New Rite Aid (RADCQ) 10-Q 6 Jul 17 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Jun. 03, 2017	Jun. 22, 2017
Document and Entity Information
Entity Registrant Name	RITE AID CORP
Entity Central Index Key	84,129
Document Type	10-Q
Document Period End Date	Jun. 3, 2017
Amendment Flag	false
Current Fiscal Year End Date	--03-03
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		1,053,291,998
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q1

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 03, 2017	Mar. 04, 2017
Current assets:
Cash and cash equivalents	$ 214,449	$ 245,410
Accounts receivable, net	1,781,175	1,771,126
Inventories, net of LIFO reserve of $1,016,650 and $999,776	2,789,176	2,837,211
Prepaid expenses and other current assets	192,767	211,541
Total current assets	4,977,567	5,065,288
Property, plant and equipment, net	2,218,333	2,251,692
Goodwill	1,715,479	1,715,479
Other intangibles, net	787,969	835,795
Deferred tax assets	1,556,301	1,505,564
Other assets	204,489	219,934
Total assets	11,460,138	11,593,752
Current liabilities:
Current maturities of long-term debt and lease financing obligations	22,460	21,335
Accounts payable	1,646,457	1,613,909
Accrued salaries, wages and other current liabilities	1,339,778	1,370,004
Total current liabilities	3,008,695	3,005,248
Long-term debt, less current maturities	7,177,918	7,263,288
Lease financing obligations, less current maturities	39,889	44,070
Other noncurrent liabilities	673,008	667,076
Total liabilities	10,899,510	10,979,682
Commitments and contingencies
Stockholders' equity:
Common stock, par value $1 per share; 1,500,000 shares authorized; shares issued and outstanding 1,053,685 and 1,053,690	1,053,685	1,053,690
Additional paid-in capital	4,848,675	4,839,854
Accumulated deficit	(5,299,929)	(5,237,157)
Accumulated other comprehensive loss	(41,803)	(42,317)
Total stockholders' equity	560,628	614,070
Total liabilities and stockholders' equity	$ 11,460,138	$ 11,593,752

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Jun. 03, 2017	Mar. 04, 2017
CONDENSED CONSOLIDATED BALANCE SHEETS
Inventories, LIFO reserve (in dollars)	$ 1,016,650	$ 999,776
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shares authorized	1,500,000	1,500,000
Common stock, shares issued	1,053,685	1,053,690
Common stock, shares outstanding	1,053,685	1,053,690

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended
	Jun. 03, 2017	May 28, 2016
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Revenues	$ 7,781,453	$ 8,184,181
Costs and expenses:
Cost of revenues	6,022,419	6,289,881
Selling, general and administrative expenses	1,761,290	1,793,247
Lease termination and impairment charges	4,086	5,781
Interest expense	109,937	105,113
(Gain) loss on sale of assets, net	(5,721)	1,056
Total costs and expenses	7,892,011	8,195,078
Loss before income taxes	(110,558)	(10,897)
Income tax benefit	(35,209)	(6,309)
Net loss	(75,349)	(4,588)
Computation of loss attributable to common stockholders:
Loss attributable to common stockholders-basic and diluted	$ (75,349)	$ (4,588)
Basic and diluted loss per share	$ (0.07)	$ 0

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended
	Jun. 03, 2017	May 28, 2016
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Net loss	$ (75,349)	$ (4,588)
Defined benefit pension plans:
Amortization of prior service cost, net transition obligation and net actuarial losses included in net periodic pension cost, net of $342 and $451 tax expense	514	681
Total other comprehensive income	514	681
Comprehensive loss	$ (74,835)	$ (3,907)

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Jun. 03, 2017	May 28, 2016
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Amortization of prior service cost, net transition obligation and net actuarial losses included in net periodic pension cost, tax expense	$ 342	$ 451

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Jun. 03, 2017	May 28, 2016
Operating activities:
Net loss	$ (75,349)	$ (4,588)
Adjustments to reconcile to net cash provided by operating activities:
Depreciation and amortization	142,092	138,788
Lease termination and impairment charges	4,086	5,781
LIFO charge	16,874	13,751
(Gain) loss on sale of assets, net	(5,721)	1,056
Stock-based compensation expense	9,038	11,144
Changes in deferred taxes	(38,160)	(5,749)
Excess tax benefit on stock options and restricted stock		(883)
Changes in operating assets and liabilities:
Accounts receivable	(13,757)	(74,530)
Inventories	31,172	59,440
Accounts payable	4,372	115,646
Other assets and liabilities, net	18,087	(99,856)
Net cash provided by operating activities	92,734	160,000
Investing activities:
Payments for property, plant and equipment	(60,738)	(106,077)
Intangible assets acquired	(8,234)	(16,381)
Proceeds from dispositions of assets and investments	8,639	3,088
Proceeds from insured loss	2,137
Net cash used in investing activities	(58,196)	(119,370)
Financing activities:
Net payments to revolver	(90,000)	(20,000)
Principal payments on long-term debt	(4,267)	(5,721)
Change in zero balance cash accounts	28,768	2,262
Net proceeds from issuance of common stock	147	2,371
Excess tax benefit on stock options and restricted stock		883
Payments for taxes related to net share settlement of equity awards	(147)	(56)
Net cash used in financing activities	(65,499)	(20,261)
(Decrease) increase in cash and cash equivalents	(30,961)	20,369
Cash and cash equivalents, beginning of period	245,410	124,471
Cash and cash equivalents, end of period	214,449	144,840
Supplementary cash flow data:
Cash paid for interest (net of capitalized amounts of $71 and $56, respectively)	75,535	71,434
Cash payments of income taxes, net of refunds	1,461	3,869
Equipment financed under capital leases	3,857	1,553
Equipment received for noncash consideration	1,295	632
Reduction in lease financing obligation	2,416
Gross borrowings from revolver	579,000	867,000
Gross payments to revolver	$ 669,000	$ 887,000

CONDENSED CONSOLIDATED STATEME8

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Jun. 03, 2017	May 28, 2016
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Cash paid for interest, capitalized amounts	$ 71	$ 56

Basis of Presentation

Basis of Presentation	3 Months Ended
	Jun. 03, 2017
Basis of Presentation
Basis of Presentation	1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X and therefore do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete annual financial statements. The accompanying financial information reflects all adjustments which are of a recurring nature and, in the opinion of management, are necessary for a fair presentation of the results for the interim periods. The results of operations for the thirteen week period ended June 3, 2017 are not necessarily indicative of the results to be expected for the full year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Rite Aid Corporation (“Rite Aid”) and Subsidiaries (together with Rite Aid, the “Company”) Fiscal 2017 10-K. Recently Adopted Accounting Pronouncements In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation, (Topic 718): Improvements to Employee Share-Based Payment Accounting , which amends the accounting for certain aspects of share-based payments to employees in ASC Topic 718, Compensation — Stock Compensation . The new guidance eliminates the accounting for any excess tax benefits and deficiencies through equity and requires all excess tax benefits and deficiencies related to employee share-based compensation arrangements to be recorded in the income statement. This aspect of the new guidance is required to be applied prospectively. The new guidance also requires (i.) the presentation of excess tax benefits on the statement of cash flows as an operating activity rather than a financing activity, a change which may be applied prospectively or retrospectively and (ii.) the presentation of employee taxes paid when an employer withholds shares for tax withholding purposes on the statement of cash flows as a financing activity, a change which must be applied retrospectively. The new guidance further provides an accounting policy election to account for forfeitures as they occur rather than utilizing the estimated amount of forfeitures at the time of issuance. The Company adopted this new guidance effective March 5, 2017. The primary impact of adoption was (i.) the modified retrospective recognition of the cumulative amount of previously unrecognized excess tax benefits as an opening balance sheet adjustment and (ii.) the recognition of excess tax benefits in the income statement on a prospective basis, rather than equity. As a result, the Company (i.) increased the deferred tax asset and reduced accumulated deficit by $12,577 as of the beginning of the thirteen weeks ended June 3, 2017, and (ii.) the Company recognized a discrete income tax expense of $52 in income tax expense for the thirteen weeks ended June 3, 2017. The Company also elected to adopt the cash flow presentation of the excess tax benefits prospectively commencing in the first quarter of fiscal 2018. The retrospective application of cash paid on employees’ behalf related to shares withheld for tax purposes resulted in increases to both “Net cash provided by operating activities” and “Net cash used in financing activities” of $56 for the thirteen weeks ended May 28, 2016. The Company’s stock-based compensation expense continues to reflect estimated forfeitures. None of the other provisions in this new guidance had a material impact on the Company’s condensed consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606) , an update to ASU 2014-09. This ASU amends ASU 2014-09 to defer the effective date by one year for annual reporting periods beginning after December 15, 2017 (fiscal 2019). Subsequently, the FASB has also issued accounting standards updates which clarify the guidance. This ASU removes inconsistencies, complexities and allows transparency and comparability of revenue transactions across entities, industries, jurisdictions and capital markets by providing a single comprehensive principles-based model with additional disclosures regarding uncertainties. The principles-based revenue recognition model has a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Early adoption is permitted for annual reporting periods beginning after December 15, 2016 (fiscal 2018). In transition, the ASU may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company does not intend to early adopt the new standard. During the thirteen weeks ended June 3, 2017, the Company assembled a cross functional team to identify the population of contracts with customers, for both its Retail Pharmacy and Pharmacy Services segments, and evaluate them under the provisions of ASU 2014-09. The Company intends to adopt the new standard on a modified retrospective basis. Under this implementation method, the Company will recognize the cumulative effect of initially applying the new guidance as an adjustment to the opening retained earnings balance for the annual reporting period of initial application. While the Company is continuing its assessment of all of the potential impacts of the new standard, it does not expect the implementation of the standard to have a material impact on the Company’s consolidated financial position, results of operations or cash flow. 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 (fiscal 2020). The Company believes that the new standard will have a material impact on its financial position. The Company is currently evaluating the impact this standard implementation will have on its results of operations and cash flows. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other, (Topic 350): Simplifying the Test for Goodwill Impairment , which is intended to simplify the subsequent measurement and impairment of goodwill. The ASU simplifies the complexity of evaluating goodwill for impairment by eliminating the second step of the impairment test, which compares the implied fair value of a reporting unit’s goodwill to the carrying amount of that goodwill. Instead, the ASU requires entities to compare the fair value of a reporting unit to its carrying amount in order to determine the amount of goodwill impairment recognized. ASU No. 2017-04 is effective for fiscal years and interim periods within those years beginning after December 15, 2019 (fiscal 2020). Early adoption of all the amendments for ASU 2017-04 is permitted. Amendments must be applied prospectively. The Company is in process of assessing the impact of the adoption of ASU No. 2017-04 on its financial position, results of operations and cash flows.

Acquisition

Acquisition	3 Months Ended
	Jun. 03, 2017
Acquisition
Acquisition	2. Acquisition On June 24, 2015, the Company completed its 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 (the “Acquisition”). 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 pharmacy benefit manager (“PBM”) service options through its EnvisionRx and MedTrak PBMs, respectively. EnvisionRx also offers fully integrated mail-order and specialty pharmacy services through EnvisionPharmacies; 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 Envision Insurance Company’s (“EIC”) 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 Company’s condensed consolidated financial statements for the thirteen week periods ended June 3, 2017 and May 28, 2016 include EnvisionRx results of operations (please see Note 12 Segment Reporting for the Pharmacy Services segment results included within the condensed consolidated financial statements for the thirteen week periods ended June 3, 2017 and May 28, 2016, which reflects the results of EnvisionRx). The Company’s condensed consolidated financial statements reflect the purchase accounting adjustments in accordance with ASC 805 “Business Combinations”, whereby the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values on the Acquisition date. During fiscal 2017, the Company finalized the valuation of the identifiable assets acquired and the liabilities assumed. The following is the allocation of the purchase price: Final purchase price Cash consideration $ Stock consideration Total $ Final 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 final 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 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 final purchase price allocation include: Estimated Estimated Customer relationships $ CMS license Claims adjudication and other developed software Trademarks Backlog Trademarks Indefinite Total $ (2) Other current liabilities includes $116,057 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 $1,639,355 has been allocated to the Pharmacy Services segment of which $1,368,657 is deductible for tax purposes.

Termination of the Merger Agree

Termination of the Merger Agreement with WBA and the Pending Asset Sale to WBA	3 Months Ended
	Jun. 03, 2017
Termination of the Merger Agreement with WBA, and the Pending Asset Sale to WBA,
Termination of the Merger Agreement with WBA,and the Pending Asset Sale to WBA	3. Termination of the Merger Agreement with WBA and the Pending Asset Sale to WBA Termination of Merger Agreement with Walgreens Boots Alliance, Inc. On October 27, 2015, Rite Aid, Walgreens Boots Alliance, Inc. (NASDAQ: WBA) (“WBA”) and Victoria Merger Sub, Inc. (“Merger Sub”), a Delaware corporation and a wholly owned subsidiary of WBA, entered into an Agreement and Plan of Merger (as amended by Amendment No. 1, dated as of January 29, 2017 (the “Amendment”)) (the “Merger Agreement”). Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub was to merge with and into Rite Aid (the “Merger”), with Rite Aid surviving the Merger as a 100 percent owned direct subsidiary of WBA. On June 28, 2017, Rite Aid, WBA and Merger Sub entered into a Termination Agreement (the “Merger Termination Agreement”) under which the parties agreed to terminate the Merger Agreement. The Merger Termination Agreement provides that WBA would pay to Rite Aid a termination fee in the amount of $325,000. Rite Aid received the termination fee payment on June 30, 2017. Subject to limited customary exceptions, the Merger Termination Agreement also mutually releases the parties from any claims of liability to one another relating to the contemplated merger transaction. Termination of the Divestiture Asset Purchase Agreement with Fred’s As previously disclosed, on December 19, 2016, Rite Aid entered into an Asset Purchase Agreement (the “Divestiture Asset Purchase Agreement”) with AFAE, LLC, a Tennessee limited liability company (“AFAE”), Fred’s, Inc., a Tennessee corporation (“Fred’s”) (solely for the purposes set forth in the Divestiture Asset Purchase Agreement) and WBA (solely for the purposes set forth in the Divestiture Asset Purchase Agreement). Pursuant to the terms and subject to the conditions set forth in the Divestiture Asset Purchase Agreement, Rite Aid agreed to sell 865 Rite Aid stores and certain specified assets to Fred’s (the “Divestiture Sale”). In connection with the Merger and pursuant to the terms and subject to the conditions set forth in the Divestiture Asset Purchase Agreement, AFAE was to purchase from Rite Aid 865 stores and certain specified assets related thereto. On June 28, 2017, Rite Aid, AFAE, Fred’s and WBA entered into a letter agreement (the “APA Termination Agreement” and together with the Merger Termination Agreement, the “Terminations”) under which the parties agreed to terminate the Divestiture Asset Purchase Agreement. Subject to limited customary exceptions, the APA Termination Agreement also mutually releases the parties from any claims of liability to one another relating to the contemplated sale transaction. Entry Into Asset Purchase Agreement with WBA On June 28, 2017, Rite Aid entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with WBA and Walgreen Co., an Illinois corporation (“Walgreen’s”) and wholly owned direct subsidiary of WBA (“Buyer”). Pursuant to the terms and subject to the conditions set forth in the Asset Purchase Agreement, Buyer will purchase from Rite Aid 2,186 stores (the “Acquired Stores”), three (3) distribution centers, related inventory and other specified assets related thereto for a purchase price of approximately $5.175 billion, on a cash-free, debt-free basis (the “Sale”). Completion of the Sale is subject to various closing conditions, including but not limited to (i) the waiting period (and any extension thereof) applicable to the Sale and the other transactions contemplated by the Asset Purchase Agreement under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, shall have expired or been earlier terminated, (ii) the absence of a material adverse effect on the stores and distribution centers being acquired in the Sale, (iii) a duplicate copy of Rite Aid’s prescription dispensing system being operational and (iv) receipt of required licenses and lease consents. The parties to the Asset Purchase Agreement have each made customary representations and warranties. Rite Aid has agreed to various covenants and agreements, including, among others, Rite Aid’s agreement to conduct its business at the Acquired Stores in the ordinary course during the period between the execution of the Asset Purchase Agreement and the closing of the Sale, subject to certain exceptions, Rite Aid’s agreement not to solicit proposals from third parties for the purchase of the remainder of Rite Aid or over 50% of its stock or assets for sixty (60) days after the date of the Asset Purchase Agreement subject to certain exceptions and the parties’ agreement to use their reasonable best efforts to obtain all authorizations and approvals from governmental authorities. Rite Aid has agreed to provide transition services to Buyer for up to (3) three years after closing of the Sale. The Asset Purchase Agreement contains specified termination rights for Rite Aid and WBA, including a mutual termination right in the event any court of competent jurisdiction or other governmental entity shall have issued a final and nonappealable legal restraint that prevents, makes illegal, prohibits, restrains or enjoins the completion of the Sale, and a termination right for WBA in the event Rite Aid enters into an agreement to sell all of the remainder of Rite Aid or over 50% of its stock or assets to a third party. Under the terms of the Asset Purchase Agreement, Rite Aid has the option to purchase pharmaceutical drugs through an affiliate of WBA under terms, including cost, that are substantially equivalent to Walgreen’s for a period of ten (10) years.

Loss Per Share

Loss Per Share	3 Months Ended
	Jun. 03, 2017
Loss Per Share
Loss Per Share	4. Loss Per Share Basic loss per share is computed by dividing loss available to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the income of the Company subject to anti-dilution limitations. Thirteen Week June 3, May 28, Numerator for loss per share: Loss attributable to common stockholders—basic and diluted $ ) $ ) Denominator: Basic weighted average shares Outstanding options and restricted shares, net — — Diluted weighted average shares Basic and diluted loss per share $ ) $ ) Due to their antidilutive effect, 33,747 and 36,860 potential common shares related to stock options have been excluded from the computation of diluted loss per share as of June 3, 2017 and May 28, 2016, respectively. Also, excluded from the computation of diluted loss per share as of June 3, 2017 and May 28, 2016 are restricted shares of 5,623 and 4,742, respectively, which are included in shares outstanding.

Lease Termination and Impairmen

Lease Termination and Impairment Charges	3 Months Ended
	Jun. 03, 2017
Lease Termination and Impairment Charges
Lease Termination and Impairment Charges	5. Lease Termination and Impairment Charges Lease termination and impairment charges consist of amounts as follows: Thirteen Week June 3, May 28, Impairment charges $ $ Lease termination charges $ $ Impairment Charges These amounts include the write-down of long-lived assets at locations that were assessed for impairment because of management’s intention to relocate or close the location or because of changes in circumstances that indicated the carrying value of an asset may not be recoverable. Lease Termination Charges As part of the Company’s ongoing business activities, the Company assesses stores and distribution centers for potential closure or relocation. Decisions to close or relocate stores or distribution centers in future periods would result in lease termination charges, lease exit costs and inventory liquidation charges, as well as impairment of assets at these locations. The following table reflects the closed store and distribution center charges that relate to new closures, changes in assumptions and interest accretion: Thirteen Week June 3, May 28, Balance—beginning of period $ $ Provision for present value of noncancellable lease payments of closed stores Changes in assumptions about future sublease income, terminations and changes in interest rates ) Interest accretion Cash payments, net of sublease income ) ) Balance—end of period $ $

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Jun. 03, 2017
Fair Value Measurements
Fair Value Measurements	6. Fair Value Measurements The Company utilizes the three-level valuation hierarchy for the recognition and disclosure of fair value measurements. The categorization of assets and liabilities within this hierarchy is based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy consist of the following: · Level 1—Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. · Level 2—Inputs to the valuation methodology are quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active or inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument. · Level 3—Inputs to the valuation methodology are unobservable inputs based upon management’s best estimate of inputs market participants could use in pricing the asset or liability at the measurement date, including assumptions about risk. Non-Financial Assets Measured on a Non-Recurring Basis Long-lived non-financial assets are measured at fair value on a nonrecurring basis for purposes of calculating impairment using Level 2 and Level 3 inputs as defined in the fair value hierarchy. The fair value of long-lived assets using Level 2 inputs is determined by evaluating the current economic conditions in the geographic area for similar use assets. The fair value of long-lived assets using Level 3 inputs is determined by estimating the amount and timing of net future cash flows (which are unobservable inputs) and discounting them using a risk-adjusted rate of interest (which is Level 1). The Company estimates future cash flows based on its experience and knowledge of the market in which the store is located. Significant increases or decreases in actual cash flows may result in valuation changes. During the thirteen week period ended June 3, 2017, long-lived assets from continuing operations with a carrying value of $964, primarily store assets, were written down to their fair value of $305, resulting in an impairment charge of $659. During the thirteen week period ended May 28, 2016, long-lived assets from continuing operations with a carrying value of $1,051, primarily store assets, were written down to their fair value of $432, resulting in an impairment charge of $619. If our actual future cash flows differ from our projections materially, certain stores that are either not impaired or partially impaired in the current period may be further impaired in future periods. The following table presents fair values for those assets measured at fair value on a non-recurring basis at June 3, 2017 and May 28, 2016: Fair Value Measurement Using Level 1 Level 2 Level 3 Total as of Long-lived assets held for use $ — $ — $ $ Long-lived assets held for sale $ — $ $ — $ Total $ — $ $ $ Level 1 Level 2 Level 3 Total as of Long-lived assets held for use $ — $ — $ $ Long-lived assets held for sale $ — $ — $ — $ — Total $ — $ — $ $ As of June 3, 2017 and May 28, 2016, the Company did not have any financial assets measured on a recurring basis. Other Financial Instruments Financial instruments other than long-term indebtedness include cash and cash equivalents, accounts receivable and accounts payable. These instruments are recorded at book value, which the Company believes approximate their fair values due to their short term nature. In addition, as of June 3, 2017 and May 28, 2016 the Company has $7,018 and $6,567, respectively, of investments carried at amortized cost as these investments are being held to maturity. These investments are included as a component of prepaid expenses and other current assets as of June 3, 2017 and are included as a component of other assets as of May 28, 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 $7,178,008 and $7,273,272, respectively, as of June 3, 2017. There were no outstanding derivative financial instruments as of June 3, 2017 and March 4, 2017.

Income Taxes

Income Taxes	3 Months Ended
	Jun. 03, 2017
Income Taxes
Income Taxes	7. Income Taxes The Company recorded an income tax benefit of $35,209 and $6,309 for the thirteen week periods ended June 3, 2017 and May 28, 2016, respectively. The effective tax rate for the thirteen week periods ended June 3, 2017 and May 28, 2016 was 31.8% and 57.9%, respectively. The effective tax rate for the period ended June 3, 2017 is net of an adjustment of (8.4%) to increase the valuation allowance to offset the current year deferred state tax benefits. The higher effective income tax benefit rate for the period ended May 28, 2016 was the result of a discrete income tax benefit recorded for the lapse of a statute of limitations on an uncertain tax position which raised the Company’s effective income tax benefit rate by 13.3%. The Company recognizes tax liabilities in accordance with the guidance for uncertain tax positions and management adjusts these liabilities with changes in judgment as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of the tax liabilities. While it is expected that the amount of unrecognized tax benefits will change in the next twelve months, the Company does not expect the change to have a significant impact on the results of operations or the financial position of the Company. The Company regularly evaluates valuation allowances established for deferred tax assets for which future realization is uncertain. Management will continue to monitor all available evidence related to the net deferred tax assets that may change the most recent assessment, including events that have occurred or are anticipated to occur. The Company continues to maintain a valuation allowance against net deferred tax assets of $235,983 and $226,726, which relates primarily to state deferred tax assets at June 3, 2017 and March 4, 2017, respectively.

Medicare Part D

Medicare Part D	3 Months Ended
	Jun. 03, 2017
Medicare Part D
Medicare Part D	8. Medicare Part D The Company offers Medicare Part D benefits through EIC, which has contracted with Centers of Medicare and Medicaid Services (“CMS”) to be a Prescription Drug Plan (“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 $31,650 as of March 31, 2017. EIC was in excess of the minimum required amounts in these states as of June 3, 2017. 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 June 3, 2017, accounts receivable, net included $311,905 due from CMS and accrued salaries, wages and other current liabilities included $166,665 of EIC liabilities under certain reinsurance contracts. As of May 28, 2016, accounts receivable, net included $319,976 due from CMS and accrued salaries, wages and other current liabilities included $152,970 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.

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets	3 Months Ended
	Jun. 03, 2017
Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets	9. Goodwill and Other Intangible Assets Goodwill and indefinitely-lived assets, such as certain trademarks acquired in connection with acquisition transactions, are not amortized, but are instead evaluated for impairment on an annual basis at the end of the fiscal year, or more frequently if events or circumstances indicate that impairment may be more likely. During the thirteen weeks ended June 3, 2017 and the fifty-three weeks ended March 4, 2017, no impairment charges have been taken against the Company’s goodwill or indefinitely-lived intangible assets. No changes were made to the carrying amount of goodwill for the thirteen week period ended June 3, 2017. The Company’s intangible assets are primarily finite-lived and amortized over their useful lives. Following is a summary of the Company’s finite-lived and indefinite-lived intangible assets as of June 3, 2017 and March 4, 2017. June 3, 2017 March 4, 2017 Gross Accumulated Net Remaining Gross Accumulated Net Remaining Favorable leases and other $ $ ) $ 7 years $ $ ) $ 7 years Prescription files ) 3 years ) 3 years Customer relationships(a) ) 15 years ) 16 years CMS license ) 23 years ) 24 years Claims adjudication and other developed software ) 5 years ) 6 years Trademarks ) 8 years ) 9 years Backlog ) 1 year ) 2 years Total finite $ $ ) $ $ $ ) $ Trademarks — Indefinite — 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 June 3, 2017 and March 4, 2017 are unfavorable lease intangibles with a net carrying amount of $37,053 and $38,242, respectively. These intangible liabilities are amortized over their remaining lease terms at the time of acquisition. Amortization expense for these intangible assets and liabilities was $54,932 and $55,503 for the thirteen week periods ended June 3, 2017 and May 28, 2016, respectively. The anticipated annual amortization expense for these intangible assets and liabilities is 2018—$181,675; 2019—$144,555; 2020—$115,010; 2021—$82,456 and 2022—$53,534.

Indebtedness and Credit Agreeme

Indebtedness and Credit Agreements	3 Months Ended
	Jun. 03, 2017
Indebtedness and Credit Agreements
Indebtedness and Credit Agreements	10. Indebtedness and Credit Agreements Following is a summary of indebtedness and lease financing obligations at June 3, 2017 and March 4, 2017: June 3, March 4, Secured Debt: Senior secured revolving credit facility due January 2020 ($2,340,000 and $2,430,000 face value less unamortized debt issuance costs of $22,715 and $24,918) $ $ Tranche 1 Term Loan (second lien) due August 2020 ($470,000 face value less unamortized debt issuance costs of $3,861 and $4,167) Tranche 2 Term Loan (second lien) due June 2021 ($500,000 face value less unamortized debt issuance costs of $2,290 and $2,431) Other secured Guaranteed Unsecured Debt: 9.25% senior notes due March 2020 ($902,000 face value plus unamortized premium of $1,903 and $2,071 and less unamortized debt issuance costs of $6,876 and $7,527) 6.75% senior notes due June 2021 ($810,000 face value less unamortized debt issuance costs of $5,989 and $6,360) 6.125% senior notes due April 2023 ($1,800,000 face value less unamortized debt issuance costs of $24,915 and $25,984) Unguaranteed Unsecured Debt: 7.7% notes due February 2027 ($295,000 face value less unamortized debt issuance costs of $1,584 and $1,625) 6.875% fixed-rate senior notes due December 2028 ($128,000 face value less unamortized debt issuance costs of $755 and $771) 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 The Company’s Amended and Restated Senior Secured Credit Facility has a borrowing capacity of $3,700,000 and matures in January 2020. 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. 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 June 3, 2017, the Company had $2,340,000 of borrowings outstanding under the revolver and had letters of credit outstanding against the revolver of $59,388 which resulted in additional borrowing capacity of $1,300,612. 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 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 revolver 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 revolver is less than $200,000 or (b) on the third consecutive business day on which availability under the revolver 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 revolver is equal to or greater than $250,000. As of June 3, 2017, the Company had availability under its revolver of $1,300,612, its fixed charge coverage ratio was greater than 1.00 to 1.00, and the Company was in compliance with the senior secured credit facility’s financial 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 Tranche 1 Term Loan and the Tranche 2 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 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 14 “Guarantor and Non-Guarantor Condensed Consolidating Financial Information” for additional disclosure. Maturities The aggregate annual principal payments of long-term debt for the remainder of fiscal 2018 and thereafter are as follows: 2018—$90; 2019—$0; 2020—$2,340,000; 2021—$1,372,000; 2022—$1,310,000 and $2,223,000 thereafter.

Retirement Plans

Retirement Plans	3 Months Ended
	Jun. 03, 2017
Retirement Plans
Retirement Plans	11. Retirement Plans Net periodic pension expense recorded in the thirteen week periods ended June 3, 2017 and May 28, 2016, for the Company’s defined benefit plan includes the following components: Defined Benefit Thirteen Week Period Ended June 3, May 28, Service cost $ $ Interest cost Expected return on plan assets ) ) Amortization of unrecognized prior service cost — — Amortization of unrecognized net loss Net periodic pension expense $ $ During the thirteen week period ended June 3, 2017 the Company contributed $0 to the Defined Benefit Pension Plan. During the remainder of fiscal 2018, the Company expects to contribute $4,900 to the Defined Benefit Pension Plan.

Segment Reporting

Segment Reporting	3 Months Ended
	Jun. 03, 2017
Segment Reporting
Segment Reporting	12. 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, collectively the “Parent Company”. 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 condensed consolidated financial statements for the thirteen week periods ended June 3, 2017 and May 28, 2016: Retail Pharmacy Intersegment Consolidated June 3, 2017: Revenues $ $ $ ) $ Gross Profit — Adjusted EBITDA(2) — May 28, 2016: 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 (Loss), Adjusted Net Income (Loss) per Diluted Share and Other Non-GAAP Measures” in MD&A for additional details. The following is a reconciliation of net loss to Adjusted EBITDA for the thirteen week periods ended June 3, 2017 and May 28, 2016: Thirteen Week Period June 3, May 28, (dollars in thousands) Net loss $ ) $ ) Interest expense Income tax benefit ) ) Depreciation and amortization expense LIFO charge Lease termination and impairment charges Other Adjusted EBITDA $ $ The following is balance sheet information for the Company’s reportable segments: Retail Pharmacy Eliminations(2) Consolidated June 3, 2017: Total Assets $ $ $ ) $ Goodwill — Additions to property and equipment and intangible assets — March 4, 2017: Total Assets $ $ $ ) $ Goodwill — Additions to property and equipment and intangible assets(1) — (1) Includes additions to property and equipment and intangible assets for the fifty-three week period ended March 4, 2017. (2) As of June 3, 2017 and March 4, 2017, intersegment eliminations include netting of the Pharmacy Services segment long-term deferred tax liability of $145,998 and $140,865, respectively, against the Retail Pharmacy segment long-term deferred tax asset for consolidation purposes in accordance with ASC 740, and intersegment accounts receivable of $20,538 and $16,742, respectively, 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 and Contingencies

Commitments and Contingencies	3 Months Ended
	Jun. 03, 2017
Commitments and Contingencies
Commitments and Contingencies	13. Commitments and Contingencies Legal Matters The Company is a party to legal proceedings, investigations and claims in the ordinary course of its business, including the matters described below. The Company records accruals for outstanding legal matters when it believes it is probable that a loss will be incurred and the amount can be reasonably estimated. The Company evaluates, on a quarterly basis, developments in legal matters that could affect the amount of any accrual and developments that would make a loss contingency both probable and reasonably estimable. If a loss contingency is not both probable and estimable, the Company does not establish an accrued liability. The Company’s contingencies are subject to significant uncertainties, including, among other factors: (i) proceedings are in early stages; (ii) whether class or collective action status is sought and the likelihood of a class being certified; (iii) the outcome of pending appeals or motions; (iv) the extent of potential damages, fines or penalties, which are often unspecified or indeterminate; (v) the impact of discovery on the matter; (vi) whether novel or unsettled legal theories are at issue; (vii) there are significant factual issues to be resolved; and/or (viii) in the case of certain government agency investigations, whether a sealed qui tam lawsuit (“whistleblower” action) has been filed and whether the government agency makes a decision to intervene in the lawsuit following investigation. After the announcement of the proposed Merger between the Company and Walgreens Boots Alliance, Inc. (WBA), a putative class action lawsuit was filed in Pennslyvania in the Court of Common Pleas of Cumberland County (Wilson v. Rite Aid Corp., et al.) by purported Company stockholders against the Company, its directors (the Individual Defendants, together with the Company, the Rite Aid Defendants), WBA and Victoria Merger Sub Inc. (Victoria) challenging the transactions contemplated by the Merger agreement. The complaint alleged primarily that the Individual Defendants 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 complaint further alleged that the Company, WBA and/or Victoria aided and abetted these alleged breaches of fiduciary duty. The complaint sought, among other things, to enjoin the closing of the Merger as well as money damages and attorneys’ and experts’ fees. An 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 the Rite Aid Defendants, WBA and Victoria 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 complaint in the Herring action alleged, among other things, that the Rite Aid Defendants disseminated an allegedly false and materially misleading proxy and 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 lead plaintiffs’ unopposed motion to stay the Herring action for all purposes pending consummation of the Merger. On March 17, 2017, the Herring plaintiffs filed a motion to lift the stay for the purpose of filing a proposed amended complaint. Defendants opposed the motion, and briefing concluded on April 17, 2017. The motion is currently pending before the Pennsylvania District Court. The proposed amended complaint asserts state law breach of fiduciary duty claims against the Individual Defendants, a claim of aiding and abetting the alleged breaches of fiduciary duty against Rite Aid, WBA and Victoria, as well as claims for violations of Section 14(a) of the Exchange Act and SEC Rule 14a-9 against the Rite Aid Defendants, WBA and Victoria, claims for violations of Section 10(b) of the Exchange Act and SEC Rule 10b-5 against the Rite Aid Defendants, WBA, Victoria and certain WBA executives, and a claim for violations of Section 20(a) of the Exchange Act against the Individual Defendants, WBA and Victoria. 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, 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. On January 12, 2017, the parties reached a settlement in principle of this matter, for an immaterial amount of money, which is subject to preliminary and final approval by the court. On January 19, 2017, the court entered an order staying the case indefinitely pending preliminary and final court approval. In the event the settlement does not receive preliminary and/or final approval by the court, the litigation will resume. If such occurs, the Company presently 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 class actions 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. In the business expense class action ( Fenley v. Rite Aid Corporation, Santa Clara Superior Court ), the parties reached a settlement pursuant to which the Company will pay an immaterial amount to settle the class claims. The court granted final approval of the settlement on February 3, 2017. 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 were stayed pending a decision by the California Supreme Court in two similar cases. That decision was rendered on April 4, 2016. A status conference in the case was held on November 18, 2016, at which time the court lifted the stay and scheduled the case for trial on January 26, 2018. With respect to the California Cases, 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 and is vigorously defending them. 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 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 the Company entered into an agreement tolling the statute of limitations until October 7, 2015. The parties agreed to extend the tolling agreement and continue to exchange pertinent claims data in the near future. On January 19, 2017, the District Court for the Eastern District of Michigan unsealed Relator’s Second Amended Complaint against the Company. In its Complaint, Relator alleges that the Company failed to report Rx Savings prices as its usual and customary charges under the Medicare Part D program and to federal and state Medicaid programs in 18 (eighteen) states and the District of Columbia; and that the Company is thus liable under the federal False Claims Act and similar False Claims Act statutes operative in the states named in the Complaint. The federal government and the 18 (eighteen) states and the District of Columbia named in the lawsuit have elected not to intervene in this action. At this stage of the proceedings, 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 and is vigorously defending this lawsuit. 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 lawsuits or charges have been filed. Between September 2015 and January 2017, the Company received several 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 attempt to resolve these matters with those USAOs and the Department of Justice, 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 not able 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 prescribers 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 regarding this matter. The Company 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. On February 28, 2017, the USAO, Central District of California, and the Company entered into a settlement agreement resolving this matter for an immaterial amount. The settlement agreement is not an admission of liability by the Company. In June 2013, the Company was served with a Civil Investigative Demand (“CID”) by the United States Attorney’s Office for the Eastern District of California (the “USAO”). The CID requested records and responses to interrogatories regarding the Company’s Drug Utilization Review and prescription dispensing protocol and the dispensing of drugs designated as “Code 1” by the State of California. The Company researched the government’s allegations and refuted the government’s position in writing and on conference calls. Subsequently, the USAO’s office, along with the State of California, Department of Justice, Bureau of Medical Fraud and Elder Abuse (the “Bureau”), requested the Company to produce certain prescription files related to Code 1 drugs. There has been a series of four document productions in which the Company has produced prescription and associated documentation concerning Code 1 drugs: (i) on May 15, 2014, the government requested that the Company produce 60 prescriptions; (ii) on July 30, 2014, the government requested that the Company produce 30 prescriptions; (iii) on June 15, 2015, the government requested that the Company produce 80 prescriptions; and (iv) on September 30, 2016, the Company agreed to produce an additional 242 prescriptions. The Company is continuing discussions with the government. Relator, Matthew Omlansky, filed a qui tam action, State of California ex rel. Matthew Omlansky v. Rite Aid Corporation, on behalf of the State of California against Rite Aid in the Superior Court of the State of California. In his Complaint, Relator alleges that Rite Aid violated the California False Claims Act by (i) failing to comply with California rules governing the Company’s reporting of its usual and customary prices; (ii) failing to dispense the least expensive equivalent generic drug in certain circumstances, in violation of applicable regulations; and (iii) dispensing, and seeking reimbursement for, restricted brand name drugs without prior approval. Relator filed his Second Amended Complaint on April 19, 2016 and Rite Aid filed its demurrer on July 29, 2016. On October 5, 2016, Rite Aid’s demurrer was granted and plaintiff’s complaint was dismissed with leave for plaintiff to file an amended complaint. Plaintiff filed a Third Amended Complaint to which Rite Aid filed a second demurrer, which is pending. At this stage of the proceedings, Rite Aid is unable to predict the outcome of its demurrer and Relator’s suit. 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.

Guarantor and Non-Guarantor Con

Guarantor and Non-Guarantor Condensed Consolidating Financial Information	3 Months Ended
	Jun. 03, 2017
Guarantor and Non-Guarantor Condensed Consolidating Financial Information
Guarantor and Non-Guarantor Condensed Consolidating Financial Information	14. 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, with the exception of EIC, the subsidiaries, including joint ventures, that do not guarantee the Amended and Restated Senior Secured Credit Facility, second priority secured term loan facilities, secured guaranteed notes and unsecured guaranteed notes, are minor. 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 June 3, 2017, March 4, 2017, and for the thirteen week periods ended June 3, 2017 and May 28, 2016. Separate financial statements for Subsidiary Guarantors are not presented. Rite Aid Corporation Rite Aid Subsidiary Non- Eliminations Consolidated (in thousands) ASSETS Current assets: Cash and cash equivalents $ — $ $ $ — $ Accounts receivable, net — — Intercompany receivable — — )(a) — Inventories, net of LIFO reserve of $0, $1,016,650, $0, $0, and $1,016,650 — — — 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 )(b) 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 Rite Aid Subsidiary Non- Eliminations Consolidated (in thousands) ASSETS Current assets: Cash and cash equivalents $ — $ $ $ — $ Accounts receivable, net — — Intercompany receivable — — )(a) — Inventories, net of LIFO reserve of $0, $999,776, $0, $0, and $999,776 — — — 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 )(b) 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 Rite Aid Subsidiary Non- Eliminations Consolidated (in thousands) Revenues $ — $ $ $ )(a) $ Costs and expenses: Cost of revenues — )(a) Selling, general and administrative expenses — (a) Lease termination and impairment charges — — — Interest expense — Gain on sale of assets, net — ) — — ) Equity in earnings of subsidiaries, net of tax ) — (b) — Loss before income taxes ) ) ) ) ) Income tax benefit — ) ) — ) Net (loss) income $ ) $ $ ) $ )(b) $ ) Total other comprehensive income (loss) — ) Comprehensive (loss) income $ ) $ $ ) $ ) $ ) (a) Elimination of intercompany revenues and expenses. (b) Elimination of equity in earnings of subsidiaries. Rite Aid Corporation Rite Aid Subsidiary Non- Eliminations Consolidated (in thousands) Revenues $ — $ $ $ )(a) $ Costs and expenses: Cost of revenues — )(a) Selling, general and administrative expenses — )(a) Lease termination and impairment charges — — — Interest expense (income) ) — Loss on sale of assets, net — — — Equity in earnings of subsidiaries, net of tax ) — (b) — (Loss) income before income taxes ) ) ) ) Income tax benefit — ) ) — ) Net (loss) income $ ) $ $ ) $ )(b) $ ) Total other comprehensive income (loss) — ) Comprehensive (loss) income $ ) $ $ ) $ ) $ ) (a) Elimination of intercompany revenues and expenses. (b) Elimination of equity in earnings of subsidiaries. Rite Aid Corporation Rite Aid Subsidiary Non- 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 — ) — — ) Intercompany activity — ) — — Proceeds from dispositions of assets and investments — Proceeds from insured loss — — — Net cash (used in) provided by investing activities — ) — ) Financing activities: Net payments on revolver ) — — — ) Principal payments on long-term debt — ) — — ) Change in zero balance cash accounts — — — Net proceeds from issuance of common stock — — — Payments for taxes related to net share settlement of equity awards — ) — — ) 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 $ — $ $ $ — $ Rite Aid Corporation Rite Aid Subsidiary Non- 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 — ) — — ) Intercompany activity — ) — — Proceeds from dispositions of assets and investments — — — Net cash (used in) provided by investing activities — ) — ) Financing activities: Net payments on revolver ) — — — ) Principal payments on long-term debt — ) — — ) Change in zero balance cash accounts — — — Net proceeds from issuance of common stock — — — Excess tax benefit on stock options and restricted stock — — — Payments for taxes related to net share settlement of equity awards — ) — — ) Intercompany activity — — ) — Net cash provided by (used in) financing activities ) — ) ) Increase in cash and cash equivalents — — Cash and cash equivalents, beginning of period — — Cash and cash equivalents, end of period $ — $ $ $ — $

Basis of Presentation (Policies

Basis of Presentation (Policies)	3 Months Ended
	Jun. 03, 2017
Basis of Presentation
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X and therefore do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete annual financial statements. The accompanying financial information reflects all adjustments which are of a recurring nature and, in the opinion of management, are necessary for a fair presentation of the results for the interim periods. The results of operations for the thirteen week period ended June 3, 2017 are not necessarily indicative of the results to be expected for the full year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Rite Aid Corporation (“Rite Aid”) and Subsidiaries (together with Rite Aid, the “Company”) Fiscal 2017 10-K.
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted	Recently Adopted Accounting Pronouncements In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation, (Topic 718): Improvements to Employee Share-Based Payment Accounting , which amends the accounting for certain aspects of share-based payments to employees in ASC Topic 718, Compensation — Stock Compensation . The new guidance eliminates the accounting for any excess tax benefits and deficiencies through equity and requires all excess tax benefits and deficiencies related to employee share-based compensation arrangements to be recorded in the income statement. This aspect of the new guidance is required to be applied prospectively. The new guidance also requires (i.) the presentation of excess tax benefits on the statement of cash flows as an operating activity rather than a financing activity, a change which may be applied prospectively or retrospectively and (ii.) the presentation of employee taxes paid when an employer withholds shares for tax withholding purposes on the statement of cash flows as a financing activity, a change which must be applied retrospectively. The new guidance further provides an accounting policy election to account for forfeitures as they occur rather than utilizing the estimated amount of forfeitures at the time of issuance. The Company adopted this new guidance effective March 5, 2017. The primary impact of adoption was (i.) the modified retrospective recognition of the cumulative amount of previously unrecognized excess tax benefits as an opening balance sheet adjustment and (ii.) the recognition of excess tax benefits in the income statement on a prospective basis, rather than equity. As a result, the Company (i.) increased the deferred tax asset and reduced accumulated deficit by $12,577 as of the beginning of the thirteen weeks ended June 3, 2017, and (ii.) the Company recognized a discrete income tax expense of $52 in income tax expense for the thirteen weeks ended June 3, 2017. The Company also elected to adopt the cash flow presentation of the excess tax benefits prospectively commencing in the first quarter of fiscal 2018. The retrospective application of cash paid on employees’ behalf related to shares withheld for tax purposes resulted in increases to both “Net cash provided by operating activities” and “Net cash used in financing activities” of $56 for the thirteen weeks ended May 28, 2016. The Company’s stock-based compensation expense continues to reflect estimated forfeitures. None of the other provisions in this new guidance had a material impact on the Company’s condensed consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606) , an update to ASU 2014-09. This ASU amends ASU 2014-09 to defer the effective date by one year for annual reporting periods beginning after December 15, 2017 (fiscal 2019). Subsequently, the FASB has also issued accounting standards updates which clarify the guidance. This ASU removes inconsistencies, complexities and allows transparency and comparability of revenue transactions across entities, industries, jurisdictions and capital markets by providing a single comprehensive principles-based model with additional disclosures regarding uncertainties. The principles-based revenue recognition model has a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Early adoption is permitted for annual reporting periods beginning after December 15, 2016 (fiscal 2018). In transition, the ASU may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company does not intend to early adopt the new standard. During the thirteen weeks ended June 3, 2017, the Company assembled a cross functional team to identify the population of contracts with customers, for both its Retail Pharmacy and Pharmacy Services segments, and evaluate them under the provisions of ASU 2014-09. The Company intends to adopt the new standard on a modified retrospective basis. Under this implementation method, the Company will recognize the cumulative effect of initially applying the new guidance as an adjustment to the opening retained earnings balance for the annual reporting period of initial application. While the Company is continuing its assessment of all of the potential impacts of the new standard, it does not expect the implementation of the standard to have a material impact on the Company’s consolidated financial position, results of operations or cash flow. 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 (fiscal 2020). The Company believes that the new standard will have a material impact on its financial position. The Company is currently evaluating the impact this standard implementation will have on its results of operations and cash flows. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other, (Topic 350): Simplifying the Test for Goodwill Impairment , which is intended to simplify the subsequent measurement and impairment of goodwill. The ASU simplifies the complexity of evaluating goodwill for impairment by eliminating the second step of the impairment test, which compares the implied fair value of a reporting unit’s goodwill to the carrying amount of that goodwill. Instead, the ASU requires entities to compare the fair value of a reporting unit to its carrying amount in order to determine the amount of goodwill impairment recognized. ASU No. 2017-04 is effective for fiscal years and interim periods within those years beginning after December 15, 2019 (fiscal 2020). Early adoption of all the amendments for ASU 2017-04 is permitted. Amendments must be applied prospectively. The Company is in process of assessing the impact of the adoption of ASU No. 2017-04 on its financial position, results of operations and cash flows.

Acquisition (Tables)

Acquisition (Tables)	3 Months Ended
	Jun. 03, 2017
Acquisition
Schedule of purchase price allocation	Final purchase price Cash consideration $ Stock consideration Total $ Final 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 final 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 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 final purchase price allocation include: Estimated Estimated Customer relationships $ CMS license Claims adjudication and other developed software Trademarks Backlog Trademarks Indefinite Total $ (2) Other current liabilities includes $116,057 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 final purchase price allocation	Estimated Estimated Customer relationships $ CMS license Claims adjudication and other developed software Trademarks Backlog Trademarks Indefinite Total $

Loss Per Share (Tables)

Loss Per Share (Tables)	3 Months Ended
	Jun. 03, 2017
Loss Per Share
Schedule of calculation of basic and diluted loss per share	Thirteen Week June 3, May 28, Numerator for loss per share: Loss attributable to common stockholders—basic and diluted $ ) $ ) Denominator: Basic weighted average shares Outstanding options and restricted shares, net — — Diluted weighted average shares Basic and diluted loss per share $ ) $ )

Lease Termination and Impairm26

Lease Termination and Impairment Charges (Tables)	3 Months Ended
	Jun. 03, 2017
Lease Termination and Impairment Charges
Schedule of amounts relating to lease termination and impairment charges	Thirteen Week June 3, May 28, Impairment charges $ $ Lease termination charges $ $
Schedule of closed store and distribution center charges related to new closures, changes in assumptions and interest accretion	Thirteen Week June 3, May 28, Balance—beginning of period $ $ Provision for present value of noncancellable lease payments of closed stores Changes in assumptions about future sublease income, terminations and changes in interest rates ) Interest accretion Cash payments, net of sublease income ) ) Balance—end of period $ $

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Jun. 03, 2017
Fair Value Measurements
Schedule of fair value of assets measured on non-recurring basis	Level 1 Level 2 Level 3 Total as of Long-lived assets held for use $ — $ — $ $ Long-lived assets held for sale $ — $ $ — $ Total $ — $ $ $ Level 1 Level 2 Level 3 Total as of Long-lived assets held for use $ — $ — $ $ Long-lived assets held for sale $ — $ — $ — $ — Total $ — $ — $ $

Goodwill and Other Intangible28

Goodwill and Other Intangible Assets (Tables)	3 Months Ended
	Jun. 03, 2017
Goodwill and Other Intangible Assets
Summary of the company's finite-lived and indefinite-lived intangible assets	June 3, 2017 March 4, 2017 Gross Accumulated Net Remaining Gross Accumulated Net Remaining Favorable leases and other $ $ ) $ 7 years $ $ ) $ 7 years Prescription files ) 3 years ) 3 years Customer relationships(a) ) 15 years ) 16 years CMS license ) 23 years ) 24 years Claims adjudication and other developed software ) 5 years ) 6 years Trademarks ) 8 years ) 9 years Backlog ) 1 year ) 2 years Total finite $ $ ) $ $ $ ) $ Trademarks — Indefinite — 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.

Indebtedness and Credit Agree29

Indebtedness and Credit Agreements (Tables)	3 Months Ended
	Jun. 03, 2017
Indebtedness and Credit Agreements
Summary of indebtedness and lease financing obligations	June 3, March 4, Secured Debt: Senior secured revolving credit facility due January 2020 ($2,340,000 and $2,430,000 face value less unamortized debt issuance costs of $22,715 and $24,918) $ $ Tranche 1 Term Loan (second lien) due August 2020 ($470,000 face value less unamortized debt issuance costs of $3,861 and $4,167) Tranche 2 Term Loan (second lien) due June 2021 ($500,000 face value less unamortized debt issuance costs of $2,290 and $2,431) Other secured Guaranteed Unsecured Debt: 9.25% senior notes due March 2020 ($902,000 face value plus unamortized premium of $1,903 and $2,071 and less unamortized debt issuance costs of $6,876 and $7,527) 6.75% senior notes due June 2021 ($810,000 face value less unamortized debt issuance costs of $5,989 and $6,360) 6.125% senior notes due April 2023 ($1,800,000 face value less unamortized debt issuance costs of $24,915 and $25,984) Unguaranteed Unsecured Debt: 7.7% notes due February 2027 ($295,000 face value less unamortized debt issuance costs of $1,584 and $1,625) 6.875% fixed-rate senior notes due December 2028 ($128,000 face value less unamortized debt issuance costs of $755 and $771) 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 $ $

Retirement Plans (Tables)

Retirement Plans (Tables)	3 Months Ended
	Jun. 03, 2017
Retirement Plans
Summary of net periodic pension expense for the defined benefit plans	Defined Benefit Thirteen Week Period Ended June 3, May 28, Service cost $ $ Interest cost Expected return on plan assets ) ) Amortization of unrecognized prior service cost — — Amortization of unrecognized net loss Net periodic pension expense $ $

Segment Reporting (Tables)

Segment Reporting (Tables)	3 Months Ended
	Jun. 03, 2017
Segment Reporting
Schedule of reconciliation of the Company's business segments to the condensed consolidated financial statements	Retail Pharmacy Intersegment Consolidated June 3, 2017: Revenues $ $ $ ) $ Gross Profit — Adjusted EBITDA(2) — May 28, 2016: 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 (Loss), Adjusted Net Income (Loss) per Diluted Share and Other Non-GAAP Measures” in MD&A for additional details.
Schedule of reconciliation of net loss to Adjusted EBITDA	Thirteen Week Period June 3, May 28, (dollars in thousands) Net loss $ ) $ ) Interest expense Income tax benefit ) ) Depreciation and amortization expense LIFO charge Lease termination and impairment charges Other Adjusted EBITDA $ $
Schedule of reconciliation of balance sheet information for the Company's reportable segments	Retail Pharmacy Eliminations(2) Consolidated June 3, 2017: Total Assets $ $ $ ) $ Goodwill — Additions to property and equipment and intangible assets — March 4, 2017: Total Assets $ $ $ ) $ Goodwill — Additions to property and equipment and intangible assets(1) — (1) Includes additions to property and equipment and intangible assets for the fifty-three week period ended March 4, 2017. (2) As of June 3, 2017 and March 4, 2017, intersegment eliminations include netting of the Pharmacy Services segment long-term deferred tax liability of $145,998 and $140,865, respectively, against the Retail Pharmacy segment long-term deferred tax asset for consolidation purposes in accordance with ASC 740, and intersegment accounts receivable of $20,538 and $16,742, respectively, 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.

Guarantor and Non-Guarantor C32

Guarantor and Non-Guarantor Condensed Consolidating Financial Information (Tables)	3 Months Ended
	Jun. 03, 2017
Guarantor and Non-Guarantor Condensed Consolidating Financial Information
Schedule of condensed consolidating balance sheet	Rite Aid Corporation Rite Aid Subsidiary Non- Eliminations Consolidated (in thousands) ASSETS Current assets: Cash and cash equivalents $ — $ $ $ — $ Accounts receivable, net — — Intercompany receivable — — )(a) — Inventories, net of LIFO reserve of $0, $1,016,650, $0, $0, and $1,016,650 — — — 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 )(b) 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 Rite Aid Subsidiary Non- Eliminations Consolidated (in thousands) ASSETS Current assets: Cash and cash equivalents $ — $ $ $ — $ Accounts receivable, net — — Intercompany receivable — — )(a) — Inventories, net of LIFO reserve of $0, $999,776, $0, $0, and $999,776 — — — 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 )(b) Total liabilities and stockholders’ equity $ $ $ $ ) $ (a) Elimination of intercompany accounts receivable and accounts payable amounts. (b) Elimination of investments in consolidated subsidiaries.
Schedule of condensed consolidating statement of operations	Rite Aid Corporation Rite Aid Subsidiary Non- Eliminations Consolidated (in thousands) Revenues $ — $ $ $ )(a) $ Costs and expenses: Cost of revenues — )(a) Selling, general and administrative expenses — (a) Lease termination and impairment charges — — — Interest expense — Gain on sale of assets, net — ) — — ) Equity in earnings of subsidiaries, net of tax ) — (b) — Loss before income taxes ) ) ) ) ) Income tax benefit — ) ) — ) Net (loss) income $ ) $ $ ) $ )(b) $ ) Total other comprehensive income (loss) — ) Comprehensive (loss) income $ ) $ $ ) $ ) $ ) (a) Elimination of intercompany revenues and expenses. (b) Elimination of equity in earnings of subsidiaries. Rite Aid Corporation Rite Aid Subsidiary Non- Eliminations Consolidated (in thousands) Revenues $ — $ $ $ )(a) $ Costs and expenses: Cost of revenues — )(a) Selling, general and administrative expenses — )(a) Lease termination and impairment charges — — — Interest expense (income) ) — Loss on sale of assets, net — — — Equity in earnings of subsidiaries, net of tax ) — (b) — (Loss) income before income taxes ) ) ) ) Income tax benefit — ) ) — ) Net (loss) income $ ) $ $ ) $ )(b) $ ) Total other comprehensive income (loss) — ) Comprehensive (loss) income $ ) $ $ ) $ ) $ ) (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 Rite Aid Subsidiary Non- 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 — ) — — ) Intercompany activity — ) — — Proceeds from dispositions of assets and investments — Proceeds from insured loss — — — Net cash (used in) provided by investing activities — ) — ) Financing activities: Net payments on revolver ) — — — ) Principal payments on long-term debt — ) — — ) Change in zero balance cash accounts — — — Net proceeds from issuance of common stock — — — Payments for taxes related to net share settlement of equity awards — ) — — ) 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 $ — $ $ $ — $ Rite Aid Corporation Rite Aid Subsidiary Non- 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 — ) — — ) Intercompany activity — ) — — Proceeds from dispositions of assets and investments — — — Net cash (used in) provided by investing activities — ) — ) Financing activities: Net payments on revolver ) — — — ) Principal payments on long-term debt — ) — — ) Change in zero balance cash accounts — — — Net proceeds from issuance of common stock — — — Excess tax benefit on stock options and restricted stock — — — Payments for taxes related to net share settlement of equity awards — ) — — ) Intercompany activity — — ) — Net cash provided by (used in) financing activities ) — ) ) Increase in cash and cash equivalents — — Cash and cash equivalents, beginning of period — — Cash and cash equivalents, end of period $ — $ $ $ — $

Basis of Presentation (Details)

Basis of Presentation (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 03, 2017	May 28, 2016	Mar. 04, 2017
Basis of presentation
Accumulated deficit	$ (5,299,929)		$ (5,237,157)
Income tax (benefit) expense	(35,209)	$ (6,309)
Accounting Standards Update 2016-09
Basis of presentation
Deferred tax asset	12,577
Accumulated deficit	(12,577)
Income tax (benefit) expense	$ 52
Increase in cash provided by operating activities and financing activities		$ 56

Acquisition (Details)

Acquisition (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	Nov. 05, 2015	Jun. 24, 2015	Mar. 04, 2017	Jun. 03, 2017	Apr. 02, 2015
Final purchase price allocation
Goodwill			$ 1,715,479	$ 1,715,479
Pharmacy Services
Final purchase price allocation
Goodwill		$ 1,639,355
Amount of goodwill deductible for tax purpose		$ 1,368,657
6.125% senior notes due 2023
Acquisition
Principal amount of debt			$ 1,800,000	$ 1,800,000
Debt instrument, stated interest rate (as a percent)			6.125%	6.125%
EnvisionRx
Acquisition
Ownership interest (as a percent)		100.00%
Stock consideration (in shares)		27,754
Share price		$ 8.68
Final purchase price
Cash consideration	$ 116,057	$ 1,882,211	$ 1,882,211
Stock consideration		240,907	240,907
Total			2,123,118
Final purchase price allocation
Cash and cash equivalents			103,834
Accounts receivable			892,678
Inventories			7,276
Prepaid expenses and other current assets			13,386
Total current assets			1,017,174
Property and equipment			13,196
Intangible assets(1)		646,600	646,600
Goodwill			1,639,355
Other assets			7,219
Total assets acquired			3,323,544
Accounts payable			491,672
Reinsurance funds held			381,225
Other current liabilities(2)			215,770
Total current liabilities			1,088,667
Other long term liabilities(3)			111,759
Total liabilities assumed			1,200,426
Net assets acquired			$ 2,123,118
EnvisionRx | Trademarks
Final purchase price allocation
Estimated Fair Value of indefinite lived intangible assets		33,500
EnvisionRx | Customer relationships
Final purchase price allocation
Estimated Fair Value of Finite lived intangible assets		$ 465,000
Estimated Useful Life		17 years
EnvisionRx | CMS license
Final 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
Final purchase price allocation
Estimated Fair Value of Finite lived intangible assets		$ 59,000
Estimated Useful Life		7 years
EnvisionRx | Trademarks
Final purchase price allocation
Estimated Fair Value of Finite lived intangible assets		$ 20,100
Estimated Useful Life		10 years
EnvisionRx | Backlog
Final 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
Acquisition
Principal amount of debt					$ 1,800,000
Debt instrument, stated interest rate (as a percent)					6.125%

Termination of the Merger Agr35

Termination of the Merger Agreement with WBA, and the Pending Asset Sale to WBA (Details) $ in Thousands	Jun. 28, 2017USD ($)storeitem	Jun. 30, 2017USD ($)	Jun. 03, 2017	Jan. 29, 2017	Dec. 19, 2016store
Termination of the Merger Agreement with WBA and the Pending Asset Sale to WBA
Ownership interest (as a percent)			100.00%
WBA and Victoria Merger Sub | Rite Aid | Terminated Agreement
Termination of the Merger Agreement with WBA and the Pending Asset Sale to WBA
Merger termination fee | $		$ 325,000
AFAE and Fred's and WBA | Rite Aid | Terminated Agreement
Termination of the Merger Agreement with WBA and the Pending Asset Sale to WBA
Number of stores Rite Aid agreed to sell | store					865
WBA and Walgreen Co. | Rite Aid | Pending Asset Sale
Termination of the Merger Agreement with WBA and the Pending Asset Sale to WBA
Number of stores Rite Aid agreed to sell | store	2,186
Purchase price | $	$ 5,175,000
Number of distribution centers agreed to sell | item	3
Nonsolicitation period for remainder of interest in assets	60 days
Maximum period for transition services (in years)	3 years
Option to purchase pharmaceutical drugs (in years)	10 years
WBA and Walgreen Co. | Rite Aid | Pending Asset Sale | Minimum
Termination of the Merger Agreement with WBA and the Pending Asset Sale to WBA
Agreement not to solicit proposals from third parties for purchase of remainder interest (as a percent)	50.00%
WBA | Rite Aid | Terminated Agreement
Termination of the Merger Agreement with WBA and the Pending Asset Sale to WBA
Ownership interest (as a percent)				100.00%

Loss Per Share (Details)

Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Jun. 03, 2017	May 28, 2016
Numerator for loss per share:
Loss attributable to common stockholders-basic and diluted	$ (75,349)	$ (4,588)
Denominator:
Basic weighted average shares	1,046,826	1,042,437
Diluted weighted average shares	1,046,826	1,042,437
Basic and diluted loss per share	$ (0.07)	$ 0
Stock options
Antidilutive securities excluded from computation of loss per share
Shares excluded from the computation of diluted loss per share	33,747	36,860
Restricted shares
Antidilutive securities excluded from computation of loss per share
Shares excluded from the computation of diluted loss per share	5,623	4,742

Lease Termination and Impairm37

Lease Termination and Impairment Charges (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 03, 2017	May 28, 2016
Lease termination and impairment charges
Lease termination and impairment charges	$ 4,086	$ 5,781
Impairment charges
Lease termination and impairment charges
Lease termination and impairment charges	659	619
Lease termination charges
Lease termination and impairment charges
Lease termination and impairment charges	3,427	5,162
Closed store and distribution center charges
Balance-beginning of period	165,138	208,421
Provision for present value of noncancellable lease payments of closed stores	913	622
Changes in assumptions about future sublease income, terminations and changes in interest rates	(549)	811
Interest accretion	3,095	3,778
Cash payments, net of sublease income	(12,931)	(14,642)
Balance-end of period	$ 155,666	$ 198,990

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 03, 2017	May 28, 2016	Mar. 04, 2017
Non-financial assets measured on a non-recurring basis
Outstanding derivative financial instruments	$ 0		$ 0
Prepaid expenses and other current assets
Non-financial assets measured on a non-recurring basis
Investment at amortized cost	7,018
Other assets
Non-financial assets measured on a non-recurring basis
Investment at amortized cost		$ 6,567
Nonrecurring basis
Non-financial assets measured on a non-recurring basis
Carrying value of long-lived assets	964	1,051
Impairment charges	659	619
Nonrecurring basis | Level 1
Non-financial assets measured on a non-recurring basis
Carrying value of total long-term indebtedness	7,178,008
Estimated fair value of total long-term indebtedness	7,273,272
Nonrecurring basis | Level 2
Non-financial assets measured on a non-recurring basis
Fair value of Total	104
Fair value of Long-lived assets held for sale	104
Nonrecurring basis | Level 3
Non-financial assets measured on a non-recurring basis
Fair value of Total	201	432
Fair value of Long-lived assets held for use	201	432
Nonrecurring basis | Fair Value
Non-financial assets measured on a non-recurring basis
Fair value of Total	305	432
Fair value of Long-lived assets held for use	201	$ 432
Fair value of Long-lived assets held for sale	$ 104

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 03, 2017	May 28, 2016	Mar. 04, 2017
Income Taxes
Income tax expense (benefit)	$ 35,209	$ 6,309
Estimated effective tax rate (as a percent)	31.80%	57.90%
Increase in valuation allowance to offset the current year deferred state tax benefits (as a percent)	(8.40%)
Increase Decrease In Effective Income Tax Rate Continuing Operations	13.30%
Valuation allowance against net deferred tax assets	$ 235,983		$ 226,726

Medicare Part D (Details)

Medicare Part D (Details) - USD ($) $ in Thousands	Jun. 03, 2017	Mar. 31, 2017	May 28, 2016
Medicare Part D
Accounts receivable, net	$ 311,905		$ 319,976
Accrued salaries, wages and other current liabilities
Medicare Part D
Liabilities under reinsurance contracts	$ 166,665		$ 152,970
EIC
Medicare Part D
Minimum amount of capital and surplus required by regulatory requirements		$ 31,650

Goodwill and Other Intangible41

Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended			12 Months Ended
	Jun. 03, 2017	Mar. 04, 2017	May 28, 2016	Mar. 04, 2017
Finite Lived And Indefinite Lived Intangible Assets By Major Class
Goodwill, Impairment Loss	$ 0	$ 0
Gross Carrying Amount of Finite Lived	2,864,022	2,862,005		$ 2,862,005
Accumulated Amortization	(2,109,553)	(2,059,710)		(2,059,710)
Net	754,469	802,295		802,295
Gross Carrying Amount of Indefinite Lived	33,500
Gross Carrying Amount, Total	2,897,522	2,895,505		2,895,505
Net, Total	787,969	835,795		835,795
Unfavorable lease intangibles	37,053	38,242		38,242
Amortization expense for intangible assets and liabilities	54,932		$ 55,503
Anticipated annual amortization expense for intangible assets and liabilities
2,018	181,675
2,019	144,555
2,020	115,010
2,021	82,456
2,022	53,534
Trademarks
Finite Lived And Indefinite Lived Intangible Assets By Major Class
Gross Carrying Amount of Indefinite Lived	33,500	33,500		33,500
Favorable leases and other
Finite Lived And Indefinite Lived Intangible Assets By Major Class
Gross Carrying Amount of Finite Lived	663,949	664,670		664,670
Accumulated Amortization	(537,884)	(531,022)		(531,022)
Net	$ 126,065	133,648		$ 133,648
Remaining Weighted Average Amortization Period	7 years			7 years
Prescription files
Finite Lived And Indefinite Lived Intangible Assets By Major Class
Gross Carrying Amount of Finite Lived	$ 1,586,981	1,584,240		$ 1,584,240
Accumulated Amortization	(1,412,404)	(1,390,139)		(1,390,139)
Net	$ 174,577	194,101		$ 194,101
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	465,000		$ 465,000
Accumulated Amortization	(127,226)	(110,653)		(110,653)
Net	$ 337,774	354,347		$ 354,347
Remaining Weighted Average Amortization Period	15 years			16 years
CMS license
Finite Lived And Indefinite Lived Intangible Assets By Major Class
Gross Carrying Amount of Finite Lived	$ 57,500	57,500		$ 57,500
Accumulated Amortization	(4,447)	(3,872)		(3,872)
Net	$ 53,053	53,628		$ 53,628
Remaining Weighted Average Amortization Period	23 years			24 years
Claims adjudication and other developed software
Finite Lived And Indefinite Lived Intangible Assets By Major Class
Gross Carrying Amount of Finite Lived	$ 58,992	58,995		$ 58,995
Accumulated Amortization	(16,295)	(14,188)		(14,188)
Net	$ 42,697	44,807		$ 44,807
Remaining Weighted Average Amortization Period	5 years			6 years
Trademarks
Finite Lived And Indefinite Lived Intangible Assets By Major Class
Gross Carrying Amount of Finite Lived	$ 20,100	20,100		$ 20,100
Accumulated Amortization	(3,886)	(3,383)		(3,383)
Net	$ 16,214	16,717		$ 16,717
Remaining Weighted Average Amortization Period	8 years			9 years
Backlog
Finite Lived And Indefinite Lived Intangible Assets By Major Class
Gross Carrying Amount of Finite Lived	$ 11,500	11,500		$ 11,500
Accumulated Amortization	(7,411)	(6,453)		(6,453)
Net	$ 4,089	$ 5,047		$ 5,047
Remaining Weighted Average Amortization Period	1 year			2 years

Indebtedness and Credit Agree42

Indebtedness and Credit Agreements (Details) $ in Thousands	3 Months Ended
	Jun. 03, 2017USD ($)loan	Mar. 04, 2017USD ($)	Nov. 26, 2016USD ($)	Jan. 15, 2015USD ($)
Indebtedness and credit agreements
Lease financing obligations	$ 62,259	$ 65,315
Total debt	7,240,267	7,328,693
Current maturities of long-term debt and lease financing obligations	(22,460)	(21,335)
Long-term debt and lease financing obligations, less current maturities	$ 7,217,807	7,307,358
Credit facility
Number of second priority secured term loan facilities | loan	2
Ownership interest (as a percent)	100.00%
Maturities
Remainder of fiscal 2018	$ 90
2,019	0
2,010	2,340,000
2,021	1,372,000
2,021	1,310,000
Thereafter	2,223,000
Secured Debt
Indebtedness and credit agreements
Long-term debt	3,281,224	3,368,574
Senior secured revolving credit facility due January 2020
Indebtedness and credit agreements
Long-term debt	2,317,285	2,405,082
Principal amount of debt	2,340,000	2,430,000
Unamortized debt issuance costs	22,715	24,918
Credit facility
Maximum borrowing capacity				$ 3,700,000
Outstanding borrowings	2,340,000
Letters of credit outstanding	59,388
Additional borrowing capacity	1,300,612
Amount of debt allowed to be outstanding	1,500,000
Threshold amount of debt	$ 750,000
Number of days relating to debt threshold	90 days
Period allowed for extensions on customary terms	90 days
Availability under revolving credit facility	$ 1,300,612
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		$ 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 1 Term Loan (second lien) due August 2020
Indebtedness and credit agreements
Long-term debt	$ 466,139	465,833
Principal amount of debt	470,000	470,000
Unamortized debt issuance costs	$ 3,861	4,167
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 agreements
Long-term debt	$ 497,710	497,569
Principal amount of debt	500,000	500,000
Unamortized debt issuance costs	$ 2,290	2,431
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%
Other secured
Indebtedness and credit agreements
Long-term debt	$ 90	90
Guaranteed Unsecured Debt
Indebtedness and credit agreements
Long-term debt	3,476,123	3,474,200
9.25% senior notes due March 2020
Indebtedness and credit agreements
Long-term debt	$ 897,027	$ 896,544
Debt instrument, stated interest rate (as a percent)	9.25%	9.25%
Principal amount of debt	$ 902,000	$ 902,000
Unamortized debt issuance costs	6,876	7,527
Unamortized premium	1,903	2,071
6.75% senior notes due June 2021
Indebtedness and credit agreements
Long-term debt	$ 804,011	$ 803,640
Debt instrument, stated interest rate (as a percent)	6.75%	6.75%
Principal amount of debt	$ 810,000	$ 810,000
Unamortized debt issuance costs	5,989	6,360
6.125% senior notes due 2023
Indebtedness and credit agreements
Long-term debt	$ 1,775,085	$ 1,774,016
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	24,915	25,984
Unguaranteed Unsecured Debt
Indebtedness and credit agreements
Long-term debt	420,661	420,604
7.7% notes due February 2027
Indebtedness and credit agreements
Long-term debt	$ 293,416	$ 293,375
Debt instrument, stated interest rate (as a percent)	7.70%	7.70%
Principal amount of debt	$ 295,000	$ 295,000
Unamortized debt issuance costs	1,584	1,625
6.875% fixed-rate senior notes due December 2028
Indebtedness and credit agreements
Long-term debt	$ 127,245	$ 127,229
Debt instrument, stated interest rate (as a percent)	6.875%	6.875%
Principal amount of debt	$ 128,000	$ 128,000
Unamortized debt issuance costs	$ 755	$ 771

Retirement Plans (Details)

Retirement Plans (Details) - Defined Benefit Pension Plan - USD ($) $ in Thousands	3 Months Ended
	Jun. 03, 2017	May 28, 2016
Net periodic pension expense
Service cost	$ 346	$ 292
Interest cost	1,603	1,621
Expected return on plan assets	(1,147)	(1,142)
Amortization of unrecognized net loss	856	1,132
Net periodic pension expense	1,658	$ 1,903
Employer contributions	0
Expected employer contribution during the remainder of fiscal year	$ 4,900

Segment Reporting (Details)

Segment Reporting (Details) $ in Thousands	Jun. 24, 2015USD ($)segment	Jun. 23, 2015segment	Jun. 03, 2017USD ($)	May 28, 2016USD ($)	Mar. 04, 2017USD ($)
Segment Reporting
Number of reportable segments | segment	2	1
Revenues			$ 7,781,453	$ 8,184,181
Gross Profit			1,759,034	1,894,300
Adjusted EBITDA			192,564	286,002
Total Assets			11,460,138		$ 11,593,752
Goodwill			1,715,479		1,715,479
Additions to property and equipment and intangible assets			68,972		481,111
Accounts receivable			1,781,175		1,771,126
Pharmacy Services
Segment Reporting
Goodwill	$ 1,639,355
Operating segments | Retail Pharmacy
Segment Reporting
Revenues			6,350,208	6,675,548
Gross Profit			1,654,062	1,805,367
Adjusted EBITDA			143,965	244,827
Total Assets			8,497,159		8,664,216
Goodwill			76,124		76,124
Additions to property and equipment and intangible assets			65,771		468,386
Operating segments | Pharmacy Services
Segment Reporting
Revenues			1,513,241	1,602,359
Gross Profit			104,972	88,933
Adjusted EBITDA			48,599	41,175
Total Assets			3,129,515		3,087,143
Goodwill			1,639,355		1,639,355
Additions to property and equipment and intangible assets			3,201		12,725
Intersegment elimination
Segment Reporting
Revenues			(81,996)	$ (93,726)
Total Assets			(166,536)		(157,607)
Long-term deferred tax liability			(145,998)		(140,865)
Accounts receivable			$ (20,538)		$ (16,742)

Segment Reporting - Adjusted EB

Segment Reporting - Adjusted EBITDA (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 03, 2017	May 28, 2016
Segment Reporting
Net loss	$ (75,349)	$ (4,588)
Interest expense	109,937	105,113
Income tax benefit	(35,209)	(6,309)
Depreciation and amortization expense	142,092	138,788
LIFO charge	16,874	13,751
Lease termination and impairment charges	4,086	5,781
Other	30,133	33,466
Adjusted EBITDA	$ 192,564	$ 286,002

Commitments and Contingencies (

Commitments and Contingencies (Details)	Sep. 30, 2016item	Jun. 15, 2015item	Jul. 30, 2014item	May 15, 2014item	Jun. 03, 2017caseitemStoreManager	Jan. 19, 2017state
Commitments and Contingencies
Number of states failed to report Rx savings prices | state						18
Number of document productions | item					4
Number of prescriptions requested the company produce | item	242	80	30	60
Indergit
Commitments and Contingencies
Number of current and former store managers court ordered notices to be sent					7,000
Number of current and former store managers who joined the action					1,550
Number of current and former store managers to whom notices will be sent after the Court approval					1,750
Hall
Commitments and Contingencies
Number of similar cases | case					2

Guarantor and Non-Guarantor C47

Guarantor and Non-Guarantor Condensed Consolidating Financial Information - Balance Sheet (Details) - USD ($) $ in Thousands	Jun. 03, 2017	Mar. 04, 2017	May 28, 2016	Feb. 27, 2016
Condensed consolidating balance sheet
Ownership interest (as a percent)	100.00%
Current assets:
Cash and cash equivalents	$ 214,449	$ 245,410	$ 144,840	$ 124,471
Accounts receivable, net	1,781,175	1,771,126
Inventories, net of LIFO reserve	2,789,176	2,837,211
Prepaid expenses and other current assets	192,767	211,541
Total current assets	4,977,567	5,065,288
Property, plant and equipment, net	2,218,333	2,251,692
Goodwill	1,715,479	1,715,479
Other intangibles, net	787,969	835,795
Deferred tax assets	1,556,301	1,505,564
Other assets	204,489	219,934
Total assets	11,460,138	11,593,752
Current liabilities:
Current maturities of long-term debt and lease financing obligations	22,460	21,335
Accounts payable	1,646,457	1,613,909
Accrued salaries, wages and other current liabilities	1,339,778	1,370,004
Total current liabilities	3,008,695	3,005,248
Long-term debt, less current maturities	7,177,918	7,263,288
Lease financing obligations, less current maturities	39,889	44,070
Other noncurrent liabilities	673,008	667,076
Total liabilities	10,899,510	10,979,682
Commitments and contingencies
Total stockholders' equity	560,628	614,070
Total liabilities and stockholders' equity	11,460,138	11,593,752
Inventories, LIFO reserve (in dollars)	1,016,650	999,776
Reportable legal entity | Rite Aid Corporation (Parent Company Only)
Current assets:
Investment in subsidiaries	15,327,513	15,275,488
Total assets	15,327,513	15,275,488
Current liabilities:
Current maturities of long-term debt and lease financing obligations	90	90
Accrued salaries, wages and other current liabilities	95,162	66,365
Total current liabilities	95,252	66,455
Long-term debt, less current maturities	7,177,918	7,263,288
Intercompany payable	7,493,715	7,331,675
Total liabilities	14,766,885	14,661,418
Commitments and contingencies
Total stockholders' equity	560,628	614,070
Total liabilities and stockholders' equity	15,327,513	15,275,488
Inventories, LIFO reserve (in dollars)	0	0
Reportable legal entity | Subsidiary Guarantors
Current assets:
Cash and cash equivalents	181,648	213,104	105,971	90,569
Accounts receivable, net	1,459,122	1,506,288
Intercompany receivable	225,223	215,862
Inventories, net of LIFO reserve	2,789,176	2,837,211
Prepaid expenses and other current assets	184,090	203,033
Total current assets	4,839,259	4,975,498
Property, plant and equipment, net	2,218,333	2,251,692
Goodwill	1,715,479	1,715,479
Other intangibles, net	734,916	782,167
Deferred tax assets	1,556,301	1,505,564
Investment in subsidiaries	48,692	50,004
Intercompany receivable	7,493,715	7,331,675
Other assets	204,489	219,934
Total assets	18,811,184	18,832,013
Current liabilities:
Current maturities of long-term debt and lease financing obligations	22,370	21,245
Accounts payable	1,642,397	1,609,025
Accrued salaries, wages and other current liabilities	1,126,776	1,236,297
Total current liabilities	2,791,543	2,866,567
Lease financing obligations, less current maturities	39,889	44,070
Other noncurrent liabilities	652,239	645,888
Total liabilities	3,483,671	3,556,525
Commitments and contingencies
Total stockholders' equity	15,327,513	15,275,488
Total liabilities and stockholders' equity	18,811,184	18,832,013
Inventories, LIFO reserve (in dollars)	1,016,650	999,776
Reportable legal entity | Non-Guarantor Subsidiaries
Current assets:
Cash and cash equivalents	32,801	32,306	$ 38,869	$ 33,902
Accounts receivable, net	322,053	264,838
Prepaid expenses and other current assets	8,677	8,508
Total current assets	363,531	305,652
Other intangibles, net	53,053	53,628
Total assets	416,584	359,280
Current liabilities:
Accounts payable	4,060	4,884
Intercompany payable	225,223	215,862
Accrued salaries, wages and other current liabilities	117,840	67,342
Total current liabilities	347,123	288,088
Other noncurrent liabilities	20,769	21,188
Total liabilities	367,892	309,276
Commitments and contingencies
Total stockholders' equity	48,692	50,004
Total liabilities and stockholders' equity	416,584	359,280
Inventories, LIFO reserve (in dollars)	0	0
Eliminations
Current assets:
Intercompany receivable	(225,223)	(215,862)
Total current assets	(225,223)	(215,862)
Investment in subsidiaries	(15,376,205)	(15,325,492)
Intercompany receivable	(7,493,715)	(7,331,675)
Total assets	(23,095,143)	(22,873,029)
Current liabilities:
Intercompany payable	(225,223)	(215,862)
Total current liabilities	(225,223)	(215,862)
Intercompany payable	(7,493,715)	(7,331,675)
Total liabilities	(7,718,938)	(7,547,537)
Commitments and contingencies
Total stockholders' equity	(15,376,205)	(15,325,492)
Total liabilities and stockholders' equity	(23,095,143)	(22,873,029)
Inventories, LIFO reserve (in dollars)	$ 0	$ 0

Guarantor and Non-Guarantor C48

Guarantor and Non-Guarantor Condensed Consolidating Financial Information - Statement of Operations (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 03, 2017	May 28, 2016
Condensed consolidating statement of operations
Revenues	$ 7,781,453	$ 8,184,181
Costs and expenses:
Cost of revenues	6,022,419	6,289,881
Selling, general and administrative expenses	1,761,290	1,793,247
Lease termination and impairment charges	4,086	5,781
Interest expense (income)	109,937	105,113
(Gain) loss on sale of assets, net	(5,721)	1,056
Total costs and expenses	7,892,011	8,195,078
(Loss) income before income taxes	(110,558)	(10,897)
Income tax benefit	(35,209)	(6,309)
Net loss	(75,349)	(4,588)
Total other comprehensive income (loss)	514	681
Comprehensive loss	(74,835)	(3,907)
Reportable legal entity | Rite Aid Corporation (Parent Company Only)
Costs and expenses:
Interest expense (income)	105,384	100,448
Equity in earnings of subsidiaries, net of tax	(30,035)	(95,860)
Total costs and expenses	75,349	4,588
(Loss) income before income taxes	(75,349)	(4,588)
Net loss	(75,349)	(4,588)
Total other comprehensive income (loss)	514	681
Comprehensive loss	(74,835)	(3,907)
Reportable legal entity | Subsidiary Guarantors
Condensed consolidating statement of operations
Revenues	7,760,058	8,168,192
Costs and expenses:
Cost of revenues	6,003,041	6,275,447
Selling, general and administrative expenses	1,757,620	1,791,637
Lease termination and impairment charges	4,086	5,781
Interest expense (income)	4,515	4,666
(Gain) loss on sale of assets, net	(5,721)	1,056
Equity in earnings of subsidiaries, net of tax	1,312	52
Total costs and expenses	7,764,853	8,078,639
(Loss) income before income taxes	(4,795)	89,553
Income tax benefit	(34,830)	(6,307)
Net loss	30,035	95,860
Total other comprehensive income (loss)	514	681
Comprehensive loss	30,549	96,541
Reportable legal entity | Non-Guarantor Subsidiaries
Condensed consolidating statement of operations
Revenues	39,450	58,528
Costs and expenses:
Cost of revenues	37,902	55,846
Selling, general and administrative expenses	3,201	2,737
Interest expense (income)	38	(1)
Total costs and expenses	41,141	58,582
(Loss) income before income taxes	(1,691)	(54)
Income tax benefit	(379)	(2)
Net loss	(1,312)	(52)
Comprehensive loss	(1,312)	(52)
Eliminations
Condensed consolidating statement of operations
Revenues	(18,055)	(42,539)
Costs and expenses:
Cost of revenues	(18,524)	(41,412)
Selling, general and administrative expenses	469	(1,127)
Equity in earnings of subsidiaries, net of tax	28,723	95,808
Total costs and expenses	10,668	53,269
(Loss) income before income taxes	(28,723)	(95,808)
Net loss	(28,723)	(95,808)
Total other comprehensive income (loss)	(514)	(681)
Comprehensive loss	$ (29,237)	$ (96,489)

Guarantor and Non-Guarantor C49

Guarantor and Non-Guarantor Condensed Consolidating Financial Information - Statement of Cash Flow (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 03, 2017	May 28, 2016
Operating activities:
Net cash (used in) provided by operating activities	$ 92,734	$ 160,000
Investing activities:
Payments for property, plant and equipment	(60,738)	(106,077)
Intangible assets acquired	(8,234)	(16,381)
Proceeds from dispositions of assets and investments	8,639	3,088
Proceeds from insured loss	2,137
Net cash used in investing activities	(58,196)	(119,370)
Financing activities:
Net payments on revolver	(90,000)	(20,000)
Principal payments on long-term debt	(4,267)	(5,721)
Change in zero balance cash accounts	28,768	2,262
Net proceeds from issuance of common stock	147	2,371
Excess tax benefit on stock options and restricted stock		883
Payments for taxes related to net share settlement of equity awards	(147)	(56)
Net cash used in financing activities	(65,499)	(20,261)
(Decrease) increase in cash and cash equivalents	(30,961)	20,369
Cash and cash equivalents, beginning of period	245,410	124,471
Cash and cash equivalents, end of period	214,449	144,840
Reportable legal entity | Rite Aid Corporation (Parent Company Only)
Operating activities:
Net cash (used in) provided by operating activities	(71,957)	(67,457)
Financing activities:
Net payments on revolver	(90,000)	(20,000)
Net proceeds from issuance of common stock	147	2,371
Intercompany activity	161,810	85,086
Net cash used in financing activities	71,957	67,457
Reportable legal entity | Subsidiary Guarantors
Operating activities:
Net cash (used in) provided by operating activities	164,196	222,490
Investing activities:
Payments for property, plant and equipment	(60,738)	(106,077)
Intangible assets acquired	(8,234)	(16,381)
Intercompany activity	(161,810)	(85,086)
Proceeds from dispositions of assets and investments	8,639	3,088
Proceeds from insured loss	2,137
Net cash used in investing activities	(220,006)	(204,456)
Financing activities:
Principal payments on long-term debt	(4,267)	(5,721)
Change in zero balance cash accounts	28,768	2,262
Excess tax benefit on stock options and restricted stock		883
Payments for taxes related to net share settlement of equity awards	(147)	(56)
Net cash used in financing activities	24,354	(2,632)
(Decrease) increase in cash and cash equivalents	(31,456)	15,402
Cash and cash equivalents, beginning of period	213,104	90,569
Cash and cash equivalents, end of period	181,648	105,971
Reportable legal entity | Non-Guarantor Subsidiaries
Operating activities:
Net cash (used in) provided by operating activities	495	4,967
Financing activities:
(Decrease) increase in cash and cash equivalents	495	4,967
Cash and cash equivalents, beginning of period	32,306	33,902
Cash and cash equivalents, end of period	32,801	38,869
Eliminations
Investing activities:
Intercompany activity	161,810	85,086
Net cash used in investing activities	161,810	85,086
Financing activities:
Intercompany activity	(161,810)	(85,086)
Net cash used in financing activities	$ (161,810)	$ (85,086)