark Stores, Inc.
Notes to Consolidated Financial Statements (Unaudited)  (Continued)

##### Note 13. Benefits

The Company sponsors a
tax-qualified  pension plan which covers  substantially  all non-union and certain union
associates  and several  nonqualified  pension plans for certain of its  associates  as
well as retiree  health and  life  insurance  benefits,  primarily  for union groups and
retired  non-union  associates.  The  components of net  periodic benefit cost (cost
reduction) are as follows (in millions):

Pension Benefits:

|                                    | 13 Weeks Ended |  | 39 Weeks Ended
|----------------------------------- | -------------- |  | --------------
|
|Service cost                        |                |  | $             
|Interest cost                       |                |  |               
|Expected return on plan assets      |                |  |               
|Amortization of prior service costs |                |  |               
|Amortization of losses              |                |  |               
|                                    |                |  |               
|Net periodic benefit cost reduction |                |  | $             
|                                    |                |  |               

Other Postretirement Benefits:

|                                    | 13 Weeks Ended |  | 39 Weeks Ended
|----------------------------------- | -------------- |  | --------------
|
|Service cost                        |                |  | $             
|Interest cost                       |                |  |               
|Amortization of prior service costs |                |  |               
|Amortization of losses              |                |  |               
|                                    |                |  |               
|Net periodic benefit cost           |                |  | $             
|                                    |                |  |               

##### Note 14. Capital Stock

Preferred Stock.As
of October 29, 2005 and January 29, 2005, there were 5,000,000 shares of preferred stock
authorized of which none are issued and outstanding.

Common Stock.As of
October 29, 2005 and January 29, 2005, there were 100,000,000 shares authorized of $0.01
par value Common Stock. The following table summarizes the change in the number of shares
of Common Stock outstanding:

|                                                 | Common Stock
|------------------------------------------------ | ------------
|
|Balance, January 29, 2005                        |             
|Issuance of common stock (see Note 2)            |             
|Exercise of stock options                        |             
|Issuance of restricted common stock (see Note 4) |             
|Vesting of restricted stock units (see Note 4)   |             
|                                                 |             
|Balance, October 29, 2005                        |             
|                                                 |             

12

#### Pathmark Stores, Inc.
Notes to Consolidated Financial Statements (Unaudited)  (Continued)

##### Note 14. Capital Stock  (Continued)

Shares of Common Stock are
subject to dilution from (1) the issuance of new shares of Common Stock, (2) the
exercise of Common Stock warrants, (3) the exercise of options to purchase
Common Stock issued pursuant to the EEP, DEP, and the Employment Agreement, and (4) the vesting of
restricted stock units.

Common Stock Warrants.As of October 29, 2005, warrants to purchase 5,294,118 shares of Common Stock at
$22.31 per share were outstanding and expire on September 19, 2010, Series A Warrants to
purchase 10,060,000 shares of Common Stock at $8.50 per share were outstanding and expire
on June 9, 2008 and Series B Warrants to purchase 15,046,350 shares of Common Stock at
$15.00 per share were outstanding and expire on June 9, 2015. The Series A Warrants and
Series B Warrants were issued under the Purchase Agreement (see Note 2).

##### Note 15. Commitments and Contingencies

Contingencies.On
June 15, 2005, Rick Hartman, a stockholder in the Company, filed in the United
States District Court for the District of Delaware a purported class action
complaint (the Complaint) against the Company and its directors (the
Individual Defendants; the Company and the Individual Defendants
hereinafter collectively referred to as the Defendants). The
Complaint asserts on behalf of a purported class of stockholders of the Company
a claim against the Defendants for issuing a proxy statement in connection with
the Purchase Agreement, that was allegedly materially false and misleading. The
Complaint additionally asserts a claim against the Individual Defendants for
alleged breach of fiduciary duties in connection with the Purchase Agreement.
The Complaint seeks an award of damages for the alleged wrongs asserted in the
Complaint. The lawsuit is in its preliminary stage. On August 19, 2005, the
Defendants filed a motion to dismiss the Complaint. The Company believes that
the lawsuit is without merit and intends to defend vigorously against it.

Guarantees.In the
normal course of business, the Company has assigned to third parties various leases
related to former businesses that the Company sold as well as former operating Pathmark
supermarkets (the Assigned Leases). When the Assigned Leases were assigned,
the Company generally remained secondarily liable with respect to these lease obligations.
As such, if any of the assignees were to become unable to continue making payments under
the Assigned Leases, the Company could be required to assume the lease obligation. As of
October 29, 2005, 64 Assigned Leases remain in place. Assuming that each respective
assignee became unable to continue to make payments under an Assigned Lease, an event the
Company believes to be remote, management estimates its maximum potential obligation with
respect to the Assigned Leases to be approximately $98 million, which could be partially
or totally offset by reassigning or subletting such leases. The Company has recognized a
liability on its consolidated balance sheet as of October 29, 2005 of $2.6 million, which
represents certain guarantees attributable to the Companys secondary liability in
connection with the Assigned Leases.

Variable Interest
Entity.During the third quarter of fiscal 2005, the Company and a real
estate developer formed a joint venture to develop a parcel of property,
ground-leased by the Company, and sublease said property to an unrelated party.
The Company contributed its operating lease by assigning it to the joint venture
and as a result has a 50% interest in the joint venture. The Company considers
the joint venture a variable interest entity and accounts for such investment on
the equity method of accounting, since the Company does not have a controlling
interest and is not the primary beneficiary; as of October 29, 2005, the
Company's financial basis in the joint venture is zero.

13

#### Pathmark Stores, Inc.
Notes to Consolidated Financial Statements (Unaudited)  (Continued)

##### Note 16. Consolidating Financial Information

The following represents
the consolidating financial information of Pathmark and its 100% owned guarantor and
non-guarantor subsidiaries. The guarantor subsidiaries are comprised of six 100% owned
entities, including Pathmarks distribution subsidiary, and guarantee on a full and
unconditional and joint and several basis, the Senior Subordinated Notes. The
non-guarantor subsidiaries are comprised of four 100% owned single-purpose entities. Each
of those entities owns the real estate on which a supermarket leased to Pathmark is
located.

|                                             | Pathmark | GuarantorSubsidiaries | Non-GuarantorSubsidiaries | Intercompany Eliminations | ConsolidatedTotal
|-------------------------------------------- | -------- | --------------------- | ------------------------- | ------------------------- | -----------------
|
|Consolidating Statements of Operations:      |          |                       |                           |                           |                  
|For the 13 Weeks Ended October 29, 2005      |          |                      
|Sales                                        |          |                       | $                         | 980.5                     |                  
|Cost of goods sold                           |          |                       |                           | (707.3                    | )                
|                                             |          |                       |                           |                           |                  
|Gross profit                                 |          |                       |                           | 273.2                     |                  
|Selling, general and administrative expenses |          |                       |                           | (266.7                    | )                
|Depreciation and amortization                |          |                       |                           | (20.7                     | )                
|                                             |          |                       |                           |                           |                  
|Operating earnings (loss)                    |          |                       |                           | (14.2                     | )                
|Interest expense, net                        |          |                       |                           | (14.8                     | )                
|Equity in earnings of subsidiaries           |          |                       |                           | 0.6                       |                  
|                                             |          |                       |                           |                           |                  
|Earnings (loss) before income taxes          |          |                       |                           | (28.4                     | )                
|Income tax benefit                           |          |                       |                           | 10.1                      |                  
|                                             |          |                       |                           |                           |                  
|Net earnings (loss)                          |          |                       | $                         | (18.3                     | )                
|                                             |          |                       |                           |                           |                  
|For the 13 Weeks Ended October 30, 2004      |          |                      
|Sales                                        |          |                       | $                         | 979.9                     |                  
|Cost of goods sold                           |          |                       |                           | (704.5                    | )                
|                                             |          |                       |                           |                           |                  
|Gross profit                                 |          |                       |                           | 275.4                     |                  
|Selling, general and administrative expenses |          |                       |                           | (248.7                    | )                
|Depreciation and amortization                |          |                       |                           | (19.9                     | )                
|                                             |          |                       |                           |                           |                  
|Operating earnings                           |          |                       |                           | 6.8                       |                  
|Interest expense, net                        |          |                       |                           | (17.5                     | )                
|Equity in earnings of subsidiaries           |          |                       |                           | 2.5                       |                  
|                                             |          |                       |                           |                           |                  
|Earnings (loss) before income taxes          |          |                       |                           | (8.2                      | )                
|Income tax benefit                           |          |                       |                           | 4.6                       |                  
|                                             |          |                       |                           |                           |                  
|Net earnings (loss)                          |          |                       | $                         | (3.6                      | )                
|                                             |          |                       |                           |                           |                  

14

#### Pathmark Stores, Inc.
Notes to Consolidated Financial Statements (Unaudited)  (Continued)

##### Note 16. Consolidating Financial Information  (Continued)

|                                                    | Pathmark | GuarantorSubsidiaries | Non-GuarantorSubsidiaries | Intercompany Eliminations | ConsolidatedTotal
|--------------------------------------------------- | -------- | --------------------- | ------------------------- | ------------------------- | -----------------
|
|Consolidating Statements of Operations (Continued): |          |                       |                           |                           |                  
|For the 39 Weeks Ended October 29, 2005             |          |                      
|Sales                                               |          |                       | $                         | 2,983.7                   |                  
|Cost of goods sold                                  |          |                       |                           | (2,139.6                  | )                
|                                                    |          |                       |                           |                           |                  
|Gross profit                                        |          |                       |                           | 844.1                     |                  
|Selling, general and administrative expenses        |          |                       |                           | (777.6                    | )                
|Depreciation and amortization                       |          |                       |                           | (61.7                     | )                
|                                                    |          |                       |                           |                           |                  
|Operating earnings                                  |          |                       |                           | 4.8                       |                  
|Interest expense, net                               |          |                       |                           | (45.5                     | )                
|Equity in loss of subsidiaries                      |          |                       |                           | (1.6                      | )                
|                                                    |          |                       |                           |                           |                  
|Earnings (loss) before income taxes                 |          |                       |                           | (42.3                     | )                
|Income tax benefit                                  |          |                       |                           | 16.8                      |                  
|                                                    |          |                       |                           |                           |                  
|Net earnings (loss)                                 |          |                       | $                         | (25.5                     | )                
|                                                    |          |                       |                           |                           |                  
|For the 39 Weeks Ended October 30, 2004             |          |                      
|Sales                                               |          |                       | $                         | 2,981.7                   |                  
|Cost of goods sold                                  |          |                       |                           | (2,141.4                  | )                
|                                                    |          |                       |                           |                           |                  
|Gross profit                                        |          |                       |                           | 840.3                     |                  
|Selling, general and administrative expenses        |          |                       |                           | (746.7                    | )                
|Depreciation and amortization                       |          |                       |                           | (58.9                     | )                
|                                                    |          |                       |                           |                           |                  
|Operating earnings                                  |          |                       |                           | 34.7                      |                  
|Interest expense, net                               |          |                       |                           | (49.0                     | )                
|Equity in earnings of subsidiaries                  |          |                       |                           | 0.6                       |                  
|                                                    |          |                       |                           |                           |                  
|Earnings (loss) before income taxes                 |          |                       |                           | (13.7                     | )                
|Income tax benefit                                  |          |                       |                           | 6.7                       |                  
|                                                    |          |                       |                           |                           |                  
|Net earnings (loss)                                 |          |                       | $                         | (7.0                      | )                
|                                                    |          |                       |                           |                           |                  

15

#### Pathmark Stores, Inc.
Notes to Consolidated Financial Statements (Unaudited)  (Continued)

##### Note 16. Consolidating Financial Information  (Continued)

|                                           | Pathmark | GuarantorSubsidiaries | Non-GuarantorSubsidiaries | Intercompany Eliminations | ConsolidatedTotal
|------------------------------------------ | -------- | --------------------- | ------------------------- | ------------------------- | -----------------
|
|Consolidating Balance Sheets:              |          |                       |                           |                           |                  
|As of October 29, 2005                     |          |                      
|Merchandise inventories                    |          |                       | $                         | 169.5                     |                  
|Other current assets                       |          |                       |                           | 190.3                     |                  
|                                           |          |                       |                           |                           |                  
|Total current assets                       |          |                       |                           | 359.8                     |                  
|Property and equipment, net                |          |                       |                           | 469.6                     |                  
|Goodwill                                   |          |                       |                           | 144.7                     |                  
|Investment in subsidiaries                 |          |                       |                           | 79.1                      |                  
|Other noncurrent assets                    |          |                       |                           | 193.0                     |                  
|                                           |          |                       |                           |                           |                  
|Total assets                               |          |                       | $                         | 1,246.2                   |                  
|                                           |          |                       |                           |                           |                  
|                                          
|Accounts payable                           |          |                       | $                         | 100.2                     |                  
|Other current liabilities                  |          |                       |                           | 172.5                     |                  
|                                           |          |                       |                           |                           |                  
|Total current liabilities                  |          |                       |                           | 272.7                     |                  
|Long-term debt                             |          |                       |                           | 424.0                     |                  
|Long-term lease obligations                |          |                       |                           | 162.2                     |                  
|Other noncurrent liabilities               |          |                       |                           | 203.0                     |                  
|                                           |          |                       |                           |                           |                  
|Total liabilities                          |          |                       |                           | 1,061.9                   |                  
|Stockholders' equity                       |          |                       |                           | 184.3                     |                  
|                                           |          |                       |                           |                           |                  
|Total liabilities and stockholders' equity |          |                       | $                         | 1,246.2                   |                  
|                                           |          |                       |                           |                           |                  
|                                          
|As of January 29, 2005                     |          |                      
|Merchandise inventories                    |          |                       | $                         | 159.8                     |                  
|Other current assets                       |          |                       |                           | 154.6                     |                  
|                                           |          |                       |                           |                           |                  
|Total current assets                       |          |                       |                           | 314.4                     |                  
|Property and equipment, net                |          |                       |                           | 487.1                     |                  
|Goodwill                                   |          |                       |                           | 144.7                     |                  
|Investment in subsidiaries                 |          |                       |                           | 59.9                      |                  
|Other noncurrent assets                    |          |                       |                           | 192.2                     |                  
|                                           |          |                       |                           |                           |                  
|Total assets                               |          |                       | $                         | 1,198.3                   |                  
|                                           |          |                       |                           |                           |                  
|                                          
|Accounts payable                           |          |                       | $                         | 93.5                      |                  
|Other current liabilities                  |          |                       |                           | 209.9                     |                  
|                                           |          |                       |                           |                           |                  
|Total current liabilities                  |          |                       |                           | 303.4                     |                  
|Long-term debt                             |          |                       |                           | 424.2                     |                  
|Long-term lease obligations                |          |                       |                           | 169.6                     |                  
|Other noncurrent liabilities               |          |                       |                           | 233.8                     |                  
|                                           |          |                       |                           |                           |                  
|Total liabilities                          |          |                       |                           | 1,131.0                   |                  
|Stockholders' equity                       |          |                       |                           | 65.2                      |                  
|                                           |          |                       |                           |                           |                  
|Total liabilities and stockholders' equity |          |                       | $                         | 1,198.3                   |                  
|                                           |          |                       |                           |                           |                  

16

#### Pathmark Stores, Inc.
Notes to Consolidated Financial Statements (Unaudited)  (Continued)

##### Note 16. Consolidating Financial Information  (Continued)

|                                                                | Pathmark | GuarantorSubsidiaries | Non-GuarantorSubsidiaries | Intercompany Eliminations | ConsolidatedTotal
|--------------------------------------------------------------- | -------- | --------------------- | ------------------------- | ------------------------- | -----------------
|
|Consolidating Cash Flow Statements:                             |          |                       |                           |                           |                  
|For the 39 Weeks Ended October 29, 2005                         |          |                      
|Operating Activities                                            |          |                      
|Cash provided by (used for) operating activities                |          |                       | $                         | 2.4                       |                  
|                                                                |          |                       |                           |                           |                  
|Investing Activities                                            |          |                      
|Capital expenditures, including technology investments          |          |                       |                           | (39.4                     | )                
|Purchases of marketable securities                              |          |                       |                           | (9.0                      | )                
|                                                                |          |                       |                           |                           |                  
|Cash used for investing activities                              |          |                       |                           | (48.4                     | )                
|                                                                |          |                       |                           |                           |                  
|Financing Activities                                            |          |                      
|Proceeds from issuance of common stock and                      |          |                      
|common stock warrants, net of expenses                          |          |                       |                           | 137.5                     |                  
|Repayments of the working capital facility, net                 |          |                       |                           | (34.4                     | )                
|Mortgage debt repayments and extinguishment                     |          |                       |                           |                          |                  
|Repayments of capital lease obligations                         |          |                       |                           | (9.4                      | )                
|Proceeds from exercise of stock options                         |          |                       |                           | 4.5                       |                  
|Borrowings of other debt, net                                   |          |                       |                           | 1.5                       |                  
|Deferred financing costs                                        |          |                       |                           | (0.5                      | )                
|Intercompany equity transactions                                |          |                       |                           | (20.8                     | )                
|                                                                |          |                       |                           |                           |                  
|Cash provided by (used for) financing activities                |          |                       |                           | 78.4                      |                  
|                                                                |          |                       |                           |                           |                  
|Increase (decrease) in cash and cash equivalents                |          |                       |                           | 32.4                      |                  
|Cash and cash equivalents at beginning at period                |          |                       |                           | 42.3                      |                  
|                                                                |          |                       |                           |                           |                  
|Cash and cash equivalents at end of period                      |          |                       | $                         | 74.7                      |                  
|                                                                |          |                       |                           |                           |                  
|                                                               
|For the 39 Weeks Ended October 30, 2004 (Restated  see Note 6) |          |                      
|Operating Activities                                            |          |                      
|Cash provided by operating activities                           |          |                       | $                         | 51.2                      |                  
|                                                                |          |                       |                           |                           |                  
|Investing Activities                                            |          |                      
|Capital expenditures, including technology investments          |          |                       |                           | (76.3                     | )                
|Proceeds from sale of real estate                               |          |                       |                           | 6.3                       |                  
|Acquisition of Community Supermarket Corporation                |          |                       |                           | (4.5                      | )                
|                                                                |          |                       |                           |                           |                  
|Cash used for investing activities                              |          |                       |                           | (74.5                     | )                
|                                                                |          |                       |                           |                           |                  
|Financing Activities                                            |          |                      
|Borrowings under the working capital facilities, net            |          |                       |                           | 45.6                      |                  
|Borrowings under the term loan, net                             |          |                       |                           | 24.2                      |                  
|Repayments of capital lease obligations                         |          |                       |                           | (8.6                      | )                
|Deferred financing costs                                        |          |                       |                           | (5.1                      | )                
|Repayments of other debt, net                                   |          |                       |                           | (0.4                      | )                
|Intercompany equity transactions                                |          |                       |                           | 0.2                       |                  
|                                                                |          |                       |                           |                           |                  
|Cash provided by (used for) financing activities                |          |                       |                           | 55.9                      |                  
|                                                                |          |                       |                           |                           |                  
|Increase in cash                                                |          |                       |                           | 32.6                      |                  
|Cash at beginning of period                                     |          |                       |                           | 8.7                       |                  
|                                                                |          |                       |                           |                           |                  
|Cash at end of period                                           |          |                       | $                         | 41.3                      |                  
|                                                                |          |                       |                           |                           |                  

17

#### Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.

##### Results of Operations

The following table sets
forth selected consolidated statements of operations data (dollars in millions):

|                                                 | 13 Weeks Ended | 39 Weeks Ended
|------------------------------------------------ | -------------- | --------------
|                                                 |                |               
|                                                 |                |               
|Sales                                            |                |               
|                                                 |                |               
|Gross profit                                     |                |               
|Selling, general and administrative     expenses |                |               
|Depreciation and amortization                    |                |               
|                                                 |                |               
|Operating earnings (loss)                        |                |               
|Interest expense, net                            |                |               
|                                                 |                |               
|Loss before income taxes                         |                |               
|Income tax benefit                               |                |               
|                                                 |                |               
|Net loss                                         |                |               
|                                                 |                |               
|LIFO charge                                      |                |               
|                                                 |                |               

Merchandising and Store Initiative.During the
third quarter of fiscal 2005, we implemented an Initiative in all of our stores to
increase same-store sales and profitability by enhancing the customers shopping
experience. The Initiative, which was substantially completed in all stores by the end of
the third quarter, was designed to:

- Expand the selection and variety in all of our perishable departments, especially
produce, meat and deli,
- Better utilize key merchandising areas for value concepts, such as
party goods, kitchen items, dollar merchandise and toys, and
- Make our stores easier to shop by eliminating clutter.

This Initiative is the
first phase in our broader merchandising plan to increase same-store sales and
profitability. In the longer term, we will focus on additional marketing and merchandising
areas, including product placement and adjacencies, private label and enhanced use of the
Pathmark Advantage Card.

In connection with the
Initiative, we incurred incremental costs of $4.2 million and capital
expenditures of $7.5 million in the third quarter of fiscal 2005. The
incremental costs attributable to the Initiative of $4.2 million are reflected
in our statement of operations for the third quarter and the first nine months
of fiscal 2005 and are comprised of additional store labor expenses of $2.0
million and supply and maintenance expenses of $2.2 million.
In the fourth quarter of fiscal 2005, we expect to incur incremental costs of $0.4 million
and capital expenditures of $1.0 million related to the Inititiative.

In the third
quarter of fiscal 2005, inventory shrink in the perishable departments increased
$4.9 million over the prior year's third quarter. We believe the higher
inventory shrink in the perishable departments was due to certain implementation
issues associated with the Initiative as we expanded our perishable variety.
Stronger inventory and ordering control processes related to the expanded
perishable departments are being implemented to reduce the increased inventory
shrink, although there is no assurance that such controls and processes will
lower inventory shrink.

Sales. Sales in the
third quarter of fiscal 2005 were $980.5 million, up 0.1% from $979.9 million in the third
quarter of fiscal 2004. The sales increase in the third quarter of fiscal 2005 was due to
a 0.8% increase from new stores, partially offset by a 0.6% decrease in same-store sales
(stores open the entire third quarter in both fiscal 2005 and fiscal 2004, including
replacement stores) and a 0.1% decrease from closed stores. Sales in the first nine months
of fiscal 2005 were $2,983.7 million, up 0.1% from $2,981.7 million in the first nine
months of fiscal 2004. The sales increase in the first nine months of fiscal 2005 was due
to a 1.3% increase from new stores, partially offset by a 0.8% decrease in same-store
sales and a 0.4% decrease from closed stores. Sales in the third quarter and first nine
months of fiscal 2005 benefited from an increase in average order size, but continued to
be negatively affected by a decrease in customer traffic. We expect to improve our
same-store sales as a result of the recently implemented Initiative. The Company operated
142 stores at the end of the third quarters of fiscal 2005 and fiscal 2004.

18

Gross Profit. Gross
profit represents the difference between sales and cost of goods sold, which includes the
cost of inventory sold and the related purchase and distribution costs, net of vendor
allowances and rebates. Gross profit in the third quarter of fiscal 2005 was $273.2
million or 27.9% of sales compared to $277.2 million or 28.3% of sales in the third
quarter of fiscal 2004. The $4.0 million decrease in gross profit in the third quarter of
fiscal 2005 was primarily due to higher inventory shrink and higher logistic costs,
partially offset by improved departmental mix. We believe the higher inventory shrink of $4.9 million
occurred primarily in the perishable departments due to the Initiative. Gross profit in
the first nine months of fiscal 2005 was $844.1 million or 28.3% of sales compared to
$840.3 million or 28.2% of sales in the first nine months of fiscal 2004. The $3.8 million
increase in gross profit in the first nine months of fiscal 2005 was primarily due to
improved departmental mix, partially offset by higher logistic costs.

SG&A. SG&A
in the third quarter of fiscal 2005 was $264.1 million or 26.9% of sales compared to
$245.8 million or 25.1% of sales in the third quarter of fiscal 2004. The $18.3 million
increase in SG&A in the third quarter of fiscal 2005 included a $4.2 million charge
related to the Initiative, a $3.6 million charge related to the store labor buyout
initiative, a $1.6 million charge related to a separation agreement with our former Chief
Executive Officer and a $0.5 million charge related to the amortization of unearned
restricted stock compensation. SG&A in the third quarter of fiscal 2004 included a
$0.3 million gain from the sale of real estate. SG&A in the first nine months of
fiscal 2005 was $769.9 million or 25.8% of sales compared to $738.6 million or 24.8% of
sales in the first nine months of fiscal 2004. The $31.3 million increase in SG&A in
the first nine months of fiscal 2005 included the aforementioned charges for the $4.2
million Initiative, the $3.6 million labor buyout and the $1.6 million separation
agreement. SG&A in the first nine months of fiscal 2005 also included a $1.1 million
charge related to our review of strategic alternatives and a $0.6 million charge related
to the amortization of unearned restricted stock compensation. SG&A in the first nine
months of fiscal 2004 included a $1.5 million gain from the sale of real estate. The
balance of the increase in SG&A in the third quarter and in the first nine months of
fiscal 2005 over the prior year periods is primarily due to (1) higher store labor
expenses resulting from contractual increases, (2) higher supply and utility charges
resulting from higher oil prices, and (3) higher medical expenses.

Depreciation and
Amortization. Depreciation and amortization in the third quarter of fiscal 2005 were
$22.5 million compared to $21.6 million in the third quarter of fiscal 2004. Depreciation
and amortization in the first nine months of fiscal 2005 were $67.0 million compared to
$64.6 million in the first nine months of fiscal 2004. The increase in depreciation and
amortization in the third quarter and in the first nine months of fiscal 2005 was
primarily due to the amortization of the first phase, completed in fiscal 2004, of a
multi-year project to upgrade our merchandising system.

Operating Earnings
(Loss). The operating loss in the third quarter of fiscal 2005 was $13.4 million
compared to operating earnings of $9.8 million in the third quarter of fiscal 2004.
Operating earnings in the first nine months of fiscal 2005 were $7.2 million compared to
$37.1 million in the first nine months of fiscal 2004. The decrease in operating earnings
in the third quarter and in the first nine months of fiscal 2005 was primarily due to
lower gross profit and higher SG&A.

Interest Expense,
Net. Interest expense was $15.0 million in the third quarter of fiscal 2005 compared
to $18.0 million in the third quarter of fiscal 2004. Interest expense in the third
quarter of fiscal 2004 included a write off of deferred financing costs of $1.5 million
related to the early extinguishment of the 2000 Credit Agreement. Excluding this item,
interest expense in the third quarter of fiscal 2005 decreased by $1.5 million compared to
the third quarter of fiscal 2004. Interest expense was $49.5 million in the first nine
months of fiscal 2005 compared to $50.8 million in the first nine months of fiscal 2004.
Interest expense in the first nine months of fiscal 2005 included an early extinguishment
of mortgage debt charge of $2.8 million and in the first nine months of fiscal 2004
included a write off of deferred financing costs of $1.5 million related to the early
extinguishment of our previous credit agreement. Excluding these items, interest expense
in the first nine months of fiscal 2005 decreased by $2.6 million compared to the first
nine months of fiscal 2004. The decrease in interest expense in the third quarter and in
the first nine months of fiscal 2005 was primarily due to lower debt and higher cash
investments resulting from the Yucaipa investment.

19

Income Tax Benefit.The income tax benefit was $10.1 million in the third quarter of fiscal 2005 compared
to $4.6 million in the third quarter of fiscal 2004 and was based on an effective tax rate
of 35.5% in the third quarter of fiscal 2005 compared to 57.1% in the third quarter of
fiscal 2004. The income tax benefit was $16.8 million in the first nine months of fiscal
2005 compared to $6.7 million in the first nine months of fiscal 2004 and was based on an
effective tax rate of 39.8% in the first nine months of fiscal 2005 compared to 49.2% in
the first nine months of fiscal 2004. The tax benefit and effective tax rate in the third
quarter and the first nine months of fiscal 2005 were negatively impacted by a $2.0
million third quarter charge to increase our valuation allowance related to certain state
net operating loss carryforwards. The tax benefit and effective tax rate in the third
quarter and the first nine months of fiscal 2004 were positively impacted by the
legislative reinstatement of the Work Opportunity Credit, retroactive to the beginning of
2004.

Summary of
Operations. The net loss was $18.3 million in the third quarter of fiscal 2005
compared to $3.6 million in the third quarter of fiscal 2004. The net loss in the first
nine months of fiscal 2005 was $25.5 million compared to $7.0 in the first nine months of
fiscal 2004. The increase in the net loss in the third quarter and in the first nine
months of fiscal 2005 was primarily due to lower operating earnings and higher interest
expense, primarily due to the early extinguishment of debt charge, partially offset by
higher income tax benefits.

##### Liquidity and Capital Resources

Cash Flows.
The following table sets forth certain consolidated statements of cash flow data (in millions):

|                             | 39 Weeks Ended
|---------------------------- | --------------
|
|Cash provided by (used for): |               
|Operating activities         |               
|Investing activities         |               
|Financing activities         |               

Subsequent to the issuance
of our financial statements for the 39 weeks ended October 30, 2004, we
determined that we should have reported cash flows associated with
book overdrafts as operating activities and should not have netted these book
overdrafts in the balance reported as cash in our consolidated statement of cash
flows for the 39 weeks ended October 30, 2004 because we no longer had the right
of offset between our disbursing cash accounts and accounts payable due to the
transfer of our depository accounts in the third quarter of fiscal 2004 to a new
financial institution. In addition, we also determined that accounts
payable incurred in connection with capital expenditures represented a non-cash
investing activity that should not have been reflected in our consolidated
statement of cash flows until payment of the liability had been made. As a
result, the accompanying consolidated statement of cash flows for the 39 weeks
ended October 30, 2004 has been restated from the amount previously reported to
correct the presentation of these items. See Note 6 of the Notes to Consolidated
Financial Statements for the summary of the significant effects of the
restatement. The decrease in cash provided by operating activities in fiscal
2005 compared to fiscal 2004 was primarily due to a higher net loss. The
decrease in cash used for investing activities in fiscal 2005 compared to fiscal
2004 was due to lower capital expenditures, partially offset by purchases of
marketable securities and lower proceeds from the sale of real estate. The
increase in cash provided by financing activities in fiscal 2005 compared to
fiscal 2004 was primarily due to the proceeds related to the issuance of the
Purchased Securities, net of debt repayments (see Debt Service and Liquidity
below).

Debt Service and
Liquidity. Our liquidity significantly improved on June 9, 2005, when pursuant to the
Purchase Agreement, we issued the Purchased Securities to the Investors for an aggregate
purchase price of $150 million in cash. We received $137.5 million for the Purchased
Securities, net of $12.5 million of costs directly attributable to the offering. We used
$40.3 million of the net proceeds to pay down our Working Capital Facility borrowings and
$23.3 million to defease our mortgage borrowings. The remaining net proceeds were invested
in short-term cash investments and will be used for general corporate purposes, including
capital expenditures.

20

The Credit Agreement
contains certain covenants which, among other things, place limits on the
incurrence of additional indebtedness, issuance of cash-pay preferred stock,
repurchase of Company stock, incurrence of liens, sale-leaseback transactions,
hedging activities, sale or discount of receivables, investments, loans,
advances, guarantees with affiliates, asset sales, acquisitions, mergers and
consolidations, changing lines of business, repayments of other indebtedness,
amendments to organizational documents and other matters customarily restricted
in such agreements. The Credit Agreement also contains provisions permitting us
to increase the size of the Working Capital Facility by $25 million and to repay
and subsequently reborrow any portion of the Term Loan, in each instance subject
to certain conditions. The Credit Agreement further provides that we must
maintain a minimum inventory level of $150 million, that the maximum annual cash
capital expenditures in a fiscal year are limited to the lesser of $150 million
or an amount equal to our Consolidated EBITDA for the immediately preceding
fiscal year plus any unused cash capital expenditures in the immediately
preceding fiscal year up to a maximum of $20 million, and that we must maintain
the Senior Leverage Ratio at or below 1.9:1.0 (calculated on a trailing
four-fiscal quarters basis). As used in the Credit Agreement, Credit Extensions
mean the sum of the principal balance of all outstanding borrowings thereunder
and the amount of outstanding letters of credit ($80.0 million as of October 29,
2005). Based on the Senior Leverage Ratio at the end of the third quarter of
fiscal 2005, our availability under the Working Capital Facility after giving
effect to Credit Extension is $86.0 million. Also, the Credit Agreement prohibits
the payment of cash dividends. The Credit Agreement contains customary events of
default, including without limitation, payment defaults, material breaches of
representations, warranties and covenants, certain events of bankruptcy and
insolvency, and a change of control (excluding the purchase by the Investors of
the Purchased Securities). We were in compliance with all Credit Agreement
covenants as of October 29, 2005.

We believe that cash flows
generated from operations supplemented by our cash and cash equivalents and marketable
securities, the unused borrowing capacity under the Credit Agreement and the availability
of capital lease financing will be sufficient to provide for our debt service
requirements, working capital needs and capital expenditure program. However, in the event
that cash flows from operations continue to decrease, we may decide to limit our future
cash capital expenditure program and, to the extent the Senior Leverage Ratio continues to
increase, our ability to utilize the full amount available under the Working
Capital Facility will be limited.

There are no credit agency
ratings-related triggers in either the Credit Agreement or in the Indenture relating to
the Senior Subordinated Notes that would adversely impact the cost of borrowings, annual
amortization of principal or related debt maturities.

Borrowings under the Credit
Agreement bear interest at floating rates equal to LIBOR plus a premium that ranges
between 1.50% to 2.25%, depending on the average remaining availability under the Credit
Agreement. Our interest rate on borrowings under the Credit Agreement is currently at
LIBOR plus 1.75%. Under the Term Loan, we are required to make a balloon payment of $70
million on October 1, 2009. The Working Capital Facility also expires on October 1, 2009.
The weighted-average interest rate in effect on all borrowings under the Term Loan was
5.5% during the first nine months of fiscal 2005.

All of the obligations
under the Credit Agreement are guaranteed by the Companys 100% owned subsidiaries,
except our non-guarantor subsidiaries, which are comprised of four 100% owned and
consolidated single-purpose entities. Each of these single-purpose entities owns the real
estate on which a supermarket leased to Pathmark is located. The obligations under the
Credit Agreement and those of the subsidiaries guaranteeing the Credit Agreement are
secured by substantially all of the Companys tangible and intangible assets
including, without limitation, intellectual property, real property, including leasehold
interests, and the capital stock in each of these subsidiaries.

We have outstanding $350
million aggregate principal amount of Senior Subordinated Notes, including $150 million
issued at a premium, which pay cash interest semi-annually on February 1 and August 1. The
Indenture contains a number of restrictive covenants, including a restriction on our
ability to declare cash dividends on our common stock. We were in compliance with all
Senior Subordinated Notes covenants as of October 29, 2005.

21

Capital Expenditures.
Total capital expenditures in the third quarter of fiscal 2005 were $28.3
million compared to $36.7 million in the third quarter of fiscal 2004 and in the
first nine months of fiscal 2005 were $43.8 million compared to $101.2 million
in the first nine months of fiscal 2004. Total capital expenditures in fiscal
2005 include $7.5 million related to the Initiative. During the first nine
months of fiscal 2005, we opened one new store, closed two stores and renovated
six stores. The new store was a replacement for a closed store. During the
remainder of fiscal 2005, we expect to open one new store and complete two store
renovations. Total capital expenditures for fiscal 2005, including property
acquired under capital leases and technology investments, are expected to be
approximately $70 million.

##### Critical Accounting Policies

Our discussion of results
of operations and financial condition relies on our consolidated financial statements that
are prepared based on certain critical accounting policies that require management to make
judgments and estimates that are subject to varying degrees of uncertainty. We believe
that investors need to be aware of these policies and how they impact our financial
statements as a whole, as well as our related discussion and analysis presented herein.
While we believe that these accounting policies are based on sound measurement criteria,
actual future events can and often do result in outcomes that can be materially different
from these estimates or forecasts. The accounting policies and related risk described in
our Annual Report on Form 10-K for the year ended January 29, 2005 are those that depend
most heavily on these judgments and estimates. As of October 29, 2005, there have been no
material changes to any of the critical accounting policies contained therein.

##### New Accounting Pronouncements

In December 2004, the FASB
issued SFAS No. 123 (revised 2004), Share-Based Payment, which replaced SFAS
No. 123, Accounting for Stock-Based Compensation, and superseded APB Opinion
No. 25, Accounting for Stock Issued to Employees. This statement requires
compensation costs relating to share-based payment transactions, including grants of
employee stock options, be recognized in the financial statements based on their fair
values. The pro forma disclosure previously permitted under SFAS No. 123 will no longer be
an acceptable alternative to recognition of expenses in the financial statements. The
effective date of this statement was deferred until the beginning of the annual reporting
period that begins after June 15, 2005, i.e., for the Companys first quarterly
reporting period ending April 29, 2006. As a result, the Company will adopt this statement
in fiscal 2006. The Company currently measures compensation costs related to share-based
payments under APB No. 25, as allowed by SFAS No. 123, and provides the required
disclosure in the notes to financial statements. This statement provides for two
transition alternatives: modified-prospective transition or modified-retrospective
transition. The Company is currently evaluating the transition alternatives and the impact
on the Companys financial statements.

In May 2005, the FASB
issued SFAS No. 154, Accounting Changes and Error Corrections, which replaced
APB Opinion No. 20, Accounting Changes, and SFAS No. 3, Reporting
Accounting Changes in Interim Financial Statements, and changed the requirements for
the accounting for and reporting of a change in accounting principle. The statement
applies to all voluntary changes in accounting principle. It also applies to changes
required by an accounting pronouncement in the unusual instance that the pronouncement
does not include specific transition provisions. When a pronouncement includes specific
transition provisions, those provisions should be followed. APB Opinion No. 20 previously
required that most voluntary changes in accounting principle be recognized by including in
net income of the period of the change the cumulative effect of changing to the new
accounting principle. This statement requires retrospective application to prior period
financial statements of changes in accounting principle, unless it is impracticable to
determine either the period-specific effects or the cumulative effect of the change. When
it is impracticable to determine the period-specific effects of an accounting change on
one or more individual prior periods presented, this statement requires that the new
accounting principle be applied to the balances of assets and liabilities as of the
beginning of the earliest period for which retrospective application is practicable and
that a corresponding adjustment be made to the opening balance of retained earnings (or
other appropriate components of equity or net assets in the statement of financial
position) for that period rather than being reported in an income statement. When it is
impracticable to determine the cumulative effect of applying a change in accounting
principle to all prior periods, this statement requires that the new accounting principle
be applied as if it were adopted prospectively from the earliest date practicable. This
statement requires that retrospective application of a change in accounting principle be
limited to the direct effects of the change. Indirect effects of a change in accounting
principle, such as a change in nondiscretionary profit-sharing payments resulting from an
accounting change, should be recognized in the period of the accounting change. This
statement also requires that a change in depreciation, amortization, or depletion method
for long-lived, nonfinancial assets be accounted for as a change in accounting estimate
effected by a change in accounting principle. This statement carries forward without
change the guidance contained in APB Opinion No. 20 for reporting the correction of an
error in previously issued financial statements and a change in accounting estimate. This
statement also carries forward the guidance in APB Opinion No. 20 requiring justification
of a change in accounting principle on the basis of preferability. The provisions of SFAS
No. 154 are required to be adopted effective with the Companys first quarterly
reporting period in fiscal 2006. The Company does not expect that the adoption of this
statement will have an impact on its financial position or results of operations.

22

In June 2005, the FASB
ratified the recommendation of the staff of the Emerging Issues Task Force (the
EITF) on EITF Issue No. 05-3, Accounting for Rental Costs Incurred
During the Construction Period that an entity may not capitalize rental costs
associated with either ground or building operating leases that are incurred during the
construction period. The guidance in this issue is effective for the Companys fourth
quarterly reporting period ending January 28, 2006 and its adoption is not expected to
have any impact on the Companys financial position or results of operations.

In June 2005, the EITF
reached a consensus on EITF Issue No. 05-06, Determining the Amortization Period for
Leasehold Improvements Purchased After Lease Inception or Acquired in a Business
Combination. This issue states that leasehold improvements acquired in a business
combination and leasehold improvements purchased significantly after, and not contemplated
at the beginning of the lease term, should both be amortized over the lesser of the useful
life of the assets or a term that includes renewals that are reasonably assured at the
date of acquisition. The guidance in this issue is effective for leasehold improvements
that are purchased or acquired in reporting periods beginning after June 29, 2005, i.e.,
for the Companys third quarterly reporting period ended October 29, 2005. The
Companys accounting policies already reflect adoption of this guidance.

##### Forward-Looking Information

This report contains both
historical and forward-looking statements within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act. These statements appear in a
number of places in this report and include statements regarding our intent, belief and
current expectations with respect to, among other things, capital expenditures and
technology initiatives, the ability to borrow funds under our credit facility, the ability
to successfully implement our operating strategies, including trends affecting our
business, financial condition and results of operations. The words anticipate,
believe, expect, forecast, guidance,
intend, may, plan, project,
will and other similar expressions generally identify forward-looking
statements. While these forward-looking statements and the related assumptions are made in
good faith and reflect our current judgment regarding the direction of our business,
actual results will almost always vary, sometimes materially, from any estimates,
predictions, projections, assumptions or other future performance suggested herein. These
statements are based upon a number of assumptions and estimates which are inherently
subject to significant uncertainties and contingencies, many of which are beyond our
control and reflect future business decisions which are subject to change. Some of these
assumptions inevitably will not materialize, and unanticipated events will occur which
will affect our results.

Some important factors (but
not necessarily all factors) that could negatively affect our revenues, growth strategies,
future profitability and operating results, or that otherwise could cause actual results
to differ materially from those expressed in or implied by any forward-looking statement,
include the following:

- changes in business and economic conditions and other adverse
conditions in our markets;
- unanticipated environmental damages;
- increased competition;
- increased labor and labor related (e.g., health and welfare
and pension) costs and/or labor disruptions;
- reliance on third-party suppliers;
- our ability to successfully implement our operating,
marketing, renovation and expansion strategies; and
- natural disasters.

For a discussion of these
factors, see Item 1  Business  Factors Affecting Our Business and Prospects in
our Annual Report on Form 10-K for the year ended January 29, 2005.

23

#### Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Our financial results are
subject to risk from interest rate fluctuations on debt which carries variable interest
rates. Variable rate debt outstanding under our Term Loan was $70.0 million on October 29,
2005. The interest rate in effect on all borrowings under our Term Loan was 5.5% during
the first nine months of fiscal 2005. A 1% change in interest rates applied to the $70.0
million balance of floating-rate Term Loan debt would affect pre-tax annual results of
operations by approximately $0.7 million. Our Senior Subordinated Notes bear interest at a
fixed rate of 8.75%, and are, therefore, not subject to risk from interest rate
fluctuations. The principal objective of our investment management activities is to
maintain acceptable levels of interest rate and liquidity risk to facilitate our funding
needs. As part of our risk management, we may use derivative financial products such as
interest rate hedges and interest rate swaps in the future.

#### Item 4. Controls and Procedures.

The Companys management, with the participation of
the Companys Chief Executive Officer and Chief Financial Officer, has evaluated the
effectiveness of the Companys disclosure controls and procedures pursuant to Rule
13a-15(b) of the Exchange Act as of October 29, 2005. Based on that evaluation, the
Companys Chief Executive Officer and Chief Financial Officer have concluded that, as
of October 29, 2005, the Companys disclosure controls and procedures are effective
in timely alerting them to material information relating to the Company required to be
included in the Companys Exchange Act reports.

In the first quarter of fiscal 2005, the Company
remediated a material weakness in internal controls over financial reporting, which was
reported in the Companys Annual Report on Form 10-K for the year ended January 29,
2005, by implementing a more extensive analysis and review over the accounting for book
overdrafts.

There has been no other change during the Companys
fiscal quarter ended October 29, 2005 in the Companys internal controls over
financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) that has materially affected, or is reasonably likely to materially affect,
the Companys internal controls over financing reporting.

### Part II. Other Information

#### Item 6. Exhibits.



|10.1 | Second
Amendment to Credit Agreement, filed herewith.
|---- | -----------------------------------------------------



|31.1 | Form
of CEO Certification, filed herewith.
|---- | ------------------------------------------



|31.2 | Form
of CFO Certification, filed herewith.
|---- | ------------------------------------------



|32.1 | Certification
of John T. Standley, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of  the Sarbanes-Oxley Act of 2002, filed herewith.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------



|32.2 | Certification
of Frank G. Vitrano, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of  the Sarbanes-Oxley Act of 2002, filed herewith.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------

24

#### 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.

| |  | Pathmark Stores, Inc.
| |  | ---------------------
|
| |  | By:                  
|
| |  | By:                  

Date: December 2, 2005

25