Ross Stores (ROST)

Distribution

We have a total of four distribution processing facilities. We lease a 1.3 million square foot distribution center in Perris, California. We own our 1.3 million square foot distribution center in Fort Mill, South Carolina, our 685,000 square foot distribution center in Moreno Valley, California, and our 450,000 square foot distribution center located in Carlisle, Pennsylvania. We currently have under construction a 610,000 square foot expansion of our Moreno Valley, California, distribution center scheduled for completion in 2009. See additional discussion in Management’s Discussion and Analysis.

In addition, we lease four separate warehouse facilities for packaway storage, two of which are located in Carlisle, Pennsylvania, totaling approximately 239,000 and 246,000 square feet, and two of which are located in Fort Mill, South Carolina, totaling 253,000 and 423,000 square feet, respectively. We utilize other third-party facilities as needed for storage of packaway inventory. We also lease a 10-acre parcel which we currently have under construction for future trailer parking adjacent to our Perris distribution center.

We utilize third-party cross docks to distribute merchandise to stores on a regional basis. Shipments are made by contract carriers to the stores from three to six times per week depending on location.

We believe that our existing distribution centers with their current expansion capabilities will provide adequate processing capacity to support store growth over the next several years.

4

Distribution

We have a total of four
distribution processing facilities. We lease a 1.3 million square foot
distribution center in Perris, California. We own our 1.3 million square foot
distribution center in Fort Mill, South Carolina, our 685,000 square foot
distribution center in Moreno Valley, California, and our 450,000 square foot
distribution center located in Carlisle, Pennsylvania. We currently have under
construction a 610,000 square foot expansion of our Moreno Valley, California,
distribution center scheduled for completion in 2009. See additional discussion
in Management’s Discussion and Analysis.

In addition, we lease four
separate warehouse facilities for packaway storage, two of which are located in
Carlisle, Pennsylvania, totaling approximately 239,000 and 246,000 square feet,
and two of which are located in Fort Mill, South Carolina, totaling 253,000 and
423,000 square feet, respectively. We utilize other third-party facilities as
needed for storage of packaway inventory. We also lease a 10-acre parcel which
we currently have under construction for future trailer parking adjacent to our
Perris distribution center.

We utilize third-party cross docks
to distribute merchandise to stores on a regional basis. Shipments are made by
contract carriers to the stores from three to six times per week depending on
location.

We believe that our existing
distribution centers with their current expansion capabilities will provide
adequate processing capacity to support store growth over the next several
years.

4

We have a total of four distribution processing facilities. We lease a 1.3 million square foot distribution center in Perris, California. We own our 1.3 million square foot distribution center in Fort Mill, South Carolina, which we purchased in 2006, our 685,000 square foot distribution center in Moreno Valley, California, which we purchased in 2005, and our 426,000 square foot distribution center located in Carlisle, Pennsylvania. We have plans for future expansion at the Moreno Valley, California, distribution center. See additional discussion in Management’s Discussion and Analysis.

In addition, we lease three separate warehouse facilities for packaway storage, two of which are located in Carlisle, Pennsylvania, totaling approximately 239,000 and 246,000 square feet, and the third in Fort Mill, South Carolina, totaling 253,000 square feet. We utilize other third-party facilities as needed for storage of packaway inventory.

In fiscal 2007 we plan to continue to invest in our distribution network by spending approximately $90 million, mainly for the expansion of our Moreno Valley facility to increase our distribution and packaway storage capacity.

We also utilize third-party cross docks to distribute merchandise to stores on a regional basis. Shipments are made by contract carriers to the stores from three to five times per week depending on location.

We believe that our existing distribution centers with their expansion capabilities will provide adequate processing capacity to support store growth into fiscal year 2008.

Distribution

We have a source-based distribution network with a total of four distribution processing facilities strategically located close to the source of inbound merchandise receipts.  We lease two 1.3 million square foot distribution centers -- one in Fort Mill, South Carolina and the other in Perris, California.  We own a third 426,000 square foot distribution center located in Carlisle, Pennsylvania. 

We sold our 530,000 square foot Newark, California distribution center (“Newark Facility”) in 2004 and entered into a short-term lease arrangement to use approximately 154,000 square feet of the Newark Facility to support distribution activities for dd’s DISCOUNTS. 

In addition, we lease two warehouses for packaway storage totaling about 485,000 square feet in Carlisle, Pennsylvania and 253,000 square feet in Fort Mill, South Carolina, and utilize other third-party facilities as needed for storage of packaway inventory. 

In 2005, we purchased a 685,000 square foot warehouse with expansion rights in Moreno Valley, California.

4

Distribution

The Company has a source-based distribution network with a total of four distribution processing facilities strategically located close to the source of inbound merchandise receipts.  There are two 1.3 million square foot distribution centers that the Company leases in Fort Mill, South Carolina, and Perris, California.  The Company owns a third 426,000 square foot distribution center located in Carlisle, Pennsylvania. 

The Company sold its 530,000 square foot Newark distribution center (“Newark Facility”) in 2004 and entered into a lease arrangement to use approximately 154,000 square feet of the Newark Facility to support distribution activities for dd’s DISCOUNTS^SM and the Company’s data center.  See additional discussion in Management’s Discussion and Analysis. 

In addition, the Company leases two warehouses for packaway storage totaling about 485,000 square feet in Carlisle, Pennsylvania and 253,000 square feet in Fort Mill, South Carolina, and utilizes other third-party facilities as needed for storage of packaway inventory.

The Company also utilizes third-party cross docks to distribute merchandise to stores on a regional basis.  Shipments are made by contract carriers to the stores from three to five times per week depending on location.  The Company is currently in negotiations to acquire additional distribution center space during 2005.  The Company believes that its existing distribution centers will provide adequate processing capacity to support store growth at least into 2006.