The Jean Coutu Group (PJC) Inc.
TSX : PJC.SV.A

The Jean Coutu Group (PJC) Inc.

January 25, 2005 00:00 ET

Eckerd integration is on schedule and the US network contributed to second quarter growth

LONGUEUIL, Jan. 25 /CCNMatthews/ - The Jean Coutu Group (PJC) Inc. ("PJC"
or the "Company") reported its second quarter 2004-2005 financial results
today. For the first time, these quarterly results include the operations of
Eckerd drugstores for the full 13 weeks ended November 27, 2004. As a result,
revenues grew by 256% during the second quarter.

<<
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SUMMARY OF RESULTS
(in thousands of US dollars except per share amounts)


Q2/2005 Q2/2004 First half First half
2005 2004
------------------------------------------------------
Revenues 2,696,877 757,633 4,033,544 1,475,491

Operating income before
amortization ("OIBA") 117,059 60,679 178,987 120,751

Net earnings (loss) (3,994) 32,506 18,308 64,044

Earnings (loss) per share $(0.02) $0.14 $0.07 $0.28

Earnings per share before
unrealized losses on
financing activities $0.06 $0.14 $0.15 $0.28
>>

HIGHLIGHTS

- Net earnings before unrealized losses on financing activities were
$14.8 million ($0.06 per share).
- The Company had to bear the cost of running several head office
infrastructures. The Eckerd integration is on schedule and the Brooks -
Eckerd network is now in operational and selling mode.
- The second quarter results reflect the operations of Eckerd drugstores
for 13 weeks. First half results reflect 17 weeks of Eckerd operations.
- During the second quarter, the Company recorded a $19.7 million ($0.08
per share), unrealized foreign exchange loss on monetary items related
to the Eckerd acquisition. The Company is in the process of reviewing
these arrangements and their documentation in order to ensure that they
are properly hedged against future foreign exchange risk.

"The Jean Coutu Group made good progress this quarter. We are pleased
with the growth of our existing operations while the integration of the Eckerd
drugstore network is on schedule," said François J. Coutu, President and Chief
Executive Officer. "The second quarter results of our Canadian and American
operations were satisfactory. We completed the first full quarter of
operations of the Eckerd drugstores while having to bear the costs of running
several head office infrastructures during the integration. The Brooks -
Eckerd network is now in operational and selling mode. We are now in a
position to begin to capture the Eckerd integration cost savings while we
continue to improve the performance of our US network of drugstores. At the
same time we will continue to build on the strong base of our Canadian
network."

Net earnings
For the second quarter, the net loss was $4.0 million ($0.02 per share)
compared with net earnings of $32.5 million ($0.14 per share) for the second
quarter of the previous fiscal year. There was an unrealized foreign exchange
loss on monetary items of $19.7 million ($0.08 per share) recorded during the
current quarter. The Company is in the process of reviewing these arrangements
and their documentation in order to ensure that they are properly hedged
against future foreign exchange risk. Net earnings before unrealized losses on
financing activities were $14.8 million ($0.06 per share). The Company
operated its acquired Eckerd drugstores for the full second quarter, resulting
in substantial increases in revenues, cost of goods sold and operating
expenses.
First half net earnings before unrealized losses on financing activities
were $39.0 million ($0.15 per share) compared to $64.0 million ($0.28 per
share) for the corresponding period last year. The unrealized foreign exchange
loss on monetary items for the first half was $20.1 million ($0.08 per share).

Revenues
The revenues of PJC's Canadian operations for the second quarter reached
$365.7 million compared with $317.5 million for the second quarter of the 2003-
2004 fiscal year, an increase of $48.2 million or 15.2% (7.9% in local
currency).
Our American operations generated revenues of $2.331 billion, an increase
of $1.891 billion or 429.7% over the second quarter of the previous fiscal
year. The substantial increase is attributable to the Company operating its
acquired Eckerd drugstores for the full 13 weeks of the second quarter.
First half revenues increased by $2.558 billion or 173.3% to $4.034
billion from $1.475 billion a year ago.

Retail sales
In the second quarter, the Company's Canadian franchise network showed a
6.6% increase in sales. The American corporate pharmacy network posted retail
sales of $2.327 billion, up 429.8% when compared with the same quarter of the
2003-2004 fiscal year.
In terms of comparable stores, the Canadian network's retail sales were
up 6.1%. In the United States, also in terms of comparable stores, retail
sales rose by 3.5% compared with the same quarter last year. This measure does
not include same-store sales for the acquired Eckerd drugstores, which will be
included in same-store sales in August 2005.
The Jean Coutu Group's Canadian franchise network recorded a 6.7%
increase in first half retail sales. The American corporate pharmacy network
posted retail sales of $3.350 billion, up 281.6% when compared with the first
half of the 2003-2004 fiscal year.

OIBA
In the second quarter, Operating income before amortization ("OIBA")
amounted to $117.1 million against $60.7 million for the corresponding quarter
last year.
OIBA for the 26-weeks ended November 27, 2004 improved to $179.0 million
against $120.8 million for the corresponding period last year.

Store network development
During the second quarter, 38 drugstores were opened, twenty of which
were relocations and two drugstores were closed. At quarter-end, there were
2,225 stores in the system, comprised of 321 Canadian PJC stores, and 1,569
Eckerd and 335 Brooks stores in the United States.

Presentation of financial statements
As previously announced, PJC changed its reporting currency to US dollars
to reflect the fact that most of its activities are conducted in the United
States following the acquisition of Eckerd drugstores. Our US dollar reporting
currency ensures that our financial statements more accurately reflect the
Company's true operating results and financial position.

Outlook
The Company operates its Canadian and US network with a focus on sales
growth, network renovation, relocation and expansion projects and operating
efficiency. The Company has completed several aspects of the Eckerd
integration which was focused on three principal areas:

- Reduction of support functions
Head and field office head count reductions are substantially complete
and productivity will be enhanced. The Company will continue to move
toward the right sized support structure which should be completed by
June 2005. At the same time, efforts are being made to optimize supply
chain efficiency.

- Operational improvements
The Company has implemented plans, processes and deployed people to
reduce inventory shrink, optimize marketing revenues and expenses,
increase store labour efficiency and eliminate non-productive
contracts.

- Growth initiatives
Initiatives have been taken, and will continue to be implemented to
improve merchandising mix, extend store hours, improve customer
service, expand private label sales and improve pricing.

The Brooks - Eckerd network is now in operational and selling mode. The
Company is now in a position to begin to capture the Eckerd integration cost
savings while we continue to improve the performance of our US network of
drugstores. At the same time we will continue to build on the strong base of
our Canadian network.
The Company's target is to reduce leverage (Funded debt/OIBA) to less
than 3.5x within 24 months after the closing of the Eckerd acquisition
(July 31, 2004) and to less than 2.0x within 48 months.
The Eckerd acquisition is expected to impact net earnings in fiscal 2005
because the transaction closed 45 days later than expected. As a result, a
portion of the integration savings has been pushed into fiscal 2006.

Dividend
The Board of Directors of The Jean Coutu Group declared a quarterly
dividend of C$0.03 per share. This dividend is payable on February 24, 2005 to
all holders of Class A Subordinate Voting shares and holders of Class B shares
listed in the Company's shareholder ledger as of February 10, 2005.

Conference call
Financial analysts are invited to attend the Second Quarter Results
conference call to be held on Tuesday, January 25, 2005 at 9:00 AM Eastern
Time. The toll free call-in number is 1-800-387-6216. Media and other
interested individuals are invited to listen to the live or deferred broadcast
on The Jean Coutu Group corporate Web site at www.jeancoutu.com . A full
replay will also be available by dialing 1-800-408-3053 Code 3127132 (pound
sign) until February 25, 2005.
Supporting documentation (financial statements, management's discussion
and analysis, additional information and investor presentation) is available
at www.jeancoutu.com using the Investors link. Our filings may be accessed
using the following links to the www.sedar.com (Canada) and www.sec.gov
(United States) websites.

About The Jean Coutu Group
The Jean Coutu Group (PJC) Inc. is the fourth largest drugstore chain in
North America and the second largest in both the eastern United States and
Canada. The Company and its combined network of 2,225 corporate and affiliated
drugstores (under the banners of Eckerd, Brooks, PJC Jean Coutu, PJC Clinique
and PJC Santé Beauté) employ more than 60,000 people.
The Jean Coutu Group's United States operations employ over 46,000
persons and comprise 1,904 corporate owned stores located in 18 states of the
Northeastern, mid-Atlantic and Southeastern United States. The Jean Coutu
Group's Canadian operations and drugstores affiliated to its network employ
over 14,000 people and comprise 321 PJC Jean Coutu franchised stores in
Quebec, New Brunswick and Ontario.

Certain statements in this press release, including statements regarding
future results and performance, are forward-looking statements (as such
term is defined under the United States Private Securities Litigation
Reform Act of 1995) based on current expectations. The accuracy of such
statements is subject to a number of risks, uncertainties and assumptions
that may cause actual results to differ materially from those projected,
including, but not limited to, changes in foreign currency valuations,
our ability to effectively compete and changes in competition or other
trends in the industries in which we compete and other factors. The
Company disclaims any intention or obligation to update or revise any
forward-looking information contained in its communications, whether as a
result of new information, future events or otherwise.

This press release also contains certain non-GAAP financial measures.
Such information is reconciled to the most directly comparable financial
measures, as set forth in the "additional information" section, which is
attached to the Company's financial statements.


<<
THE JEAN COUTU GROUP (PJC) INC.
Unaudited consolidated statements of income
(in thousands of US dollars except for per share amounts)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Thirteen Three Twenty-six Six
weeks months weeks months
ended ended ended ended
November 27, November 30, November 27, November 30,
2004 2003 2004 2003
$ $ $ $
------------------------------------------------------
(restated) (restated)

Sales 2,653,312 721,257 3,951,547 1,401,053
Other revenues 43,565 36,376 81,997 74,438
-------------------------------------------------------------------------
2,696,877 757,633 4,033,544 1,475,491
-------------------------------------------------------------------------
Operating expenses
Cost of goods sold 2,047,610 587,032 3,073,806 1,136,663
General and
operating expenses 533,111 110,744 782,477 219,696
Amortization 55,591 9,321 80,886 18,411
-------------------------------------------------------------------------
2,636,312 707,097 3,937,169 1,374,770
-------------------------------------------------------------------------
Operating income 60,565 50,536 96,375 100,721
-------------------------------------------------------------------------
Interest on
long-term debt 44,826 2,876 59,849 6,055
Unrealized loss
(gain) on derivative
financial instruments (1,350) - 884 -
Unrealized foreign
exchange loss on
monetary items 19,746 - 20,100 -
Other financing
expenses, net 822 446 920 1,374
-------------------------------------------------------------------------
64,044 3,322 81,753 7,429
-------------------------------------------------------------------------
Earnings (loss) before
income taxes (3,479) 47,214 14,622 93,292
Income taxes 515 14,708 (3,686) 29,248
-------------------------------------------------------------------------
Net earnings (loss) (3,994) 32,506 18,308 64,044
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Earnings (loss) per
share (Note 3)
Basic (0.02) 0.14 0.07 0.28
Diluted (0.02) 0.14 0.07 0.28
-------------------------------------------------------------------------
-------------------------------------------------------------------------


The segmented information and the accompanying notes are an integral part
of these unaudited interim consolidated financial statements



THE JEAN COUTU GROUP (PJC) INC.
Unaudited consolidated statements of retained earnings
(in thousands of US dollars)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Thirteen Three Twenty-six Six
weeks months weeks months
ended ended ended ended
November 27, November 30, November 27, November 30,
2004 2003 2004 2003
$ $ $ $
------------------------------------------------------
(restated) (restated)
Balance, beginning
of period
As previously reported 724,877 628,909 709,419 602,093
Restatement related
to changes in
accounting policies
(Note 2) - (6,135) (867) (5,945)
-------------------------------------------------------------------------
Restated balance 724,877 622,774 708,552 596,148

Net earnings (loss) (3,994) 32,506 18,308 64,044

Dividends 6,567 5,133 12,544 10,045
-------------------------------------------------------------------------
Balance, end of period 714,316 650,147 714,316 650,147
-------------------------------------------------------------------------
-------------------------------------------------------------------------


The segmented information and the accompanying notes are an integral part
of these unaudited interim consolidated financial statements



THE JEAN COUTU GROUP (PJC) INC.
Consolidated balance sheets
(in thousands of US dollars)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

As at As at
November 27, May 31,
2004 2004
-------------------------------------------------------------------------
$ $
(unaudited) (audited)
(restated)

Assets
Current assets
Cash 178,157 14,554
Accounts receivable 539,804 199,516
Inventories 1,686,010 391,916
Prepaid expenses and other current assets 53,437 22,455
-------------------------------------------------------------------------
2,457,408 628,441
Investments 23,028 21,298
Capital assets 1,559,462 544,174
Intangible assets 756,079 19,277
Goodwill 702,420 95,330
Other long-term assets 124,349 35,234
-------------------------------------------------------------------------
5,622,746 1,343,754
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Liabilities
Current liabilities
Bank loans - 15,000
Accounts payable and accrued liabilities 1,016,907 231,306
Income taxes payable 9,345 42,004
Future income taxes 92,447 -
Current portion of long term debt 44,761 22,566
-------------------------------------------------------------------------
1,163,460 310,876
Long-term debt 2,540,955 169,609
Other long-term liabilities (Note 4) 532,457 9,826
-------------------------------------------------------------------------
4,236,872 490,311
-------------------------------------------------------------------------

Guarantees and commitments (Notes 7 and 9)

Shareholders' equity
Capital stock (Note 5) 575,827 144,996
Contributed surplus 402 188
Retained earnings 714,316 708,552
Foreign currency translation adjustments 95,329 (293)
-------------------------------------------------------------------------
1,385,874 853,443
-------------------------------------------------------------------------
5,622,746 1,343,754
-------------------------------------------------------------------------
-------------------------------------------------------------------------


The segmented information and the accompanying notes are an integral part
of these unaudited interim consolidated financial statements



THE JEAN COUTU GROUP (PJC) INC.
Unaudited consolidated statements of cash flows
(in thousands of US dollars)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Thirteen Three Twenty-six Six
weeks months weeks months
ended ended ended ended
November 27, November 30, November 27, November 30,
2004 2003 2004 2003
$ $ $ $
------------------------------------------------------
(restated) (restated)
Operating activities
Net earnings (loss) (3,994) 32,506 18,308 64,044
Items not affecting
cash
Amortization 55,591 9,321 80,886 18,411
Amortization of
incentives paid
to franchisees 903 822 1,726 1,619
Amortization of
deferred financing
fees 2,999 285 4,431 571
Loss on disposal of
assets 51 46 27 64
Unrealized loss
(gain) on
derivative financial
instruments (1,350) - 884 -
Unrealized foreign
exchange loss on
monetary items 19,746 - 20,100 -
Future income taxes 3,819 (3,977) (2,093) (7,671)
Stock-based
compensation 126 - 214 -
Share in income of
companies subject
to significant
influence (92) (6) 51 18
-------------------------------------------------------------------------
77,799 38,997 124,534 77,056
Net changes in non-cash
asset and liability
items 61,319 34,928 (77,494) 18,672
-------------------------------------------------------------------------
139,118 73,925 47,040 95,728
-------------------------------------------------------------------------

Investing activities
Business acquisitions
(Note 9) (4,879) (3,910) (2,519,400) (3,910)
Investments (3,813) 2,541 1,461 (4,548)
Purchase of capital
assets (53,541) (21,704) (74,094) (38,315)
Proceeds from the
disposal of capital
assets 4,002 306 4,404 564
Intangible assets (406) 65 (1,029) (206)
Other long-term assets (2,684) (2,274) (75,755) (3,309)
-------------------------------------------------------------------------
(61,321) (24,976) (2,664,413) (49,724)
-------------------------------------------------------------------------

Financing activities
Changes in bank loans - (26,947) (15,000) (22,397)
Changes in long-term
debt 52,871 (5,638) 2,417,395 (10,869)
Issuance of capital
stock (Note 5) 733 1,080 430,831 1,968
Dividends (12,544) (5,133) (12,544) (10,045)
-------------------------------------------------------------------------
41,060 (36,638) 2,820,682 (41,343)
-------------------------------------------------------------------------
Foreign currency
translation adjustments (42,281) 5,073 (39,706) 3,945
-------------------------------------------------------------------------

Increase in cash and
cash equivalents 76,576 17,384 163,603 8,606
Cash (bank overdraft),
beginning of period 101,581 (17,051) 14,554 (8,273)
-------------------------------------------------------------------------
Cash, end of period 178,157 333 178,157 333
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Additional cash flow
information
Interest paid 14,983 3,467 17,832 7,313
Income taxes paid 1,269 11,714 45,769 18,067


The segmented information and the accompanying notes are an integral part
of these unaudited interim consolidated financial statements


THE JEAN COUTU GROUP (PJC) INC.
Unaudited consolidated segmented information
(in thousands of US dollars)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

The Company applied on a retroactive basis changes in its reportable
segments determination. The impact of these changes is the aggregation of the
franchising and real estate segments. The Company has now two reportable
segments: franchising and retail sales. Within the segment of franchising, the
Company carries on the franchising activity of the "PJC Jean Coutu" banner,
operates a distribution centre and coordinates several other services for the
benefit of its franchisees. The Company operates retail sales outlets selling
pharmaceutical and other products under the "Brooks" and "Eckerd" banners.
The Company analyzes the performance of its operating segments based on
their operating income before amortization, which is not a measure of
performance under Canadian generally accepted accounting principles ("GAAP");
however, management uses this performance measure for assessing the operating
performance of its reportable segments.

Thirteen Three Twenty-six Six
weeks months weeks months
ended ended ended ended
November 27, November 30, November 27, November 30,
2004 2003 2004 2003
------------------------------------------------------
Segmented information
is summarized
as follows: $ $ $ $
(restated) (restated)
Revenues(1)
Franchising 365,715 317,544 678,248 593,024
Retail sales 2,331,162 440,089 3,355,296 882,467
-------------------------------------------------------------------------
2,696,877 757,633 4,033,544 1,475,491
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Operating income before
amortization
Franchising 37,442 33,769 69,397 65,963
Retail sales 79,617 26,910 109,590 54,788
-------------------------------------------------------------------------
117,059 60,679 178,987 120,751
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Amortization
Franchising 3,461 2,491 6,657 4,864
Retail sales 53,033 7,652 75,955 15,166
-------------------------------------------------------------------------
56,494 10,143 82,612 20,030
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Operating income
Franchising 33,981 31,278 62,740 61,099
Retail sales 26,584 19,258 33,635 39,622
-------------------------------------------------------------------------
60,565 50,536 96,375 100,721
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Acquisition of capital
assets and intangible
assets(2)
Franchising 7,393 6,492 10,469 10,980
Retail sales 46,554 15,212 64,654 27,541
-------------------------------------------------------------------------
53,947 21,704 75,123 38,521
-------------------------------------------------------------------------
-------------------------------------------------------------------------

(1)Revenues include sales and other revenues
(2)Excluding business acquisitions


As at As at
November 27, May 31,
2004 2004
--------------------------
$ $
Total assets (restated)
Franchising 775,976 464,758
Retail sales 4,846,770 878,996
-------------------------------------------------------------------------
5,622,746 1,343,754
-------------------------------------------------------------------------


THE JEAN COUTU GROUP (PJC) INC.
Unaudited additional information
(Tabular amounts are in thousands of US dollars except for shares,
margins and network performances)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

As at As at
November 27, May 31,
2004 2004
--------------------------
$ $
Capital assets, intangible assets and goodwill
Canada 308,907 254,661
United States 2,709,054 404,120
-------------------------------------------------------------------------
3,017,961 658,781
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Thirteen Three Twenty-six Six
weeks months weeks months
ended ended ended ended
November 27, November 30, November 27, November 30,
2004 2003 2004 2003
------------------------------------------------------
$ $ $ $
Revenus(1)
Canada 365,715 317,544 678,248 593,024
United States 2,331,162 440,089 3,355,296 882,467
-------------------------------------------------------------------------
2,696,877 757,633 4,033,544 1,475,491
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Gross margin
Canada 9.8% 9.3% 9.3% 9.5%
United States 24.7% 24.6% 24.5% 24.4%

Network performance -
Retail sales
Canada(2) 542,912 477,615 1,024,973 928,603
United States 2,326,816 439,201 3,349,769 877,831
-------------------------------------------------------------------------
2,869,728 916,816 4,374,742 1,806,434
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Network performance -
Retail sales
Pharmacy
Canada(2) 59% 57% 58% 56%
United States 73% 69% 73% 69%

Front-end
Canada(2) 41% 43% 42% 44%
United States 27% 31% 27% 31%

Number of outlets
Beginning of period 2,209 645 655 643
Openings 38 8 56 12
Acquisition - - 1,549 -
Relocations (20) (2) (30) (4)
Closings (2) - (5) -
-------------------------------------------------------------------------
End of period 2,225 651 2,225 651
-------------------------------------------------------------------------
-------------------------------------------------------------------------


Thirteen Three Twenty-six Six
weeks months weeks months
ended ended ended ended
November 27, November 30, November 27, November 30,
2004 2003 2004 2003
------------------------------------------------------

Retail sales growth(3)
Total
Canada(2) 6.6% 6.9% 6.7% 7.1%
United States 429.8% 4.4% 281.6% 4.7%

Front-end
Canada(2) 1.4% 1.5% 1.7% 2.0%
United States 360.0% 4.6% 233.8% 3.9%

Pharmacy
Canada(2) 10.7% 10.9% 10.3% 11.4%
United States 460.7% 4.3% 303.0% 5.0%

Retail sales growth
- same store(3)
Total
Canada(2) 6.1% 6.5% 6.1% 6.5%
United States 3.5% 4.4% 2.8% 4.6%

Front-end
Canada(2) 1.0% 1.4% 1.3% 1.6%
United States 0.6% 4.6% (0.4%) 3.6%

Pharmacy
Canada(2) 10.2% 10.4% 9.6% 10.7%
United States 4.7% 4.3% 4.3% 5.0%


(1)Revenues include sales and other revenues
(2)Franchisee's sales are not included in the Company's consolidated
financial statements
(3)Growth is calculated in local currency and is based on comparable
periods


THE JEAN COUTU GROUP (PJC) INC.
Unaudited additional information
(Tabular amounts are in thousands of US dollars except for shares,
margins and network performances)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Non GAAP measures - Operating income before amortization ("OIBA")

Operating income before amortization is not a measure of performance
under Canadian generally accepted accounting principles ("GAAP"); however
management uses this performance measure for assessing the operating and
financial performance of its reportable segments. Besides, we believe that
operating income before amortization is an additional measurement used by
investors to evaluate operating performance and capacity of a company to meet
its financial obligations. However, operating income before amortization is
not and must not be used as alternative to net earnings (loss) or cash flow
generated by operating activities as defined by Canadian GAAP. Operating
income before amortization is not necessarily an indication that cash flow
will be sufficient to meet our financial obligations. Further, our definition
of operating income before amortization may not be necessarily comparable to
similarly titles measures reported by other companies.
Net earnings (loss), which is a performance measure defined by Canadian
GAAP, is reconciled below with operating income before amortization.


Thirteen Three Twenty-six Six
weeks months weeks months
ended ended ended ended
November 27, November 30, November 27, November 30,
2004 2003 2004 2003
------------------------------------------------------
$ $ $ $

Net earnings (loss) (3,994) 32,506 18,308 64,044
Interest on
long-term debt 44,826 2,876 59,849 6,055
Unrealized loss (gain)
on derivative financial
instruments (1,350) - 884 -
Unrealized exchange loss
on monetary items 19,746 - 20,100 -
Other financing
expenses, net 822 446 920 1,374
Income taxes 515 14,708 (3,686) 29,248
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Operating income 60,565 50,536 96,375 100,721
Amortization 55,591 9,321 80,886 18,411
Amortization of
incentive paid
to franchisees 903 822 1,726 1,619
-------------------------------------------------------------------------
Operating income
before amortization 117,059 60,679 178,987 120,751
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Non GAAP measures - Earnings before unrealized losses on financing
activities

Earnings before unrealized losses on financing activities and earnings
per share before unrealized losses on financing activities are non-GAAP
measures. The Company believes that it is useful for investors to be aware of
significant items of an unusual or non-recurring nature that have adversely or
positively affected its GAAP measures, and that the above mentioned non-GAAP
measures provide investors with a measure of performance with which to compare
its results between periods without regard to these items. The Company's
measures excluding certain items have no standardized meaning prescribed by
GAAP and are not necessarily comparable to similar measures presented by other
companies and therefore should not be considered in isolation.
Net earnings (loss) and earnings (loss) per share are reconciled
hereunder to earnings before unrealized losses on financing activities and
earnings per share before unrealized losses on financing activities.


Thirteen Three Twenty-six Six
weeks months weeks months
ended ended ended ended
November 27, November 30, November 27, November 30,
2004 2003 2004 2003
$ $ $ $
------------------------------------------------------
Net earnings (loss) (3,994) 32,506 18,308 64,044
Unrealized loss (gain)
on derivative financial
instruments, net of
income taxes (932) - 610 -
Unrealized exchange
loss on monetary items,
net of income taxes 19,746 - 20,100 -
-------------------------------------------------------------------------
Earnings before
unrealized losses on
financing activities 14,820 32,506 39,018 64,044
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Earnings (loss) per share (0.02) 0.14 0.07 0.28
Unrealized losses on
financing activities,
net of income taxes 0.08 - 0.08 -
-------------------------------------------------------------------------
Earnings per share
before unrealized losses
on financing activities 0.06 0.14 0.15 0.28
-------------------------------------------------------------------------
-------------------------------------------------------------------------
>>

Description of foreign currency balance sheet translation

Even though the Company's reporting currency is US dollars, non-
consolidated financial statements of the parent company and its subsidiaries
are measured based on their respective functional currencies, which is US
dollars for US operations and Canadian dollars for Canadian operations and
corporate activities.
Assets and liabilities denominated in currencies other than an entity's
functional currency are translated according to the temporal method. Monetary
assets and liabilities are translated at the exchange rate in effect at the
balance sheet date, and non-monetary assets and liabilities at historical
rates. All exchange gains and losses on monetary items are current in nature
and are included in the statement of income.
The weakening of the US dollar against the Canadian dollar, from $0.7631
as at August 27, 2004 to $0.8493 as at November 27, 2004, resulted in the
Company recording an unrealized exchange loss of $19.7 million during the
second quarter of fiscal 2005. This loss is attributable to US dollar net
monetary assets held by the parent company for the benefit of its US
subsidiaries.
In order to avoid the impact of these foreign currency fluctuations in
the future, the Company's is in the process of reviewing these arrangements
and their documentation in order to ensure that they are properly hedged
against foreign exchange risk.



For further information: Michael Murray, Director, Investor Relations,
The Jean Coutu Group (PJC) Inc., (450) 646-9760; Hélène Bisson, Media and
Public Relations, (514) 842-8860, ext. 343; Source: André Belzile, Senior
Vice-President Finance and Corporate Affairs, The Jean Coutu Group (PJC) Inc.,
(450) 646-9760