Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Feb. 27, 2016 | Apr. 08, 2016 | Aug. 29, 2015 | |
Document and Entity Information | |||
Entity Registrant Name | RITE AID CORP | ||
Entity Central Index Key | 84,129 | ||
Document Type | 10-K | ||
Document Period End Date | Feb. 27, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --02-27 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 8,554,385,104 | ||
Entity Common Stock, Shares Outstanding | 1,048,406,901 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Feb. 27, 2016 | Feb. 28, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 124,471 | $ 115,899 |
Accounts receivable, net | 1,601,008 | 980,904 |
Inventories, net | 2,697,104 | 2,882,980 |
Deferred tax assets | 17,823 | |
Prepaid expenses and other current assets | 128,144 | 224,152 |
Total current assets | 4,550,727 | 4,221,758 |
Property, plant and equipment, net | 2,255,398 | 2,091,369 |
Goodwill | 1,713,475 | 76,124 |
Other intangibles, net | 1,004,379 | 421,480 |
Deferred tax assets | 1,539,141 | 1,766,349 |
Other assets | 213,890 | 200,345 |
Total assets | 11,277,010 | 8,777,425 |
Current liabilities: | ||
Current maturities of long-term debt and lease financing obligations | 26,848 | 100,376 |
Accounts payable | 1,542,797 | 1,133,520 |
Accrued salaries, wages and other current liabilities | 1,427,250 | 1,193,419 |
Deferred tax liabilities | 57,685 | |
Total current liabilities | 2,996,895 | 2,485,000 |
Long-term debt, less current maturities | 6,914,393 | 5,397,588 |
Lease financing obligations, less current maturities | 52,895 | 61,152 |
Other noncurrent liabilities | 731,399 | 776,629 |
Total liabilities | $ 10,695,582 | $ 8,720,369 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, par value $1 per share; 1,500,000 shares authorized; shares issued and outstanding 1,047,754 and 988,588 | $ 1,047,754 | $ 988,558 |
Additional paid-in capital | 4,822,665 | 4,521,023 |
Accumulated deficit | (5,241,210) | (5,406,675) |
Accumulated other comprehensive loss | (47,781) | (45,850) |
Total stockholders' equity | 581,428 | 57,056 |
Total liabilities and stockholders' equity | $ 11,277,010 | $ 8,777,425 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Feb. 27, 2016 | Feb. 28, 2015 |
CONDENSED CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized | 1,500,000 | 1,500,000 |
Common stock, shares issued | 1,047,754 | 988,558 |
Common stock, shares outstanding | 1,047,754 | 988,558 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 27, 2016 | Nov. 28, 2015 | Aug. 29, 2015 | May. 30, 2015 | Feb. 28, 2015 | Nov. 29, 2014 | Aug. 30, 2014 | May. 31, 2014 | Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||
Revenues | $ 8,270,136 | $ 8,154,184 | $ 7,664,776 | $ 6,647,561 | $ 6,847,929 | $ 6,692,333 | $ 6,522,584 | $ 6,465,531 | $ 30,736,657 | $ 26,528,377 | $ 25,526,413 |
Costs and expenses: | |||||||||||
Cost of revenues | 6,228,581 | 6,151,305 | 5,742,485 | 4,788,031 | 4,892,068 | 4,769,020 | 4,628,005 | 4,662,552 | 22,910,402 | 18,951,645 | 18,202,679 |
Selling, general and administrative expenses | 1,810,288 | 1,777,647 | 1,725,826 | 1,699,585 | 1,718,327 | 1,692,437 | 1,640,524 | 1,644,354 | 7,013,346 | 6,695,642 | 6,561,162 |
Lease termination and impairment charges | 26,753 | 7,011 | 9,637 | 5,022 | 21,284 | 8,702 | 7,111 | 4,848 | 48,423 | 41,945 | 41,304 |
Interest expense | 103,678 | 106,879 | 115,410 | 123,607 | 98,442 | 97,400 | 100,950 | 100,820 | 449,574 | 397,612 | 424,591 |
Loss on debt retirement, net | 33,205 | 18,512 | 33,205 | 18,512 | 62,443 | ||||||
Loss (gain) on sale of assets, net | (348) | 3,331 | 281 | 39 | (1,259) | (455) | (1,715) | (370) | 3,303 | (3,799) | (15,984) |
Total costs and expenses | 8,168,952 | 8,046,173 | 7,626,844 | 6,616,284 | 6,728,862 | 6,585,616 | 6,374,875 | 6,412,204 | 30,458,253 | 26,101,557 | 25,276,195 |
Income before income taxes | 101,184 | 108,011 | 37,932 | 31,277 | 119,067 | 106,717 | 147,709 | 53,327 | 278,404 | 426,820 | 250,218 |
Income tax expense (benefit) | 35,567 | 48,468 | 16,463 | 12,441 | (1,715,965) | 1,871 | 19,860 | 11,881 | 112,939 | (1,682,353) | 804 |
Net income | 65,617 | 59,543 | 21,469 | 18,836 | 1,835,032 | 104,846 | 127,849 | 41,446 | 165,465 | 2,109,173 | 249,414 |
Computation of income attributable to common stockholders: | |||||||||||
Net income | $ 65,617 | $ 59,543 | $ 21,469 | $ 18,836 | $ 1,835,032 | $ 104,846 | $ 127,849 | $ 41,446 | 165,465 | 2,109,173 | 249,414 |
Accretion of redeemable preferred stock | (77) | ||||||||||
Cumulative preferred stock dividends | (8,318) | ||||||||||
Conversion of Series G and H preferred stock | (25,603) | ||||||||||
Income attributable to common stockholders-basic | 165,465 | 2,109,173 | 215,416 | ||||||||
Add back-interest on convertible notes | 5,456 | 5,456 | |||||||||
Income attributable to common stockholders-diluted | $ 165,465 | $ 2,114,629 | $ 220,872 | ||||||||
Basic income per share (in dollars per share) | $ 0.06 | $ 0.06 | $ 0.02 | $ 0.02 | $ 1.88 | $ 0.11 | $ 0.13 | $ 0.04 | $ 0.16 | $ 2.17 | $ 0.23 |
Diluted income per share (in dollars per share) | $ 0.06 | $ 0.06 | $ 0.02 | $ 0.02 | $ 1.79 | $ 0.10 | $ 0.13 | $ 0.04 | $ 0.16 | $ 2.08 | $ 0.23 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 27, 2016 | Nov. 28, 2015 | Aug. 29, 2015 | May. 30, 2015 | Feb. 28, 2015 | Nov. 29, 2014 | Aug. 30, 2014 | May. 31, 2014 | Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||
Net income | $ 65,617 | $ 59,543 | $ 21,469 | $ 18,836 | $ 1,835,032 | $ 104,846 | $ 127,849 | $ 41,446 | $ 165,465 | $ 2,109,173 | $ 249,414 |
Defined benefit pension plans: | |||||||||||
Amortization of prior service cost, net transition obligation and net actuarial losses included in net periodic pension cost, net of $1,681, $6,042, and $0 tax benefit | (1,931) | (8,516) | 24,035 | ||||||||
Total other comprehensive (loss) income | (1,931) | (8,516) | 24,035 | ||||||||
Comprehensive income | $ 163,534 | $ 2,100,657 | $ 273,449 |
CONSOLIDATED STATEMENTS OF COM6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Amortization of prior service cost, net transition obligation and net actuarial losses included in net periodic pension cost, tax expense | $ 1,681 | $ 6,042 | $ 0 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) shares in Thousands, $ in Thousands | Series G preferred stock | Series H preferred stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated other comprehensive Income (Loss) | Total |
Balance - beginning of period at Mar. 02, 2013 | $ 1 | $ 182,097 | $ 904,268 | $ 4,280,831 | $ (7,765,262) | $ (61,369) | $ (2,459,434) |
BALANCE (in shares) at Mar. 02, 2013 | 1,821 | 904,268 | |||||
Increase (Decrease) in Stockholders' Deficit | |||||||
Net income | 249,414 | 249,414 | |||||
Other comprehensive income (loss): | |||||||
Changes in Defined Benefit Plans, net of $1,681 and $6,042 tax benefit at February 27, 2016 and February 28, 2015 respectively | 24,035 | 24,035 | |||||
Comprehensive income | 273,449 | ||||||
Exchange of restricted shares for taxes | $ (1,341) | (2,452) | (3,793) | ||||
Exchange of restricted shares for taxes (in shares) | (1,341) | ||||||
Issuance of restricted stock | $ 2,743 | (2,743) | |||||
Issuance of restricted stock (in shares) | 2,743 | ||||||
Cancellation of restricted stock | $ (1,212) | 1,212 | |||||
Cancellation of restricted stock (in shares) | (1,212) | ||||||
Amortization of restricted stock balance | 6,146 | 6,146 | |||||
Stock-based compensation expense | 10,048 | 10,048 | |||||
Tax benefit from exercise of stock options and restricted stock vesting | 26,665 | 26,665 | |||||
Stock options exercised | $ 26,873 | 6,344 | 33,217 | ||||
Stock options exercised (in shares) | 26,873 | ||||||
Dividends on preferred stock | $ 8,318 | (8,318) | |||||
Dividends on preferred stock (in shares) | 83 | ||||||
Conversion of convertible debt instruments | $ (1) | $ (190,415) | $ 40,000 | 150,416 | |||
Conversion of convertible debt instruments (in shares) | (1,904) | 40,000 | |||||
Balance - end of period at Mar. 01, 2014 | $ 971,331 | 4,468,149 | (7,515,848) | (37,334) | (2,113,702) | ||
BALANCE (in shares) at Mar. 01, 2014 | 971,331 | ||||||
Increase (Decrease) in Stockholders' Deficit | |||||||
Net income | 2,109,173 | 2,109,173 | |||||
Other comprehensive income (loss): | |||||||
Changes in Defined Benefit Plans, net of $1,681 and $6,042 tax benefit at February 27, 2016 and February 28, 2015 respectively | (8,516) | (8,516) | |||||
Comprehensive income | 2,100,657 | ||||||
Exchange of restricted shares for taxes | $ (2,115) | (13,063) | (15,178) | ||||
Exchange of restricted shares for taxes (in shares) | (2,115) | ||||||
Issuance of restricted stock | $ 3,303 | (3,303) | |||||
Issuance of restricted stock (in shares) | 3,303 | ||||||
Cancellation of restricted stock | $ (454) | 454 | |||||
Cancellation of restricted stock (in shares) | (454) | ||||||
Amortization of restricted stock balance | 12,441 | 12,441 | |||||
Stock-based compensation expense | 10,949 | 10,949 | |||||
Tax benefit from exercise of stock options and restricted stock vesting | 37,772 | 37,772 | |||||
Stock options exercised | $ 16,485 | 7,612 | 24,097 | ||||
Stock options exercised (in shares) | 16,485 | ||||||
Conversion of convertible debt instruments | $ 8 | 12 | 20 | ||||
Conversion of convertible debt instruments (in shares) | 8 | ||||||
Balance - end of period at Feb. 28, 2015 | $ 988,558 | 4,521,023 | (5,406,675) | (45,850) | 57,056 | ||
BALANCE (in shares) at Feb. 28, 2015 | 988,558 | ||||||
Increase (Decrease) in Stockholders' Deficit | |||||||
Net income | 165,465 | 165,465 | |||||
Other comprehensive income (loss): | |||||||
Changes in Defined Benefit Plans, net of $1,681 and $6,042 tax benefit at February 27, 2016 and February 28, 2015 respectively | (1,931) | (1,931) | |||||
Comprehensive income | 163,534 | ||||||
Exchange of restricted shares for taxes | $ (2,045) | (15,461) | (17,506) | ||||
Exchange of restricted shares for taxes (in shares) | (2,045) | ||||||
Issuance of restricted stock | $ 2,751 | (2,751) | |||||
Issuance of restricted stock (in shares) | 2,751 | ||||||
Cancellation of restricted stock | $ (420) | 420 | |||||
Cancellation of restricted stock (in shares) | (420) | ||||||
Amortization of restricted stock balance | 28,342 | 28,342 | |||||
Stock-based compensation expense | 11,164 | 11,164 | |||||
Tax benefit from exercise of stock options and restricted stock vesting | 22,466 | 22,466 | |||||
Stock options exercised | $ 6,394 | 4,982 | 11,376 | ||||
Stock options exercised (in shares) | 6,394 | ||||||
Conversion of convertible debt instruments | $ 24,762 | 39,327 | 64,089 | ||||
Conversion of convertible debt instruments (in shares) | 24,762 | ||||||
Shares issued for EnvisionRx acquisition | $ 27,754 | 213,153 | 240,907 | ||||
Shares issued for EnvisionRx acquisition (in shares) | 27,754 | ||||||
Balance - end of period at Feb. 27, 2016 | $ 1,047,754 | $ 4,822,665 | $ (5,241,210) | $ (47,781) | $ 581,428 | ||
BALANCE (in shares) at Feb. 27, 2016 | 1,047,754 |
CONSOLIDATED STATEMENTS OF STO8
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT | |||
Changes in defined benefit plans tax benefit | $ 1,681 | $ 6,042 | $ 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
OPERATING ACTIVITIES: | |||
Net income | $ 165,465 | $ 2,109,173 | $ 249,414 |
Adjustments to reconcile to net cash provided by operating activities: | |||
Depreciation and amortization | 509,212 | 416,628 | 403,741 |
Lease termination and impairment charges | 48,423 | 41,945 | 41,304 |
Gain from lease termination | (8,750) | ||
LIFO charge (credit) | 11,163 | (18,857) | 104,142 |
Loss (gain) on sale of assets, net | 3,303 | (3,799) | (15,984) |
Stock-based compensation expense | 37,948 | 23,390 | 16,194 |
Loss on debt retirements, net | 33,205 | 18,512 | 62,443 |
Changes in deferred taxes | 79,488 | (1,726,487) | |
Excess tax benefit on stock options and restricted stock | (22,884) | (41,563) | (26,665) |
Changes in operating assets and liabilities: | |||
Accounts receivable | 291,659 | (25,902) | (28,051) |
Inventories | 181,958 | 129,985 | 56,557 |
Accounts payable | (21,187) | (169,952) | (100,774) |
Other assets and liabilities, net | (320,351) | (104,114) | (51,525) |
Net cash provided by operating activities | 997,402 | 648,959 | 702,046 |
INVESTING ACTIVITIES: | |||
Payments for property, plant and equipment | (541,347) | (426,828) | (333,870) |
Intangible assets acquired | (128,648) | (112,558) | (87,353) |
Acquisition of businesses, net of cash acquired | (1,778,377) | (69,793) | |
Proceeds from sale-leaseback transactions | 36,732 | 3,989 | |
Proceeds from dispositions of assets and investments | 9,782 | 15,494 | 28,416 |
Proceeds from lease termination | 8,750 | ||
Proceeds from insured loss | 15,144 | ||
Net cash used in investing activities | (2,401,858) | (593,685) | (364,924) |
FINANCING ACTIVITIES: | |||
Proceeds from issuance of long-term debt | 1,800,000 | 1,152,293 | 1,310,000 |
Net proceeds from (repayments to) revolver | 375,000 | 1,325,000 | (265,000) |
Principal payments on long-term debt | (672,717) | (2,595,709) | (1,340,435) |
Change in zero balance cash accounts | (62,878) | 1,081 | (95) |
Net proceeds from issuance of common stock | 11,376 | 24,117 | 33,217 |
Payments for the repurchase of preferred stock | (21,034) | ||
Financing fees paid for early debt redemption | (26,003) | (13,841) | (45,636) |
Excess tax benefit on stock options and restricted stock | 22,884 | 41,563 | 26,665 |
Deferred financing costs paid | (34,634) | (20,285) | (17,850) |
Net cash provided by (used in) financing activities | 1,413,028 | (85,781) | (320,168) |
Increase (decrease) in cash and cash equivalents | 8,572 | (30,507) | 16,954 |
Cash and cash equivalents, beginning of year | 115,899 | 146,406 | 129,452 |
Cash and cash equivalents, end of year | $ 124,471 | $ 115,899 | $ 146,406 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Feb. 27, 2016 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Description of Business The Company is a Delaware corporation and through its 100 percent owned subsidiaries, operates a pharmacy retail healthcare company in the United States of America. The Company operates various programs through its two reportable segments: the Retail Pharmacy segment and the Pharmacy Services segment. The Retail Pharmacy segment operates one of the largest retail drugstore chains in the United States, with 4,561 stores in operation as of February 27, 2016. The Retail Pharmacy segment's drugstores' primary business is the sale of brand and generic prescription drugs. The Retail Pharmacy segment also sells a full selection of health and beauty aids and personal care products, seasonal merchandise and a large private brand product line. The Pharmacy Services segment, acquired by the Company in connection with the June 24, 2015 acquisition of EnvisionRx, operates both a transparent and traditional pharmacy benefit management ("PBM") business; mail-order and specialty pharmacy services through Orchard Pharmaceutical Services; access to the nation's largest cash pay infertility discount drug program via Design Rx; a claims adjudication software platform through Laker Software; and a national Medicare Part D prescription drug plan through EIC. See Note 20 for additional details on the Company's reportable segments. Prior to the June 24, 2015 acquisition of EnvisionRx, the Company's operations consisted solely of the Retail Pharmacy segment. Following the completion of the EnvisionRx acquisition, the Company organized its operations into the Retail Pharmacy segment and the Pharmacy Services segment. Revenues for the Company are as follows: Year Ended February 27, 2016 (52 Weeks) February 28, 2015 (52 Weeks) March 1, 2014 (52 Weeks) Retail Pharmacy segment: Pharmacy sales $ $ $ Front end sales Other revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Retail Pharmacy segment $ $ $ Pharmacy Services segment revenue — — Intersegment elimination ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total revenue $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales of prescription drugs for our Retail Pharmacy segment represented approximately 69.1%, 68.8% and 67.9% of the Company's total drugstore sales in fiscal years 2016, 2015 and 2014, respectively. The Retail Pharmacy segment's principal classes of products in fiscal 2016 were the following: Product Class Percentage of Sales Prescription drugs % Over-the-counter medications and personal care % Health and beauty aids % General merchandise and other % Fiscal Year The Company's fiscal year ends on the Saturday closest to February 29 or March 1. The fiscal years ended February 27, 2016, February 28, 2015 and March 1, 2014 included 52 weeks. Principles of Consolidation The consolidated financial statements include the accounts of the Company and all of its 100 percent owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand and highly liquid investments, which are readily convertible to known amounts of cash and which have original maturities of three months or less when purchased. Allowance for Uncollectible Receivables Approximately 97.8% of prescription sales are made to customers who are covered by third-party payors, such as insurance companies, government agencies and employers. The Company recognizes receivables that represent the amount owed to the Company for sales made to customers or employees of those payors that have not yet been paid. The Company maintains a reserve for the amount of these receivables deemed to be uncollectible. This reserve is calculated based upon historical collection activity adjusted for current conditions. Inventories Inventories are stated at the lower of cost or market. Inventory balances include the capitalization of certain costs related to purchasing, freight and handling costs associated with placing inventory in its location and condition for sale. The Company uses the last-in, first-out ("LIFO") cost flow assumption for substantially all of its inventories. The Company calculates its inflation index based on internal product mix and utilizes the link-chain LIFO method. Impairment of Long-Lived Assets Asset impairments are recorded when the carrying value of assets are not recoverable. For purposes of recognizing and measuring impairment of long-lived assets, the Company categorizes assets of operating stores as "Assets to Be Held and Used" and "Assets to Be Disposed Of." The Company evaluates assets at the store level because this is the lowest level of identifiable cash flows ascertainable to evaluate impairment. Assets being tested for recoverability at the store level include tangible long-lived assets and identifiable, finite-lived intangibles that arose in purchase business combinations. Corporate assets to be held and used are evaluated for impairment based on excess cash flows from the stores that support those assets. The Company reviews long-lived assets to be held and used for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the undiscounted expected future cash flows is less than the carrying amount of the asset, the Company recognizes an impairment loss. Impairment losses are measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risks associated with the recovery of the asset. Property, Plant and Equipment Property, plant and equipment are stated at cost, net of accumulated depreciation and amortization. The Company provides for depreciation using the straight-line method over the following useful lives: buildings—30 to 45 years; equipment—3 to 15 years. Leasehold improvements are amortized on a straight-line basis over the shorter of the estimated useful life of the asset or the term of the lease. When determining the amortization period of a leasehold improvement, the Company considers whether discretionary exercise of a lease renewal option is reasonably assured. If it is determined that the exercise of such option is reasonably assured, the Company will amortize the leasehold improvement asset over the minimum lease term, plus the option period. This determination depends on the remaining life of the minimum lease term and any economic penalties that would be incurred if the lease option is not exercised. Capitalized lease assets are recorded at the lesser of the present value of minimum lease payments or fair market value and amortized over the estimated useful life of the related property or term of the lease. The Company capitalizes direct internal and external development costs associated with internal-use software. Neither preliminary evaluation costs nor costs associated with the software after implementation are capitalized. For fiscal years 2016, 2015 and 2014, the Company capitalized costs of approximately $7,680, $7,550 and $6,547, respectively. Goodwill The Company recognizes goodwill as the excess of the purchase price over the fair value of the assets acquired and liabilities assumed during business combinations. The Company accounts for goodwill under ASC Topic 350, "Intangibles—Goodwill and Other", which does not permit amortization, but instead requires the Company to perform an annual impairment review, or more frequently if events or circumstances indicate that impairment may be more likely. See Note 12 for additional information on goodwill. Intangible Assets The Company has certain finite-lived intangible assets that are amortized over their useful lives. The value of favorable and unfavorable leases on stores acquired in business combinations are amortized over the terms of the leases on a straight-line basis. Prescription files acquired in business combinations are amortized over an estimated useful life of ten years on an accelerated basis, which approximates the anticipated prescription file retention and related cash flows. Purchased prescription files acquired in other than business combinations are amortized over their estimated useful lives of five years on a straight-line basis. The value of finite-lived trade names are amortized over 10 years on a straight-line basis. The value of customer relationships, acquired in connection with the Company's acquisition of EnvisionRx, are amortized over a period between 10 and 20 years on a descending percentage method which matches the pattern of expected discounted cash flows. The Pharmacy Services segment's contract with CMS for Medicare Part D, which is required in order to act as a national provider of the Part D benefit, is amortized over 25 years on a straight line basis. Deferred Financing Costs Costs incurred to issue debt are deferred and amortized as a component of interest expense over the terms of the related debt agreements. Amortization expense of deferred financing costs was $19,545, $15,301 and $15,259 for fiscal 2016, 2015 and 2014, respectively. Revenue Recognition Retail Pharmacy Segment For front end sales, the Retail Pharmacy segment recognizes revenue from the sale of merchandise at the time the merchandise is sold. The Retail Pharmacy segment records revenue net of an allowance for estimated future returns. Return activity is immaterial to revenues and results of operations in all periods presented. For third party payor pharmacy sales, revenue is recognized at the time the prescription is filled, which is or approximates when the customer picks up the prescription and is recorded net of an allowance for prescriptions that were filled but will not be picked up by the customer. For all periods presented, there is no material difference between the revenue recognized at the time the prescription is filled and that which would be recognized when the customer picks up the prescription. For cash prescriptions and patient third party payor co-payments, the Retail Pharmacy segment recognizes revenue when the patient picks up the prescription and tenders the cash price or patient third party payor co-payment amount at the point of sale. Prescriptions are generally not returnable. The Retail Pharmacy segment offers a chain wide loyalty card program titled wellness +. Members participating in the wellness + loyalty card program earn points on a calendar year basis for eligible front end merchandise purchases and qualifying prescriptions. One point is awarded for each dollar spent towards front end merchandise and 25 points are awarded for each qualifying prescription. Members reach specific wellness + tiers based on the points accumulated during the calendar year, which entitles such customers to certain future discounts and other benefits upon reaching that tier. For example, any customer that reaches 1,000 points in a calendar year achieves the "Gold" tier, enabling them to receive a 20% discount on qualifying purchases of front end merchandise for the remaining portion of the calendar year and also the next calendar year. There are also similar "Silver" and "Bronze" levels with lower thresholds and benefit levels. As wellness + customers accumulate points, the Retail Pharmacy segment defers the value of the points earned as deferred revenue (included in other current and noncurrent liabilities, based on the expected usage). The amount deferred is based on historic and projected customer activity (e.g., tier level, spending level). As customers receive discounted front end merchandise, the Retail Pharmacy segment recognizes an allocable portion of the deferred revenue. The Retail Pharmacy segment deferred $110,208 as of February 27, 2016 of which $88,470 is included in other current liabilities and $21,738 is included in noncurrent liabilities. The Retail Pharmacy segment deferred $111,208 as of February 28, 2015 of which $89,657 is included in other current liabilities and $21,551 is included in noncurrent liabilities. During fiscal 2016, the Company partnered with American Express Travel Related Services Company, Inc. to be part of a coalition loyalty program titled Plenti. This awards program allows a customer to earn points based on qualifying purchases at participating retailers. Each Plenti point is worth the equivalent of $0.01. The customer has the opportunity to redeem their accumulated points on a future purchase at any of the participating retailers. All points are redeemed using a FIFO methodology (e.g., first points earned are the first to be redeemed). Points expire on December 31st of each year for any point that has aged a minimum of two years that has not been redeemed by the customer. For a majority of the Plenti point issuances, funding is provided by our vendors through contractual arrangements. This funding is treated as deferred revenue and remains in deferred revenue until a customer redeems their points. Upon redemption, the deferred revenue account is decremented with an offsetting credit to sales. For Plenti point redemptions that are not vendor funded, deferred revenue is recorded and not recognized until the points are redeemed. As of February 27, 2016, the Company had deferred revenue of $39,253 relating to the Plenti program which is included in other current liabilities. Pharmacy Services Segment The Pharmacy Services segment ("Pharmacy Services") sells prescription drugs indirectly through its retail pharmacy network and directly through its mail service dispensing pharmacy. The Pharmacy Services segment recognizes revenue from prescription drugs sold by (i) its mail service dispensing pharmacy and (ii) under retail pharmacy network contracts where it is the principal using the gross method at the contract prices negotiated with its clients, primarily employers, insurance companies, unions, government employee groups, health plans, Managed Medicaid plans, Medicare plans, and other sponsors of health benefit plans, and individuals throughout the United States. Revenues include: (i) the portion of the price the client pays directly to the Pharmacy Services segment, net of any volume-related or other discounts paid back to the client (see "Drug Discounts" below), (ii) the price paid to the Pharmacy Services segment by client plan members for mail order prescriptions ("Mail Co-Payments"), (iii) customer copayments made directly to the retail pharmacy network, and (iv) administrative fees. Sales taxes are not included in revenue. Revenue is recognized when: (i) persuasive evidence that the prescription drug sale has occurred or a contractual arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the seller's price to the buyer is fixed or determinable, and (iv) collectability is reasonably assured. The following revenue recognition policies have been established for the Pharmacy Services segment: • Revenues generated from prescription drugs sold by third party pharmacies in the Pharmacy Services segment's retail pharmacy network and associated administrative fees are recognized at the Pharmacy Services segment's point-of-sale, which is when the claim is adjudicated by the Pharmacy Services segment's online claims processing system. • Revenues generated from prescription drugs sold by the Pharmacy Services segment's mail service dispensing pharmacy are recognized when the prescription is delivered. At the time of delivery, the Pharmacy Services segment has performed substantially all of its obligations under its client contracts and does not experience a significant level of returns or reshipments. • Revenues generated from administrative fees based on membership or claims volume are recognized monthly upon active membership in the plan or actual claims volume. In the majority of its contracts, the Pharmacy Services segment has determined it is the principal due to it: (i) being the primary obligor in the arrangement, (ii) latitude in establishing price, (iii) performs part of the service, (iv) having discretion in supplier selection and v) having involvement in the determination of product or service specifications. The Pharmacy Services segment's obligations under its client contracts for which revenues are reported using the gross method are separate and distinct from its obligations to the third party pharmacies included in its retail pharmacy network contracts. Pursuant to these contracts, the Pharmacy Services segment is contractually required to pay the third party pharmacies in its retail pharmacy network for products sold after payment is received from its clients. The Pharmacy Services segment's responsibilities under its client contracts typically include validating eligibility and coverage levels, communicating the prescription price and the co-payments due to the third party retail pharmacy, identifying possible adverse drug interactions for the pharmacist to address with the prescriber prior to dispensing, suggesting generic alternatives where clinically appropriate and approving the prescription for dispensing. Although the Pharmacy Services segment does not have credit risk with respect to its pharmacy benefit manager operations and retail co-payments, management believes that all of the other applicable indicators of gross revenue reporting are present. Drug Discounts—The Pharmacy Services segment deducts from its revenues that are generated from prescription drugs sold by third party pharmacies any rebates, inclusive of discounts and fees, earned by its clients. Rebates are paid to clients in accordance with the terms of client contracts. Medicare Part D—The Pharmacy Services segment, through its EIC subsidiary, participates in the federal government's Medicare Part D program as a Prescription Drug Plan ("PDP"). Net revenues include insurance premiums earned by the PDP, which are determined based on the PDP's annual bid and related contractual arrangements with the Centers for Medicare and Medicaid Services ("CMS"). The insurance premiums include a direct premium paid by CMS and a beneficiary premium, which is the responsibility of the PDP member, but is subsidized by CMS in the case of low-income members. Premiums collected in advance are initially deferred in accrued expenses and are then recognized in net revenues over the period in which members are entitled to receive benefits. The Pharmacy Services segment records estimates of various assets and liabilities arising from its participation in the Medicare Part D program based on information in its claims management and enrollment systems. Significant estimates arising from its participation in the Medicare Part D program include: (i) estimates of low-income cost subsidy, reinsurance amounts and coverage gap discount amounts ultimately payable to or receivable from CMS based on a detailed claims reconciliation, (ii) an estimate of amounts receivable from CMS under a risk-sharing feature of the Medicare Part D program design, referred to as the risk corridor and (iii) estimates for claims that have been reported and are in the process of being paid or contested. Actual amounts of Medicare Part D-related assets and liabilities could differ significantly from amounts recorded. Historically, the effect of these adjustments has not been material to our results of operations or financial position. See Note 20 for additional information about the revenues of the Company's business segments. Cost of Revenues Retail Pharmacy Segment Cost of revenues for the Retail Pharmacy segment includes the following: the cost of inventory sold during the period, including related vendor rebates and allowances, LIFO credit or charges, costs incurred to return merchandise to vendors, inventory shrink, purchasing costs and warehousing costs, which include inbound freight costs from the vendor, distribution payroll and benefit costs, distribution center occupancy costs and depreciation expense and delivery expenses to the stores. Pharmacy Services Segment The Pharmacy Services segment's cost of revenues includes the cost of prescription drugs sold during the reporting period indirectly through its retail pharmacy network and directly through its mail service dispensing pharmacy. The cost of prescription drugs sold component of cost of revenues includes: (i) the cost of the prescription drugs purchased from manufacturers or distributors and shipped to members in clients' benefit plans from the Pharmacy Services segment's mail service dispensing pharmacy, net of any volume-related or other discounts (see "Vendor allowances and purchase discounts" below) and (ii) the cost of prescription drugs sold through the Pharmacy Services segment's retail pharmacy network under contracts where it is the principal, net of any volume-related or other discounts. As a result of the Acquisition, and the related addition of the Pharmacy Services segment, the Company now refers to its cost of goods sold as its cost of revenues, as these costs are now inclusive of the cost of prescription drugs sold through the Pharmacy Services segment's retail pharmacy network under contracts where it is the principal. See Note 20 for additional information about the cost of revenues of the Company's business segments. Vendor Rebates and Allowances and Purchase Discounts Retail Pharmacy Segment The Retail Pharmacy segment rebates and allowances received from vendors relate to either buying and merchandising or promoting the product. Buying and merchandising related rebates and allowances are recorded as a reduction of cost of revenue as product is sold. Buying and merchandising rebates and allowances include all types of vendor programs such as cash discounts from timely payment of invoices, purchase discounts or rebates, volume purchase allowances, price reduction allowances and slotting allowances. Certain product promotion related rebates and allowances, primarily related to advertising, are recorded as a reduction in selling, general and administrative expenses when the advertising commitment has been satisfied. Pharmacy Services Segment The Pharmacy Services segment receives purchase discounts on products purchased. The Pharmacy Services segment's contractual arrangements with vendors, including manufacturers, wholesalers and retail pharmacies, normally provide for the Pharmacy Services segment to receive purchase discounts from established list prices in one, or a combination, of the following forms: (i) a direct discount at the time of purchase, or (ii) a discount (or rebate) paid subsequent to dispensing when products are purchased indirectly from a manufacturer (e.g., through a wholesaler or retail pharmacy). These rebates are recognized when prescriptions are dispensed and are generally calculated and billed to manufacturers within 30 days of the end of each completed quarter. Historically, the effect of adjustments resulting from the reconciliation of rebates recognized to the amounts billed and collected has not been material to the Pharmacy Services segment's results of operations. The Pharmacy Services segment accounts for the effect of any such differences as a change in accounting estimate in the period the reconciliation is completed. The Pharmacy Services segment also receives additional discounts under its wholesaler contracts. In addition, the Pharmacy Services segment receives fees from pharmaceutical manufacturers for administrative services. Purchase discounts and administrative service fees are recorded as a reduction of cost of revenues. Reinsurance To minimize risk and statutory capital requirements, EIC enters into quota share reinsurance agreements with unaffiliated reinsurers whereby they assume a quota share percentage of the company's Medicare Part D program. The net revenue and net cost of revenue for EIC has been reduced by the amounts ceded to reinsurers under these agreements. Rent The Company records rent expense on operating leases on a straight-line basis over the minimum lease term. The Company begins to record rent expense at the time that the Company has the right to use the property. From time to time, the Company receives incentive payments from landlords that subsidize lease improvement construction. These leasehold incentives are deferred and recognized on a straight-line basis over the minimum lease term. Selling, General and Administrative Expenses Selling, general and administrative expenses include store and corporate administrative payroll and benefit costs, occupancy costs which include retail store and corporate rent costs, facility and leasehold improvement depreciation and utility costs, advertising, repair and maintenance, insurance, equipment depreciation and professional fees. Repairs and Maintenance Routine repairs and maintenance are charged to operations as incurred. Improvements and major repairs, which extend the useful life of an asset, are capitalized and depreciated. Advertising Advertising costs, net of specific vendor advertising allowances, are expensed in the period the advertisement first takes place. Advertising expenses, net of vendor advertising allowances, for fiscal 2016, 2015 and 2014 were $307,817, $318,157 and $322,843, respectively. Insurance The Company is self-insured for certain general liability and workers' compensation claims. For claims that are self-insured, stop-loss insurance coverage is maintained for workers' compensation occurrences exceeding $1,000 and general liability occurrences exceeding $3,000. The Company utilizes actuarial studies as the basis for developing reported claims and estimating claims incurred but not reported relating to the Company's self-insurance. Workers' compensation claims are discounted to present value using a risk-free interest rate. Benefit Plan Accruals The Company has several defined benefit plans, under which participants earn a retirement benefit based upon a formula set forth in the plan. The Company records expense related to these plans using actuarially determined amounts that are calculated under the provisions of ASC 715, "Compensation—Retirement Benefits." Key assumptions used in the actuarial valuations include the discount rate, the expected rate of return on plan assets and the rate of increase in future compensation levels. Stock-Based Compensation The Company has several stock option plans, which are described in detail in Note 16. The Company accounts for stock-based compensation under ASC 718, "Compensation—Stock Compensation." The Company recognizes option expense over the requisite service period of the award, net of an estimate for the impact of award forfeitures. Store Pre-opening Expenses Costs incurred prior to the opening of a new or relocated store, associated with a remodeled store or related to the opening of a distribution facility are charged against earnings when incurred. Litigation Reserves The Company is involved in litigation on an ongoing basis. The Company accrues its best estimate of the probable loss related to legal claims. Such estimates are developed in consultation with in-house counsel, and are based upon a combination of litigation and settlement strategies. Facility Closing Costs and Lease Exit Charges When a store or distribution center is closed, the Company records an expense for unrecoverable costs and accrues a liability equal to the present value at current credit adjusted risk-free interest rates of the remaining lease obligations and anticipated ancillary occupancy costs, net of estimated sublease income. Other store or distribution center closing and liquidation costs are expensed when incurred. Income Taxes Deferred income taxes are determined based on the difference between the financial reporting and tax basis of assets and liabilities. Deferred income tax expense (benefit) represents the change during the reporting period in the deferred tax assets and deferred tax liabilities, net of the effect of acquisitions and dispositions. Deferred tax assets include tax loss and credit carryforwards and are reduced by a valuation allowance if, based on available evidence, it is more likely than not that some portion of the deferred tax assets will not be realized. Changes in valuation allowances from period to period are included in the tax provision in the period of change. The Company has net operating loss ("NOL") carryforwards that can be utilized to offset future income for federal and state tax purposes. These NOLs generate a significant deferred tax asset. The Company regularly reviews the deferred tax assets for recoverability considering historical profitability, projected taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies. The Company recognizes tax liabilities in accordance with ASC 740, "Income Taxes" and the Company 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. Sales Tax Collected Sales taxes collected from customers and remitted to various governmental agencies are presented on a net basis (excluded from revenues) in the Company's statement of operations. Use of Estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Significant Concentrations Retail Pharmacy Segment The Company's pharmacy sales were primarily to customers covered by health plan contracts, which typically contract with a third party payor that agrees to pay for all or a portion of a customer's eligible prescription purchases. During fiscal 2016, the top five third party payors accounted for approximately 70.4% of the Company's pharmacy sales. The largest third party payor, Express Scripts, represented 25.3%, 27.8% and 31.6% of pharmacy sales during fiscal 2016, 2015 and 2014, respectively. Third party payors are entities such as an insurance company, governmental agency, health maintenance organization or other managed care provider, and typically represent several health care contracts and customers. During fiscal 2016, state sponsored Medicaid agencies and related managed care Medicaid payors accounted for approximately 19.9% of the Company's pharmacy sales, the largest of which was approximately 1.5% of the Company's pharmacy sales. During fiscal 2016, approximately 31.9% of the Company's pharmacy sales were to customers covered by Medicare Part D. Any significant loss of third-party payor business could have a material adverse effect on the Company's business and results of operations. On February 17, 2014, the Company executed an expanded five-year agreement with McKesson Corporation ("McKesson") for pharmaceutical purchasing and distribution (our "Purchasing and Delivery Arrangement"). As part of its Purchasing and Delivery Arrangement, McKesson assumed responsibility for purchasing essentially all of the brand and generic medications the Company dispenses as well as providing a new direct store delivery model to all of the Company's stores. During fiscal 2016, the Company purchased brand and generic pharmaceuticals, which amounted to approximately 97.5% of the dollar volume of its prescription drugs from McKesson. If the Company's relationship with McKesson was disrupted, it could temporarily have difficulty filling prescriptions for brand-named and generic drugs until it executed a replacement wholesaler agreement or developed and implemented self- distribution processes. Pharmacy Services Segment The Pharmacy Services segment, through its EIC subsidiary, participates in the federal government's Medicare Part D program as a PDP. Net revenues of $162,620 (0.5% of consolidated revenues) include insurance premiums earned by the PDP, which are determined based on the PDP's annual bid and related contractual arrangements with CMS. EIC has entered into a quota share reinsurance agreement with Swiss Re Life & Health America Inc. ("Swiss Re") whereby they assume a quota share percentage of the company's Medicare Part D program. Fifty percent of the net revenue and net cost of revenue for EIC has been ceded to Swiss Re under this agreement. Derivatives The Company may enter into interest rate |
Acquisition
Acquisition | 12 Months Ended |
Feb. 27, 2016 | |
Acquisition | |
Acquisition | 2. Acquisition On June 24, 2015, the Company completed its previously announced acquisition of TPG VI Envision BL, LLC and Envision Topco Holdings, LLC ("EnvisionRx"), pursuant to the terms of an agreement ("Agreement") dated February 10, 2015. EnvisionRx, which was a portfolio company of TPG Capital L.P. prior to its acquisition by the Company, is a full-service pharmacy services provider. EnvisionRx provides both transparent and traditional PBM options through its EnvisionRx and MedTrak PBMs, respectively. EnvisionRx also offers fully integrated mail-order and specialty pharmacy services through Orchard Pharmaceutical Services; access to the nation's largest cash pay infertility discount drug program via Design Rx; an innovative claims adjudication software platform in Laker Software; and a national Medicare Part D prescription drug plan through EIC's EnvisionRx Plus Silver product for the low income auto-assign market and its Clear Choice product for the chooser market. EnvisionRx is headquartered in Twinsburg, Ohio and operates as a 100 percent owned subsidiary of the Company. Pursuant to the terms of the Agreement, as consideration for the Acquisition, the Company paid $1,882,211 in cash and issued 27,754 shares of Rite Aid common stock. The Company financed the cash portion of the Acquisition with borrowings under its Amended and Restated Senior Secured Revolving Credit Facility, and the net proceeds from the April 2, 2015 issuance of $1,800,000 aggregate principal amount of 6.125% senior notes due 2023 (the "6.125% Notes"). The consideration associated with the common stock was $240,907 based on a stock price of $8.68 per share, representing the closing price of the Company's common stock on the closing date of the Acquisition. The closing balance sheet has not yet been finalized, as the Company is still in process of finalizing the valuation, and therefore, the final purchase price and related purchase price allocation of the Acquisition is subject to change. The Company's consolidated financial statements for fiscal 2016 includes EnvisionRx results of operations from the Acquisition date of June 24, 2015 through February 27, 2016 (please see Note 20 Segment Reporting for the Pharmacy Services segment results included within the consolidated financial statements for the fifty-two week period ended February 27, 2016, which reflects the results of EnvisionRx). The Company's financial statements reflect preliminary purchase accounting adjustments in accordance with ASC 805 "Business Combinations", whereby the purchase price was preliminarily allocated to the assets acquired and liabilities assumed based upon their estimated fair values on the Acquisition date. The following allocation of the purchase price and the estimated transaction costs is preliminary and is based on information available to the Company's management at the time the consolidated financial statements were prepared. Accordingly, the allocation is subject to change and the impact of such changes may be material. Preliminary purchase price Cash consideration $ Stock consideration ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Preliminary purchase price allocation Cash and cash equivalents $ Accounts receivable Inventories Prepaid expenses and other current assets ​ ​ ​ ​ ​ Total current assets Property and equipment Intangible assets(1) Goodwill Other assets ​ ​ ​ ​ ​ Total assets acquired ​ ​ ​ ​ ​ Accounts payable Reinsurance funds held Other current liabilities(2) ​ ​ ​ ​ ​ Total current liabilities Other long term liabilities(3) ​ ​ ​ ​ ​ Total liabilities assumed ​ ​ ​ ​ ​ Net assets acquired $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Intangible assets are recorded at estimated fair value, as determined by management based on available information which includes a preliminary valuation prepared by an independent third party. The fair values assigned to identifiable intangible assets were determined through the use of the income approach, specifically the relief from royalty and the multi-period excess earnings methods. The major assumptions used in arriving at the estimated identifiable intangible asset values included management's preliminary estimates of future cash flows, discounted at an appropriate rate of return which are based on the weighted average cost of capital for both the Company and other market participants, projected customer attrition rates, as well as applicable royalty rates for comparable assets. The useful lives for intangible assets were determined based upon the remaining useful economic lives of the intangible assets that are expected to contribute directly or indirectly to future cash flows. The estimated fair value of intangible assets and related useful lives as included in the preliminary purchase price allocation include: Estimated Fair Value Estimated Useful Life (In Years) Customer relationships $ CMS license Claims adjudication and other developed software Trademarks Backlog Trademarks Indefinite ​ ​ ​ ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (2) Other current liabilities includes $116,500 due to TPG under the terms of the Agreement, representing the amounts due to EnvisionRx from CMS, less corresponding amounts due to various reinsurance providers under certain reinsurance programs, for CMS activities that relate to the year ended December 31, 2014. This liability was satisfied with a payment to TPG on November 5, 2015. (3) Primarily relates to deferred tax liabilities. The above goodwill represents future economic benefits expected to be recognized from the Company's expansion into the pharmacy services market, as well as expected future synergies and operating efficiencies from combining operations with EnvisionRx. Goodwill resulting from the Acquisition of $1,637,351 has been allocated to the Pharmacy Services segment of which $1,360,156 is deductible for tax purposes. At the time the financial statements were issued, initial accounting for the business combination related to tax matters were preliminary and may be adjusted during the measurement period. During the fourth quarter of fiscal 2016, the Company made measurement period adjustments to reflect facts and circumstances in existence as of the acquisition date. These adjustments resulted in an increase in goodwill of $158,278, mostly due to a reduction of intangible assets of $178,500 and offset by certain corresponding tax adjustments. As a result of the reduction of intangible assets during the fourth quarter of fiscal 2016, the Company recorded a reduction to its amortization expense of $4,739, which adjusts the amortization expense to the amount that would have been recorded in previous interim reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. During fiscal 2016 and fiscal 2015, acquisition costs of $27,402 and $15,442, respectively, were expensed as incurred. The following unaudited pro forma combined financial data gives effect to the Acquisition as if it had occurred as of March 1, 2014. These unaudited pro forma combined results have been prepared by combining the historical results of the Company and historical results of EnvisionRx. The unaudited pro forma combined financial data for all periods presented were adjusted to give effect to pro forma events that 1) are directly attributable to the aforementioned transaction, 2) factually supportable, and 3) expected to have a continuing impact on the consolidated results of operations. Specifically, these adjustments reflect: • Incremental interest expense relating to the $1,800,000 6.125% Notes issued on April 2, 2015, the net proceeds of which were used finance the cash portion of the Acquisition. • Incremental amortization resulting from increased fair value of the identifiable intangible assets as noted in the preliminary purchase price allocation. • Removal of costs incurred in connection with the Acquisition by both the Company and EnvisionRx, including bridge loan commitment fees of $15,375. • Removal of interest expense incurred by EnvisionRx as the underlying debt was repaid upon the acquisition date. • Removal of debt extinguishment charges incurred by EnvisionRx. • Inclusion of the 27,754 shares of Rite Aid common stock issued to fund the stock portion of the purchase price in the basic and diluted share calculation. The unaudited pro forma combined results do not include any incremental cost savings that may result from the integration. The adjustments are based on information available to the Company at this time. Accordingly, the adjustments are subject to change and the impact of such changes may be material. The unaudited pro forma combined information is not necessarily indicative of what the combined company's results actually would have been had the Acquisition been completed as of the beginning of the periods as indicated. In addition, the unaudited pro forma combined information does not purport to project the future results of the combined company. Year Ended February 27, 2016 (52 weeks) February 28, 2015 (52 weeks) Pro forma Pro forma Net revenues as reported $ $ EnvisionRx revenue, prior to the acquisition Less pre-acquisition intercompany revenue ) ) ​ ​ ​ ​ ​ ​ ​ ​ Pro forma combined revenues $ $ Net income as reported $ $ EnvisionRx net (loss) income before income taxes, prior to the acquisition ) Incremental interest expense on the 6.125% Notes issued on April 2, 2015 ) ) Incremental amortization resulting from fair value adjustments of the identifiable intangible assets ) ) Transaction costs incurred by both the Company and EnvisionRx Interest expense incurred by EnvisionRx Debt extinguishment charges incurred by EnvisionRx — Income tax expense relating to pro forma adjustments ) — ​ ​ ​ ​ ​ ​ ​ ​ Pro forma net income $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic income per share $ $ Diluted income per share $ $ |
Pending Merger
Pending Merger | 12 Months Ended |
Feb. 27, 2016 | |
Pending Merger | |
Pending Merger | 3. Pending Merger On October 27, 2015, Rite Aid entered into an Agreement and Plan of Merger (the "Merger Agreement") with WBA, and Victoria Merger Sub, Inc., a Delaware corporation and a wholly owned direct subsidiary of WBA ("Victoria Merger Sub"). Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, Victoria Merger Sub will merge with and into Rite Aid (the "Merger"), with Rite Aid surviving the Merger as a 100 percent owned direct subsidiary of WBA. On February 4, 2016, the proposal to adopt the Merger Agreement was approved by holders of approximately 74% of our outstanding common stock entitled to vote as of the record date of the special meeting. Completion of the Merger is subject to various closing conditions, including but not limited to (i) the expiration or earlier termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (ii) the absence of any law or order prohibiting the Merger, and (iii) the absence of a material adverse effect on Rite Aid, as defined in the Merger Agreement. Under the terms of the Merger Agreement, at the effective time of the Merger, each share of Rite Aid's common stock, par value $1.00 per share, issued and outstanding immediately prior to the effective time (other than shares owned by (i) WBA, Victoria Merger Sub or Rite Aid (which will be cancelled), (ii) stockholders who have properly exercised and perfected appraisal rights under Delaware law, or (iii) any direct or indirect 100 percent owned subsidiary of Rite Aid or WBA (which will be converted into shares of common stock of the surviving corporation)) will be converted into the right to receive $9.00 per share in cash, without interest. Rite Aid and WBA and Victoria Merger Sub have each made customary representations, warranties and covenants in the Merger Agreement, including, among other things, that (i) Rite Aid and its subsidiaries will continue to conduct our business in the ordinary course consistent with past practice between the execution of the Merger Agreement and the closing of the Merger and (ii) Rite Aid will not solicit proposals relating to alternative transactions to the Merger or engage in discussions or negotiations with respect thereto, subject to certain exceptions. Additionally, the Merger Agreement limits the Company's ability to incur indebtedness for borrowed money and issue additional capital stock, among other things. The Company currently anticipates that the Merger will close in the second half of calendar 2016. |
Income Per Share
Income Per Share | 12 Months Ended |
Feb. 27, 2016 | |
Income Per Share | |
Income Per Share | 4. 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. Year Ended February 27, 2016 (52 Weeks) February 28, 2015 (52 Weeks) March 1, 2014 (52 Weeks) Numerator for income per share: Net income $ $ $ Accretion of redeemable preferred stock — — ) Cumulative preferred stock dividends — — ) Conversion of Series G and H preferred stock — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income attributable to common stockholders—basic $ $ $ Add back—interest on convertible notes — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income attributable to common stockholders—diluted $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator: Basic weighted average shares Outstanding options and restricted shares, net Convertible notes — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted weighted average shares ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic income per share $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted income per share $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Due to their anti-dilutive effect, the following potential common shares have been excluded from the computation of diluted income per share as of February 27, 2016, February 28, 2015 and March 1, 2014: Year Ended February 27, 2016 (52 Weeks) February 28, 2015 (52 Weeks) March 1, 2014 (52 Weeks) Stock options ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ On September 30, 2013, the Company redeemed all of its outstanding Series G and Series H Convertible Preferred Stock (collectively the "Convertible Preferred Stock") at the Company's election. The Convertible Preferred Stock was convertible into common stock of the Company, at the holder's option, at a conversion rate of $5.50 per share or 34,621,117 shares of common stock on September 30, 2013. The Convertible Preferred Stock was redeemable by the Company for cash at 105% of the Cumulative Preferred Stock's $100.00 per share liquidation preference or $199,937. In an individually negotiated exchange transaction, the Company exchanged 40,000,000 shares of its common stock, par value of $1.00 per share, with a market value of $190,400 at the $4.76 per share closing price on September 30, 2013, for all of the outstanding Convertible Preferred Stock. Accordingly, income attributable to common stock holders was reduced by $25,603, or $0.03 per diluted share, the value of the additional 5,378,883 shares of common stock issued upon conversion at the $4.76 per share closing price. During May 2015, $64,089 of the Company's 8.5% convertible notes due 2015 were converted into 24,762 shares of common stock, pursuant to their terms. |
Lease Termination and Impairmen
Lease Termination and Impairment Charges | 12 Months Ended |
Feb. 27, 2016 | |
Lease Termination and Impairment Charges | |
Lease Termination and Impairment Charges | 5. Lease Termination and Impairment Charges Impairment Charges The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that an asset group has a carrying value that may not be recoverable. The individual operating store is the lowest level for which cash flows are identifiable. As such, the Company evaluates individual stores for recoverability of assets. To determine if a store needs to be tested for recoverability, the Company considers items such as decreases in market prices, changes in the manner in which the store is being used or physical condition, changes in legal factors or business climate, an accumulation of losses significantly in excess of budget, a current period operating or cash flow loss combined with a history of operating or cash flow losses or a projection of continuing losses, or an expectation that the store will be closed or sold. The Company monitors new and recently relocated stores against operational projections and other strategic factors such as regional economics, new competitive entries and other local market considerations to determine if an impairment evaluation is required. For other stores, it performs a recoverability analysis if it has experienced current-period and historical cash flow losses. In performing the recoverability test, the Company compares the expected future cash flows of a store to the carrying amount of its assets. Significant judgment is used to estimate future cash flows. Major assumptions that contribute to its future cash flow projections include expected sales, gross profit, and distribution expenses; expected costs such as payroll, occupancy costs and advertising expenses; and estimates for other significant selling, and general and administrative expenses. Many long-term macro-economic and industry factors are considered, both quantitatively and qualitatively, in the future cash flow assumptions. In addition to current and expected economic conditions such as inflation, interest and unemployment rates that affect customer shopping patterns, the Company considers that it operates in a highly competitive industry which includes the actions of other national and regional drugstore chains, independently owned drugstores, supermarkets, mass merchandisers, dollar stores and internet pharmacies. Additionally, the Company takes into consideration that certain operating stores are executing specific improvement plans which are monitored quarterly to recoup recent capital investments, such as an acquisition of an independent pharmacy, which it has made to respond to specific competitive or local market conditions, or have specific programs tailored towards a specific geography or market. The Company recorded impairment charges of $17,219 in fiscal 2016, $14,438 in fiscal 2015 and $13,077 in fiscal 2014. The Company's methodology for recording impairment charges has been consistently applied in the periods presented. At February 27, 2016, $2.077 billion of the Company's long-lived assets, including intangible assets, were associated with 4,561 active operating stores. If an operating store's estimated future undiscounted cash flows are not sufficient to cover its carrying value, its carrying value is reduced to fair value which is its estimated future discounted cash flows. The discount rate is commensurate with the risks associated with the recovery of a similar asset. An impairment charge is recorded in the period that the store does not meet its original return on investment and/or has an operating loss for the last 2 years and its projected cash flows do not exceed its current asset carrying value. The amount of the impairment charge is the entire difference between the current asset carrying value and the estimated fair value of the assets using discounted future cash flows. Most stores are fully impaired in the period that the impairment charge is originally recorded. The Company recorded impairment charges for active stores of $16,106 in fiscal 2016, $12,126 in fiscal 2015 and $11,748 in fiscal 2014. The Company reviews key performance results for active stores on a quarterly basis and approves certain stores for closure. Impairment for closed stores, if any (many stores are closed on lease expiration), are recorded in the quarter the closure decision is approved. Closure decisions are made on an individual store or regional basis considering all of the macro-economic, industry and other factors, in addition to, the active store's individual operating results. The Company recorded impairment charges for closed facilities of $1,113 in fiscal 2016, $2,312 in fiscal 2015 and $1,329 in fiscal 2014. The following table summarizes the impairment charges and number of locations, segregated by closed facilities and active stores that have been recorded in fiscal 2016, 2015 and 2014: Year Ended February 27, 2016 February 28, 2015 March 1, 2014 (in thousands, except number of stores) Number Charge Number Charge Number Charge Active stores: Stores previously impaired(1) $ $ $ New, relocated and remodeled stores(2) Remaining stores not meeting the recoverability test(3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total impairment charges—active stores Total impairment charges-closed facilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total impairment charges—all locations $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) These charges are related to stores that were impaired for the first time in prior periods. Most active stores, requiring an impairment charge, are fully impaired in the first period that they do not meet their asset recoverability test. However, we do often make capital additions to certain stores to improve their operating results or to meet geographical competition, which if later are deemed to be unrecoverable, will be impaired in future periods. Of this total, 351, 369 and 375 stores for fiscal years 2016, 2015 and 2014 respectively have been fully impaired. Also included in these charges are an insignificant number of stores, which were only partially impaired in prior years based on our analysis that supported a reduced net book value greater than zero, but now require additional charges. (2) These charges are related to new stores (open at least 3 years) and relocated stores (relocated in the last 2 years) and significant strategic remodels (remodeled in the last year) that did not meet their recoverability test during the current period. These stores have not met their original return on investment projections and have a historical loss of at least 2 years. Their future cash flow projections do not recover their current carrying value. Of this total, 3, 1 and 1 stores for fiscal years 2016, 2015 and 2014 respectively have been fully impaired. (3) These charges are related to the remaining active stores that did not meet the recoverability test during the current period. These stores have a historical loss of at least 2 years. Their future cash flow projections do not recover their current carrying value. Of this total, 27, 14 and 14 stores for fiscal years 2016, 2015 and 2014 respectively have been fully impaired. The primary drivers of its impairment charges are each store's current and historical operating performance and the assumptions that the Company makes about each store's operating performance in future periods. Projected cash flows are updated based on the next year's operating budget which includes the qualitative factors noted above. 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. 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. The table below sets forth by level within the fair value hierarchy the long-lived assets as of the impairment measurement date for which an impairment assessment was performed and total losses as of February 27, 2016 and February 28, 2015: Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Values as of Impairment Date Total Charges February 27, 2016 Long-lived assets held and used $ — $ $ $ $ ) Long-lived assets held for sale — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ — $ $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Values as of Impairment Date Total Charges February 28, 2015 Long-lived assets held and used $ — $ $ $ $ ) Long-lived assets held for sale — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ — $ $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Lease Termination Charges Charges to close a store, which principally consist of continuing lease obligations, are recorded at the time the store is closed and all inventory is liquidated, pursuant to the guidance set forth in ASC 420, "Exit or Disposal Cost Obligations." The Company calculates the liability for closed stores on a store-by-store basis. The calculation includes the discounted effect of future minimum lease payments and related ancillary costs, from the date of closure to the end of the remaining lease term, net of estimated cost recoveries that may be achieved through subletting or favorable lease terminations. The Company evaluates these assumptions each quarter and adjusts the liability accordingly. In fiscal 2016, 2015 and 2014, the Company recorded lease termination charges of $31,204, $27,507 and $28,227, respectively. These charges related to changes in future assumptions, interest accretion and provisions for 23 stores in fiscal 2016, 10 stores in fiscal 2015, and 15 stores in fiscal 2014. As part of its ongoing business activities, the Company assesses stores and distribution centers for potential closure. Decisions to close or relocate stores or distribution centers in future periods would result in lease termination charges for lease exit costs and liquidation of inventory, 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: Year Ended February 27, 2016 (52 Weeks) February 28, 2015 (52 Weeks) March 1, 2014 (52 Weeks) Balance—beginning of year $ $ $ Provision for present value of noncancellable lease payments of closed stores Changes in assumptions about future sublease income, terminations and change in interest rates ) Interest accretion Cash payments, net of sublease income ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance—end of year $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company's revenues and income before income taxes for fiscal 2016, 2015, and 2014 included results from stores that have been closed or are approved for closure as of February 27, 2016. The revenue, operating expenses and income before income taxes of these stores for the periods are presented as follows: Year Ended February 27, 2016 February 28, 2015 March 1, 2014 Revenues $ $ $ Operating expenses Gain from sale of assets ) ) ) Other expenses (income) ) Income (loss) before income taxes ) Included in these stores' (loss) income before income taxes are: Depreciation and amortization Inventory liquidation charges The above results are not necessarily indicative of the impact that these closures will have on revenues and operating results of the Company in the future, as the Company often transfers the business of a closed store to another Company store, thereby retaining a portion of these revenues and operating expenses. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Feb. 27, 2016 | |
Fair Value Measurements | |
Fair Value Measurements | 6. Fair Value Measurements The Company utilizes the three-level valuation hierarchy as described in Note 5, Lease Termination and Impairment Charges , for the recognition and disclosure of fair value measurements. As of February 27, 2016 and February 28, 2015, the Company did not have any financial assets measured on a recurring basis. Please see Note 5 for fair value measurements of non-financial assets measured on a non-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. In addition, the Company has $6,069 of investments, carried at amortized cost as these investments are being held to maturity, which are included as a component of other assets as of February 27, 2016. The Company believes the carrying value of these investments approximates their fair value. 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 $6,914,483 and $7,235,916, respectively, as of February 27, 2016. The carrying amount and estimated fair value of the Company's total long-term indebtedness was $5,467,123 and $5,880,626, respectively, as of February 28, 2015. There were no outstanding derivative financial instruments as of February 27, 2016 and February 28, 2015. |
Income Taxes
Income Taxes | 12 Months Ended |
Feb. 27, 2016 | |
Income Taxes | |
Income Taxes | 7. Income Taxes The provision for income tax expense (benefit) was as follows: Year Ended February 27, 2016 (52 Weeks) February 28, 2015 (52 Weeks) March 1, 2014 (52 Weeks) Current tax: Federal $ ) $ — $ — State ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax and other: Federal ) — State ) ) ) Tax expense recorded as an increase of additional paid-in-capital — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total income tax (benefit) expense $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ A reconciliation of the expected statutory federal tax and the total income tax expense (benefit) was as follows: Year Ended February 27, 2016 (52 Weeks) February 28, 2015 (52 Weeks) March 1, 2014 (52 Weeks) Federal statutory rate % % % Nondeductible expenses State income taxes, net Decrease of previously recorded liabilities — ) ) Nondeductible compensation Acquisition Costs — — Release of indemnification asset — — Valuation allowance ) ) ) Other ) ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total income tax expense (benefit) % )% % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income for fiscal 2016 included income tax expense of $112,939 based on the effective tax rate above, which included a benefit of $26,358 related to a reduction in valuation allowance primarily for an increase in estimated utilization of state NOLs and for expiring carryforwards. The fiscal 2015 income tax benefit of $1,682,353 was primarily attributable to the reduction of the deferred tax valuation allowance. The reduction of the valuation allowance was based upon the Company's achievement of cumulative profitability over a three year window, reported earnings for ten consecutive quarters, utilization of federal and state net operating losses against taxable income for the last three years and the Company's historical ability of predicting earnings. Based upon the Company's projections for future taxable income over the periods in which the deferred tax assets are recoverable, management believed that it was more likely than not that the Company would realize the benefits of substantially all the net deferred tax assets existing at February 28, 2015. Net Income for fiscal 2014 included income tax expense of $804 resulting from an increase in the deferred tax valuation allowance for the windfall tax benefits recorded in additional paid-in capital ("APIC") pursuant to the tax law ordering approach offset by adjustments to unrecognized tax benefits due to the lapse of statute of limitations. The tax effect of temporary differences that gave rise to significant components of deferred tax assets and liabilities consisted of the following at February 27, 2016 and February 28, 2015: 2016 2015 Deferred tax assets: Accounts receivable $ $ Accrued expenses Liability for lease exit costs Pension, retirement and other benefits Long-lived assets Other Credits Net operating losses ​ ​ ​ ​ ​ ​ ​ ​ Total gross deferred tax assets Valuation allowance ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets Deferred tax liabilities: Outside basis difference — Inventory ​ ​ ​ ​ ​ ​ ​ ​ Total gross deferred tax liabilities ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax assets $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows: 2016 2015 2014 Unrecognized tax benefits $ $ $ Increases to prior year tax positions — Decreases to tax positions in prior periods ) ) ) Increases to current year tax positions — Settlements — ) — Lapse of statute of limitations — ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrecognized tax benefits balance $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The amount of the above unrecognized tax benefits at February 27, 2016, February 28, 2015 and March 1, 2014 which would impact the Company's effective tax rate, if recognized, was $2,084, $440 and $876, respectively. Additionally, any impact on the effective rate may be mitigated by the valuation allowance that is remaining against the Company's net deferred tax assets. While it is expected that the amount of unrecognized tax benefits will change in the next twelve months, management does not expect the change to have a significant impact on the results of operations or the financial position of the Company. The Company recognizes interest and penalties related to tax contingencies as income tax expense. Prior to the adoption of ASC 740, "Income Taxes," the Company included interest as income tax expense and penalties as an operating expense. The Company recognized an expense/(benefit) for interest and penalties in connection with tax matters of $60, ($5,250) and ($16,833) for fiscal years 2016, 2015 and 2014, respectively. As of February 27, 2016 and February 28, 2015 the total amount of accrued income tax-related interest and penalties was $539 and $115, respectively. The Company files U.S. federal income tax returns as well as income tax returns in those states where it does business. The consolidated federal income tax returns are closed for examination through fiscal year 2012. However, any net operating losses that were generated in these prior closed years may be subject to examination by the IRS upon utilization. Tax examinations by various state taxing authorities could generally be conducted for a period of three to five years after filing of the respective return. However, as a result of filing amended returns, the Company has statutes open in some states from fiscal year 2005. Net Operating Losses and Tax Credits At February 27, 2016, the Company had federal net operating loss (NOL) carryforwards of approximately $2,865,598. Of these, $1,673,912 will expire, if not utilized, between fiscal 2020 and 2028. An additional $1,173,321 will expire, if not utilized, between fiscal 2029 and 2036. At February 27, 2016, the Company had state NOL carryforwards of approximately $4,538,030, the majority of which will expire between fiscal 2023 and 2027. The Company's federal and state net operating loss carryforwards include federal deductions of $18,365 and state deductions of $79,442 for windfall tax benefits that have not yet been recognized in the financial statements at February 27, 2016. These tax benefits will be credited to additional paid-in capital when they reduce current taxable income consistent with the tax law ordering approach. At February 27, 2016, the Company had federal business tax credit carryforwards of $50,165, the majority of which will expire between 2019 and 2021. In addition to these credits, the Company had alternative minimum tax credit carryforwards of $3,234. Valuation Allowances The valuation allowances as of February 27, 2016 and February 28, 2015 apply to the net deferred tax assets of the Company. The Company maintained a valuation allowance of $212,023 and $231,679, which relates primarily to state deferred tax assets at February 27, 2016 and February 28, 2015, respectively. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Feb. 27, 2016 | |
Accounts Receivable | |
Accounts Receivable | 8. Accounts Receivable The Company maintains an allowance for doubtful accounts receivable based upon the expected collectability of accounts receivable. The allowance for uncollectible accounts at February 27, 2016 and February 28, 2015 was $32,820 and $31,247 respectively. The Company's accounts receivable are due primarily from third-party payors (e.g., pharmacy benefit management companies, insurance companies or governmental agencies) and are recorded net of any allowances provided for under the respective plans. Since payments due from third-party payors are sensitive to payment criteria changes and legislative actions, the allowance is reviewed continually and adjusted for accounts deemed uncollectible by management. |
Medicare Part D
Medicare Part D | 12 Months Ended |
Feb. 27, 2016 | |
Medicare Part D | |
Medicare Part D | 9. Medicare Part D The Company offers Medicare Part D benefits through EIC, which has contracted with CMS to be a PDP and, pursuant to the Medicare Prescription Drug, Improvement and Modernization Act of 2003, must be a risk-bearing entity regulated under state insurance laws or similar statutes. EIC is a licensed domestic insurance company under the applicable laws and regulations. Pursuant to these laws and regulations, EIC must file quarterly and annual reports with the National Association of Insurance Commissioners ("NAIC") and certain state regulators, must maintain certain minimum amounts of capital and surplus under formulas established by certain states and must, in certain circumstances, request and receive the approval of certain state regulators before making dividend payments or other capital distributions to the Company. The Company does not believe these limitations on dividends and distributions materially impact its financial position. EIC is subject to minimum capital and surplus requirements in certain states. The minimum amount of capital and surplus required to satisfy regulatory requirements in these states is $19,627 as of December 31, 2015. EIC was in excess of the minimum required amounts in these states as of February 27, 2016. The Company has recorded estimates of various assets and liabilities arising from its participation in the Medicare Part D program based on information in its claims management and enrollment systems. Significant estimates arising from its participation in this program include: (i) estimates of low-income cost subsidies, reinsurance amounts, and coverage gap discount amounts ultimately payable to CMS based on a detailed claims reconciliation that will occur in the following year; (ii) an estimate of amounts receivable from CMS under a risk-sharing feature of the Medicare Part D program design, referred to as the risk corridor and (iii) estimates for claims that have been reported and are in the process of being paid or contested and for our estimate of claims that have been incurred but have not yet been reported. As of February 27, 2016, accounts receivable, net included $275,032 due from CMS and accrued salaries, wages and other current liabilities included $166,238 of EIC liabilities under certain reinsurance contracts. EIC limits its exposure to loss and recovers a portion of benefits paid by utilizing quota-share reinsurance with a commercial reinsurance company. |
Inventory
Inventory | 12 Months Ended |
Feb. 27, 2016 | |
Inventory | |
Inventory | 10. Inventory At February 27, 2016 and February 28, 2015, inventories were $1,006,396 and $997,528, respectively, lower than the amounts that would have been reported using the first-in, first-out ("FIFO") cost flow assumption. The Company calculates its FIFO inventory valuation using the retail method for store inventories and the cost method for distribution facility inventories. The Company recorded a LIFO charge for fiscal year 2016 of $11,163, compared to a LIFO credit of $18,857 for fiscal year 2015 and a LIFO charge of $104,142 for fiscal year 2014. During fiscal 2016, 2015 and 2014, a reduction in inventories related to working capital initiatives resulted in the liquidation of applicable LIFO inventory quantities carried at lower costs in prior years. This LIFO liquidation resulted in a $60,653, $38,867 and $13,894 cost of revenues decrease, with a corresponding reduction to the adjustment to LIFO for fiscal 2016, fiscal 2015 and fiscal 2014, respectively. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Feb. 27, 2016 | |
Property, Plant and Equipment | |
Property, Plant and Equipment | 11. Property, Plant and Equipment Following is a summary of property, plant and equipment, including capital lease assets, at February 27, 2016 and February 28, 2015: 2016 2015 Land $ $ Buildings Leasehold improvements Equipment Software — Construction in progress ​ ​ ​ ​ ​ ​ ​ ​ Accumulated depreciation ) ) ​ ​ ​ ​ ​ ​ ​ ​ Property, plant and equipment, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation expense, which included the depreciation of assets recorded under capital leases, was $322,396, $298,523 and $284,603 in fiscal 2016, 2015 and 2014, respectively. Included in property, plant and equipment was the carrying amount, which approximates fair value, of assets to be disposed of totaling $3,256 and $6,317 at February 27, 2016 and February 28, 2015, respectively. |
Goodwill and Other Intangibles
Goodwill and Other Intangibles | 12 Months Ended |
Feb. 27, 2016 | |
Goodwill and Other Intangibles | |
Goodwill and Other Intangibles | 12. Goodwill and Other Intangibles Goodwill and indefinitely-lived assets, such as certain trademarks acquired in connection with acquisition transactions, are 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. When evaluating goodwill for possible impairment, the Company performs a qualitative assessment in the fourth quarter of the fiscal year to determine if it is more likely than not that the carrying value of the goodwill exceeds the fair value of the goodwill. During the Company's qualitative assessment it makes significant estimates, assumptions, and judgments, including, but not limited to, the overall economy, industry and market conditions, financial performance of the Company, changes in the Company's share price, and forecasts of revenue, profit, working capital requirements, and cash flows. The Company considers its two reporting units', the Retail Pharmacy segment and the Pharmacy Services segment, historical results and operating trends when determining these assumptions. If the Company determines that it is more likely than not that the carrying value of the goodwill exceeds the fair value of the goodwill, it performs the first step of the impairment process, which compares the fair value of a reporting unit to its carrying amount, including the goodwill. The Company estimates the fair value of its reporting units using a combination of a future discounted cash flow valuation model and a comparable market transaction model. If the carrying value of a reporting unit exceeds the fair value, the second step of the impairment process is performed and the implied fair value of a reporting unit is compared to the carrying amount of the goodwill. The implied fair value of the goodwill is determined the same way as the goodwill recognized in a business combination. The Company assigns the fair value of a reporting unit to all of the assets and liabilities of that unit (including unrecognized intangible assets) and any excess goes to the goodwill (its implied fair value). Any excess carrying amount of the goodwill over the implied fair value of the goodwill, is the amount of the impairment loss recognized. In the fiscal fourth quarter the Company completed a qualitative goodwill impairment assessment, and after evaluating the results, events and circumstances of the reporting units, the Company concluded that sufficient evidence existed to assert qualitatively that it is more likely than not that the fair values of the reporting units exceeded their carrying values. Therefore, a two- step impairment assessment was not necessary and no goodwill impairment charge was assessed for the fiscal years ended February 27, 2016 and February 28, 2015. Below is a summary of the changes in the carrying amount of goodwill by segment for the fiscal years ended February 27, 2016 and February 28, 2015: Retail Pharmacy Pharmacy Services Total Balance, March 1, 2014 $ — — — Acquisitions — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, February 28, 2015 $ $ — $ Acquisition (see Note 2. Acquisition) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, February 27, 2016 $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company's intangible assets are finite-lived and amortized over their useful lives. Following is a summary of the Company's finite-lived and indefinitely-lived intangible assets as of February 27, 2016 and February 28, 2015. 2016 2015 Gross Carrying Amount Accumulated Amortization Net Remaining Weighted Average Amortization Period Gross Carrying Amount Accumulated Amortization Net Remaining Weighted Average Amortization Period Favorable leases and other $ $ ) $ 8 years $ $ ) $ 8 years Prescription files ) 3 years ) 3 years Customer relationships(a) ) 17 years — — — CMS license ) 25 years — — — Claims adjudication and other developed software ) 7 years — — — Trademarks ) 10 years — — — Backlog ) 3 years — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total finite $ $ ) $ $ ) $ Trademarks — Indefinite — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ) $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) —Amortized on an accelerated basis which is determined based on the remaining useful economic lives of the customer relationships that are expected to contribute directly or indirectly to future cash flows. Also included in other non-current liabilities as of February 27, 2016 and February 28, 2015 are unfavorable lease intangibles with a net carrying amount of $46,947 and $55,571, respectively. These intangible liabilities are amortized over their remaining lease terms at time of acquisition. Amortization expense for these intangible assets and liabilities was $186,816, $118,105 and $119,138 for fiscal 2016, 2015 and 2014, respectively. The anticipated annual amortization expense for these intangible assets and liabilities is 2017—$211,622; 2018—$168,788; 2019—$131,417; 2020—$101,961 and 2021—$69,252. |
Accrued Salaries, Wages and Oth
Accrued Salaries, Wages and Other Current Liabilities | 12 Months Ended |
Feb. 27, 2016 | |
Accrued Salaries, Wages and Other Current Liabilities | |
Accrued Salaries, Wages and Other Current Liabilities | 13. Accrued Salaries, Wages and Other Current Liabilities Accrued salaries, wages and other current liabilities consisted of the following at February 27, 2016 and February 28, 2015: 2016 2015 Accrued wages, benefits and other personnel costs $ $ Accrued interest Accrued sales and other taxes payable Accrued store expense Accrued reinsurance — Other ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Indebtedness and Credit Agreeme
Indebtedness and Credit Agreement | 12 Months Ended |
Feb. 27, 2016 | |
Indebtedness and Credit Agreement | |
Indebtedness and Credit Agreement | 14. Indebtedness and Credit Agreement Following is a summary of indebtedness and lease financing obligations at February 27, 2016 and February 28, 2015: 2016 2015 Secured Debt: Senior secured revolving credit facility due January 2020 ($2,100,000 and $1,725,000 face value less unamortized debt issuance costs of $33,903 and $42,782) $ $ 8.00% senior secured notes (senior lien) due August 2020 ($650,000 face value less unamortized debt issuance costs of $7,773) — Tranche 1 Term Loan (second lien) due August 2020 ($470,000 face value less unamortized debt issuance costs of $5,414 and $6,638) Tranche 2 Term Loan (second lien) due June 2021 ($500,000 face value less unamortized debt issuance costs of $3,007 and $3,572) Other secured ​ ​ ​ ​ ​ ​ ​ ​ Guaranteed Unsecured Debt: 9.25% senior notes due March 2020 ($902,000 face value plus unamortized premium of $2,743 and $3,415 and less unamortized debt issuance costs of $10,180 and $12,783) 6.75% senior notes due June 2021 ($810,000 face value less unamortized debt issuance costs of $7,872 and $9,355) 6.125% senior notes due April 2023 ($1,800,000 face value less unamortized debt issuance costs of $30,343) — ​ ​ ​ ​ ​ ​ ​ ​ Unguaranteed Unsecured Debt: 8.5% convertible notes due May 2015 ($64,168 face value less unamortized debt issuance costs of $63) — 7.7% notes due February 2027 ($295,000 face value less unamortized debt issuance costs of $1,794 and $1,959) 6.875% fixed-rate senior notes due December 2028 ($128,000 face value less unamortized debt issuance costs of $837 and $902) ​ ​ ​ ​ ​ ​ ​ ​ Lease financing obligations ​ ​ ​ ​ ​ ​ ​ ​ Total debt Current maturities of long-term debt and lease financing obligations ) ) ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt and lease financing obligations, less current maturities $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Credit Facility On January 13, 2015, the Company amended and restated its senior secured credit facility ("Amended and Restated Senior Secured Credit Facility" or "revolver"), which, among other things, increased borrowing capacity from $1,795,000 to $3,000,000 (which further increased to $3,700,000 upon the redemption of its 8.00% senior secured notes due August 2020 ("8.00% Notes") on August 15, 2015), and extended the maturity to January 2020 from February 2018. The Company used borrowings under the revolver to repay and retire all of the $1,143,650 outstanding under its Tranche 7 Senior Secured Term Loan due 2020, along with associated fees and expenses. Borrowings under the revolver bear interest at a rate per annum between (i) LIBOR plus 1.50% and LIBOR plus 2.00% with respect to Eurodollar borrowings and (ii) the alternate base rate plus 0.50% and the alternate base rate plus 1.00% with respect to ABR borrowings, in each case, based upon the average revolver availability (as defined in the Amended and Restated Senior Secured Credit Facility). The Company is required to pay fees between 0.250% and 0.375% per annum on the daily unused amount of the revolver, depending on the Average Revolver Availability (as defined in the Amended and Restated Senior Secured Credit Facility). Amounts drawn under the revolver become due and payable on January 13, 2020. On February 10, 2015, the Company amended the Amended and Restated Senior Secured Credit Facility to, among other things, increase the flexibility of Rite Aid to incur and/or issue unsecured indebtedness, including in connection with the Acquisition, and made certain other modifications to the covenants applicable to Rite Aid and its subsidiaries. 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 February 27, 2016, the Company had $2,100,000 of borrowings outstanding under the revolver and had letters of credit outstanding against the revolver of $69,301, which resulted in additional borrowing capacity of $1,530,699. The Amended and Restated Senior Secured Credit Facility restricts the Company and the Subsidiary Guarantors (as defined herein) from accumulating 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 Amended and Restated Senior Secured Credit Facility and then to be held as collateral for the senior obligations. The Amended and Restated Senior Secured Credit Facility allows the Company to have outstanding, at any time, up to $1,500,000 (or $1,800,000 solely to the extent incurred for the purpose of funding of the Acquisition) in secured second priority debt, split-priority term loan debt, unsecured debt and disqualified preferred stock in addition to borrowings under the Amended and Restated Senior Secured Credit Facility and existing indebtedness, provided that not in excess of $750,000 of such secured second priority debt, split-priority term loan debt, unsecured debt and disqualified preferred stock shall mature or require scheduled payments of principal prior to 90 days after the latest of (a) the fifth anniversary of the effectiveness of the Amended and Restated Senior Secured Credit Facility and (b) the latest maturity date of any Term Loan or Other Revolving Loan (each as defined in the Amended and Restated Senior Secured Credit Facility) (excluding bridge facilities allowing extensions on customary terms to at least the date that is 90 days after such date and, with respect to any escrow notes issued by Rite Aid, excluding any special mandatory redemption of the type described in clause (iii) of the definition of "Escrow Notes" in the Amended and Restated Senior Secured Credit Facility). Subject to the limitations described in clauses (a) and (b) of the immediately preceding sentence, the Amended and Restated Senior Secured Credit Facility additionally allows the Company to issue or incur an unlimited amount of unsecured debt and disqualified preferred stock so long as a Financial Covenant Effectiveness Period (as defined in the Amended and Restated Senior Secured Credit Facility) is not in effect; provided, however, that certain of the Company's other outstanding indebtedness limits the amount of unsecured debt that can be incurred if certain interest coverage levels are not met at the time of incurrence or other exemptions are not available. The Amended and Restated Senior Secured Credit Facility also contains certain restrictions on the amount of secured first priority debt the Company is able to incur. The Amended and Restated Senior Secured Credit Facility also allows for the voluntary repurchase of any debt or other convertible debt, so long as the Amended and Restated Senior Secured Credit Facility is not in default and the Company maintains availability under its revolving credit facility of more than $365,000. The Amended and Restated Senior Secured Credit Facility has a financial covenant that requires the Company to maintain a minimum fixed charge coverage ratio of 1.00 to 1.00 (a) on any date on which availability under the revolving credit facility is less than $200,000 or (b) on the third consecutive business day on which availability under the revolving credit facility is less than $250,000 and, in each case, ending on and excluding the first day thereafter, if any, which is the 30th consecutive calendar day on which availability under the revolving credit facility is equal to or greater than $250,000. As of February 27, 2016, the availability was at a level that did not trigger this covenant. The Amended and Restated Senior Secured Credit Facility also contains 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 Amended and Restated 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%. With the exception of EIC, substantially all of Rite Aid Corporation's 100 percent owned subsidiaries guarantee the obligations under the Amended and Restated Senior Secured Credit Facility, second priority secured term loan facilities, and unsecured guaranteed notes. The Amended and Restated Senior Secured Credit Facility and second priority secured term loan facilities 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 Amended and Restated Senior Secured Credit Facility and second priority secured term loan facilities 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, prior to the Acquisition, the subsidiaries, including joint ventures, that did not guarantee the Amended and Restated Senior Secured Credit Facility, the credit facility, second priority secured term loan facilities and applicable notes, were minor. Accordingly, condensed consolidating financial information for the Company and subsidiaries is not presented for those periods. Subsequent to the Acquisition, other than EIC, the subsidiaries, including joint ventures, that do not guarantee the credit facility, second priority secured term loan facilities and applicable notes, are minor. As such, condensed consolidating financial information for the Company, its guaranteeing subsidiaries and non-guaranteeing subsidiaries is presented for those periods subsequent to the Acquisition. See Note 24 "Guarantor and Non-Guarantor Condensed Consolidating Financial Information" for additional disclosure. Other 2016 Transactions On April 2, 2015, the Company issued $1,800,000 aggregate principal amount of its 6.125% Notes, the net proceeds of which, along with other available cash and borrowings under its Amended and Restated Senior Secured Credit Facility, were used to finance the cash portion of the Acquisition, which closed on June 24, 2015. The Company's obligations under the notes are fully and unconditionally guaranteed, jointly and severally, on an unsubordinated basis, by all of its subsidiaries that guarantee the Company's obligations under the Amended and Restated Senior Secured Credit Facility, second priority secured term loan facilities, the 9.25% senior notes due 2020 (the "9.25% Notes") and the 6.75% senior notes due 2021 (the "6.75% Notes") (the "Rite Aid Subsidiary Guarantors"), including EnvisionRx and certain of its domestic subsidiaries other than, among others, EIC (the "EnvisionRx Subsidiary Guarantors" and, together with the Rite Aid Subsidiary Guarantors, the "Subsidiary Guarantors"). The guarantees are unsecured. The 6.125% Notes are unsecured, unsubordinated obligations of Rite Aid Corporation and rank equally in right of payment with all of its other unsecured, unsubordinated indebtedness. During May 2015, $64,089 of the Company's 8.5% convertible notes due 2015 were converted into 24,762 shares of common stock, pursuant to their terms. The remaining $79 of the Company's 8.5% convertible notes due 2015 were repaid by the Company upon maturity. On August 15, 2015, the Company completed the redemption of all of its outstanding $650,000 aggregate principal amount of its 8.00% Notes. In connection with the redemption, the Company recorded a loss on debt retirement, including call premium and unamortized debt issue costs, of $33,205 during the second quarter of fiscal 2016. 2015 Transactions On October 15, 2014, the Company completed the redemption of all of its outstanding $270,000 aggregate principal amount of its 10.25% senior notes due October 2019 at their contractually determined early redemption price of 105.125% of the principal amount, plus accrued interest. The Company funded this redemption with borrowings under its revolving credit facility. The Company recorded a loss on debt retirement of $18,512 related to this transaction. 2014 Transactions In June 2013, the Company completed a tender offer for its 7.5% senior secured notes due 2017 in which $419,237 aggregate principal amount of the outstanding 7.5% notes were tendered and repurchased. In July 2013, the Company redeemed the remaining 7.5% notes for $85,154, which included the call premium and interest to the redemption date. The tender offer for, and redemption of, the 7.5% notes were funded using the proceeds from the Tranche 2 Term Loan, borrowings under the Company's revolving credit facility and available cash. On July 2, 2013, the Company issued $810,000 of its 6.75% senior notes due 2021. The Company's obligations under the notes are fully and unconditionally guaranteed, jointly and severally, on an unsubordinated basis, by all of its subsidiaries that guarantee the Company's obligations under the senior secured credit facility, the second priority secured term loan facilities and the outstanding 8.00% senior secured notes due 2020, 10.25% senior secured notes due 2019 and 9.25% senior notes due 2020. The Company used the net proceeds of the 6.75% notes, borrowings under its revolving credit facility and available cash to repurchase and repay all of the Company's outstanding $810,000 aggregate principal of 9.5% senior notes due 2017. In July 2013, the Company completed a tender offer for its 9.5% notes in which $739,642 aggregate principal amount of the outstanding 9.5% notes were tendered and repurchased. In August 2013, the Company redeemed the remaining 9.5% notes for $73,440, which included the call premium and interest to the redemption date. In connection with these refinancing transactions, the Company recorded a loss on debt retirement, including tender and call premium and interest, unamortized debt issue costs and unamortized discount of $62,172. As of March 2, 2013, Rite Aid Lease Management Company, a 100 percent owned subsidiary of the Company, had 213,000 shares of its Cumulative Preferred Stock, Class A, par value $100 per share ("RALMCO Cumulative Preferred Stock"), outstanding. The carrying amount of the RALMCO Cumulative Preferred Stock as of November 29, 2013 was $20,763 and was recorded in Other Noncurrent Liabilities. On November 29, 2013, the Company repurchased all of the outstanding RALMCO Cumulative Preferred Stock for $21,034. In connection with this transaction, the Company recorded a loss on debt retirement of $271. Interest Rates and Maturities The annual weighted average interest rate on the Company's indebtedness was 5.4%, 5.8%, and 6.4% for fiscal 2016, 2015, and 2014, respectively. The aggregate annual principal payments of long-term debt for the five succeeding fiscal years are as follows: 2017—$90; 2018—$0; 2019—$0; 2020—$2,100,000 and $4,905,000 in 2021 and thereafter. |
Leases
Leases | 12 Months Ended |
Feb. 27, 2016 | |
Leases | |
Leases | 15. Leases The Company leases most of its retail stores and certain distribution facilities under noncancellable operating and capital leases, most of which have initial lease terms ranging from 5 to 22 years. The Company also leases certain of its equipment and other assets under noncancellable operating leases with initial terms ranging from 3 to 10 years. In addition to minimum rental payments, certain store leases require additional payments based on sales volume, as well as reimbursements for taxes, maintenance and insurance. Most leases contain renewal options, certain of which involve rent increases. Total rental expense, net of sublease income of $8,995, $8,559, and $8,369, was $973,347, $964,484, and $952,777 in fiscal 2016, 2015, and 2014, respectively. These amounts include contingent rentals of $17,755, $18,919 and $18,679 in fiscal 2016, 2015, and 2014, respectively. During fiscal 2016, the Company sold 10 owned operating stores to independent third parties. Net proceeds from the sale were $36,732. Concurrent with these sales, the Company entered into agreements to lease the stores back from the purchasers over minimum lease terms of 20 years. Eight leases were accounted for as operating leases and the remaining two were accounted for as capital leases. The transactions resulted in a gain for certain stores of $670 which is deferred over the life of the leases. In addition, the transaction resulted in a loss for certain stores of $546 which is included in the loss on sale of assets, net for the fifty-two weeks ended February 27, 2016. During fiscal 2015, the Company did not enter into any sale-leaseback transactions whereby the Company sold owned operating stores to independent third parties and concurrent with the sale, entered into an agreement to lease the store back from the purchasers. During fiscal 2014, the Company sold one owned operating store to an independent third party. Net proceeds from the sale were $3,989. Concurrent with this sale, the Company entered into an agreement to lease the store back from the purchaser over a minimum lease term of 20 years. The Company accounted for this lease as an operating lease. The transaction resulted in a gain of $269 which is included in the gain on sale of assets, net for the fifty-two weeks ended March 1, 2014. The net book values of assets under capital leases and sale-leasebacks accounted for under the financing method at February 27, 2016 and February 28, 2015 are summarized as follows: 2016 2015 Land $ $ Buildings Leasehold improvements Equipment Accumulated depreciation ) ) ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Following is a summary of lease finance obligations at February 27, 2016 and February 28, 2015: 2016 2015 Obligations under financing leases $ $ Sale-leaseback obligations Less current obligation ) ) ​ ​ ​ ​ ​ ​ ​ ​ Long-term lease finance obligations $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Following are the minimum lease payments for all properties under a lease agreement that will have to be made in each of the years indicated based on non-cancelable leases in effect as of February 27, 2016: Fiscal year Lease Financing Obligations Operating Leases 2017 $ $ 2018 2019 2020 2021 Later years ​ ​ ​ ​ ​ ​ ​ ​ Total minimum lease payments $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amount representing interest ) ​ ​ ​ ​ ​ ​ ​ ​ Present value of minimum lease payments $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Stock Options and Stock Award P
Stock Options and Stock Award Plans | 12 Months Ended |
Feb. 27, 2016 | |
Stock Options and Stock Award Plans | |
Stock Options and Stock Award Plans | 16. Stock Option and Stock Award Plans The Company recognizes share-based compensation expense in accordance with ASC 718, "Compensation—Stock Compensation." Expense is recognized over the requisite service period of the award, net of an estimate for the impact of forfeitures. Operating results for fiscal 2016, 2015 and 2014 include $37,948, $23,390 and $16,194 of compensation costs related to the Company's stock-based compensation arrangements. In December 2000, the Company adopted the 2000 Omnibus Equity Plan (the 2000 Plan) under which 22,000 shares of common stock are reserved for granting of restricted stock, stock options, phantom stock, stock bonus awards and other stock awards at the discretion of the Board of Directors. In February 2001, the Company adopted the 2001 Stock Option Plan (the 2001 Plan) which was approved by the shareholders under which 20,000 shares of common stock are authorized for granting of stock options at the discretion of the Board of Directors. In April 2004, the Board of Directors adopted the 2004 Omnibus Equity Plan, which was approved by the shareholders. Under the plan, 20,000 shares of common stock are authorized for granting of restricted stock, stock options, phantom stock, stock bonus awards and other equity based awards at the discretion of the Board of Directors. In January 2007, the stockholders of Rite Aid Corporation approved the adoption of the Rite Aid Corporation 2006 Omnibus Equity Plan. Under the plan, 50,000 shares of Rite Aid common stock are available for granting of restricted stock, stock options, phantom stock, stock bonus awards and other equity based awards at the discretion of the Board of Directors. In June 2010, the stockholders of Rite Aid Corporation approved the adoption of the Rite Aid Corporation 2010 Omnibus Equity Plan. Under the plan, 35,000 shares of Rite Aid common stock are available for granting of restricted stock, stock options, phantom stock, stock bonus awards and other equity based awards at the discretion of the Board of Directors. The adoption of the 2010 Omnibus Equity Plan became effective on June 23, 2010. In June 2012, the stockholders of Rite Aid Corporation approved the adoption of the Rite Aid Corporation 2012 Omnibus Equity Plan. Under the plan, 28,500 shares of Rite Aid common stock are available for granting of restricted stock, stock options, phantom stock, stock bonus awards and other equity based awards at the discretion of the Board of Directors. The adoption of the 2012 Omnibus Equity Plan became effective on June 21, 2012. In June 2014, the stockholders of Rite Aid Corporation approved the adoption of the Rite Aid Corporation 2014 Omnibus Equity Plan. Under the plan, 58,000 shares of Rite Aid common stock plus any shares of common stock remaining available for grant under the Rite Aid Corporation 2010 Omnibus Equity Plan and the Rite Aid Corporation 2012 Omnibus Equity Plan as of the effective date of the 2014 Plan (provided that no more than 25,000 shares may be granted as incentive stock options) are available for granting of restricted stock, stock options, phantom stock, stock bonus awards and other equity based awards at the discretion of the Board of Directors. The adoption of the 2014 Omnibus Equity Plan became effective on June 19, 2014. All of the plans provide for the Board of Directors (or at its election, the Compensation Committee) to determine both when and in what manner options may be exercised; however, it may not be more than 10 years from the date of grant. All of the plans provide that stock options may be granted at prices that are not less than the fair market value of a share of common stock on the date of grant. The aggregate number of shares authorized for issuance for all plans is 61,446 as of February 27, 2016. Stock Options The Company determines the fair value of stock options issued on the date of grant using the Black-Scholes-Merton option-pricing model. The following weighted average assumptions were used for options granted in fiscal 2016, 2015 and 2014: 2016 2015 2014 Expected stock price volatility(1) % % % Expected dividend yield(2) % % % Risk-free interest rate(3) % % % Expected option life(4) 5.5 years 5.5 years 5.5 years (1) The expected volatility is based on the historical volatility of the stock price over the most recent period equal to expected life of the option. (2) The dividend rate that will be paid out on the underlying shares during the expected term of the options. The Company does not currently pay dividends on its common stock, as such, the dividend rate is assumed to be zero percent. (3) The risk free interest rate is equal to the rate available on United States Treasury zero-coupon issues as of the grant date of the option with a remaining term equal to the expected term. (4) The period of time for which the option is expected to be outstanding. The Company analyzed historical exercise behavior. The weighted average fair value of options granted during fiscal 2016, 2015 and 2014 was $4.45, $4.43 and $1.91, respectively. Following is a summary of stock option transactions for the fiscal years ended February 27, 2016, February 28, 2015 and March 1, 2014: Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at March 2, 2013 $ Granted Exercised ) Cancelled ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at March 1, 2014 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted Exercised ) Cancelled ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at February 28, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted Exercised ) Cancelled ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at February 27, 2016 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Vested or expected to vest at February 27, 2016 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable at February 27, 2016 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of February 27, 2016, there was $21,933 of total unrecognized pre-tax compensation costs related to unvested stock options, net of forfeitures. These costs are expected to be recognized over a weighted average period of 2.65 years. Cash received from stock option exercises for fiscal 2016, 2015 and 2014 was $11,376, $24,117 and $33,217, respectively. The income tax benefit from stock options for fiscal 2016, 2015 and 2014 was $11,764, $30,099 and $23,660, respectively. The total intrinsic value of stock options exercised for fiscal 2016, 2015 and 2014 was $42,207, $92,355 and $80,598, respectively. Typically, stock options granted vest, and are subsequently exercisable in equal annual installments over a four-year period for employees. Restricted Stock The Company provides restricted stock grants to associates under plans approved by the stockholders. Shares awarded under the plans typically vest in equal annual installments over a three-year period. Unvested shares are forfeited upon termination of employment. Following is a summary of restricted stock transactions for the fiscal years ended February 27, 2016, February 28, 2015 and March 1, 2014: Shares Weighted Average Grant Date Fair Value Balance at March 2, 2013 $ Granted Vested ) Cancelled ) ​ ​ ​ ​ ​ ​ ​ ​ Balance at March 1, 2014 $ ​ ​ ​ ​ ​ ​ ​ ​ Granted Vested ) Cancelled ) ​ ​ ​ ​ ​ ​ ​ ​ Balance at February 28, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ Granted Vested ) Cancelled ) ​ ​ ​ ​ ​ ​ ​ ​ Balance at February 27, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At February 27, 2016, there was $26,040 of total unrecognized pre-tax compensation costs related to unvested restricted stock grants, net of forfeitures. These costs are expected to be recognized over a weighted average period of 2.06 years. The total fair value of restricted stock vested during fiscal years 2016, 2015 and 2014 was $15,104, $8,090 and $5,098, respectively. Performance Based Incentive Plan Beginning in fiscal 2015, the Company provided certain of its associates with performance based incentive plans under which the associates will receive a certain number of shares of the Company's common stock based on the Company meeting certain financial and performance goals. The Company incurred $12,634, $1,769 and $0 related to these performance based incentive plans for fiscal 2016, 2015, and 2014, respectively, which is recorded as a component of stock-based compensation expense. |
Reclassifications from Accumula
Reclassifications from Accumulated Other Comprehensive Loss | 12 Months Ended |
Feb. 27, 2016 | |
Reclassifications from Accumulated Other Comprehensive Loss | |
Reclassifications from Accumulated Other Comprehensive Loss | 17. 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 fiscal years ended February 27, 2016, February 28, 2015 and March 1, 2014: February 27, 2016 (52 Weeks) February 28, 2015 (52 Weeks) March 1, 2014 (52 Weeks) Defined benefit pension plans Accumulated other comprehensive loss Defined benefit pension plans Accumulated other comprehensive loss Defined benefit pension plans Accumulated other comprehensive loss Accumulated other comprehensive loss Balance—beginning of period $ ) $ ) $ ) $ ) $ ) $ ) Other comprehensive (loss) income before reclassifications, net of $3,162, $7,506, and $0 tax benefit ) ) ) ) Amounts reclassified from accumulated other comprehensive loss to net income, net of $1,481, $1,464, and $0 tax expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance—end of period $ ) $ ) $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table summarizes the effects on net income of significant amounts classified out of each component of accumulated other comprehensive loss for the fiscal years ended February 27, 2016, February 28, 2015 and March 1, 2014: Fiscal Years Ended February 27, 2016, February 28, 2015 and March 1, 2014 Amount reclassified from accumulated other comprehensive loss Details about accumulated other comprehensive loss components February 27, 2016 (52 Weeks) February 28, 2015 (52 Weeks) March 1, 2014 (52 Weeks) Affected line item in the consolidated statements of operations Defined benefit pension plans Amortization of unrecognized prior service cost(a) $ ) $ ) $ ) Selling, general and administrative expenses Amortization of unrecognized net loss(a) ) ) ) Selling, general and administrative expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) ) ) Total before income tax expense — Income tax benefit(b) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ ) $ ) $ ) Net of income tax benefit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a)—See Note 18, Retirement Plans for additional details. (b)—Income tax expense is $0 for fiscal 2014 due to the valuation allowance. See Note 7, Income Taxes for additional details. |
Retirement Plans
Retirement Plans | 12 Months Ended |
Feb. 27, 2016 | |
Retirement Plans | |
Retirement Plans | 18. Retirement Plans Defined Contribution Plans The Company and its subsidiaries sponsor several retirement plans that are primarily 401(k) defined contribution plans covering nonunion associates and certain union associates. The Company does not contribute to all of the plans. In accordance with those plan provisions, the Company matches 100% of a participant's pretax payroll contributions, up to a maximum of 3% of such participant's pretax annual compensation. Thereafter, the Company will match 50% of the participant's additional pretax payroll contributions, up to a maximum of 2% of such participant's additional pretax annual compensation. Total expense recognized for the above plans was $65,118 in fiscal 2016, $60,552 in fiscal 2015 and $57,857 in fiscal 2014. The Company sponsors a Supplemental Executive Retirement Plan ("SERP") for its officers, which is a defined contribution plan that is subject to a five year graduated vesting schedule. The expense recognized for the SERP was $1,377 in fiscal 2016, $8,748 in fiscal 2015 and $11,531 in fiscal 2014. Defined Benefit Plans The Company and its subsidiaries also sponsor a qualified defined benefit pension plan that requires benefits to be paid to eligible associates based upon years of service and, in some cases, eligible compensation. The Company's funding policy for The Rite Aid Pension Plan (The "Defined Benefit Pension Plan") is to contribute the minimum amount required by the Employee Retirement Income Security Act of 1974. However, the Company may, at its sole discretion, contribute additional funds to the plan. The Company made contributions of $0 in fiscal 2016, $1,159 in fiscal 2015 and $8,000 in fiscal 2014. The Company also maintains a nonqualified executive retirement plan for certain former employees who, pursuant to their employment agreements, did not participate in the SERP. The Company no longer enrolls new participants into this plan. These participants generally receive an annual benefit payable monthly over fifteen years. This nonqualified defined benefit plan is unfunded. Net periodic pension expense and other changes recognized in other comprehensive income for the defined benefit pension plans and the nonqualified executive retirement plan included the following components: Defined Benefit Pension Plan Nonqualified Executive Retirement Plan 2016 2015 2014 2016 2015 2014 Service cost $ $ $ $ — $ — $ — Interest cost Expected return on plan assets ) ) ) — — — Amortization of unrecognized prior service cost — — — Amortization of unrecognized net loss (gain) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net pension expense $ $ $ $ ) $ $ Other changes recognized in other comprehensive loss: Unrecognized net (gain) loss arising during period $ $ $ ) $ ) $ $ ) Prior service cost arising during period — — — — — — Amortization of unrecognized prior service costs ) ) ) — — — Amortization of unrecognized net (loss) gain ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net amount recognized in other comprehensive loss ) — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net amount recognized in pension expense and other comprehensive loss $ $ $ ) $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The table below sets forth reconciliation from the beginning of the year for both the benefit obligation and plan assets of the Company's defined benefit plans, as well as the funded status and amounts recognized in the Company's balance sheet as of February 27, 2016 and February 28, 2015: Defined Benefit Pension Plan Nonqualified Executive Retirement Plan 2016 2015 2016 2015 Change in benefit obligations: Benefit obligation at end of prior year $ $ $ $ Service cost — — Interest cost Distributions ) ) ) ) Change due to change in assumptions — — — — Actuarial (gain) loss ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Benefit obligation at end of year $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in plan assets: Fair value of plan assets at beginning of year $ $ $ — $ — Employer contributions — Actual return on plan assets ) — — Distributions (including expenses paid by the plan) ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value of plan assets at end of year $ $ $ — $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Funded status $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net amount recognized $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts recognized in consolidated balance sheets consisted of: Prepaid pension cost $ — $ — $ — $ — Accrued pension liability ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net amount recognized $ ) $ ) $ ) $ ) Amounts recognized in accumulated other comprehensive loss consist of: Net actuarial loss $ ) $ ) $ — $ — Prior service cost — ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amount recognized $ ) $ ) $ — $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The estimated net actuarial loss and prior service cost amounts that will be amortized from accumulated other comprehensive loss into net periodic pension expense in fiscal 2017 are $4,529 and $0, respectively. The accumulated benefit obligation for the defined benefit pension plan was $156,474 and $167,256 as of February 27, 2016 and February 28, 2015, respectively. The accumulated benefit obligation for the nonqualified executive retirement plan was $11,046 and $12,685 as of February 27, 2016 and February 28, 2015, respectively. The significant actuarial assumptions used for all defined benefit plans to determine the benefit obligation as of February 27, 2016, February 28, 2015 and March 1, 2014 were as follows: Defined Benefit Pension Plan Nonqualified Executive Retirement Plan 2016 2015 2014 2016 2015 2014 Discount rate % % % % % % Rate of increase in future compensation levels N/A N/A % N/A N/A N/A Expected long-term rate of return on plan assets % % % N/A N/A N/A Weighted average assumptions used to determine net cost for the fiscal years ended February 27, 2016, February 28, 2015 and March 1, 2014 were: Defined Benefit Pension Plan Nonqualified Executive Retirement Plan 2016 2015 2014 2016 2015 2014 Discount rate % % % % % % Rate of increase in future compensation levels N/A N/A % N/A N/A N/A Expected long-term rate of return on plan assets % % % N/A N/A N/A To develop the expected long-term rate of return on assets assumption, the Company considered the historical returns and the future expectations for returns for each asset class, as well as the target asset allocation of the pension portfolio. This resulted in the selection of the 6.50% long-term rate of return on plan assets assumption for fiscal 2016, 6.50% for fiscal 2015 and 7.75% for fiscal 2014. The Company's pension plan asset allocations at February 27, 2016 and February 28, 2015 by asset category were as follows: February 27, 2016 February 28, 2015 Equity securities % % Fixed income securities % % ​ ​ ​ ​ ​ ​ ​ ​ Total % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The investment objectives of the Defined Benefit Pension Plan, the only defined benefit plan with assets, are to: • Achieve a rate of return on investments that exceeds inflation over a full market cycle and is consistent with actuarial assumptions; • Balance the correlation between assets and liabilities by diversifying the portfolio among various asset classes to address return risk and interest rate risk; • Balance the allocation of assets between the investment managers to minimize concentration risk; • Maintain liquidity in the portfolio sufficient to meet plan obligations as they come due; and • Control administrative and management costs. The asset allocation established for the pension investment program reflects the risk tolerance of the Company, as determined by: • the current and anticipated financial strength of the Company; • the funded status of the plan; and • plan liabilities. Investments in both the equity and fixed income markets will be maintained, recognizing that historical results indicate that equities (primarily common stocks) have higher expected returns than fixed income investments. It is also recognized that the correlation between assets and liabilities must be balanced to address higher volatility of equity investments (return risk) and interest rate risk. The following targets are to be applied to the allocation of plan assets. Category Target Allocation U.S. equities % International equities % U.S. fixed income % ​ ​ ​ ​ ​ Total % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company expects to contribute $0 to the Defined Benefit Pension Plan and make payments of $1,602 to participants of the Nonqualified Executive Retirement Plan during fiscal 2017. The following table sets forth by level within the fair value hierarchy a summary of the plan's investments measured at fair value on a recurring basis as of February 27, 2016 and February 28, 2015: Fair Value Measurements at February 27, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Equity Securities International equity $ — $ $ — $ Large Cap — — Small-Mid Cap — — Fixed Income Long Term Credit Bond Index — — 20+ Year Treasury STRIPS — — Intermediate Fixed Income — — Other types of investments Short Term Investments — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ — $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements at February 28, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Equity Securities International equity $ — $ $ — $ Large Cap — — Small-Mid Cap — — Fixed Income Long Term Credit Bond Index — — Intermediate Fixed Income — — Other types of investments Short Term Investments — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ — $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following is a description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy. Common and Collective Trusts Common collective trust funds are stated at fair value as determined by the issuer of the common collective trust funds based on the fair market value of the underlying investments. Following are the future benefit payments expected to be paid for the Defined Benefit Pension Plan and the nonqualified executive retirement plan during the years indicated: Fiscal Year Defined Benefit Pension Plan Nonqualified Executive Retirement Plan 2017 $ $ 2018 2019 2020 2021 2022 - 2026 ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other Plans The Company participates in various multi-employer union pension plans that are not sponsored by the Company. Total expenses recognized for the multi-employer plans were $25,966 in fiscal 2016, $24,261 in fiscal 2015 and $26,617 in fiscal 2014. |
Multiemployer Plans that Provid
Multiemployer Plans that Provide Pension Benefits | 12 Months Ended |
Feb. 27, 2016 | |
Multiemployer Plans that Provide Pension Benefits | |
Multiemployer Plans that Provide Pension Benefits | 19. Multiemployer Plans that Provide Pension Benefits The Company contributes to a number of multiemployer defined benefit pension plans under the terms of collective-bargaining agreements that cover certain of its union-represented employees. The risks of participating in these multiemployer plans are different from single-employer plans. Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. Additionally, if the Company chooses to stop participating in some of its multiemployer plans, the Company may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability. The Company's participation in these plans for the annual period ended February 27, 2016 is outlined in the table below. The "EIN/Pension Plan Number" column provides the Employer Identification Number (EIN) and the three- digit plan number, if applicable. The most recent Pension Protection Act (PPA) zone status available for fiscal 2016 and fiscal 2015 is for the plan year- ends as indicated below. The zone status is based on information that the Company received from the plan and is certified by the plan's actuary. Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the yellow zone are less than 80 percent funded, and plans in the green zone are at least 80 percent funded. The "FIP/RP Status Pending/Implemented" column indicates plans for which a financial improvement plan (FIP) or a rehabilitation plan (RP) is either pending or has been implemented. In addition to regular plan contributions, the Company may be subject to a surcharge if the plan is in the red zone. The "Surcharge Imposed" column indicates whether a surcharge has been imposed on contributions to the plan. The last two columns list the expiration date(s) of the collective-bargaining agreement(s) to which the plans are subject and any minimum funding requirements. There have been no significant changes that affect the comparability of total employer contributions of fiscal years 2016, 2015, and 2014. Contributions of the Company Expiration Date of Collective- Bargaining Agreement Pension Protection Act Zone Status FIP/ RP Status Pending/ Implemented Surcharge Imposed Minimum Funding Requirements Pension EIN/Pension Plan Number 2016 2015 2016 2015 2014 1199 SEIU Health Care Employees Pension Fund 13-3604862-001 Green—12/31/2014 Green—12/31/2013 No $ $ $ No 4/18/2015 Contribution rate of 11.25% of gross wages earned per associate through 12/31/2014. Contribution rate of 10.22% of gross wages earned per associate beginning 01/01/2015. Southern California United Food and Commercial Workers Unions and Drug Employers Pension Fund 51-6029925-001 Red—12/31/2015 Red—12/31/2014 Implemented No 7/14/2018 Subsequent to 01/01/2015 contributions of $1.328 per hour worked for pharmacists and $0.602 per hour worked for non pharmacists. Prior to 01/01/2015 contributions of $1.242 per hour worked for pharmacists and $0.563 per hour worked for non pharmacists. UFCW Pharmacists, Clerks and Drug Employers Pension Trust (formerly the Northern California Pharmacists, Clerks and Drug Employers Pension Plan) 94-2518312-001 Green—12/31/2015 Green—12/31/2014 No No 7/13/2019 Effective 09/01/2014, contribution rate frozen at $0.55 per hour worked for associates. Prior to 9/01/2014, contribution rate of $0.57 per hour worked for associates. United Food and Commercial Workers Union-Employer Pension Fund 34-6665155-001 Red—9/30/2015 Red—9/30/2014 Implemented No 12/31/2017 Contribution rate of $1.49 per hour worked. Effective 02/02/2015 contribution rate of $1.62 per hour worked. United Food and Commercial Workers Union Local 880—Mercantile Employers Joint Pension Fund 51-6031766-001 Yellow—9/30/2015 Yellow—9/30/2014 Implemented No 12/31/2017 Contribution rate of $1.52 per hour worked. Effective 10/01/2014 contribution rate of $1.73 per hour worked. Effective 01/01/2015 contribution rate of $1.61 per hour worked. Other Funds ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company was listed in these plans Forms 5500 as providing more than 5 percent of the total contributions for the following plans and plan years: Pension Fund Year Contributions to Plan Exceeded More Than 5 Percent of Total Contributions (as of the Plan's Year-End) UFCW Pharmacists, Clerks and Drug Employers Pension Trust 12/31/2014 and 12/31/2013 Southern California United Food and Commercial Workers Unions and Drug Employers Pension Fund 12/31/2014 and 12/31/2013 United Food & Commercial Workers Union- Employer Pension Fund 9/30/2014 and 9/30/2013 United Food & Commercial Workers Union Local 880—Mercantile Employers Joint Pension Fund 9/30/2014 and 9/30/2013 At the date the Company's financial statements were issued, certain Forms 5500 were not available. During fiscal 2016 and 2015, the Company did not withdrawal from any plans or incur any additional withdrawal liabilities. During fiscal 2014, the Company incurred an additional withdrawal liability of $1,000 associated with the withdrawal from the Central Ohio Locals 1059 and 75 effective March 31, 2013. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Feb. 27, 2016 | |
Segment Reporting | |
Segment Reporting | 20. Segment Reporting Prior to June 24, 2015, the Company's operations were within one reportable segment. As a result of the completion of the Acquisition, the Company has realigned its internal management reporting to reflect two reportable segments, its retail drug stores ("Retail Pharmacy"), and its pharmacy services ("Pharmacy Services") segments. The Retail Pharmacy segment's primary business is the sale of prescription drugs and related consultation to its customers. Additionally, the Retail Pharmacy segment sells a full selection of health and beauty aids and personal care products, seasonal merchandise and a large private brand product line. The Pharmacy Services segment offers a full range of pharmacy benefit management services including plan design and administration, on both a transparent pass-through model and traditional model, formulary management and claims processing. Additionally, the Pharmacy Services segment offers specialty and mail order services, infertility treatment, and drug benefits to eligible beneficiaries under the federal government's Medicare Part D program. The Parent Company's chief operating decision makers are its Parent Company Chief Executive Officer, Parent Company President and CEO—Retail Pharmacy, CEO—Pharmacy Services, Chief Financial Officer and its Senior Executive Vice Presidents (collectively the "CODM"). The CODM has ultimate responsibility for enterprise decisions. The CODM determines, in particular, resource allocation for, and monitors performance of, the consolidated enterprise, the Retail Pharmacy segment and the Pharmacy Services segment. The Retail Pharmacy and Pharmacy Services segment managers have responsibility for operating decisions, allocating resources and assessing performance within their respective segments. The CODM relies on internal management reporting that analyzes enterprise results on certain key performance indicators, namely, revenues, gross profit, and Adjusted EBITDA. The following table is a reconciliation of the Company's business segments to the consolidated financial statements for the fiscal years ended February 27, 2016, February 28, 2015 and March 1, 2014: Retail Pharmacy Pharmacy Services Intersegment Eliminations(1) Consolidated February 27, 2016: Revenues $ $ $ ) $ Gross Profit — Adjusted EBITDA(2) — February 28, 2015: Revenues $ $ — $ — $ Gross Profit — — Adjusted EBITDA(2) — — March 1, 2014: Revenues $ $ — $ — $ Gross Profit — — Adjusted EBITDA(2) — — (1) Intersegment eliminations include intersegment revenues and corresponding cost of revenues that occur when Pharmacy Services segment customers use Retail Pharmacy segment stores to purchase covered products. When this occurs, both the Retail Pharmacy and Pharmacy Services segments record the revenue on a stand-alone basis. (2) See "Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per Diluted Share and Other Non-GAAP Measures" in MD&A for additional details. The following is a reconciliation of net income to Adjusted EBITDA for fiscal 2016, 2015 and 2014: February 27, 2016 (52 weeks) February 28, 2015 (52 weeks) March 1, 2014 (52 weeks) Net income $ $ $ Interest expense Income tax expense Income tax valuation allowance reduction ) ) ) Depreciation and amortization expense LIFO charge (credit) ) Lease termination and impairment charges Loss on debt retirements, net Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted EBITDA $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following is balance sheet information for the Company's reportable segments: Retail Pharmacy Pharmacy Services Eliminations(2) Consolidated February 27, 2016: Total Assets $ $ $ ) $ Goodwill — Additions to property and equipment and intangible assets — February 28, 2015: Total Assets $ $ — $ — $ Goodwill — — Additions to property and equipment and intangible assets — — (2) Intersegment eliminations include netting of the Pharmacy Services segment long-term deferred tax liability of $116,027 against the Retail Pharmacy segment long-term deferred tax asset for consolidation purposes in accordance with ASC 740, and intersegment accounts receivable of $23,697, as of February 27, 2016, that represents amounts owed from the Pharmacy Services segment to the Retail Pharmacy segment that are created when Pharmacy Services segment customers use Retail Pharmacy segment stores to purchase covered products. |
Commitments, Contingencies and
Commitments, Contingencies and Guarantees | 12 Months Ended |
Feb. 27, 2016 | |
Commitments and Contingencies and Guarantees | |
Commitments, Contingencies and Guarantees | 21. Commitments, Contingencies and Guarantees 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. As of February 27, 2016, the Company was aware of ten (10) putative class action lawsuits that were filed by purported Company stockholders, against the Company, its directors (the Individual Defendants, together with the Company, the Rite Aid Defendants), Walgreens Boots Alliance, Inc. ("WBA") and Victoria Merger Sub Inc., (Victoria) challenging the transactions contemplated by the Merger agreement between the Company and WBA. Eight (8) of these actions were filed in the Court of Chancery of the State of Delaware (Smukler v. Rite Aid Corp., et al., Hirschler v. Standley, et al., Catelli v. Rite Aid Corp., et al., Orr v. Rite Aid Corp., et al., DePietro v. Standley, et al., Abadi v. Rite Aid Corp., et al., Mortman v. Rite Aid Corp., et al.) . One (1) action was filed in Pennsylvania in the Court of Common Pleas of Cumberland County (Wilson v. Rite Aid Corp., et al., Sachs Investment Grp., et al. v. Standley, et al.) . The complaints in these nine (9) actions alleged primarily that the Company's directors breached their fiduciary duties by, among other things, agreeing to an allegedly unfair and inadequate price, agreeing to deal protection devices that allegedly prevented the directors from obtaining higher offers from other interested buyers for the Company and allegedly failing to protect against certain purported conflicts of interest in connection with the Merger. The Complaints further allege that the Company, WBA and/or Victoria aided and abetted these alleged breaches of fiduciary duty. The complaints sought, among other things, to enjoin the closing of the Merger as well as money damages and attorneys' and experts' fees. On December 23, 2015, the eight (8) Delaware actions were consolidated in an action captioned In re Rite Aid Corporation Stockholders Litigation , Consol. C.A. No. 11663-CB (the Consolidated Action). In addition to the claims asserted in the nine (9) complaints discussed above, the operative pleading in the Consolidated Action also included allegations that the preliminary proxy statement contained material omissions, including with respect to the process that resulted in the Merger agreement and the fairness opinion rendered by the Company's banker. On December 28, 2015, the plaintiffs in the Consolidated Action filed a motion for expedited proceedings, which the Court orally denied at a hearing held on January 5, 2016. On March 11, 2016, the Court granted the plaintiffs' notice and proposed order voluntarily dismissing the Consolidated Action as moot, while retaining jurisdiction solely for the purpose of adjudicating plaintiffs' counsel's anticipated application for an award of attorneys' fees and reimbursement of expenses. On April 15, 2016, the Company reached a settlement in principle related to this matter for an immaterial amount. A tenth action was filed in the United States District Court for the Middle District of Pennsylvania (the Pennsylvania District Court), asserting a claim for violations of Section 14(a) of the Exchange Act and SEC Rule 14a-9 against all defendants and a claim for violations of Section 20(a) of the Exchange Act against the Individual Defendants and WBA (Herring v. Rite Aid Corp., et al.) . The Herring complaint alleges, among other things, that Rite Aid and its Board of Directors disseminated an allegedly false and materially misleading proxy. The complaint sought to enjoin the shareholder vote on the proposed Merger, a declaration that the proxy was materially false and misleading in violation of federal securities laws, and an award of money damages and attorneys' and experts' fees. On January 14 and 16, 2016, respectively, the plaintiff in the Herring action filed a motion for preliminary injunction and a motion for expedited discovery. On January 21, 2016, the Rite Aid Defendants filed a motion to dismiss the Herring complaint. At a hearing held on January 25, 2016, the Pennsylvania District Court orally denied the plaintiff's motion for expedited discovery and subsequently denied the plaintiff's motion for preliminary injunction on January 28, 2016. On March 14, 2016, the Pennsylvania District Court appointed Jerry Herring, Don Michael Hussey and Joanna Pauli Hussey as lead plaintiffs for the putative class and approved their selection of Robbins Geller Rudman & Dowd LLP as lead counsel. On April 14, 2016, the Pennsylvania District Court granted the plaintiffs’ unopposed motion to stay the Herring action for all purposes pending consummation of the Merger. 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. Notice of the Rule 23 class certification as to liability only has been sent to approximately 1,750 current and former store managers in the state of New York. Discovery related to the merits of the claims is ongoing. 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 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, failure to pay for missed meals and rest periods, failure to reimburse business expenses and failure to provide employee seating (the "California Cases"). The lawsuits pertaining to failure to reimburse business expenses and provide employee seating purport to be class actions and seek substantial damages. The single-plaintiff and multi-plaintiff lawsuits regarding failure to pay overtime and failure to pay for missed meals and rest periods, in the aggregate, seek substantial damages. The Company has aggressively challenged the merits of the lawsuits and, where applicable, 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 settled the lawsuit for $9.0 million. Following final approval by the Court earlier in the year, all settlement funds were disbursed in March 2016. 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. That decision was rendered on April 4, 2016. The Company is conferring with counsel about next steps in the litigation. A further status conference in the case is scheduled for May 13, 2016. 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 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 the relationship of Rite Aid's Rx Savings Program to 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 requesting additional information regarding both Rite Aid's Rx Savings Program and usual and customary charges. The Company has responded to both of the subpoenas. To enable the parties to discuss a possible resolution, the Medicaid Fraud Control Units of the several states, commonwealths and the District of Columbia and Rite Aid have entered into an agreement tolling the statute of limitations until October 7, 2015. The parties agreed to extend the tolling agreement until April 7, 2016. At this stage of the proceedings, Rite Aid is unable to predict the outcome of any review by the government of such information. On April 26, 2012, the Company received an administrative subpoena from the U.S. 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 U.S. Attorney's 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"). Additional subpoenas were issued in 2013, 2014, and 2015 seeking broader documentation regarding PSE sales and recordkeeping requirements. Assistant U.S. Attorneys from the Northern and Eastern Districts of New York and the Southern District of West Virginia are currently investigating, but no charges have been filed. On September 2, 2015 and March 11, 2016, the Company received grand jury subpoenas from the U.S. District Court for the Southern District of West Virginia seeking additional information in connection with the investigation of violations of the CMEA and/or the Controlled Substances Act ("CSA"). Violations of the CMEA or the CSA 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 USAOs in the Northern and Eastern Districts of New York and entered into a separate tolling agreement with the USAO in the Southern District of West Virginia. Discussions are underway to resolve these matters with those USAOs, but whether an agreement can be reached and on what terms is uncertain. While the Company's management cannot predict the outcome of these matters, it is possible that the Company's results of operations or cash flows could be materially affected by an unfavorable resolution. At this stage of the investigation, Rite Aid is unable to predict the outcome of the investigation. 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 has entered into a tolling agreement with the USAO. The Company recorded a legal accrual during the period ended March 1, 2014, which was revised during the period ending August 29, 2015. However, Rite Aid cannot predict at this time whether an agreement can be reached and the terms of any agreement. 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 requested 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 Company produced responsive documents and interrogatory responses to the USAO and AG. The Company and the government are in the process of evaluating the government's allegations and documents produced and have been exchanging position letters concerning the merits of the government's claims. At this stage, Rite Aid is unable to predict the outcome of the investigation. 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 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 during that fiscal year to take into account this exclusion. In December 2015, DHCS provided notice that it adjudicated all claims related to this retroactive reimbursement and the Company has adjusted its accrual to the total amount that will be recouped by DHCS. |
Supplementary Cash Flow Data
Supplementary Cash Flow Data | 12 Months Ended |
Feb. 27, 2016 | |
Supplementary Cash Flow Data | |
Supplementary Cash Flow Data | 22. Supplementary Cash Flow Data Year Ended February 27, 2016 February 28, 2015 March 1, 2014 Cash paid for interest (net of capitalized amounts of $196, $145 and $197) $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash payments for income taxes, net $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equipment financed under capital leases $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equipment received for noncash consideration $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Preferred stock dividends paid in additional shares $ — $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accrued capital expenditures $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross borrowings from revolver $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross repayments to revolver $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Feb. 27, 2016 | |
Related Party Transactions | |
Related Party Transactions | 23. Related Party Transactions There were receivables from related parties of $48 and $15 at February 27, 2016 and February 28, 2015, respectively. As contemplated by the pending Merger with WBA, on December 31, 2015, the Board of Directors of the Company approved the adoption of a retention and severance program upon the recommendation of the Compensation Committee of the Board (the "Committee"), which was advised by the Committee's independent compensation consultant, to enhance employee retention and corporate performance through the closing of the Merger, and authorized the Company to enter into individual retention award agreements with certain of its executive officers. The individual retention award agreements provide for the lump-sum payment of the retention award on the one hundred twentieth day following the closing of the Merger (the "retention date"), subject to continued employment through such retention date or upon the earlier termination of the recipient's employment by the Company without "cause" or by the recipient for "good reason" (as such terms are defined in the Company's 2014 Omnibus Equity Plan) (each referred to as a "qualifying termination"). The Company executed retention award agreements on December 31, 2015 with certain Company executive officers, which provided for the grant of retention awards under the terms described above and, for tax planning purposes, provide for the accelerated payment of the executive's fiscal year 2016 bonus in 2015, the accelerated lapse of restrictions on certain time-based restricted stock awards in 2015 and, to the extent necessary for one executive officer, the accelerated payment of the retention award in 2015, in each case subject to repayment requirements on the part of the executive if the executive would not have otherwise become entitled to such payments. During fiscal 2016, the Company made advance payments to certain executives of $500 for retention bonuses and $1,778 of fiscal 2016 performance bonuses for tax planning purposes. On July 22, 2013, the Jean Coutu Group announced that it had sold all of its 65,401,162 shares of Rite Aid's common stock. As a result of this sale, the Jean Coutu Group was required to cause its last designee to resign from Rite Aid's board of directors and, accordingly, Francois J. Coutu resigned from Rite Aid's board of directors effective November 8, 2013. On September 26, 2013, the Company agreed to exchange eight shares of 7% Series G Convertible Preferred Stock (the "Series G preferred stock") and 1,876,013 shares of 6% Series H Convertible Preferred Stock (the "Series H preferred stock", collectively the "Preferred Stock") of the Company (the "Exchange"), held by Green Equity Investors III, L.P. ("LGP") for 40,000,000 shares of the Company's common stock, par value $1.00 per share, with a market value of $190,400 at the $4.76 per share closing price on the Settlement Date (as hereinafter defined), pursuant to an individually negotiated exchange transaction. The Exchange settled on September 30, 2013 (the "Settlement Date"). The Preferred Stock, including additional shares representing earned but unpaid dividends as of the Settlement Date, was redeemable by the Company for cash at 105% of the Preferred Stock's $100 per share liquidation preference or $199,937. The Company agreed to the Exchange as it was prohibited under several of its debt instruments from using cash to effect the redemption of the Preferred Stock. Following the Settlement Date, no shares of the Series G preferred stock or Series H preferred stock remained outstanding and the Company's restated certificate of incorporation was amended to eliminate all references to the Series G preferred stock and Series H preferred stock. In accordance with the terms of the Exchange, John M. Baumer, a member of the board of directors of the Company and a limited partner of Leonard Green & Partners, L.P., an affiliate of the LGP, resigned from the Company's board of directors. The Series G preferred stock had a liquidation preference of $100 per share and paid quarterly dividends in additional shares at 7% of liquidation preference and could be redeemed at the Company's election. The Series H preferred stock paid quarterly dividends in additional shares at 6% of liquidation preference and could be redeemed at the Company's election. The Series G preferred stock and Series H preferred stock were convertible into common stock of the Company, at the holder's option, at a conversion rate of $5.50 per share. As of the Settlement Date, LGP held 1,904,161 shares of Series G preferred stock and Series H preferred stock, which included 28,140 shares of earned and unpaid dividends. The Series G preferred stock and Series H preferred stock would have converted into 34,621,117 shares of common stock at the contracted conversion rate of $5.50 per share. Accordingly, income attributable to common stockholders was reduced by $25,603, or $0.03 per diluted share, the value of the additional 5,378,883 shares of common stock issued upon conversion at the $4.76 per share closing price on the Settlement Date. |
Guarantor and Non-Guarantor Con
Guarantor and Non-Guarantor Condensed Consolidating Financial Information | 12 Months Ended |
Feb. 27, 2016 | |
Guarantor and Non-Guarantor Condensed Consolidating Financial Information | |
Guarantor and Non-Guarantor Condensed Consolidating Financial Information | 24. Guarantor and Non-Guarantor Condensed Consolidating Financial Information Rite Aid Corporation conducts the majority of its business through its subsidiaries. With the exception of EIC, substantially all of Rite Aid Corporation's 100 percent owned subsidiaries guarantee the obligations under the Amended and Restated Senior Secured Credit Facility, second priority secured term loan facilities, secured guaranteed notes and unsecured guaranteed notes (the "Subsidiary Guarantors"). Additionally, prior to the Acquisition, the subsidiaries, including joint ventures, that did not guarantee the Amended and Restated Senior Secured Credit Facility, second priority secured term loan facilities, secured guaranteed notes and unsecured guaranteed notes, were minor. Accordingly, condensed consolidating financial information for the Company and subsidiaries is not presented for those periods. Condensed consolidating financial information for the Company, its Subsidiary Guarantors and non-guarantor subsidiaries, is presented for periods subsequent to the Acquisition. For the purposes of preparing the information below, Rite Aid Corporation uses the equity method to account for its investment in subsidiaries. The equity method has been used by Subsidiary Guarantors with respect to investments in the non-guarantor subsidiaries. The subsidiary guarantees related to the Company's Amended and Restated 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. Presented below is condensed consolidating financial information for Rite Aid Corporation, the Subsidiary Guarantors, and the non-guarantor subsidiaries at February 27, 2016 and for the fiscal year ended February 27, 2016. Separate financial statements for Subsidiary Guarantors are not presented. Rite Aid Corporation Condensed Consolidating Balance Sheet February 27, 2016 Rite Aid Corporation (Parent Company Only) Subsidiary Guarantors Non- Guarantor Subsidiaries Eliminations Consolidated (in thousands) ASSETS Current assets: Cash and cash equivalents $ — $ $ $ — $ Accounts receivable, net — — Intercompany receivable — — )(a) — Inventories, net of LIFO reserve of $0, $1,006,396, $0, $0, and $1,006,396 — — — Prepaid expenses and other current assets — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current assets — ) Property, plant and equipment, net — — — Goodwill — — — Other intangibles, net — — Deferred tax assets — — — Investment in subsidiaries — )(b) — Intercompany receivable — — )(a) — Other assets — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt and lease financing obligations $ $ $ — $ — $ Accounts payable — — Intercompany payable — — )(a) — Accrued salaries, wages and other current liabilities — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current liabilities ) Long-term debt, less current maturities — — — Lease financing obligations, less current maturities — — — Intercompany payable — — )(a) — Other noncurrent liabilities — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities ) Commitments and contingencies — — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total stockholders' equity ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities and stockholders' equity $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) Elimination of intercompany accounts receivable and accounts payable amounts. (b) Elimination of investments in consolidated subsidiaries. Rite Aid Corporation Condensed Consolidating Statement of Operations For the Year Ended February 27, 2016 Rite Aid Corporation (Parent Company Only) Subsidiary Guarantors Non- Guarantor Subsidiaries Eliminations Consolidated (in thousands) Revenues $ — $ $ $ )(a) $ Costs and expenses: Cost of revenues — )(a) Selling, general and administrative expenses — )(a) Lease termination and impairment expenses — — — Interest expense — Loss on debt retirement, net — — — Loss on sale of assets, net — — — Equity in earnings of subsidiaries, net of tax ) — (b) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (loss) before income taxes ) ) Income tax expense (benefit) — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) $ $ $ ) $ ) $ Total other comprehensive (loss) income ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comprehensive income (loss) $ $ $ ) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) Elimination of intercompany revenues and expenses. (b) Elimination of equity in earnings of subsidiaries. Rite Aid Corporation Condensed Consolidating Statement of Cash Flows For the Year Ended February 27, 2016 Rite Aid Corporation (Parent Company Only) Subsidiary Guarantors Non- Guarantor Subsidiaries Eliminations Consolidated (in thousands) Operating activities: Net cash (used in) provided by operating activities $ ) $ $ ) $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Investing activities: Payments for property, plant and equipment — ) — — ) Intangible assets acquired — ) — — ) Acquisition of businesses, net of cash acquired ) — — — ) Intercompany activity ) ) — — Proceeds from sale-leaseback transaction — — — Proceeds from dispositions of assets and investments — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash (used in) provided by investing activities ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financing activities: Proceeds from issuance of long-term debt — — — Net proceeds from revolver — — — Principal payments on long-term debt ) ) — — ) Change in zero balance cash accounts — ) — — ) Net proceeds from issuance of common stock — — — Financing fees paid for early debt redemption ) — — — ) Excess tax benefit on stock options and restricted stock — — — Deferred financing costs paid ) — — — ) Intercompany activity ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) financing activities ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Decrease) increase in cash and cash equivalents — ) — Cash and cash equivalents, beginning of period — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents, end of period $ — $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Interim Financial Results (Unau
Interim Financial Results (Unaudited) | 12 Months Ended |
Feb. 27, 2016 | |
Interim Financial Results (Unaudited) | |
Interim Financial Results (Unaudited) | 25. Interim Financial Results (Unaudited) Fiscal Year 2016 First Quarter Second Quarter Third Quarter Fourth Quarter Year Revenues $ $ $ $ $ Cost of revenues Selling, general and administrative expenses Lease termination and impairment charges Interest expense Loss on debt retirements, net — — — Loss (gain) on sale of assets, net ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes Income tax expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic income per share(1) $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted income per share(1) $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year 2015 First Quarter Second Quarter Third Quarter Fourth Quarter Year Revenues $ $ $ $ $ Cost of revenues Selling, general and administrative expenses Lease termination and impairment charges Interest expense Loss on debt retirements, net — — — Gain on sale of assets, net ) ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes Income tax expense (benefit) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic income per share(1) $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted income per share(1) $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Income per share amounts for each quarter may not necessarily total to the yearly income per share due to the weighting of shares outstanding on a quarterly and year-to-date basis. During the second quarter of 2016, the Company recorded a loss on debt retirement related to the August 2015 redemption of the outstanding 8.00% Notes as discussed in Note 14. During the fourth quarter of fiscal 2016, the Company recorded facilities impairment charges of $16,401 and a LIFO credit of $6,796 due to lower deflation on pharmacy generics as compared to a larger LIFO credit recognized at prior year end caused by lower pharmacy inventory due to its Purchasing and Delivery Arrangement. During the third quarter of 2015, the Company recorded a loss on debt retirement related to the October 2014 redemption of the outstanding 10.25% senior notes due 2019 as discussed in Note 14. During the fourth quarter of fiscal 2015, the Company recorded facilities impairment charges of $13,105 and a LIFO credit of $23,489 due to lower pharmacy inventory in both its stores and distribution centers in connection with its Purchasing and Delivery Arrangement as compared to a LIFO charge recognized at prior year end caused by higher pharmacy inflation rates. |
Financial Instruments
Financial Instruments | 12 Months Ended |
Feb. 27, 2016 | |
Financial Instruments | |
Financial Instruments | 26. Financial Instruments The carrying amounts and fair values of financial instruments at February 27, 2016 and February 28, 2015 are listed as follows: 2016 2015 Carrying Amount Fair Value Carrying Amount Fair Value Variable rate indebtedness $ $ $ $ Fixed rate indebtedness $ $ $ $ Cash, trade receivables and trade payables are carried at market value, which approximates their fair values due to the short-term maturity of these instruments. In addition, the Company has $6,069 of investments, carried at amortized cost as these investments are being held to maturity, which are included as a component of other assets as of February 27, 2016. The Company believes the carrying value of these investments approximates their fair value. The following methods and assumptions were used in estimating fair value disclosures for financial instruments: LIBOR-based borrowings under credit facilities: The carrying amounts for LIBOR-based borrowings under the credit facilities, term loans and term notes are estimated based on the quoted market price of the financial instruments. Long-term indebtedness: The fair values of long-term indebtedness are estimated based on the quoted market prices of the financial instruments. If quoted market prices were not available, the Company estimated the fair value based on the quoted market price of a financial instrument with similar characteristics. |
SCHEDULE II-VALUATION AND QUALI
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Feb. 27, 2016 | |
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | |
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS For the Years Ended February 27, 2016, February 28, 2015, and March 1, 2014 (dollars in thousands) Allowances deducted from accounts receivable for estimated uncollectible amounts: Balance at Beginning of Period Additions Charged to Costs and Expenses Deductions Balance at End of Period Year ended February 27, 2016 $ $ $ $ Year ended February 28, 2015 $ $ $ $ Year ended March 1, 2014 $ $ $ $ |
Summary of Significant Accoun37
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Feb. 27, 2016 | |
Summary of Significant Accounting Policies | |
Fiscal Year | Fiscal Year The Company's fiscal year ends on the Saturday closest to February 29 or March 1. The fiscal years ended February 27, 2016, February 28, 2015 and March 1, 2014 included 52 weeks. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and all of its 100 percent owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand and highly liquid investments, which are readily convertible to known amounts of cash and which have original maturities of three months or less when purchased. |
Allowance for Uncollectible Receivables | Allowance for Uncollectible Receivables Approximately 97.8% of prescription sales are made to customers who are covered by third-party payors, such as insurance companies, government agencies and employers. The Company recognizes receivables that represent the amount owed to the Company for sales made to customers or employees of those payors that have not yet been paid. The Company maintains a reserve for the amount of these receivables deemed to be uncollectible. This reserve is calculated based upon historical collection activity adjusted for current conditions. |
Inventories | Inventories Inventories are stated at the lower of cost or market. Inventory balances include the capitalization of certain costs related to purchasing, freight and handling costs associated with placing inventory in its location and condition for sale. The Company uses the last-in, first-out ("LIFO") cost flow assumption for substantially all of its inventories. The Company calculates its inflation index based on internal product mix and utilizes the link-chain LIFO method. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Asset impairments are recorded when the carrying value of assets are not recoverable. For purposes of recognizing and measuring impairment of long-lived assets, the Company categorizes assets of operating stores as "Assets to Be Held and Used" and "Assets to Be Disposed Of." The Company evaluates assets at the store level because this is the lowest level of identifiable cash flows ascertainable to evaluate impairment. Assets being tested for recoverability at the store level include tangible long-lived assets and identifiable, finite-lived intangibles that arose in purchase business combinations. Corporate assets to be held and used are evaluated for impairment based on excess cash flows from the stores that support those assets. The Company reviews long-lived assets to be held and used for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the undiscounted expected future cash flows is less than the carrying amount of the asset, the Company recognizes an impairment loss. Impairment losses are measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risks associated with the recovery of the asset. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are stated at cost, net of accumulated depreciation and amortization. The Company provides for depreciation using the straight-line method over the following useful lives: buildings—30 to 45 years; equipment—3 to 15 years. Leasehold improvements are amortized on a straight-line basis over the shorter of the estimated useful life of the asset or the term of the lease. When determining the amortization period of a leasehold improvement, the Company considers whether discretionary exercise of a lease renewal option is reasonably assured. If it is determined that the exercise of such option is reasonably assured, the Company will amortize the leasehold improvement asset over the minimum lease term, plus the option period. This determination depends on the remaining life of the minimum lease term and any economic penalties that would be incurred if the lease option is not exercised. Capitalized lease assets are recorded at the lesser of the present value of minimum lease payments or fair market value and amortized over the estimated useful life of the related property or term of the lease. The Company capitalizes direct internal and external development costs associated with internal-use software. Neither preliminary evaluation costs nor costs associated with the software after implementation are capitalized. For fiscal years 2016, 2015 and 2014, the Company capitalized costs of approximately $7,680, $7,550 and $6,547, respectively. |
Goodwill | Goodwill The Company recognizes goodwill as the excess of the purchase price over the fair value of the assets acquired and liabilities assumed during business combinations. The Company accounts for goodwill under ASC Topic 350, "Intangibles—Goodwill and Other", which does not permit amortization, but instead requires the Company to perform an annual impairment review, or more frequently if events or circumstances indicate that impairment may be more likely. See Note 12 for additional information on goodwill. |
Intangible Assets | Intangible Assets The Company has certain finite-lived intangible assets that are amortized over their useful lives. The value of favorable and unfavorable leases on stores acquired in business combinations are amortized over the terms of the leases on a straight-line basis. Prescription files acquired in business combinations are amortized over an estimated useful life of ten years on an accelerated basis, which approximates the anticipated prescription file retention and related cash flows. Purchased prescription files acquired in other than business combinations are amortized over their estimated useful lives of five years on a straight-line basis. The value of finite-lived trade names are amortized over 10 years on a straight-line basis. The value of customer relationships, acquired in connection with the Company's acquisition of EnvisionRx, are amortized over a period between 10 and 20 years on a descending percentage method which matches the pattern of expected discounted cash flows. The Pharmacy Services segment's contract with CMS for Medicare Part D, which is required in order to act as a national provider of the Part D benefit, is amortized over 25 years on a straight line basis. |
Deferred Financing Costs | Deferred Financing Costs Costs incurred to issue debt are deferred and amortized as a component of interest expense over the terms of the related debt agreements. Amortization expense of deferred financing costs was $19,545, $15,301 and $15,259 for fiscal 2016, 2015 and 2014, respectively. |
Revenue Recognition | Revenue Recognition Retail Pharmacy Segment For front end sales, the Retail Pharmacy segment recognizes revenue from the sale of merchandise at the time the merchandise is sold. The Retail Pharmacy segment records revenue net of an allowance for estimated future returns. Return activity is immaterial to revenues and results of operations in all periods presented. For third party payor pharmacy sales, revenue is recognized at the time the prescription is filled, which is or approximates when the customer picks up the prescription and is recorded net of an allowance for prescriptions that were filled but will not be picked up by the customer. For all periods presented, there is no material difference between the revenue recognized at the time the prescription is filled and that which would be recognized when the customer picks up the prescription. For cash prescriptions and patient third party payor co-payments, the Retail Pharmacy segment recognizes revenue when the patient picks up the prescription and tenders the cash price or patient third party payor co-payment amount at the point of sale. Prescriptions are generally not returnable. The Retail Pharmacy segment offers a chain wide loyalty card program titled wellness +. Members participating in the wellness + loyalty card program earn points on a calendar year basis for eligible front end merchandise purchases and qualifying prescriptions. One point is awarded for each dollar spent towards front end merchandise and 25 points are awarded for each qualifying prescription. Members reach specific wellness + tiers based on the points accumulated during the calendar year, which entitles such customers to certain future discounts and other benefits upon reaching that tier. For example, any customer that reaches 1,000 points in a calendar year achieves the "Gold" tier, enabling them to receive a 20% discount on qualifying purchases of front end merchandise for the remaining portion of the calendar year and also the next calendar year. There are also similar "Silver" and "Bronze" levels with lower thresholds and benefit levels. As wellness + customers accumulate points, the Retail Pharmacy segment defers the value of the points earned as deferred revenue (included in other current and noncurrent liabilities, based on the expected usage). The amount deferred is based on historic and projected customer activity (e.g., tier level, spending level). As customers receive discounted front end merchandise, the Retail Pharmacy segment recognizes an allocable portion of the deferred revenue. The Retail Pharmacy segment deferred $110,208 as of February 27, 2016 of which $88,470 is included in other current liabilities and $21,738 is included in noncurrent liabilities. The Retail Pharmacy segment deferred $111,208 as of February 28, 2015 of which $89,657 is included in other current liabilities and $21,551 is included in noncurrent liabilities. During fiscal 2016, the Company partnered with American Express Travel Related Services Company, Inc. to be part of a coalition loyalty program titled Plenti. This awards program allows a customer to earn points based on qualifying purchases at participating retailers. Each Plenti point is worth the equivalent of $0.01. The customer has the opportunity to redeem their accumulated points on a future purchase at any of the participating retailers. All points are redeemed using a FIFO methodology (e.g., first points earned are the first to be redeemed). Points expire on December 31st of each year for any point that has aged a minimum of two years that has not been redeemed by the customer. For a majority of the Plenti point issuances, funding is provided by our vendors through contractual arrangements. This funding is treated as deferred revenue and remains in deferred revenue until a customer redeems their points. Upon redemption, the deferred revenue account is decremented with an offsetting credit to sales. For Plenti point redemptions that are not vendor funded, deferred revenue is recorded and not recognized until the points are redeemed. As of February 27, 2016, the Company had deferred revenue of $39,253 relating to the Plenti program which is included in other current liabilities. Pharmacy Services Segment The Pharmacy Services segment ("Pharmacy Services") sells prescription drugs indirectly through its retail pharmacy network and directly through its mail service dispensing pharmacy. The Pharmacy Services segment recognizes revenue from prescription drugs sold by (i) its mail service dispensing pharmacy and (ii) under retail pharmacy network contracts where it is the principal using the gross method at the contract prices negotiated with its clients, primarily employers, insurance companies, unions, government employee groups, health plans, Managed Medicaid plans, Medicare plans, and other sponsors of health benefit plans, and individuals throughout the United States. Revenues include: (i) the portion of the price the client pays directly to the Pharmacy Services segment, net of any volume-related or other discounts paid back to the client (see "Drug Discounts" below), (ii) the price paid to the Pharmacy Services segment by client plan members for mail order prescriptions ("Mail Co-Payments"), (iii) customer copayments made directly to the retail pharmacy network, and (iv) administrative fees. Sales taxes are not included in revenue. Revenue is recognized when: (i) persuasive evidence that the prescription drug sale has occurred or a contractual arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the seller's price to the buyer is fixed or determinable, and (iv) collectability is reasonably assured. The following revenue recognition policies have been established for the Pharmacy Services segment: • Revenues generated from prescription drugs sold by third party pharmacies in the Pharmacy Services segment's retail pharmacy network and associated administrative fees are recognized at the Pharmacy Services segment's point-of-sale, which is when the claim is adjudicated by the Pharmacy Services segment's online claims processing system. • Revenues generated from prescription drugs sold by the Pharmacy Services segment's mail service dispensing pharmacy are recognized when the prescription is delivered. At the time of delivery, the Pharmacy Services segment has performed substantially all of its obligations under its client contracts and does not experience a significant level of returns or reshipments. • Revenues generated from administrative fees based on membership or claims volume are recognized monthly upon active membership in the plan or actual claims volume. In the majority of its contracts, the Pharmacy Services segment has determined it is the principal due to it: (i) being the primary obligor in the arrangement, (ii) latitude in establishing price, (iii) performs part of the service, (iv) having discretion in supplier selection and v) having involvement in the determination of product or service specifications. The Pharmacy Services segment's obligations under its client contracts for which revenues are reported using the gross method are separate and distinct from its obligations to the third party pharmacies included in its retail pharmacy network contracts. Pursuant to these contracts, the Pharmacy Services segment is contractually required to pay the third party pharmacies in its retail pharmacy network for products sold after payment is received from its clients. The Pharmacy Services segment's responsibilities under its client contracts typically include validating eligibility and coverage levels, communicating the prescription price and the co-payments due to the third party retail pharmacy, identifying possible adverse drug interactions for the pharmacist to address with the prescriber prior to dispensing, suggesting generic alternatives where clinically appropriate and approving the prescription for dispensing. Although the Pharmacy Services segment does not have credit risk with respect to its pharmacy benefit manager operations and retail co-payments, management believes that all of the other applicable indicators of gross revenue reporting are present. Drug Discounts—The Pharmacy Services segment deducts from its revenues that are generated from prescription drugs sold by third party pharmacies any rebates, inclusive of discounts and fees, earned by its clients. Rebates are paid to clients in accordance with the terms of client contracts. Medicare Part D—The Pharmacy Services segment, through its EIC subsidiary, participates in the federal government's Medicare Part D program as a Prescription Drug Plan ("PDP"). Net revenues include insurance premiums earned by the PDP, which are determined based on the PDP's annual bid and related contractual arrangements with the Centers for Medicare and Medicaid Services ("CMS"). The insurance premiums include a direct premium paid by CMS and a beneficiary premium, which is the responsibility of the PDP member, but is subsidized by CMS in the case of low-income members. Premiums collected in advance are initially deferred in accrued expenses and are then recognized in net revenues over the period in which members are entitled to receive benefits. The Pharmacy Services segment records estimates of various assets and liabilities arising from its participation in the Medicare Part D program based on information in its claims management and enrollment systems. Significant estimates arising from its participation in the Medicare Part D program include: (i) estimates of low-income cost subsidy, reinsurance amounts and coverage gap discount amounts ultimately payable to or receivable from CMS based on a detailed claims reconciliation, (ii) an estimate of amounts receivable from CMS under a risk-sharing feature of the Medicare Part D program design, referred to as the risk corridor and (iii) estimates for claims that have been reported and are in the process of being paid or contested. Actual amounts of Medicare Part D-related assets and liabilities could differ significantly from amounts recorded. Historically, the effect of these adjustments has not been material to our results of operations or financial position. See Note 20 for additional information about the revenues of the Company's business segments. |
Cost of Revenues | Cost of Revenues Retail Pharmacy Segment Cost of revenues for the Retail Pharmacy segment includes the following: the cost of inventory sold during the period, including related vendor rebates and allowances, LIFO credit or charges, costs incurred to return merchandise to vendors, inventory shrink, purchasing costs and warehousing costs, which include inbound freight costs from the vendor, distribution payroll and benefit costs, distribution center occupancy costs and depreciation expense and delivery expenses to the stores. Pharmacy Services Segment The Pharmacy Services segment's cost of revenues includes the cost of prescription drugs sold during the reporting period indirectly through its retail pharmacy network and directly through its mail service dispensing pharmacy. The cost of prescription drugs sold component of cost of revenues includes: (i) the cost of the prescription drugs purchased from manufacturers or distributors and shipped to members in clients' benefit plans from the Pharmacy Services segment's mail service dispensing pharmacy, net of any volume-related or other discounts (see "Vendor allowances and purchase discounts" below) and (ii) the cost of prescription drugs sold through the Pharmacy Services segment's retail pharmacy network under contracts where it is the principal, net of any volume-related or other discounts. As a result of the Acquisition, and the related addition of the Pharmacy Services segment, the Company now refers to its cost of goods sold as its cost of revenues, as these costs are now inclusive of the cost of prescription drugs sold through the Pharmacy Services segment's retail pharmacy network under contracts where it is the principal. See Note 20 for additional information about the cost of revenues of the Company's business segments. |
Vendor Rebates and Allowances and Purchase Discounts | Vendor Rebates and Allowances and Purchase Discounts Retail Pharmacy Segment The Retail Pharmacy segment rebates and allowances received from vendors relate to either buying and merchandising or promoting the product. Buying and merchandising related rebates and allowances are recorded as a reduction of cost of revenue as product is sold. Buying and merchandising rebates and allowances include all types of vendor programs such as cash discounts from timely payment of invoices, purchase discounts or rebates, volume purchase allowances, price reduction allowances and slotting allowances. Certain product promotion related rebates and allowances, primarily related to advertising, are recorded as a reduction in selling, general and administrative expenses when the advertising commitment has been satisfied. Pharmacy Services Segment The Pharmacy Services segment receives purchase discounts on products purchased. The Pharmacy Services segment's contractual arrangements with vendors, including manufacturers, wholesalers and retail pharmacies, normally provide for the Pharmacy Services segment to receive purchase discounts from established list prices in one, or a combination, of the following forms: (i) a direct discount at the time of purchase, or (ii) a discount (or rebate) paid subsequent to dispensing when products are purchased indirectly from a manufacturer (e.g., through a wholesaler or retail pharmacy). These rebates are recognized when prescriptions are dispensed and are generally calculated and billed to manufacturers within 30 days of the end of each completed quarter. Historically, the effect of adjustments resulting from the reconciliation of rebates recognized to the amounts billed and collected has not been material to the Pharmacy Services segment's results of operations. The Pharmacy Services segment accounts for the effect of any such differences as a change in accounting estimate in the period the reconciliation is completed. The Pharmacy Services segment also receives additional discounts under its wholesaler contracts. In addition, the Pharmacy Services segment receives fees from pharmaceutical manufacturers for administrative services. Purchase discounts and administrative service fees are recorded as a reduction of cost of revenues. |
Reinsurance | Reinsurance To minimize risk and statutory capital requirements, EIC enters into quota share reinsurance agreements with unaffiliated reinsurers whereby they assume a quota share percentage of the company's Medicare Part D program. The net revenue and net cost of revenue for EIC has been reduced by the amounts ceded to reinsurers under these agreements. |
Rent | Rent The Company records rent expense on operating leases on a straight-line basis over the minimum lease term. The Company begins to record rent expense at the time that the Company has the right to use the property. From time to time, the Company receives incentive payments from landlords that subsidize lease improvement construction. These leasehold incentives are deferred and recognized on a straight-line basis over the minimum lease term. |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses Selling, general and administrative expenses include store and corporate administrative payroll and benefit costs, occupancy costs which include retail store and corporate rent costs, facility and leasehold improvement depreciation and utility costs, advertising, repair and maintenance, insurance, equipment depreciation and professional fees. |
Repairs and Maintenance | Repairs and Maintenance Routine repairs and maintenance are charged to operations as incurred. Improvements and major repairs, which extend the useful life of an asset, are capitalized and depreciated. |
Advertising | Advertising Advertising costs, net of specific vendor advertising allowances, are expensed in the period the advertisement first takes place. Advertising expenses, net of vendor advertising allowances, for fiscal 2016, 2015 and 2014 were $307,817, $318,157 and $322,843, respectively. |
Insurance | Insurance The Company is self-insured for certain general liability and workers' compensation claims. For claims that are self-insured, stop-loss insurance coverage is maintained for workers' compensation occurrences exceeding $1,000 and general liability occurrences exceeding $3,000. The Company utilizes actuarial studies as the basis for developing reported claims and estimating claims incurred but not reported relating to the Company's self-insurance. Workers' compensation claims are discounted to present value using a risk-free interest rate. |
Benefit Plan Accruals | Benefit Plan Accruals The Company has several defined benefit plans, under which participants earn a retirement benefit based upon a formula set forth in the plan. The Company records expense related to these plans using actuarially determined amounts that are calculated under the provisions of ASC 715, "Compensation—Retirement Benefits." Key assumptions used in the actuarial valuations include the discount rate, the expected rate of return on plan assets and the rate of increase in future compensation levels. |
Stock-Based Compensation | Stock-Based Compensation The Company has several stock option plans, which are described in detail in Note 16. The Company accounts for stock-based compensation under ASC 718, "Compensation—Stock Compensation." The Company recognizes option expense over the requisite service period of the award, net of an estimate for the impact of award forfeitures. |
Store Pre-opening Expenses | Store Pre-opening Expenses Costs incurred prior to the opening of a new or relocated store, associated with a remodeled store or related to the opening of a distribution facility are charged against earnings when incurred. |
Litigation Reserves | Litigation Reserves The Company is involved in litigation on an ongoing basis. The Company accrues its best estimate of the probable loss related to legal claims. Such estimates are developed in consultation with in-house counsel, and are based upon a combination of litigation and settlement strategies. |
Facility Closing Costs and Lease Exit Charges | Facility Closing Costs and Lease Exit Charges When a store or distribution center is closed, the Company records an expense for unrecoverable costs and accrues a liability equal to the present value at current credit adjusted risk-free interest rates of the remaining lease obligations and anticipated ancillary occupancy costs, net of estimated sublease income. Other store or distribution center closing and liquidation costs are expensed when incurred. |
Income Taxes | Income Taxes Deferred income taxes are determined based on the difference between the financial reporting and tax basis of assets and liabilities. Deferred income tax expense (benefit) represents the change during the reporting period in the deferred tax assets and deferred tax liabilities, net of the effect of acquisitions and dispositions. Deferred tax assets include tax loss and credit carryforwards and are reduced by a valuation allowance if, based on available evidence, it is more likely than not that some portion of the deferred tax assets will not be realized. Changes in valuation allowances from period to period are included in the tax provision in the period of change. The Company has net operating loss ("NOL") carryforwards that can be utilized to offset future income for federal and state tax purposes. These NOLs generate a significant deferred tax asset. The Company regularly reviews the deferred tax assets for recoverability considering historical profitability, projected taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies. The Company recognizes tax liabilities in accordance with ASC 740, "Income Taxes" and the Company 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. |
Sales Tax Collected | Sales Tax Collected Sales taxes collected from customers and remitted to various governmental agencies are presented on a net basis (excluded from revenues) in the Company's statement of operations. |
Use of Estimates | Use of Estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
Significant Concentrations | Significant Concentrations Retail Pharmacy Segment The Company's pharmacy sales were primarily to customers covered by health plan contracts, which typically contract with a third party payor that agrees to pay for all or a portion of a customer's eligible prescription purchases. During fiscal 2016, the top five third party payors accounted for approximately 70.4% of the Company's pharmacy sales. The largest third party payor, Express Scripts, represented 25.3%, 27.8% and 31.6% of pharmacy sales during fiscal 2016, 2015 and 2014, respectively. Third party payors are entities such as an insurance company, governmental agency, health maintenance organization or other managed care provider, and typically represent several health care contracts and customers. During fiscal 2016, state sponsored Medicaid agencies and related managed care Medicaid payors accounted for approximately 19.9% of the Company's pharmacy sales, the largest of which was approximately 1.5% of the Company's pharmacy sales. During fiscal 2016, approximately 31.9% of the Company's pharmacy sales were to customers covered by Medicare Part D. Any significant loss of third-party payor business could have a material adverse effect on the Company's business and results of operations. On February 17, 2014, the Company executed an expanded five-year agreement with McKesson Corporation ("McKesson") for pharmaceutical purchasing and distribution (our "Purchasing and Delivery Arrangement"). As part of its Purchasing and Delivery Arrangement, McKesson assumed responsibility for purchasing essentially all of the brand and generic medications the Company dispenses as well as providing a new direct store delivery model to all of the Company's stores. During fiscal 2016, the Company purchased brand and generic pharmaceuticals, which amounted to approximately 97.5% of the dollar volume of its prescription drugs from McKesson. If the Company's relationship with McKesson was disrupted, it could temporarily have difficulty filling prescriptions for brand-named and generic drugs until it executed a replacement wholesaler agreement or developed and implemented self- distribution processes. Pharmacy Services Segment The Pharmacy Services segment, through its EIC subsidiary, participates in the federal government's Medicare Part D program as a PDP. Net revenues of $162,620 (0.5% of consolidated revenues) include insurance premiums earned by the PDP, which are determined based on the PDP's annual bid and related contractual arrangements with CMS. EIC has entered into a quota share reinsurance agreement with Swiss Re Life & Health America Inc. ("Swiss Re") whereby they assume a quota share percentage of the company's Medicare Part D program. Fifty percent of the net revenue and net cost of revenue for EIC has been ceded to Swiss Re under this agreement. |
Derivatives | Derivatives The Company may enter into interest rate swap agreements to hedge the exposure to increasing rates with respect to its variable rate debt, when the Company deems it prudent to do so. Upon inception of interest rate swap agreements, or modifications thereto, the Company performs a comprehensive review of the interest rate swap agreements based on the criteria as provided by ASC 815, "Derivatives and Hedging." As of February 27, 2016 and February 28, 2015, the Company had no interest rate swap arrangements or other derivatives. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases, (Topic 842) , which is intended to improve financial reporting around leasing transactions. The ASU affects all companies and other organizations that engage in lease transactions (both lessee and lessor) that lease assets such as real estate and manufacturing equipment. This ASU will require organizations that lease assets—referred to as "leases"—to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. ASU No. 2016-02 is effective for fiscal years and interim periods within those years beginning January 1, 2019. The Company is in process of assessing the impact of the adoption of ASU No. 2016-02 on its financial position, results of operations and cash flows. 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, 2017, 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 February 2015, the FASB issued ASU No. 2015-02, Consolidation—Amendments to the Consolidation Analysis (Topic 810) . This ASU requires reporting entities to reevaluate whether they should consolidate certain legal entities under the revised consolidation model. This standard modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs), eliminates the presumption that a general partner should consolidate a limited partnership, and affects the consolidation analysis of reporting entities that are involved with VIEs, especially those that have fee arrangements and related party relationships. 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 2015-02 on its financial position, results of operations and cash flows. In April 2015, the FASB issued ASU No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs . This ASU simplifies the presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction from the carrying amount of the debt liability, which is consistent with the treatment of debt discounts. Recognition and measurement of debt issuance costs were not affected by this amendment. The new guidance should be applied on a retrospective basis, and upon transition, an entity is required to comply with the applicable disclosures necessary for a change in accounting principle. This ASU is effective for fiscal years beginning after December 15, 2015, and for interim periods within those fiscal years. As permitted, the Company early adopted this standard beginning in the fourth quarter of fiscal 2016. The effect of the adoption of ASU 2015-03 on the Company's consolidated balance sheet is a reduction of other assets and long-term debt of $85,827 as of February 28, 2015. The following is a reconciliation of the effect of this reclassification on the Company's consolidated balance sheet as of February 28, 2015: As Previously Reported Adjustments As Revised Other assets $ $ ) $ Total assets ) Long-term debt, less current maturities ) Total liabilities ) Total liabilities and stockholders' equity ) In April 2015, the FASB issued ASU No. 2015-04, Compensation—Retirement Benefits (Topic 715): Practical Expedient for the Measurement Date of an Employer's Defined Benefit Obligation and Plan Assets. This ASU allows an employer whose fiscal year-end does not coincide with a calendar month-end, for example, an entity that has a 52-week or 53-week fiscal year, the ability as a practical expedient, to measure defined benefit retirement obligations and related plan assets as of the month-end that is closest to its fiscal year-end. This ASU is effective for fiscal years beginning after December 15, 2015, and for interim periods within those fiscal years. Early adoption of this ASU is permitted. The Company adopted this guidance in the fiscal fourth quarter of fiscal 2016 and consequently measured its plan assets as of February 29, 2016. This adoption did not materially affect the Company's financial position, results of operations or cash flows. In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805)—Simplifying the Accounting for Measurement-Period Adjustments. This ASU requires an acquirer to recognize provisional adjustments identified during the measurement period in the reporting period in which the adjustment amounts are determined. This amendment requires an acquirer to record the income statement effects, if any, as a result of the change in provisional amounts in the period's financial statements when the adjustment is determined, calculated as if the accounting had been completed at the acquisition date. This amendment eliminates the requirement to retrospectively account for provisional adjustments. This ASU is effective for fiscal years beginning after December 15, 2015, and for interim periods within those fiscal years. Early adoption of this ASU is permitted. The adoption of this guidance in the fiscal fourth quarter of fiscal 2016 did not materially affect the Company's financial position, results of operations or cash flows. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740)—Balance Sheet Classification of Deferred Taxes . This ASU requires an entity to classify deferred income tax assets and liabilities as noncurrent on the entity's classified statement of financial position. This amendment eliminates the current requirement to classify deferred tax assets and liabilities as either current or noncurrent on the entity's statement of financial position. This amendment may be applied either prospectively to all deferred tax liabilities and assets or retrospective to all periods presented. If applied prospectively, the entity should disclose in the first interim and first annual period of change, the nature of and the reason for the change in accounting principle and a statement that prior periods were not retrospectively adjusted. If applied retrospectively, the entity should disclose in the first interim and first annual period of change, the nature of and reason for the change in accounting principle and quantitative information about the effects of the accounting change on prior periods. This ASU is effective for fiscal years beginning after December 15, 2016, and for interim periods within those fiscal years. Earlier application is permitted as of the beginning of an interim or annual reporting period. The Company has elected to early adopt this ASU and consequently classified deferred income tax assets and liabilities as noncurrent beginning with the fiscal year ending February 27, 2016. |
Summary of Significant Accoun38
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Summary of Significant Accounting Policies | |
Schedule of revenues | Year Ended February 27, 2016 (52 Weeks) February 28, 2015 (52 Weeks) March 1, 2014 (52 Weeks) Retail Pharmacy segment: Pharmacy sales $ $ $ Front end sales Other revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Retail Pharmacy segment $ $ $ Pharmacy Services segment revenue — — Intersegment elimination ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total revenue $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of principal classes of products | Product Class Percentage of Sales Prescription drugs % Over-the-counter medications and personal care % Health and beauty aids % General merchandise and other % |
Schedule of impact of the Company's adoption of the ASU on the prior period consolidated balance sheet | As Previously Reported Adjustments As Revised Other assets $ $ ) $ Total assets ) Long-term debt, less current maturities ) Total liabilities ) Total liabilities and stockholders' equity ) |
Acquisition (Tables)
Acquisition (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Acquisition | |
Schedule of purchase price allocation | Preliminary purchase price Cash consideration $ Stock consideration ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Preliminary purchase price allocation Cash and cash equivalents $ Accounts receivable Inventories Prepaid expenses and other current assets ​ ​ ​ ​ ​ Total current assets Property and equipment Intangible assets(1) Goodwill Other assets ​ ​ ​ ​ ​ Total assets acquired ​ ​ ​ ​ ​ Accounts payable Reinsurance funds held Other current liabilities(2) ​ ​ ​ ​ ​ Total current liabilities Other long term liabilities(3) ​ ​ ​ ​ ​ Total liabilities assumed ​ ​ ​ ​ ​ Net assets acquired $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Intangible assets are recorded at estimated fair value, as determined by management based on available information which includes a preliminary valuation prepared by an independent third party. The fair values assigned to identifiable intangible assets were determined through the use of the income approach, specifically the relief from royalty and the multi-period excess earnings methods. The major assumptions used in arriving at the estimated identifiable intangible asset values included management's preliminary estimates of future cash flows, discounted at an appropriate rate of return which are based on the weighted average cost of capital for both the Company and other market participants, projected customer attrition rates, as well as applicable royalty rates for comparable assets. The useful lives for intangible assets were determined based upon the remaining useful economic lives of the intangible assets that are expected to contribute directly or indirectly to future cash flows. The estimated fair value of intangible assets and related useful lives as included in the preliminary purchase price allocation include: Estimated Fair Value Estimated Useful Life (In Years) Customer relationships $ CMS license Claims adjudication and other developed software Trademarks Backlog Trademarks Indefinite ​ ​ ​ ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (2) Other current liabilities includes $116,500 due to TPG under the terms of the Agreement, representing the amounts due to EnvisionRx from CMS, less corresponding amounts due to various reinsurance providers under certain reinsurance programs, for CMS activities that relate to the year ended December 31, 2014. This liability was satisfied with a payment to TPG on November 5, 2015. (3) Primarily relates to deferred tax liabilities. |
Schedule of estimated fair value of intangible assets and related useful lives as included in the preliminary purchase price allocation | Estimated Fair Value Estimated Useful Life (In Years) Customer relationships $ CMS license Claims adjudication and other developed software Trademarks Backlog Trademarks Indefinite ​ ​ ​ ​ ​ ​ ​ ​ Total $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of unaudited pro forma combined financial data | Year Ended February 27, 2016 (52 weeks) February 28, 2015 (52 weeks) Pro forma Pro forma Net revenues as reported $ $ EnvisionRx revenue, prior to the acquisition Less pre-acquisition intercompany revenue ) ) ​ ​ ​ ​ ​ ​ ​ ​ Pro forma combined revenues $ $ Net income as reported $ $ EnvisionRx net (loss) income before income taxes, prior to the acquisition ) Incremental interest expense on the 6.125% Notes issued on April 2, 2015 ) ) Incremental amortization resulting from fair value adjustments of the identifiable intangible assets ) ) Transaction costs incurred by both the Company and EnvisionRx Interest expense incurred by EnvisionRx Debt extinguishment charges incurred by EnvisionRx — Income tax expense relating to pro forma adjustments ) — ​ ​ ​ ​ ​ ​ ​ ​ Pro forma net income $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic income per share $ $ Diluted income per share $ $ |
Income Per Share (Tables)
Income Per Share (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Income Per Share | |
Schedule of calculation of basic and diluted income per share | Year Ended February 27, 2016 (52 Weeks) February 28, 2015 (52 Weeks) March 1, 2014 (52 Weeks) Numerator for income per share: Net income $ $ $ Accretion of redeemable preferred stock — — ) Cumulative preferred stock dividends — — ) Conversion of Series G and H preferred stock — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income attributable to common stockholders—basic $ $ $ Add back—interest on convertible notes — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income attributable to common stockholders—diluted $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominator: Basic weighted average shares Outstanding options and restricted shares, net Convertible notes — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted weighted average shares ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic income per share $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted income per share $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of antidilutive effect of potential common shares, excluded from computation of diluted income per share | Year Ended February 27, 2016 (52 Weeks) February 28, 2015 (52 Weeks) March 1, 2014 (52 Weeks) Stock options ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Lease Termination and Impairm41
Lease Termination and Impairment Charges (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Lease Termination and Impairment Charges | |
Schedule of amounts relating to lease termination and impairment charges | Year Ended February 27, 2016 February 28, 2015 March 1, 2014 (in thousands, except number of stores) Number Charge Number Charge Number Charge Active stores: Stores previously impaired(1) $ $ $ New, relocated and remodeled stores(2) Remaining stores not meeting the recoverability test(3) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total impairment charges—active stores Total impairment charges-closed facilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total impairment charges—all locations $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) These charges are related to stores that were impaired for the first time in prior periods. Most active stores, requiring an impairment charge, are fully impaired in the first period that they do not meet their asset recoverability test. However, we do often make capital additions to certain stores to improve their operating results or to meet geographical competition, which if later are deemed to be unrecoverable, will be impaired in future periods. Of this total, 351, 369 and 375 stores for fiscal years 2016, 2015 and 2014 respectively have been fully impaired. Also included in these charges are an insignificant number of stores, which were only partially impaired in prior years based on our analysis that supported a reduced net book value greater than zero, but now require additional charges. (2) These charges are related to new stores (open at least 3 years) and relocated stores (relocated in the last 2 years) and significant strategic remodels (remodeled in the last year) that did not meet their recoverability test during the current period. These stores have not met their original return on investment projections and have a historical loss of at least 2 years. Their future cash flow projections do not recover their current carrying value. Of this total, 3, 1 and 1 stores for fiscal years 2016, 2015 and 2014 respectively have been fully impaired. (3) These charges are related to the remaining active stores that did not meet the recoverability test during the current period. These stores have a historical loss of at least 2 years. Their future cash flow projections do not recover their current carrying value. Of this total, 27, 14 and 14 stores for fiscal years 2016, 2015 and 2014 respectively have been fully impaired. |
Schedule of fair value of long-lived assets for which an impairment assessment was performed and total losses | Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Values as of Impairment Date Total Charges February 27, 2016 Long-lived assets held and used $ — $ $ $ $ ) Long-lived assets held for sale — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ — $ $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Values as of Impairment Date Total Charges February 28, 2015 Long-lived assets held and used $ — $ $ $ $ ) Long-lived assets held for sale — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ — $ $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of closed store and distribution center charges related to new closures, changes in assumptions and interest accretion | Year Ended February 27, 2016 (52 Weeks) February 28, 2015 (52 Weeks) March 1, 2014 (52 Weeks) Balance—beginning of year $ $ $ Provision for present value of noncancellable lease payments of closed stores Changes in assumptions about future sublease income, terminations and change in interest rates ) Interest accretion Cash payments, net of sublease income ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance—end of year $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of revenue, operating expenses, and income before income taxes of stores | Year Ended February 27, 2016 February 28, 2015 March 1, 2014 Revenues $ $ $ Operating expenses Gain from sale of assets ) ) ) Other expenses (income) ) Income (loss) before income taxes ) Included in these stores' (loss) income before income taxes are: Depreciation and amortization Inventory liquidation charges |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Income Taxes | |
Schedule of provision for income tax (benefit) expense | Year Ended February 27, 2016 (52 Weeks) February 28, 2015 (52 Weeks) March 1, 2014 (52 Weeks) Current tax: Federal $ ) $ — $ — State ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax and other: Federal ) — State ) ) ) Tax expense recorded as an increase of additional paid-in-capital — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total income tax (benefit) expense $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of reconciliation of the expected statutory federal tax and the total income tax (benefit) expense | Year Ended February 27, 2016 (52 Weeks) February 28, 2015 (52 Weeks) March 1, 2014 (52 Weeks) Federal statutory rate % % % Nondeductible expenses State income taxes, net Decrease of previously recorded liabilities — ) ) Nondeductible compensation Acquisition Costs — — Release of indemnification asset — — Valuation allowance ) ) ) Other ) ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total income tax expense (benefit) % )% % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of significant components of deferred tax assets and liabilities | 2016 2015 Deferred tax assets: Accounts receivable $ $ Accrued expenses Liability for lease exit costs Pension, retirement and other benefits Long-lived assets Other Credits Net operating losses ​ ​ ​ ​ ​ ​ ​ ​ Total gross deferred tax assets Valuation allowance ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets Deferred tax liabilities: Outside basis difference — Inventory ​ ​ ​ ​ ​ ​ ​ ​ Total gross deferred tax liabilities ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax assets $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits | 2016 2015 2014 Unrecognized tax benefits $ $ $ Increases to prior year tax positions — Decreases to tax positions in prior periods ) ) ) Increases to current year tax positions — Settlements — ) — Lapse of statute of limitations — ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrecognized tax benefits balance $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Property, Plant and Equipment | |
Schedule of property, plant and equipment, including capital lease assets | 2016 2015 Land $ $ Buildings Leasehold improvements Equipment Software — Construction in progress ​ ​ ​ ​ ​ ​ ​ ​ Accumulated depreciation ) ) ​ ​ ​ ​ ​ ​ ​ ​ Property, plant and equipment, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Goodwill and Other Intangibles
Goodwill and Other Intangibles (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Goodwill and Other Intangibles | |
Summary of the changes in the carrying amount of goodwill | Retail Pharmacy Pharmacy Services Total Balance, March 1, 2014 $ — — — Acquisitions — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, February 28, 2015 $ $ — $ Acquisition (see Note 2. Acquisition) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, February 27, 2016 $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of the company's finite-lived and indefinitely-lived intangible assets | 2016 2015 Gross Carrying Amount Accumulated Amortization Net Remaining Weighted Average Amortization Period Gross Carrying Amount Accumulated Amortization Net Remaining Weighted Average Amortization Period Favorable leases and other $ $ ) $ 8 years $ $ ) $ 8 years Prescription files ) 3 years ) 3 years Customer relationships(a) ) 17 years — — — CMS license ) 25 years — — — Claims adjudication and other developed software ) 7 years — — — Trademarks ) 10 years — — — Backlog ) 3 years — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total finite $ $ ) $ $ ) $ Trademarks — Indefinite — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ) $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) —Amortized on an accelerated basis which is determined based on the remaining useful economic lives of the customer relationships that are expected to contribute directly or indirectly to future cash flows. |
Accrued Salaries, Wages and O45
Accrued Salaries, Wages and Other Current Liabilities (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Accrued Salaries, Wages and Other Current Liabilities | |
Schedule of accrued salaries, wages and other current liabilities | 2016 2015 Accrued wages, benefits and other personnel costs $ $ Accrued interest Accrued sales and other taxes payable Accrued store expense Accrued reinsurance — Other ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Indebtedness and Credit Agree46
Indebtedness and Credit Agreement (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Indebtedness and Credit Agreement | |
Summary of indebtedness and lease financing obligations | 2016 2015 Secured Debt: Senior secured revolving credit facility due January 2020 ($2,100,000 and $1,725,000 face value less unamortized debt issuance costs of $33,903 and $42,782) $ $ 8.00% senior secured notes (senior lien) due August 2020 ($650,000 face value less unamortized debt issuance costs of $7,773) — Tranche 1 Term Loan (second lien) due August 2020 ($470,000 face value less unamortized debt issuance costs of $5,414 and $6,638) Tranche 2 Term Loan (second lien) due June 2021 ($500,000 face value less unamortized debt issuance costs of $3,007 and $3,572) Other secured ​ ​ ​ ​ ​ ​ ​ ​ Guaranteed Unsecured Debt: 9.25% senior notes due March 2020 ($902,000 face value plus unamortized premium of $2,743 and $3,415 and less unamortized debt issuance costs of $10,180 and $12,783) 6.75% senior notes due June 2021 ($810,000 face value less unamortized debt issuance costs of $7,872 and $9,355) 6.125% senior notes due April 2023 ($1,800,000 face value less unamortized debt issuance costs of $30,343) — ​ ​ ​ ​ ​ ​ ​ ​ Unguaranteed Unsecured Debt: 8.5% convertible notes due May 2015 ($64,168 face value less unamortized debt issuance costs of $63) — 7.7% notes due February 2027 ($295,000 face value less unamortized debt issuance costs of $1,794 and $1,959) 6.875% fixed-rate senior notes due December 2028 ($128,000 face value less unamortized debt issuance costs of $837 and $902) ​ ​ ​ ​ ​ ​ ​ ​ Lease financing obligations ​ ​ ​ ​ ​ ​ ​ ​ Total debt Current maturities of long-term debt and lease financing obligations ) ) ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt and lease financing obligations, less current maturities $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Leases | |
Schedule of net book values of assets under capital leases and sale-leasebacks accounted for under the financing method | 2016 2015 Land $ $ Buildings Leasehold improvements Equipment Accumulated depreciation ) ) ​ ​ ​ ​ ​ ​ ​ ​ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of lease finance obligations | 2016 2015 Obligations under financing leases $ $ Sale-leaseback obligations Less current obligation ) ) ​ ​ ​ ​ ​ ​ ​ ​ Long-term lease finance obligations $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of minimum lease payments for all properties under a lease agreement | Fiscal year Lease Financing Obligations Operating Leases 2017 $ $ 2018 2019 2020 2021 Later years ​ ​ ​ ​ ​ ​ ​ ​ Total minimum lease payments $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amount representing interest ) ​ ​ ​ ​ ​ ​ ​ ​ Present value of minimum lease payments $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Stock Option and Stock Award Pl
Stock Option and Stock Award Plans (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Stock Options and Stock Award Plans | |
Schedule of weighted average assumptions used for options granted | 2016 2015 2014 Expected stock price volatility(1) % % % Expected dividend yield(2) % % % Risk-free interest rate(3) % % % Expected option life(4) 5.5 years 5.5 years 5.5 years (1) The expected volatility is based on the historical volatility of the stock price over the most recent period equal to expected life of the option. (2) The dividend rate that will be paid out on the underlying shares during the expected term of the options. The Company does not currently pay dividends on its common stock, as such, the dividend rate is assumed to be zero percent. (3) The risk free interest rate is equal to the rate available on United States Treasury zero-coupon issues as of the grant date of the option with a remaining term equal to the expected term. (4) The period of time for which the option is expected to be outstanding. The Company analyzed historical exercise behavior. |
Schedule of stock option transactions | Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at March 2, 2013 $ Granted Exercised ) Cancelled ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at March 1, 2014 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted Exercised ) Cancelled ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at February 28, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted Exercised ) Cancelled ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at February 27, 2016 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Vested or expected to vest at February 27, 2016 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable at February 27, 2016 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of restricted stock transactions | Shares Weighted Average Grant Date Fair Value Balance at March 2, 2013 $ Granted Vested ) Cancelled ) ​ ​ ​ ​ ​ ​ ​ ​ Balance at March 1, 2014 $ ​ ​ ​ ​ ​ ​ ​ ​ Granted Vested ) Cancelled ) ​ ​ ​ ​ ​ ​ ​ ​ Balance at February 28, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ Granted Vested ) Cancelled ) ​ ​ ​ ​ ​ ​ ​ ​ Balance at February 27, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Reclassifications from Accumu49
Reclassifications from Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
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 | February 27, 2016 (52 Weeks) February 28, 2015 (52 Weeks) March 1, 2014 (52 Weeks) Defined benefit pension plans Accumulated other comprehensive loss Defined benefit pension plans Accumulated other comprehensive loss Defined benefit pension plans Accumulated other comprehensive loss Accumulated other comprehensive loss Balance—beginning of period $ ) $ ) $ ) $ ) $ ) $ ) Other comprehensive (loss) income before reclassifications, net of $3,162, $7,506, and $0 tax benefit ) ) ) ) Amounts reclassified from accumulated other comprehensive loss to net income, net of $1,481, $1,464, and $0 tax expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance—end of period $ ) $ ) $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of effects on net income of significant amounts classified out of each component of accumulated other comprehensive loss | Fiscal Years Ended February 27, 2016, February 28, 2015 and March 1, 2014 Amount reclassified from accumulated other comprehensive loss Details about accumulated other comprehensive loss components February 27, 2016 (52 Weeks) February 28, 2015 (52 Weeks) March 1, 2014 (52 Weeks) Affected line item in the consolidated statements of operations Defined benefit pension plans Amortization of unrecognized prior service cost(a) $ ) $ ) $ ) Selling, general and administrative expenses Amortization of unrecognized net loss(a) ) ) ) Selling, general and administrative expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) ) ) Total before income tax expense — Income tax benefit(b) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ ) $ ) $ ) Net of income tax benefit ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a)—See Note 18, Retirement Plans for additional details. (b)—Income tax expense is $0 for fiscal 2014 due to the valuation allowance. See Note 7, Income Taxes for additional details. |
Retirement Plans (Tables)
Retirement Plans (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Retirement Plans | |
Schedule of net periodic pension expense and other changes recognized in other comprehensive income for the defined benefit pension plans and the nonqualified executive retirement plan | Defined Benefit Pension Plan Nonqualified Executive Retirement Plan 2016 2015 2014 2016 2015 2014 Service cost $ $ $ $ — $ — $ — Interest cost Expected return on plan assets ) ) ) — — — Amortization of unrecognized prior service cost — — — Amortization of unrecognized net loss (gain) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net pension expense $ $ $ $ ) $ $ Other changes recognized in other comprehensive loss: Unrecognized net (gain) loss arising during period $ $ $ ) $ ) $ $ ) Prior service cost arising during period — — — — — — Amortization of unrecognized prior service costs ) ) ) — — — Amortization of unrecognized net (loss) gain ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net amount recognized in other comprehensive loss ) — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net amount recognized in pension expense and other comprehensive loss $ $ $ ) $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of reconciliation for both benefit obligation and plan assets of defined benefit plans, as well as funded status and amounts recognized in balance sheet | Defined Benefit Pension Plan Nonqualified Executive Retirement Plan 2016 2015 2016 2015 Change in benefit obligations: Benefit obligation at end of prior year $ $ $ $ Service cost — — Interest cost Distributions ) ) ) ) Change due to change in assumptions — — — — Actuarial (gain) loss ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Benefit obligation at end of year $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in plan assets: Fair value of plan assets at beginning of year $ $ $ — $ — Employer contributions — Actual return on plan assets ) — — Distributions (including expenses paid by the plan) ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value of plan assets at end of year $ $ $ — $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Funded status $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net amount recognized $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts recognized in consolidated balance sheets consisted of: Prepaid pension cost $ — $ — $ — $ — Accrued pension liability ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net amount recognized $ ) $ ) $ ) $ ) Amounts recognized in accumulated other comprehensive loss consist of: Net actuarial loss $ ) $ ) $ — $ — Prior service cost — ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amount recognized $ ) $ ) $ — $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of significant actuarial assumptions used for all defined benefit plans to determine benefit obligation | Defined Benefit Pension Plan Nonqualified Executive Retirement Plan 2016 2015 2014 2016 2015 2014 Discount rate % % % % % % Rate of increase in future compensation levels N/A N/A % N/A N/A N/A Expected long-term rate of return on plan assets % % % N/A N/A N/A |
Schedule of weighted average assumptions used to determine net benefit cost | Defined Benefit Pension Plan Nonqualified Executive Retirement Plan 2016 2015 2014 2016 2015 2014 Discount rate % % % % % % Rate of increase in future compensation levels N/A N/A % N/A N/A N/A Expected long-term rate of return on plan assets % % % N/A N/A N/A |
Schedule of pension plan asset allocations by asset category | February 27, 2016 February 28, 2015 Equity securities % % Fixed income securities % % ​ ​ ​ ​ ​ ​ ​ ​ Total % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of target allocation of plan assets | Category Target Allocation U.S. equities % International equities % U.S. fixed income % ​ ​ ​ ​ ​ Total % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of the plan's investments measured at fair value on a recurring basis | Fair Value Measurements at February 27, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Equity Securities International equity $ — $ $ — $ Large Cap — — Small-Mid Cap — — Fixed Income Long Term Credit Bond Index — — 20+ Year Treasury STRIPS — — Intermediate Fixed Income — — Other types of investments Short Term Investments — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ — $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements at February 28, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Equity Securities International equity $ — $ $ — $ Large Cap — — Small-Mid Cap — — Fixed Income Long Term Credit Bond Index — — Intermediate Fixed Income — — Other types of investments Short Term Investments — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ — $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of future benefit payments expected to be paid | Fiscal Year Defined Benefit Pension Plan Nonqualified Executive Retirement Plan 2017 $ $ 2018 2019 2020 2021 2022 - 2026 ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Multiemployer Plans that Prov51
Multiemployer Plans that Provide Pension Benefits (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Multiemployer Plans that Provide Pension Benefits | |
Schedule of multiemployer defined benefit pension plans | Contributions of the Company Expiration Date of Collective- Bargaining Agreement Pension Protection Act Zone Status FIP/ RP Status Pending/ Implemented Surcharge Imposed Minimum Funding Requirements Pension EIN/Pension Plan Number 2016 2015 2016 2015 2014 1199 SEIU Health Care Employees Pension Fund 13-3604862-001 Green—12/31/2014 Green—12/31/2013 No $ $ $ No 4/18/2015 Contribution rate of 11.25% of gross wages earned per associate through 12/31/2014. Contribution rate of 10.22% of gross wages earned per associate beginning 01/01/2015. Southern California United Food and Commercial Workers Unions and Drug Employers Pension Fund 51-6029925-001 Red—12/31/2015 Red—12/31/2014 Implemented No 7/14/2018 Subsequent to 01/01/2015 contributions of $1.328 per hour worked for pharmacists and $0.602 per hour worked for non pharmacists. Prior to 01/01/2015 contributions of $1.242 per hour worked for pharmacists and $0.563 per hour worked for non pharmacists. UFCW Pharmacists, Clerks and Drug Employers Pension Trust (formerly the Northern California Pharmacists, Clerks and Drug Employers Pension Plan) 94-2518312-001 Green—12/31/2015 Green—12/31/2014 No No 7/13/2019 Effective 09/01/2014, contribution rate frozen at $0.55 per hour worked for associates. Prior to 9/01/2014, contribution rate of $0.57 per hour worked for associates. United Food and Commercial Workers Union-Employer Pension Fund 34-6665155-001 Red—9/30/2015 Red—9/30/2014 Implemented No 12/31/2017 Contribution rate of $1.49 per hour worked. Effective 02/02/2015 contribution rate of $1.62 per hour worked. United Food and Commercial Workers Union Local 880—Mercantile Employers Joint Pension Fund 51-6031766-001 Yellow—9/30/2015 Yellow—9/30/2014 Implemented No 12/31/2017 Contribution rate of $1.52 per hour worked. Effective 10/01/2014 contribution rate of $1.73 per hour worked. Effective 01/01/2015 contribution rate of $1.61 per hour worked. Other Funds ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of year contributions to plan that exceeded more than 5 percent of the total contributions | Pension Fund Year Contributions to Plan Exceeded More Than 5 Percent of Total Contributions (as of the Plan's Year-End) UFCW Pharmacists, Clerks and Drug Employers Pension Trust 12/31/2014 and 12/31/2013 Southern California United Food and Commercial Workers Unions and Drug Employers Pension Fund 12/31/2014 and 12/31/2013 United Food & Commercial Workers Union- Employer Pension Fund 9/30/2014 and 9/30/2013 United Food & Commercial Workers Union Local 880—Mercantile Employers Joint Pension Fund 9/30/2014 and 9/30/2013 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Segment Reporting | |
Schedule of reconciliation of the company's business segments to the condensed consolidated financial statements | Retail Pharmacy Pharmacy Services Intersegment Eliminations(1) Consolidated February 27, 2016: Revenues $ $ $ ) $ Gross Profit — Adjusted EBITDA(2) — February 28, 2015: Revenues $ $ — $ — $ Gross Profit — — Adjusted EBITDA(2) — — March 1, 2014: Revenues $ $ — $ — $ Gross Profit — — Adjusted EBITDA(2) — — (1) Intersegment eliminations include intersegment revenues and corresponding cost of revenues that occur when Pharmacy Services segment customers use Retail Pharmacy segment stores to purchase covered products. When this occurs, both the Retail Pharmacy and Pharmacy Services segments record the revenue on a stand-alone basis. (2) See "Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per Diluted Share and Other Non-GAAP Measures" in MD&A for additional details. |
Schedule of reconciliation of net income to Adjusted EBITDA | February 27, 2016 (52 weeks) February 28, 2015 (52 weeks) March 1, 2014 (52 weeks) Net income $ $ $ Interest expense Income tax expense Income tax valuation allowance reduction ) ) ) Depreciation and amortization expense LIFO charge (credit) ) Lease termination and impairment charges Loss on debt retirements, net Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted EBITDA $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of reconciliation of balance sheet information for the Company's reportable segments | Retail Pharmacy Pharmacy Services Eliminations(2) Consolidated February 27, 2016: Total Assets $ $ $ ) $ Goodwill — Additions to property and equipment and intangible assets — February 28, 2015: Total Assets $ $ — $ — $ Goodwill — — Additions to property and equipment and intangible assets — — (2) Intersegment eliminations include netting of the Pharmacy Services segment long-term deferred tax liability of $116,027 against the Retail Pharmacy segment long-term deferred tax asset for consolidation purposes in accordance with ASC 740, and intersegment accounts receivable of $23,697, as of February 27, 2016, that represents amounts owed from the Pharmacy Services segment to the Retail Pharmacy segment that are created when Pharmacy Services segment customers use Retail Pharmacy segment stores to purchase covered products. |
Supplementary Cash Flow Data (T
Supplementary Cash Flow Data (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Supplementary Cash Flow Data | |
Schedule of supplementary cash flow data | Year Ended February 27, 2016 February 28, 2015 March 1, 2014 Cash paid for interest (net of capitalized amounts of $196, $145 and $197) $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash payments for income taxes, net $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equipment financed under capital leases $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equipment received for noncash consideration $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Preferred stock dividends paid in additional shares $ — $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accrued capital expenditures $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross borrowings from revolver $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross repayments to revolver $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Guarantor and Non-Guarantor C54
Guarantor and Non-Guarantor Condensed Consolidating Financial Information (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Guarantor and Non-Guarantor Condensed Consolidating Financial Information | |
Schedule of condensed consolidating balance sheet | Rite Aid Corporation Condensed Consolidating Balance Sheet February 27, 2016 Rite Aid Corporation (Parent Company Only) Subsidiary Guarantors Non- Guarantor Subsidiaries Eliminations Consolidated (in thousands) ASSETS Current assets: Cash and cash equivalents $ — $ $ $ — $ Accounts receivable, net — — Intercompany receivable — — )(a) — Inventories, net of LIFO reserve of $0, $1,006,396, $0, $0, and $1,006,396 — — — Prepaid expenses and other current assets — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current assets — ) Property, plant and equipment, net — — — Goodwill — — — Other intangibles, net — — Deferred tax assets — — — Investment in subsidiaries — )(b) — Intercompany receivable — — )(a) — Other assets — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt and lease financing obligations $ $ $ — $ — $ Accounts payable — — Intercompany payable — — )(a) — Accrued salaries, wages and other current liabilities — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current liabilities ) Long-term debt, less current maturities — — — Lease financing obligations, less current maturities — — — Intercompany payable — — )(a) — Other noncurrent liabilities — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities ) Commitments and contingencies — — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total stockholders' equity ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities and stockholders' equity $ $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) Elimination of intercompany accounts receivable and accounts payable amounts. (b) Elimination of investments in consolidated subsidiaries. |
Schedule of consolidated statements of operations | Rite Aid Corporation Condensed Consolidating Statement of Operations For the Year Ended February 27, 2016 Rite Aid Corporation (Parent Company Only) Subsidiary Guarantors Non- Guarantor Subsidiaries Eliminations Consolidated (in thousands) Revenues $ — $ $ $ )(a) $ Costs and expenses: Cost of revenues — )(a) Selling, general and administrative expenses — )(a) Lease termination and impairment expenses — — — Interest expense — Loss on debt retirement, net — — — Loss on sale of assets, net — — — Equity in earnings of subsidiaries, net of tax ) — (b) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (loss) before income taxes ) ) Income tax expense (benefit) — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) $ $ $ ) $ ) $ Total other comprehensive (loss) income ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comprehensive income (loss) $ $ $ ) $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) Elimination of intercompany revenues and expenses. (b) Elimination of equity in earnings of subsidiaries. |
Schedule of condensed consolidating statement of cash flows | Rite Aid Corporation Condensed Consolidating Statement of Cash Flows For the Year Ended February 27, 2016 Rite Aid Corporation (Parent Company Only) Subsidiary Guarantors Non- Guarantor Subsidiaries Eliminations Consolidated (in thousands) Operating activities: Net cash (used in) provided by operating activities $ ) $ $ ) $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Investing activities: Payments for property, plant and equipment — ) — — ) Intangible assets acquired — ) — — ) Acquisition of businesses, net of cash acquired ) — — — ) Intercompany activity ) ) — — Proceeds from sale-leaseback transaction — — — Proceeds from dispositions of assets and investments — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash (used in) provided by investing activities ) ) — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financing activities: Proceeds from issuance of long-term debt — — — Net proceeds from revolver — — — Principal payments on long-term debt ) ) — — ) Change in zero balance cash accounts — ) — — ) Net proceeds from issuance of common stock — — — Financing fees paid for early debt redemption ) — — — ) Excess tax benefit on stock options and restricted stock — — — Deferred financing costs paid ) — — — ) Intercompany activity ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) financing activities ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Decrease) increase in cash and cash equivalents — ) — Cash and cash equivalents, beginning of period — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents, end of period $ — $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Interim Financial Results (Un55
Interim Financial Results (Unaudited) (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Interim Financial Results (Unaudited) | |
Schedule of interim financial results (unaudited) | Fiscal Year 2016 First Quarter Second Quarter Third Quarter Fourth Quarter Year Revenues $ $ $ $ $ Cost of revenues Selling, general and administrative expenses Lease termination and impairment charges Interest expense Loss on debt retirements, net — — — Loss (gain) on sale of assets, net ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes Income tax expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic income per share(1) $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted income per share(1) $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year 2015 First Quarter Second Quarter Third Quarter Fourth Quarter Year Revenues $ $ $ $ $ Cost of revenues Selling, general and administrative expenses Lease termination and impairment charges Interest expense Loss on debt retirements, net — — — Gain on sale of assets, net ) ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes Income tax expense (benefit) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic income per share(1) $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted income per share(1) $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Income per share amounts for each quarter may not necessarily total to the yearly income per share due to the weighting of shares outstanding on a quarterly and year-to-date basis. |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Feb. 27, 2016 | |
Financial Instruments | |
Schedule of carrying amounts and fair values of financial instruments | 2016 2015 Carrying Amount Fair Value Carrying Amount Fair Value Variable rate indebtedness $ $ $ $ Fixed rate indebtedness $ $ $ $ |
Summary of Significant Accoun57
Summary of Significant Accounting Policies - Description of Business (Details) $ in Thousands | Jun. 24, 2015segment | Jun. 23, 2015segment | Feb. 27, 2016USD ($)store | Nov. 28, 2015USD ($) | Aug. 29, 2015USD ($) | May. 30, 2015USD ($) | Feb. 28, 2015USD ($) | Nov. 29, 2014USD ($) | Aug. 30, 2014USD ($) | May. 31, 2014USD ($) | Feb. 27, 2016USD ($)segmentstore | Feb. 28, 2015USD ($) | Mar. 01, 2014USD ($) |
Description of Business | |||||||||||||
Ownership interest (as a percent) | 100.00% | 100.00% | |||||||||||
Number of reportable segments | segment | 2 | 1 | 2 | ||||||||||
Numbers of stores in operation | store | 4,561 | 4,561 | |||||||||||
Revenues | $ 8,270,136 | $ 8,154,184 | $ 7,664,776 | $ 6,647,561 | $ 6,847,929 | $ 6,692,333 | $ 6,522,584 | $ 6,465,531 | $ 30,736,657 | $ 26,528,377 | $ 25,526,413 | ||
Intersegment elimination | |||||||||||||
Description of Business | |||||||||||||
Revenues | (232,787) | ||||||||||||
Retail Pharmacy | |||||||||||||
Description of Business | |||||||||||||
Pharmacy sales | 18,442,557 | 18,114,768 | 17,239,436 | ||||||||||
Front end sales | 8,238,450 | 8,232,256 | 8,168,922 | ||||||||||
Other revenue | 184,924 | 181,353 | 118,055 | ||||||||||
Revenues | 26,865,931 | $ 26,528,377 | $ 25,526,413 | ||||||||||
Pharmacy Services | |||||||||||||
Description of Business | |||||||||||||
Revenues | $ 4,103,513 |
Summary of Significant Accoun58
Summary of Significant Accounting Policies - Sales by Product (Details) | 12 Months Ended | ||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Fiscal Year | |||
Length of reporting period | 364 days | 364 days | 364 days |
Prescription drugs | Pharmacy sales | Retail Pharmacy | |||
Product Class | |||
Percentage of sales | 69.10% | 68.80% | 67.90% |
Over-the-counter medications and personal care | Pharmacy sales | Retail Pharmacy | |||
Product Class | |||
Percentage of sales | 9.80% | ||
Health and beauty aids | Pharmacy sales | Retail Pharmacy | |||
Product Class | |||
Percentage of sales | 4.80% | ||
General merchandise and other | Pharmacy sales | Retail Pharmacy | |||
Product Class | |||
Percentage of sales | 16.30% |
Summary of Significant Accoun59
Summary of Significant Accounting Policies - Prescription Sales Covered by Third Party Payors (Details) | 12 Months Ended |
Feb. 27, 2016 | |
Allowance for Uncollectible Receivables | |
Percentage of prescription sales made to customers who are covered by third-party payors | 97.80% |
Summary of Significant Accoun60
Summary of Significant Accounting Policies - Property, Plant and Equipment (Details) $ in Thousands | Jun. 24, 2015 | Feb. 27, 2016USD ($)Point$ / Point | Feb. 28, 2015USD ($) | Mar. 01, 2014USD ($) |
Intangible Assets | ||||
Estimated Useful Life | 10 years | |||
Estimated useful life of purchased prescription files acquired in other than business combinations | 5 years | |||
Deferred Financing Costs | ||||
Amortization expenses of deferred financing costs | $ 19,545 | $ 15,301 | $ 15,259 | |
Advertising | ||||
Advertising expenses, net of vendor advertising allowances | 307,817 | 318,157 | 322,843 | |
American Express Travel Related Services Company, Inc. | ||||
Revenue Recognition | ||||
Deferred revenue | $ 39,253 | |||
Value of each point earned by customer based on qualifying purchases at participating retailers under the program Plenti | $ / Point | 0.01 | |||
Trade names | ||||
Intangible Assets | ||||
Finite-lived intangible assets amortization period | 10 years | |||
Customer relationships | ||||
Intangible Assets | ||||
Finite-lived intangible assets amortization period | 17 years | |||
Customer relationships | EnvisionRx | ||||
Intangible Assets | ||||
Estimated Useful Life | 17 years | |||
CMS license | ||||
Intangible Assets | ||||
Finite-lived intangible assets amortization period | 25 years | |||
CMS license | EnvisionRx | ||||
Intangible Assets | ||||
Estimated Useful Life | 25 years | |||
Minimum | ||||
Insurance | ||||
Workers compensation occurrences | $ 1,000 | |||
General liability occurrences | $ 3,000 | |||
Minimum | American Express Travel Related Services Company, Inc. | ||||
Revenue Recognition | ||||
Period for expiration of earned points by customer based on qualifying purchases at participating retailers if not redeemed under the program Plenti (in years) | 2 years | |||
Minimum | Customer relationships | EnvisionRx | ||||
Intangible Assets | ||||
Finite-lived intangible assets amortization period | 10 years | |||
Maximum | Customer relationships | EnvisionRx | ||||
Intangible Assets | ||||
Finite-lived intangible assets amortization period | 20 years | |||
Buildings | Minimum | ||||
Property, Plant and Equipment | ||||
Useful life | 30 years | |||
Buildings | Maximum | ||||
Property, Plant and Equipment | ||||
Useful life | 45 years | |||
Equipment | Minimum | ||||
Property, Plant and Equipment | ||||
Useful life | 3 years | |||
Equipment | Maximum | ||||
Property, Plant and Equipment | ||||
Useful life | 15 years | |||
Internal-use software | ||||
Property, Plant and Equipment | ||||
Capitalized costs | $ 7,680 | 7,550 | $ 6,547 | |
Retail Pharmacy | ||||
Revenue Recognition | ||||
Number of points awarded for each dollar spent towards front end merchandise | Point | 1 | |||
Number of points awarded for each qualifying prescription | Point | 25 | |||
Accumulated number of points in a calendar year to achieve the "Gold" tier | Point | 1,000 | |||
Percentage discount on qualifying purchases of front end merchandise on achieving "Gold" tier | 20.00% | |||
Deferred revenue | $ 110,208 | 111,208 | ||
Deferred revenue included in other current liabilities | 88,470 | 89,657 | ||
Deferred revenue included in noncurrent liabilities | $ 21,738 | $ 21,551 | ||
Pharmacy Services | ||||
Vendor Rebates and Allowances and Purchase Discounts | ||||
Period for rebates are dispensed to manufacturers | 30 days |
Summary of Significant Accoun61
Summary of Significant Accounting Policies - Significant Concentrations (Details) $ in Thousands | Feb. 17, 2014 | Feb. 27, 2016USD ($)derivative | Feb. 28, 2015derivative | Mar. 01, 2014 |
Derivatives | ||||
Number of interest rate swap arrangements or other derivatives held | derivative | 0 | 0 | ||
Retail Pharmacy | Pharmacy sales | Customers | Top five third party payors | ||||
Significant Concentrations | ||||
Percentage of concentration risk | 70.40% | |||
Retail Pharmacy | Pharmacy sales | Customers | Largest third party payor | Express Scripts | ||||
Significant Concentrations | ||||
Percentage of concentration risk | 25.30% | 27.80% | 31.60% | |
Retail Pharmacy | Pharmacy sales | Customers | Medicaid agencies and related managed care Medicaid payors | ||||
Significant Concentrations | ||||
Percentage of concentration risk | 19.90% | |||
Retail Pharmacy | Pharmacy sales | Customers | Largest Medicaid agency | ||||
Significant Concentrations | ||||
Percentage of concentration risk | 1.50% | |||
Retail Pharmacy | Pharmacy sales | Customers | Medicare Part D | ||||
Significant Concentrations | ||||
Percentage of concentration risk | 31.90% | |||
Retail Pharmacy | Purchases | Suppliers | McKesson Corp. | ||||
Significant Concentrations | ||||
Percentage of concentration risk | 97.50% | |||
Period for Purchasing and Delivery Arrangement | 5 years | |||
Pharmacy Services | Medicare Part D | ||||
Significant Concentrations | ||||
Net revenues | $ | $ 162,620 | |||
Percentage of revenues | 0.50% | |||
Pharmacy Services | Medicare Part D | Swiss Re | ||||
Significant Concentrations | ||||
Percentage of revenues | 50.00% | |||
Percentage of cost of revenue | 50.00% |
Summary of Significant Accoun62
Summary of Significant Accounting Policies - New Accounting Pronouncements (Details) - USD ($) $ in Thousands | Feb. 27, 2016 | Feb. 28, 2015 |
New accounting pronouncements | ||
Other assets | $ 213,890 | $ 200,345 |
Total Assets | 11,277,010 | 8,777,425 |
Long-term debt, less current maturities | 6,914,393 | 5,397,588 |
Total liabilities | 10,695,582 | 8,720,369 |
Total liabilities and stockholders' equity | $ 11,277,010 | 8,777,425 |
As Previously Reported | ||
New accounting pronouncements | ||
Other assets | 286,172 | |
Total Assets | 8,863,252 | |
Long-term debt, less current maturities | 5,483,415 | |
Total liabilities | 8,806,196 | |
Total liabilities and stockholders' equity | 8,863,252 | |
Adjustments | ||
New accounting pronouncements | ||
Other assets | (85,827) | |
Total Assets | (85,827) | |
Long-term debt, less current maturities | (85,827) | |
Total liabilities | (85,827) | |
Total liabilities and stockholders' equity | (85,827) | |
Accounting Standards Update 2015-03 | Impact of Adoption of ASU | ||
New accounting pronouncements | ||
Noncurrent assets | (85,827) | |
Long-term debt, less current maturities | $ (85,827) |
Acquisition (Details)
Acquisition (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 25, 2015 | Jun. 24, 2015 | Feb. 27, 2016 | Nov. 28, 2015 | Aug. 29, 2015 | May. 30, 2015 | Feb. 28, 2015 | Nov. 29, 2014 | Aug. 30, 2014 | May. 31, 2014 | Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | Apr. 02, 2015 |
Preliminary purchase price | ||||||||||||||
Cash consideration | $ 116,500 | |||||||||||||
Preliminary purchase price allocation | ||||||||||||||
Goodwill | $ 1,713,475 | $ 76,124 | $ 1,713,475 | $ 76,124 | ||||||||||
Estimated Useful Life | 10 years | |||||||||||||
Reduction in amortization expense | (4,739) | |||||||||||||
Acquisition costs | $ 27,402 | 15,442 | ||||||||||||
Unaudited pro forma combined financial data | ||||||||||||||
Bridge loan commitment fees incurred with the Acquisition by both the Company and EnvisionRx | 15,375 | |||||||||||||
Net revenues | 8,270,136 | $ 8,154,184 | $ 7,664,776 | $ 6,647,561 | 6,847,929 | $ 6,692,333 | $ 6,522,584 | $ 6,465,531 | 30,736,657 | 26,528,377 | $ 25,526,413 | |||
Less pre-acquisition intercompany revenue | (103,363) | (272,530) | ||||||||||||
Pro forma combined revenues | 32,368,929 | 30,528,863 | ||||||||||||
Income (loss) before income taxes | 101,184 | 108,011 | 37,932 | 31,277 | 119,067 | 106,717 | 147,709 | 53,327 | 278,404 | 426,820 | 250,218 | |||
Net income | 65,617 | $ 59,543 | 21,469 | $ 18,836 | 1,835,032 | 104,846 | $ 127,849 | $ 41,446 | 165,465 | 2,109,173 | 249,414 | |||
Incremental interest expense on the 6.125% Notes issued on April 2, 2015 | (11,097) | (115,407) | ||||||||||||
Incremental amortization resulting from fair value adjustments of the identifiable intangible assets | (14,297) | (48,586) | ||||||||||||
Transaction costs incurred by both the Company and EnvisionRx | 56,194 | 16,199 | ||||||||||||
Debt extinguishment charges incurred by EnvisionRx | $ (33,205) | $ (18,512) | (33,205) | (18,512) | $ (62,443) | |||||||||
Income tax benefit (expense) relating to pro forma adjustments | (15,866) | |||||||||||||
Pro forma net income | $ 188,677 | $ 2,032,294 | ||||||||||||
Basic income per share | $ 0.18 | $ 2.03 | ||||||||||||
Diluted income per share | $ 0.18 | $ 1.95 | ||||||||||||
Pharmacy Services | ||||||||||||||
Preliminary purchase price allocation | ||||||||||||||
Goodwill | $ 1,637,351 | 1,637,351 | $ 1,637,351 | |||||||||||
Amount of goodwill deductible for tax purpose | $ 1,360,156 | |||||||||||||
Unaudited pro forma combined financial data | ||||||||||||||
Net revenues | 4,103,513 | |||||||||||||
6.125% senior notes due 2023 | ||||||||||||||
Acquisitions | ||||||||||||||
Principal amount of debt | $ 1,800,000 | $ 1,800,000 | $ 1,800,000 | $ 1,800,000 | ||||||||||
Debt instrument, stated interest rate (as a percent) | 6.125% | 6.125% | 6.125% | 6.125% | ||||||||||
EnvisionRx | ||||||||||||||
Acquisitions | ||||||||||||||
Ownership interest (as a percent) | 100.00% | |||||||||||||
Stock consideration (in shares) | 27,754 | |||||||||||||
Share price | $ 8.68 | |||||||||||||
Preliminary purchase price | ||||||||||||||
Cash consideration | $ 1,882,211 | |||||||||||||
Stock consideration | 240,907 | |||||||||||||
Total | 2,123,118 | |||||||||||||
Preliminary purchase price allocation | ||||||||||||||
Cash and cash equivalents | 103,834 | |||||||||||||
Accounts receivable | 896,473 | |||||||||||||
Inventories | 7,276 | |||||||||||||
Prepaid expenses and other current assets | 13,386 | |||||||||||||
Total current assets | 1,020,969 | |||||||||||||
Property and equipment | 13,196 | |||||||||||||
Intangible assets(1) | 646,600 | |||||||||||||
Goodwill | 1,637,351 | |||||||||||||
Other assets | 7,219 | |||||||||||||
Total assets acquired | 3,325,335 | |||||||||||||
Accounts payable | 491,672 | |||||||||||||
Reinsurance funds held | 381,225 | |||||||||||||
Other current liabilities(2) | 216,937 | |||||||||||||
Total current liabilities | 1,089,834 | |||||||||||||
Other long term liabilities(3) | 112,383 | |||||||||||||
Total liabilities assumed | 1,202,217 | |||||||||||||
Net assets acquired | 2,123,118 | |||||||||||||
Estimated Fair Value of Finite lived intangible assets | 646,600 | |||||||||||||
Change in goodwill resulting from changes to the preliminary purchase price allocation | $ 158,278 | |||||||||||||
Reduction in intangibles | $ (178,500) | |||||||||||||
EnvisionRx | Trademarks | ||||||||||||||
Preliminary purchase price allocation | ||||||||||||||
Estimated Fair Value of Finite lived intangible assets | 33,500 | |||||||||||||
EnvisionRx | Customer relationships | ||||||||||||||
Preliminary purchase price allocation | ||||||||||||||
Estimated Fair Value of Finite lived intangible assets | $ 465,000 | |||||||||||||
Estimated Useful Life | 17 years | |||||||||||||
EnvisionRx | CMS license | ||||||||||||||
Preliminary purchase price allocation | ||||||||||||||
Estimated Fair Value of Finite lived intangible assets | $ 57,500 | |||||||||||||
Estimated Useful Life | 25 years | |||||||||||||
EnvisionRx | Claims adjudication and other developed software | ||||||||||||||
Preliminary purchase price allocation | ||||||||||||||
Estimated Fair Value of Finite lived intangible assets | $ 59,000 | |||||||||||||
Estimated Useful Life | 7 years | |||||||||||||
EnvisionRx | Trademarks | ||||||||||||||
Preliminary purchase price allocation | ||||||||||||||
Estimated Fair Value of Finite lived intangible assets | $ 20,100 | |||||||||||||
Estimated Useful Life | 10 years | |||||||||||||
EnvisionRx | Backlog | ||||||||||||||
Preliminary purchase price allocation | ||||||||||||||
Estimated Fair Value of Finite lived intangible assets | $ 11,500 | |||||||||||||
Estimated Useful Life | 3 years | |||||||||||||
EnvisionRx | 6.125% senior notes due 2023 | ||||||||||||||
Acquisitions | ||||||||||||||
Principal amount of debt | $ 1,800,000 | |||||||||||||
Debt instrument, stated interest rate (as a percent) | 6.125% | |||||||||||||
EnvisionRx | ||||||||||||||
Unaudited pro forma combined financial data | ||||||||||||||
Net revenues | $ 1,735,635 | $ 4,273,016 | ||||||||||||
Net income | (45,307) | 14,031 | ||||||||||||
Interest expense incurred by EnvisionRx | 21,984 | $ 56,884 | ||||||||||||
Debt extinguishment charges incurred by EnvisionRx | $ 31,601 |
Pending Merger (Details)
Pending Merger (Details) - $ / shares | Feb. 27, 2016 | Feb. 04, 2016 | Oct. 27, 2015 | Feb. 28, 2015 | Sep. 30, 2013 |
Pending Merger | |||||
Ownership interest (as a percent) | 100.00% | ||||
Holders of outstanding common stock entitled to vote as of the record date who approved the merger agreement ( as a percent) | 74.00% | ||||
Par value of common stock (in dollars per share) | $ 1 | $ 1 | $ 1 | $ 1 | |
WBA | Rite Aid | |||||
Pending Merger | |||||
Ownership interest (as a percent) | 100.00% | ||||
Price of shares (in dollars per share) | $ 9 |
Income Per Share (Details)
Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 27, 2016 | Nov. 28, 2015 | Aug. 29, 2015 | May. 30, 2015 | Feb. 28, 2015 | Nov. 29, 2014 | Aug. 30, 2014 | May. 31, 2014 | Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Numerator for income per share: | |||||||||||
Net income | $ 65,617 | $ 59,543 | $ 21,469 | $ 18,836 | $ 1,835,032 | $ 104,846 | $ 127,849 | $ 41,446 | $ 165,465 | $ 2,109,173 | $ 249,414 |
Accretion of redeemable preferred stock | (77) | ||||||||||
Cumulative preferred stock dividends | (8,318) | ||||||||||
Conversion of Series G and H preferred stock | (25,603) | ||||||||||
Income attributable to common stockholders-basic | 165,465 | 2,109,173 | 215,416 | ||||||||
Add back-interest on convertible notes | 5,456 | 5,456 | |||||||||
Income attributable to common stockholders-diluted | $ 165,465 | $ 2,114,629 | $ 220,872 | ||||||||
Denominator: | |||||||||||
Basic weighted average shares | 1,024,377,000 | 971,102,000 | 922,199,000 | ||||||||
Outstanding options and restricted shares, net (in shares) | 17,985,000 | 21,967,000 | 32,093,000 | ||||||||
Convertible notes (in shares) | 24,792,000 | 24,800,000 | |||||||||
Diluted weighted average shares | 1,042,362,000 | 1,017,861,000 | 979,092,000 | ||||||||
Basic income per share (in dollars per share) | $ 0.06 | $ 0.06 | $ 0.02 | $ 0.02 | $ 1.88 | $ 0.11 | $ 0.13 | $ 0.04 | $ 0.16 | $ 2.17 | $ 0.23 |
Diluted income per share (in dollars per share) | $ 0.06 | $ 0.06 | $ 0.02 | $ 0.02 | $ 1.79 | $ 0.10 | $ 0.13 | $ 0.04 | $ 0.16 | $ 2.08 | $ 0.23 |
Stock options | |||||||||||
Antidilutive securities excluded from computation of earnings per share | |||||||||||
Potential common shares excluded from the computation of diluted income (loss) per share | 3,464,000 | 2,777,000 | 4,044,000 |
Income Per Share - Redemption o
Income Per Share - Redemption of Convertible Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 30, 2013 | May. 30, 2015 | Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | Oct. 27, 2015 |
Conversion of redeemable preference shares | ||||||
Redemption percentage of the liquidation preference per share | 105.00% | |||||
Liquidation preference (in dollars per share) | $ 100 | |||||
Liquidation preference | $ 199,937 | |||||
Par value of common stock (in dollars per share) | $ 1 | $ 1 | $ 1 | $ 1 | ||
Market value of common stock issued upon redemption of preferred stock | $ 64,089 | $ 20 | ||||
Closing price per share (in dollars per share) | 4.76 | |||||
Conversion of Series G and H preferred stock | $ 25,603 | |||||
8.5% convertible notes due May 2015 | ||||||
Convertible notes due 2015 | ||||||
Convertible notes amount | $ 64,089 | |||||
Debt instrument, stated interest rate (as a percent) | 8.50% | 8.50% | 8.50% | |||
Shares issued | 24,762,000 | |||||
Preferred Stock (Series G and H) | ||||||
Conversion of redeemable preference shares | ||||||
Contracted conversion rate (in dollars per share) | $ 5.50 | |||||
Total common stock shares issuable at contracted conversion rate | 34,621,117 | |||||
Conversion of Series G and H preferred stock | $ 25,603 | |||||
Diluted earning per share due to conversion of preferred stock (in dollars per share) | $ 0.03 | |||||
Common stock issued on conversion of preferred stock (in shares) | 5,378,883 | |||||
Common Stock | ||||||
Conversion of redeemable preference shares | ||||||
Common stock issued upon redemption of preferred stock (in shares) | 40,000,000 | |||||
Market value of common stock issued upon redemption of preferred stock | $ 190,400 |
Lease Termination and Impairm67
Lease Termination and Impairment Charges (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 27, 2016USD ($)storelocationfacility | Nov. 28, 2015USD ($) | Aug. 29, 2015USD ($) | May. 30, 2015USD ($) | Feb. 28, 2015USD ($)storelocationfacility | Nov. 29, 2014USD ($) | Aug. 30, 2014USD ($) | May. 31, 2014USD ($) | Feb. 27, 2016USD ($)storelocationfacility | Feb. 28, 2015USD ($)storelocationfacility | Mar. 01, 2014USD ($)storelocationfacility | |
Lease termination and impairment charges | |||||||||||
Lease termination and impairment charges | $ 26,753 | $ 7,011 | $ 9,637 | $ 5,022 | $ 21,284 | $ 8,702 | $ 7,111 | $ 4,848 | $ 48,423 | $ 41,945 | $ 41,304 |
Number of stores | store | 4,561 | 4,561 | |||||||||
Lease termination charges | 8,750 | ||||||||||
Revenues and operating losses of closed stores or stores approved for closure | |||||||||||
Revenues | $ 8,270,136 | 8,154,184 | 7,664,776 | 6,647,561 | 6,847,929 | 6,692,333 | 6,522,584 | 6,465,531 | $ 30,736,657 | 26,528,377 | 25,526,413 |
Income (loss) before income taxes | 101,184 | $ 108,011 | $ 37,932 | 31,277 | $ 119,067 | $ 106,717 | $ 147,709 | 53,327 | 278,404 | 426,820 | 250,218 |
Depreciation and amortization | 509,212 | 416,628 | 403,741 | ||||||||
Active stores | |||||||||||
Lease termination and impairment charges | |||||||||||
Long-lived assets | $ 2,077,000 | $ 2,077,000 | |||||||||
Number of stores | store | 4,561 | 4,561 | |||||||||
Impairment charges | |||||||||||
Lease termination and impairment charges | |||||||||||
Lease termination and impairment charges | $ 17,219 | $ 14,438 | $ 13,077 | ||||||||
Total number of locations | location | 416 | 429 | 416 | 429 | 434 | ||||||
Impairment charges | Active stores | |||||||||||
Lease termination and impairment charges | |||||||||||
Lease termination and impairment charges | $ 16,106 | $ 12,126 | $ 11,748 | ||||||||
Number of stores | store | 389 | 394 | 389 | 394 | 396 | ||||||
Period considered for recording impairment charges on the basis of operating loss | 2 years | ||||||||||
Impairment charges | Closed facilities | |||||||||||
Lease termination and impairment charges | |||||||||||
Lease termination and impairment charges | $ 1,113 | $ 2,312 | $ 1,329 | ||||||||
Number of facilities | facility | 27 | 35 | 27 | 35 | 38 | ||||||
Lease termination charges | $ 1,113 | $ 2,312 | $ 1,329 | ||||||||
Additional current period charges for stores previously impaired in prior periods | Active stores | |||||||||||
Lease termination and impairment charges | |||||||||||
Lease termination and impairment charges | $ 9,183 | $ 6,949 | $ 4,162 | ||||||||
Number of stores | store | 357 | 376 | 357 | 376 | 378 | ||||||
Number of stores fully impaired | store | 351 | 369 | 375 | ||||||||
Charges for new, relocated and remodeled stores that did not meet their asset recoverability test in the current period | Active stores | |||||||||||
Lease termination and impairment charges | |||||||||||
Lease termination and impairment charges | $ 1,649 | $ 1,108 | $ 4,028 | ||||||||
Number of stores | store | 3 | 2 | 3 | 2 | 1 | ||||||
Number of stores fully impaired | store | 3 | 1 | 1 | ||||||||
Period considered for impairment of relocated stores | 2 years | ||||||||||
Charges for new, relocated and remodeled stores that did not meet their asset recoverability test in the current period | Active stores | Minimum | |||||||||||
Lease termination and impairment charges | |||||||||||
Period considered for recording impairment charges on the basis of operating loss | 2 years | ||||||||||
Period considered for impairment of new stores | 3 years | ||||||||||
Charges for the remaining stores that did not meet their asset recoverability test in the current period | Active stores | |||||||||||
Lease termination and impairment charges | |||||||||||
Lease termination and impairment charges | $ 5,274 | $ 4,069 | $ 3,558 | ||||||||
Number of stores | store | 29 | 16 | 29 | 16 | 17 | ||||||
Number of stores fully impaired | store | 27 | 14 | 14 | ||||||||
Charges for the remaining stores that did not meet their asset recoverability test in the current period | Active stores | Minimum | |||||||||||
Lease termination and impairment charges | |||||||||||
Period considered for recording impairment charges on the basis of operating loss | 2 years | ||||||||||
Lease termination charges | |||||||||||
Lease termination and impairment charges | |||||||||||
Number of stores | store | 23 | 10 | 23 | 10 | 15 | ||||||
Lease termination charges | $ 31,204 | $ 27,507 | $ 28,227 | ||||||||
Closed store and distribution center charges | |||||||||||
Balance-beginning of period | $ 241,047 | $ 284,270 | 241,047 | 284,270 | 323,757 | ||||||
Provision for present value of noncancellable lease payments of closed stores | 9,709 | 1,661 | 11,646 | ||||||||
Changes in assumptions about future sublease income, terminations and changes in interest rates | 5,655 | 7,560 | (4,343) | ||||||||
Interest accretion | 16,463 | 18,988 | 21,250 | ||||||||
Cash payments, net of sublease income | (64,453) | (71,432) | (68,040) | ||||||||
Balance-end of period | $ 208,421 | $ 241,047 | 208,421 | 241,047 | 284,270 | ||||||
Closed stores or stores approved for closure | |||||||||||
Revenues and operating losses of closed stores or stores approved for closure | |||||||||||
Revenues | 30,403 | 75,174 | 147,559 | ||||||||
Operating expenses | 35,409 | 84,855 | 162,357 | ||||||||
Gain from sale of assets | (5,607) | (5,536) | (13,114) | ||||||||
Other expenses (income) | 384 | 389 | (8,482) | ||||||||
Income (loss) before income taxes | 217 | (4,534) | 6,798 | ||||||||
Depreciation and amortization | 138 | 296 | 838 | ||||||||
Inventory liquidation charges | $ 295 | $ 222 | $ 552 |
Lease Termination and Impairm68
Lease Termination and Impairment Charges - Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 27, 2016 | Nov. 28, 2015 | Aug. 29, 2015 | May. 30, 2015 | Feb. 28, 2015 | Nov. 29, 2014 | Aug. 30, 2014 | May. 31, 2014 | Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Fair value of long-lived assets | |||||||||||
Total Losses | $ (26,753) | $ (7,011) | $ (9,637) | $ (5,022) | $ (21,284) | $ (8,702) | $ (7,111) | $ (4,848) | $ (48,423) | $ (41,945) | $ (41,304) |
Nonrecurring basis | |||||||||||
Fair value of long-lived assets | |||||||||||
Long-lived assets held and used, impairment charges | (16,672) | (12,503) | |||||||||
Long-lived assets held for sale, impairment charges | (547) | (1,935) | |||||||||
Total Losses | (17,219) | (14,438) | |||||||||
Nonrecurring basis | Fair Value | |||||||||||
Fair value of long-lived assets | |||||||||||
Long-lived assets held and used | 21,286 | 20,684 | 21,286 | 20,684 | |||||||
Long-lived assets held for sale | 3,472 | 6,024 | 3,472 | 6,024 | |||||||
Fair value of Total | 24,758 | 26,708 | 24,758 | 26,708 | |||||||
Nonrecurring basis | Level 2 | |||||||||||
Fair value of long-lived assets | |||||||||||
Long-lived assets held and used | 3,641 | 3,692 | 3,641 | 3,692 | |||||||
Long-lived assets held for sale | 3,283 | 6,024 | 3,283 | 6,024 | |||||||
Fair value of Total | 6,924 | 9,716 | 6,924 | 9,716 | |||||||
Nonrecurring basis | Level 3 | |||||||||||
Fair value of long-lived assets | |||||||||||
Long-lived assets held and used | 17,645 | 16,992 | 17,645 | 16,992 | |||||||
Long-lived assets held for sale | 189 | 189 | |||||||||
Fair value of Total | $ 17,834 | $ 16,992 | $ 17,834 | $ 16,992 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Feb. 27, 2016 | Feb. 28, 2015 |
Non-financial assets measured on a non-recurring basis | ||
Carrying value of total long-term indebtedness | $ 6,914,483 | $ 5,467,123 |
Outstanding derivative financial instruments | 0 | 0 |
Other assets | ||
Non-financial assets measured on a non-recurring basis | ||
Investment at amortized cost | 6,069 | |
Nonrecurring basis | Level 1 | ||
Non-financial assets measured on a non-recurring basis | ||
Estimated fair value of total long-term indebtedness | $ 7,235,916 | $ 5,880,626 |
Income Taxes (Details)
Income Taxes (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 27, 2016USD ($) | Nov. 28, 2015USD ($) | Aug. 29, 2015USD ($) | May. 30, 2015USD ($) | Feb. 28, 2015USD ($) | Nov. 29, 2014USD ($) | Aug. 30, 2014USD ($) | May. 31, 2014USD ($) | Feb. 27, 2016USD ($)item | Feb. 28, 2015USD ($) | Mar. 01, 2014USD ($) | |
Current tax: | |||||||||||
Federal | $ (52) | ||||||||||
State | 9,396 | $ 6,011 | $ 4,748 | ||||||||
Total current tax expense (benefit) | 9,344 | 6,011 | 4,748 | ||||||||
Deferred tax and other: | |||||||||||
Federal | 117,200 | (1,544,344) | |||||||||
State | (13,605) | (144,020) | (30,609) | ||||||||
Tax expense recorded as an increase of additional paid-in capital | 26,665 | ||||||||||
Total deferred tax expense (benefit) | 103,595 | (1,688,364) | (3,944) | ||||||||
Total income tax (benefit) expense | $ 35,567 | $ 48,468 | $ 16,463 | $ 12,441 | $ (1,715,965) | $ 1,871 | $ 19,860 | $ 11,881 | $ 112,939 | $ (1,682,353) | $ 804 |
Reconciliation of the expected statutory federal tax and the total income tax expense (benefit) | |||||||||||
Federal statutory rate (as a percent) | 35.00% | 35.00% | 35.00% | ||||||||
Nondeductible expenses | 2.30% | 0.20% | 0.30% | ||||||||
State income taxes, net | 8.60% | 2.70% | 17.70% | ||||||||
Decrease of previously recorded liabilities | (0.90%) | (8.40%) | |||||||||
Nondeductible compensation | 2.20% | 1.20% | 17.70% | ||||||||
Acquisition Costs | 2.40% | ||||||||||
Release of indemnification asset | 2.40% | ||||||||||
Valuation allowance | (9.50%) | (431.40%) | (64.40%) | ||||||||
Other | (0.40%) | (1.00%) | |||||||||
Total income tax expense (benefit) | 40.60% | (394.20%) | 0.30% | ||||||||
Income tax valuation allowance reduction | $ (26,358) | $ (1,841,304) | $ (161,079) | ||||||||
Cumulative profitability period used to determine change in valuation allowance | 3 years | ||||||||||
Number of consecutive quarters' reported earnings used to determine change in valuation allowance | item | 10 | ||||||||||
Number of years' utilization of federal and state NOL's used to determine change in valuation allowance | 3 years | ||||||||||
Deferred tax assets: | |||||||||||
Accounts receivable | 72,883 | 68,582 | $ 72,883 | 68,582 | |||||||
Accrued expenses | 198,636 | 207,553 | 198,636 | 207,553 | |||||||
Liability for lease exit costs | 81,704 | 98,906 | 81,704 | 98,906 | |||||||
Pension, retirement and other benefits | 182,394 | 175,081 | 182,394 | 175,081 | |||||||
Long-lived assets | 487,944 | 475,187 | 487,944 | 475,187 | |||||||
Other | 6,203 | 5,232 | 6,203 | 5,232 | |||||||
Credits | 64,382 | 63,826 | 64,382 | 63,826 | |||||||
Net operating losses | 1,182,440 | 1,300,964 | 1,182,440 | 1,300,964 | |||||||
Total gross deferred tax assets | 2,276,586 | 2,395,331 | 2,276,586 | 2,395,331 | |||||||
Valuation allowance | (212,023) | (231,679) | (212,023) | (231,679) | |||||||
Total deferred tax assets | 2,064,563 | 2,163,652 | 2,064,563 | 2,163,652 | |||||||
Deferred tax liabilities: | |||||||||||
Outside basis difference | 108,860 | 108,860 | |||||||||
Inventory | 416,562 | 437,165 | 416,562 | 437,165 | |||||||
Total gross deferred tax liabilities | 525,422 | 437,165 | 525,422 | 437,165 | |||||||
Net deferred tax assets | 1,539,141 | 1,726,487 | 1,539,141 | 1,726,487 | |||||||
Reconciliation of beginning and ending amount of unrecognized tax benefits | |||||||||||
Unrecognized tax benefits at beginning of the period | $ 9,514 | $ 10,143 | 9,514 | 10,143 | 30,020 | ||||||
Increases to prior year tax positions | 1,667 | 1,003 | |||||||||
Decreases to tax positions in prior periods | (577) | (984) | (3,215) | ||||||||
Increases to current year tax positions | 72 | 123 | |||||||||
Settlements | (681) | ||||||||||
Lapse of statute of limitations | (90) | (16,662) | |||||||||
Unrecognized tax benefits balance at end of the period | 10,676 | 9,514 | 10,676 | 9,514 | 10,143 | ||||||
Unrecognized tax benefits which would impact effective tax rate, if recognized | $ 2,084 | $ 440 | $ 2,084 | $ 440 | $ 876 |
Income Taxes - Tax Contingencie
Income Taxes - Tax Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Income Taxes | |||
Interest and penalties related to tax contingencies recognized as income tax expense / (benefit) | $ 60 | $ (5,250) | $ (16,833) |
Accrued income tax-related interest and penalties | $ 539 | $ 115 | |
Period of state income tax returns subject to examination, low end of range | 3 years | ||
Period of state income tax returns subject to examination, high end of range | 5 years |
Income Taxes - Net Operating Lo
Income Taxes - Net Operating Losses and Tax Credits (Details) $ in Thousands | Feb. 27, 2016USD ($) |
Net Operating Losses and Tax Credits | |
Alternative minimum tax credit carryforwards | $ 3,234 |
Federal | |
Net Operating Losses and Tax Credits | |
Net operating loss carryforwards | 2,865,598 |
Amount of deductions under net operating loss carryforwards | 18,365 |
Federal business tax credit carryforwards | 50,165 |
Federal | Net Operating Losses expiration period 2020 and 2028 | |
Net Operating Losses and Tax Credits | |
Net operating losses expiration amount | 1,673,912 |
Federal | Net Operating Losses expiration period 2029 and 2036 | |
Net Operating Losses and Tax Credits | |
Net operating losses expiration amount | 1,173,321 |
State | |
Net Operating Losses and Tax Credits | |
Net operating loss carryforwards | 4,538,030 |
Amount of deductions under net operating loss carryforwards | $ 79,442 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Thousands | Feb. 27, 2016 | Feb. 28, 2015 |
Accounts Receivable | ||
Allowance for uncollectable accounts | $ 32,820 | $ 31,247 |
Medicare Part D (Details)
Medicare Part D (Details) - USD ($) $ in Thousands | Feb. 27, 2016 | Dec. 31, 2015 |
Medicare Part D | ||
Accounts receivable, net | $ 275,032 | |
Accrued salaries, wages and other current liabilities | ||
Medicare Part D | ||
Liabilities under reinsurance contracts | $ 166,238 | |
EIC | ||
Medicare Part D | ||
Minimum amount of capital and surplus required by regulatory requirements | $ 19,627 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Feb. 27, 2016 | Feb. 28, 2015 | Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Inventory | |||||
Inventories, last-in, first-out (LIFO) cost flow assumption | $ 1,006,396 | $ 997,528 | $ 1,006,396 | $ 997,528 | |
LIFO charge (credit) | $ 6,796 | $ (23,489) | 11,163 | (18,857) | $ 104,142 |
Amount of decrease in the cost of revenues due to the effect of LIFO inventory liquidation | $ 60,653 | $ 38,867 | $ 13,894 |
Property, Plant and Equipment76
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Property, Plant and Equipment | |||
Property, plant and equipment, gross | $ 5,806,876 | $ 5,546,174 | |
Accumulated depreciation | (3,551,478) | (3,454,805) | |
Property, plant and equipment, net | 2,255,398 | 2,091,369 | |
Depreciation expense | 322,396 | 298,523 | $ 284,603 |
Carrying amount of assets to be disposed | 3,256 | 6,317 | |
Land | |||
Property, Plant and Equipment | |||
Property, plant and equipment, gross | 221,409 | 232,785 | |
Buildings | |||
Property, Plant and Equipment | |||
Property, plant and equipment, gross | 764,497 | 761,262 | |
Leasehold improvements | |||
Property, Plant and Equipment | |||
Property, plant and equipment, gross | 2,245,307 | 2,078,974 | |
Equipment | |||
Property, Plant and Equipment | |||
Property, plant and equipment, gross | 2,416,316 | 2,377,481 | |
Software | |||
Property, Plant and Equipment | |||
Property, plant and equipment, gross | 6,111 | ||
Construction in progress | |||
Property, Plant and Equipment | |||
Property, plant and equipment, gross | $ 153,236 | $ 95,672 |
Goodwill and Other Intangible77
Goodwill and Other Intangibles - Goodwill (Details) $ in Thousands | 12 Months Ended | |
Feb. 27, 2016USD ($)segment | Feb. 28, 2015USD ($) | |
Goodwill | ||
Number of reportable units | segment | 2 | |
Goodwill impairment charges | $ 0 | $ 0 |
Carrying amount of goodwill | ||
Balance at beginning of period | 76,124 | |
Acquisitions | 1,637,351 | 76,124 |
Balance at end of period | 1,713,475 | 76,124 |
Retail Pharmacy | ||
Carrying amount of goodwill | ||
Balance at beginning of period | 76,124 | |
Acquisitions | 76,124 | |
Balance at end of period | 76,124 | $ 76,124 |
Pharmacy Services | ||
Carrying amount of goodwill | ||
Acquisitions | 1,637,351 | |
Balance at end of period | $ 1,637,351 |
Goodwill and Other Intangible78
Goodwill and Other Intangibles - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Finite Lived And Indefinite Lived Intangible Assets By Major Class | |||
Gross Carrying Amount of Finite Lived | $ 2,819,815 | $ 2,093,531 | |
Accumulated Amortization | (1,848,936) | (1,672,051) | |
Net | 970,879 | 421,480 | |
Gross Carrying Amount, Total | 2,853,315 | 2,093,531 | |
Net, Total | 1,004,379 | 421,480 | |
Unfavorable lease intangibles | 46,947 | 55,571 | |
Amortization expense for intangible assets and liabilities | 186,816 | 118,105 | $ 119,138 |
Anticipated annual amortization expense for intangible assets and liabilities | |||
2,017 | 211,622 | ||
2,018 | 168,788 | ||
2,019 | 131,417 | ||
2,020 | 101,961 | ||
2,021 | 69,252 | ||
Trademarks | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class | |||
Gross Carrying Amount of Indefinite Lived | 33,500 | ||
Favorable leases and other | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class | |||
Gross Carrying Amount of Finite Lived | 665,197 | 653,377 | |
Accumulated Amortization | (507,776) | (481,041) | |
Net | $ 157,421 | $ 172,336 | |
Remaining Weighted Average Amortization Period | 8 years | 8 years | |
Prescription files | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class | |||
Gross Carrying Amount of Finite Lived | $ 1,541,518 | $ 1,440,154 | |
Accumulated Amortization | (1,285,633) | (1,191,010) | |
Net | $ 255,885 | $ 249,144 | |
Remaining Weighted Average Amortization Period | 3 years | 3 years | |
Customer relationships | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class | |||
Gross Carrying Amount of Finite Lived | $ 465,000 | ||
Accumulated Amortization | (44,203) | ||
Net | $ 420,797 | ||
Remaining Weighted Average Amortization Period | 17 years | ||
CMS license | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class | |||
Gross Carrying Amount of Finite Lived | $ 57,500 | ||
Accumulated Amortization | (1,572) | ||
Net | $ 55,928 | ||
Remaining Weighted Average Amortization Period | 25 years | ||
Claims adjudication and other developed software | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class | |||
Gross Carrying Amount of Finite Lived | $ 59,000 | ||
Accumulated Amortization | (5,760) | ||
Net | $ 53,240 | ||
Remaining Weighted Average Amortization Period | 7 years | ||
Trademarks | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class | |||
Gross Carrying Amount of Finite Lived | $ 20,100 | ||
Accumulated Amortization | (1,373) | ||
Net | $ 18,727 | ||
Remaining Weighted Average Amortization Period | 10 years | ||
Backlog | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class | |||
Gross Carrying Amount of Finite Lived | $ 11,500 | ||
Accumulated Amortization | (2,619) | ||
Net | $ 8,881 | ||
Remaining Weighted Average Amortization Period | 3 years |
Accrued Salaries, Wages and O79
Accrued Salaries, Wages and Other Current Liabilities (Details) - USD ($) $ in Thousands | Feb. 27, 2016 | Feb. 28, 2015 |
Accrued wages, benefits and other personnel costs | $ 457,135 | $ 444,278 |
Accrued interest | 65,729 | 57,539 |
Accrued sales and other taxes payable | 155,999 | 137,236 |
Accrued store expense | 231,900 | 244,031 |
Accrued reinsurance | 166,238 | |
Other | 350,249 | 310,335 |
Accrued salaries, wages and other current liabilities | $ 1,427,250 | $ 1,193,419 |
Indebtedness and Credit Agree80
Indebtedness and Credit Agreement (Details) $ / shares in Units, shares in Thousands, $ in Thousands | Aug. 15, 2015USD ($) | Oct. 15, 2014USD ($) | Nov. 29, 2013USD ($) | Jul. 31, 2013USD ($) | May. 30, 2015USD ($)shares | Aug. 31, 2013USD ($) | Aug. 29, 2015USD ($) | Nov. 29, 2014USD ($) | Feb. 27, 2016USD ($)loan | Feb. 28, 2015USD ($) | Mar. 01, 2014USD ($) | May. 31, 2015USD ($) | Apr. 02, 2015USD ($) | Jan. 13, 2015USD ($) | Jan. 12, 2015USD ($) | Jul. 02, 2013USD ($) | Jun. 30, 2013USD ($) | Mar. 02, 2013$ / sharesshares |
Indebtedness and credit agreement | ||||||||||||||||||
Lease financing obligations | $ 79,653 | $ 91,993 | ||||||||||||||||
Total debt | 6,994,136 | 5,559,116 | ||||||||||||||||
Current maturities of long-term debt and lease financing obligations | (26,848) | (100,376) | ||||||||||||||||
Long-term debt and lease financing obligations, less current maturities | $ 6,967,288 | 5,458,740 | ||||||||||||||||
Credit facility | ||||||||||||||||||
Number of second priority secured term loan facilities | loan | 2 | |||||||||||||||||
Ownership interest (as a percent) | 100.00% | |||||||||||||||||
Loss on debt retirement, net | $ 33,205 | $ 18,512 | $ 33,205 | 18,512 | $ 62,443 | |||||||||||||
Preferred stock value included in other non-current liabilities | $ 731,399 | $ 776,629 | ||||||||||||||||
Interest Rates and Maturities | ||||||||||||||||||
Annual weighted average rate (as a percent) | 5.40% | 5.80% | 6.40% | |||||||||||||||
Maturities | ||||||||||||||||||
2,017 | $ 90 | |||||||||||||||||
2,018 | 0 | |||||||||||||||||
2,019 | 0 | |||||||||||||||||
2,020 | 2,100,000 | |||||||||||||||||
2021 and thereafter | 4,905,000 | |||||||||||||||||
Class A Cumulative Preferred Stock | Rite Aid Lease Management Co. | ||||||||||||||||||
Credit facility | ||||||||||||||||||
Preferred stock outstanding (in shares) | shares | 213 | |||||||||||||||||
Par value (in dollars per share) | $ / shares | $ 100 | |||||||||||||||||
Rite Aid Lease Management Company | ||||||||||||||||||
Credit facility | ||||||||||||||||||
Ownership interest (as a percent) | 100.00% | |||||||||||||||||
Rite Aid Lease Management Company | Class A Cumulative Preferred Stock | ||||||||||||||||||
Credit facility | ||||||||||||||||||
Loss on debt retirement, net | $ 271 | |||||||||||||||||
Preferred stock value included in other non-current liabilities | 20,763 | |||||||||||||||||
Repurchase of preferred stock, value | $ 21,034 | |||||||||||||||||
Senior secured credit facility | ||||||||||||||||||
Indebtedness and credit agreement | ||||||||||||||||||
Long-term debt | 3,027,766 | $ 3,289,602 | ||||||||||||||||
Senior secured revolving credit facility due January 2020 | ||||||||||||||||||
Indebtedness and credit agreement | ||||||||||||||||||
Long-term debt | 2,066,097 | 1,682,218 | ||||||||||||||||
Principal amount of debt | 2,100,000 | 1,725,000 | ||||||||||||||||
Unamortized debt issuance costs | 33,903 | 42,782 | ||||||||||||||||
Credit facility | ||||||||||||||||||
Maximum borrowing capacity | $ 3,700,000 | $ 3,000,000 | $ 1,795,000 | |||||||||||||||
Outstanding borrowings | 2,100,000 | |||||||||||||||||
Letters of credit outstanding | 69,301 | |||||||||||||||||
Additional borrowing capacity | 1,530,699 | |||||||||||||||||
Amount of debt allowed to be outstanding | 1,500,000 | |||||||||||||||||
Amount of debt allowed to be outstanding related to Pending Acquisition | $ 1,800,000 | |||||||||||||||||
Number of days relating to debt threshold | 90 days | |||||||||||||||||
Period allowed for extensions on customary terms | 90 days | |||||||||||||||||
Line Of Credit Facility Threshold Amount Of Debt | $ 750,000 | |||||||||||||||||
Senior secured revolving credit facility due January 2020 | Minimum | ||||||||||||||||||
Credit facility | ||||||||||||||||||
Percentage of fee payable on daily unused revolver availability | 0.25% | |||||||||||||||||
Additional borrowing capacity | $ 365,000 | |||||||||||||||||
Threshold availability on the thirtieth consecutive calendar day | $ 250,000 | |||||||||||||||||
Fixed charge coverage ratio | 1 | |||||||||||||||||
Senior secured revolving credit facility due January 2020 | Maximum | ||||||||||||||||||
Credit facility | ||||||||||||||||||
Percentage of fee payable on daily unused revolver availability | 0.375% | |||||||||||||||||
Threshold availability on revolving credit facility to trigger fixed charge coverage requirements | $ 200,000 | |||||||||||||||||
Threshold availability on the third consecutive business day | $ 250,000 | |||||||||||||||||
Senior secured revolving credit facility due January 2020 | LIBOR | Minimum | ||||||||||||||||||
Credit facility | ||||||||||||||||||
Percentage points added to the reference rate | 1.50% | |||||||||||||||||
Senior secured revolving credit facility due January 2020 | LIBOR | Maximum | ||||||||||||||||||
Credit facility | ||||||||||||||||||
Percentage points added to the reference rate | 2.00% | |||||||||||||||||
Senior secured revolving credit facility due January 2020 | Alternate base rate | Minimum | ||||||||||||||||||
Credit facility | ||||||||||||||||||
Percentage points added to the reference rate | 0.50% | |||||||||||||||||
Senior secured revolving credit facility due January 2020 | Alternate base rate | Maximum | ||||||||||||||||||
Credit facility | ||||||||||||||||||
Percentage points added to the reference rate | 1.00% | |||||||||||||||||
Tranche 7 Term Loan due February 2020 | ||||||||||||||||||
Credit facility | ||||||||||||||||||
Amount of debt repurchased | $ 1,143,650 | |||||||||||||||||
8.00% senior secured notes (senior lien) due August 2020 | ||||||||||||||||||
Indebtedness and credit agreement | ||||||||||||||||||
Long-term debt | $ 642,227 | |||||||||||||||||
Debt instrument, stated interest rate (as a percent) | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | |||||||||||||
Principal amount of debt | $ 650,000 | $ 650,000 | ||||||||||||||||
Unamortized debt issuance costs | 7,773 | |||||||||||||||||
Credit facility | ||||||||||||||||||
Loss on debt retirement, net | $ 33,205 | |||||||||||||||||
Notes redeemed and discharged | $ 650,000 | |||||||||||||||||
7.5% senior secured notes (second lien) due March 2017 | ||||||||||||||||||
Indebtedness and credit agreement | ||||||||||||||||||
Debt instrument, stated interest rate (as a percent) | 7.50% | 7.50% | 7.50% | |||||||||||||||
Credit facility | ||||||||||||||||||
Amount of debt repurchased | $ 419,237 | |||||||||||||||||
Repayment of senior secured notes, including call premium and interest | $ 85,154 | |||||||||||||||||
Tranche 1 Term Loan (second lien) due August 2020 | ||||||||||||||||||
Indebtedness and credit agreement | ||||||||||||||||||
Long-term debt | 464,586 | 463,362 | ||||||||||||||||
Principal amount of debt | 470,000 | 470,000 | ||||||||||||||||
Unamortized debt issuance costs | $ 5,414 | 6,638 | ||||||||||||||||
Tranche 1 Term Loan (second lien) due August 2020 | LIBOR | ||||||||||||||||||
Credit facility | ||||||||||||||||||
Percentage points added to the reference rate | 4.75% | |||||||||||||||||
LIBOR floor (as a percent) | 1.00% | |||||||||||||||||
Tranche 1 Term Loan (second lien) due August 2020 | Citibank's base rate | ||||||||||||||||||
Credit facility | ||||||||||||||||||
Percentage points added to the reference rate | 3.75% | |||||||||||||||||
Tranche 2 Term Loan (second lien) due June 2021 | ||||||||||||||||||
Indebtedness and credit agreement | ||||||||||||||||||
Long-term debt | $ 496,993 | 496,428 | ||||||||||||||||
Principal amount of debt | 500,000 | 500,000 | ||||||||||||||||
Unamortized debt issuance costs | $ 3,007 | 3,572 | ||||||||||||||||
Tranche 2 Term Loan (second lien) due June 2021 | LIBOR | ||||||||||||||||||
Credit facility | ||||||||||||||||||
Percentage points added to the reference rate | 3.875% | |||||||||||||||||
LIBOR floor (as a percent) | 1.00% | |||||||||||||||||
Tranche 2 Term Loan (second lien) due June 2021 | Citibank's base rate | ||||||||||||||||||
Credit facility | ||||||||||||||||||
Percentage points added to the reference rate | 2.875% | |||||||||||||||||
10.25% senior secured notes (second lien) due October 2019 | ||||||||||||||||||
Indebtedness and credit agreement | ||||||||||||||||||
Debt instrument, stated interest rate (as a percent) | 10.25% | 10.25% | 10.25% | |||||||||||||||
Credit facility | ||||||||||||||||||
Early redemption of debt | $ 270,000 | |||||||||||||||||
Redemption price | 105.125% | |||||||||||||||||
Loss on debt retirement, net | $ 18,512 | |||||||||||||||||
Other secured | ||||||||||||||||||
Indebtedness and credit agreement | ||||||||||||||||||
Long-term debt | $ 90 | 5,367 | ||||||||||||||||
7.5% senior secured notes (second lien) due March 2017, 6.75% senior notes due June 2021 and 9.5% senior notes due June 2017 | ||||||||||||||||||
Credit facility | ||||||||||||||||||
Loss on debt retirement, net | $ 62,172 | |||||||||||||||||
Unsecured Guaranteed Debt | ||||||||||||||||||
Indebtedness and credit agreement | ||||||||||||||||||
Long-term debt | 3,466,348 | 1,693,277 | ||||||||||||||||
9.5% senior notes due June 2017 | ||||||||||||||||||
Indebtedness and credit agreement | ||||||||||||||||||
Debt instrument, stated interest rate (as a percent) | 9.50% | 9.50% | 9.50% | |||||||||||||||
Credit facility | ||||||||||||||||||
Amount of debt repurchased | $ 739,642 | |||||||||||||||||
Repayment of senior notes, including call premium and interest | $ 73,440 | |||||||||||||||||
Face amount of debt repurchased | $ 810,000 | |||||||||||||||||
9.25% senior notes due March 2020 | ||||||||||||||||||
Indebtedness and credit agreement | ||||||||||||||||||
Long-term debt | $ 894,563 | $ 892,632 | ||||||||||||||||
Debt instrument, stated interest rate (as a percent) | 9.25% | 9.25% | 9.25% | |||||||||||||||
Principal amount of debt | $ 902,000 | $ 902,000 | ||||||||||||||||
Unamortized debt issuance costs | 10,180 | 12,783 | ||||||||||||||||
Unamortized premium | 2,743 | 3,415 | ||||||||||||||||
6.75% senior notes due June 2021 | ||||||||||||||||||
Indebtedness and credit agreement | ||||||||||||||||||
Long-term debt | $ 802,128 | $ 800,645 | $ 810,000 | |||||||||||||||
Debt instrument, stated interest rate (as a percent) | 6.75% | 6.75% | 6.75% | |||||||||||||||
Principal amount of debt | $ 810,000 | $ 810,000 | ||||||||||||||||
Unamortized debt issuance costs | 7,872 | $ 9,355 | ||||||||||||||||
6.125% senior notes due 2023 | ||||||||||||||||||
Indebtedness and credit agreement | ||||||||||||||||||
Long-term debt | $ 1,769,657 | |||||||||||||||||
Debt instrument, stated interest rate (as a percent) | 6.125% | 6.125% | ||||||||||||||||
Principal amount of debt | $ 1,800,000 | $ 1,800,000 | ||||||||||||||||
Unamortized debt issuance costs | 30,343 | 30,343 | ||||||||||||||||
6.125% senior notes due 2023 | EnvisionRx | ||||||||||||||||||
Indebtedness and credit agreement | ||||||||||||||||||
Debt instrument, stated interest rate (as a percent) | 6.125% | |||||||||||||||||
Principal amount of debt | $ 1,800,000 | |||||||||||||||||
Unsecured Unguaranteed Debt | ||||||||||||||||||
Indebtedness and credit agreement | ||||||||||||||||||
Long-term debt | $ 420,369 | 484,244 | ||||||||||||||||
8.5% convertible notes due May 2015 | ||||||||||||||||||
Indebtedness and credit agreement | ||||||||||||||||||
Long-term debt | $ 64,105 | |||||||||||||||||
Debt instrument, stated interest rate (as a percent) | 8.50% | 8.50% | 8.50% | |||||||||||||||
Principal amount of debt | $ 64,168 | |||||||||||||||||
Unamortized debt issuance costs | 63 | |||||||||||||||||
Credit facility | ||||||||||||||||||
Conversion of the 8.5% convertible notes to common stock | $ 64,089 | |||||||||||||||||
Shares issued | shares | 24,762 | |||||||||||||||||
Face amount of debt repurchased | $ 79 | |||||||||||||||||
7.7% notes due February 2027 | ||||||||||||||||||
Indebtedness and credit agreement | ||||||||||||||||||
Long-term debt | $ 293,206 | $ 293,041 | ||||||||||||||||
Debt instrument, stated interest rate (as a percent) | 7.70% | 7.70% | ||||||||||||||||
Principal amount of debt | $ 295,000 | $ 295,000 | ||||||||||||||||
Unamortized debt issuance costs | 1,794 | 1,959 | ||||||||||||||||
6.875% fixed-rate senior notes due December 2028 | ||||||||||||||||||
Indebtedness and credit agreement | ||||||||||||||||||
Long-term debt | $ 127,163 | $ 127,098 | ||||||||||||||||
Debt instrument, stated interest rate (as a percent) | 6.875% | 6.875% | ||||||||||||||||
Principal amount of debt | $ 128,000 | $ 128,000 | ||||||||||||||||
Unamortized debt issuance costs | $ 837 | $ 902 |
Leases (Details)
Leases (Details) $ in Thousands | 12 Months Ended | ||
Feb. 27, 2016USD ($)store | Feb. 28, 2015USD ($) | Mar. 01, 2014USD ($)store | |
Leases | |||
Sublease income | $ 8,995 | $ 8,559 | $ 8,369 |
Total rental expense, net of sublease income | 973,347 | 964,484 | 952,777 |
Contingent rental | $ 17,755 | $ 18,919 | $ 18,679 |
Number of operating stores sold | store | 10 | 1 | |
Number of stores related to operating lease | store | 8 | ||
Number of stores related to capital lease | store | 2 | ||
Proceeds from sale of owned properties | $ 36,732 | $ 3,989 | |
Gain on sale of assets | 670 | $ 269 | |
Loss on sale of assets | $ 546 | ||
Minimum | |||
Leases | |||
Initial lease terms under noncancellable operating and capital leases | 5 years | ||
Initial terms of noncancellable operating lease | 3 years | ||
Sale leaseback lease terms | 20 years | 20 years | |
Maximum | |||
Leases | |||
Initial lease terms under noncancellable operating and capital leases | 22 years | ||
Initial terms of noncancellable operating lease | 10 years |
Leases - Net Book Value (Detail
Leases - Net Book Value (Details) - USD ($) $ in Thousands | Feb. 27, 2016 | Feb. 28, 2015 |
Net book values of assets under capital leases and sale-leasebacks | ||
Accumulated depreciation | $ (128,168) | $ (123,581) |
Net value | 48,842 | 52,923 |
Capital leases | ||
Obligations under financing leases | 74,913 | 87,253 |
Sale-leaseback obligations | 4,740 | 4,740 |
Less current obligation | (26,758) | (30,841) |
Long-term lease finance obligations | 52,895 | 61,152 |
Minimum payments for Lease Financing Obligations | ||
2,017 | 32,650 | |
2,018 | 14,277 | |
2,019 | 12,848 | |
2,020 | 8,784 | |
2,021 | 5,259 | |
Later years | 30,780 | |
Total minimum lease payments | 104,598 | |
Amount representing interest | (24,945) | |
Present value of minimum lease payments | 79,653 | |
Minimum payments for Operating Leases | ||
2,017 | 1,041,231 | |
2,018 | 989,087 | |
2,019 | 906,242 | |
2,020 | 784,162 | |
2,021 | 656,268 | |
Later years | 3,393,866 | |
Total minimum lease payments | 7,770,856 | |
Land | ||
Net book values of assets under capital leases and sale-leasebacks | ||
Gross value | 5,063 | 5,063 |
Buildings | ||
Net book values of assets under capital leases and sale-leasebacks | ||
Gross value | 136,416 | 133,177 |
Leasehold improvements | ||
Net book values of assets under capital leases and sale-leasebacks | ||
Gross value | 1,612 | 1,330 |
Equipment | ||
Net book values of assets under capital leases and sale-leasebacks | ||
Gross value | $ 33,919 | $ 36,934 |
Stock Options and Stock Awards
Stock Options and Stock Awards (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Stock options and stock award Plans | |||
Stock-based compensation costs | $ 37,948 | $ 23,390 | $ 16,194 |
Shares of common stock authorized under stock-based compensation plans | 61,446 | ||
Maximum | |||
Stock options and stock award Plans | |||
Term of options | 10 years | ||
Stock options | |||
Fair value assumptions | |||
Expected stock price volatility (as a percent) | 56.00% | 74.00% | 85.00% |
Expected dividend yield (as a percent) | 0.00% | 0.00% | 0.00% |
Risk-free interest rate (as a percent) | 1.70% | 1.70% | 1.45% |
Expected option life | 5 years 6 months | 5 years 6 months | 5 years 6 months |
Additional General Disclosures | |||
Weighted average fair value of options granted (in dollars per share) | $ 4.45 | $ 4.43 | $ 1.91 |
Cash received from stock option exercises | $ 11,376 | $ 24,117 | $ 33,217 |
Income tax benefit from stock options | 11,764 | 30,099 | 23,660 |
Total intrinsic value of options exercised | $ 42,207 | $ 92,355 | $ 80,598 |
Vesting period | 4 years | ||
Shares | |||
Outstanding at the beginning of the period (in shares) | 41,668 | 55,966 | 81,000 |
Granted (in shares) | 3,579 | 3,097 | 4,828 |
Exercised (in shares) | (6,400) | (16,485) | (26,873) |
Cancelled (in shares) | (722) | (910) | (2,989) |
Outstanding at the end of the period (in shares) | 38,125 | 41,668 | 55,966 |
Vested or expected to vest at the end of the period (in shares) | 36,062 | ||
Exercisable at the end of the period (in shares) | 27,836 | ||
Weighted Average Exercise Price Per Share | |||
Outstanding at the beginning of the period (in dollars per share) | $ 2.09 | $ 1.65 | $ 1.48 |
Granted (in dollars per share) | 8.68 | 7.04 | 2.76 |
Exercised (in dollars per share) | 1.78 | 1.46 | 1.24 |
Cancelled (in dollars per share) | 4.20 | 3.16 | 2.46 |
Outstanding at the end of the period (in dollars per share) | 2.73 | $ 2.09 | $ 1.65 |
Vested or expected to vest at the end of the period (in dollars per share) | 2.65 | ||
Exercisable at the end of the period (in dollars per share) | $ 1.77 | ||
Weighted Average Remaining Contractual Term | |||
Outstanding at the end of the period | 5 years 7 months 21 days | ||
Vested or expected to vest at the end of the period | 5 years 6 months 15 days | ||
Exercisable at the end of the period | 4 years 9 months 11 days | ||
Aggregate Intrinsic Value | |||
Outstanding at the end of the period | $ 202,027 | ||
Vested or expected to vest at the end of the period | 193,716 | ||
Exercisable at the end of the period | 172,288 | ||
Unrecognized pre-tax compensation costs related to unvested stock options and restricted stock grants | |||
Total unrecognized pre-tax compensation costs, net of forfeitures | $ 21,933 | ||
Weighted-average period over which remaining share-based cost is expected to be recognized | 2 years 7 months 24 days | ||
Restricted stock | |||
Additional General Disclosures | |||
Total fair value of awards vested during the period | $ 15,104 | $ 8,090 | $ 5,098 |
Unrecognized pre-tax compensation costs related to unvested stock options and restricted stock grants | |||
Total unrecognized pre-tax compensation costs, net of forfeitures | $ 26,040 | ||
Weighted-average period over which remaining share-based cost is expected to be recognized | 2 years 22 days | ||
Shares | |||
Outstanding at the beginning of the period (in shares) | 7,666 | 10,056 | 12,677 |
Granted (in shares) | 2,752 | 3,303 | 2,743 |
Vested (in shares) | (5,140) | (5,239) | (4,152) |
Cancelled (in shares) | (420) | (454) | (1,212) |
Outstanding at the end of the period (in shares) | 4,858 | 7,666 | 10,056 |
Weighted Average Grant Date Fair Value | |||
Outstanding at the beginning of the period (in dollars per share) | $ 3.84 | $ 1.66 | $ 1.25 |
Granted (in dollars per share) | 8.60 | 7.01 | 2.79 |
Vested (in dollars per share) | 2.94 | 1.54 | 1.23 |
Cancelled (in dollars per share) | 6.89 | 5 | 1.48 |
Outstanding at the end of the period (in dollars per share) | $ 7.23 | $ 3.84 | $ 1.66 |
Restricted stock | Maximum | |||
Additional General Disclosures | |||
Vesting period | 3 years | ||
Performance based | |||
Stock options and stock award Plans | |||
Stock-based compensation costs | $ 12,634 | $ 1,769 | $ 0 |
2000 Plan | |||
Stock options and stock award Plans | |||
Shares of common stock reserved for the granting of stock options and other incentive awards | 22,000 | ||
2001 Plan | |||
Stock options and stock award Plans | |||
Shares of common stock authorized under stock-based compensation plans | 20,000 | ||
2004 Omnibus Equity Plan | |||
Stock options and stock award Plans | |||
Shares of common stock authorized under stock-based compensation plans | 20,000 | ||
2006 Omnibus Equity Plan | |||
Stock options and stock award Plans | |||
Shares of common stock available for grant | 50,000 | ||
2010 Omnibus Equity Plan | |||
Stock options and stock award Plans | |||
Shares of common stock available for grant | 35,000 | ||
2012 Omnibus Equity Plan | |||
Stock options and stock award Plans | |||
Shares of common stock available for grant | 28,500 | ||
2014 Omnibus Equity Plan | |||
Stock options and stock award Plans | |||
Shares of common stock available for grant | 58,000 | ||
2014 Omnibus Equity Plan | Stock options | Maximum | |||
Stock options and stock award Plans | |||
Shares of common stock available for grant | 25,000 |
Reclassifications from Accumu84
Reclassifications from Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Accumulated other comprehensive loss | |||
Balance - beginning of period | $ 57,056 | $ (2,113,702) | $ (2,459,434) |
Balance - end of period | 581,428 | 57,056 | (2,113,702) |
Accumulated other comprehensive Income (Loss) | |||
Accumulated other comprehensive loss | |||
Balance - beginning of period | (45,850) | (37,334) | (61,369) |
Other comprehensive (loss) income before reclassifications, net of $3,162, $7,506, and $0 tax benefit | (3,633) | (10,578) | 19,211 |
Amounts reclassified from accumulated other comprehensive loss to net income, net of $1,481, $1,464, and $0 tax expense | 1,702 | 2,062 | 4,824 |
Balance - end of period | (47,781) | (45,850) | (37,334) |
Defined benefit pension plans | |||
Accumulated other comprehensive loss | |||
Balance - beginning of period | (45,850) | (37,334) | (61,369) |
Other comprehensive (loss) income before reclassifications, net of $3,162, $7,506, and $0 tax benefit | (3,633) | (10,578) | 19,211 |
Amounts reclassified from accumulated other comprehensive loss to net income, net of $1,481, $1,464, and $0 tax expense | 1,702 | 2,062 | 4,824 |
Balance - end of period | (47,781) | (45,850) | (37,334) |
Other comprehensive income before reclassifications, tax benefit | 3,162 | 7,506 | 0 |
Amounts reclassified from accumulated other comprehensive loss to net income, tax expense | $ 1,481 | $ 1,464 | $ 0 |
Reclassifications from Accumu85
Reclassifications from Accumulated Other Comprehensive Loss - Amount Reclassified from AOCL (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 27, 2016 | Nov. 28, 2015 | Aug. 29, 2015 | May. 30, 2015 | Feb. 28, 2015 | Nov. 29, 2014 | Aug. 30, 2014 | May. 31, 2014 | Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Reclassification from accumulated other comprehensive loss | |||||||||||
Income (loss) before income taxes | $ 101,184 | $ 108,011 | $ 37,932 | $ 31,277 | $ 119,067 | $ 106,717 | $ 147,709 | $ 53,327 | $ 278,404 | $ 426,820 | $ 250,218 |
Reclassification from accumulated other comprehensive loss | Selling, general and administrative expenses | |||||||||||
Reclassification from accumulated other comprehensive loss | |||||||||||
Total before income tax expense | (3,183) | (3,526) | (4,824) | ||||||||
Defined benefit pension plans | |||||||||||
Reclassification from accumulated other comprehensive loss | |||||||||||
Net of income tax expense | (1,702) | (2,062) | (4,824) | ||||||||
Defined benefit pension plans | Reclassification from accumulated other comprehensive loss | |||||||||||
Reclassification from accumulated other comprehensive loss | |||||||||||
Total before income tax expense | 1,481 | 1,464 | |||||||||
Income tax expense | (1,702) | (2,062) | (4,824) | ||||||||
Prior service cost | Reclassification from accumulated other comprehensive loss | Selling, general and administrative expenses | |||||||||||
Reclassification from accumulated other comprehensive loss | |||||||||||
Income (loss) before income taxes | (67) | (240) | (240) | ||||||||
Unrecognized net loss | Reclassification from accumulated other comprehensive loss | Selling, general and administrative expenses | |||||||||||
Reclassification from accumulated other comprehensive loss | |||||||||||
Total before income tax expense | $ (3,116) | $ (3,286) | $ (4,584) |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Defined Contribution Plans | |||
Employer match of employee contributions up to 3% of pretax annual compensation to 401 (k) defined contribution plan (as a percent) | 100.00% | ||
Percentage of participant's pretax annual compensation matched 100% by employer | 3.00% | ||
Employer match of employee contributions of additional 2% of pretax annual compensation to 401 (k) defined contribution plan (as a percent) | 50.00% | ||
Percentage of participant's pretax annual compensation matched 50% by employer | 2.00% | ||
Total expense recognized for 401(k) defined contribution plans | $ 65,118 | $ 60,552 | $ 57,857 |
Vesting period | 5 years | ||
Expense recognized for supplemental retirement defined contribution plan | $ 1,377 | $ 8,748 | 11,531 |
Estimated amounts that will be amortized from accumulated other comprehensive loss into net periodic pension expense | |||
Net actuarial loss | 4,529 | ||
Prior service cost | $ 0 | ||
Asset allocations | |||
Total (as a percent) | 100.00% | 100.00% | |
Target allocation of plan assets | |||
Total (as a percent) | 100.00% | ||
Equity Securities | |||
Asset allocations | |||
Total (as a percent) | 49.00% | 53.00% | |
U.S. equities | |||
Target allocation of plan assets | |||
Total (as a percent) | 36.00% | ||
International equity | |||
Target allocation of plan assets | |||
Total (as a percent) | 13.00% | ||
Fixed Income | |||
Asset allocations | |||
Total (as a percent) | 51.00% | 47.00% | |
Target allocation of plan assets | |||
Total (as a percent) | 51.00% | ||
Defined Benefit Pension Plan | |||
Net periodic pension expense | |||
Service cost | $ 1,498 | $ 2,543 | 3,341 |
Interest cost | 6,398 | 6,474 | 6,120 |
Expected return on plan assets | (6,330) | (7,339) | (6,738) |
Amortization of unrecognized prior service cost | 67 | 240 | 240 |
Amortization of unrecognized net loss (gain) | 3,690 | 2,392 | 4,935 |
Net pension expense | 5,323 | 4,310 | 7,898 |
Other changes recognized in other comprehensive loss: | |||
Unrecognized net (gain) loss arising during period | 7,369 | 17,190 | (18,860) |
Amortization of unrecognized prior service cost | (67) | (240) | (240) |
Amortization of unrecognized net (loss) gain | (3,690) | (2,392) | (4,935) |
Net amount recognized in other comprehensive loss | 3,612 | 14,558 | (24,035) |
Net amount recognized in pension expense and other comprehensive loss | 8,935 | 18,868 | (16,137) |
Change in benefit obligations: | |||
Benefit obligation at end of prior year | 167,256 | 148,596 | |
Service cost | 1,498 | 2,543 | 3,341 |
Interest cost | 6,398 | 6,474 | 6,120 |
Distributions | (7,408) | (12,190) | |
Actuarial (gain) loss | (11,270) | 21,833 | |
Benefit obligation at end of year | 156,474 | 167,256 | 148,596 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 129,934 | 128,984 | |
Employer contributions | 0 | 1,159 | 8,000 |
Actual return on plan assets | (12,309) | 11,981 | |
Distributions (including expenses paid by the plan) | (7,408) | (12,190) | |
Fair value of plan assets at end of year | 110,217 | 129,934 | $ 128,984 |
Funded status | (46,257) | (37,322) | |
Amounts recognized in consolidated balance sheets consisted of: | |||
Accrued pension liability | (46,257) | (37,322) | |
Net amount recognized | (46,257) | (37,322) | |
Amounts recognized in accumulated other comprehensive loss consist of: | |||
Net actuarial loss | (53,825) | (50,146) | |
Prior service cost | (67) | ||
Amount recognized | (53,825) | (50,213) | |
Estimated amounts that will be amortized from accumulated other comprehensive loss into net periodic pension expense | |||
Accumulated benefit obligation | $ 156,474 | $ 167,256 | |
Significant actuarial assumptions used for all defined benefit plans to determine the benefit obligation | |||
Discount rate (as a percent) | 4.25% | 4.00% | 4.50% |
Rate of increase in future compensation levels (as a percent) | 4.50% | ||
Expected long term rate of return on plan assets | 6.50% | 6.50% | 7.75% |
Weighted average assumptions used to determine net cost | |||
Discount rate (as a percent) | 4.00% | 4.50% | 4.00% |
Rate of increase in future compensation levels (as a percent) | 4.50% | ||
Expected long-term rate of return on plan assets (as a percent) | 6.50% | 7.75% | 7.75% |
Defined benefit plans estimated future employer contributions | |||
Expected employer contribution during next fiscal year | $ 0 | ||
Nonqualified Executive Retirement Plan | |||
Defined Benefit Plans | |||
Defined benefit plans, annual benefit payment period | 15 years | ||
Net periodic pension expense | |||
Interest cost | $ 475 | $ 542 | $ 541 |
Amortization of unrecognized net loss (gain) | (574) | 894 | (351) |
Net pension expense | (99) | 1,436 | 190 |
Other changes recognized in other comprehensive loss: | |||
Unrecognized net (gain) loss arising during period | (574) | 894 | (351) |
Amortization of unrecognized net (loss) gain | 574 | (894) | 351 |
Net amount recognized in pension expense and other comprehensive loss | (99) | 1,436 | 190 |
Change in benefit obligations: | |||
Benefit obligation at end of prior year | 12,685 | 12,865 | |
Interest cost | 475 | 542 | 541 |
Distributions | (1,540) | (1,616) | |
Actuarial (gain) loss | (574) | 894 | |
Benefit obligation at end of year | 11,046 | 12,685 | $ 12,865 |
Change in plan assets: | |||
Employer contributions | 1,540 | 1,616 | |
Distributions (including expenses paid by the plan) | (1,540) | (1,616) | |
Funded status | (11,046) | (12,685) | |
Amounts recognized in consolidated balance sheets consisted of: | |||
Accrued pension liability | (11,046) | (12,685) | |
Net amount recognized | (11,046) | (12,685) | |
Estimated amounts that will be amortized from accumulated other comprehensive loss into net periodic pension expense | |||
Accumulated benefit obligation | $ 11,046 | $ 12,685 | |
Significant actuarial assumptions used for all defined benefit plans to determine the benefit obligation | |||
Discount rate (as a percent) | 4.25% | 4.00% | 4.50% |
Weighted average assumptions used to determine net cost | |||
Discount rate (as a percent) | 4.00% | 4.50% | 4.00% |
Defined benefit plans estimated future employer contributions | |||
Expected employer contribution during next fiscal year | $ 1,602 |
Retirement Plans - Fair Value (
Retirement Plans - Fair Value (Details) - Recurring - USD ($) $ in Thousands | Feb. 27, 2016 | Feb. 28, 2015 |
Retirement Plans | ||
Total assets at fair value | $ 110,217 | $ 129,934 |
International equity | ||
Retirement Plans | ||
Total assets at fair value | 14,414 | 17,071 |
Large Cap | ||
Retirement Plans | ||
Total assets at fair value | 28,188 | 35,524 |
Small-Mid Cap | ||
Retirement Plans | ||
Total assets at fair value | 11,684 | 15,977 |
Long Term Credit Bond Index | ||
Retirement Plans | ||
Total assets at fair value | 43,130 | 47,249 |
20+ Year Treasury STRIPS | ||
Retirement Plans | ||
Total assets at fair value | 10,929 | |
Intermediate Fixed Income | ||
Retirement Plans | ||
Total assets at fair value | 41 | 13,612 |
Short Term Investments | ||
Retirement Plans | ||
Total assets at fair value | 1,831 | 501 |
Level 2 | ||
Retirement Plans | ||
Total assets at fair value | 110,217 | 129,934 |
Level 2 | International equity | ||
Retirement Plans | ||
Total assets at fair value | 14,414 | 17,071 |
Level 2 | Large Cap | ||
Retirement Plans | ||
Total assets at fair value | 28,188 | 35,524 |
Level 2 | Small-Mid Cap | ||
Retirement Plans | ||
Total assets at fair value | 11,684 | 15,977 |
Level 2 | Long Term Credit Bond Index | ||
Retirement Plans | ||
Total assets at fair value | 43,130 | 47,249 |
Level 2 | 20+ Year Treasury STRIPS | ||
Retirement Plans | ||
Total assets at fair value | 10,929 | |
Level 2 | Intermediate Fixed Income | ||
Retirement Plans | ||
Total assets at fair value | 41 | 13,612 |
Level 2 | Short Term Investments | ||
Retirement Plans | ||
Total assets at fair value | $ 1,831 | $ 501 |
Retirement Plans - Future Benef
Retirement Plans - Future Benefit Payments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Future benefit payments expected to be paid in Fiscal Year | |||
Multiemployer plans total expenses recognized | $ 25,966 | $ 24,261 | $ 26,617 |
Defined Benefit Pension Plan | |||
Future benefit payments expected to be paid in Fiscal Year | |||
2,017 | 7,971 | ||
2,018 | 8,153 | ||
2,019 | 8,134 | ||
2,020 | 8,332 | ||
2,021 | 8,495 | ||
2022 - 2026 | 44,253 | ||
Total | 85,338 | ||
Nonqualified Executive Retirement Plan | |||
Future benefit payments expected to be paid in Fiscal Year | |||
2,017 | 1,602 | ||
2,018 | 1,234 | ||
2,019 | 1,209 | ||
2,020 | 1,129 | ||
2,021 | 961 | ||
2022 - 2026 | 3,818 | ||
Total | $ 9,953 |
Multiemployer Plans that Prov89
Multiemployer Plans that Provide Pension Benefits (Details) $ in Thousands | Feb. 02, 2015$ / h | Feb. 01, 2015$ / h | Jan. 01, 2015$ / h | Dec. 31, 2014$ / h | Oct. 01, 2014$ / h | Sep. 01, 2014$ / h | Aug. 31, 2014$ / h | Feb. 27, 2016USD ($) | Feb. 28, 2015USD ($) | Mar. 01, 2014USD ($) |
Multiemployer Plans that Provide Pension Benefits | ||||||||||
Contributions by employer | $ 25,966 | $ 24,261 | $ 26,617 | |||||||
Minimum | ||||||||||
Multiemployer Plans that Provide Pension Benefits | ||||||||||
Company listed in these plan's Forms 5500 as providing more than specified percentage of the total contributions (as a percent) | 5.00% | |||||||||
1199 SEIU Health Care Employees Pension Fund | ||||||||||
Multiemployer Plans that Provide Pension Benefits | ||||||||||
Contributions by employer | $ 12,959 | 11,568 | 14,093 | |||||||
Minimum funding requirements (as a percent) | 10.22% | 11.25% | ||||||||
Southern California United Food and Commercial Workers Unions and Drug Employers Pension Fund | ||||||||||
Multiemployer Plans that Provide Pension Benefits | ||||||||||
Contributions by employer | 7,552 | 7,002 | 6,476 | |||||||
Minimum funding requirements for pharmacists (in dollars per hour) | $ / h | 1.328 | 1.242 | ||||||||
Minimum funding requirements for non pharmacists (in dollars per hour) | $ / h | 0.602 | 0.563 | ||||||||
UFCW Pharmacists, Clerks and Drug Employers Pension Trust (formerly Northern California Pharmacists, Clerks and Drug Employers Pension Plan) | ||||||||||
Multiemployer Plans that Provide Pension Benefits | ||||||||||
Contributions by employer | 3,006 | 2,938 | 2,900 | |||||||
Minimum funding requirements (in dollars per hour) | $ / h | 0.55 | 0.57 | ||||||||
United Food and Commercial Workers Union-Employer Pension Fund | ||||||||||
Multiemployer Plans that Provide Pension Benefits | ||||||||||
Contributions by employer | 732 | 667 | 629 | |||||||
Minimum funding requirements (in dollars per hour) | $ / h | 1.49 | 1.62 | ||||||||
United Food and Commercial Workers Union Local 880 - Mercantile Employers Joint Pension Fund | ||||||||||
Multiemployer Plans that Provide Pension Benefits | ||||||||||
Contributions by employer | 454 | 480 | 441 | |||||||
Minimum funding requirements (in dollars per hour) | $ / h | 1.73 | 1.52 | ||||||||
Other Funds | ||||||||||
Multiemployer Plans that Provide Pension Benefits | ||||||||||
Contributions by employer | $ 1,263 | 1,606 | $ 2,078 | |||||||
Minimum funding requirements (in dollars per hour) | $ / h | 1.61 | |||||||||
Central Ohio Locals 1059 and 75 | ||||||||||
Multiemployer Plans that Provide Pension Benefits | ||||||||||
Withdrawal liability incurred | $ 1,000 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | Jun. 24, 2015USD ($)segment | Jun. 23, 2015segment | Feb. 27, 2016USD ($) | Nov. 28, 2015USD ($) | Aug. 29, 2015USD ($) | May. 30, 2015USD ($) | Feb. 28, 2015USD ($) | Nov. 29, 2014USD ($) | Aug. 30, 2014USD ($) | May. 31, 2014USD ($) | Feb. 27, 2016USD ($)segment | Feb. 28, 2015USD ($) | Mar. 01, 2014USD ($) |
Segment Reporting | |||||||||||||
Number of reportable segments | segment | 2 | 1 | 2 | ||||||||||
Revenues | $ 8,270,136 | $ 8,154,184 | $ 7,664,776 | $ 6,647,561 | $ 6,847,929 | $ 6,692,333 | $ 6,522,584 | $ 6,465,531 | $ 30,736,657 | $ 26,528,377 | $ 25,526,413 | ||
Gross Profit | 7,826,255 | 7,576,732 | 7,323,734 | ||||||||||
Adjusted EBITDA | 1,402,262 | 1,322,843 | 1,324,959 | ||||||||||
Total Assets | 11,277,010 | 8,777,425 | 11,277,010 | 8,777,425 | |||||||||
Goodwill | 1,713,475 | 76,124 | 1,713,475 | 76,124 | |||||||||
Additions to property and equipment and intangible assets | 669,995 | 539,386 | |||||||||||
Accounts receivable | 1,601,008 | 980,904 | 1,601,008 | 980,904 | |||||||||
Retail Pharmacy | |||||||||||||
Segment Reporting | |||||||||||||
Revenues | 26,865,931 | 26,528,377 | 25,526,413 | ||||||||||
Goodwill | 76,124 | 76,124 | 76,124 | 76,124 | |||||||||
Pharmacy Services | |||||||||||||
Segment Reporting | |||||||||||||
Revenues | 4,103,513 | ||||||||||||
Goodwill | $ 1,637,351 | 1,637,351 | 1,637,351 | ||||||||||
Operating segments | Retail Pharmacy | |||||||||||||
Segment Reporting | |||||||||||||
Revenues | 26,865,931 | 26,528,377 | 25,526,413 | ||||||||||
Gross Profit | 7,595,429 | 7,576,732 | 7,323,734 | ||||||||||
Adjusted EBITDA | 1,300,905 | 1,322,843 | $ 1,324,959 | ||||||||||
Total Assets | 8,468,186 | 8,777,425 | 8,468,186 | 8,777,425 | |||||||||
Goodwill | 76,124 | $ 76,124 | 76,124 | 76,124 | |||||||||
Additions to property and equipment and intangible assets | 667,719 | $ 539,386 | |||||||||||
Operating segments | Pharmacy Services | |||||||||||||
Segment Reporting | |||||||||||||
Revenues | 4,103,513 | ||||||||||||
Gross Profit | 230,826 | ||||||||||||
Adjusted EBITDA | 101,357 | ||||||||||||
Total Assets | 2,948,548 | 2,948,548 | |||||||||||
Goodwill | 1,637,351 | 1,637,351 | |||||||||||
Additions to property and equipment and intangible assets | 2,276 | ||||||||||||
Intersegment elimination | |||||||||||||
Segment Reporting | |||||||||||||
Revenues | (232,787) | ||||||||||||
Total Assets | (139,724) | (139,724) | |||||||||||
Long-term deferred tax liability | 116,027 | 116,027 | |||||||||||
Accounts receivable | $ 23,697 | $ 23,697 |
Segment Reporting - Adjusted EB
Segment Reporting - Adjusted EBITDA (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 27, 2016 | Nov. 28, 2015 | Aug. 29, 2015 | May. 30, 2015 | Feb. 28, 2015 | Nov. 29, 2014 | Aug. 30, 2014 | May. 31, 2014 | Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Segment Reporting | |||||||||||
Net income | $ 65,617 | $ 59,543 | $ 21,469 | $ 18,836 | $ 1,835,032 | $ 104,846 | $ 127,849 | $ 41,446 | $ 165,465 | $ 2,109,173 | $ 249,414 |
Interest expense | 103,678 | 106,879 | 115,410 | 123,607 | 98,442 | 97,400 | 100,950 | 100,820 | 449,574 | 397,612 | 424,591 |
Income tax expense | 139,297 | 158,951 | 161,883 | ||||||||
Income tax valuation allowance reduction | (26,358) | (1,841,304) | (161,079) | ||||||||
Depreciation and amortization expense | 509,212 | 416,628 | 403,741 | ||||||||
LIFO charge (credit) | 6,796 | (23,489) | 11,163 | (18,857) | 104,142 | ||||||
Lease termination and impairment charges | $ 26,753 | $ 7,011 | 9,637 | $ 5,022 | $ 21,284 | 8,702 | $ 7,111 | $ 4,848 | 48,423 | 41,945 | 41,304 |
Loss on debt retirement, net | $ 33,205 | $ 18,512 | 33,205 | 18,512 | 62,443 | ||||||
Other | 72,281 | 40,183 | 38,520 | ||||||||
Adjusted EBITDA | $ 1,402,262 | $ 1,322,843 | $ 1,324,959 |
Commitments, Contingencies an92
Commitments, Contingencies and Guarantees (Details) $ in Millions | Feb. 27, 2016caseStoreManager | Dec. 23, 2015case | Feb. 27, 2016USD ($)caseStoreManager |
WBA Merger | |||
Commitments and contingencies | |||
Number of lawsuits | 10 | ||
Indergit | |||
Commitments and contingencies | |||
Number of current and former store managers court ordered notices to be sent | StoreManager | 7,000 | 7,000 | |
Number of current and former store managers who joined the action | StoreManager | 1,550 | 1,550 | |
Number of current and former store managers to whom notices will be sent after the Court approval | StoreManager | 1,750 | 1,750 | |
Chase and Scherwin and Kyle | |||
Commitments and contingencies | |||
Legal settlement amount | $ | $ 9 | ||
Hall | |||
Commitments and contingencies | |||
Number of similar cases | 2 | ||
DELAWARE | |||
Commitments and contingencies | |||
Number of lawsuits | 8 | ||
DELAWARE | WBA Merger | |||
Commitments and contingencies | |||
Number of lawsuits | 8 | ||
PENNSYLVANIA | WBA Merger | |||
Commitments and contingencies | |||
Number of lawsuits | 1 | ||
DELAWARE AND PENNSYLVANIA | WBA Merger | |||
Commitments and contingencies | |||
Number of lawsuits | 9 |
Supplementary Cash Flow Data (D
Supplementary Cash Flow Data (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Supplementary Cash Flow Data | |||
Cash paid for interest (net of capitalized amounts of $196, $145 and $197) | $ 403,727 | $ 384,329 | $ 414,692 |
Capitalized amount of interest | 196 | 145 | 197 |
Cash payments for income taxes, net | 4,856 | 6,665 | 3,191 |
Equipment financed under capital leases | 9,614 | 6,157 | 18,065 |
Equipment received for noncash consideration | 3,011 | 1,600 | 2,825 |
Preferred stock dividends paid in additional shares | 8,318 | ||
Accrued capital expenditures | 69,417 | 87,916 | 72,841 |
Gross borrowings from revolver | 4,729,000 | 6,078,000 | 2,668,000 |
Gross repayments to revolver | $ 4,354,000 | $ 4,753,000 | $ 2,933,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2015 | Sep. 30, 2013 | Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | Oct. 27, 2015 | Jul. 22, 2013 | Mar. 02, 2013 |
Related Party Transactions | ||||||||
Receivables from related parties | $ 48 | $ 15 | ||||||
Number of days following the closing of the merger | 120 days | |||||||
Prepayment of executive retention bonus | 500 | |||||||
Bonus expense, net | $ 1,778 | |||||||
Par value of common stock (in dollars per share) | $ 1 | $ 1 | $ 1 | $ 1 | ||||
Market value of common stock issued upon redemption of preferred stock | $ 64,089 | $ 20 | ||||||
Closing price per share (in dollars per share) | $ 4.76 | |||||||
Redemption percentage of the liquidation preference per share | 105.00% | |||||||
Liquidation preference (in dollars per share) | $ 100 | |||||||
Liquidation preference | $ 199,937 | |||||||
Conversion of Series G and H preferred stock | $ 25,603 | |||||||
Common Stock | ||||||||
Related Party Transactions | ||||||||
Common stock issued upon redemption of preferred stock (in shares) | 24,762,000 | 8,000 | 40,000,000 | |||||
Market value of common stock issued upon redemption of preferred stock | $ 24,762 | $ 8 | $ 40,000 | |||||
Series G preferred stock | ||||||||
Related Party Transactions | ||||||||
Quarterly dividend (as a percent) | 7.00% | |||||||
Market value of common stock issued upon redemption of preferred stock | $ (1) | |||||||
Liquidation preference (in dollars per share) | $ 100 | $ 100 | $ 100 | |||||
Series H preferred stock | ||||||||
Related Party Transactions | ||||||||
Quarterly dividend (as a percent) | 6.00% | |||||||
Common stock issued upon redemption of preferred stock (in shares) | (1,904,000) | |||||||
Market value of common stock issued upon redemption of preferred stock | $ (190,415) | |||||||
Preferred Stock (Series G and H) | ||||||||
Related Party Transactions | ||||||||
Preferred stock outstanding (in shares) | 0 | |||||||
Contracted conversion rate (in dollars per share) | $ 5.50 | |||||||
Total common stock shares issuable at contracted conversion rate | 34,621,117 | |||||||
Conversion of Series G and H preferred stock | $ 25,603 | |||||||
Diluted earning per share due to conversion of preferred stock (in dollars per share) | $ 0.03 | |||||||
Green Equity Investors III, L.P. ("LGP") | Common Stock | ||||||||
Related Party Transactions | ||||||||
Common stock issued upon redemption of preferred stock (in shares) | 40,000,000 | |||||||
Market value of common stock issued upon redemption of preferred stock | $ 190,400 | |||||||
Green Equity Investors III, L.P. ("LGP") | Series G preferred stock | ||||||||
Related Party Transactions | ||||||||
Number of shares agreed to be exchanged | 8 | |||||||
Green Equity Investors III, L.P. ("LGP") | Series H preferred stock | ||||||||
Related Party Transactions | ||||||||
Number of shares agreed to be exchanged | 1,876,013 | |||||||
Green Equity Investors III, L.P. ("LGP") | Preferred Stock (Series G and H) | ||||||||
Related Party Transactions | ||||||||
Preferred stock outstanding (in shares) | 1,904,161 | |||||||
Shares of earned and unpaid dividends | 28,140 | |||||||
Total common stock shares issuable at contracted conversion rate | 34,621,117 | |||||||
Conversion of Series G and H preferred stock | $ 25,603 | |||||||
Diluted earning per share due to conversion of preferred stock (in dollars per share) | $ 0.03 | |||||||
Additional common stock issued upon redemption of preferred stock (in shares) | 5,378,883 | |||||||
Jean Coutu Group | ||||||||
Related Party Transactions | ||||||||
Number of shares sold | 65,401,162 |
Guarantor and Non-Guarantor C95
Guarantor and Non-Guarantor Condensed Consolidating Financial Information - Balance Sheet (Details) - USD ($) $ in Thousands | Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | Mar. 02, 2013 |
Condensed consolidating balance sheet | ||||
Ownership interest (as a percent) | 100.00% | |||
Current assets: | ||||
Cash and cash equivalents | $ 124,471 | $ 115,899 | $ 146,406 | $ 129,452 |
Accounts receivable, net | 1,601,008 | 980,904 | ||
Inventories, net of LIFO reserve of $0, $1,006,396, $0, $0, and $1,006,396 | 2,697,104 | 2,882,980 | ||
Deferred tax assets | 17,823 | |||
Prepaid expenses and other current assets | 128,144 | 224,152 | ||
Total current assets | 4,550,727 | 4,221,758 | ||
Property, plant and equipment, net | 2,255,398 | 2,091,369 | ||
Goodwill | 1,713,475 | 76,124 | ||
Other intangibles, net | 1,004,379 | 421,480 | ||
Deferred tax assets | 1,539,141 | 1,766,349 | ||
Other assets | 213,890 | 200,345 | ||
Total assets | 11,277,010 | 8,777,425 | ||
Current liabilities: | ||||
Current maturities of long-term debt and lease financing obligations | 26,848 | 100,376 | ||
Accounts payable | 1,542,797 | 1,133,520 | ||
Accrued salaries, wages and other current liabilities | 1,427,250 | 1,193,419 | ||
Deferred tax liabilities | 57,685 | |||
Total current liabilities | 2,996,895 | 2,485,000 | ||
Long-term debt, less current maturities | 6,914,393 | 5,397,588 | ||
Lease financing obligations, less current maturities | 52,895 | 61,152 | ||
Other noncurrent liabilities | 731,399 | 776,629 | ||
Total liabilities | $ 10,695,582 | $ 8,720,369 | ||
Commitments and contingencies | ||||
Total stockholders' equity | $ 581,428 | $ 57,056 | $ (2,113,702) | $ (2,459,434) |
Total liabilities and stockholders' equity | 11,277,010 | 8,777,425 | ||
Inventories, LIFO reserve (in dollars) | 1,006,396 | |||
Reportable legal entity | Rite Aid Corporation (Parent Company Only) | ||||
Current assets: | ||||
Investment in subsidiaries | 14,832,523 | |||
Total assets | 14,832,523 | |||
Current liabilities: | ||||
Current maturities of long-term debt and lease financing obligations | 90 | |||
Accrued salaries, wages and other current liabilities | 65,743 | |||
Total current liabilities | 65,833 | |||
Long-term debt, less current maturities | 6,914,393 | |||
Intercompany payable | 7,270,869 | |||
Total liabilities | 14,251,095 | |||
Total stockholders' equity | 581,428 | |||
Total liabilities and stockholders' equity | 14,832,523 | |||
Inventories, LIFO reserve (in dollars) | 0 | |||
Reportable legal entity | Subsidiary Guarantors | ||||
Current assets: | ||||
Cash and cash equivalents | 90,569 | $ 115,899 | ||
Accounts receivable, net | 1,316,797 | |||
Intercompany receivable | 224,220 | |||
Inventories, net of LIFO reserve of $0, $1,006,396, $0, $0, and $1,006,396 | 2,697,104 | |||
Prepaid expenses and other current assets | 121,684 | |||
Total current assets | 4,450,374 | |||
Property, plant and equipment, net | 2,255,398 | |||
Goodwill | 1,713,475 | |||
Other intangibles, net | 948,451 | |||
Deferred tax assets | 1,539,141 | |||
Investment in subsidiaries | 57,167 | |||
Intercompany receivable | 7,270,869 | |||
Other assets | 207,821 | |||
Total assets | 18,442,696 | |||
Current liabilities: | ||||
Current maturities of long-term debt and lease financing obligations | 26,758 | |||
Accounts payable | 1,541,984 | |||
Accrued salaries, wages and other current liabilities | 1,274,074 | |||
Total current liabilities | 2,842,816 | |||
Lease financing obligations, less current maturities | 52,895 | |||
Other noncurrent liabilities | 714,462 | |||
Total liabilities | 3,610,173 | |||
Total stockholders' equity | 14,832,523 | |||
Total liabilities and stockholders' equity | 18,442,696 | |||
Inventories, LIFO reserve (in dollars) | 1,006,396 | |||
Reportable legal entity | Non-Guarantor Subsidiaries | ||||
Current assets: | ||||
Cash and cash equivalents | 33,902 | |||
Accounts receivable, net | 284,211 | |||
Prepaid expenses and other current assets | 6,460 | |||
Total current assets | 324,573 | |||
Other intangibles, net | 55,928 | |||
Other assets | 6,069 | |||
Total assets | 386,570 | |||
Current liabilities: | ||||
Accounts payable | 813 | |||
Intercompany payable | 224,220 | |||
Accrued salaries, wages and other current liabilities | 87,433 | |||
Total current liabilities | 312,466 | |||
Other noncurrent liabilities | 16,937 | |||
Total liabilities | 329,403 | |||
Total stockholders' equity | 57,167 | |||
Total liabilities and stockholders' equity | 386,570 | |||
Inventories, LIFO reserve (in dollars) | 0 | |||
Eliminations | ||||
Current assets: | ||||
Intercompany receivable | (224,220) | |||
Total current assets | (224,220) | |||
Investment in subsidiaries | (14,889,690) | |||
Intercompany receivable | (7,270,869) | |||
Total assets | (22,384,779) | |||
Current liabilities: | ||||
Intercompany payable | (224,220) | |||
Total current liabilities | (224,220) | |||
Intercompany payable | (7,270,869) | |||
Total liabilities | (7,495,089) | |||
Total stockholders' equity | (14,889,690) | |||
Total liabilities and stockholders' equity | (22,384,779) | |||
Inventories, LIFO reserve (in dollars) | $ 0 |
Guarantor and Non-Guarantor C96
Guarantor and Non-Guarantor Condensed Consolidating Financial Information - Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 27, 2016 | Nov. 28, 2015 | Aug. 29, 2015 | May. 30, 2015 | Feb. 28, 2015 | Nov. 29, 2014 | Aug. 30, 2014 | May. 31, 2014 | Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Condensed consolidated statements of operations | |||||||||||
Revenues | $ 8,270,136 | $ 8,154,184 | $ 7,664,776 | $ 6,647,561 | $ 6,847,929 | $ 6,692,333 | $ 6,522,584 | $ 6,465,531 | $ 30,736,657 | $ 26,528,377 | $ 25,526,413 |
Costs and expenses: | |||||||||||
Cost of revenues | 6,228,581 | 6,151,305 | 5,742,485 | 4,788,031 | 4,892,068 | 4,769,020 | 4,628,005 | 4,662,552 | 22,910,402 | 18,951,645 | 18,202,679 |
Selling, general and administrative expenses | 1,810,288 | 1,777,647 | 1,725,826 | 1,699,585 | 1,718,327 | 1,692,437 | 1,640,524 | 1,644,354 | 7,013,346 | 6,695,642 | 6,561,162 |
Lease termination and impairment charges | 26,753 | 7,011 | 9,637 | 5,022 | 21,284 | 8,702 | 7,111 | 4,848 | 48,423 | 41,945 | 41,304 |
Interest expense | 103,678 | 106,879 | 115,410 | 123,607 | 98,442 | 97,400 | 100,950 | 100,820 | 449,574 | 397,612 | 424,591 |
Loss on debt retirement, net | 33,205 | 18,512 | 33,205 | 18,512 | 62,443 | ||||||
Loss on sale of assets, net | (348) | 3,331 | 281 | 39 | (1,259) | (455) | (1,715) | (370) | 3,303 | (3,799) | (15,984) |
Total costs and expenses | 8,168,952 | 8,046,173 | 7,626,844 | 6,616,284 | 6,728,862 | 6,585,616 | 6,374,875 | 6,412,204 | 30,458,253 | 26,101,557 | 25,276,195 |
Income (loss) before income taxes | 101,184 | 108,011 | 37,932 | 31,277 | 119,067 | 106,717 | 147,709 | 53,327 | 278,404 | 426,820 | 250,218 |
Income tax expense (benefit) | 35,567 | 48,468 | 16,463 | 12,441 | (1,715,965) | 1,871 | 19,860 | 11,881 | 112,939 | (1,682,353) | 804 |
Net income | $ 65,617 | $ 59,543 | $ 21,469 | $ 18,836 | $ 1,835,032 | $ 104,846 | $ 127,849 | $ 41,446 | 165,465 | 2,109,173 | 249,414 |
Total other comprehensive (loss) income | (1,931) | (8,516) | 24,035 | ||||||||
Comprehensive income | 163,534 | $ 2,100,657 | $ 273,449 | ||||||||
Reportable legal entity | Rite Aid Corporation (Parent Company Only) | |||||||||||
Costs and expenses: | |||||||||||
Interest expense | 415,304 | ||||||||||
Loss on debt retirement, net | 33,205 | ||||||||||
Equity in earnings of subsidiaries, net of tax | (613,974) | ||||||||||
Total costs and expenses | (165,465) | ||||||||||
Income (loss) before income taxes | 165,465 | ||||||||||
Net income | 165,465 | ||||||||||
Total other comprehensive (loss) income | (1,931) | ||||||||||
Comprehensive income | 163,534 | ||||||||||
Reportable legal entity | Subsidiary Guarantors | |||||||||||
Condensed consolidated statements of operations | |||||||||||
Revenues | 30,731,771 | ||||||||||
Costs and expenses: | |||||||||||
Cost of revenues | 22,910,402 | ||||||||||
Selling, general and administrative expenses | 7,004,321 | ||||||||||
Lease termination and impairment charges | 48,423 | ||||||||||
Interest expense | 34,268 | ||||||||||
Loss on sale of assets, net | 3,303 | ||||||||||
Equity in earnings of subsidiaries, net of tax | 3,972 | ||||||||||
Total costs and expenses | 30,004,689 | ||||||||||
Income (loss) before income taxes | 727,082 | ||||||||||
Income tax expense (benefit) | 113,108 | ||||||||||
Net income | 613,974 | ||||||||||
Total other comprehensive (loss) income | (1,931) | ||||||||||
Comprehensive income | 612,043 | ||||||||||
Reportable legal entity | Non-Guarantor Subsidiaries | |||||||||||
Condensed consolidated statements of operations | |||||||||||
Revenues | 162,620 | ||||||||||
Costs and expenses: | |||||||||||
Cost of revenues | 154,838 | ||||||||||
Selling, general and administrative expenses | 11,921 | ||||||||||
Interest expense | 2 | ||||||||||
Total costs and expenses | 166,761 | ||||||||||
Income (loss) before income taxes | (4,141) | ||||||||||
Income tax expense (benefit) | (169) | ||||||||||
Net income | (3,972) | ||||||||||
Comprehensive income | (3,972) | ||||||||||
Eliminations | |||||||||||
Condensed consolidated statements of operations | |||||||||||
Revenues | (157,734) | ||||||||||
Costs and expenses: | |||||||||||
Cost of revenues | (154,838) | ||||||||||
Selling, general and administrative expenses | (2,896) | ||||||||||
Equity in earnings of subsidiaries, net of tax | 610,002 | ||||||||||
Total costs and expenses | 452,268 | ||||||||||
Income (loss) before income taxes | (610,002) | ||||||||||
Net income | (610,002) | ||||||||||
Total other comprehensive (loss) income | 1,931 | ||||||||||
Comprehensive income | $ (608,071) |
Guarantor and Non-Guarantor C97
Guarantor and Non-Guarantor Condensed Consolidating Financial Information - Statement of Cash Flow (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Operating activities: | |||
Net cash (used in) provided by operating activities | $ 997,402 | $ 648,959 | $ 702,046 |
Investing activities: | |||
Payments for property, plant and equipment | (541,347) | (426,828) | (333,870) |
Intangible assets acquired | (128,648) | (112,558) | (87,353) |
Acquisition of businesses, net of cash acquired | (1,778,377) | (69,793) | |
Proceeds from sale-leaseback transactions | 36,732 | 3,989 | |
Proceeds from dispositions of assets and investments | 9,782 | 15,494 | 28,416 |
Net cash used in investing activities | (2,401,858) | (593,685) | (364,924) |
Financing activities: | |||
Proceeds from issuance of long-term debt | 1,800,000 | 1,152,293 | 1,310,000 |
Net proceeds from revolver | 375,000 | 1,325,000 | (265,000) |
Principal payments on long-term debt | (672,717) | (2,595,709) | (1,340,435) |
Change in zero balance cash accounts | (62,878) | 1,081 | (95) |
Net proceeds from issuance of common stock | 11,376 | 24,117 | 33,217 |
Financing fees paid for early debt redemption | (26,003) | (13,841) | (45,636) |
Excess tax benefit on stock options and restricted stock | 22,884 | 41,563 | 26,665 |
Deferred financing costs paid | (34,634) | (20,285) | (17,850) |
Net cash provided by (used in) financing activities | 1,413,028 | (85,781) | (320,168) |
Increase (decrease) in cash and cash equivalents | 8,572 | (30,507) | 16,954 |
Cash and cash equivalents, beginning of year | 115,899 | 146,406 | 129,452 |
Cash and cash equivalents, end of year | 124,471 | 115,899 | $ 146,406 |
Reportable legal entity | Rite Aid Corporation (Parent Company Only) | |||
Operating activities: | |||
Net cash (used in) provided by operating activities | (387,871) | ||
Investing activities: | |||
Acquisition of businesses, net of cash acquired | (1,778,377) | ||
Intercompany activity | (103,834) | ||
Net cash used in investing activities | (1,882,211) | ||
Financing activities: | |||
Proceeds from issuance of long-term debt | 1,800,000 | ||
Net proceeds from revolver | 375,000 | ||
Principal payments on long-term debt | (650,079) | ||
Net proceeds from issuance of common stock | 11,376 | ||
Financing fees paid for early debt redemption | (26,003) | ||
Deferred financing costs paid | (34,634) | ||
Intercompany activity | 794,422 | ||
Net cash provided by (used in) financing activities | 2,270,082 | ||
Reportable legal entity | Subsidiary Guarantors | |||
Operating activities: | |||
Net cash (used in) provided by operating activities | 1,391,759 | ||
Investing activities: | |||
Payments for property, plant and equipment | (541,347) | ||
Intangible assets acquired | (128,648) | ||
Intercompany activity | (794,422) | ||
Proceeds from sale-leaseback transactions | 36,732 | ||
Proceeds from dispositions of assets and investments | 9,782 | ||
Net cash used in investing activities | (1,417,903) | ||
Financing activities: | |||
Principal payments on long-term debt | (22,638) | ||
Change in zero balance cash accounts | (62,878) | ||
Excess tax benefit on stock options and restricted stock | 22,884 | ||
Intercompany activity | 63,446 | ||
Net cash provided by (used in) financing activities | 814 | ||
Increase (decrease) in cash and cash equivalents | (25,330) | ||
Cash and cash equivalents, beginning of year | 115,899 | ||
Cash and cash equivalents, end of year | 90,569 | $ 115,899 | |
Reportable legal entity | Non-Guarantor Subsidiaries | |||
Operating activities: | |||
Net cash (used in) provided by operating activities | (6,486) | ||
Financing activities: | |||
Intercompany activity | 40,388 | ||
Net cash provided by (used in) financing activities | 40,388 | ||
Increase (decrease) in cash and cash equivalents | 33,902 | ||
Cash and cash equivalents, end of year | 33,902 | ||
Eliminations | |||
Investing activities: | |||
Intercompany activity | 898,256 | ||
Net cash used in investing activities | 898,256 | ||
Financing activities: | |||
Intercompany activity | (898,256) | ||
Net cash provided by (used in) financing activities | $ (898,256) |
Interim Financial Results (Un98
Interim Financial Results (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 15, 2014 | Feb. 27, 2016 | Nov. 28, 2015 | Aug. 29, 2015 | May. 30, 2015 | Feb. 28, 2015 | Nov. 29, 2014 | Aug. 30, 2014 | May. 31, 2014 | Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | Aug. 15, 2015 | Jul. 02, 2013 |
Revenues | $ 8,270,136 | $ 8,154,184 | $ 7,664,776 | $ 6,647,561 | $ 6,847,929 | $ 6,692,333 | $ 6,522,584 | $ 6,465,531 | $ 30,736,657 | $ 26,528,377 | $ 25,526,413 | |||
Cost of revenues | 6,228,581 | 6,151,305 | 5,742,485 | 4,788,031 | 4,892,068 | 4,769,020 | 4,628,005 | 4,662,552 | 22,910,402 | 18,951,645 | 18,202,679 | |||
Selling, general and administrative expenses | 1,810,288 | 1,777,647 | 1,725,826 | 1,699,585 | 1,718,327 | 1,692,437 | 1,640,524 | 1,644,354 | 7,013,346 | 6,695,642 | 6,561,162 | |||
Lease termination and impairment charges | 26,753 | 7,011 | 9,637 | 5,022 | 21,284 | 8,702 | 7,111 | 4,848 | 48,423 | 41,945 | 41,304 | |||
Interest expense | 103,678 | 106,879 | 115,410 | 123,607 | 98,442 | 97,400 | 100,950 | 100,820 | 449,574 | 397,612 | 424,591 | |||
Loss on debt retirements, net | 33,205 | 18,512 | 33,205 | 18,512 | 62,443 | |||||||||
Loss (gain) on sale of assets, net | (348) | 3,331 | 281 | 39 | (1,259) | (455) | (1,715) | (370) | 3,303 | (3,799) | (15,984) | |||
Total costs and expenses | 8,168,952 | 8,046,173 | 7,626,844 | 6,616,284 | 6,728,862 | 6,585,616 | 6,374,875 | 6,412,204 | 30,458,253 | 26,101,557 | 25,276,195 | |||
Income before income taxes | 101,184 | 108,011 | 37,932 | 31,277 | 119,067 | 106,717 | 147,709 | 53,327 | 278,404 | 426,820 | 250,218 | |||
Income tax expense | 35,567 | 48,468 | 16,463 | 12,441 | (1,715,965) | 1,871 | 19,860 | 11,881 | 112,939 | (1,682,353) | 804 | |||
Net income | $ 65,617 | $ 59,543 | $ 21,469 | $ 18,836 | $ 1,835,032 | $ 104,846 | $ 127,849 | $ 41,446 | $ 165,465 | $ 2,109,173 | $ 249,414 | |||
Basic (loss) income per share (in dollars per share) | $ 0.06 | $ 0.06 | $ 0.02 | $ 0.02 | $ 1.88 | $ 0.11 | $ 0.13 | $ 0.04 | $ 0.16 | $ 2.17 | $ 0.23 | |||
Diluted (loss) income per share (in dollars per share) | $ 0.06 | $ 0.06 | $ 0.02 | $ 0.02 | $ 1.79 | $ 0.10 | $ 0.13 | $ 0.04 | $ 0.16 | $ 2.08 | $ 0.23 | |||
Facilities impairment charges | $ 16,401 | $ 13,105 | ||||||||||||
LIFO charge (credit) | $ 6,796 | $ (23,489) | $ 11,163 | $ (18,857) | $ 104,142 | |||||||||
8.00% senior secured notes (senior lien) due August 2020 | ||||||||||||||
Loss on debt retirements, net | $ 33,205 | |||||||||||||
Debt instrument, stated interest rate (as a percent) | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | |||||||
10.25% senior secured notes (second lien) due October 2019 | ||||||||||||||
Loss on debt retirements, net | $ 18,512 | |||||||||||||
Debt instrument, stated interest rate (as a percent) | 10.25% | 10.25% | 10.25% |
Financial Instruments (Details)
Financial Instruments (Details) - USD ($) $ in Thousands | Feb. 27, 2016 | Feb. 28, 2015 |
Carrying Amount | ||
Financial instruments | ||
Variable rate indebtedness | $ 3,027,675 | $ 2,642,008 |
Fixed rate indebtedness | 3,886,808 | 2,825,115 |
Fair Value | ||
Financial instruments | ||
Variable rate indebtedness | 3,025,500 | 2,649,825 |
Fixed rate indebtedness | 4,210,416 | $ 3,230,801 |
Other assets | ||
Financial instruments | ||
Investment at amortized cost | $ 6,069 |
SCHEDULE II-VALUATION AND QU100
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS (Details) - Allowances deducted from accounts receivable for estimated uncollectible amounts: - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 27, 2016 | Feb. 28, 2015 | Mar. 01, 2014 | |
Allowances deducted from accounts receivable for estimated uncollectible amounts: | |||
Balance at Beginning of Period | $ 31,247 | $ 26,873 | $ 28,271 |
Additions Charged to Costs and Expenses | 71,984 | 66,319 | 43,524 |
Deductions | 70,411 | 61,945 | 44,922 |
Balance at End of Period | $ 32,820 | $ 31,247 | $ 26,873 |