Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Aug. 30, 2014 | Sep. 18, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'RITE AID CORP | ' |
Entity Central Index Key | '0000084129 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Aug-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--02-28 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 981,430,837 |
Document Fiscal Year Focus | '2015 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Aug. 30, 2014 | Mar. 01, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $185,758 | $146,406 |
Accounts receivable, net | 954,785 | 949,062 |
Inventories, net of LIFO reserve of $1,021,670 and $1,018,581 | 2,922,203 | 2,993,948 |
Prepaid expenses and other current assets | 131,281 | 195,709 |
Total current assets | 4,194,027 | 4,285,125 |
Property, plant and equipment, net | 2,006,872 | 1,957,329 |
Goodwill | 73,103 | ' |
Other intangibles, net | 411,295 | 431,227 |
Other assets | 274,047 | 271,190 |
Total assets | 6,959,344 | 6,944,871 |
Current liabilities: | ' | ' |
Current maturities of long-term debt and lease financing obligations | 113,070 | 49,174 |
Accounts payable | 1,205,834 | 1,292,419 |
Accrued salaries, wages and other current liabilities | 1,092,072 | 1,165,859 |
Total current liabilities | 2,410,976 | 2,507,452 |
Long-term debt, less current maturities | 5,570,583 | 5,632,798 |
Lease financing obligations, less current maturities | 68,633 | 75,171 |
Other noncurrent liabilities | 815,677 | 843,152 |
Total liabilities | 8,865,869 | 9,058,573 |
Commitments and contingencies | ' | ' |
Stockholders' deficit: | ' | ' |
Common stock, par value $1 per share; 1,500,000 authorized; shares issued and outstanding 981,339 and 971,331 | 981,339 | 971,331 |
Additional paid-in capital | 4,494,704 | 4,468,149 |
Accumulated deficit | -7,346,553 | -7,515,848 |
Accumulated other comprehensive loss | -36,015 | -37,334 |
Total stockholders' deficit | -1,906,525 | -2,113,702 |
Total liabilities and stockholders' deficit | $6,959,344 | $6,944,871 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Aug. 30, 2014 | Mar. 01, 2014 |
In Thousands, except Per Share data, unless otherwise specified | ||
CONDENSED CONSOLIDATED BALANCE SHEETS | ' | ' |
Inventories, LIFO reserve (in dollars) | $1,021,670 | $1,018,581 |
Common stock, par value (in dollars per share) | $1 | $1 |
Common stock, shares authorized | 1,500,000 | 1,500,000 |
Common stock, shares issued | 981,339 | 971,331 |
Common stock, shares outstanding | 981,339 | 971,331 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Aug. 30, 2014 | Aug. 31, 2013 | Aug. 30, 2014 | Aug. 31, 2013 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ' | ' | ' | ' |
Revenues | $6,522,584 | $6,278,165 | $12,988,115 | $12,571,222 |
Costs and expenses: | ' | ' | ' | ' |
Cost of goods sold | 4,628,005 | 4,461,804 | 9,290,557 | 8,933,870 |
Selling, general and administrative expenses | 1,640,524 | 1,602,931 | 3,284,878 | 3,212,192 |
Lease termination and impairment charges | 7,111 | 11,390 | 11,959 | 22,362 |
Interest expense | 100,950 | 106,716 | 201,770 | 219,780 |
Loss on debt retirements, net | ' | 62,172 | ' | 62,172 |
Gain on sale of assets, net | -1,715 | -1,885 | -2,085 | -7,065 |
Total costs and expenses | 6,374,875 | 6,243,128 | 12,787,079 | 12,443,311 |
Income before income taxes | 147,709 | 35,037 | 201,036 | 127,911 |
Income tax expense (benefit) | 19,860 | 2,210 | 31,741 | 5,422 |
Net income | 127,849 | 32,827 | 169,295 | 122,489 |
Computation of income attributable to common stockholders: | ' | ' | ' | ' |
Net income | 127,849 | 32,827 | 169,295 | 122,489 |
Accretion of redeemable preferred stock | ' | -26 | ' | -51 |
Cumulative preferred stock dividends | ' | -2,772 | ' | -5,504 |
Income attributable to common stockholders-basic | 127,849 | 30,029 | 169,295 | 116,934 |
Add back-interest on convertible notes | 1,364 | ' | 2,728 | 2,728 |
Income attributable to common stockholders-diluted | $129,213 | $30,029 | $172,023 | $119,662 |
Basic income per share (in dollars per share) | $0.13 | $0.03 | $0.18 | $0.13 |
Diluted income per share (in dollars per share) | $0.13 | $0.03 | $0.17 | $0.12 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Aug. 30, 2014 | Aug. 31, 2013 | Aug. 30, 2014 | Aug. 31, 2013 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ' | ' | ' | ' |
Net income | $127,849 | $32,827 | $169,295 | $122,489 |
Defined benefit pension plans: | ' | ' | ' | ' |
Amortization of prior service cost, net transition obligation and net actuarial losses included in net periodic pension cost | 660 | 1,262 | 1,319 | 2,525 |
Total other comprehensive income (loss) | 660 | 1,262 | 1,319 | 2,525 |
Comprehensive income | $128,509 | $34,089 | $170,614 | $125,014 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Aug. 30, 2014 | Aug. 31, 2013 |
Operating activities: | ' | ' |
Net income | $169,295 | $122,489 |
Adjustments to reconcile to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 204,589 | 200,493 |
Lease termination and impairment charges | 11,959 | 22,362 |
LIFO charges | 3,089 | 35,000 |
Gain on sale of assets, net | -2,085 | -7,065 |
Stock-based compensation expense | 9,892 | 8,077 |
Loss on debt retirements, net | ' | 62,172 |
Excess tax benefit on stock options and restricted stock | -27,058 | ' |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | 441 | 6,743 |
Inventories | 68,917 | -95,926 |
Accounts payable | -26,750 | 36,200 |
Other assets and liabilities, net | -50,058 | -126,633 |
Net cash provided by operating activities | 362,231 | 263,912 |
Investing activities | ' | ' |
Payments for property, plant and equipment | -193,633 | -170,850 |
Intangible assets acquired | -40,023 | -35,651 |
Acquisition of Health Dialog and RediClinic, net of cash acquired | -69,793 | ' |
Proceeds from sale-leaseback transactions | ' | 3,989 |
Proceeds from dispositions of assets and investments | 6,102 | 9,698 |
Net cash used in investing activities | -297,347 | -192,814 |
Financing activities: | ' | ' |
Proceeds from issuance of long-term debt | 1,152,293 | 1,310,000 |
Net proceeds from revolver | 5,000 | 12,000 |
Principal payments on long-term debt | -1,165,623 | -1,321,971 |
Change in zero balance cash accounts | -57,545 | -5,319 |
Net proceeds from issuance of common stock | 14,791 | 12,263 |
Financing fees paid for early debt redemption | ' | -45,636 |
Excess tax benefit on stock options and restricted stock | 27,058 | ' |
Deferred financing costs paid | -1,506 | -17,720 |
Net cash used in financing activities | -25,532 | -56,383 |
Increase in cash and cash equivalents | 39,352 | 14,715 |
Cash and cash equivalents, beginning of period | 146,406 | 129,452 |
Cash and cash equivalents, end of period | 185,758 | 144,167 |
Supplementary cash flow data: | ' | ' |
Cash paid for interest (net of capitalized amounts of $000 and $106, respectively) | 192,319 | 219,240 |
Cash payments of income taxes, net of refunds | 4,118 | 401 |
Equipment financed under capital leases | 3,925 | 13,117 |
Equipment received for non-cash consideration | 1,337 | ' |
Preferred stock dividends paid in additional shares | ' | 5,504 |
Gross borrowings from revolver | 1,556,000 | 1,542,000 |
Gross repayments to revolver | $1,551,000 | $1,530,000 |
CONDENSED_CONSOLIDATED_STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Aug. 30, 2014 | Aug. 31, 2013 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ' | ' |
Cash paid for interest, capitalized amounts | $90 | $106 |
Basis_of_Presentation
Basis of Presentation | 6 Months Ended |
Aug. 30, 2014 | |
Basis of Presentation | ' |
Basis of Presentation | ' |
1. Basis of Presentation | |
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X and therefore do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete annual financial statements. The accompanying financial information reflects all adjustments which are of a recurring nature and, in the opinion of management, are necessary for a fair presentation of the results for the interim periods. The results of operations for the thirteen and twenty-six week periods ended August 30, 2014 are not necessarily indicative of the results to be expected for the full year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Rite Aid Corporation and Subsidiaries (the "Company") Fiscal 2014 10-K. | |
New Accounting Pronouncements | |
In July 2013, the FASB issued ASU No. 2013-11, Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. ASU No. 2013-11 requires an entity to present unrecognized tax benefits as a reduction to deferred tax assets when a net operating loss carryforward, similar tax loss or a tax credit carryforward exists, with limited exceptions. ASU No. 2013-11 is effective for fiscal years beginning on or after December 15, 2013, and for interim periods within those fiscal years. This pronouncement had no effect on the financial statements as the Company has historically presented uncertain tax positions in accordance with ASU No. 2013-11. | |
In May 2013, the FASB issued a proposed Accounting Standards Update, Leases (Topic 842): a revision of the 2010 proposed Accounting Standards Update, Leases (Topic 840), that would require an entity to recognize assets and liabilities arising under lease contracts on the balance sheet. The proposed standard, as currently drafted, will have a material impact on the Company's reported results of operations and financial position. | |
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. This ASU supersedes the revenue recognition requirements in Accounting Standards Codification 605—Revenue Recognition and most industry-specific guidance throughout the Codification. The standard requires that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This ASU is effective for fiscal years beginning after December 15, 2016, and for interim periods within those fiscal years. The Company is in the process of assessing the impact of the adoption of ASU 2014-09 on its financial position, results of operations and cash flows. | |
In June 2014, the FASB issued ASU No. 2014-11, Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures. The standard requires the accounting for repurchase-to-maturity transactions to be treated in the same manner as secured borrowing accounting, making the accounting consistent with other repurchase agreements. In addition, the standard requires separate accounting for a transfer of a financial asset executed contemporaneously with a repurchase agreement with the same counterparty, resulting in the accounting remaining consistent with other repurchase agreements. This ASU is effective for fiscal years beginning after December 15, 2014, and for interim periods within those fiscal years. The Company is in the process of assessing the impact of the adoption of ASU 2014-11 on its financial position, results of operations and cash flows. | |
In June 2014, the FASB issued ASU No. 2014-12, Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved After the Requisite Service Period. The standard requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition, and compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved. This ASU is effective for fiscal years beginning after December 15, 2015, and for interim periods within those fiscal years. The Company is in the process of assessing the impact of the adoption of ASU 2014-12 on its financial position, results of operations and cash flows. | |
Acquisitions
Acquisitions | 6 Months Ended |
Aug. 30, 2014 | |
Acquisitions | ' |
Acquisitions | ' |
2. Acquisitions | |
On April 1, 2014, the Company acquired Boston based Health Dialog Services Corporation, which is engaged in providing health coaching, shared decision making and healthcare analytics from Bupa, a London based international healthcare services group. Health Dialog operates as a 100 percent owned subsidiary of the Company. | |
On April 10, 2014, the Company acquired Houston based RediClinic, which is engaged in the operation of retail clinics in the greater Houston and San Antonio areas. RediClinic operates as a 100 percent owned subsidiary of the Company. As part of the acquisition of RediClinic, the Company acquired an immaterial equity investment in RediClinic Austin, LLC, which operates as a joint venture in the greater Austin area. | |
The Company paid a combined amount of $69,793, net of cash acquired of $19,945, related to the acquisitions of Health Dialog and RediClinic (collectively "acquisitions"). The preliminary purchase accounting for these acquisitions resulted in goodwill of $73,103, relating to expected future synergies and operating efficiencies, with the remaining amount allocated to tangible assets, less liabilities assumed. Such amounts are not significant. This allocation is subject to change as the Company finalizes purchase accounting. | |
Operating results of the acquisitions have been included in the Condensed Consolidated Statements of Operations from their respective acquisition dates forward in the Company's sole retail drug segment. Pro forma information for the acquisitions is not presented as their results are immaterial to the Company's condensed consolidated financial statements. | |
Income_Per_Share
Income Per Share | 6 Months Ended | |||||||||||||
Aug. 30, 2014 | ||||||||||||||
Income Per Share | ' | |||||||||||||
Income Per Share | ' | |||||||||||||
3. Income Per Share | ||||||||||||||
Basic income per share is computed by dividing income available to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the income of the Company subject to anti-dilution limitations. | ||||||||||||||
Thirteen Week Period | Twenty-Six Week Period | |||||||||||||
Ended | Ended | |||||||||||||
August 30, | August 31, | August 30, | August 31, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Numerator for income per share: | ||||||||||||||
Net income | $ | 127,849 | $ | 32,827 | $ | 169,295 | $ | 122,489 | ||||||
Accretion of redeemable preferred stock | — | (26 | ) | — | (51 | ) | ||||||||
Cumulative preferred stock dividends | — | (2,772 | ) | — | (5,504 | ) | ||||||||
| | | | | | | | | | | | | | |
Income attributable to common stockholders—basic | $ | 127,849 | $ | 30,029 | $ | 169,295 | $ | 116,934 | ||||||
Add back—interest on convertible notes | 1,364 | — | 2,728 | 2,728 | ||||||||||
| | | | | | | | | | | | | | |
Income attributable to common stockholders—diluted | $ | 129,213 | $ | 30,029 | $ | 172,023 | $ | 119,662 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Denominator: | ||||||||||||||
Basic weighted average shares | 970,664 | 901,992 | 966,997 | 897,993 | ||||||||||
Outstanding options and restricted shares, net | 26,132 | 44,726 | 26,141 | 40,143 | ||||||||||
Convertible notes | 24,796 | — | 24,796 | 24,800 | ||||||||||
| | | | | | | | | | | | | | |
Diluted weighted average shares | 1,021,592 | 946,718 | 1,017,934 | 962,936 | ||||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Basic income per share | $ | 0.13 | $ | 0.03 | $ | 0.18 | $ | 0.13 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Diluted income per share | $ | 0.13 | $ | 0.03 | $ | 0.17 | $ | 0.12 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Due to their antidilutive effect, the following potential common shares have been excluded from the computation of diluted income per share as of August 30, 2014 and August 31, 2013: | ||||||||||||||
Thirteen Week Period | Twenty-Six Week Period | |||||||||||||
Ended | Ended | |||||||||||||
August 30, | August 31, | August 30, | August 31, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Stock options | 2,836 | 39,014 | 2,836 | 43,668 | ||||||||||
Convertible notes | — | 24,800 | — | — | ||||||||||
Convertible preferred stock | — | 34,109 | — | 34,109 | ||||||||||
| | | | | | | | | | | | | | |
2,836 | 97,923 | 2,836 | 77,777 | |||||||||||
Lease_Termination_and_Impairme
Lease Termination and Impairment Charges | 6 Months Ended | |||||||||||||
Aug. 30, 2014 | ||||||||||||||
Lease Termination and Impairment Charges | ' | |||||||||||||
Lease Termination and Impairment Charges | ' | |||||||||||||
4. Lease Termination and Impairment Charges | ||||||||||||||
Lease termination and impairment charges consist of amounts as follows: | ||||||||||||||
Thirteen Week Period | Twenty-Six Week Period | |||||||||||||
Ended | Ended | |||||||||||||
August 30, | August 31, | August 30, | August 31, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Impairment charges | $ | 132 | $ | 265 | $ | 283 | $ | 4,866 | ||||||
Lease termination charges | 6,979 | 11,125 | 11,676 | 17,496 | ||||||||||
| | | | | | | | | | | | | | |
$ | 7,111 | $ | 11,390 | $ | 11,959 | $ | 22,362 | |||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Impairment Charges | ||||||||||||||
These amounts include the write-down of long-lived assets at locations that were assessed for impairment because of management's intention to relocate or close the location or because of changes in circumstances that indicated the carrying value of an asset may not be recoverable. | ||||||||||||||
Lease Termination Charges | ||||||||||||||
As part of the Company's ongoing business activities, the Company assesses stores and distribution centers for potential closure or relocation. Decisions to close or relocate stores or distribution centers in future periods would result in lease termination charges, lease exit costs and inventory liquidation charges, as well as impairment of assets at these locations. The following table reflects the closed store and distribution center charges that relate to new closures, changes in assumptions and interest accretion: | ||||||||||||||
Thirteen Week Period | Twenty-Six Week Period | |||||||||||||
Ended | Ended | |||||||||||||
August 30, | August 31, | August 30, | August 31, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Balance—beginning of period | $ | 270,322 | $ | 312,011 | $ | 284,270 | $ | 323,758 | ||||||
Provision for present value of noncancellable lease payments of closed stores | 294 | 5,981 | 436 | 6,374 | ||||||||||
Changes in assumptions about future sublease income, terminations and changes in interest rates | 1,844 | (308 | ) | 1,417 | 213 | |||||||||
Interest accretion | 4,845 | 5,452 | 9,827 | 10,909 | ||||||||||
Cash payments, net of sublease income | (16,175 | ) | (19,499 | ) | (34,820 | ) | (37,617 | ) | ||||||
| | | | | | | | | | | | | | |
Balance—end of period | $ | 261,130 | $ | 303,637 | $ | 261,130 | $ | 303,637 | ||||||
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Fair_Value_Measurements
Fair Value Measurements | 6 Months Ended | |||||||||||||
Aug. 30, 2014 | ||||||||||||||
Fair Value Measurements | ' | |||||||||||||
Fair Value Measurements | ' | |||||||||||||
5. Fair Value Measurements | ||||||||||||||
The Company utilizes the three-level valuation hierarchy for the recognition and disclosure of fair value measurements. The categorization of assets and liabilities within this hierarchy is based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy consist of the following: | ||||||||||||||
• | ||||||||||||||
Level 1—Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. | ||||||||||||||
• | ||||||||||||||
Level 2—Inputs to the valuation methodology are quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active or inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument. | ||||||||||||||
• | ||||||||||||||
Level 3—Inputs to the valuation methodology are unobservable inputs based upon management's best estimate of inputs market participants could use in pricing the asset or liability at the measurement date, including assumptions about risk. | ||||||||||||||
Non-Financial Assets Measured on a Non-Recurring Basis | ||||||||||||||
Long-lived non-financial assets are measured at fair value on a nonrecurring basis for purposes of calculating impairment using Level 2 and Level 3 inputs as defined in the fair value hierarchy. The fair value of long-lived assets using Level 2 inputs is determined by evaluating the current economic conditions in the geographic area for similar use assets. The fair value of long-lived assets using Level 3 inputs is determined by estimating the amount and timing of net future cash flows (which are unobservable inputs) and discounting them using a risk-adjusted rate of interest (which is Level 1). The Company estimates future cash flows based on its experience and knowledge of the market in which the store is located. Significant increases or decreases in actual cash flows may result in valuation changes. During the twenty-six week period ended August 30, 2014, long-lived assets from continuing operations with a carrying value of $1,849, primarily store assets, were written down to their fair value of $1,566, resulting in an impairment charge of $283 of which $132 relates to the thirteen-week period ended August 30, 2014. During the twenty-six week period ended August 31, 2013, long-lived assets from continuing operations with a carrying value of $18,162, primarily store assets, were written down to their fair value of $13,296, resulting in an impairment charge of $4,866 of which $265 relates to the thirteen-week period ended August 31, 2013. If our actual future cash flows differ from our projections materially, certain stores that are either not impaired or partially impaired in the current period may be further impaired in future periods. | ||||||||||||||
The following table presents fair values for those assets measured at fair value on a non-recurring basis at August 30, 2014 and August 31, 2013: | ||||||||||||||
Fair Value Measurement Using | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total as of | |||||||||||
August 30, | ||||||||||||||
2014 | ||||||||||||||
Long-lived assets held for use | $ | — | $ | — | $ | 1,566 | $ | 1,566 | ||||||
Long-lived assets held for sale | $ | — | $ | — | $ | — | $ | — | ||||||
| | | | | | | | | | | | | | |
Total | $ | — | $ | — | $ | 1,566 | $ | 1,566 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Level 1 | Level 2 | Level 3 | Total as of | |||||||||||
August 31, | ||||||||||||||
2013 | ||||||||||||||
Long-lived assets held for use | $ | — | $ | — | $ | 865 | $ | 865 | ||||||
Long-lived assets held for sale | $ | — | $ | 12,431 | $ | — | $ | 12,431 | ||||||
| | | | | | | | | | | | | | |
Total | $ | — | $ | 12,431 | $ | 865 | $ | 13,296 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
As of August 30, 2014 and August 31, 2013, the Company did not have any financial assets measured on a recurring basis. | ||||||||||||||
Other Financial Instruments | ||||||||||||||
Financial instruments other than long-term indebtedness include cash and cash equivalents, accounts receivable and accounts payable. These instruments are recorded at book value, which we believe approximate their fair values due to their short term nature. | ||||||||||||||
The fair value for LIBOR-based borrowings under the Company's senior secured credit facility and first and second lien term loans are estimated based on the quoted market price of the financial instrument which is considered Level 1 of the fair value hierarchy. The fair values of substantially all of the Company's other long-term indebtedness are estimated based on quoted market prices of the financial instruments which are considered Level 1 of the fair value hierarchy. The carrying amount and estimated fair value of the Company's total long-term indebtedness was $5,651,608 and $5,989,414, respectively, as of August 30, 2014. There were no outstanding derivative financial instruments as of August 30, 2014 and March 1, 2014. | ||||||||||||||
Income_Taxes
Income Taxes | 6 Months Ended |
Aug. 30, 2014 | |
Income Taxes | ' |
Income Taxes | ' |
6. Income Taxes | |
The Company recorded an income tax expense of $19,860 and $2,210 for the thirteen week periods ended August 30, 2014 and August 31, 2013, respectively, and an income tax expense of $31,741 and $5,422 for the twenty-six week periods ended August 30, 2014 and August 31, 2013, respectively. The income tax expense is recorded net of adjustments to maintain a full valuation allowance against the Company's net deferred tax assets. | |
The income tax expense for the thirteen and twenty-six week periods ended August 30, 2014 is primarily attributable to an increase in the deferred tax valuation allowance to offset the windfall tax benefits recorded in Additional Paid in Capital ("APIC") pursuant to the tax law ordering approach. | |
The income tax expense for the thirteen and twenty-six week periods ended August 31, 2013 is primarily attributable to the accrual of federal, state and local taxes and adjustments to unrecognized tax benefits offset by adjustments to the valuation allowance of $2,197 and $(34,692), respectively. | |
The Company recognizes tax liabilities in accordance with the guidance for uncertain tax positions and management adjusts these liabilities with changes in judgment as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of the tax liabilities. | |
While it is expected that the amount of unrecognized tax benefits will change in the next twelve months, the Company does not expect the change to have a significant impact on the results of operations or the financial position of the Company. | |
The valuation allowances as of August 30, 2014 and March 1, 2014 apply to the net deferred tax assets of the Company. The Company continues to maintain a full valuation allowance of $2,016,475 and $2,060,811 against net deferred tax assets at August 30, 2014 and March 1, 2014, respectively. | |
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 6 Months Ended | ||||||||||||||||
Aug. 30, 2014 | |||||||||||||||||
Goodwill and Other Intangible Assets | ' | ||||||||||||||||
Goodwill and Other Intangible Assets | ' | ||||||||||||||||
7. Goodwill and Other Intangible Assets | |||||||||||||||||
Goodwill is not amortized, but is instead evaluated for impairment on an annual basis at the end of the fiscal year, or more frequently if events or circumstances indicate that impairment may be more likely. During the twenty-six weeks ended August 30, 2014, no impairment charges have been taken against the Company's goodwill. Below is a summary of the changes in the carrying amount of goodwill for the twenty-six week period ended August 30, 2014: | |||||||||||||||||
August 30, 2014 | |||||||||||||||||
Balance, March 1, 2014 | $ | — | |||||||||||||||
Acquisitions: | |||||||||||||||||
Initial goodwill acquired | 83,971 | ||||||||||||||||
Change in purchase price allocation | (10,868 | ) | |||||||||||||||
| | | | | |||||||||||||
Balance, August 30, 2014 | $ | 73,103 | |||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
The Company's other intangible assets are finite-lived and amortized over their useful lives. Following is a summary of the Company's amortizable intangible assets as of August 30, 2014 and March 1, 2014. | |||||||||||||||||
August 30, 2014 | March 1, 2014 | ||||||||||||||||
Gross | Accumulated | Remaining | Gross | Accumulated | Remaining | ||||||||||||
Carrying | Amortization | Weighted | Carrying | Amortization | Weighted | ||||||||||||
Amount | Average | Amount | Average | ||||||||||||||
Amortization | Amortization | ||||||||||||||||
Period | Period | ||||||||||||||||
Favorable leases and other | $ | 643,747 | $ | (466,290 | ) | 9 years | $ | 634,320 | $ | (447,608 | ) | 9 years | |||||
Prescription files | 1,381,923 | (1,148,085 | ) | 3 years | 1,353,057 | (1,108,542 | ) | 4 years | |||||||||
| | | | | | | | | | | | | | | | | |
Total | $ | 2,025,670 | $ | (1,614,375 | ) | $ | 1,987,377 | $ | (1,556,150 | ) | |||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Also included in other non-current liabilities as of August 30, 2014 and March 1, 2014 are unfavorable lease intangibles with a net carrying amount of $59,278 and $62,687, respectively. These intangible liabilities are amortized over their remaining lease terms at time of acquisition. | |||||||||||||||||
Amortization expense for these intangible assets and liabilities was $28,532 and $57,769 for the thirteen and twenty-six week periods ended August 30, 2014, respectively. Amortization expense for these intangible assets and liabilities was $29,121 and $60,806 for the thirteen and twenty-six week periods ended August 31, 2013, respectively. The anticipated annual amortization expense for these intangible assets and liabilities is 2015—$111,742; 2016—$101,315; 2017—$88,024; 2018—$50,059 and 2019—$24,105. | |||||||||||||||||
Indebtedness_and_Credit_Agreem
Indebtedness and Credit Agreements | 6 Months Ended | |||||||
Aug. 30, 2014 | ||||||||
Indebtedness and Credit Agreements | ' | |||||||
Indebtedness and Credit Agreements | ' | |||||||
8. Indebtedness and Credit Agreements | ||||||||
Following is a summary of indebtedness and lease financing obligations at August 30, 2014 and March 1, 2014: | ||||||||
August 30, | March 1, | |||||||
2014 | 2014 | |||||||
Secured Debt: | ||||||||
Senior secured revolving credit facility due February 2018 | $ | 405,000 | $ | 400,000 | ||||
Tranche 6 Term Loan due February 2020 | — | 1,152,293 | ||||||
Tranche 7 Term Loan due February 2020 | 1,149,412 | — | ||||||
10.25% senior secured notes (second lien) due October 2019 ($270,000 face value less unamortized discount of $1,057 and $1,160) | 268,943 | 268,840 | ||||||
8.00% senior secured notes (senior lien) due August 2020 | 650,000 | 650,000 | ||||||
Tranche 1 Term Loan (second lien) due August 2020 | 470,000 | 470,000 | ||||||
Tranche 2 Term Loan (second lien) due June 2021 | 500,000 | 500,000 | ||||||
Other secured | 5,324 | 5,324 | ||||||
| | | | | | | | |
3,448,679 | 3,446,457 | |||||||
Guaranteed Unsecured Debt: | ||||||||
9.25% senior notes due March 2020 ($902,000 face value plus unamortized premium of $3,751 and $4,087) | 905,751 | 906,087 | ||||||
6.75% senior notes due June 2021 | 810,000 | 810,000 | ||||||
| | | | | | | | |
1,715,751 | 1,716,087 | |||||||
Unguaranteed Unsecured Debt: | ||||||||
8.5% convertible notes due May 2015 | 64,178 | 64,188 | ||||||
7.7% notes due February 2027 | 295,000 | 295,000 | ||||||
6.875% fixed-rate senior notes due December 2028 | 128,000 | 128,000 | ||||||
| | | | | | | | |
487,178 | 487,188 | |||||||
Lease financing obligations | 100,678 | 107,411 | ||||||
| | | | | | | | |
Total debt | 5,752,286 | 5,757,143 | ||||||
Current maturities of long-term debt and lease financing obligations | (113,070 | ) | (49,174 | ) | ||||
| | | | | | | | |
Long-term debt and lease financing obligations, less current maturities | $ | 5,639,216 | 5,707,969 | |||||
| | | | | | | | |
| | | | | | | | |
Credit Facility | ||||||||
The Company has a senior secured credit facility that consists of a $1,795,000 revolving credit facility and a $1,149,412 senior secured term loan (the "Tranche 7 Term Loan"). Borrowings under the revolving credit facility bear interest at a rate per annum between LIBOR plus 2.25% and LIBOR plus 2.75%, if the Company chooses to make LIBOR borrowings, or between Citibank's base rate plus 1.25% and Citibank's base rate plus 1.75% in each case based upon the amount of revolver availability as defined in the senior secured credit facility. The Company is required to pay fees between 0.375% and 0.50% per annum on the daily unused amount of the revolver, depending on the amount of revolver availability. Amounts drawn under the revolver become due and payable on February 21, 2018. On March 14, 2014, the Company amended and restated its credit agreement, pursuant to which it prepaid its outstanding Tranche 6 Term Loan with the proceeds of a new $1,152,293 Tranche 7 Term Loan. The Tranche 7 Term Loan matures on February 21, 2020 and currently bears interest at a rate per annum equal to LIBOR plus 2.75%, if the Company chooses to make LIBOR borrowings, or at Citibank's base rate plus 1.75%. The Tranche 7 Term Loan is subject to a 0.75% LIBOR floor per annum. | ||||||||
The Company's ability to borrow under the revolver is based upon a specified borrowing base consisting of accounts receivable, inventory and prescription files. At August 30, 2014, the Company had $405,000 of borrowings outstanding under the revolver and had letters of credit outstanding against the revolver of $71,789, which resulted in additional borrowing capacity of $1,318,211. | ||||||||
The senior secured credit facility contains certain restrictions on the ability of the Company and the subsidiary guarantors to accumulate cash on hand, and under certain circumstances, requires the funds in the Company's deposit accounts to be applied first to the repayment of outstanding revolving loans under the senior secured credit facility and then to be held as collateral for the senior obligations. | ||||||||
The senior credit facility restricts the amount of secured and unsecured debt the Company may have outstanding. The senior secured credit facility allows the Company to incur an unlimited amount of unsecured debt with a maturity beyond May 21, 2020. However, the Company's second priority secured term loan facilities and the indentures that govern the Company's secured and guaranteed unsecured notes contain restrictions on the amount of additional secured and unsecured debt that can be incurred by the Company. Pursuant to certain of the Company's existing indentures, the Company could not incur any additional secured debt assuming a fully drawn revolver and the outstanding letters of credit. The ability to issue additional unsecured debt under the second priority secured term loan facilities and the indentures is generally governed by an interest coverage ratio test. As of August 30, 2014, the Company had the ability to issue additional unsecured debt under the second lien credit facilities and other indentures. | ||||||||
The credit facility has a financial covenant that, if availability on the revolving credit facility is less than $150,000, the Company maintain a minimum fixed charge coverage ratio of 1.00 to 1.00. As of August 30, 2014, the availability was in excess of $150,000, and as such, this covenant does not apply. The senior secured credit facility contains additional covenants which place restrictions on the incurrence of debt, the payments of dividends, sale of assets, mergers and acquisitions and the granting of liens. The senior secured credit facility also provides for customary events of default. | ||||||||
The Company also has two second priority secured term loan facilities. The first includes a $470,000 second priority secured term loan (the "Tranche 1 Term Loan"). The Tranche 1 Term Loan matures on August 21, 2020 and currently bears interest at a rate per annum equal to LIBOR plus 4.75% with a LIBOR floor of 1.00%, if the Company chooses to make LIBOR borrowings, or at Citibank's base rate plus 3.75%. The second includes a $500,000 second priority secured term loan (the "Tranche 2 Term Loan"). The Tranche 2 Term Loan matures on June 21, 2021 and currently bears interest at a rate per annum equal to LIBOR plus 3.875% with a LIBOR floor of 1.00%, if the Company chooses to make LIBOR borrowings, or at Citibank's base rate plus 2.875%. | ||||||||
Substantially all of Rite Aid Corporation's 100 percent owned subsidiaries guarantee the obligations under the senior secured credit facility, second priority secured term loan facilities, secured guaranteed notes and unsecured guaranteed notes. The senior secured credit facility, second priority secured term loan facilities and secured guaranteed notes are secured, on a senior or second priority basis, as applicable, by a lien on, among other things, accounts receivable, inventory and prescription files of the subsidiary guarantors. The subsidiary guarantees related to the Company's senior secured credit facility, second priority secured term loan facilities and secured guaranteed notes and, on an unsecured basis, the unsecured guaranteed notes are full and unconditional and joint and several, and there are no restrictions on the ability of the Company to obtain funds from its subsidiaries. The Company has no independent assets or operations. Additionally, the subsidiaries, including joint ventures, that do not guaranty the credit facility, second priority secured term loan facilities and applicable notes, are minor. Accordingly, condensed consolidating financial information for the Company and subsidiaries is not presented. | ||||||||
Other Transactions | ||||||||
On September 15, 2014, the Company called for the early redemption of all of its outstanding $270,000 aggregate principal amount of its 10.25% senior notes due October 2019. The Company intends to use borrowings under its revolving credit facility to fund the October 2014 redemption. See Note 13. | ||||||||
Maturities | ||||||||
The aggregate annual principal payments of long-term debt for the remainder of fiscal 2015 and thereafter are as follows: 2015—$11,085; 2016—$75,701; 2017—$11,523; 2018—$416,523; 2019—$11,523 and $5,122,559 thereafter. | ||||||||
Stock_Options_and_Stock_Awards
Stock Options and Stock Awards | 6 Months Ended | |||||||||||||
Aug. 30, 2014 | ||||||||||||||
Stock Option and Stock Award Plans | ' | |||||||||||||
Stock Options and Stock Awards | ' | |||||||||||||
9. Stock Options and Stock Awards | ||||||||||||||
The Company recognizes share-based compensation expense over the requisite service period of the award, net of an estimate for the impact of forfeitures. Operating results for the twenty-six week periods ended August 30, 2014 and August 31, 2013 include $9,892 and $8,077, respectively, of compensation costs related to the Company's stock-based compensation arrangements. | ||||||||||||||
The total number and type of newly awarded grants and the related weighted average fair value for the twenty-six week periods ended August 30, 2014 and August 31, 2013 are as follows: | ||||||||||||||
August 30, 2014 | August 31, 2013 | |||||||||||||
Shares | Weighted | Shares | Weighted | |||||||||||
Average | Average | |||||||||||||
Fair Value | Fair Value | |||||||||||||
Stock options granted | 3,113 | $ | 4.43 | 4,828 | $ | 1.91 | ||||||||
Stock awards granted | 3,304 | $ | 7.01 | 2,721 | $ | 2.77 | ||||||||
| | | | | | | | | | | | | | |
Total awards | 6,417 | 7,549 | ||||||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Typically, stock options granted vest, and are subsequently exercisable in equal annual installments over a four-year period for employees. Stock awards typically vest in equal annual installments over a three-year period. | ||||||||||||||
The Company calculates the fair value of stock options using the Black- Scholes-Merton option pricing model. The following assumptions were used in the Black-Scholes-Merton option pricing model: | ||||||||||||||
Twenty-Six Week Period | ||||||||||||||
Ended | ||||||||||||||
August 30, | August 31, | |||||||||||||
2014 | 2013 | |||||||||||||
Expected stock price volatility | 74 | % | 85 | % | ||||||||||
Expected dividend yield | 0 | % | 0 | % | ||||||||||
Risk-free interest rate | 1.7 | % | 1.4 | % | ||||||||||
Expected option life | 5.5 years | 5.5 years | ||||||||||||
As of August 30, 2014, the total unrecognized pre-tax compensation costs related to unvested stock options and restricted stock grants, net of estimated forfeitures and the weighted average period of cost amortization are as follows: | ||||||||||||||
August 30, 2014 | ||||||||||||||
Unvested | Unvested | |||||||||||||
stock | restricted | |||||||||||||
options | stock | |||||||||||||
Unrecognized pre-tax costs | $ | $ | ||||||||||||
23,018 | 33,348 | |||||||||||||
Weighted average amortization period | 2.9 years | 2.6 years | ||||||||||||
Reclassifications_from_Accumul
Reclassifications from Accumulated Other Comprehensive Loss | 6 Months Ended | |||||||||||||||||||||||||||
Aug. 30, 2014 | ||||||||||||||||||||||||||||
Reclassifications from Accumulated Other Comprehensive Loss | ' | |||||||||||||||||||||||||||
Reclassifications from Accumulated Other Comprehensive Loss | ' | |||||||||||||||||||||||||||
10. Reclassifications from Accumulated Other Comprehensive Loss | ||||||||||||||||||||||||||||
The following table summarizes the components of accumulated other comprehensive loss and the changes in balances of each component of accumulated other comprehensive loss, net of tax as applicable, for the thirteen and twenty-six week periods ended August 30, 2014 and August 31, 2013: | ||||||||||||||||||||||||||||
Thirteen Week Period | Thirteen Week Period | Twenty-Six Week Period | Twenty-Six Week Period | |||||||||||||||||||||||||
Ended | Ended | Ended August 30, 2014 | Ended August 31, 2013 | |||||||||||||||||||||||||
August 30, 2014 | August 31, 2013 | |||||||||||||||||||||||||||
Defined | Accumulated | Defined | Accumulated | Defined | Accumulated | Defined | Accumulated | |||||||||||||||||||||
benefit | other | benefit | other | benefit | other | benefit | other | |||||||||||||||||||||
pension | comprehensive | pension | comprehensive | pension | comprehensive | pension | comprehensive | |||||||||||||||||||||
plans | loss | plans | loss | plans | loss | plans | loss | |||||||||||||||||||||
Accumulated other comprehensive loss | ||||||||||||||||||||||||||||
Balance-beginning of period | $ | (36,675 | ) | $ | (36,675 | ) | $ | (60,106 | ) | $ | (60,106 | ) | $ | (37,334 | ) | $ | (37,334 | ) | $ | (61,369 | ) | $ | (61,369 | ) | ||||
Amounts reclassified from accumulated other comprehensive loss to net income | 660 | 660 | 1,262 | 1,262 | 1,319 | 1,319 | 2,525 | 2,525 | ||||||||||||||||||||
Balance-end of period | $ | (36,015 | ) | $ | (36,015 | ) | $ | (58,844 | ) | $ | (58,844 | ) | $ | (36,015 | ) | $ | (36,015 | ) | $ | (58,844 | ) | $ | (58,844 | ) | ||||
The following table summarizes the effects on net income of significant amounts classified out of each component of accumulated other comprehensive loss for the thirteen and twenty-six week periods ended August 30, 2014 and August 31, 2013: | ||||||||||||||||||||||||||||
Thirteen Week Periods Ended August 30, 2014 and August 31, 2013 | ||||||||||||||||||||||||||||
Amount reclassified | ||||||||||||||||||||||||||||
from accumulated other | ||||||||||||||||||||||||||||
comprehensive loss | ||||||||||||||||||||||||||||
Details about accumulated other | August 30, | August 31, | Affected line item in the condensed | |||||||||||||||||||||||||
comprehensive loss components | 2014 | 2013 | consolidated statements of operations | |||||||||||||||||||||||||
Defined benefit pension plans | ||||||||||||||||||||||||||||
Amortization of unrecognized prior service cost(a) | $ | (60 | ) | $ | (60 | ) | Selling, general and administrative expenses | |||||||||||||||||||||
Amortization of unrecognized net loss(a) | (600 | ) | (1,202 | ) | Selling, general and administrative expenses | |||||||||||||||||||||||
| | | | | | | | | ||||||||||||||||||||
(660 | ) | (1,262 | ) | Total before income tax expense | ||||||||||||||||||||||||
— | — | Income tax expense(b) | ||||||||||||||||||||||||||
| | | | | | | | | ||||||||||||||||||||
$ | (660 | ) | $ | (1,262 | ) | Net of income tax expense | ||||||||||||||||||||||
| | | | | | | | | ||||||||||||||||||||
| | | | | | | | | ||||||||||||||||||||
Twenty-Six Week Periods Ended August 30, 2014 and August 31, 2013 | ||||||||||||||||||||||||||||
Amount reclassified | ||||||||||||||||||||||||||||
from accumulated other | ||||||||||||||||||||||||||||
comprehensive loss | ||||||||||||||||||||||||||||
Details about accumulated other | August 30, | August 31, | Affected line item in the condensed | |||||||||||||||||||||||||
comprehensive loss components | 2014 | 2013 | consolidated statements of operations | |||||||||||||||||||||||||
Defined benefit pension plans | ||||||||||||||||||||||||||||
Amortization of unrecognized prior service cost(a) | $ | (120 | ) | $ | (120 | ) | Selling, general and administrative expenses | |||||||||||||||||||||
Amortization of unrecognized net loss(a) | (1,199 | ) | (2,405 | ) | Selling, general and administrative expenses | |||||||||||||||||||||||
| | | | | | | | | ||||||||||||||||||||
(1,319 | ) | (2,525 | ) | Total before income tax expense | ||||||||||||||||||||||||
— | — | Income tax expense(b) | ||||||||||||||||||||||||||
| | | | | | | | | ||||||||||||||||||||
$ | (1,319 | ) | $ | (2,525 | ) | Net of income tax expense | ||||||||||||||||||||||
| | | | | | | | | ||||||||||||||||||||
| | | | | | | | | ||||||||||||||||||||
(a)See Note 11, Retirement Plans for additional details. | ||||||||||||||||||||||||||||
(b) Income tax expense is $0 due to the valuation allowance. See Note 6, Income Taxes for additional details. | ||||||||||||||||||||||||||||
Retirement_Plans
Retirement Plans | 6 Months Ended | |||||||||||||||||||||||||||||||||
Aug. 30, 2014 | ||||||||||||||||||||||||||||||||||
Retirement Plans | ' | |||||||||||||||||||||||||||||||||
Retirement Plans | ' | |||||||||||||||||||||||||||||||||
11. Retirement Plans | ||||||||||||||||||||||||||||||||||
Net periodic pension expense recorded in the thirteen and twenty-six week periods ended August 30, 2014 and August 31, 2013, for the Company's defined benefit plans includes the following components: | ||||||||||||||||||||||||||||||||||
Defined Benefit | Nonqualified | Defined Benefit | Nonqualified | |||||||||||||||||||||||||||||||
Pension Plan | Executive Retirement | Pension Plan | Executive Retirement | |||||||||||||||||||||||||||||||
Plans | Plans | |||||||||||||||||||||||||||||||||
Thirteen Week Period Ended | Twenty-Six Week Period Ended | |||||||||||||||||||||||||||||||||
August 30, | August 31, | August 30, | August 31, | August 30, | August 31, | August 30, | August 31, | |||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||||
Service cost | $ | 792 | $ | 830 | $ | — | $ | — | $ | 1,585 | $ | 1,660 | $ | — | $ | — | ||||||||||||||||||
Interest cost | 1,631 | 1,551 | 135 | 135 | 3,262 | 3,102 | 270 | 271 | ||||||||||||||||||||||||||
Expected return on plan assets | (1,929 | ) | (1,779 | ) | — | — | (3,858 | ) | (3,558 | ) | — | — | ||||||||||||||||||||||
Amortization of unrecognized prior service cost | 60 | 60 | — | — | 120 | 120 | — | — | ||||||||||||||||||||||||||
Amortization of unrecognized net loss | 600 | 1,202 | — | — | 1,199 | 2,405 | — | — | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||
Net pension expense | $ | 1,154 | $ | 1,864 | $ | 135 | $ | 135 | $ | 2,308 | $ | 3,729 | $ | 270 | $ | 271 | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||
During the thirteen and twenty-six week periods ended August 30, 2014 the Company contributed $420 and $806, respectively, to the Nonqualified Executive Retirement Plans and $1,159 to the Defined Benefit Pension Plan. During the remainder of fiscal 2015, the Company expects to contribute $834 to the Nonqualified Executive Retirement Plans and $0 to the Defined Benefit Pension Plan. | ||||||||||||||||||||||||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended |
Aug. 30, 2014 | |
Commitments and Contingencies: | ' |
Commitments and Contingencies | ' |
12. Commitments and Contingencies | |
Legal Matters | |
The Company is a party to legal proceedings, investigations and claims in the ordinary course of its business, including the matters described below. The Company records accruals for outstanding legal matters when it believes it is probable that a loss will be incurred and the amount can be reasonably estimated. The Company evaluates, on a quarterly basis, developments in legal matters that could affect the amount of any accrual and developments that would make a loss contingency both probable and reasonably estimable. If a loss contingency is not both probable and estimable, the Company does not establish an accrued liability. | |
The Company's contingencies are subject to significant uncertainties, including, among other factors: (i) proceedings are in early stages; (ii) whether class or collective action status is sought and the likelihood of a class being certified; (iii) the outcome of pending appeals or motions; (iv) the extent of potential damages, fines or penalties, which are often unspecified or indeterminate; (v) the impact of discovery on the matter; (vi) whether novel or unsettled legal theories are at issue; (vii) there are significant factual issues to be resolved; and/or (viii) in the case of certain government agency investigations, whether a sealed qui tam lawsuit ("whistleblower" action) has been filed and whether the government agency makes a decision to intervene in the lawsuit following investigation. | |
The Company has been named in a collective and class action lawsuit, Indergit v. Rite Aid Corporation et al pending in the United States District Court for the Southern District of New York, filed purportedly on behalf of current and former store managers working in the Company's stores at various locations around the country. The lawsuit alleges that the Company failed to pay overtime to store managers as required under the FLSA and under certain New York state statutes. The lawsuit also seeks other relief, including liquidated damages, punitive damages, attorneys' fees, costs and injunctive relief arising out of state and federal claims for overtime pay. On April 2, 2010, the Court conditionally certified a nationwide collective group of individuals who worked for the Company as store managers since March 31, 2007. The Court ordered that Notice of the Indergit action be sent to the purported members of the collective group (approximately 7,000 current and former store managers) and approximately 1,550 joined the Indergit action. Discovery as to certification issues has been completed. On September 26, 2013, the Court granted Rule 23 class certification of the New York store manager claims as to liability only, but denied it as to damages, and denied the Company's motion for decertification of the nationwide collective action claims. The Company filed a motion seeking reconsideration of the Court's September 26, 2013 decision which motion was denied in June 2014. The Company subsequently filed a petition for an interlocutory appeal of the Court's September 26, 2013 ruling with the U. S. Court of Appeals for the Second Circuit which petition was denied in September 2014. Once approved by the Court, notice of the Rule 23 class certification as to liability only will be sent to approximately 1,750 current and former store managers in the state of New York. At this time, the Company is not able to either predict the outcome of this lawsuit or estimate a potential range of loss with respect to the lawsuit. The Company's management believes, however, that this lawsuit is without merit and is vigorously defending this lawsuit. | |
The Company is currently a defendant in several putative class action lawsuits filed in state Courts in California alleging violations of California wage and hour laws, rules and regulations pertaining primarily to failure to pay overtime, pay for missed meals and rest periods, failure to reimburse business expenses and failure to provide employee seating (the "California Cases"). These suits purport to be class actions and seek substantial damages. The Company has aggressively challenged both the merits of the lawsuits and the allegations that the cases should be certified as class or representative actions. | |
With respect to cases involving pharmacist meal and rest periods (Chase and Scherwin v. Rite Aid Corporation pending in Los Angeles County Superior Court and Kyle v. Rite Aid Corporation pending in Sacramento County Superior Court), during the period ended March 1, 2014, the Company recorded a legal accrual with respect to these matters. The Company and the attorneys representing the putative class of pharmacists have agreed to a class wide settlement of the case of $9.7 million subject to final Court approval. The parties are in the process of documenting the settlement and obtaining Court approval. | |
In the employee seating case (Hall v. Rite Aid Corporation, San Diego County Superior Court), the Court, in October 2011, granted the plaintiff's motion for class certification. The Company filed its motion for decertification, which motion was granted in November 2012. Plaintiff subsequently appealed the Court's order which appeal was granted in May 2014. The Company filed a petition for review of the appellate court's decision with the California Supreme Court, which petition was denied in August 2014. Proceedings in the Hall case are stayed pending a decision by the California Supreme Court in two similar cases. With respect to the California Cases (other than Chase and Scherwin and Kyle) , the Company, at this time, is not able to predict either the outcome of these lawsuits or estimate a potential range of loss with respect to said lawsuits. | |
The Company was served with a United States Department of Health and Human Services Office of the Inspector General ("OIG") subpoena dated March 5, 2010 in connection with an investigation being conducted by the OIG and the United States Attorney's Office for the Central District of California. The subpoena requests records related to any gift card inducement programs for customers who transferred prescriptions for drugs or medicines to the Company's pharmacies, and whether any customers who receive federally funded prescription benefits (e.g. Medicare and Medicaid) may have benefited from those programs. The Company has substantially completed its production of records in response to the subpoena. In June 2013, the government contacted the Company, and the Company has been involved in discussions with the government regarding the matter. The Company recorded a legal accrual with respect to this matter during the period ended August 30, 2014. Subsequent to the end of the second quarter, the Company has agreed to pay $2.99 million to settle the matter. The parties are in the process of documenting the settlement. | |
The Company was served with a Civil Investigative Demand Subpoena Duces Tecum dated August 26, 2011 by the United States Attorney's Office for the Eastern District of Michigan. The subpoena requests records regarding Rite Aid's Rx Savings Program and the reporting of usual and customary charges to publicly funded health programs. In connection with the same investigation, the Company was served with a Civil Subpoena Duces Tecum dated February 22, 2013 by the State of Indiana Office of the Attorney General. The Company has substantially completed its response to both of the subpoenas and is unable to predict the timing or outcome of any review by the government of such information. | |
In April 2012, the Company received an administrative subpoena from the Drug Enforcement Administration ("DEA"), Albany, New York District Office, requesting information regarding the Company's sale of products containing pseudoephedrine ("PSE"). In April 2012, it also received a communication from the United States Attorneys Office ("USAO") for the Northern District of New York concerning an investigation of possible civil violations of the Combat Methamphetamine Epidemic Act of 2005 ("CMEA"). In April 2013, the Company received additional administrative subpoenas from DEA concerning certain retail PSE transactions at New York stores and the USAO commenced discussions with the Company regarding whether, from 2009 (upon implementation of an electronic PSE transaction logbook system) through the present, the Company sold products containing PSE in violation of the CMEA. Violations of the CMEA could result in the imposition of administrative, civil and/or criminal penalties against the Company. The Company is cooperating with the government and continues to provide information responsive to the subpoenas. The Company has entered into a tolling agreement with the USAO. The Company is unable to predict the timing or outcome of any review by the government of such information. | |
The Company received an additional administrative subpoena from the DEA in December 2013 requesting information in connection with an investigation of violations of the CMEA in West Virginia. The Company is unable to predict the timing or outcome of any review by the government of such information. | |
In January 2013, the DEA, Los Angeles District Office, served an administrative subpoena on the Company seeking documents related to prescriptions by a certain prescriber. The USAO, Central District of California, also contacted the Company about a related investigation into allegations that Rite Aid pharmacies filled certain controlled substance prescriptions for a number of practitioners after their DEA registrations had expired or otherwise become invalid in violation of the federal Controlled Substances Act and DEA regulations. The Company responded to the administrative subpoena and subsequent informal requests for information from the USAO. The Company met with the USAO and DEA in January 2014 and is involved in ongoing discussions with the government regarding this matter. The Company recorded a legal accrual during the period ended March 1, 2014. | |
The Company was served with a Civil Investigative Demand ("CID") dated June 21, 2013 by the USAO for the Eastern District of California and the Attorney General's Office of the State of California (the "AG"). The CID requests records and responses to interrogatories regarding Rite Aid's Drug Utilization Review and prescription dispensing protocol and the dispensing of drugs designated "Code 1" by the State of California. The USAO has indicated that it was dropping its inquiry. The Company is in the process of producing responsive documents and interrogatory responses to the AG and is unable to predict the timing or outcome of any review by the government of such information. | |
In addition to the above described matters, the Company is subject from time to time to various claims and lawsuits and governmental investigations arising in the ordinary course of business. While the Company's management cannot predict the outcome of any of the claims, the Company's management does not believe that the outcome of any of these legal matters will be material to the Company's consolidated financial position. It is possible, however, that the Company's results of operations or cash flows in a particular fiscal period could be materially affected by an unfavorable resolution of pending litigation or contingencies. | |
Contingencies | |
The California Department of Health Care Services ("DHCS"), the agency responsible for administering the State of California Medicaid program, implemented retroactive reimbursement rate reductions effective June 1, 2011, impacting the medical provider community in California, including pharmacies. Numerous medical providers, including representatives of both chain and independent pharmacies, filed suits against DHCS in Federal District Court in California and obtained preliminary injunctions against the rate cuts, subject to a trial on the merits. DHCS appealed the preliminary injunctions to the Ninth Circuit Court of Appeals, which Court vacated the injunctions. Based upon the actions of DHCS and the decision of the Appeals Court, the Company recorded an appropriate accrual. In January 2014, the Center for Medicare and Medicaid Services approved a state plan amendment that excluded certain drugs from the retroactive reimbursement rate reductions effective March 31, 2012. Accordingly, the Company adjusted its accrual to take into account this exclusion at year end. As pertinent facts and circumstances develop, this accrual may be adjusted further. | |
Subsequent_Events
Subsequent Events | 6 Months Ended |
Aug. 30, 2014 | |
Subsequent Events | ' |
Subsequent Events | ' |
13. Subsequent Events | |
On September 15, 2014, the Company called for the early redemption of all of its outstanding $270,000 aggregate principal amount of 10.25% senior notes due October 2019. The 10.25% senior notes will be redeemed on October 15, 2014 at their contractually determined early redemption price of 105.125% of the principal amount, plus accrued interest to, but not including, the date of redemption. To fund this redemption, the Company plans to use borrowings under its revolving credit facility. The Company expects to recognize a loss on debt retirement of approximately $18,000 in the third quarter of fiscal 2015 related to this transaction. | |
Basis_of_Presentation_Policies
Basis of Presentation (Policies) | 6 Months Ended |
Aug. 30, 2014 | |
Basis of Presentation | ' |
Basis of Presentation | ' |
1. Basis of Presentation | |
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X and therefore do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete annual financial statements. The accompanying financial information reflects all adjustments which are of a recurring nature and, in the opinion of management, are necessary for a fair presentation of the results for the interim periods. The results of operations for the thirteen and twenty-six week periods ended August 30, 2014 are not necessarily indicative of the results to be expected for the full year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Rite Aid Corporation and Subsidiaries (the "Company") Fiscal 2014 10-K. | |
New Accounting Pronouncements | ' |
New Accounting Pronouncements | |
In July 2013, the FASB issued ASU No. 2013-11, Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. ASU No. 2013-11 requires an entity to present unrecognized tax benefits as a reduction to deferred tax assets when a net operating loss carryforward, similar tax loss or a tax credit carryforward exists, with limited exceptions. ASU No. 2013-11 is effective for fiscal years beginning on or after December 15, 2013, and for interim periods within those fiscal years. This pronouncement had no effect on the financial statements as the Company has historically presented uncertain tax positions in accordance with ASU No. 2013-11. | |
In May 2013, the FASB issued a proposed Accounting Standards Update, Leases (Topic 842): a revision of the 2010 proposed Accounting Standards Update, Leases (Topic 840), that would require an entity to recognize assets and liabilities arising under lease contracts on the balance sheet. The proposed standard, as currently drafted, will have a material impact on the Company's reported results of operations and financial position. | |
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. This ASU supersedes the revenue recognition requirements in Accounting Standards Codification 605—Revenue Recognition and most industry-specific guidance throughout the Codification. The standard requires that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This ASU is effective for fiscal years beginning after December 15, 2016, and for interim periods within those fiscal years. The Company is in the process of assessing the impact of the adoption of ASU 2014-09 on its financial position, results of operations and cash flows. | |
In June 2014, the FASB issued ASU No. 2014-11, Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures. The standard requires the accounting for repurchase-to-maturity transactions to be treated in the same manner as secured borrowing accounting, making the accounting consistent with other repurchase agreements. In addition, the standard requires separate accounting for a transfer of a financial asset executed contemporaneously with a repurchase agreement with the same counterparty, resulting in the accounting remaining consistent with other repurchase agreements. This ASU is effective for fiscal years beginning after December 15, 2014, and for interim periods within those fiscal years. The Company is in the process of assessing the impact of the adoption of ASU 2014-11 on its financial position, results of operations and cash flows. | |
In June 2014, the FASB issued ASU No. 2014-12, Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved After the Requisite Service Period. The standard requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition, and compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved. This ASU is effective for fiscal years beginning after December 15, 2015, and for interim periods within those fiscal years. The Company is in the process of assessing the impact of the adoption of ASU 2014-12 on its financial position, results of operations and cash flows. | |
Income_Per_Share_Tables
Income Per Share (Tables) | 6 Months Ended | |||||||||||||
Aug. 30, 2014 | ||||||||||||||
Income Per Share | ' | |||||||||||||
Schedule of calculation of basic and diluted income per share | ' | |||||||||||||
Thirteen Week Period | Twenty-Six Week Period | |||||||||||||
Ended | Ended | |||||||||||||
August 30, | August 31, | August 30, | August 31, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Numerator for income per share: | ||||||||||||||
Net income | $ | 127,849 | $ | 32,827 | $ | 169,295 | $ | 122,489 | ||||||
Accretion of redeemable preferred stock | — | (26 | ) | — | (51 | ) | ||||||||
Cumulative preferred stock dividends | — | (2,772 | ) | — | (5,504 | ) | ||||||||
| | | | | | | | | | | | | | |
Income attributable to common stockholders—basic | $ | 127,849 | $ | 30,029 | $ | 169,295 | $ | 116,934 | ||||||
Add back—interest on convertible notes | 1,364 | — | 2,728 | 2,728 | ||||||||||
| | | | | | | | | | | | | | |
Income attributable to common stockholders—diluted | $ | 129,213 | $ | 30,029 | $ | 172,023 | $ | 119,662 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Denominator: | ||||||||||||||
Basic weighted average shares | 970,664 | 901,992 | 966,997 | 897,993 | ||||||||||
Outstanding options and restricted shares, net | 26,132 | 44,726 | 26,141 | 40,143 | ||||||||||
Convertible notes | 24,796 | — | 24,796 | 24,800 | ||||||||||
| | | | | | | | | | | | | | |
Diluted weighted average shares | 1,021,592 | 946,718 | 1,017,934 | 962,936 | ||||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Basic income per share | $ | 0.13 | $ | 0.03 | $ | 0.18 | $ | 0.13 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Diluted income per share | $ | 0.13 | $ | 0.03 | $ | 0.17 | $ | 0.12 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Schedule of antidilutive effect of potential common shares, excluded from computation of diluted income per share | ' | |||||||||||||
Thirteen Week Period | Twenty-Six Week Period | |||||||||||||
Ended | Ended | |||||||||||||
August 30, | August 31, | August 30, | August 31, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Stock options | 2,836 | 39,014 | 2,836 | 43,668 | ||||||||||
Convertible notes | — | 24,800 | — | — | ||||||||||
Convertible preferred stock | — | 34,109 | — | 34,109 | ||||||||||
| | | | | | | | | | | | | ||
2,836 | 97,923 | 2,836 | 77,777 | |||||||||||
Lease_Termination_and_Impairme1
Lease Termination and Impairment Charges (Tables) | 6 Months Ended | |||||||||||||
Aug. 30, 2014 | ||||||||||||||
Lease Termination and Impairment Charges | ' | |||||||||||||
Schedule of amounts relating to lease termination and impairment charges | ' | |||||||||||||
Thirteen Week Period | Twenty-Six Week Period | |||||||||||||
Ended | Ended | |||||||||||||
August 30, | August 31, | August 30, | August 31, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Impairment charges | $ | 132 | $ | 265 | $ | 283 | $ | 4,866 | ||||||
Lease termination charges | 6,979 | 11,125 | 11,676 | 17,496 | ||||||||||
| | | | | | | | | | | | | | |
$ | 7,111 | $ | 11,390 | $ | 11,959 | $ | 22,362 | |||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Schedule of closed store and distribution center charges related to new closures, changes in assumptions and interest accretion | ' | |||||||||||||
Thirteen Week Period | Twenty-Six Week Period | |||||||||||||
Ended | Ended | |||||||||||||
August 30, | August 31, | August 30, | August 31, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Balance—beginning of period | $ | 270,322 | $ | 312,011 | $ | 284,270 | $ | 323,758 | ||||||
Provision for present value of noncancellable lease payments of closed stores | 294 | 5,981 | 436 | 6,374 | ||||||||||
Changes in assumptions about future sublease income, terminations and changes in interest rates | 1,844 | (308 | ) | 1,417 | 213 | |||||||||
Interest accretion | 4,845 | 5,452 | 9,827 | 10,909 | ||||||||||
Cash payments, net of sublease income | (16,175 | ) | (19,499 | ) | (34,820 | ) | (37,617 | ) | ||||||
| | | | | | | | | | | | | | |
Balance—end of period | $ | 261,130 | $ | 303,637 | $ | 261,130 | $ | 303,637 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 6 Months Ended | |||||||||||||
Aug. 30, 2014 | ||||||||||||||
Fair Value Measurements | ' | |||||||||||||
Schedule of fair value of assets measured on non-recurring basis | ' | |||||||||||||
Fair Value Measurement Using | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total as of | |||||||||||
August 30, | ||||||||||||||
2014 | ||||||||||||||
Long-lived assets held for use | $ | — | $ | — | $ | 1,566 | $ | 1,566 | ||||||
Long-lived assets held for sale | $ | — | $ | — | $ | — | $ | — | ||||||
| | | | | | | | | | | | | | |
Total | $ | — | $ | — | $ | 1,566 | $ | 1,566 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Level 1 | Level 2 | Level 3 | Total as of | |||||||||||
August 31, | ||||||||||||||
2013 | ||||||||||||||
Long-lived assets held for use | $ | — | $ | — | $ | 865 | $ | 865 | ||||||
Long-lived assets held for sale | $ | — | $ | 12,431 | $ | — | $ | 12,431 | ||||||
| | | | | | | | | | | | | | |
Total | $ | — | $ | 12,431 | $ | 865 | $ | 13,296 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended | ||||||||||||||||
Aug. 30, 2014 | |||||||||||||||||
Goodwill and Other Intangible Assets | ' | ||||||||||||||||
Summary of the changes in the carrying amount of goodwill | ' | ||||||||||||||||
August 30, 2014 | |||||||||||||||||
Balance, March 1, 2014 | $ | — | |||||||||||||||
Acquisitions: | |||||||||||||||||
Initial goodwill acquired | 83,971 | ||||||||||||||||
Change in purchase price allocation | (10,868 | ) | |||||||||||||||
| | | | | |||||||||||||
Balance, August 30, 2014 | $ | 73,103 | |||||||||||||||
| | | | | |||||||||||||
| | | | | |||||||||||||
Summary of the Company's amortizable intangible assets | ' | ||||||||||||||||
August 30, 2014 | March 1, 2014 | ||||||||||||||||
Gross | Accumulated | Remaining | Gross | Accumulated | Remaining | ||||||||||||
Carrying | Amortization | Weighted | Carrying | Amortization | Weighted | ||||||||||||
Amount | Average | Amount | Average | ||||||||||||||
Amortization | Amortization | ||||||||||||||||
Period | Period | ||||||||||||||||
Favorable leases and other | $ | 643,747 | $ | (466,290 | ) | 9 years | $ | 634,320 | $ | (447,608 | ) | 9 years | |||||
Prescription files | 1,381,923 | (1,148,085 | ) | 3 years | 1,353,057 | (1,108,542 | ) | 4 years | |||||||||
| | | | | | | | | | | | | | | | | |
Total | $ | 2,025,670 | $ | (1,614,375 | ) | $ | 1,987,377 | $ | (1,556,150 | ) | |||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Indebtedness_and_Credit_Agreem1
Indebtedness and Credit Agreements (Tables) | 6 Months Ended | |||||||
Aug. 30, 2014 | ||||||||
Indebtedness and Credit Agreements | ' | |||||||
Summary of indebtedness and lease financing obligations | ' | |||||||
August 30, | March 1, | |||||||
2014 | 2014 | |||||||
Secured Debt: | ||||||||
Senior secured revolving credit facility due February 2018 | $ | 405,000 | $ | 400,000 | ||||
Tranche 6 Term Loan due February 2020 | — | 1,152,293 | ||||||
Tranche 7 Term Loan due February 2020 | 1,149,412 | — | ||||||
10.25% senior secured notes (second lien) due October 2019 ($270,000 face value less unamortized discount of $1,057 and $1,160) | 268,943 | 268,840 | ||||||
8.00% senior secured notes (senior lien) due August 2020 | 650,000 | 650,000 | ||||||
Tranche 1 Term Loan (second lien) due August 2020 | 470,000 | 470,000 | ||||||
Tranche 2 Term Loan (second lien) due June 2021 | 500,000 | 500,000 | ||||||
Other secured | 5,324 | 5,324 | ||||||
| | | | | | | | |
3,448,679 | 3,446,457 | |||||||
Guaranteed Unsecured Debt: | ||||||||
9.25% senior notes due March 2020 ($902,000 face value plus unamortized premium of $3,751 and $4,087) | 905,751 | 906,087 | ||||||
6.75% senior notes due June 2021 | 810,000 | 810,000 | ||||||
| | | | | | | | |
1,715,751 | 1,716,087 | |||||||
Unguaranteed Unsecured Debt: | ||||||||
8.5% convertible notes due May 2015 | 64,178 | 64,188 | ||||||
7.7% notes due February 2027 | 295,000 | 295,000 | ||||||
6.875% fixed-rate senior notes due December 2028 | 128,000 | 128,000 | ||||||
| | | | | | | | |
487,178 | 487,188 | |||||||
Lease financing obligations | 100,678 | 107,411 | ||||||
| | | | | | | | |
Total debt | 5,752,286 | 5,757,143 | ||||||
Current maturities of long-term debt and lease financing obligations | (113,070 | ) | (49,174 | ) | ||||
| | | | | | | | |
Long-term debt and lease financing obligations, less current maturities | $ | 5,639,216 | 5,707,969 | |||||
| | | | | | | | |
| | | | | | | | |
Stock_Option_and_Stock_Award_P
Stock Option and Stock Award Plans (Tables) | 6 Months Ended | |||||||||||||
Aug. 30, 2014 | ||||||||||||||
Stock Option and Stock Award Plans | ' | |||||||||||||
Schedule of total number and type of newly awarded grants and the related weighted average fair value | ' | |||||||||||||
August 30, 2014 | August 31, 2013 | |||||||||||||
Shares | Weighted | Shares | Weighted | |||||||||||
Average | Average | |||||||||||||
Fair Value | Fair Value | |||||||||||||
Stock options granted | 3,113 | $ | 4.43 | 4,828 | $ | 1.91 | ||||||||
Stock awards granted | 3,304 | $ | 7.01 | 2,721 | $ | 2.77 | ||||||||
| | | | | | | | | | | | | | |
Total awards | 6,417 | 7,549 | ||||||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Schedule of weighted average assumptions used for options granted | ' | |||||||||||||
Twenty-Six Week Period | ||||||||||||||
Ended | ||||||||||||||
August 30, | August 31, | |||||||||||||
2014 | 2013 | |||||||||||||
Expected stock price volatility | 74 | % | 85 | % | ||||||||||
Expected dividend yield | 0 | % | 0 | % | ||||||||||
Risk-free interest rate | 1.7 | % | 1.4 | % | ||||||||||
Expected option life | 5.5 years | 5.5 years | ||||||||||||
Schedule of unrecognized pre-tax compensation costs, net of estimated forfeitures and the weighted average period of cost amortization | ' | |||||||||||||
August 30, 2014 | ||||||||||||||
Unvested | Unvested | |||||||||||||
stock | restricted | |||||||||||||
options | stock | |||||||||||||
Unrecognized pre-tax costs | $ | $ | ||||||||||||
23,018 | 33,348 | |||||||||||||
Weighted average amortization period | 2.9 years | 2.6 years | ||||||||||||
Reclassifications_from_Accumul1
Reclassifications from Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended | |||||||||||||||||||||||||||
Aug. 30, 2014 | ||||||||||||||||||||||||||||
Reclassifications from Accumulated Other Comprehensive Loss | ' | |||||||||||||||||||||||||||
Summary of components of accumulated other comprehensive loss and the changes in balances of each component of accumulated other comprehensive loss, net of tax | ' | |||||||||||||||||||||||||||
Thirteen Week Period | Thirteen Week Period | Twenty-Six Week Period | Twenty-Six Week Period | |||||||||||||||||||||||||
Ended | Ended | Ended August 30, 2014 | Ended August 31, 2013 | |||||||||||||||||||||||||
August 30, 2014 | August 31, 2013 | |||||||||||||||||||||||||||
Defined | Accumulated | Defined | Accumulated | Defined | Accumulated | Defined | Accumulated | |||||||||||||||||||||
benefit | other | benefit | other | benefit | other | benefit | other | |||||||||||||||||||||
pension | comprehensive | pension | comprehensive | pension | comprehensive | pension | comprehensive | |||||||||||||||||||||
plans | loss | plans | loss | plans | loss | plans | loss | |||||||||||||||||||||
Accumulated other comprehensive loss | ||||||||||||||||||||||||||||
Balance-beginning of period | $ | (36,675 | ) | $ | (36,675 | ) | $ | (60,106 | ) | $ | (60,106 | ) | $ | (37,334 | ) | $ | (37,334 | ) | $ | (61,369 | ) | $ | (61,369 | ) | ||||
Amounts reclassified from accumulated other comprehensive loss to net income | 660 | 660 | 1,262 | 1,262 | 1,319 | 1,319 | 2,525 | 2,525 | ||||||||||||||||||||
Balance-end of period | $ | (36,015 | ) | $ | (36,015 | ) | $ | (58,844 | ) | $ | (58,844 | ) | $ | (36,015 | ) | $ | (36,015 | ) | $ | (58,844 | ) | $ | (58,844 | ) | ||||
Summary of effects on net income of significant amounts classified out of each component of accumulated other comprehensive loss | ' | |||||||||||||||||||||||||||
Thirteen Week Periods Ended August 30, 2014 and August 31, 2013 | ||||||||||||||||||||||||||||
Amount reclassified | ||||||||||||||||||||||||||||
from accumulated other | ||||||||||||||||||||||||||||
comprehensive loss | ||||||||||||||||||||||||||||
Details about accumulated other | August 30, | August 31, | Affected line item in the condensed | |||||||||||||||||||||||||
comprehensive loss components | 2014 | 2013 | consolidated statements of operations | |||||||||||||||||||||||||
Defined benefit pension plans | ||||||||||||||||||||||||||||
Amortization of unrecognized prior service cost(a) | $ | (60 | ) | $ | (60 | ) | Selling, general and administrative expenses | |||||||||||||||||||||
Amortization of unrecognized net loss(a) | (600 | ) | (1,202 | ) | Selling, general and administrative expenses | |||||||||||||||||||||||
| | | | | | | | | ||||||||||||||||||||
(660 | ) | (1,262 | ) | Total before income tax expense | ||||||||||||||||||||||||
— | — | Income tax expense(b) | ||||||||||||||||||||||||||
| | | | | | | | | ||||||||||||||||||||
$ | (660 | ) | $ | (1,262 | ) | Net of income tax expense | ||||||||||||||||||||||
| | | | | | | | | ||||||||||||||||||||
| | | | | | | | | ||||||||||||||||||||
Twenty-Six Week Periods Ended August 30, 2014 and August 31, 2013 | ||||||||||||||||||||||||||||
Amount reclassified | ||||||||||||||||||||||||||||
from accumulated other | ||||||||||||||||||||||||||||
comprehensive loss | ||||||||||||||||||||||||||||
Details about accumulated other | August 30, | August 31, | Affected line item in the condensed | |||||||||||||||||||||||||
comprehensive loss components | 2014 | 2013 | consolidated statements of operations | |||||||||||||||||||||||||
Defined benefit pension plans | ||||||||||||||||||||||||||||
Amortization of unrecognized prior service cost(a) | $ | (120 | ) | $ | (120 | ) | Selling, general and administrative expenses | |||||||||||||||||||||
Amortization of unrecognized net loss(a) | (1,199 | ) | (2,405 | ) | Selling, general and administrative expenses | |||||||||||||||||||||||
| | | | | | | | | ||||||||||||||||||||
(1,319 | ) | (2,525 | ) | Total before income tax expense | ||||||||||||||||||||||||
— | — | Income tax expense(b) | ||||||||||||||||||||||||||
| | | | | | | | | ||||||||||||||||||||
$ | (1,319 | ) | $ | (2,525 | ) | Net of income tax expense | ||||||||||||||||||||||
| | | | | | | | | ||||||||||||||||||||
| | | | | | | | | ||||||||||||||||||||
(a) | ||||||||||||||||||||||||||||
See Note 11, Retirement Plans for additional details. | ||||||||||||||||||||||||||||
(b) | ||||||||||||||||||||||||||||
Income tax expense is $0 due to the valuation allowance. See Note 6, Income Taxes for additional details. | ||||||||||||||||||||||||||||
Retirement_Plans_Tables
Retirement Plans (Tables) | 6 Months Ended | |||||||||||||||||||||||||||||||||
Aug. 30, 2014 | ||||||||||||||||||||||||||||||||||
Retirement Plans | ' | |||||||||||||||||||||||||||||||||
Summary of net periodic pension expense for the defined benefit plans | ' | |||||||||||||||||||||||||||||||||
Defined Benefit | Nonqualified | Defined Benefit | Nonqualified | |||||||||||||||||||||||||||||||
Pension Plan | Executive Retirement | Pension Plan | Executive Retirement | |||||||||||||||||||||||||||||||
Plans | Plans | |||||||||||||||||||||||||||||||||
Thirteen Week Period Ended | Twenty-Six Week Period Ended | |||||||||||||||||||||||||||||||||
August 30, | August 31, | August 30, | August 31, | August 30, | August 31, | August 30, | August 31, | |||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||||
Service cost | $ | 792 | $ | 830 | $ | — | $ | — | $ | 1,585 | $ | 1,660 | $ | — | $ | — | ||||||||||||||||||
Interest cost | 1,631 | 1,551 | 135 | 135 | 3,262 | 3,102 | 270 | 271 | ||||||||||||||||||||||||||
Expected return on plan assets | (1,929 | ) | (1,779 | ) | — | — | (3,858 | ) | (3,558 | ) | — | — | ||||||||||||||||||||||
Amortization of unrecognized prior service cost | 60 | 60 | — | — | 120 | 120 | — | — | ||||||||||||||||||||||||||
Amortization of unrecognized net loss | 600 | 1,202 | — | — | 1,199 | 2,405 | — | — | ||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||
Net pension expense | $ | 1,154 | $ | 1,864 | $ | 135 | $ | 135 | $ | 2,308 | $ | 3,729 | $ | 270 | $ | 271 | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||
Acquisitions_Details
Acquisitions (Details) (USD $) | 6 Months Ended | ||
In Thousands, unless otherwise specified | Aug. 30, 2014 | Apr. 01, 2014 | Apr. 10, 2014 |
Health Dialog | RediClinic | ||
Acquisitions | ' | ' | ' |
Ownership (as a percent) | ' | 100.00% | 100.00% |
Combined amount paid for entities acquired, net of cash acquired | $69,793 | ' | ' |
Cash acquired related to the acquisitions | 19,945 | ' | ' |
Goodwill related to expected future synergies and operating efficiencies | $73,103 | ' | ' |
Income_Per_Share_Details
Income Per Share (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Aug. 30, 2014 | Aug. 31, 2013 | Aug. 30, 2014 | Aug. 31, 2013 |
Numerator for income (loss) per share: | ' | ' | ' | ' |
Net income | $127,849 | $32,827 | $169,295 | $122,489 |
Accretion of redeemable preferred stock | ' | -26 | ' | -51 |
Cumulative preferred stock dividends | ' | -2,772 | ' | -5,504 |
Income attributable to common stockholders-basic | 127,849 | 30,029 | 169,295 | 116,934 |
Add back-interest on convertible notes | 1,364 | ' | 2,728 | 2,728 |
Income attributable to common stockholders-diluted | $129,213 | $30,029 | $172,023 | $119,662 |
Denominator: | ' | ' | ' | ' |
Basic weighted average shares | 970,664 | 901,992 | 966,997 | 897,993 |
Outstanding options and restricted shares, net (in shares) | 26,132 | 44,726 | 26,141 | 40,143 |
Convertible notes | 24,796 | ' | 24,796 | 24,800 |
Diluted weighted average shares | 1,021,592 | 946,718 | 1,017,934 | 962,936 |
Basic income per share (in dollars per share) | $0.13 | $0.03 | $0.18 | $0.13 |
Diluted income per share (in dollars per share) | $0.13 | $0.03 | $0.17 | $0.12 |
Antidilutive securities excluded from computation of earnings per share | ' | ' | ' | ' |
Potential common shares excluded from the computation of diluted income per share | 2,836 | 97,923 | 2,836 | 77,777 |
Stock options | ' | ' | ' | ' |
Antidilutive securities excluded from computation of earnings per share | ' | ' | ' | ' |
Potential common shares excluded from the computation of diluted income per share | 2,836 | 39,014 | 2,836 | 43,668 |
Convertible notes | ' | ' | ' | ' |
Antidilutive securities excluded from computation of earnings per share | ' | ' | ' | ' |
Potential common shares excluded from the computation of diluted income per share | ' | 24,800 | ' | ' |
Convertible preferred stock | ' | ' | ' | ' |
Antidilutive securities excluded from computation of earnings per share | ' | ' | ' | ' |
Potential common shares excluded from the computation of diluted income per share | ' | 34,109 | ' | 34,109 |
Lease_Termination_and_Impairme2
Lease Termination and Impairment Charges (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Aug. 30, 2014 | Aug. 31, 2013 | Aug. 30, 2014 | Aug. 31, 2013 |
Lease termination and impairment charges | ' | ' | ' | ' |
Lease termination and impairment charges | $7,111 | $11,390 | $11,959 | $22,362 |
Impairment charges | ' | ' | ' | ' |
Lease termination and impairment charges | ' | ' | ' | ' |
Lease termination and impairment charges | 132 | 265 | 283 | 4,866 |
Lease termination charges | ' | ' | ' | ' |
Lease termination and impairment charges | ' | ' | ' | ' |
Lease termination and impairment charges | 6,979 | 11,125 | 11,676 | 17,496 |
Closed store and distribution center charges | ' | ' | ' | ' |
Balance-beginning of period | 270,322 | 312,011 | 284,270 | 323,758 |
Provision for present value of noncancellable lease payments of closed stores | 294 | 5,981 | 436 | 6,374 |
Changes in assumptions about future sublease income, terminations and changes in interest rates | 1,844 | -308 | 1,417 | 213 |
Interest accretion | 4,845 | 5,452 | 9,827 | 10,909 |
Cash payments, net of sublease income | -16,175 | -19,499 | -34,820 | -37,617 |
Balance-end of period | $261,130 | $303,637 | $261,130 | $303,637 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Thousands, unless otherwise specified | Aug. 30, 2014 | Aug. 31, 2013 | Aug. 30, 2014 | Aug. 31, 2013 | Mar. 01, 2014 |
Fair Value Measurements | ' | ' | ' | ' | ' |
Carrying value of long-lived assets | $1,849 | $18,162 | $1,849 | $18,162 | ' |
Fair value of long-lived assets | 1,566 | 13,296 | 1,566 | 13,296 | ' |
Impairment charges | 132 | 265 | 283 | 4,866 | ' |
Non-financial assets measured on a non-recurring basis | ' | ' | ' | ' | ' |
Outstanding derivative financial instruments | 0 | ' | 0 | ' | 0 |
Nonrecurring basis | Total | ' | ' | ' | ' | ' |
Non-financial assets measured on a non-recurring basis | ' | ' | ' | ' | ' |
Fair value of Long-lived assets held for use | 1,566 | 865 | 1,566 | 865 | ' |
Fair value of Long-lived assets held for sale | ' | 12,431 | ' | 12,431 | ' |
Fair value of Total | 1,566 | 13,296 | 1,566 | 13,296 | ' |
Nonrecurring basis | Level 1 | ' | ' | ' | ' | ' |
Non-financial assets measured on a non-recurring basis | ' | ' | ' | ' | ' |
Carrying value of total long-term indebtedness | 5,651,608 | ' | 5,651,608 | ' | ' |
Estimated fair value of total long-term indebtedness | 5,989,414 | ' | 5,989,414 | ' | ' |
Nonrecurring basis | Level 2 | ' | ' | ' | ' | ' |
Non-financial assets measured on a non-recurring basis | ' | ' | ' | ' | ' |
Fair value of Long-lived assets held for sale | ' | 12,431 | ' | 12,431 | ' |
Fair value of Total | ' | 12,431 | ' | 12,431 | ' |
Nonrecurring basis | Level 3 | ' | ' | ' | ' | ' |
Non-financial assets measured on a non-recurring basis | ' | ' | ' | ' | ' |
Fair value of Long-lived assets held for use | 1,566 | 865 | 1,566 | 865 | ' |
Fair value of Total | $1,566 | $865 | $1,566 | $865 | ' |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Thousands, unless otherwise specified | Aug. 30, 2014 | Aug. 31, 2013 | Aug. 30, 2014 | Aug. 31, 2013 | Mar. 01, 2014 |
Income Taxes | ' | ' | ' | ' | ' |
Income tax expense (benefit) | $19,860 | $2,210 | $31,741 | $5,422 | ' |
Adjustments to valuation allowance | ' | 2,197 | ' | -34,692 | ' |
Valuation allowance against net deferred tax assets | $2,016,475 | ' | $2,016,475 | ' | $2,060,811 |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets (Details) (USD $) | 3 Months Ended | 6 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | Aug. 30, 2014 | Aug. 31, 2013 | Aug. 30, 2014 | Aug. 31, 2013 | Mar. 01, 2014 | Aug. 30, 2014 | Mar. 01, 2014 | Aug. 30, 2014 | Mar. 01, 2014 |
Favorable leases and other | Favorable leases and other | Prescription files | Prescription files | ||||||
Goodwill and Other Intangible Assets | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill impairment charges | ' | ' | $0 | ' | ' | ' | ' | ' | ' |
Acquisitions: | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Initial goodwill acquired | ' | ' | 83,971 | ' | ' | ' | ' | ' | ' |
Change in purchase price allocation | ' | ' | -10,868 | ' | ' | ' | ' | ' | ' |
Balance at end of period | 73,103 | ' | 73,103 | ' | ' | ' | ' | ' | ' |
Finite-lived intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross Carrying Amount | 2,025,670 | ' | 2,025,670 | ' | 1,987,377 | 643,747 | 634,320 | 1,381,923 | 1,353,057 |
Accumulated Amortization | -1,614,375 | ' | -1,614,375 | ' | -1,556,150 | -466,290 | -447,608 | -1,148,085 | -1,108,542 |
Remaining Weighted Average Amortization Period | ' | ' | ' | ' | ' | '9 years | '9 years | '3 years | '4 years |
Unfavorable lease intangibles | 59,278 | ' | 59,278 | ' | 62,687 | ' | ' | ' | ' |
Amortization expense for intangible assets and liabilities | 28,532 | 29,121 | 57,769 | 60,806 | ' | ' | ' | ' | ' |
Anticipated annual amortization expense for intangible assets and liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2015 | 111,742 | ' | 111,742 | ' | ' | ' | ' | ' | ' |
2016 | 101,315 | ' | 101,315 | ' | ' | ' | ' | ' | ' |
2017 | 88,024 | ' | 88,024 | ' | ' | ' | ' | ' | ' |
2018 | 50,059 | ' | 50,059 | ' | ' | ' | ' | ' | ' |
2019 | $24,105 | ' | $24,105 | ' | ' | ' | ' | ' | ' |
Indebtedness_and_Credit_Agreem2
Indebtedness and Credit Agreements (Details) (USD $) | 6 Months Ended | 6 Months Ended | 6 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | 6 Months Ended | |||||||||||||||||||||||||||||||||||||||
In Thousands, unless otherwise specified | Aug. 30, 2014 | Mar. 01, 2014 | Aug. 30, 2014 | Mar. 01, 2014 | Aug. 30, 2014 | Mar. 01, 2014 | Aug. 30, 2014 | Aug. 30, 2014 | Aug. 30, 2014 | Aug. 30, 2014 | Aug. 30, 2014 | Aug. 30, 2014 | Mar. 01, 2014 | Aug. 30, 2014 | Mar. 14, 2014 | Aug. 30, 2014 | Aug. 30, 2014 | Aug. 30, 2014 | Mar. 01, 2014 | Oct. 15, 2014 | Aug. 30, 2014 | Mar. 01, 2014 | Aug. 30, 2014 | Mar. 01, 2014 | Aug. 30, 2014 | Aug. 30, 2014 | Aug. 30, 2014 | Mar. 01, 2014 | Aug. 30, 2014 | Aug. 30, 2014 | Aug. 30, 2014 | Mar. 01, 2014 | Aug. 30, 2014 | Mar. 01, 2014 | Aug. 30, 2014 | Mar. 01, 2014 | Aug. 30, 2014 | Mar. 01, 2014 | Aug. 30, 2014 | Mar. 01, 2014 | Aug. 30, 2014 | Mar. 01, 2014 | Aug. 30, 2014 | Mar. 01, 2014 | Aug. 30, 2014 | Mar. 01, 2014 |
loan | Senior secured credit facility | Senior secured credit facility | Senior secured revolving credit facility due February 2018 | Senior secured revolving credit facility due February 2018 | Senior secured revolving credit facility due February 2018 | Senior secured revolving credit facility due February 2018 | Senior secured revolving credit facility due February 2018 | Senior secured revolving credit facility due February 2018 | Senior secured revolving credit facility due February 2018 | Senior secured revolving credit facility due February 2018 | Tranche 6 Term Loan due February 2020 | Tranche 7 Term Loan due February 2020 | Tranche 7 Term Loan due February 2020 | Tranche 7 Term Loan due February 2020 | Tranche 7 Term Loan due February 2020 | 10.25% senior secured notes (second lien) due October 2019 | 10.25% senior secured notes (second lien) due October 2019 | 10.25% senior secured notes (second lien) due October 2019 | 8.00% senior secured notes (senior lien) due August 2020 | 8.00% senior secured notes (senior lien) due August 2020 | Tranche 1 Term Loan (second lien) due August 2020 | Tranche 1 Term Loan (second lien) due August 2020 | Tranche 1 Term Loan (second lien) due August 2020 | Tranche 1 Term Loan (second lien) due August 2020 | Tranche 2 Term Loan (second lien) due June 2021 | Tranche 2 Term Loan (second lien) due June 2021 | Tranche 2 Term Loan (second lien) due June 2021 | Tranche 2 Term Loan (second lien) due June 2021 | Other secured | Other secured | Guaranteed Unsecured Debt | Guaranteed Unsecured Debt | 9.25% senior notes due March 2020 | 9.25% senior notes due March 2020 | 6.75% senior notes due June 2021 | 6.75% senior notes due June 2021 | Unguaranteed Unsecured Debt | Unguaranteed Unsecured Debt | 8.5% convertible notes due May 2015 | 8.5% convertible notes due May 2015 | 7.7% notes due February 2027 | 7.7% notes due February 2027 | 6.875% fixed-rate senior notes due December 2028 | 6.875% fixed-rate senior notes due December 2028 | ||
Minimum | Maximum | LIBOR | LIBOR | Citibank's base rate | Citibank's base rate | LIBOR | Citibank's base rate | Subsequent Event | LIBOR | Citibank's base rate | LIBOR | Citibank's base rate | ||||||||||||||||||||||||||||||||||
Minimum | Maximum | Minimum | Maximum | Forecast | ||||||||||||||||||||||||||||||||||||||||||
Indebtedness and credit agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term debt | ' | ' | $3,448,679 | $3,446,457 | $405,000 | $400,000 | ' | ' | ' | ' | ' | ' | $1,152,293 | $1,149,412 | ' | ' | ' | $268,943 | $268,840 | ' | $650,000 | $650,000 | $470,000 | $470,000 | ' | ' | $500,000 | $500,000 | ' | ' | $5,324 | $5,324 | $1,715,751 | $1,716,087 | $905,751 | $906,087 | $810,000 | $810,000 | $487,178 | $487,188 | $64,178 | $64,188 | $295,000 | $295,000 | $128,000 | $128,000 |
Lease financing obligations | 100,678 | 107,411 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total debt | 5,752,286 | 5,757,143 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current maturities of long-term debt and lease financing obligations | -113,070 | -49,174 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term debt and lease financing obligations, less current maturities | 5,639,216 | 5,707,969 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Face value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,152,293 | ' | ' | 270,000 | 270,000 | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' | ' | ' | 902,000 | 902,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized discount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,057 | 1,160 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized premium | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,751 | 4,087 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Early redemption of debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 270,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, stated interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.25% | 10.25% | ' | 8.00% | 8.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9.25% | 9.25% | 6.75% | 6.75% | ' | ' | 8.50% | 8.50% | 7.70% | 7.70% | 6.88% | 6.88% |
Credit facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revolving credit facility | ' | ' | ' | ' | 1,795,000 | ' | ' | ' | ' | ' | ' | ' | ' | 1,149,412 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of second priority secured term loan facilities | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage points added to the reference rate | ' | ' | ' | ' | ' | ' | ' | ' | 2.25% | 2.75% | 1.25% | 1.75% | ' | ' | ' | 2.75% | 1.75% | ' | ' | ' | ' | ' | ' | ' | 4.75% | 3.75% | ' | ' | 3.88% | 2.88% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of fee payable on daily unused revolver availability | ' | ' | ' | ' | ' | ' | 0.38% | 0.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
LIBOR floor (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.75% | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | ' | ' | ' | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding borrowings | ' | ' | ' | ' | 405,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Letters of credit outstanding | ' | ' | ' | ' | 71,789 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional borrowing capacity | ' | ' | ' | ' | 1,318,211 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Threshold availability on revolving credit facility to trigger fixed charge coverage requirements | ' | ' | ' | ' | 150,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fixed charge coverage ratio | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ownership interest (as a percent) | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maturities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Remainder of fiscal 2015 | 11,085 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2016 | 75,701 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2017 | 11,523 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2018 | 416,523 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2019 | 11,523 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Thereafter | $5,122,559 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock_Option_and_Stock_Award_P1
Stock Option and Stock Award Plan (Details) (USD $) | 6 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Aug. 30, 2014 | Aug. 31, 2013 |
Stock options and stock award Plans | ' | ' |
Stock-based compensation costs | $9,892 | $8,077 |
Weighted Average Fair Value | ' | ' |
Total (in shares) | 6,417 | 7,549 |
Stock options | ' | ' |
Fair value assumptions | ' | ' |
Expected stock price volatility (as a percent) | 74.00% | 85.00% |
Expected dividend yield (as a percent) | 0.00% | 0.00% |
Risk-free interest rate (as a percent) | 1.70% | 1.40% |
Expected option life | '5 years 6 months | '5 years 6 months |
Shares | ' | ' |
Granted (in shares) | 3,113 | 4,828 |
Weighted Average Fair Value | ' | ' |
Granted (in dollars per share) | $4.43 | $1.91 |
Unrecognized pre-tax compensation costs related to unvested stock options and restricted stock grants | ' | ' |
Unrecognized pre tax costs | 23,018 | ' |
Weighted average amortization period | '2 years 10 months 24 days | ' |
Stock options | Maximum | ' | ' |
Additional General Disclosures | ' | ' |
Vesting period | '4 years | ' |
Restricted stock | ' | ' |
Unrecognized pre-tax compensation costs related to unvested stock options and restricted stock grants | ' | ' |
Unrecognized pre tax costs | $33,348 | ' |
Weighted average amortization period | '2 years 7 months 6 days | ' |
Stock awards | ' | ' |
Stock awards | ' | ' |
Granted (in shares) | 3,304 | 2,721 |
Weighted Average Fair Value | ' | ' |
Granted (in dollars per share) | $7.01 | $2.77 |
Stock awards | Maximum | ' | ' |
Additional General Disclosures | ' | ' |
Vesting period | '3 years | ' |
Reclassifications_from_Accumul2
Reclassifications from Accumulated Other Comprehensive Loss (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Aug. 30, 2014 | Aug. 31, 2013 | Aug. 30, 2014 | Aug. 31, 2013 |
Accumulated other comprehensive loss | ' | ' | ' | ' |
Balance - beginning of period | ($36,675) | ($60,106) | ($37,334) | ($61,369) |
Amounts reclassified from accumulated other comprehensive loss to net income | 660 | 1,262 | 1,319 | 2,525 |
Balance - end of period | -36,015 | -58,844 | -36,015 | -58,844 |
Defined benefit pension plans | ' | ' | ' | ' |
Accumulated other comprehensive loss | ' | ' | ' | ' |
Balance - beginning of period | -36,675 | -60,106 | -37,334 | -61,369 |
Amounts reclassified from accumulated other comprehensive loss to net income | 660 | 1,262 | 1,319 | 2,525 |
Balance - end of period | ($36,015) | ($58,844) | ($36,015) | ($58,844) |
Reclassifications_from_Accumul3
Reclassifications from Accumulated Other Comprehensive Loss (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Aug. 30, 2014 | Aug. 31, 2013 | Aug. 30, 2014 | Aug. 31, 2013 |
Reclassification from accumulated other comprehensive loss | ' | ' | ' | ' |
Total before income tax expense | ($147,709) | ($35,037) | ($201,036) | ($127,911) |
Income tax expenses | 19,860 | 2,210 | 31,741 | 5,422 |
Net of income tax expense | -127,849 | -32,827 | -169,295 | -122,489 |
Defined benefit pension plans | Reclassification from accumulated other comprehensive loss | ' | ' | ' | ' |
Reclassification from accumulated other comprehensive loss | ' | ' | ' | ' |
Total before income tax expense | -660 | -1,262 | -1,319 | -2,525 |
Net of income tax expense | -660 | -1,262 | -1,319 | -2,525 |
Defined benefit pension plans | Reclassification from accumulated other comprehensive loss | Selling, general and administrative expenses | ' | ' | ' | ' |
Reclassification from accumulated other comprehensive loss | ' | ' | ' | ' |
Amortization of unrecognized prior service cost | -60 | -60 | -120 | -120 |
Amortization of unrecognized net loss | ($600) | ($1,202) | ($1,199) | ($2,405) |
Retirement_Plans_Details
Retirement Plans (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Aug. 30, 2014 | Aug. 31, 2013 | Aug. 30, 2014 | Aug. 31, 2013 |
Defined Benefit Pension Plan | ' | ' | ' | ' |
Net periodic pension expense | ' | ' | ' | ' |
Service cost | $792 | $830 | $1,585 | $1,660 |
Interest cost | 1,631 | 1,551 | 3,262 | 3,102 |
Expected return on plan assets | -1,929 | -1,779 | -3,858 | -3,558 |
Amortization of unrecognized prior service cost | 60 | 60 | 120 | 120 |
Amortization of unrecognized net loss (gain) | 600 | 1,202 | 1,199 | 2,405 |
Net pension expense | 1,154 | 1,864 | 2,308 | 3,729 |
Employer contributions | 1,159 | ' | 1,159 | ' |
Expected employer contribution during the remainder of fiscal 2015 | ' | ' | 0 | ' |
Nonqualified Executive Retirement Plan | ' | ' | ' | ' |
Net periodic pension expense | ' | ' | ' | ' |
Interest cost | 135 | 135 | 270 | 271 |
Net pension expense | 135 | 135 | 270 | 271 |
Employer contributions | 420 | ' | 806 | ' |
Expected employer contribution during the remainder of fiscal 2015 | ' | ' | $834 | ' |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | Aug. 30, 2014 | Aug. 30, 2014 | Aug. 30, 2014 | Oct. 02, 2014 |
In Millions, unless otherwise specified | Indergit | Chase and Scherwin and Kyle | Hall | Office Of The Inspector General |
StoreManager | case | Subsequent Event | ||
Commitments and contingencies | ' | ' | ' | ' |
Number of current and former store managers court ordered notices to be sent | 7,000 | ' | ' | ' |
Number of current and former store managers who joined the action | 1,550 | ' | ' | ' |
Number of current and former store managers to whom notices will be sent after the Court approval | 1,750 | ' | ' | ' |
Legal settlement amount | ' | $9.70 | ' | $2.99 |
Number of similar cases | ' | ' | 2 | ' |
Subsequent_Event_Details
Subsequent Event (Details) (USD $) | 3 Months Ended | 6 Months Ended | 0 Months Ended | 3 Months Ended | |||
In Thousands, unless otherwise specified | Aug. 31, 2013 | Aug. 31, 2013 | Aug. 30, 2014 | Mar. 01, 2014 | Oct. 15, 2014 | Oct. 15, 2014 | Nov. 29, 2014 |
10.25% senior secured notes (second lien) due October 2019 | 10.25% senior secured notes (second lien) due October 2019 | Subsequent Event | Subsequent Event | Subsequent Event | |||
10.25% senior secured notes (second lien) due October 2019 | Forecast | Forecast | |||||
10.25% senior secured notes (second lien) due October 2019 | 10.25% senior secured notes (second lien) due October 2019 | ||||||
Subsequent Events | ' | ' | ' | ' | ' | ' | ' |
Principal amount of debt redeemed | ' | ' | ' | ' | ' | $270,000 | ' |
Interest rate (as a percent) | ' | ' | 10.25% | 10.25% | ' | ' | ' |
Redemption price | ' | ' | ' | ' | 105.13% | ' | ' |
Gain (loss) on debt retirement | ($62,172) | ($62,172) | ' | ' | ' | ' | $18,000 |