Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Mar. 04, 2023 | Jul. 22, 2024 | Aug. 27, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K/A | ||
Document Annual Report | true | ||
Document Period End Date | Mar. 04, 2023 | ||
Document Transition Report | false | ||
Entity File Number | 1-5742 | ||
Entity Registrant Name | RITE AID CORP | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 23-1614034 | ||
Entity Address, Address Line One | PO Box 3165 | ||
Entity Address, City or Town | Harrisburg | ||
Entity Address, State or Province | PA | ||
Entity Address, Postal Zip Code | 17105 | ||
City Area Code | 717 | ||
Local Phone Number | 761-2633 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | No | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
ICFR Auditor Attestation Flag | true | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Public Float | $ 447,694,555 | ||
Entity Common Stock, Shares Outstanding | 55,974,015 | ||
Auditor Name | Deloitte & Touche LLP | ||
Auditor Firm ID | 34 | ||
Auditor Location | Philadelphia, Pennsylvania | ||
Entity Central Index Key | 0000084129 | ||
Current Fiscal Year End Date | --03-04 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | true | ||
Amendment Description | Rite Aid Corporation ("Rite Aid," the "Company," "we," "us," and "our") is filing this Amendment No. 1 on Form 10-K/A (this "Amendment" or "Form 10-K/A") to our Annual Report on Form 10-K for the fiscal year ended March 4, 2023, which was filed with the Securities and Exchange Commission (the "SEC") on May 1, 2023 (the "Original Form 10-K") to make certain changes, as described below. Subsequent to the issuance of the Company's consolidated financial statements as of and for the fiscal year ended March 4, 2023, management evaluated the materiality of a misstatement related to the Company's historical accounting for closed store liabilities in accordance with changes in ASC 420, Exit or Disposal Cost Obligations. Based on their evaluation, management concluded the misstatement is not material to the Company's previously issued consolidated financial statements as of and for each of the three fiscal years ended March 4, 2023 and each of the interim and year-to-date periods then ended, (collectively the "previously issued financial statements"). However, due to the discovery of this error, we reevaluated the effectiveness of our internal control over financial reporting ("ICFR") as of March 4, 2023 and identified a material weakness in our ICFR. For a more detailed description of this material weakness, refer to Part II, Item 9A,"Controls and Procedures." This Amendment therefore amends our assessment of our ICFR and our disclosure controls and procedures to indicate that they were not effective as of March 4, 2023 because of this material weakness. Our independent registered public accounting firm, Deloitte & Touche LLP, has also amended its opinion on our ICFR as of March 4, 2023. In conjunction with filing this Amendment, we determined it was appropriate to revise the consolidated financial statements as of and for each of the three fiscal years ended March 4, 2023 and the related notes thereto to reflect the impact of the immaterial misstatement in the periods impacted. For additional information and a more detailed discussion, refer to Note 25 Revision of Previously Issued Consolidated Financial Statements. Item 1A, "Risk Factors," of Part I of the Original Form 10-K, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Continuing Operations;" Item 8, "Financial Statements and Supplementary Data," and Item 9A, "Controls and Procedures," of Part II of the Original Form 10-K are hereby deleted in their entireties and replaced with Item 1A, Item 7, Item 8, and Item 9A included herein, Item 15, "Exhibits and Financial Statement Schedule," of Part IV of the Original Form 10-K also has been amended to include a new consent of Deloitte & Touche LLP and, as required by Rule 12b-15 under the Securities Act of 1934, as amended, to provide new currently dated certifications by our Chief Executive Officer and Chief Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. The new consent is attached to this Amendment as Exhibit 23 and the new certifications are attached to this Amendment as Exhibits 31.1, 31.2 and 32. The other Items of the Original Form 10-K have not been amended and, accordingly, have not been repeated in this Amendment. The only changes to the Original Form 10-K are related to the matters described above. Except as described above, this Amendment does not amend, update, or change any other item or disclosure in the Original Form 10-K and does not purport to reflect any information or event subsequent to the filing thereof. As such, this Amendment speaks only as of the date the Original Form 10-K was filed, and the Company has not undertaken herein to amend, update, or change any information contained in the Original Form 10-K to give effect to any event following the date of filing of the Original Form 10-K, other than as expressly indicated in this Amendment. Accordingly, this Amendment should be read in conjunction with the Original Form 10-K and any subsequent filing with the SEC. |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 04, 2023 | Feb. 26, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 157,151 | $ 39,721 |
Accounts receivable, net | 1,149,958 | 1,343,496 |
Inventories, net | 1,900,744 | 1,959,389 |
Prepaid expenses and other current assets | 93,194 | 106,749 |
Total current assets | 3,301,047 | 3,449,355 |
Property, plant and equipment, net | 907,771 | 989,167 |
Operating lease right-of-use assets | 2,497,206 | 2,813,535 |
Goodwill | 507,936 | 879,136 |
Other intangibles, net | 250,112 | 291,196 |
Deferred tax assets | 12,368 | 20,071 |
Other assets | 50,922 | 86,543 |
Total assets | 7,527,362 | 8,529,003 |
Current liabilities: | ||
Current maturities of long-term debt and lease financing obligations | 6,332 | 5,544 |
Accounts payable | 1,494,611 | 1,571,261 |
Accrued salaries, wages and other current liabilities | 709,891 | 776,559 |
Current portion of operating lease liabilities | 502,403 | 575,651 |
Total current liabilities | 2,713,237 | 2,929,015 |
Long-term debt, less current maturities | 2,925,258 | 2,732,986 |
Long-term operating lease liabilities | 2,372,943 | 2,597,090 |
Lease financing obligations, less current maturities | 12,580 | 14,830 |
Other noncurrent liabilities | 97,577 | 139,254 |
Total liabilities | 8,121,595 | 8,413,175 |
Commitments and contingencies | ||
Stockholders' (deficit) equity: | ||
Common stock, par value $1 per share; 75,000 shares authorized; shares issued and outstanding 56,629 and 55,752 | 56,629 | 55,752 |
Additional paid-in capital | 5,917,964 | 5,910,299 |
Accumulated deficit | (6,553,974) | (5,834,786) |
Accumulated other comprehensive loss | (14,852) | (15,437) |
Total stockholders' (deficit) equity | (594,233) | 115,828 |
Total liabilities and stockholders' (deficit) equity | $ 7,527,362 | $ 8,529,003 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Mar. 04, 2023 | Feb. 26, 2022 |
CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized | 75,000 | 75,000 |
Common stock, shares issued | 56,629 | 55,752 |
Common stock, shares outstanding | 56,629 | 55,752 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | |||
Revenues | $ 24,091,899 | $ 24,568,255 | $ 24,043,240 |
Costs and expenses: | |||
Cost of revenues | 19,287,959 | 19,461,760 | 19,338,918 |
Selling, general and administrative expenses | 4,902,087 | 5,033,876 | 4,657,185 |
Facility exit and impairment charges | 180,637 | 164,084 | 57,714 |
Goodwill and intangible asset impairment charges | 371,200 | 229,000 | 29,852 |
Interest expense | 224,399 | 191,601 | 201,388 |
(Gain) loss on debt modifications and retirements, net | (80,142) | 3,235 | (5,274) |
(Gain) loss on sale of assets, net | (68,586) | 5,505 | (69,300) |
Loss (gain) on Bartell acquisition | 5,346 | (47,705) | |
Total costs and expenses | 24,817,554 | 25,094,407 | 24,162,778 |
Loss before income taxes | (725,655) | (526,152) | (119,538) |
Income tax benefit | (6,467) | (3,780) | (20,157) |
Net loss from continuing operations | (719,188) | (522,372) | (99,381) |
Net income from discontinued operations, net of tax | 9,161 | ||
Net loss | (719,188) | (522,372) | (90,220) |
Computation of loss attributable to common stockholders: | |||
Loss from continuing operations attributable to common stockholders - basic | (719,188) | (522,372) | (99,381) |
Loss from continuing operations attributable to common stockholders - diluted | (719,188) | (522,372) | (99,381) |
Income from discontinued operations attributable to common stockholders-basic | 9,161 | ||
Income from discontinued operations attributable to common stockholders-diluted | 9,161 | ||
Net loss attributable to common stockholders - basic | (719,188) | (522,372) | (90,220) |
Net loss attributable to common stockholders - diluted | $ (719,188) | $ (522,372) | $ (90,220) |
Basic loss per share: | |||
Continuing operations | $ (13.15) | $ (9.66) | $ (1.86) |
Discontinued operations | 0.18 | ||
Net basic loss per share | (13.15) | (9.66) | (1.68) |
Diluted loss per share: | |||
Continuing operations | (13.15) | (9.66) | (1.86) |
Discontinued operations | 0.18 | ||
Net diluted loss per share | $ (13.15) | $ (9.66) | $ (1.68) |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | |||
Net loss | $ (719,188) | $ (522,372) | $ (90,220) |
Defined benefit pension plans: | |||
Amortization of net actuarial losses included in net periodic pension cost, net of $0, $0 and $0 income tax expense | 585 | 8,590 | 24,382 |
Change in fair value of interest rate cap | 27 | 462 | |
Total other comprehensive income | 585 | 8,617 | 24,844 |
Comprehensive loss | $ (718,603) | $ (513,755) | $ (65,376) |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | |||
Amortization of net actuarial losses included in net periodic pension cost, net of income tax expense | $ 0 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total |
BALANCE - beginning of period at Feb. 29, 2020 | $ 54,716 | $ 5,890,903 | $ (5,222,194) | $ (48,898) | $ 674,527 |
BALANCE (in shares) at Feb. 29, 2020 | 54,716 | ||||
Increase (Decrease) in Stockholders' Deficit | |||||
Net loss | (90,220) | (90,220) | |||
Comprehensive loss | (65,376) | ||||
Changes in Defined Benefit Plans, net of $0 tax expense | 24,382 | 24,382 | |||
Change in fair value of interest rate cap | 462 | 462 | |||
Issuance of restricted stock | $ 780 | (780) | |||
Issuance of restricted stock (in shares) | 780 | ||||
Exchange of restricted shares for taxes | $ (189) | (2,897) | (3,086) | ||
Exchange of restricted shares for taxes (in shares) | (189) | ||||
Cancellation of restricted stock | $ (166) | 166 | |||
Cancellation of restricted stock (in shares) | (166) | ||||
Amortization of restricted stock balance | 9,126 | 9,126 | |||
Stock-based compensation expense | 599 | 599 | |||
Stock options exercised | $ 2 | 51 | $ 53 | ||
Stock options exercised (in shares) | 2 | 2 | |||
BALANCE - end of period at Feb. 27, 2021 | $ 55,143 | 5,897,168 | (5,312,414) | (24,054) | $ 615,843 |
BALANCE (in shares) at Feb. 27, 2021 | 55,143 | ||||
Increase (Decrease) in Stockholders' Deficit | |||||
Net loss | (522,372) | (522,372) | |||
Comprehensive loss | (513,755) | ||||
Changes in Defined Benefit Plans, net of $0 tax expense | 8,590 | 8,590 | |||
Change in fair value of interest rate cap | 27 | 27 | |||
Issuance of restricted stock | $ 973 | (973) | |||
Issuance of restricted stock (in shares) | 973 | ||||
Exchange of restricted shares for taxes | $ (177) | (2,411) | (2,588) | ||
Exchange of restricted shares for taxes (in shares) | (177) | ||||
Cancellation of restricted stock | $ (187) | 187 | |||
Cancellation of restricted stock (in shares) | (187) | ||||
Amortization of restricted stock balance | 10,308 | 10,308 | |||
Stock-based compensation expense | 600 | 600 | |||
Amortization of performance-based incentive plans | 5,420 | $ 5,420 | |||
Stock options exercised (in shares) | |||||
BALANCE - end of period at Feb. 26, 2022 | $ 55,752 | 5,910,299 | (5,834,786) | (15,437) | $ 115,828 |
BALANCE (in shares) at Feb. 26, 2022 | 55,752 | ||||
Increase (Decrease) in Stockholders' Deficit | |||||
Net loss | (719,188) | (719,188) | |||
Comprehensive loss | (718,603) | ||||
Changes in Defined Benefit Plans, net of $0 tax expense | 585 | 585 | |||
Issuance of restricted stock | $ 1,662 | (1,662) | |||
Issuance of restricted stock (in shares) | 1,662 | ||||
Exchange of restricted shares for taxes | $ (415) | (2,247) | (2,662) | ||
Exchange of restricted shares for taxes (in shares) | (415) | ||||
Cancellation of restricted stock | $ (370) | 370 | |||
Cancellation of restricted stock (in shares) | (370) | ||||
Amortization of restricted stock balance | 13,897 | 13,897 | |||
Stock-based compensation expense | 720 | 720 | |||
Amortization of performance-based incentive plans | (3,413) | $ (3,413) | |||
Stock options exercised (in shares) | |||||
BALANCE - end of period at Mar. 04, 2023 | $ 56,629 | $ 5,917,964 | $ (6,553,974) | $ (14,852) | $ (594,233) |
BALANCE (in shares) at Mar. 04, 2023 | 56,629 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY | |||
Changes in defined benefit plans, tax expense | $ 0 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Operating activities: | |||
Net loss | $ (719,188) | $ (522,372) | $ (90,220) |
Net income from discontinued operations, net of tax | 9,161 | ||
Net loss from continuing operations | (719,188) | (522,372) | (99,381) |
Adjustments to reconcile to net cash (used in) provided by operating activities of continuing operations: | |||
Depreciation and amortization | 276,583 | 295,686 | 327,124 |
Facility exit and impairment charges | 180,637 | 164,084 | 57,714 |
Goodwill and intangible asset impairment charges | 371,200 | 229,000 | 29,852 |
LIFO charge (credit) | 53,028 | 1,314 | (51,692) |
(Gain) loss on sale of assets, net | (68,586) | 5,505 | (69,300) |
Change in allowances for uncollectible accounts receivable | 15,267 | 22,011 | |
Loss (gain) on Bartell acquisition | 5,346 | (47,705) | |
Stock-based compensation expense | 11,537 | 13,050 | 13,003 |
(Gain) loss on debt modifications and retirements, net | (80,142) | 3,235 | (5,274) |
Changes in deferred taxes | 7,703 | (6,709) | (10,633) |
Changes in operating assets and liabilities: | |||
Accounts receivable | 151,610 | 54,086 | (182,404) |
Inventories | 5,158 | (97,112) | 177,263 |
Accounts payable | (96,570) | 139,228 | (35,372) |
Operating lease right-of-use assets and operating lease liabilities | (86,133) | (29,375) | (28,044) |
Other assets | 36,478 | 33,737 | 80,975 |
Other liabilities | (111,021) | 68,558 | (50,947) |
Net cash (used in) provided by operating activities of continuing operations: | (52,439) | 379,272 | 105,179 |
Investing activities: | |||
Payments for property, plant and equipment | (215,285) | (194,090) | (195,141) |
Intangible assets acquired | (32,400) | (26,623) | (29,800) |
Acquisition of business, net of cash acquired | (86,230) | ||
Proceeds from insured loss | 10,436 | 12,500 | |
Proceeds from dispositions of assets and investments | 69,582 | 18,706 | 11,444 |
Proceeds from sale-leaseback transactions | 73,344 | 57,498 | 177,892 |
Net cash used in investing activities of continuing operations: | (104,759) | (134,073) | (109,335) |
Financing activities: | |||
Proceeds from issuance of long-term debt | 50,000 | 350,000 | 849,918 |
Net proceeds from (payments to) revolver | 491,000 | (141,000) | 200,000 |
Principal payments on long-term debt | (277,941) | (545,036) | (1,058,537) |
Change in zero balance cash accounts | 18,289 | (8,285) | (36,463) |
Net proceeds from issuance of common stock | 53 | ||
Financing fees paid for early debt redemption | (1,733) | (833) | (2,399) |
Payments for taxes related to net share settlement of equity awards | (2,662) | (2,588) | (3,086) |
Deferred financing costs paid | (2,325) | (18,638) | (14,729) |
Net cash provided by (used in) financing activities of continuing operations: | 274,628 | (366,380) | (65,243) |
Cash flows from discontinued operations: | |||
Operating activities of discontinued operations | 0 | 0 | (82,189) |
Investing activities of discontinued operations | 0 | 0 | 94,310 |
Financing activities of discontinued operations | 0 | 0 | 0 |
Net cash provided by discontinued operations | 0 | 0 | 12,121 |
Increase (decrease) in cash and cash equivalents | 117,430 | (121,181) | (57,278) |
Cash and cash equivalents, beginning of period | 39,721 | 160,902 | 218,180 |
Cash and cash equivalents, end of period | $ 157,151 | $ 39,721 | $ 160,902 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Mar. 04, 2023 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Description of Business The Company is a Delaware corporation and through its 100% owned subsidiaries, operates a pharmacy retail healthcare company in the United States of America. The Company operates through its two reportable segments: the Retail Pharmacy Segment and the Pharmacy Services Segment. The Retail Pharmacy Segment operates one of the largest retail drugstore chains in the United States, with 2,309 stores in operation as of March 4, 2023. The Retail Pharmacy Segment’s drugstores’ primary business is the sale of brand and generic prescription drugs. The Retail Pharmacy Segment also sells a full selection of health and beauty aids and personal care products, seasonal merchandise and a large private brand product line. The Pharmacy Services Segment provides a fully integrated suite of pharmacy benefit management (“PBM”) offerings including technology solutions, mail delivery services, specialty pharmacy, network and rebate administration, claims adjudication and pharmacy discount programs, through Elixir Pharmacy and Laker Software. Elixir also offers a national Medicare Part D prescription drug plan through Elixir Insurance (“EI”). See Note 21 for additional details on the Company’s reportable segments. The discussion and presentation of the operating and financial results of our business segments have been impacted by the following event. Pursuant to the terms and subject to the conditions set forth in the Amended and Restated Asset Purchase Agreement (the "Amended and Restated Asset Purchase Agreement"), dated as of September 18, 2017, by and among Rite Aid, WBA and Walgreen Co., an Illinois corporation and 100% owned subsidiary of WBA ("Buyer"), Buyer agreed to purchase from Rite Aid 1,932 stores (the "Acquired Stores"), three distribution centers, related inventory and other specified assets and liabilities related thereto for a purchase price of approximately $4,375,000, on a cash free, debt free basis (the "Asset Sale" or the "Sale"). As of March 4, 2023, the Company has sold all 1,932 Acquired Stores, three distribution centers and related assets to WBA in exchange for proceeds of $4,375,000, which were used to repay outstanding debt. Based on its magnitude and because the Company has exited certain markets, the Sale represented a significant strategic shift that has a material effect on the Company’s operations and financial results. Accordingly, the Company has applied discontinued operations treatment for the Asset Sale as required by Accounting Standards Codification 210-05—Discontinued Operations (ASC 205-20). See additional information as provided in Note 4 Asset Sale to WBA. Revenues for the Company are as follows: Year Ended March 4, February 26, February 27, 2023 2022 2021 (53 Weeks) (52 Weeks) (52 Weeks) Retail Pharmacy Segment: Pharmacy sales $ 12,582,593 $ 12,152,491 $ 10,915,442 Front-end sales 5,078,820 5,218,182 5,322,943 Other revenue 123,654 124,143 126,875 Total Retail Pharmacy Segment 17,785,067 17,494,816 16,365,260 Pharmacy Services Segment revenue 6,522,299 7,323,125 7,970,137 Intersegment elimination (215,467) (249,686) (292,157) Total revenue $ 24,091,899 $ 24,568,255 $ 24,043,240 Sales of prescription drugs for our Retail Pharmacy Segment represented approximately 71.2%, 70.0% and 66.7% of the Company’s total drugstore sales in fiscal years 2023, 2022 and 2021, respectively. The Retail Pharmacy Segment’s principal classes of products in fiscal 2023 were the following: Percentage Product Class of Sales Prescription drugs 71.2 % Over-the-counter medications and personal care 10.9 % Health and beauty aids 4.3 % General merchandise and other 13.6 % Fiscal Year The Company’s fiscal year ends on the Saturday closest to February 29 or March 1. The fiscal year ended March 4, 2023 included 53 weeks. The fiscal years ended February 26, 2022 and February 27, 2021 included 52 weeks. Principles of Consolidation The consolidated financial statements include the accounts of the Company and all of its 100% owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand and highly liquid investments, which are readily convertible to known amounts of cash and which have original maturities of three months or less when purchased. Allowance for Uncollectible Receivables In our Retail Pharmacy Segment, substantially all prescription sales are made to customers who are covered by third-party payors, such as insurance companies, government agencies and employers. The Company recognizes receivables that represent the amount owed to the Company for sales made to customers or employees of those payors that have not yet been paid. In our Pharmacy Services Segment, receivables are recorded for claims for prescriptions issued for customers, customer administrative fees, amounts due from the Centers for Medicare and Medicaid Services (“CMS”) for Medicare Part D, and amounts due from certain drug manufacturers or rebate aggregators for rebates. The Company maintains a reserve for the expected credit losses associated with these receivables. This reserve is calculated based upon historical collection activity adjusted for current conditions. Inventories Inventories are stated at the lower of cost or market. Inventory balances include the capitalization of certain costs related to purchasing, freight and handling costs associated with placing inventory in its location and condition for sale. The Company uses the last-in, first-out (“LIFO”) cost flow assumption for substantially all of its inventories. The Company calculates its inflation index based on internal product mix and utilizes the link-chain LIFO method. Impairment of Long-Lived Assets Asset impairments are recorded when the carrying value of assets are not recoverable. For purposes of recognizing and measuring impairment of long-lived assets, the Company categorizes assets of operating stores as “Assets to Be Held and Used” and “Assets to Be Disposed Of.” The Company evaluates assets at the store level because this is the lowest level of identifiable cash flows ascertainable to evaluate impairment. Assets being tested for recoverability at the store level include tangible long-lived assets, right-of-use assets for leased stores, and identifiable, finite-lived intangibles that arose in purchase business combinations. Corporate assets to be held and used are evaluated for impairment based on excess cash flows from the stores that support those assets. The Company reviews long-lived assets to be held and used for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the undiscounted expected future cash flows is less than the carrying amount of the asset, the Company recognizes an impairment loss. Impairment losses are measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risks associated with the recovery of the asset. Property, Plant and Equipment Property, plant and equipment are stated at cost, net of accumulated depreciation and amortization. The Company provides for depreciation using the straight-line method over the following useful lives: buildings—30 to 45 years; equipment—3 to 15 years. Leasehold improvements are amortized on a straight-line basis over the shorter of the estimated useful life of the asset or the term of the lease. When determining the amortization period of a leasehold improvement, the Company considers whether discretionary exercise of a lease renewal option is reasonably assured. If it is determined that the exercise of such option is reasonably assured, the Company will amortize the leasehold improvement asset over the minimum lease term, plus the option period. This determination depends on the remaining life of the minimum lease term and any economic penalties that would be incurred if the lease option is not exercised. Capitalized lease assets are recorded at the lesser of the present value of minimum lease payments or fair market value and amortized over the estimated useful life of the related property or term of the lease. The Company capitalizes direct internal and external development costs associated with internal-use software. Neither preliminary evaluation costs nor costs associated with the software after implementation are capitalized. For fiscal years 2023, 2022 and 2021, the Company capitalized costs of approximately $5,099, $13,388 and $12,669, respectively. Goodwill The Company recognizes goodwill as the excess of the purchase price over the fair value of the assets acquired and liabilities assumed during business combinations. The Company accounts for goodwill under ASC Topic 350, “Intangibles—Goodwill and Other”, which does not permit amortization, but instead requires the Company to perform an annual impairment review, or more frequently if events or circumstances indicate that impairment may be more likely. See Note 14 for additional information on goodwill. Intangible Assets The Company has certain finite-lived intangible assets that are amortized over their useful lives. Prescription files acquired in business combinations are amortized over an estimated useful life of 10 years on an accelerated basis, which approximates the anticipated prescription file retention and related cash flows. Purchased prescription files acquired in other than business combinations are amortized over their estimated useful lives of five years on a straight-line basis. The value of finite-lived trade names are amortized over 10 years on a straight-line basis. The value of customer relationships, acquired in connection with the Company’s acquisition of Elixir, are amortized over a period between 10 and 20 years on a descending percentage method which matches the pattern of expected discounted cash flows. The Pharmacy Services Segment’s contract with CMS for Part D, which is required in order to act as a national provider of the Part D benefit, is amortized over 12 years on a straight line basis, of which four years remain. Indefinite lived assets The Company has a single indefinite-lived intangible asset consisting of a trade name. Intangible assets that are determined to have an indefinite life are not amortized, but are required to be evaluated at least annually for impairment. If the carrying value of an individual indefinite-lived intangible asset exceeds its fair value, such individual indefinite-lived intangible asset is impaired by the amount of the excess. Deferred Financing Costs Costs incurred to issue debt are deferred and amortized as a component of interest expense over the terms of the related debt agreements. Amortization expense of deferred financing costs was $9,993, $10,927 and $11,201 for fiscal 2023, 2022 and 2021, respectively. Revenue Recognition Retail Pharmacy Segment For front-end sales, the Retail Pharmacy Segment recognizes revenues upon the transfer of control of the goods to the customer. The Company satisfies its performance obligation at the point of sale for front-end transactions. The Retail Pharmacy Segment front-end revenue is measured based on the amount of fixed consideration that it expects to receive, net of an allowance for estimated future returns. Return activity is immaterial to revenues and results of operations in all periods presented. For pharmacy sales, the Retail Pharmacy Segment recognizes revenue upon the transfer of control of the goods to the customer. The Company satisfies its performance obligation, upon pickup by the customer, which is when the customer takes title to the product. Each prescription claim represents an individual arrangement with the customer and is a performance obligation, separate and distinct from other prescription claims. The Company's revenue is measured based on the amount of fixed consideration that we expect to receive, reduced by refunds owed to the third-party payor for pricing guarantees and performance against defined value-based service and performance metrics. The inputs to these estimates are not highly subjective or volatile. The effect of adjustments between estimated and actual amounts has not been material to the Company's results of operations or financial position. Prescriptions are generally not returnable. The Retail Pharmacy Segment offered a chain-wide loyalty card program titled wellness+. Individual customers were able to become members of the wellness+ program. Members participating in the wellness+ loyalty card program earned points on a calendar year basis for eligible front-end merchandise purchases and qualifying prescription purchases. The wellness+ program was terminated as of July 1, 2020, with benefits earned as of that date available to be used through the end of calendar 2020. Beginning in December 2020, the Company granted temporary extensions of benefits to certain previous members that were eligible for a discount as of the end of each previous six-month period such that those prior members were eligible to continue to receive that discount on purchases made through the subsequent six months with no additional purchase requirement. New and existing customers who were not already eligible for program benefits also had the opportunity to earn additional discounts on purchases made through each six-month period. A final extension was granted on December 31, 2021 through February 26, 2022 at which point all discounts were terminated. A new loyalty program, Rite Aid Rewards, was initiated on February 27, 2022. Customers that enroll in the new program earn points for each dollar spent on front of store purchases as well as for eligible pharmacy prescriptions. Points can then be converted into a “Rite Aid Rewards” coupon that can be tendered as payment in a future purchase. Each point is worth $0.002. Customers must accumulate 1,000 points and create an online account in order to convert earned points to a “Rite Aid Rewards” coupon. Unused/unconverted points expire after 90 days. Unredeemed “Rite Aid Rewards” coupons expire 30 days after conversion from points earned. Points earned pursuant to the Rite Aid Rewards program represent a performance obligation. The value of unredeemed Rite Aid Rewards points is deferred as a contract liability (included in other current liabilities). As members redeem points in the form of a Rite Aid Rewards coupon or when points or unredeemed Rite Aid Rewards coupons expire, the Retail Pharmacy Segment recognizes the redeemed/expired portion of the deferred contract liability into revenue. For the fifty-three week period ended March 4, 2023, the Company recognized additional contract deferrals of Pharmacy Services Segment The Pharmacy Services Segment sells prescription drugs indirectly through its retail pharmacy network and directly through its mail service dispensing pharmacy. The Pharmacy Services Segment recognizes revenue from prescription drugs sold by: (i) its mail service dispensing pharmacy and; (ii) under retail pharmacy network contracts where it is the principal at the contract prices negotiated with its clients, primarily employers, insurance companies, unions, government employee groups, health plans, Managed Medicaid plans, Medicare plans, and other sponsors of health benefit plans, and individuals throughout the United States. Revenues include: (i) the portion of the price the client pays directly to the Pharmacy Services Segment, net of any volume-related or other discounts paid back to the client (see “Drug Discounts” below); (ii) the price paid to the Pharmacy Services Segment by client plan members for mail order prescriptions (“Mail Co-Payments”); (iii) client plan member co-payments made directly to the retail pharmacy network and; (iv) administrative fees. Revenue is recognized when the Pharmacy Services Segment meets its performance obligations relative to each transaction type. The following revenue recognition policies have been established for the Pharmacy Services Segment: ● Revenues generated from prescription drugs sold by third-party pharmacies in the Pharmacy Services Segment’s retail pharmacy network and associated administrative fees are recognized at the Pharmacy Services Segment’s point-of-sale, which is when the claim is adjudicated by the Pharmacy Services Segment’s online claims processing system. At this point the Company has performed all of its performance obligations. ● Revenues generated from prescription drugs sold by the Pharmacy Services Segment’s mail service dispensing pharmacy are recognized when the prescription is shipped. At the time of shipment, the Pharmacy Services Segment has performed all of its performance obligations under its client contracts, as control of and title to the product has passed to the client plan members. The Pharmacy Services Segment does not experience a significant level of returns or reshipments. ● Revenues generated from administrative fees based on membership or claims volume are recognized monthly based on the terms within the individual contracts, either a monthly member-based fee, or a claims volume-based fee. In the majority of its contracts, the Pharmacy Services Segment is the principal because its client contracts give clients the right to obtain access to its pharmacy contracts under which the Pharmacy Services Segment directs its pharmacy network to provide the services (drug dispensing, consultation, etc.) and goods (prescription drugs) to the clients’ members at its negotiated pricing. The Pharmacy Services Segment’s obligations under its client contracts are separate and distinct from its obligations to the third-party pharmacies included in its retail pharmacy network contracts. In the majority of these contracts, the Pharmacy Services Segment is contractually required to pay the third-party pharmacies in its retail pharmacy network for products sold after payment is received from its clients. The Pharmacy Services Segment has control over these transactions until the prescription is transferred to the member and, thus, that it is acting as a principal. As such, the Pharmacy Services Segment records the total prescription price contracted with clients in revenues. Amounts paid to pharmacies and amounts charged to clients are exclusive of the applicable co-payment under Pharmacy Services Segment contracts. Retail pharmacy co-payments, which we instruct retail pharmacies to collect from members, are included in our revenues and our cost of revenues. For contracts under which the Pharmacy Services Segment acts as an agent or does not control the prescription drugs prior to transfer to the client, no revenue is recognized, except the administrative fee. Drug Discounts—The Pharmacy Services Segment deducts from its revenues that are generated from prescription drugs sold by third-party pharmacies any rebates, inclusive of discounts and fees, earned by its clients based on utilization levels and other factors as negotiated with the prescription drug manufacturers, rebate aggregators or suppliers. Rebates are paid to clients in accordance with the terms of client contracts. Medicare Part D—The Pharmacy Services Segment, through its EI subsidiary, participates in the federal government’s Medicare Part D program as a Medicare Part D Prescription Drug Plan (“PDP”). Please refer to Note 10, Medicare Part D. Disaggregation of Revenue The following tables disaggregate the Company’s revenue by major source in each segment for the fiscal year ended March 4, 2023: March 4, 2023 In thousands (53 Weeks) Retail Pharmacy Segment: Pharmacy sales $ 12,582,593 Front-end sales 5,078,820 Other revenue 123,654 Total Retail Pharmacy Segment 17,785,067 Pharmacy Services Segment 6,522,299 Intersegment elimination (215,467) Total revenue $ 24,091,899 See Note 21 for additional information about the revenues of the Company’s business segments. Cost of Revenues Retail Pharmacy Segment Cost of revenues for the Retail Pharmacy Segment includes the following: the cost of inventory sold during the period, including related vendor rebates and allowances, LIFO credit or charges, costs incurred to return merchandise to vendors, inventory shrink, purchasing costs and warehousing costs, which include inbound freight costs from the vendor, distribution payroll and benefit costs, distribution center occupancy costs and depreciation expense and delivery expenses to the stores. Pharmacy Services Segment The Pharmacy Services Segment’s cost of revenues includes the cost of prescription drugs sold during the reporting period indirectly through its retail pharmacy network and directly through its mail service dispensing pharmacy. The cost of prescription drugs sold component of cost of revenues includes: (i) the cost of the prescription drugs purchased from manufacturers or distributors and shipped to members in clients’ benefit plans from the Pharmacy Services Segment’s mail service dispensing pharmacy, net of any volume-related or other discounts (see the section entitled “Vendor Rebates and Allowances and Purchase Discounts” below) and (ii) the cost of prescription drugs sold through the Pharmacy Services Segment’s retail pharmacy network under contracts where it is the principal, net of any volume-related or other discounts. See Note 21 for additional information about the cost of revenues of the Company’s business segments. Vendor Rebates and Allowances and Purchase Discounts Retail Pharmacy Segment The Retail Pharmacy Segment’s rebates and allowances received from vendors relate to either buying and merchandising or promoting the product. Buying and merchandising related rebates and allowances are recorded as a reduction of cost of revenue as product is sold. Buying and merchandising rebates and allowances include all types of vendor programs such as cash discounts from timely payment of invoices, purchase discounts or rebates, volume purchase allowances, price reduction allowances and slotting allowances. Certain product promotion related rebates and allowances, primarily related to advertising, are recorded as a reduction in selling, general and administrative expenses when the advertising commitment has been satisfied. Pharmacy Services Segment The Pharmacy Services Segment receives purchase discounts on products purchased. The Pharmacy Services Segment’s contractual arrangements with vendors, including manufacturers and rebate aggregators, wholesalers and retail pharmacies, normally provide for the Pharmacy Services Segment to receive purchase discounts from established list prices in one, or a combination, of the following forms: (i) a direct discount at the time of purchase, or (ii) a discount (or rebate) paid subsequent to dispensing when products are purchased indirectly from a manufacturer (e.g., through a wholesaler or retail pharmacy). These rebates are recognized when prescriptions are dispensed and are generally billed within 30 days of the end of each completed quarter. Historically, the effect of adjustments resulting from the reconciliation of rebates recognized to the amounts billed and collected has not been material to the Pharmacy Services Segment’s results of operations. The Pharmacy Services Segment accounts for the effect of any such differences as a change in accounting estimate in the period the reconciliation is completed. The Pharmacy Services Segment also receives additional discounts under its wholesaler and rebate aggregator contracts and fees from pharmaceutical manufacturers for administrative services. Purchase discounts and administrative service fees are recorded as a reduction of cost of revenues. Rebates payable to clients for the Pharmacy Services Segment The Pharmacy Services Segment has contractual arrangements with clients, including health plans, commercial employers, labor groups, and state and local governments, which entitles such clients to a portion of certain rebates received by the Pharmacy Services Segment. Estimated rebates payable to clients are recognized when prescriptions are dispensed and are generally paid to clients up to eight months in arrears. Historically, the effect of adjustments resulting from the reconciliation of estimated rebates payable to clients recognized and the amount actually paid has not been material to the Pharmacy Services Segment’s results of operations. The Pharmacy Services Segment accounts for the effect of any such difference as a change in accounting estimate in the period the reconciliation is completed. Estimated rebates payable to clients are recorded as a reduction of revenues. Leases The Company determines if an arrangement contains a lease at the inception of a contract. Operating lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right-of-use assets and operating lease liabilities are recognized at the commencement date based on the present value of the remaining future minimum lease payments. As the interest rate implicit in the Company’s leases is not readily determinable, the Company utilizes its incremental borrowing rate, determined by class of underlying asset, to discount the lease payments. The incremental borrowing rate is determined using a portfolio approach based on the rate of interest that we would pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. The Company uses quoted interest rates obtained from financial institutions in an input to derive its incremental borrowing rate as the discount rate for the lease. The ROU asset is equal to the operating lease liability plus lease payments made before commencement, less lease incentives received from the landlord. The Company’s real estate leases typically contain options that permit lease extensions for additional periods of up to five years each. For real estate leases, generally, the renewal periods are not included within the lease term and the associated payments are not included in the measurement of the ROU asset and operating lease liability as the options to extend are not considered reasonably certain to occur at lease commencement. The Company reevaluates each lease on a regular basis to consider the economic and strategic incentives of exercising the renewal options and will include all reasonably certain options in the measurement of its lease term. Generally, the renewal option periods are not included within the lease term and the associated payments are not included in the measurement of the operating lease right-of-use asset and the operating lease liability until the renewals are i) evaluated and ii) determined to be exercised. The Company has an insignificant amount of non-real estate leases however, renewal options are not included in the lease term for non-real estate leases because they are not considered reasonably certain of being exercised at lease commencement. The Company rarely executes leases less than 12 months. For real estate leases, the Company accounts for lease components and non-lease components as a single lease component. Certain real estate leases require additional payments based on sales volume, as well as reimbursement for real estate taxes, common area maintenance and insurance, which are expensed as incurred as variable lease costs. Other real estate leases contain one fixed lease payment that includes real estate taxes, common area maintenance and insurance. These fixed payments are considered part of the lease payment and included in the operating lease right-of-use assets and operating lease liabilities. The Company records rent expense on operating leases on a straight-line basis over the reasonably certain lease term. The Company begins to record rent expense at the time that the Company has the right to use the property. Selling, General and Administrative Expenses Selling, general and administrative expenses include store and corporate administrative payroll and benefit costs, occupancy costs which include retail store and corporate rent costs, facility and leasehold improvement depreciation and utility costs, advertising, repair and maintenance, insurance, equipment depreciation and professional fees. Repairs and Maintenance Routine repairs and maintenance are charged to operations as incurred. Improvements and major repairs, which extend the useful life of an asset, are capitalized and depreciated. Advertising Advertising costs, net of specific vendor advertising allowances, are expensed in the period the advertisement first takes place. Advertising expenses, net of vendor advertising allowances, for fiscal 2023, 2022 and 2021 were $133,379, $146,085 and $122,725, respectively. Insurance The Company is self-insured for certain general liability and workers’ compensation claims. For claims that are self-insured, stop-loss insurance coverage is maintained for workers’ compensation occurrences exceeding $1,000 and general liability occurrences exceeding $3,000. The Company utilizes actuarial studies as the basis for developing reported claims and estimating claims incurred but not reported relating to the Company’s self-insurance. Workers’ compensation claims are discounted to present value using a risk-free interest rate. The Company is also self-insured for certain employee health and welfare plans. We record the related self-insurance liabilities based on claims incurred and an estimate of claims incurred but not yet reported. Benefit Plan Accruals The Company has several defined benefit plans, under which participants earn a retirement benefit based upon a formula set forth in the plan. The Company records expense related to these plans using actuarially determined amounts that are calculated under the provisions of ASC 715, “Compensation—Retirement Benefits.” Key assumptions used in the actuarial valuations include the discount rate, the expected rate of return on plan assets and the rate of increase in future compensation levels. Stock-Based Compensation The Company has several stock award plans, which are described in detail in Note 18. The Company accounts for stock-based compensation under ASC 718, “Compensation—Stock Compensation.” The Company recognizes expense over the requisite service period of the award, net of an estimate for the impact of award forfeitures. Store Pre-opening Expenses Costs incurred prior to the opening of a new or relocated store, associated with a remodeled store or related to the opening of a distribution facility are charged to operations as incurred. Litigation Reserves The Company is involved in litigation on an ongoing basis. The Company accrues its best estimate of the probable loss related to legal claims. Such estimates are developed in consultation with in-house counsel, and are based upon a combination of litigation and settlement strategies. Income Taxes Deferred income taxes are determined based on the difference between the financial reporting and tax basis of assets and liabilities. Deferred income tax expense (benefit) represents the change during the reporting period in the deferred tax assets and deferred tax liabilities, net of the effect of acquisitions and dispositions. Deferred tax assets include tax loss and credit carryforwards and are reduced by a valuation allowance if, based on available evidence, it is more likely than not that some portion of the deferred tax assets will not be realized. Changes in valuation allowances from period to period are included in the tax provision in the period of change. The Company has net operating loss (“NOL”) carryforwards that can be utilized to offset future income for federal and state tax purposes. These NOLs generate a significant deferred tax asset. The Company regularly reviews the deferred tax assets for recoverability considering historical profitability, projected taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies. The Company recognizes tax liabilities in accordance with ASC 740, “Income Taxes” and the Company adjusts these liabilities with changes in judgment as a result of the evaluation of new information not previously ava |
Acquisition
Acquisition | 12 Months Ended |
Mar. 04, 2023 | |
Acquisition | |
Acquisition | 2. Acquisition On December 18, 2020, pursuant to that certain stock purchase agreement, dated as of October 7, 2020, by and between the Company and Bartell Drug Company (“Bartell”), the Company acquired Bartell (the “Acquisition”), a Washington corporation, for approximately $89,724 in cash, subject to certain customary post-closing working capital adjustments. The Company financed the Acquisition with borrowings under its senior secured credit facilities together with cash on hand. Bartell operated 67 retail drugstores and one distribution center in the greater Seattle Washington area. Bartell operates as a 100 percent owned subsidiary of the Company within its Retail Pharmacy Segment. The Company’s consolidated financial statements for fiscal 2023 and 2022 include Bartell’s results of operations. The Company’s consolidated financial statements for fiscal 2021 include Bartell’s results of operations from the Acquisition date of December 18, 2020 through February 27, 2021, including revenues of $101,083 . The Company’s consolidated financial statements at February 26, 2022 reflect the final 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. The following allocation of the purchase price and the estimated transaction costs is final: Final purchase price Cash consideration $ 89,724 Total 89,724 Final purchase price allocation Cash and cash equivalents $ 3,494 Accounts receivable 23,860 Inventories 67,745 Prepaid expenses and other current assets 1,857 Total current assets 96,956 Property and equipment 28,229 Operating lease right-of-use assets 143,651 Intangible assets (1) 68,700 Other assets 1,805 Total assets acquired 339,341 Accounts payable 24,166 Accrued salaries, wages and other current liabilities 20,335 Current portion of operating lease liabilities 24,617 Total current liabilities 69,118 Long-term operating lease liabilities 124,023 Other long-term liabilities 166 Total liabilities assumed 193,307 Deferred tax liabilities recorded on purchase 13,951 Net assets acquired 132,083 Bargain purchase gain (42,359) Total purchase price $ 89,724 (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 final 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 Fair Value Estimated Useful Life (In Years) Prescription files $ 54,300 10 Tradename 14,400 Indefinite Total $ 68,700 During fiscal 2021, the Company recorded a gain on Bartell acquisition . The Company believes that the bargain purchase gain was primarily the result of the decision by the Bartell stockholders to sell their interests as Bartell had been experiencing increasing borrowings under its credit agreements to meet its operating needs and increasing net losses. The agreed upon purchase price reflected the fact the seller would have needed to incur further significant debt to cover the operating costs of Bartell, which would have required amendments to its credit arrangements. With the Company’s existing infrastructure, scale and expertise, the Company believe that it has access to the necessary synergies to allow necessary operational improvements to be implemented more efficiently than the seller. During fiscal 2023, fiscal 2022 and fiscal 2021, acquisition costs of $0, $12,797 and $10,549 , respectively, were expensed as incurred. The following unaudited pro forma combined financial data gives effect to the Acquisition as if it had occurred as of March 1, 2019. The unaudited combined pro forma results do not include any incremental cost savings that may result from the integration. The adjustments are based on information available to the Company at this time. Accordingly, the adjustments are subject to change and the impact of such changes may be material. The unaudited combined pro forma information is for informational purposes only. The pro forma information is not necessarily indicative of what the combined company’s results actually would have been had the Acquisition been completed as of the beginning of the periods as indicated. In addition, the unaudited pro forma information does not purport to project the future results of the combined company. March 4, February 26, February 27, 2023 2022 2021 (53 Weeks) (52 Weeks) (52 Weeks) Pro forma Pro forma Pro forma Net revenues as reported $ 24,091,899 $ 24,568,255 $ 24,043,240 Supplemental Pro forma revenues $ 24,091,899 $ 24,568,255 $ 24,468,777 Net loss as reported $ (719,188) $ (522,372) $ (90,220) Supplemental Pro forma net loss $ (719,188) $ (522,372) $ (116,040) |
Restructuring
Restructuring | 12 Months Ended |
Mar. 04, 2023 | |
Restructuring | |
Restructuring | 3. Restructuring Beginning in fiscal 2019, the Company initiated a series of restructuring plans designed to reorganize its executive management team, reduce managerial layers, and consolidate roles. In March 2020, the Company announced the details of its strategy, which includes building tools to work with regional health plans to improve patient health outcomes, rationalizing SKU’s in its front-end offering to free up working capital and update its merchandise assortment, assessing its pricing and promotional strategy, rebranding its retail pharmacy and pharmacy services business, launching its Store of the Future format and further reducing SG&A and headcount, including integrating certain back office functions in the Pharmacy Services Segment both within the segment and across the enterprise. Other strategic initiatives include the expansion of the Company’s digital business, replacing and updating the Company’s financial systems to improve efficiency, and movement to a common client platform at Elixir. In April 2022, the Company announced further strategic initiatives to reduce costs through the closure of unprofitable stores, reduce corporate administration expenses, improve efficiencies in worked payroll and other store labor costs, engage in a comprehensive review of purchasing and other business processes in both the Retail Pharmacy and Pharmacy Services Segments in order to identify areas of opportunity, as well as expense reductions at the Pharmacy Services Segment. In December 2022, the Company announced a new multi-year performance acceleration program, which allows it to fast-track initiatives that will improve sales, script volume and operating margins, and free up cash. The Company is partnering with a leading consulting firm that has worked with several Fortune 150 firms to execute the turnaround model. This program has given the Company visibility to the profitability opportunities it can drive over the next three years by focusing on improvements and growth in its core businesses. These and future restructuring activities are expected to provide future growth and expense efficiency benefits. There can be no assurance that the Company’s current and future restructuring charges will achieve the cost savings and remerchandising benefits in the amounts or time anticipated. For the year ended March 4, 2023, the Company incurred total restructuring-related costs of $108,626, which are included as a component of SG&A. These costs are as follows: Retail Pharmacy Pharmacy Segment Services Segment Total Restructuring-related costs Severance and related costs associated with ongoing reorganization efforts (a) $ 15,342 $ 4,088 $ 19,430 Professional and other fees relating to restructuring activities (c) 71,142 18,054 89,196 Total restructuring-related costs $ 86,484 $ 22,142 $ 108,626 For the year ended February 26, 2022, the Company incurred total restructuring-related costs of $35,121, which are included as a component of SG&A. These costs are as follows: Retail Pharmacy Pharmacy Segment Services Segment Total Restructuring-related costs Severance and related costs associated with ongoing reorganization efforts (a) $ — $ 2,502 $ 2,502 Professional and other fees relating to restructuring activities (c) 12,237 20,382 32,619 Total restructuring-related costs $ 12,237 $ 22,884 $ 35,121 For the year ended February 27, 2021, the Company incurred total restructuring-related costs of $84,552, of which $63,613 is included as a component of SG&A and $20,939 is included as a component of cost of revenues. These costs are as follows: Retail Pharmacy Pharmacy Segment Services Segment Total Restructuring-related costs Severance and related costs associated with ongoing reorganization efforts (a) $ 13,443 $ 4,353 $ 17,796 Non-executive retention costs associated with the March 2019 reorganization (b) 1,136 (124) 1,012 Professional and other fees relating to restructuring activities (c) 40,053 4,752 44,805 SKU optimization charges (d) 20,939 — 20,939 Total restructuring-related costs $ 75,571 $ 8,981 $ 84,552 In addition, during the fiscal year ended February 27, 2021, the Company incurred intangible asset impairment charges of $29,852 in connection with its rebranding initiatives as described in Note 14, Goodwill and Other Intangibles A summary of activity for the year ended March 4, 2023 in the restructuring-related liabilities associated with the programs noted above, which is included in accrued salaries, wages and other current liabilities, is as follows: Severance and related Professional and costs (a) other fees (c) Total Balance as of February 26, 2022 $ 4,257 $ 4,463 $ 8,720 Additions charged to expense 11,904 10,742 22,646 Cash payments (5,231) (11,727) (16,958) Balance as of May 28, 2022 $ 10,930 $ 3,478 $ 14,408 Additions charged to expense 913 11,892 12,805 Cash payments (2,782) (10,066) (12,848) Balance as of August 27, 2022 $ 9,061 $ 5,304 $ 14,365 Additions charged to expense 4,800 21,700 26,500 Cash payments (4,452) (18,297) (22,749) Balance as of November 26, 2022 $ 9,409 $ 8,707 $ 18,116 Additions charged to expense 1,813 44,862 46,675 Cash payments (3,564) (11,415) (14,979) Balance as of March 4, 2023 $ 7,658 $ 42,154 $ 49,812 (a) – Severance and related costs reflect severance accruals, executive search fees, outplacement services and other similar charges associated with ongoing reorganization efforts. (b) – As part of its March 2019 reorganization, the Company incurred costs with the implementation of a retention plan for certain of its key associates. (c) – Professional and other fees include costs incurred in connection with the identification and implementation of initiatives associated with restructuring activities. (d) – Inventory reserve on product lines the Company is exiting and will no longer carry as part of its rebranding initiative. |
Asset Sale to WBA
Asset Sale to WBA | 12 Months Ended |
Mar. 04, 2023 | |
Asset Sale to WBA | |
Asset Sale to WBA | 4. Asset Sale to WBA On September 18, 2017, the Company entered into the Amended and Restated Asset Purchase Agreement with WBA and Buyer, which amended and restated in its entirety the previously disclosed Asset Purchase Agreement, dated as of June 28, 2017, by and among the Company, WBA and Buyer. Pursuant to the terms and subject to the conditions set forth in the Amended and Restated Asset Purchase Agreement, Buyer purchased from the Company 1,932 Acquired Stores, three distribution centers, related inventory and other specified assets and liabilities related thereto for a purchase price of $4,375,000, on a cash-free, debt-free basis (the “Asset Sale” or “Sale”). The Company completed the store transfer process in March of 2018, which resulted in the transfer of all 1,932 stores and related assets to WBA, and received cash proceeds of $4,156,686. During the first quarter of fiscal 2021, the Company completed the sale of the final distribution center and related assets to WBA for proceeds of $94,289. The impact of the sale of the distribution center and related assets resulted in a pre-tax gain of $12,690, which was included in the results of operations and cash flows of discontinued operations during fiscal 2021. The transfer of the final distribution center and related assets constitutes the final closing under the Amended and Restated Asset Purchase Agreement. The Company had agreed to provide transition services to Buyer for up to three years after the initial closing of the Sale. Under the terms of the TSA, the Company provided various services on behalf of WBA, including, but not limited to, the purchase and distribution of inventory and virtually all selling, general and administrative activities. The term of the TSA had been extended to October 17, 2020, unless earlier terminated. In connection with these services, the Company purchased the related inventory and incurred cash payments for the selling, general and administrative activities, which, the Company billed on a cash neutral basis to WBA in accordance with terms as outlined in the TSA. There were no billings for these items during the fifty-three week period ended March 4, 2023 and fifty-two week period ended February 26, 2022. The Company charged WBA TSA fees of $0, $0 and $1,467 during the fifty-three week period ended March 4, 2023, and fifty-two week periods ended February 26, 2022 and February 27, 2021, respectively, which are reflected as a reduction to selling, general and administrative expenses. On October 17, 2020, the Company and WBA mutually agreed to terminate the services under the TSA. Based on its magnitude and because the Company exited certain markets, the Sale represented a significant strategic shift that has a material effect on the Company’s operations and financial results. Accordingly, the Company has applied discontinued operations treatment for the Sale as required by Accounting Standards Codification 210-05— Discontinued Operations As of March 4, 2023 and February 26, 2022, there were no assets and liabilities classified as held for sale relating to the Asset Sale to WBA. The operating results of the discontinued operations that are reflected on the consolidated statements of operations within net income from discontinued operations are as follows: March 4, February 26, February 27, 2023 2022 2021 (53 weeks) (52 weeks) (52 weeks) Revenues $ — $ — $ 174 Costs and expenses: Cost of revenues (a) — — 8 Selling, general and administrative expenses (a) — — 871 Interest expense (b) — — — Gain on sale of assets, net — — (14,149) — — (13,270) Income from discontinued operations before income taxes — — 13,444 Income tax expense — — 4,283 Net income from discontinued operations, net of tax $ — $ — $ 9,161 (a) Cost of revenues and selling, general and administrative expenses for the discontinued operations excludes corporate overhead. These charges are reflected in continuing operations. (b) In accordance with ASC 205-20, the operating results for the fifty-two week period ended February 27, 2021, for the discontinued operations include interest expense relating to the outstanding indebtedness repaid with the estimated excess proceeds from the Sale. The operating results reflected above do not fully represent the Disposal Group’s historical operating results, as the results reported within net income from discontinued operations only include expenses that are directly attributable to the Disposal Group. |
Loss Per Share
Loss Per Share | 12 Months Ended |
Mar. 04, 2023 | |
Loss Per Share | |
Loss Per Share | 5. Loss Per Share Basic loss per share is computed by dividing loss attributable 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 loss of the Company subject to anti-dilution limitations. March 4, February 26, February 27, 2023 2022 2021 (53 Weeks) (52 Weeks) (52 Weeks) Basic and diluted loss per share: Numerator: Net loss from continuing operations $ (719,188) $ (522,372) $ (99,381) Net income from discontinued operations — — 9,161 Loss attributable to common stockholders — basic and diluted $ (719,188) $ (522,372) $ (90,220) Denominator: Basic and diluted weighted average shares 54,680 54,055 53,653 Basic and diluted loss per share: Continuing operations $ (13.15) $ (9.66) $ (1.86) Discontinued operations — — 0.18 Net basic and diluted loss per share $ (13.15) $ (9.66) $ (1.68) Due to their anti-dilutive effect, 532, 701 and 780 potential common shares related to stock options have been excluded from the computation of diluted loss per share as of March 4, 2023, February 26, 2022 and February 27, 2021, respectively. Also, excluded from the computation of diluted loss per share as of March 4, 2023, February 26, 2022 and February 27, 2021 are restricted shares of 1,476, 1,533 and 1,293, respectively, which are included in shares outstanding. |
Facility Exit and Impairment Ch
Facility Exit and Impairment Charges | 12 Months Ended |
Mar. 04, 2023 | |
Facility Exit and Impairment Charges | |
Facility Exit and Impairment Charges | 6. Facility Exit and Impairment Charges Impairment Charges The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that an asset group has a carrying value that may not be recoverable. The individual operating store is the lowest level for which cash flows are identifiable. As such, the Company evaluates individual stores for recoverability of assets. To determine if a store needs to be tested for recoverability, the Company considers items such as decreases in market prices, changes in the manner in which the store is being used or physical condition, changes in legal factors or business climate, an accumulation of losses significantly in excess of budget, a current period operating or cash flow loss combined with a history of operating or cash flow losses or a projection of continuing losses, or an expectation that the store will be closed or sold. The Company monitors new and recently relocated stores against operational projections and other strategic factors such as regional economics, new competitive entries and other local market considerations to determine if an impairment evaluation is required. For other stores, it performs a recoverability analysis if it has experienced current-period and historical cash flow losses. In performing the recoverability test, the Company compares the expected future cash flows of a store to the carrying amount of its assets. Significant judgment is used to estimate future cash flows. Major assumptions that contribute to its future cash flow projections include expected sales, gross profit and distribution expenses; expected costs such as payroll, occupancy costs and advertising expenses; and estimates for other significant selling, general and administrative expenses. Many long-term macroeconomic and industry factors are considered, both quantitatively and qualitatively, in the future cash flow assumptions. In addition to current and expected economic conditions such as inflation, interest and unemployment rates that affect customer shopping patterns, the Company considers that it operates in a highly competitive industry which includes the actions of other national and regional drugstore chains, independently owned drugstores, supermarkets, mass merchandisers, dollar stores and internet pharmacies. Additionally, the Company takes into consideration that certain operating stores are executing specific improvement plans which are monitored quarterly to recoup recent capital investments, such as an acquisition of an independent pharmacy, which it has made to respond to specific competitive or local market conditions, or have specific programs tailored towards a specific geography or market. The Company recorded impairment charges of $137,075 in fiscal 2023, $150,788 in fiscal 2022 and $46,287 in fiscal 2021. The Company recorded impairment charges of $59,573 in the fourth quarter of fiscal 2023, $99,416 in the fourth quarter of fiscal 2022 and $31,057 in the fourth quarter of fiscal 2021. The Company’s methodology for recording impairment charges has been consistently applied in the periods presented. As of March 4, 2023, $717.2 million of the Company’s long-lived assets, including intangible assets, were associated with 2,309 active operating stores. Additionally, we have approximately $2.3 billion of operating lease right-of-use assets associated with the active stores. If an operating store’s estimated future undiscounted cash flows are not sufficient to cover its carrying value, its carrying value is reduced to fair value. Fair value is its estimated future discounted cash flows. The discount rate is commensurate with the risks associated with the recovery of a similar asset. Operating lease right-of-use assets are included within the stores’ asset groups. The Company obtains fair values of these right-of-use assets based on real estate market data. An impairment charge is recorded in the period that the store does not meet its original return on investment and/or has an operating loss for the last two years and its projected cash flows do not exceed its current asset carrying value. The amount of the impairment charge is the entire difference between the current asset carrying value and its fair value which is the estimated future discounted cash flows. The Company recorded impairment charges for active stores of $13,544 in fiscal 2023, $56,182 in fiscal 2022 and $29,745 in fiscal 2021. The Company reviews key performance results for active stores on a quarterly basis and approves certain stores for closure. Impairment for closed stores, if any (many stores are closed on lease expiration), are recorded in the quarter the closure decision is approved. Closure decisions are made on an individual store or regional basis considering all of the macroeconomic, industry and other factors, in addition to the active store’s individual operating results. The Company recorded impairment charges for closed facilities of $123,531 in fiscal 2023, $94,606 in fiscal 2022 and $16,542 in fiscal 2021. The following table summarizes the impairment charges and number of locations, segregated by closed facilities and active stores that have been recorded in fiscal 2023, 2022 and 2021: March 4, 2023 February 26, 2022 February 27, 2021 (in thousands, except number of stores) Number Charge Number Charge Number Charge Active stores: Stores previously impaired (1) 44 $ 4,866 118 $ 12,339 174 $ 21,372 New, relocated and remodeled stores (2) 8 4,640 1 538 2 1,519 Remaining stores not meeting the recoverability test (3) 12 4,038 88 43,305 19 6,854 Total impairment charges—active stores 64 13,544 207 56,182 195 29,745 Total impairment charges—closed facilities 194 123,531 147 94,606 33 16,542 Total impairment charges—all locations 258 $ 137,075 354 $ 150,788 228 $ 46,287 (1) These charges are related to stores that were impaired for the first time in prior periods. In an effort to improve the operating results or to meet geographical competition, the Company will often make additional capital additions in stores that were impaired in prior periods. These additions will be impaired in future periods if they are deemed to be unrecoverable. The fiscal 2023 impairment charge includes $3,087 of impairment relating to the ROU and $1,779 of capital additions. The fiscal 2022 impairment charge includes $5,434 of impairment relating to the ROU and $6,905 of capital additions. The fiscal 2021 impairment charge includes $15,459 of impairment relating to the ROU and $5,913 of capital additions. (2) These charges are related to new stores (open at least three years ) and relocated stores (relocated in the last two years ) and significant strategic remodels (remodeled in the last year) that did not meet their recoverability test during the current period. These stores have not met their original return on investment projections and have a historical loss of at least two years . Their future cash flow projections do not recover their current carrying value. The fiscal 2023 impairment charge includes $1,765 of impairment relating to the ROU and $2,875 of capital additions. The fiscal 2022 impairment charge includes $0 of impairment relating to the ROU and $538 of capital additions. The fiscal 2021 impairment charge includes $347 of impairment relating to the ROU and $1,172 of capital additions. (3) These charges are related to the remaining active stores that did not meet the recoverability test during the current period. These stores have a historical loss of at least two years . Their future cash flow projections do not recover their current carrying value. The fiscal 2023 impairment charge includes $1,765 of impairment relating to the ROU and $2,273 of capital additions. The fiscal 2022 impairment charge includes $26,130 of impairment relating to the ROU and $17,175 of capital additions. The fiscal 2021 impairment charge includes $3,177 of impairment relating to the ROU and $3,677 of capital additions. The primary drivers of its impairment charges are each store’s current and historical operating performance and the assumptions that the Company makes about each store’s operating performance in future periods. Projected cash flows are updated based on the next year’s operating budget which includes the qualitative factors noted above. The Company utilizes the three-level valuation hierarchy for the recognition and disclosure of fair value measurements. The categorization of assets and liabilities within this hierarchy is based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy consist of the following: ● Level 1—Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. ● Level 2—Inputs to the valuation methodology are quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active or inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument. ● Level 3—Inputs to the valuation methodology are unobservable inputs based upon management’s best estimate of inputs market participants could use in pricing the asset or liability at the measurement date, including assumptions about risk. Long-lived non-financial assets are measured at fair value on a non-recurring basis for purposes of calculating impairment using Level 2 and Level 3 inputs as defined in the fair value hierarchy. The fair value of long-lived assets using Level 2 inputs is determined by evaluating the current economic conditions in the geographic area for similar use assets. The fair value of long-lived assets using Level 3 inputs is determined by estimating the amount and timing of net future cash flows (which are unobservable inputs) and discounting them using a risk-adjusted rate of interest (which is Level 1). The Company estimates future cash flows based on its experience and knowledge of the market in which the store is located. Significant increases or decreases in actual cash flows may result in valuation changes. The table below sets forth by level within the fair value hierarchy the long-lived assets, which include right-of-use assets, as of the impairment measurement date for which an impairment assessment was performed and total losses as of March 4, 2023 and February 26, 2022: Fair Values Total as of Charges Level 1 Level 2 Level 3 Impairment Date March 4, 2023 Long-lived assets held for use $ — $ 22,959 $ 42,717 $ 65,676 $ (132,243) Long-lived assets held for sale $ — $ 5,115 $ — $ 5,115 $ (4,832) Total $ — $ 28,074 $ 42,717 $ 70,791 $ (137,075) Fair Values Total as of Charges Level 1 Level 2 Level 3 Impairment Date February 26, 2022 Long-lived assets held for use $ — $ 240,176 $ 23,594 $ 263,770 $ (150,064) Long-lived assets held for sale $ — $ 2,371 $ — $ 2,371 $ (724) Total $ — $ 242,547 $ 23,594 $ 266,141 $ (150,788) The above assets reflected in the caption ‘Long-lived assets held for sale’ have not been reclassified to assets held for sale due to their immateriality. Lease Termination and Facility Exit Charges 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 inventory liquidation charges, as well as impairment of assets at these locations. When a store or distribution center is closed, the Company records executory costs for leases, as well as other store or distribution center closing and liquidation costs, when incurred. In fiscal 2023, 2022 and 2021, the Company recorded facility exit charges of $43,562, $13,296 and $11,427, respectively. The Company calculates the liability for facility exit or disposal cost obligations to include long-term contract termination costs and costs related to the disposal of long-lived assets. The following table reflects the accrued facility exit charges: Year Ended March 4, February 26, February 27, 2023 2022 2021 (53 Weeks) (52 Weeks) (52 Weeks) Balance—beginning of period $ 1,892 $ 2,754 $ 2,253 Provision for facility exit charges 461 162 793 Changes in assumptions and other adjustments — — — Interest accretion — — — Cash payments (125) (1,024) (292) Balance—end of period $ 2,228 $ 1,892 $ 2,754 The Company’s revenues and income before income taxes for fiscal 2023, 2022 and 2021 included results from stores that have been closed or are approved for closure as of March 4, 2023. The revenue, operating expenses and income before income taxes of these stores for the periods are presented as follows: Year Ended March 4, February 26, February 27, 2023 2022 2021 Revenues $ 178,030 $ 586,056 $ 639,471 Operating expenses 192,357 640,996 699,662 Gain from sale of assets (46,125) (13,670) (7,954) Other expenses 25,396 52,999 13,057 Income (loss) before income taxes 6,402 (94,269) (65,294) Included in these stores’ income (loss) before income taxes are: Depreciation and amortization 934 3,499 4,535 Inventory liquidation charges (6,369) (1,646) (1,528) The above results are not necessarily indicative of the impact that these closures will have on revenues and operating results of the Company in the future, as the Company often transfers the business of a closed store to another Company store, thereby retaining a portion of these revenues and operating expenses. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Mar. 04, 2023 | |
Fair Value Measurements | |
Fair Value Measurements | 7. Fair Value Measurements The Company utilizes the three-level valuation hierarchy as described in Note 6 for the recognition and disclosure of fair value measurements. As of March 4, 2023 and February 26, 2022, the Company did not have any financial assets measured on a recurring basis. Please see Note 6 and Note 14 for fair value measurements of non-financial assets measured on a non-recurring basis. Other Financial Instruments Financial instruments other than long-term indebtedness include cash and cash equivalents, accounts receivable and accounts payable. These instruments are recorded at book value, which we believe approximate their fair values due to their short-term nature. In addition, as of March 4, 2023, the Company has $7,457 of investments carried at amortized cost as these investments are being held to maturity, which are included as a component of prepaid expenses and other current assets. As of February 26, 2022, the Company has $7,406 of investments carried at amortized cost as these investments are being held to maturity, which are included as a component of other assets. The Company believes the carrying value of these investments approximates their fair value. The fair value for Secured Overnight Financing Rate (“SOFR”) based borrowings as of March 4, 2023 and LIBOR-based borrowings as of February 26, 2022 under the Company’s senior secured credit facility is 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 $2,925,258 and $2,368,328, respectively, as of March 4, 2023. The carrying amount and estimated fair value of the Company’s total long-term indebtedness was $2,732,986 and $2,661,122 respectively, as of February 26, 2022. |
Income Taxes
Income Taxes | 12 Months Ended |
Mar. 04, 2023 | |
Income Taxes | |
Income Taxes | 8. Income Taxes The provision for income tax benefit from continuing operations was as follows: Year Ended March 4, February 26, February 27, 2023 2022 2021 (53 Weeks) (52 Weeks) (52 Weeks) Current tax: Federal $ (6) $ (6) $ (6,758) State 9,082 7,454 4,145 9,076 7,448 (2,613) Deferred tax and other: Federal — (1,301) (12,649) State (15,543) (9,927) (4,895) (15,543) (11,228) (17,544) Total income tax benefit $ (6,467) $ (3,780) $ (20,157) A reconciliation of the expected statutory federal tax and the total income tax benefit from continuing operations was as follows: Year Ended March 4, February 26, February 27, 2023 2022 2021 (53 Weeks) (52 Weeks) (52 Weeks) Federal statutory rate $ (152,388) $ (110,492) $ (25,103) Nondeductible expenses 556 398 588 State income taxes, net 271,306 (45,388) 10,042 Bargain purchase gain — 1,123 (10,018) Decrease of previously recorded liabilities (18,689) (3,798) (2,273) Nondeductible compensation 2,045 1,551 3,764 Qualified fringe disallowance 342 224 313 Nondeductible excise tax — — 1,296 Stock based compensation 2,213 198 2,806 Valuation allowance (112,037) 152,785 (2,222) Other 185 (381) 650 Total income tax benefit $ (6,467) $ (3,780) $ (20,157) Net loss for fiscal 2023 from continuing operations included an income tax benefit of $6,467. The state income tax expense reflected in the table above primarily resulted from the re-measurement of state deferred tax assets due to a reduced statutory Pennsylvania corporate net income tax rate. This state tax expense was offset by a corresponding income tax benefit of $256,411 to reduce the valuation allowance as a result of the reduced tax rate. Overall, an income tax benefit of $112,037 was recorded to maintain a full valuation allowance for federal deferred tax assets as well as the majority of the Company’s state deferred tax assets. These assets may not be realized based on the Company's most recent assessment that it is more likely than not that sufficient taxable income may not be generated to realize the tax benefits of the Company’s net deferred tax assets. Net loss for fiscal 2022 from continuing operations included an income tax benefit of $3,780, of which $152,785 of income tax expense was recorded to maintain a full valuation allowance for federal deferred tax assets as well as the majority of the Company’s state deferred tax assets. These assets may not be realized based on the Company's most recent assessment that it is more likely than not that sufficient taxable income may not be generated to realize the tax benefits of the Company’s net deferred tax assets. Net loss for fiscal 2021 from continuing operations included income tax benefit of $20,157, of which $2,222 was recorded to maintain a full valuation allowance for federal deferred tax assets as well as the majority of the Company’s state deferred tax assets. These assets may not be realized based on the Company's most recent assessment that it is more likely than not that sufficient taxable income may not be generated to realize the tax benefits of the Company’s net deferred tax assets. Additionally, the overall tax rate includes a permanent tax benefit related to the Company’s bargain purchase gain on the Bartell acquisition resulting in an impact of 8.4%. On August 16, 2022, the U.S. enacted the Inflation Reduction Act of 2022, which, among other things, implemented a 15% minimum tax on book income of certain large corporations, a 1% excise tax on net stock repurchases and several tax incentives to promote clean energy. Based on the Company’s current analysis of the provisions, it does not believe that this legislation will have a material impact on its financial statements. The tax effect of temporary differences that gave rise to significant components of deferred tax assets and liabilities consisted of the following as of March 4, 2023 and February 26, 2022: 2023 2022 Deferred tax assets: Accounts receivable $ 26,769 $ 22,958 Accrued expenses 143,207 95,421 Pension, retirement and other benefits 40,100 67,686 Long-lived assets 364,618 299,507 Operating lease liabilities 781,721 883,713 Credits 21,955 22,917 Net operating losses 1,200,516 1,487,639 Other 271 225 Total gross deferred tax assets 2,579,157 2,880,066 Valuation allowance (1,636,461) (1,818,069) Total deferred tax assets 942,696 1,061,997 Deferred tax liabilities: Outside basis difference 5,622 5,682 Inventory 244,554 251,221 Operating lease right-of-use assets 680,152 785,023 Total gross deferred tax liabilities 930,328 1,041,926 Net deferred tax assets $ 12,368 $ 20,071 A reconciliation of the beginning and ending amount of unrecognized tax benefits from continuing operations was as follows: 2023 2022 2021 Unrecognized tax benefits $ 103,629 $ 184,414 $ 198,325 Increases to prior year tax positions 1 24 42 Decreases to tax positions in prior periods (29,432) (294) (807) Increases to current year tax positions — — — Settlements — — — Divestitures — — — Lapse of statute of limitations (27,113) (80,515) (13,146) Unrecognized tax benefits balance $ 47,085 $ 103,629 $ 184,414 The amount of the above unrecognized tax benefits as of March 4, 2023, February 26, 2022 and February 27, 2021 which would impact the Company’s effective tax rate, if recognized, was $1,498, $18,737 and $20,923, respectively. Additionally, any impact on the effective rate may be mitigated by the valuation allowance that is remaining against the Company’s net deferred tax assets. The Company believes that it is reasonably possible that a decrease of up to $4,001 in unrecognized tax benefits related to state exposures may be necessary in the next twelve months, however, management does not expect the change to have a significant impact on the results of operations or the financial position of the Company. The Company recognizes interest and penalties related to tax contingencies as income tax expense. The Company recognized an expense/(benefit) for interest and penalties in connection with tax matters of $(6,006), $(183) and $(123) for fiscal years 2023, 2022 and 2021, respectively. As of March 4, 2023 and February 26, 2022 the total amount of accrued income tax-related interest and penalties was $490 and $6,496, respectively. The Company files U.S. federal income tax returns as well as income tax returns in those states where it does business. The consolidated federal income tax returns are closed for examination through fiscal year 2019. However, any net operating losses that were generated in these prior closed years may be subject to examination by the IRS upon utilization. Tax examinations by various state taxing authorities could generally be conducted for a period of three Net Operating Losses and Tax Credits As of March 4, 2023, the Company had federal net operating loss carryforwards of approximately $2,133,742. Of these, $884,668 will expire, if not utilized, between fiscal 2029 and 2031. An additional $193,961 will expire, if not utilized, between fiscal 2032 and 2038. As of March 4, 2023, the Company had state net operating loss carryforwards of approximately $12,279,752, the majority of which will expire ratably through fiscal 2032; the net tax effect of these carryforwards is $754,483 and are reflected in the table above. As of March 4, 2023, the Company had federal business tax credit carryforwards of $11,363, the majority of which will expire between 2024 and 2029. Valuation Allowances The valuation allowances as of March 4, 2023 and February 26, 2022 apply to the net deferred tax assets of the Company. The Company maintained a valuation allowance of $1,636,461 and $1,818,069 as of March 4, 2023 and February 26, 2022, respectively. A valuation allowance has been recorded for fiscal 2023 and fiscal 2022 to reduce certain federal and state net deferred tax assets that may not be realized based on all available evidence that currently does not support the realization of these assets. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Mar. 04, 2023 | |
Accounts Receivable | |
Accounts Receivable | 9. Accounts Receivable The Company maintains an allowance for doubtful accounts receivable based upon the expected collectability of accounts receivable. The allowance for uncollectible accounts as of March 4, 2023 and February 26, 2022 was $53,453 and $28,069, respectively. The Company’s accounts receivable are due primarily from third-party payors (e.g., PBM companies, insurance companies or governmental agencies) and are recorded net of any allowances provided for under the respective plans. Since payments due from third-party payors are sensitive to payment criteria changes and legislative actions, the allowance is reviewed continually and adjusted for accounts deemed uncollectible by management. |
Medicare Part D
Medicare Part D | 12 Months Ended |
Mar. 04, 2023 | |
Medicare Part D | |
Medicare Part D | 10. Medicare Part D The Company offers Medicare Part D benefits through EI, which has contracted with CMS to be a PDP and, pursuant to the Medicare Prescription Drug, Improvement and Modernization Act of 2003, must be a risk-bearing entity regulated under state insurance laws or similar statutes. EI is a licensed domestic insurance company under the applicable laws and regulations. Pursuant to these laws and regulations, EI 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. EI 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 $10,693 as of December 31, 2022. EI was in excess of the minimum required amounts in these states as of March 4, 2023. 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. On November 12, 2020, the Company entered into a receivable purchase agreement (the “November 2020 Receivable Purchase Agreement”) with Bank of America, N.A. (the “Purchaser”). Pursuant to the terms and conditions set forth in the November 2020 Receivable Purchase Agreement, the Company sold $464,019, a portion of its calendar 2020 CMS receivable, for $444,812, of which $412,795 was received on November 12, 2020 and the remainder was received in fiscal 2022 upon receipt of the final remittance from CMS. In connection therewith, the Company recognized a loss of $19,207, which is included as a component of (gain) loss on sale of assets, net during the thirteen-week period ended November 28, 2020. On November 12, 2020, concurrent with the November 2020 Receivable Purchase Agreement, the Company entered into an indemnity agreement (the “November 2020 Indemnity Agreement”), whereby the Company has agreed to indemnify, reimburse and hold Purchaser harmless from certain liabilities and expenses actually suffered or incurred by the Purchaser resulting from the occurrence of certain events as specified in the November 2020 Indemnity Agreement. Based on its evaluation of the November 2020 Indemnity Agreement, the Company has determined that it is highly unlikely that the events covered under the November 2020 Indemnity Agreement would occur, and consequently, the Company has not recorded any indemnification liability associated with the November 2020 Indemnity Agreement. On February 18, 2021, the Company entered into a receivable purchase agreement (the “February 2021 Receivable Purchase Agreement”) with Purchaser. Pursuant to the terms and conditions set forth in the February 2021 Receivable Purchase Agreement, the Company sold $300,015, the remaining portion of its calendar 2020 CMS receivable, for $290,613, of which $269,912 was received on February 18, 2021 and the remainder was received in fiscal 2022 upon receipt of the final remittance from CMS. In connection therewith, the Company recognized a loss of $9,403, which is included as a component of (gain) loss on sale of assets, net during the thirteen-week period ended February 27, 2021. On February 18, 2021, concurrent with the February 2021 Receivable Purchase Agreement, the Company entered into an indemnity agreement (the “February 2021 Indemnity Agreement”), whereby the Company has agreed to indemnify, reimburse and hold Purchaser harmless from certain liabilities and expenses actually suffered or incurred by the Purchaser resulting from the occurrence of certain events as specified in the February 2021 Indemnity Agreement. Based on its evaluation of the February 2021 Indemnity Agreement, the Company has determined that it is highly unlikely that the events covered under the February 2021 Indemnity Agreement would occur, and consequently, the Company has not recorded any indemnification liability associated with the February 2021 Indemnity Agreement. On August 12, 2021, the Company entered into a receivable purchase agreement (the “August 2021 Receivable Purchase Agreement”) with Purchaser. Pursuant to the terms and conditions set forth in the August 2021 Receivable Purchase Agreement, the Company sold $271,829, a portion of its calendar 2021 CMS receivable, for $258,116, of which $239,360 was received on August 12, 2021 and the remainder was received in fiscal 2023 upon final remittance from CMS. In connection therewith, the Company recognized a loss of $13,713, which is included as a component of (gain) loss on sale of assets, net during the thirteen-week period ended August 28, 2021. On August 12, 2021, concurrent with the August 2021 Receivable Purchase Agreement, the Company entered into an indemnity agreement (the “August 2021 Indemnity Agreement”), whereby the Company has agreed to indemnify, reimburse and hold Purchaser harmless from certain liabilities and expenses actually suffered or incurred by the Purchaser resulting from the occurrence of certain events as specified in the August 2021 Indemnity Agreement. Based on its evaluation of the August 2021 Indemnity Agreement, the Company has determined that it is highly unlikely that the events covered under the August 2021 Indemnity Agreement would occur, and consequently, the Company has not recorded any indemnification liability associated with the August 2021 Indemnity Agreement. On January 24, 2022, the Company entered into a receivable purchase agreement (the “January 2022 Receivable Purchase Agreement”) with Purchaser. Pursuant to the terms and conditions set forth in the January 2022 Receivable Purchase Agreement, the Company sold $400,680, a portion of its calendar 2021 CMS receivable, for $387,035, of which $359,388 was received on January 24, 2022 and the remainder was received in fiscal 2023 upon final remittance from CMS. In connection therewith, the Company recognized a loss of $13,645, which is included as a component of (gain) loss on sale of assets, net during the thirteen-week period ended February 26, 2022. On January 24, 2022, concurrent with the January 2022 Receivable Purchase Agreement, the Company entered into an indemnity agreement (the “January 2022 Indemnity Agreement”), whereby the Company has agreed to indemnify, reimburse and hold Purchaser harmless from certain liabilities and expenses actually suffered or incurred by the Purchaser resulting from the occurrence of certain events as specified in the January 2022 Indemnity Agreement. Based on its evaluation of the January 2022 Indemnity Agreement, the Company has determined that it is highly unlikely that the events covered under the January 2022 Indemnity Agreement would occur, and consequently, the Company has not recorded any indemnification liability associated with the January 2022 Indemnity Agreement. On October 13, 2022, the Company entered into a receivable purchase agreement (the “October 2022 Receivable Purchase Agreement”) with Purchaser. Pursuant to the terms and conditions set forth in the October 2022 Receivable Purchase Agreement, the Company sold $195,487, a portion of its calendar 2022 CMS receivable, for $180,405, of which $166,917 was received on October 13, 2022. The remaining $13,488, which is included in accounts receivable, net as of March 4, 2023, is payable to the Company, subject to final CMS claim reconciliation adjustments, upon receipt of the final remittance from CMS. In connection therewith, the Company recognized a loss of $15,082, which was included as a component of (gain) loss on sale of assets, net during the thirteen-week period ended November 26, 2022. On October 13, 2022, concurrent with the October 2022 Receivable Purchase Agreement, the Company entered into an indemnity agreement (the “October 2022 Indemnity Agreement”), whereby the Company has agreed to indemnify, reimburse, and hold Purchaser harmless from certain liabilities and expenses actually suffered or incurred by the Purchaser resulting from the occurrence of certain events as specified in the October 2022 Indemnity Agreement. Based on its evaluation of the October 2022 Indemnity Agreement, the Company has determined that it is highly unlikely that the events covered under the October 2022 Indemnity Agreement would occur, and consequently, the Company has not recorded any indemnification liability associated with the October 2022 Indemnity Agreement. During the thirteen-week period ended November 26, 2022, the Company incurred additional fees of $1,937, which were included as a component of (gain) loss on sale of assets, net related to the sale of the 2021 CMS receivable to Bank of America. The additional fees were incurred due to a CMS delay in settling the 2021 receivable. On February 3, 2023, the Company entered into a receivable purchase agreement (the “February 2023 Receivable Purchase Agreement”) with Purchaser. Pursuant to the terms and conditions set forth in the February 2023 Receivable Purchase Agreement, the Company sold $278,390, a portion of its calendar 2022 CMS receivable, for $261,771, of which $242,562 was received on February 3, 2023. The remaining $19,209, which is included in accounts receivable, net as of March 4, 2023, is payable to the Company, subject to final CMS claim reconciliation adjustments, upon receipt of the final remittance from CMS. In connection therewith, the Company recognized a loss of $16,619, which is included as a component of (gain) loss on sale of assets, net during the fourteen-week period ended March 4, 2023. On February 3, 2023, concurrent with the February 2023 Receivable Purchase Agreement, the Company entered into an indemnity agreement (the “February 2023 Indemnity Agreement”), whereby the Company has agreed to indemnify, reimburse and hold Purchaser harmless from certain liabilities and expenses actually suffered or incurred by the Purchaser resulting from the occurrence of certain events as specified in the February 2023 Indemnity Agreement. Based on its evaluation of the February 2023 Indemnity Agreement, the Company has determined that it is highly unlikely that the events covered under the February 2023 Indemnity Agreement would occur, and consequently, the Company has not recorded any indemnification liability associated with the February 2023 Indemnity Agreement. During the fourteen-week period ended March 4, 2023, the company incurred additional fees of $2,573, which are included as a component of (gain) loss on sale of assets, net related to the sale of the 2021 CMS receivable to Bank of America. The additional fees were incurred due to a CMS delay in settling the 2021 receivable. As of March 4, 2023 and February 26, 2022, accounts receivable, net included $22,362 and $34,898 due from the Purchaser, subject to final CMS claim reconciliation adjustments, upon receipt of the final remittance for the respective calendar years from CMS. As of March 4, 2023 and February 26, 2022, accounts receivable, net included $45,201 and $63,203 of amounts due from CMS. The Inflation Reduction Act of 2022 contains several provisions affecting Medicare, which will take effect over various periods of time from 2023 to 2029. Based on the Company’s current analysis of the provisions, it does not believe that this legislation will have a material impact on the financial statements. |
Manufacturer Rebates Receivable
Manufacturer Rebates Receivables | 12 Months Ended |
Mar. 04, 2023 | |
Manufacturer Rebates Receivables | |
Manufacturer Rebates Receivables | 11. Manufacturer Rebates Receivables The Pharmacy Services Segment has manufacturer rebates receivables of $357,699 and $535,620 included in Accounts receivable, net of an allowance for uncollectible rebates of $8,680 and $18,796, as of March 4, 2023 and February 26, 2022, respectively. During the thirteen-week period ended February 26, 2022, the Company reassessed its historical policy for estimating its allowance for manufacturer rebate receivables and concluded that, due to changes in its business practices and other market conditions, certain amounts within the outstanding receivable had an increased risk of uncollectability. As a result, the Company increased its allowance for manufacturer rebate receivables by $15,068, which was recorded as an increase to costs of revenue during the thirteen-week period ended February 26, 2022. The Company determined that this change in estimate is a non-recurring item that should be added back to Adjusted EBITDA (see “Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share and Other Non GAAP Measures” for details). |
Inventory
Inventory | 12 Months Ended |
Mar. 04, 2023 | |
Inventory | |
Inventory | 12. Inventory As of March 4, 2023 and February 26, 2022, inventories were $539,932 and $487,173, respectively, lower than the amounts that would have been reported using the first-in, first-out (“FIFO”) cost flow assumption. The Company calculates its FIFO inventory valuation using the retail method for store inventories and the cost method for distribution facility inventories. The Company recorded a LIFO charge of $53,028 and $1,314, for fiscal year 2023 and 2022, respectively, and a LIFO credit of $51,692 for fiscal year 2021. During fiscal 2023, 2022 and 2021, a reduction in non-pharmacy inventories resulted in the liquidation of applicable LIFO inventory quantities carried at lower costs in prior years. This LIFO liquidation resulted in a $31,857, $13,090 and $26,861 cost of revenues decrease, with a corresponding reduction to the adjustment to LIFO for fiscal 2023, fiscal 2022 and fiscal 2021, respectively. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Mar. 04, 2023 | |
Property, Plant and Equipment | |
Property, Plant and Equipment | 13. Property, Plant and Equipment Following is a summary of property, plant and equipment, including capital lease assets, as of March 4, 2023 and February 26, 2022: 2023 2022 Land $ 69,588 $ 83,485 Buildings 208,681 314,143 Leasehold improvements 1,568,983 1,566,082 Equipment 1,855,083 1,794,937 Software 89,597 92,139 Construction in progress 109,690 97,715 3,901,622 3,948,501 Accumulated depreciation (2,993,851) (2,959,334) Property, plant and equipment, net $ 907,771 $ 989,167 Depreciation expense, which included the depreciation of assets recorded under capital leases, was $202,559, $217,639 and $238,104 in fiscal 2023, 2022 and 2021, respectively. Included in property, plant and equipment was the carrying amount, which approximates fair value, of assets to be disposed of totaling $3,972 and $1,463 as of March 4, 2023 and February 26, 2022, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Mar. 04, 2023 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | 14. Goodwill and Other Intangibles Goodwill and indefinite-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 it may be more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill, the Company performs a quantitative goodwill impairment test. The fair value estimates used in the quantitative impairment test are calculated using an average of the income and market approaches. The income approach is based on the present value of future cash flows of each reporting unit, while the market approach is based on certain multiples of selected guideline public companies or selected guideline transactions. The approaches, which qualify as Level 3 within the fair value hierarchy, incorporate a number of market participant assumptions including future growth rates, discount rates, income tax rates and market activity in assessing fair value and are reporting unit specific. If the carrying amount exceeds the reporting unit’s fair value, the Company recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. In addition, the Company considers the income tax effect of any tax deductible goodwill when measuring a goodwill impairment loss. In the fourth quarter of fiscal 2021, the Company completed a quantitative goodwill impairment assessment and determined after evaluating the results, events and circumstances, that sufficient evidence existed to assert that it is more likely than not that the fair values of the reporting units exceeded their carrying values. Therefore, no goodwill impairment charge was recorded for the fiscal year ended February 27, 2021. In the fourth quarter of fiscal 2022, the Company completed a qualitative goodwill impairment assessment, at which time it was determined after evaluating results, events and circumstances that a quantitative assessment was necessary for the Pharmacy Services Segment. The quantitative assessment concluded that the carrying amount of the Pharmacy Services Segment exceeded its fair value principally due to a decrease in Adjusted EBITDA that was driven by commercial and Medicare Part D business compression due to industry consolidation, an increase in the medical loss ratio at Elixir Insurance, and a decision to exit our rebate aggregation business. This resulted in goodwill impairment charges of $229,000 for the fiscal year ended February 26, 2022. In the second quarter of fiscal 2023, the Company completed a qualitative goodwill impairment assessment, at which time it was determined after evaluating results, events, and circumstances that a quantitative assessment was necessary for the Pharmacy Services Segment. The quantitative assessment concluded that the carrying amount of the Pharmacy Services Segment exceeded its fair value principally due to an update to the Company’s preliminary fiscal 2024 and beyond forecasted revenue driven by current updates in the estimate of lives for calendar year 2023 based on the latest estimates of existing client retention for 2023, the latest selling season and EI bid results and other business factors which only became evident during the second quarter. This resulted in goodwill impairment charges of $252,200 in the second quarter of fiscal 2023. In the fourth quarter of fiscal 2023, the Company completed a qualitative goodwill impairment assessment, at which time it was determined after evaluating results, events, and circumstances that a quantitative assessment was necessary for the Pharmacy Services Segment. The quantitative assessment concluded that the carrying amount of the Pharmacy Services Segment exceeded its fair value principally due to downward macroeconomic pressure during the fourth quarter of fiscal 2023 which manifested in increased interest rates, increased cost of borrowing and a decrease of industry multiples. The market factors that drove the goodwill impairment charges of $119,000 in the fourth quarter of fiscal 2023 were not known in prior quarters. The goodwill related to the Pharmacy Services Segment is at risk of future impairment if the fair value of this segment, and its associated assets, decrease in value due to further declines in its operating results or an inability to execute management’s business strategies. Future cash flow estimates are, by their nature, subjective, and actual results may differ materially from the Company's estimates. If the Company's ongoing cash flow projections are not met or if market factors utilized in the impairment test deteriorate, including an unfavorable change in the terminal growth rate or the weighted-average cost of capital, the Company may have to record impairment charges in future periods. As of March 4, 2023 and February 26, 2022, the accumulated impairment losses for the Pharmacy Services Segment was $1,174,912 and $803,712, respectively. Below is a summary of the changes in the carrying amount of goodwill by segment for the fiscal years ended March 4, 2023 and February 26, 2022: Retail Pharmacy Pharmacy Services Total Balance, February 27, 2021 $ 43,492 $ 1,064,644 $ 1,108,136 Goodwill impairment — (229,000) (229,000) Balance, February 26, 2022 43,492 835,644 879,136 Goodwill impairment — (371,200) (371,200) Balance, March 4, 2023 $ 43,492 $ 464,444 $ 507,936 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 March 4, 2023 and February 26, 2022. March 4, 2023 February 26, 2022 Remaining Remaining Weighted Weighted Gross Average Gross Average Carrying Accumulated Amortization Carrying Accumulated Amortization Amount Amortization Net Period Amount Amortization Net Period Non-compete agreements and other (a) $ 201,919 $ (182,957) $ 18,962 3 years $ 197,651 $ (178,958) $ 18,693 3 years Prescription files 1,029,665 (928,478) 101,187 5 years 1,030,169 (918,773) 111,396 6 years Customer relationships (a) 388,000 (306,139) 81,861 9 years 388,000 (286,090) 101,910 10 years CMS license 57,500 (23,798) 33,702 4 years 57,500 (15,372) 42,128 5 years Claims adjudication and other developed software 58,985 (58,985) — 0 years 58,985 (56,316) 2,669 1 years Total finite $ 1,736,069 $ (1,500,357) 235,712 $ 1,732,305 $ (1,455,509) $ 276,796 Trademarks 14,400 — 14,400 Indefinite 14,400 — 14,400 Indefinite Total $ 1,750,469 $ (1,500,357) $ 250,112 $ 1,746,705 $ (1,455,509) $ 291,196 (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. The Company is continuing to reposition its approach to the Elixir Insurance Part D business including an expectation of a purposeful shrinkage of the business. As a result, at the end of fiscal 2022, the Company adjusted the remaining amortization period of the CMS License to five years. Prior to such adjustment, the remaining life was nineteen years. In connection with the restructuring initiatives previously announced on March 16, 2020, the Company rebranded its EnvisionRxOptions and MedTrak subsidiaries to its new brand name, Elixir. These trademarks qualify as Level 3 within the fair value hierarchy. Upon the implementation of the rebranding initiatives during the first quarter of fiscal 2021, the Company has determined that the carrying value exceeded the fair value and consequently the Company incurred an impairment charge of $29,852 for these trademarks, which is included within intangible asset impairment charges within the consolidated statement of operations. Amortization expense for these intangible assets and liabilities was $74,024, $78,047 and $89,020 for fiscal 2023, 2022 and 2021, respectively. The anticipated annual amortization expense for these intangible assets and liabilities is 2024—$61,343; 2025—$50,209; 2026—$39,771; 2027—$32,779 and 2028—$25,299. |
Accrued Salaries, Wages and Oth
Accrued Salaries, Wages and Other Current Liabilities | 12 Months Ended |
Mar. 04, 2023 | |
Accrued Salaries, Wages and Other Current Liabilities | |
Accrued Salaries, Wages and Other Current Liabilities | 15. Accrued Salaries, Wages and Other Current Liabilities Accrued salaries, wages and other current liabilities consisted of the following as of March 4, 2023 and February 26, 2022: 2023 2022 Accrued wages, benefits and other personnel costs $ 190,664 $ 291,004 Accrued interest 18,630 18,286 Accrued sales and other taxes payable 86,920 75,068 Accrued store expense 71,398 70,537 Accrued litigation, legal and professional fees 41,205 43,200 Accrued self-insurance 25,760 28,402 Other 275,314 250,062 $ 709,891 $ 776,559 |
Indebtedness and Credit Agreeme
Indebtedness and Credit Agreement | 12 Months Ended |
Mar. 04, 2023 | |
Indebtedness and Credit Agreement | |
Indebtedness and Credit Agreement | 16. Indebtedness and Credit Agreement Following is a summary of indebtedness and lease financing obligations as of March 4, 2023 and February 26, 2022: March 4, February 26, 2023 2022 Secured Debt: Senior secured revolving credit facility due August 2026 ($1,200,000 and $709,000 face value less unamortized debt issuance costs of $16,117 and $18,010) 1,183,883 690,990 FILO Term Loan due August 2026 ($400,000 and $350,000 face value less unamortized debt issuance costs of $2,090 and $2,344) 397,910 347,656 1,581,793 1,038,646 Second Lien Secured Debt: 7.5% senior secured notes due July 2025 ($320,002 and $600,000 face value less unamortized debt issuance costs of $2,529 and $6,824) 317,473 593,176 8.0% senior secured notes due November 2026 ($849,918 face value less unamortized debt issuance costs of $11,259 and $14,397) 838,659 835,521 1,156,132 1,428,697 Unguaranteed Unsecured Debt: 7.7% notes due February 2027 ($185,691 and $237,386 face value less unamortized debt issuance costs of $398 and $642) 185,293 236,744 6.875% fixed-rate senior notes due December 2028 ($2,046 and $29,001 face value less unamortized debt issuance costs of $6 and $102) 2,040 28,899 187,333 265,643 Lease financing obligations 18,912 20,374 Total debt 2,944,170 2,753,360 Current maturities of long-term debt and lease financing obligations (6,332) (5,544) Long-term debt and lease financing obligations, less current maturities $ 2,937,838 $ 2,747,816 Credit Facilities On December 20, 2018, the Company entered into a senior secured credit agreement (as amended by the First Amendment to Credit Agreement, dated as of January 6, 2020, the “Prior Credit Agreement”; and the Credit Agreement, as further amended by the Second Amendment (as defined below), the “Prior Amended Credit Agreement”), which provided for facilities consisting of a $2,700,000 senior secured asset-based revolving credit facility and a $450,000 “first-in, last-out” senior secured term loan facility, the proceeds of which were used in December 2018 to refinance its prior $2,700,000 existing credit agreement. On August 20, 2021, the Company entered into the Second Amendment to Credit Agreement (the “Second Amendment”), which, among other things, amended the Prior Credit Agreement to provide for a $2,800,000 senior secured asset-based revolving credit facility (the “Prior Senior Secured Revolving Credit Facility”) and a $350,000 “first-in, last-out” senior secured term loan facility (“Prior Senior Secured Term Loan” and together with the Prior Senior Secured Revolving Credit Facility, collectively, the “Prior Amended Facilities”). The Prior Amended Facilities extended the Company’s debt maturity profile and provided additional liquidity. Borrowings under the Prior Senior Secured Revolving Credit Facility bore interest at a rate per annum equal to, at the Company’s option, (x) a base rate (determined in a customary manner) plus a margin of between 0.25% to 0.75% or (y) an adjusted LIBOR rate (determined in a customary manner) plus a margin of between 1.25% and 1.75%, in each case based upon the Average ABL Availability (as defined in the Prior Amended Credit Agreement). Borrowings under the Prior Senior Secured Term Loan bore interest at a rate per annum equal to, at the Company’s option, (x) a base rate (determined in a customary manner) plus a margin of 1.75% or (y) an adjusted LIBOR rate (determined in a customary manner) plus a margin of 2.75%. On December 1, 2022, the Company entered into the Third Amendment to Credit Agreement (the “Third Amendment”), which, among other things, amended the Prior Amended Credit Agreement (the Prior Amended Credit Agreement, as modified by the Third Amendment, the “Existing Credit Agreement”) to provide for a $2,850,000 senior secured asset-based revolving credit facility (the “Existing Senior Secured Revolving Credit Facility”) and a $400,000 “first-in, last-out” senior secured term loan facility (the “Existing Senior Secured Term Loan” and, together with the Existing Senior Secured Revolving Credit Facility, collectively, the “Existing Facilities”), replaced the LIBOR rate with a Term SOFR-based rate as the applicable benchmark for the Existing Facilities, included COVID-19 vaccines in the borrowing base under the Existing Senior Secured Revolving Credit Facility, subject to limitations and conditions as specified in the Existing Credit Agreement, and increased the interest rate applicable to loans under the Existing Senior Secured Term Loan to (x) a base rate (determined in a customary manner) plus a margin of 2.00% or (y) an adjusted Term SOFR-based rate (determined in a customary manner) plus a margin of 3.00%. The Company is required to pay fees between 0.250% and 0.375% per annum on the daily unused amount of the commitments under the Existing Senior Secured Revolving Credit Facility, depending on Average ABL Availability (as defined in the Existing Credit Agreement). The Existing Facilities are scheduled to mature on August 20, 2026 (subject to a springing maturity if certain of the Company’s existing secured notes are not refinanced or repaid prior to the date that is 91 days prior to the stated maturity thereof). The Company’s borrowing capacity under the Existing Senior Secured Revolving Credit Facility is based upon a specified borrowing base consisting of accounts receivable, inventory and prescription files. As of March 4, 2023, the Company had approximately $1,600,000 of borrowings outstanding under the Existing Facilities and had letters of credit outstanding under the Existing Senior Secured Revolving Credit Facility in a face amount of approximately $208,698, which resulted in remaining borrowing capacity under the Existing Senior Secured Revolving Credit Facility of $1,403,996. If at any time the total credit exposure outstanding under the Existing Senior Secured Revolving Credit Facility exceeds the borrowing base, the Company will be required to repay amounts outstanding to eliminate such shortfall. The Existing Credit Agreement restricts the Company and all of its subsidiaries including the subsidiaries that guarantee its obligations under the Existing Facilities, the secured guaranteed notes and unsecured guaranteed notes (collectively, the “Subsidiary Guarantors”) from accumulating cash on hand in excess of $200,000 at any time when revolving loans are outstanding (not including cash located in store and lockbox deposit accounts and cash necessary to cover current liabilities). The Existing Credit Agreement also states that if at any time (other than following the exercise of remedies or acceleration of any senior obligations or second priority debt and receipt of a triggering notice by the senior collateral agent from a representative of the senior obligations or the second priority debt) either (i) an event of default exists under the Existing Facilities or (ii) availability under the Existing Senior Secured Revolving Credit Facility is less than or equal to $283,250 for three consecutive business days or less than or equal to $206,000 on any day (a “cash sweep period”), the funds in the Company’s deposit accounts will be swept to a concentration account with the senior collateral agent and will be applied first to repay outstanding revolving loans under the Existing Facilities, and then held as collateral for the senior obligations until such cash sweep period is rescinded pursuant to the terms of the Existing Facilities. The Company’s obligations under the Existing Facilities and the Subsidiary Guarantors’ obligations under the related guarantees are secured by (i) a first-priority lien on all of the Subsidiary Guarantors’ cash and cash equivalents, accounts receivable, inventory, prescription files (including eligible script lists), intellectual property (prior to the repayment of the Existing Senior Secured Term Loan) and certain other assets arising therefrom or related thereto (including substantially all of their deposit accounts, collectively, the “ABL priority collateral”) and (ii) a second-priority lien on all of the Subsidiary Guarantors’ equipment, fixtures, investment property (other than equity interests in subsidiaries), intellectual property (following the repayment of the Existing Senior Secured Term Loan) and all other assets that do not constitute ABL priority collateral, in each case, subject to customary exceptions and limitations. The Existing Credit Agreement allows the Company to have outstanding, at any time, up to an aggregate principal amount of $1,500,000 in secured second priority debt, split-priority debt, unsecured debt and disqualified preferred stock in addition to borrowings under the Existing Facilities and existing indebtedness, provided that not in excess of $750,000 of such secured second priority debt, split-priority debt, unsecured debt and disqualified preferred stock shall mature or require scheduled payments of principal prior to 90 days The Existing Credit Agreement has a financial covenant that requires the Company to maintain a minimum fixed charge coverage ratio of 1.00 to 1.00 (i) on any date on which availability under the Existing Senior Secured Revolving Credit Facility is less than $206,000 or (ii) on the third consecutive business day on which availability under the Existing Senior Secured Revolving Credit Facility is less than $257,500 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 $257,500. As of March 4, 2023, the availability under the Existing Senior Secured Revolving Credit Facility was at a level that did not trigger the Existing Credit Agreement’s financial covenant. The Existing Credit Agreement also contains covenants which place restrictions on the incurrence of debt, the payments of dividends, the making of investments, sale of assets, mergers and acquisitions and the granting of liens. The Existing Credit Agreement provides for customary events of default including nonpayment, misrepresentation, breach of covenants and bankruptcy. It is also an event of default if the Company fails to make any required payment on debt having a principal amount in excess of $50,000 or any event occurs that enables, or which with the giving of notice or the lapse of time would enable, the holder of such debt to accelerate the maturity or require the repayment, repurchase, redemption or defeasance of such debt. Fiscal 2021, 2022 and 2023 Transactions On June 25, 2020, the Company commenced an offer to exchange (the “June 25, 2020 Exchange Offer”) up to $750,000 aggregate principal amount of the outstanding 6.125% Senior Notes due 2023 (the “6.125% Notes”) for a combination of $600,000 newly issued 8.0% Senior Secured Notes due 2026 (the “8.0% Notes”) and $145,500 cash. On July 10, 2020, the Company increased the maximum amount of 6.125% Notes that may be accepted for exchange from $750,000 to $1,125,000 and, on July 24, 2020, the Company announced that it accepted for payment $1,062,682 aggregate principal amount of the 6.125% Notes in exchange for $849,918 aggregate principal amount of newly issued 8.0% Notes and $206,373 in cash. In connection therewith, the Company recorded a gain on debt modification of $5,274 which is included in the results of operations and cash flows of continuing operations. The 8.0% Notes are secured on an equal and ratable basis by the same assets that secure the 7.500% Notes. The 8.0% Notes are guaranteed on a senior secured basis by the same subsidiaries that guarantee the 7.500% Notes. In conjunction with the June 25, 2020 Exchange Offer, the Company also commenced a solicitation of consents from the holders of outstanding 6.125% Notes to certain proposed amendments to the indenture governing the 6.125% Notes. On July 9, 2020, following the receipt of the requisite number of consents, the Company entered into a supplemental indenture, which modified certain limitations in the debt covenant to allow for the creation of the 8.0% Notes. On April 28, 2021, the Company issued a notice of redemption for all of the 6.125% Notes that were outstanding on May 28, 2021, pursuant to the terms of the indenture of the 6.125% Notes. On May 28, 2021, the Company redeemed 100% of the remaining outstanding 6.125% Notes at par. In connection therewith, the Company recorded a loss on debt retirement of $396 which included unamortized debt issuance costs. The debt repayment and related loss on debt retirement is included in the results of operations and cash flows. On August 20, 2021, the Company entered into the Second Amendment in order to, among other things, increase the aggregate principal amount of commitments under the Prior Senior Secured Revolving Credit Facility from $2,700,000 to $2,800,000 and decrease the aggregate principal amount of loans outstanding under the Prior Senior Secured Term Loan from $450,000 to $350,000. In connection therewith, the Company recorded a loss on debt modification and retirement of $2,839 which included unamortized debt issuance costs. The debt repayment and related loss on debt modification and retirement is included in the results of operations and cash flows. On June 13, 2022, the Company commenced a series of cash tender offers to purchase up to $150,000 aggregate principal amount of the Company’s 7.500% Senior Secured Notes due 2025 (the “7.500% Notes”), 8.0% Notes), 7.70% Notes due 2027 (the “7.70% Notes”) and 6.875% Notes due 2028 (the “6.875% Notes”), subject to prioritized acceptance levels, a subcap of $100,000 with respect to the 7.500% Notes and proration. On June 29, 2022, pursuant to an early settlement, the Company purchased an aggregate principal amount of $114,942 of its 7.500% Notes, $51,695 aggregate principal amount of its 7.70% Notes and $26,955 aggregate principal amount of its 6.875% Notes. In connection therewith, the Company recorded a gain on debt retirement of $41,312, which included unamortized debt issuance costs. The debt repayment and related gain on debt retirement is included in the results of operations and cash flows. On November 3, 2022, the Company announced the commencement of a cash tender offer to purchase up to $200,000 aggregate purchase price (not including any accrued and unpaid interest) of the Company’s 7.500% Notes, subject to proration. On November 30, 2022, pursuant to an early settlement, the Company purchased an aggregate principal amount of $ 160,497 and on December 9, 2022, the Company purchased an additional aggregate principal amount of $4,559 of its 7.500% Notes. In connection therewith, the Company recorded a gain on debt retirement of $38,978 , which includes unamortized debt issuance costs. The debt repayment and related gain on debt retirement is included in the results of operations and cash flows On December 1, 2022, the Company entered into the Third Amendment in order to, among other things, increase the aggregate principal amount of commitments under the Existing Senior Secured Revolving Credit Facility from $2,800,000 to $2,850,000 and increase the aggregate principal amount of loans outstanding under the Existing Senior Secured Term Loan from $350,000 to $400,000. As a result of the Third Amendment, the Company has increased its liquidity by $100,000. In connection therewith, the Company recorded a loss on debt modification and retirement of $148, which includes unamortized debt issuance costs. The related loss on debt modification and retirement is included in the results of operations and cash flows. Interest Rates and Maturities The annual weighted average interest rate on the Company’s indebtedness was 7.2%, 5.6% and 5.4% for fiscal 2023, 2022 and 2021, respectively. The aggregate annual principal payments of long-term debt for the five succeeding fiscal years are as follows: 2024—$0; 2025—$0; 2026—$320,002; 2027—$2,635,609 and $2,046 in 2028 and thereafter. |
Leases
Leases | 12 Months Ended |
Mar. 04, 2023 | |
Leases | |
Leases | 17. Leases The Company leases most of its retail stores and certain distribution facilities under noncancellable operating The following table is a summary of the Company’s components of net lease cost for the fiscal years ended March 4, 2023, February 26, 2022 and February 27, 2021: Year Ended March 4, 2023 February 26, 2022 February 27, 2021 Operating lease cost $ 641,394 $ 669,421 $ 651,261 Financing lease cost: Amortization of right-of-use asset 3,471 3,638 4,359 Interest on long-term finance lease liabilities 1,968 2,167 2,505 Total finance lease costs $ 5,439 $ 5,805 $ 6,864 Short-term lease costs 3,126 3,180 3,214 Variable lease costs 178,263 175,697 172,088 Less: sublease income (12,871) (13,510) (14,886) Net lease cost $ 815,351 $ 840,593 $ 818,541 Supplemental cash flow information related to leases for the fiscal years ended March 4, 2023, February 26, 2022 and February 27, 2021: Year Ended March 4, 2023 February 26, 2022 February 27, 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows paid for operating leases $ 706,506 $ 703,326 $ 683,226 Operating cash flows paid for interest portion of finance leases 1,968 2,167 2,505 Financing cash flows paid for principal portion of finance leases 4,019 4,117 4,744 Right-of-use assets obtained in exchange for lease obligations: Operating leases 264,507 350,132 513,215 Finance leases — — — Supplemental balance sheet information related to leases as of March 4, 2023 and February 26, 2022 (in thousands, except lease term and discount rate): March 4, February 26, 2023 2022 Operating leases: Operating lease right-of-use asset $ 2,497,206 $ 2,813,535 Short-term operating lease liabilities $ 502,403 $ 575,651 Long-term operating lease liabilities 2,372,943 2,597,090 Total operating lease liabilities $ 2,875,346 $ 3,172,741 Finance leases: Property, plant and equipment, net $ 13,576 $ 13,950 Current maturities of long-term debt and lease financing obligations $ 6,332 $ 5,544 Lease financing obligations, less current maturities 12,580 14,830 Total finance lease liabilities $ 18,912 $ 20,374 Weighted average remaining lease term Operating leases 7.5 7.7 Finance leases 8.0 8.7 Weighted average discount rate Operating leases 6.5 % 6.0 % Finance leases 9.0 % 10.0 % As a result of the Sale to WBA and the related Amended and Restated Asset Purchase Agreement, the Company has lease guarantee obligations related to 676 former stores. The Company is only obligated to pay for the lease guarantees in the event that WBA fails to perform under the lease agreements, as WBA is the primary obligor. The following table summarizes the maturity of lease liabilities under finance and operating leases as of March 4, 2023: March 4, 2023 Finance Operating Fiscal year Leases Leases (1) Total 2024 $ 3,188 $ 677,631 $ 680,819 2025 7,732 593,857 601,589 2026 2,421 507,388 509,809 2027 1,567 426,503 428,070 2028 1,500 351,942 353,442 Thereafter 10,923 1,148,719 1,159,642 Total lease payments 27,331 3,706,040 3,733,371 Less: imputed interest (8,419) (830,694) (839,113) Total lease liabilities $ 18,912 $ 2,875,346 $ 2,894,258 (1) Future operating lease payments have not been reduced by minimum sublease rentals of $24.0 million due in the future under noncancelable leases. Sale-Leaseback Transactions: During the year ended March 4, 2023, the Company During the year ended February 26, 2022, the Company sold twenty owned and operating properties to independent third parties. Net proceeds from the sale were $57,498. Concurrent with these sales, the Company entered into agreements to lease the properties back from the purchasers over a minimum lease term of 15 years. The Company accounted for these leases as operating lease right-of-use assets and corresponding operating lease liabilities in accordance with the Lease Standard. The transactions resulted in a gain of $8,600 which is included in the (gain) loss on sale of assets, net for the fifty-two weeks ended February 26, 2022. During the year ended February 27, 2021, the Company sold eleven owned and operating properties, including the Company’s Perryman, MD, Woodland, CA, and Lancaster, CA distribution centers, the Company’s Ice Cream Plant and seven retail stores to independent third parties. Net proceeds from the sales were $177,892. Concurrent with these sales, the Company entered into agreements to lease the properties back from the purchasers over minimum lease terms between 15 and 20 years. The Company accounted for these leases as operating lease right-of-use assets and corresponding operating lease liabilities in accordance with the Lease Standard. The transactions resulted in a gain of $93,841 which is included in the (gain) loss on sale of assets, net for the fifty-two weeks ended February 27, 2021. The Company has additional capacity under its outstanding debt agreements to enter into additional sale-leaseback transactions. |
Stock Option and Stock Award Pl
Stock Option and Stock Award Plans | 12 Months Ended |
Mar. 04, 2023 | |
Stock Options and Stock Awards | |
Stock Options and Stock Awards | 18. Stock Option and Stock Award Plans The Company recognizes share-based compensation expense in accordance with ASC 718, “Compensation—Stock Compensation.” Expense is recognized over the requisite service period of the award, net of an estimate for the impact of forfeitures. Operating results for fiscal 2023, 2022 and 2021 include $11,537, $13,050 and $13,003 of compensation costs related to the Company’s stock-based compensation arrangements. In June 2010, the stockholders of Rite Aid Corporation approved the adoption of the Rite Aid Corporation 2010 Omnibus Equity Plan. Under the plan, 1,750 shares of Rite Aid common stock are available for granting of restricted stock, stock options, phantom stock, stock bonus awards and other equity based awards at the discretion of the Board of Directors. The adoption of the 2010 Omnibus Equity Plan became effective on June 23, 2010. In June 2012, the stockholders of Rite Aid Corporation approved the adoption of the Rite Aid Corporation 2012 Omnibus Equity Plan. Under the plan, 1,425 shares of Rite Aid common stock are available for granting of restricted stock, stock options, phantom stock, stock bonus awards and other equity based awards at the discretion of the Board of Directors. The adoption of the 2012 Omnibus Equity Plan became effective on June 21, 2012. In June 2014, the stockholders of Rite Aid Corporation approved the adoption of the Rite Aid Corporation 2014 Omnibus Equity Plan. Under the plan, 2,900 shares of Rite Aid common stock plus any shares of common stock remaining available for grant under the Rite Aid Corporation 2010 Omnibus Equity Plan and the Rite Aid Corporation 2012 Omnibus Equity Plan as of the effective date of the 2014 Plan (provided that no more than 1,250 shares may be granted as incentive stock options) are available for granting of restricted stock, stock options, phantom stock, stock bonus awards and other equity based awards at the discretion of the Board of Directors. The adoption of the 2014 Omnibus Equity Plan became effective on June 19, 2014. In July 2020, the stockholders of Rite Aid Corporation approved the adoption of the Rite Aid Corporation 2020 Omnibus Equity Plan. Under the plan, 3,350 shares of Rite Aid common stock plus any shares of common stock remaining available for grant under the Rite Aid Corporation 2010 Omnibus Equity Plan, the Rite Aid Corporation 2012 Omnibus Equity Plan and the Rite Aid Corporation 2014 Omnibus Equity Plan (collectively, the “Prior Plans”) are available for granting of restricted stock, stock options, phantom stock, stock bonus awards and other equity based awards at the discretion of the Board of Directors. The adoption of the 2020 Omnibus Equity Plan became effective on July 8, 2020. Upon the adoption date, shares of common stock may no longer be issued pursuant to the Prior Plans. In July 2021, the stockholders of Rite Aid Corporation approved the adoption of an amended and restated Rite Aid Corporation 2020 Omnibus Equity Plan. Under the plan, 4,562 shares of Rite Aid common stock plus any shares of common stock remaining available for grant under the Prior Plans are available for granting of restricted stock, stock options, phantom stock, stock bonus awards and other equity based awards at the discretion of the Board of Directors. The adoption of the Amended and Restated 2020 Omnibus Equity Plan became effective on July 7, 2021. In July 2022, the stockholders of Rite Aid Corporation approved the adoption of an amended and restated Rite Aid Corporation 2020 Omnibus Equity Plan. Under the plan, 3,250 shares of Rite Aid common stock plus any shares of common stock remaining available for grant under the Prior Plans are available for granting of restricted stock, stock options, phantom stock, stock bonus awards and other equity based awards at the discretion of the Board of Directors. The adoption of the Amended and Restated 2020 Omnibus Equity Plan became effective on July 27, 2022. All of the plans provide for the Board of Directors (or at its election, the Compensation Committee) to determine both when and in what manner options may be exercised; however, it may not be more than 10 years from the date of grant. All of the plans provide that stock options may be granted at prices that are not less than the fair market value of a share of common stock on the date of grant. The aggregate number of remaining shares authorized for issuance for all plans is 3,628 as of March 4, 2023. Stock Options The Company determines the fair value of stock options issued on the date of grant using the Black-Scholes-Merton option-pricing model. The Company did not grant any options in fiscal 2023, 2022 and 2021 The weighted average fair value of options granted during fiscal 2023, 2022 2021 Weighted Weighted Average Average Exercise Remaining Aggregate Price Contractual Intrinsic Shares Per Share Term Value Outstanding as of February 29, 2020 1,295 $ 30.29 Granted — N/A Exercised (2) 25.08 Canceled (513) 48.16 Outstanding as of February 27, 2021 780 $ 18.56 Granted — N/A Exercised — N/A Canceled (79) 45.78 Outstanding as of February 26, 2022 701 $ 15.50 Granted — N/A Exercised — N/A Canceled (169) 23.85 Outstanding as of March 4, 2023 532 $ 12.85 0.15 $ 0.00 Vested or expected to vest as of March 4, 2023 532 $ 12.85 0.15 $ 0.00 Exercisable as of March 4, 2023 532 $ 12.85 0.15 $ 0.00 As of March 4, 2023, there was $0 of total unrecognized pre-tax compensation costs related to unvested stock options, net of forfeitures. These costs are expected to be recognized over a weighted average period of zero Cash received from stock option exercises for fiscal 2023, 2022 and 2021 was $0, $0 and $53, respectively. The income tax benefit from stock options for fiscal 2023, 2022 and 2021 was $0, $0 and $1, respectively. The total intrinsic value of stock options exercised for fiscal 2023, 2022 and 2021 was $0, $0 and $10, respectively. Typically, stock options granted vest, and are subsequently exercisable in equal annual installments over a four-year period for employees. Restricted Stock The Company provides restricted stock grants to associates under plans approved by the stockholders. Shares awarded under the plans typically vest in equal annual installments over a three-year period. Unvested shares are forfeited upon termination of employment. Following is a summary of restricted stock transactions for the fiscal years ended March 4, 2023, February 26, 2022 and February 27, 2021: Weighted Average Grant Date Shares Fair Value Balance as of February 29, 2020 1,253 $ 10.32 Granted 780 17.79 Vested (574) 13.37 Canceled (166) 12.23 Balance as of February 27, 2021 1,293 $ 13.23 Granted 973 15.00 Vested (546) 12.25 Canceled (187) 15.51 Balance as of February 26, 2022 1,533 $ 14.42 Granted 1,662 6.50 Vested (1,349) 12.40 Canceled (370) 10.83 Balance as of March 4, 2023 1,476 $ 8.25 As of March 4, 2023, there was $9,719 of total unrecognized pre-tax compensation costs related to unvested restricted stock grants, net of forfeitures. These costs are expected to be recognized over a weighted average period of 1.7 years. The total fair value of restricted stock vested during fiscal years 2023, 2022 and 2021 was $16,746, $6,677 and $7,670, respectively. Performance Based Incentive Plan The Company provides certain of its associates with performance based incentive awards under its equity incentive plans, pursuant to which the associates will receive a certain number of shares of the Company’s common stock based on the Company meeting certain financial and performance goals. If such goals are not met, no stock-based compensation expense is recognized and any recognized stock-based compensation expense is reversed. The Company recorded a benefit of $3,080 and expense of $2,143 and $3,278 related to these performance based incentive awards under the Company’s equity incentive plans for fiscal 2023, 2022 and 2021, respectively, which is recorded as a component of stock-based compensation expense. |
Retirement Plans
Retirement Plans | 12 Months Ended |
Mar. 04, 2023 | |
Retirement Plans | |
Retirement Plans | 19. Retirement Plans Defined Contribution Plans The Company and its subsidiaries sponsor several retirement plans that are primarily 401(k) defined contribution plans covering nonunion associates and certain union associates. The Company does not contribute to all of the plans. In accordance with those plan provisions, the Company matches 100% of a participant’s pre-tax payroll contributions, up to a maximum of 3% of such participant’s pre-tax annual compensation. Thereafter, the Company will match 50% of the participant’s additional pre-tax payroll contributions, up to a maximum of 2% of such participant’s additional pre-tax annual compensation. Total expense recognized for the above plans was $44,504 in fiscal 2023, $41,528 in fiscal 2022 and $36,270 in fiscal 2021. The Company sponsored a Supplemental Executive Retirement Plan (“SERP”) for its officers, based on an account-based plan design, that was subject to a five-year graduated vesting schedule. On February 25, 2019, the SERP was terminated and additional allocations were discontinued and all prior benefits under the program became fully vested. During fiscal 2020, participant benefits under this program were paid in full. No expense was recognized for the SERP in fiscal 2023, 2022 or 2021. Defined Benefit Plans The Company and its subsidiaries also sponsor a qualified defined benefit pension plan that requires benefits to be paid to eligible associates based upon years of service and, in some cases, eligible compensation. The Company’s funding policy for The Rite Aid Pension Plan (the “Defined Benefit Pension Plan”) is to contribute the minimum amount required by the Employee Retirement Income Security Act of 1974. However, the Company may, at its sole discretion, contribute additional funds to the plan. The Company made contributions of $0 in fiscal 2023, $1,700 in fiscal 2022 and $6,305 in fiscal 2021. Net periodic pension expense and other changes recognized in other comprehensive income for the defined benefit pension plans included the following components: Defined Benefit Pension Plan 2023 2022 2021 Service cost $ 336 $ 425 $ 486 Interest cost 5,036 4,861 4,753 Expected return on plan assets (4,998) (5,194) (4,614) Amortization of unrecognized net loss — 344 3,749 Net periodic pension expense $ 374 $ 436 $ 4,374 Other changes recognized in other comprehensive loss: Unrecognized net gain arising during period $ (585) $ (8,246) $ (20,633) Amortization of unrecognized net (loss) gain — (344) (3,749) Net amount recognized in other comprehensive loss (585) (8,590) (24,382) Net amount recognized in pension expense and other comprehensive loss $ (211) $ (8,154) $ (20,008) The table below sets forth reconciliation from the beginning of the year for both the benefit obligation and plan assets of the Company’s defined benefit plans, as well as the funded status and amounts recognized in the Company’s balance sheet as of March 4, 2023 and February 26, 2022: Defined Benefit Pension Plan 2023 2022 Change in benefit obligations: Benefit obligation at end of prior year $ 160,133 $ 168,872 Service cost 336 425 Interest cost 5,036 4,861 Distributions (8,328) (8,582) Actuarial gain (26,014) (5,443) Benefit obligation at end of year $ 131,163 $ 160,133 Change in plan assets: Fair value of plan assets at beginning of year $ 149,527 $ 148,412 Employer contributions — 1,700 Actual return on plan assets (20,430) 7,997 Distributions (including expenses paid by the plan) (8,328) (8,582) Fair value of plan assets at end of year $ 120,769 $ 149,527 Funded status $ (10,394) $ (10,606) Net amount recognized $ (10,394) $ (10,606) Amounts recognized in consolidated balance sheets consisted of: Accrued pension liability (10,394) (10,606) Net amount recognized $ (10,394) $ (10,606) Amounts recognized in accumulated other comprehensive loss consist of: Net actuarial loss $ 11,202 $ (11,787) Amount recognized $ 11,202 $ (11,787) The decrease in the benefit obligation during the year ended March 4, 2023, was driven by the increase in discount rate from 3.25% as of February 26, 2022 to 5.00% as of March 4, 2023. The decrease in the benefit obligation during the year ended February 26, 2022, was driven by the increase in discount rate from 3.00% as of February 27, 2021 to 3.25% as of February 26, 2022. The pension plan also benefitted from favorable return on assets and favorable experience from updated census data. The estimated net actuarial loss and prior service cost amounts that will be amortized from accumulated other comprehensive loss into net periodic pension expense in fiscal 2024 are $0 and $0, respectively. The accumulated benefit obligation for the defined benefit pension plan was $131,163 and $160,133 as of March 4, 2023 and February 26, 2022, respectively. The accumulated benefit obligation and fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets as of March 4, 2023 and February 26, 2022 were as follows: Defined Benefit Pension Plan 2023 2022 Accumulated Benefit Obligations $ 131,163 $ 160,133 Fair Value of Plan Assets $ 120,769 $ 149,527 The projected benefit obligation and fair value of plan assets for pension plans with projected benefit obligations in excess of plan assets as of March 4, 2023 and February 26, 2022 were as follows: Defined Benefit Pension Plan 2023 2022 Projected Benefit Obligations $ 131,163 $ 160,133 Fair Value of Plan Assets $ 120,769 $ 149,527 The significant actuarial assumptions used for all defined benefit plans to determine the benefit obligation as of March 4, 2023, February 26, 2022 and February 27, 2021 were as follows: Defined Benefit Pension Plan 2023 2022 2021 Discount rate 5.00 % 3.25 % 3.00 % Rate of increase in future compensation levels N/A N/A N/A Expected long-term rate of return on plan assets 6.50 % 5.00 % 5.50 % Weighted average assumptions used to determine net cost for the fiscal years ended March 4, 2023, February 26, 2022 and February 27, 2021 were: Defined Benefit Pension Plan 2023 2022 2021 Discount rate 3.25 % 3.00 % 2.75 % Rate of increase in future compensation levels N/A N/A N/A Expected long-term rate of return on plan assets 5.00 % 5.50 % 6.00 % To develop the expected long-term rate of return on assets assumption, the Company considered the historical returns and the future expectations for returns for each asset class, as well as the target asset allocation of the pension portfolio. This resulted in the selection of the 5.00% long-term rate of return on plan assets assumption for fiscal 2023, 5.50% for 2022 and 6.00% for 2021. The Company’s pension plan asset allocations as of March 4, 2023 and February 26, 2022 by asset category were as follows: March 4, February 26, 2023 2022 Equity securities 30 % 30 % Fixed income securities 59 % 57 % Other 11 % 13 % Total 100 % 100 % The investment objectives of the Defined Benefit Pension Plan, the only defined benefit plan with assets, are to: ● Achieve a rate of return on investments that exceeds inflation over a full market cycle and is consistent with actuarial assumptions; ● Balance the correlation between assets and liabilities by diversifying the portfolio among various asset classes to address return risk and interest rate risk; ● Balance the allocation of assets between the investment managers to minimize concentration risk; ● Maintain liquidity in the portfolio sufficient to meet plan obligations as they come due; and ● Control administrative and management costs. The asset allocation established for the pension investment program reflects the risk tolerance of the Company, as determined by: ● the current and anticipated financial strength of the Company; ● the funded status of the plan; and ● plan liabilities. Investments in both the equity and fixed income markets will be maintained, recognizing that historical results indicate that equities (primarily common stocks) have higher expected returns than fixed income investments. It is also recognized that the correlation between assets and liabilities must be balanced to address higher volatility of equity investments (return risk) and interest rate risk. The following targets are to be applied to the allocation of plan assets. Target Category Allocation Equity securities 30 % Fixed income securities 62 % Other 8 % Total 100 % The Company expects to contribute $0 to the Defined Benefit Pension Plan during fiscal 2024. Short-Term Investments Short-term investments, which is a short-term investment fund, and is considered cash and cash equivalents, is classified within Level 2 of the valuation hierarchy due to the lack of an active market for trading. Common and Collective Trusts Common collective trust funds are stated at fair value as determined by the issuer of the common collective trust funds based on the net asset value (“NAV”) of the underlying investments in accordance with ASC 820. There are generally no restrictions on redemptions from these funds and no unfunded commitments to invest. In accordance with ASC subtopic 820-10, certain investments that were measured at NAV per share (or its equivalent) have not been classified in the fair value hierarchy. The underlying investments mainly consist of equity and fixed income securities funds that are valued based on the daily closing price as reported by the fund. The proceeding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement as of March 4, 2023. The following table sets forth by level within the fair value hierarchy a summary of the plan’s investments measured at fair value on a recurring basis as of March 4, 2023 and February 26, 2022: Fair Value Measurements as of March 4, 2023 Quoted Prices in Active Markets Significant Significant for Identical Observable Unobservable Assets (Level 1) Inputs (Level 2) Inputs (Level 3) Total Equity Securities International equity $ — $ — $ — $ 13,901 Large Cap — — — 18,556 Small-Mid Cap — — — 3,309 Fixed Income Aon High Yield Plus Bond — — — 72 Aon Multi-Asset Credit — — — 4,775 Long-Term Credit Bond Index — — — 41,360 Long-Term U.S. Government Bonds — — — 1,588 20+ Year Treasury STRIPS — — — 12,821 Intermediate Fixed Income — — — 9,781 AGT High Yield Bond — — — — Other types of investments Aon Global Real Estate — — — 11 Aon Core Real Estate Fund — — — 13,479 Short-Term Investments — 1,111 — 1,111 Total $ — $ 1,111 $ — $ 120,764 Fair Value Measurements as of February 26, 2022 Quoted Prices in Active Markets Significant Significant for Identical Observable Unobservable Assets (Level 1) Inputs (Level 2) Inputs (Level 3) Total Equity Securities International equity $ — $ — $ — $ 17,783 Large Cap — — — 23,027 Small-Mid Cap — — — 4,213 Fixed Income Aon High Yield Plus Bond — — — 75 Aon Multi-Asset Credit — — — 7,386 Long-Term Credit Bond Index — — — 47,976 Long-Term U.S. Government Bonds — — — 19,763 20+ Year Treasury STRIPS — — — 483 Intermediate Fixed Income — — — 8,554 AGT High Yield Bond — — — — Other types of investments Aon Global Real Estate — — — 13 Aon Core Real Estate Fund — — — 18,720 Short-Term Investments — 1,532 — 1,532 Total $ — $ 1,532 $ — $ 149,525 Following are the future benefit payments expected to be paid for the Defined Benefit Pension Plan during the years indicated: Defined Benefit Fiscal Year Pension Plan 2024 $ 9,497 2025 9,379 2026 9,373 2027 9,410 2028 9,252 2029 - 2033 44,769 Total $ 91,680 |
Multiemployer Plans that Provid
Multiemployer Plans that Provide Pension Benefits | 12 Months Ended |
Mar. 04, 2023 | |
Multiemployer Plans that Provide Pension Benefits | |
Multiemployer Plans that Provide Pension Benefits | 20. Multiemployer Plans that Provide Pension Benefits The Company contributes to a number of multiemployer defined benefit pension plans under the terms of collective-bargaining agreements that cover certain of its union-represented employees. The risks of participating in these multiemployer plans are different from single-employer plans. Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. Additionally, if the Company chooses to stop participating in some of its multiemployer plans, the Company may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability. The Company’s participation in these plans for the annual period ended March 4, 2023 is outlined in the table below. The “EIN/Pension Plan Number” column provides the Employer Identification Number (EIN) and the three-digit plan number, if applicable. The most recent Pension Protection Act zone status available for fiscal 2023 and fiscal 2022 is for the plan year-ends as indicated below. The zone status is based on information that the Company received from the plan and is certified by the plan’s actuary. Among other factors, plans in the red zone are generally less than 65% funded, plans in the yellow zone are less than 80% funded, and plans in the green zone are at least 80% funded. The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented. In addition to regular plan contributions, the Company may be subject to a surcharge if the plan is in the red zone. The “Surcharge Imposed” column indicates whether a surcharge has been imposed on contributions to the plan. The last two columns list the expiration date(s) of the collective-bargaining agreement(s) to which the plans are subject and any minimum funding requirements. There have been no significant changes that affect the comparability of total employer contributions of fiscal years 2023, 2022 and 2021. Expiration FIP/ RP Date of Pension Protection Status Collective- Minimum EIN/Pension Act Zone Status Pending/ Contributions of the Company Surcharge Bargaining Funding Pension Plan Number 2023 2022 Implemented 2023 2022 2021 Imposed Agreement Requirements 1199 SEIU Health Care Employees Pension Fund 13-3604862-001 Green— Green— No $ 7,493 $ 9,242 $ 9,613 No 4/18/2025 Contribution rate of 11.3% of gross wages per associate beginning 10/01/2021. Contribution rate of 12.6% of gross wages per associate beginning 09/30/2018. Southern California United Food and Commercial Workers Unions and Drug Employers Pension Fund 51-6029925-001 Green— Red— No 8,131 8,989 8,239 No 7/20/2024 Beginning 01/01/2021, contributions of $1.844 per hour worked for pharmacists and $0.836 per hour worked for non-pharmacists. From 01/01/2020 through 12/31/2020 contributions of $1.758 per hour worked for pharmacists and $0.797 per hour worked for non-pharmacists. UFCW Pharmacists, Clerks and Drug Employers Pension Trust 94-2518312-001 Green— Green— No 2,605 3,224 2,319 No 7/13/2022 Effective 01/01/2020, contribution rate of United Food and Commercial Workers Union-Employer Pension Fund 34-6665155-001 Red— Red— Implemented 954 802 809 No 7/07/2024 Effective 02/06/2022, contribution rate of $2.57 per hour worked. United Food and Commercial Workers Union Local 880—Mercantile Employers Joint Pension Fund 51-6031766-001 Green— Green— No 434 370 399 No 7/07/2024 Effective 10/01/2022 contribution rate of $2.33 per hour worked. Other Funds 2,046 1,887 1,573 $ 21,663 $ 24,514 $ 22,952 The Company was listed in these plans’ Forms 5500 as providing more than 5% of the total contributions for the following plans and plan years: Year Contributions to Plan Exceeded More Than 5 % of Total Contributions (as of Pension Fund the Plan’s Year-End) UFCW Pharmacists, Clerks and Drug Employers Pension Trust 12/31/2021 and 12/31/2020 Southern California United Food and Commercial Workers Unions and Drug Employers Pension Fund 12/31/2021 and 12/31/2020 United Food & Commercial Workers Union - Employer Pension Fund 9/30/2021 and 9/30/2020 United Food & Commercial Workers Union Local 880—Mercantile Employers Joint Pension Fund 9/30/2021 and 9/30/2020 At the date the Company’s financial statements were issued, certain Forms 5500 were not available. During fiscal 2023, 2022 and 2021, the Company did not withdraw from any plans or incur any additional withdrawal liabilities. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Mar. 04, 2023 | |
Segment Reporting | |
Segment Reporting | 21. Segment Reporting The Company has two reportable segments, Retail Pharmacy Segment and Pharmacy Services Segment. 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 PBM services including plan design and administration, formulary management and claims processing. Additionally, the Pharmacy Services Segment offers specialty and mail order services, and drug benefits to eligible beneficiaries under the federal government’s Medicare Part D program. The Company’s chief operating decision makers are its Chief Executive Officer, Chief Financial Officer, and several other members of the Executive Leadership Team (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 is balance sheet information for the Company’s reportable segments: Retail Pharmacy Pharmacy Services Eliminations (1) Consolidated March 4, 2023: Total Assets $ 5,487,845 $ 2,049,107 $ (9,590) $ 7,527,362 Goodwill 43,492 464,444 — 507,936 February 26, 2022: Total Assets $ 6,068,594 $ 2,482,232 $ (21,823) $ 8,529,003 Goodwill 43,492 835,644 — 879,136 (1) As of March 4, 2023 and February 26, 2022, intersegment eliminations include intersegment accounts receivable of $9,590 and $21,823 , respectively, that represent 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. The following table is a reconciliation of the Company’s business segments to the consolidated financial statements for the fiscal years ended March 4, 2023, February 26, 2022 and February 27, 2021: Retail Pharmacy Intersegment Pharmacy Services Eliminations (1) Consolidated March 4, 2023: Revenues $ 17,785,067 $ 6,522,299 $ (215,467) $ 24,091,899 Gross Profit 4,394,850 409,090 — 4,803,940 Adjusted EBITDA (2) 288,077 141,103 — 429,180 Depreciation and amortization 229,380 47,203 — 276,583 LIFO charge 53,028 — — 53,028 Stock-based compensation expense 10,604 933 — 11,537 Additions to property and equipment and intangible assets 226,563 21,122 — 247,685 February 26, 2022: Revenues $ 17,494,816 $ 7,323,125 $ (249,686) $ 24,568,255 Gross Profit 4,722,075 384,420 — 5,106,495 Adjusted EBITDA (2) 392,633 113,272 — 505,905 Depreciation and amortization 244,122 51,564 — 295,686 LIFO charge 1,314 — — 1,314 Stock-based compensation expense 12,282 768 — 13,050 Additions to property and equipment and intangible assets 202,386 18,327 — 220,713 February 27, 2021: — — Revenues $ 16,365,260 $ 7,970,137 $ (292,157) $ 24,043,240 Gross Profit 4,255,791 448,531 — 4,704,322 Adjusted EBITDA (2) 279,896 157,769 — 437,665 Depreciation and amortization 269,985 57,139 — 327,124 LIFO credit (51,692) — — (51,692) Stock-based compensation expense 11,594 1,409 — 13,003 Restructuring-related costs–SKU optimization charges 20,939 — — 20,939 Additions to property and equipment and intangible assets 204,290 20,651 — 224,941 (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 the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Continuing Operations—Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share and Other Non-GAAP Measures” for additional details. The following is a reconciliation of net loss to Adjusted EBITDA for fiscal 2023, 2022 and 2021: March 4, February 26, February 27, 2023 2022 2021 (53 weeks) (52 weeks) (52 weeks) Net loss from continuing operations $ (719,188) $ (522,372) $ (99,381) Interest expense 224,399 191,601 201,388 Income tax benefit (6,467) (3,780) (20,157) Depreciation and amortization 276,583 295,686 327,124 LIFO charge (credit) 53,028 1,314 (51,692) Facility exit and impairment charges 180,637 164,084 57,714 Goodwill and intangible asset impairment charges 371,200 229,000 29,852 (Gain) loss on debt modifications and retirements, net (80,142) 3,235 (5,274) Merger and Acquisition-related costs — 12,797 10,549 Stock-based compensation expense 11,537 13,050 13,003 Restructuring-related costs 108,626 35,121 84,552 Inventory write-downs related to store closings 14,270 5,298 3,709 Litigation and other contractual settlements 53,882 50,212 — (Gain) loss on sale of assets, net (68,586) 5,505 (69,300) Loss (gain) on Bartell acquisition — 5,346 (47,705) Change in estimate related to manufacturer rebate receivables — 15,068 — Other 9,401 4,740 3,283 Adjusted EBITDA from continuing operations $ 429,180 $ 505,905 $ 437,665 |
Commitments, Contingencies and
Commitments, Contingencies and Guarantees | 12 Months Ended |
Mar. 04, 2023 | |
Commitments, Contingencies and Guarantees | |
Commitments, Contingencies and Guarantees | 22. Commitments, Contingencies and Guarantees Legal Matters and Regulatory Proceedings The Company is regularly involved in a variety of legal matters including arbitration, litigation (and related settlement discussions), audits by counter parties under our contracts, and other claims, and is subject to regulatory proceedings including audits, inspections, inquiries, investigations, and similar actions by health care, insurance, pharmacy, tax and other governmental authorities arising in the ordinary course of its business, including, without limitation, the matters described below. Substantial damages are sought from the Company in virtually all of these matters, even if a specific amount is not specified. The Company records accruals for outstanding legal matters and applicable regulatory proceedings when it believes it is probable that a loss has been incurred, and the amount can be reasonably estimated. The Company evaluates on a quarterly basis, developments in legal matters and regulatory proceedings that could affect the amount of any existing accrual or that warrant an accrual. If a loss contingency is not both probable and estimable, the Company typically does not establish an accrued liability. Unless specifically noted otherwise, with respect to the litigation and other legal proceedings described below, the Company is unable to estimate the amount or range of reasonably possible loss due to the inherent difficulty of predicting the outcome of and uncertainties at the current stage of such litigation and legal proceedings. None of the Company’s accruals for outstanding legal matters or regulatory proceedings are currently material, individually or in the aggregate, to the Company’s consolidated financial position. However, during the course of any proceeding, developments may result in the creation or an increase of an accrual that could be material. Additionally, unfavorable or unexpected outcomes in outstanding legal matters or regulatory proceedings could exceed any accrual and impact the Company’s financial position. Further, even if the Company is successful in its legal proceedings, the Company may incur significant costs and expenses defending itself or others that it is required to indemnify, and such costs and expenses may not be subject to or may exceed reimbursement pursuant to any applicable insurance. Such proceedings may also require significant attention of management. The Company’s contingencies are subject to significant uncertainties, many of which are beyond the Company’s control, including, among other factors: (i) the stage of any proceeding and delays in scheduling; (ii) whether class or collective action status is sought and the likelihood of a class being certified; (iii) the outcome of pending or potential appeals, motions and settlement discussions; (iv) the range and magnitude 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 or advanced; (vii) whether there are significant factual issues to be resolved including findings made by juries; (viii) the exercise of discretion in enforcement actions including in the case of certain government agency investigations, whether a qui tam lawsuit (“whistleblower” action) has been filed and whether the government agency makes a decision to intervene in the lawsuit following investigation; (ix) changes in priorities following any change in political administration at the state or federal level; and/or (x) the impact, results and settlements of similar claims made against competitors and other industry participants. Additionally, the Company may determine that a settlement is in its best interest, even if it believes that it has meritorious defenses and has not previously accrued for the matter. Employment Litigation. The Company is currently a defendant in several lawsuits filed in courts in California that contain allegations regarding violations of the California Business and Professions Code, various California employment laws and regulations, industry wage orders, wage-and-hour laws, rules and regulations pertaining primarily to failure to pay overtime, failure to pay premiums for missed meals and rest periods, failure to provide accurate wage statements, and failure to reimburse business expenses (collectively, the “California Cases”). Some of the California Cases purport or may be determined to be class actions or representative actions under the California Private Attorneys General Act and seek substantial damages and penalties. In August 2022, the Company agreed to settle a putative class action regarding reimbursement for cell phone and mileage expenses for shift supervisors and managers/assistant managers for $1.29 million, and a putative wage and hour class action brought on behalf of drivers and other ice cream plant associates for $0.8 million. These settlements are subject to court approval. The Company has also reached an agreement in principle to resolve a putative employment collective and class action filed in federal court in New York, which raises similar allegations in addition to others about the payment frequency for certain employees (the “New York Case”). The Company has aggressively defended itself and challenged the merits of these employment lawsuits and, where applicable, allegations that the lawsuits should be certified as class or representative actions. Usual and Customary Litigation. The Company is named as a defendant in a number of lawsuits, including the cases below, that allege that the Company’s retail stores overcharged for prescription drugs by not submitting the price available to members of the Rite Aid’s Rx Savings Program as the pharmacy’s usual and customary price, and related theories. The Company is defending itself against these claims. The Company is a defendant in a putative consumer class action lawsuit in the United States District Court for the Southern District of California captioned Byron Stafford v. Rite Aid Corp Robert Josten v. Rite Aid Corp On February 6, 2019, Humana, Inc., filed a claim pursuant to a binding arbitration provision of the parties’ agreement alleging that the Company improperly submitted various usual and customary overcharges by failing to report its Rx Savings Program prices as its usual and customary prices to Humana. An arbitration hearing was held in this matter in November 2021. On April 22, 2022, the arbitrator issued an Opinion and Final Award against the Company for breach of contract awarding Humana $122.6 million, which includes $40.7 million in prejudgment interest (the “Arbitration Award”). The Company continues to believe that the Arbitration Award contains a number of significant factual and legal errors. On June 20, 2022, the Company both opposed Humana’s effort to confirm the Arbitration Award and petitioned the United States District Court for Western District of Kentucky for vacatur of the Arbitration Award, as is its right under the Federal Arbitration Act (“FAA”). As such, the Company has determined that it is not probable that a loss has occurred. The FAA, as interpreted and applied by federal courts, permits vacatur when, among other things, an arbitrator’s decision: (1) is irreconcilable with the terms of a contract between the parties; (2) rests on a plain legal error that manifests disregard for the law; or (3) incorporates a refusal to consider pertinent, material evidence. Similarly, the FAA, as interpreted and applied by federal courts, permits modification of an arbitrator’s decision to correct an evident material miscalculation of figures. Although the Company cannot make any assurances of success in its efforts, it is the Company’s view that the errors in the Arbitration Award support both vacatur and modification under the FAA, the effect of either of which could be to set aside the Arbitration Award or reduce or eliminate the damages provided for in the Arbitration Award. Argument on Humana’s petition to confirm the Arbitration Award and Rite Aid’s motion for vacatur of the Arbitration Award is scheduled for May 10, 2023. Depending on the court’s determination, it is possible that one or both parties may appeal the decision, or seek other remedies. The Company is a defendant in two consolidated lawsuits pending in the United States District Court for the District of Minnesota filed in 2020 by various Blue Cross/Blue Shield plans that operate in eight different states (North Carolina, North Dakota, Alabama, Utah, Minnesota, Oregon, Washington and New Jersey) alleging that the Company improperly submitted various usual and customary overcharges to several Pharmacy Benefit Managers, all but one of which are not owned by plaintiffs, with which Rite Aid and the insurers had independent contracts. The Company is also defending a lawsuit filed in Delaware state court in 2019 by multiple Centene entities alleging that the Company overcharged for prescriptions by improperly reporting usual and customary prices. The Delaware lawsuit is scheduled to start trial in May 2023. The Company is defending a similar lawsuit filed in 2022 by WellCare in Florida state court. Drug Utilization Review and Code 1 Litigation In June 2012, qui tam On September 5, 2018, the court issued an order denying the motion to dismiss. Substantial damages are sought from the Company in this matter. No trial date has been set and as discovery continues, the parties have participated in and are expected to continue to participate in a mediation process, although there is no expected date or terms for any potential resolution of this matter. Controlled Substances Litigation, Audits and Investigations The Company, along with various other defendants, is named in multiple opioid-related lawsuits filed by counties, cities, municipalities, Native American tribes, hospitals, third-party payers, and others across the United States. In December 2017, the U.S. Judicial Panel on Multidistrict Litigation (“JPML”) consolidated and transferred more than a thousand federal opioid-related lawsuits that name the Company as a defendant to the multi-district litigation (“MDL”) pending in the United States District Court for the Northern District of Ohio under In re National Prescription Opiate Litigation The Company also has received warrants, subpoenas, CIDs, and other requests for documents and information from, and is being investigated by, the federal and state governments regarding opioids and other controlled substances. The Company has been cooperating with and responding to these investigatory inquiries. As previously disclosed, on December 13, 2022, a qui tam complaint filed by three former Rite Aid pharmacy personnel (Andrew White, Mark Rosenberg, and Ann Wegelin) (collectively, “ qui tam federal District Court for the Northern District of Ohio in an order that also directed the United States Department of Justice to file within 90 days a complaint intervening or partially intervening in the Second Amended Complaint (the “Complaint”). On February 23, 2023, the following states, which were listed in the Complaint, declined to intervene: Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Louisiana, Maryland, Massachusetts, Michigan, Nevada, New Hampshire, New Jersey, New York, North Carolina, Oklahoma, Rhode Island, Tennessee, Texas, Vermont, Virginia, Washington and the District of Columbia. On February 23, 2023, California stated its intention to make an intervention decision on or before May 2, 2023. On March 13, 2023, the United States Department of Justice filed its complaint in the federal District Court for the Northern District of Ohio against Rite Aid (“DOJ’s Complaint”) alleging violations of the federal False Claims Act and Controlled Substances Act related to the dispensing of controlled substances, primarily opioids. DOJ’s Complaint seeks damages under the False Claims Act, civil penalties under the Controlled Substances Act, damages in connection with alleged payment by mistake (on behalf of Federal Healthcare Programs), and damages in connection with alleged unjust enrichment. In April 2019, the Company initiated a coverage action styled Rite Aid Corporation et al. v. ACE American Ins. Co. et al Miscellaneous Litigation and Investigations. Following the Company’s response to a 2020 CID from the Federal Trade Commission (“FTC”) with respect to consumer protection laws, the Company is seeking to negotiate a resolution with the FTC. The allegations relate to certain business practices that the Company has not engaged in for nearly three years, and the Company currently believes that any resolution will not likely require a monetary payment. Discussions are ongoing with the FTC and the timing and substance of any settlement cannot be determined at this time. During the course of the Company’s discussions with the FTC in connection with its response to that CID, the FTC also requested certain information from the Company related to compliance with the Company’s 2010 FTC Consent Order. The Company cooperated with the FTC's request, however, the FTC Staff informed the Company that it would recommend that the FTC file a complaint against the Company for violation of the Consent Order, including a monetary payment and other relief, unless the Company informs FTC Staff that it is willing to discuss a resolution. The Company is evaluating the matter, including potential resolution, although no assurance can be given that the matter will be resolved to the parties’ mutual satisfaction, or that the resolution will not include a monetary payment, and that the payment will not be material. It is also possible that discussions relating to the 2010 FTC Consent Order could affect the resolution of the 2020 CID. The Company has received CIDs from the Department of Justice related to the Medicare Part D plan sponsored by a subsidiary of the Company. The Company is also defending a lawsuit asserting numerous claims based on allegations surrounding the Company’s use of a certain font including in the Company’s rebranded logo. The Company is defending a putative class action it has removed to federal court in California regarding alleged privacy breaches. The Company is defending a putative shareholder class action currently captioned Page v. Rite Aid Corporation et al. . The matter names Rite Aid Corporation and certain executives individually as defendants and raises claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 related to alleged misstatements and omissions concerning the growth of Holland v. Rite Aid Corporation et al. . The matter names Rite Aid Corporation and certain former and current executives individually as defendants and raises claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 related to the DOJ’s Complaint and alleged misstatements and omissions concerning the Company’s |
Supplementary Cash Flow Data
Supplementary Cash Flow Data | 12 Months Ended |
Mar. 04, 2023 | |
Supplementary Cash Flow Data | |
Supplementary Cash Flow Data | 23. Supplementary Cash Flow Data March 4, February 26, February 27, 2023 2022 2021 Cash paid for interest (a) $ 212,355 $ 180,583 $ 181,634 Cash (refunds) payments for income taxes, net (a) $ (5,309) $ 6,233 $ 7,535 Equipment financed under capital leases $ 3,334 $ 1,698 $ 1,849 Accrued capital expenditures $ 18,711 $ 45,465 $ 19,904 Gross borrowings from revolver (a) $ 3,510,000 $ 5,131,000 $ 7,912,000 Gross repayments to revolver (a) $ 3,019,000 $ 5,272,000 $ 7,712,000 (a)–Amounts are presented on a total company basis. Significant components of cash used in Other Liabilities of $111,021 for the fifty-three week period ended March 4, 2023 includes cash used from changes in accrued wages, benefits and other personnel costs of $100,340 and provided from changes in accrued store expenses of $11,426. |
Financial Instruments
Financial Instruments | 12 Months Ended |
Mar. 04, 2023 | |
Financial Instruments | |
Financial Instruments | 24. Financial Instruments The carrying amounts and fair values of financial instruments as of March 4, 2023 and February 26, 2022 are listed as follows: 2023 2022 Carrying Fair Carrying Fair Amount Value Amount Value Variable rate indebtedness $ 1,581,793 $ 1,600,000 $ 1,038,646 $ 1,059,000 Fixed rate indebtedness $ 1,343,465 $ 768,328 $ 1,694,340 $ 1,602,122 Financial instruments other than long-term indebtedness include cash and cash equivalents, accounts receivable and accounts payable. These instruments are recorded at book value, which we believe approximate their fair values due to their short-term nature. In addition, as of March 4, 2023, the Company has $7,457 of investments carried at amortized cost as these investments are being held to maturity, which are included as a component of prepaid expenses and other current assets. As of February 26, 2022, the Company has $7,406 of investments carried at amortized cost as these investments are being held to maturity, which are included as a component of other assets. The following methods and assumptions were used in estimating fair value disclosures for financial instruments: Borrowings under credit facilities: The carrying amounts for SOFR-based and LIBOR-based borrowings under the credit facilities are estimated based on the quoted market price of the financial instruments. The LIBOR-based borrowings under the credit facilities transitioned to Term SOFR on December 1, 2022. Long-term indebtedness: The fair values of long-term indebtedness are estimated based on the quoted market prices of the financial instruments. If quoted market prices were not available, the Company estimated the fair value based on the quoted market price of a financial instrument with similar characteristics. |
Revision of Previously Issued C
Revision of Previously Issued Consolidated Financial Statements | 12 Months Ended |
Mar. 04, 2023 | |
Revision of Previously Issued Consolidated Financial Statements | |
Revision of Previously Issued Consolidated Financial Statements | 25. Revision of Previously Issued Consolidated Financial Statements Subsequent to the issuance of the Company’s consolidated financial statements as of and for the fiscal year ended March 4, 2023, management evaluated the materiality of a misstatement in accordance with the U.S. SEC Staff’s Accounting Bulletin Nos. 99, Materiality Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements (“SAB 108”). The misstatement pertains to the Company’s historical accounting for closed store liabilities. Based on their evaluation, management concluded the misstatement is not material to the Company’s previously issued consolidated financial statements as of and for each of the three fiscal years ended March 4, 2023 and each of the interim and year-to-date periods then ended, (collectively the “previously issued financial statements”). However, as prescribed by SAB 108, in conjunction with the re-issuance of the Company’s previously issued financial statements, the misstatement has been corrected as an immaterial revision of the accompanying consolidated financial statements as of and for each of the three fiscal years ended March 4, 2023 and the related notes hereto. A summary of the nature of the misstatement and its impact on the Company’s previously issued financial statements is summarized as follows. The Company adopted ASC 842, Leases Exit or Disposal Cost Obligations , (“ASC 420”). Moreover, due to the Company’s practical expedients election, variable costs, consisting primarily of real estate taxes and common area maintenance expenses, associated with store closures that occur subsequent to the adoption of ASC 842 may no longer be accrued under ASC 420, but rather recognized as expense as they are incurred. Due to an oversight in their evaluation of an amendment to ASC 420 as a result of the adoption of ASC 842, management determined that the Company incorrectly continued to accrue estimated costs associated with store closures as a liability subsequent to the date of adoption, rather than recognize the costs as they are incurred. The impact of the misstatement resulted in an overstatement of these costs, which have historically been classified within Facility exit and impairment charges Accrued salaries, wages and other current liabilities portion) and Other noncurrent liabilities A summary of revisions to the Company’s previously reported financial statements is presented below. As of and for the fiscal year ended March 4, 2023 Previously As (In 000’s, except per share amounts ) Reported Adjustment Revised Balance Sheet: Accrued salaries, wages, and other current liabilities $ 724,529 $ (14,638) $ 709,891 Total current liabilities 2,727,875 (14,638) 2,713,237 Other noncurrent liabilities 130,482 (32,905) 97,577 Total liabilities 8,169,138 (47,543) 8,121,595 Accumulated deficit (6,601,517) (47,543) (6,553,974) Total stockholders’ (deficit) equity (641,776) (47,543) (594,233) Statements of Operations and Comprehensive Loss: Facility exit and impairment charges $ 211,385 $ (30,748) $ 180,637 Loss from continuing operations before income taxes (756,403) 30,748 (725,655) Net loss from continuing operations (749,936) 30,748 (719,188) Net loss (749,936) 30,748 (719,188) Comprehensive loss (749,351) 30,748 (718,603) Basic and diluted loss per share from continuing operations (13.71) 0.56 (13.15) Net basic and diluted loss per share (13.71) 0.56 (13.15) Statement of Cash Flows: Net loss $ (749,936) $ 30,748 $ (719,188) Net loss from continuing operations (749,936) 30,748 (719,188) Facility exit and impairment charges 211,385 (30,748) 180,637 As of and for the fiscal year ended February 26, 2022 Previously As (In 000’s, except per share amounts) Reported Adjustment Revised Balance Sheet: Accrued salaries, wages, and other current liabilities $ 780,632 $ (4,073) $ 776,559 Total current liabilities 2,933,088 (4,073) 2,929,015 Other noncurrent liabilities 151,976 (12,722) 139,254 Total liabilities 8,429,970 (16,795) 8,413,175 Accumulated deficit (5,851,581) 16,795 (5,834,786) Total stockholders’ (deficit) equity 99,033 16,795 115,828 Statements of Operations and Comprehensive Loss: Facility exit and impairment charges $ 180,190 $ (16,106) $ 164,084 Loss from continuing operations before income taxes (542,258) 16,106 (526,152) Net loss from continuing operations (538,478) 16,106 (522,372) Net loss (538,478) 16,106 (522,372) Comprehensive loss (529,861) 16,106 (513,755) Basic and diluted loss per share from continuing operations (9.96) 0.30 (9.66) Net basic and diluted loss per share (9.96) 0.30 (9.66) Statement of Cash Flows: Net loss $ (538,478) $ 16,106 $ (522,372) Net loss from continuing operations (538,478) 16,106 (522,372) Facility exit and impairment charges 180,190 (16,106) 164,084 As of and for the fiscal year ended February 27, 2021 Previously As (In 000’s, except per share amounts) Reported Adjustment Revised Balance Sheet: Accrued salaries, wages, and other current liabilities $ 642,364 $ 854 $ 643,218 Total current liabilities 2,602,946 854 2,603,800 Other noncurrent liabilities 208,213 (1,543) 206,670 Total liabilities 8,720,250 (689) 8,719,561 Accumulated deficit (5,313,103) 689 (5,312,414) Total stockholders’ (deficit) equity 615,154 689 615,843 Statements of Operations and Comprehensive Loss: Facility exit and impairment charges $ 58,403 $ (689) $ 57,714 Loss from continuing operations before income taxes (120,227) 689 (119,538) Net loss from continuing operations (100,070) 689 (99,381) Net loss (90,909) 689 (90,220) Comprehensive loss (66,065) 689 (65,376) Basic and diluted loss per share from continuing operations (1.87) 0.01 (1.86) Net basic and diluted loss per share (1.69) 0.01 (1.68) Statement of Cash Flows: Net loss $ (90,909) $ 689 $ (90,220) Net loss from continuing operations (100,070) 689 (99,381) Facility exit and impairment charges 58,403 (689) 57,714 |
SCHEDULE II-VALUATION AND QUALI
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Mar. 04, 2023 | |
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | |
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS For the Years Ended March 4, 2023, February 26, 2022 and February 27, 2021 (dollars in thousands) Additions Balance at Charged to Balance at Allowances deducted from accounts receivable for estimated Beginning Costs and End of uncollectible amounts: of Period Expenses Deductions Period Year ended March 4, 2023 $ 46,865 $ 63,373 $ 48,105 $ 62,133 Year ended February 26, 2022 $ 24,854 $ 106,113 $ 84,102 $ 46,865 Year ended February 27, 2021 $ 12,849 $ 43,855 $ 31,850 $ 24,854 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Mar. 04, 2023 | |
Summary of Significant Accounting Policies | |
Comparability | Pursuant to the terms and subject to the conditions set forth in the Amended and Restated Asset Purchase Agreement (the "Amended and Restated Asset Purchase Agreement"), dated as of September 18, 2017, by and among Rite Aid, WBA and Walgreen Co., an Illinois corporation and 100% owned subsidiary of WBA ("Buyer"), Buyer agreed to purchase from Rite Aid 1,932 stores (the "Acquired Stores"), three distribution centers, related inventory and other specified assets and liabilities related thereto for a purchase price of approximately $4,375,000, on a cash free, debt free basis (the "Asset Sale" or the "Sale"). As of March 4, 2023, the Company has sold all 1,932 Acquired Stores, three distribution centers and related assets to WBA in exchange for proceeds of $4,375,000, which were used to repay outstanding debt. Based on its magnitude and because the Company has exited certain markets, the Sale represented a significant strategic shift that has a material effect on the Company’s operations and financial results. Accordingly, the Company has applied discontinued operations treatment for the Asset Sale as required by Accounting Standards Codification 210-05—Discontinued Operations (ASC 205-20). See additional information as provided in Note 4 Asset Sale to WBA. |
Fiscal Year | Fiscal Year The Company’s fiscal year ends on the Saturday closest to February 29 or March 1. The fiscal year ended March 4, 2023 included 53 weeks. The fiscal years ended February 26, 2022 and February 27, 2021 included 52 weeks. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and all of its 100% owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand and highly liquid investments, which are readily convertible to known amounts of cash and which have original maturities of three months or less when purchased. |
Allowance for Uncollectible Receivables | Allowance for Uncollectible Receivables In our Retail Pharmacy Segment, substantially all prescription sales are made to customers who are covered by third-party payors, such as insurance companies, government agencies and employers. The Company recognizes receivables that represent the amount owed to the Company for sales made to customers or employees of those payors that have not yet been paid. In our Pharmacy Services Segment, receivables are recorded for claims for prescriptions issued for customers, customer administrative fees, amounts due from the Centers for Medicare and Medicaid Services (“CMS”) for Medicare Part D, and amounts due from certain drug manufacturers or rebate aggregators for rebates. The Company maintains a reserve for the expected credit losses associated with these receivables. This reserve is calculated based upon historical collection activity adjusted for current conditions. |
Inventories | Inventories Inventories are stated at the lower of cost or market. Inventory balances include the capitalization of certain costs related to purchasing, freight and handling costs associated with placing inventory in its location and condition for sale. The Company uses the last-in, first-out (“LIFO”) cost flow assumption for substantially all of its inventories. The Company calculates its inflation index based on internal product mix and utilizes the link-chain LIFO method. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Asset impairments are recorded when the carrying value of assets are not recoverable. For purposes of recognizing and measuring impairment of long-lived assets, the Company categorizes assets of operating stores as “Assets to Be Held and Used” and “Assets to Be Disposed Of.” The Company evaluates assets at the store level because this is the lowest level of identifiable cash flows ascertainable to evaluate impairment. Assets being tested for recoverability at the store level include tangible long-lived assets, right-of-use assets for leased stores, and identifiable, finite-lived intangibles that arose in purchase business combinations. Corporate assets to be held and used are evaluated for impairment based on excess cash flows from the stores that support those assets. The Company reviews long-lived assets to be held and used for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the undiscounted expected future cash flows is less than the carrying amount of the asset, the Company recognizes an impairment loss. Impairment losses are measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risks associated with the recovery of the asset. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are stated at cost, net of accumulated depreciation and amortization. The Company provides for depreciation using the straight-line method over the following useful lives: buildings—30 to 45 years; equipment—3 to 15 years. Leasehold improvements are amortized on a straight-line basis over the shorter of the estimated useful life of the asset or the term of the lease. When determining the amortization period of a leasehold improvement, the Company considers whether discretionary exercise of a lease renewal option is reasonably assured. If it is determined that the exercise of such option is reasonably assured, the Company will amortize the leasehold improvement asset over the minimum lease term, plus the option period. This determination depends on the remaining life of the minimum lease term and any economic penalties that would be incurred if the lease option is not exercised. Capitalized lease assets are recorded at the lesser of the present value of minimum lease payments or fair market value and amortized over the estimated useful life of the related property or term of the lease. The Company capitalizes direct internal and external development costs associated with internal-use software. Neither preliminary evaluation costs nor costs associated with the software after implementation are capitalized. For fiscal years 2023, 2022 and 2021, the Company capitalized costs of approximately $5,099, $13,388 and $12,669, respectively. |
Goodwill | Goodwill The Company recognizes goodwill as the excess of the purchase price over the fair value of the assets acquired and liabilities assumed during business combinations. The Company accounts for goodwill under ASC Topic 350, “Intangibles—Goodwill and Other”, which does not permit amortization, but instead requires the Company to perform an annual impairment review, or more frequently if events or circumstances indicate that impairment may be more likely. See Note 14 for additional information on goodwill. |
Intangible Assets | Intangible Assets The Company has certain finite-lived intangible assets that are amortized over their useful lives. Prescription files acquired in business combinations are amortized over an estimated useful life of 10 years on an accelerated basis, which approximates the anticipated prescription file retention and related cash flows. Purchased prescription files acquired in other than business combinations are amortized over their estimated useful lives of five years on a straight-line basis. The value of finite-lived trade names are amortized over 10 years on a straight-line basis. The value of customer relationships, acquired in connection with the Company’s acquisition of Elixir, are amortized over a period between 10 and 20 years on a descending percentage method which matches the pattern of expected discounted cash flows. The Pharmacy Services Segment’s contract with CMS for Part D, which is required in order to act as a national provider of the Part D benefit, is amortized over 12 years on a straight line basis, of which four years remain. |
Indefinite lived assets | Indefinite lived assets The Company has a single indefinite-lived intangible asset consisting of a trade name. Intangible assets that are determined to have an indefinite life are not amortized, but are required to be evaluated at least annually for impairment. If the carrying value of an individual indefinite-lived intangible asset exceeds its fair value, such individual indefinite-lived intangible asset is impaired by the amount of the excess. |
Deferred Financing Costs | Deferred Financing Costs Costs incurred to issue debt are deferred and amortized as a component of interest expense over the terms of the related debt agreements. Amortization expense of deferred financing costs was $9,993, $10,927 and $11,201 for fiscal 2023, 2022 and 2021, respectively. |
Revenue Recognition | Revenue Recognition Retail Pharmacy Segment For front-end sales, the Retail Pharmacy Segment recognizes revenues upon the transfer of control of the goods to the customer. The Company satisfies its performance obligation at the point of sale for front-end transactions. The Retail Pharmacy Segment front-end revenue is measured based on the amount of fixed consideration that it expects to receive, net of an allowance for estimated future returns. Return activity is immaterial to revenues and results of operations in all periods presented. For pharmacy sales, the Retail Pharmacy Segment recognizes revenue upon the transfer of control of the goods to the customer. The Company satisfies its performance obligation, upon pickup by the customer, which is when the customer takes title to the product. Each prescription claim represents an individual arrangement with the customer and is a performance obligation, separate and distinct from other prescription claims. The Company's revenue is measured based on the amount of fixed consideration that we expect to receive, reduced by refunds owed to the third-party payor for pricing guarantees and performance against defined value-based service and performance metrics. The inputs to these estimates are not highly subjective or volatile. The effect of adjustments between estimated and actual amounts has not been material to the Company's results of operations or financial position. Prescriptions are generally not returnable. The Retail Pharmacy Segment offered a chain-wide loyalty card program titled wellness+. Individual customers were able to become members of the wellness+ program. Members participating in the wellness+ loyalty card program earned points on a calendar year basis for eligible front-end merchandise purchases and qualifying prescription purchases. The wellness+ program was terminated as of July 1, 2020, with benefits earned as of that date available to be used through the end of calendar 2020. Beginning in December 2020, the Company granted temporary extensions of benefits to certain previous members that were eligible for a discount as of the end of each previous six-month period such that those prior members were eligible to continue to receive that discount on purchases made through the subsequent six months with no additional purchase requirement. New and existing customers who were not already eligible for program benefits also had the opportunity to earn additional discounts on purchases made through each six-month period. A final extension was granted on December 31, 2021 through February 26, 2022 at which point all discounts were terminated. A new loyalty program, Rite Aid Rewards, was initiated on February 27, 2022. Customers that enroll in the new program earn points for each dollar spent on front of store purchases as well as for eligible pharmacy prescriptions. Points can then be converted into a “Rite Aid Rewards” coupon that can be tendered as payment in a future purchase. Each point is worth $0.002. Customers must accumulate 1,000 points and create an online account in order to convert earned points to a “Rite Aid Rewards” coupon. Unused/unconverted points expire after 90 days. Unredeemed “Rite Aid Rewards” coupons expire 30 days after conversion from points earned. Points earned pursuant to the Rite Aid Rewards program represent a performance obligation. The value of unredeemed Rite Aid Rewards points is deferred as a contract liability (included in other current liabilities). As members redeem points in the form of a Rite Aid Rewards coupon or when points or unredeemed Rite Aid Rewards coupons expire, the Retail Pharmacy Segment recognizes the redeemed/expired portion of the deferred contract liability into revenue. For the fifty-three week period ended March 4, 2023, the Company recognized additional contract deferrals of Pharmacy Services Segment The Pharmacy Services Segment sells prescription drugs indirectly through its retail pharmacy network and directly through its mail service dispensing pharmacy. The Pharmacy Services Segment recognizes revenue from prescription drugs sold by: (i) its mail service dispensing pharmacy and; (ii) under retail pharmacy network contracts where it is the principal at the contract prices negotiated with its clients, primarily employers, insurance companies, unions, government employee groups, health plans, Managed Medicaid plans, Medicare plans, and other sponsors of health benefit plans, and individuals throughout the United States. Revenues include: (i) the portion of the price the client pays directly to the Pharmacy Services Segment, net of any volume-related or other discounts paid back to the client (see “Drug Discounts” below); (ii) the price paid to the Pharmacy Services Segment by client plan members for mail order prescriptions (“Mail Co-Payments”); (iii) client plan member co-payments made directly to the retail pharmacy network and; (iv) administrative fees. Revenue is recognized when the Pharmacy Services Segment meets its performance obligations relative to each transaction type. The following revenue recognition policies have been established for the Pharmacy Services Segment: ● Revenues generated from prescription drugs sold by third-party pharmacies in the Pharmacy Services Segment’s retail pharmacy network and associated administrative fees are recognized at the Pharmacy Services Segment’s point-of-sale, which is when the claim is adjudicated by the Pharmacy Services Segment’s online claims processing system. At this point the Company has performed all of its performance obligations. ● Revenues generated from prescription drugs sold by the Pharmacy Services Segment’s mail service dispensing pharmacy are recognized when the prescription is shipped. At the time of shipment, the Pharmacy Services Segment has performed all of its performance obligations under its client contracts, as control of and title to the product has passed to the client plan members. The Pharmacy Services Segment does not experience a significant level of returns or reshipments. ● Revenues generated from administrative fees based on membership or claims volume are recognized monthly based on the terms within the individual contracts, either a monthly member-based fee, or a claims volume-based fee. In the majority of its contracts, the Pharmacy Services Segment is the principal because its client contracts give clients the right to obtain access to its pharmacy contracts under which the Pharmacy Services Segment directs its pharmacy network to provide the services (drug dispensing, consultation, etc.) and goods (prescription drugs) to the clients’ members at its negotiated pricing. The Pharmacy Services Segment’s obligations under its client contracts are separate and distinct from its obligations to the third-party pharmacies included in its retail pharmacy network contracts. In the majority of these contracts, the Pharmacy Services Segment is contractually required to pay the third-party pharmacies in its retail pharmacy network for products sold after payment is received from its clients. The Pharmacy Services Segment has control over these transactions until the prescription is transferred to the member and, thus, that it is acting as a principal. As such, the Pharmacy Services Segment records the total prescription price contracted with clients in revenues. Amounts paid to pharmacies and amounts charged to clients are exclusive of the applicable co-payment under Pharmacy Services Segment contracts. Retail pharmacy co-payments, which we instruct retail pharmacies to collect from members, are included in our revenues and our cost of revenues. For contracts under which the Pharmacy Services Segment acts as an agent or does not control the prescription drugs prior to transfer to the client, no revenue is recognized, except the administrative fee. Drug Discounts—The Pharmacy Services Segment deducts from its revenues that are generated from prescription drugs sold by third-party pharmacies any rebates, inclusive of discounts and fees, earned by its clients based on utilization levels and other factors as negotiated with the prescription drug manufacturers, rebate aggregators or suppliers. Rebates are paid to clients in accordance with the terms of client contracts. Medicare Part D—The Pharmacy Services Segment, through its EI subsidiary, participates in the federal government’s Medicare Part D program as a Medicare Part D Prescription Drug Plan (“PDP”). Please refer to Note 10, Medicare Part D. Disaggregation of Revenue The following tables disaggregate the Company’s revenue by major source in each segment for the fiscal year ended March 4, 2023: March 4, 2023 In thousands (53 Weeks) Retail Pharmacy Segment: Pharmacy sales $ 12,582,593 Front-end sales 5,078,820 Other revenue 123,654 Total Retail Pharmacy Segment 17,785,067 Pharmacy Services Segment 6,522,299 Intersegment elimination (215,467) Total revenue $ 24,091,899 See Note 21 for additional information about the revenues of the Company’s business segments. |
Cost of Revenues | Cost of Revenues Retail Pharmacy Segment Cost of revenues for the Retail Pharmacy Segment includes the following: the cost of inventory sold during the period, including related vendor rebates and allowances, LIFO credit or charges, costs incurred to return merchandise to vendors, inventory shrink, purchasing costs and warehousing costs, which include inbound freight costs from the vendor, distribution payroll and benefit costs, distribution center occupancy costs and depreciation expense and delivery expenses to the stores. Pharmacy Services Segment The Pharmacy Services Segment’s cost of revenues includes the cost of prescription drugs sold during the reporting period indirectly through its retail pharmacy network and directly through its mail service dispensing pharmacy. The cost of prescription drugs sold component of cost of revenues includes: (i) the cost of the prescription drugs purchased from manufacturers or distributors and shipped to members in clients’ benefit plans from the Pharmacy Services Segment’s mail service dispensing pharmacy, net of any volume-related or other discounts (see the section entitled “Vendor Rebates and Allowances and Purchase Discounts” below) and (ii) the cost of prescription drugs sold through the Pharmacy Services Segment’s retail pharmacy network under contracts where it is the principal, net of any volume-related or other discounts. See Note 21 for additional information about the cost of revenues of the Company’s business segments. Vendor Rebates and Allowances and Purchase Discounts Retail Pharmacy Segment The Retail Pharmacy Segment’s rebates and allowances received from vendors relate to either buying and merchandising or promoting the product. Buying and merchandising related rebates and allowances are recorded as a reduction of cost of revenue as product is sold. Buying and merchandising rebates and allowances include all types of vendor programs such as cash discounts from timely payment of invoices, purchase discounts or rebates, volume purchase allowances, price reduction allowances and slotting allowances. Certain product promotion related rebates and allowances, primarily related to advertising, are recorded as a reduction in selling, general and administrative expenses when the advertising commitment has been satisfied. Pharmacy Services Segment The Pharmacy Services Segment receives purchase discounts on products purchased. The Pharmacy Services Segment’s contractual arrangements with vendors, including manufacturers and rebate aggregators, wholesalers and retail pharmacies, normally provide for the Pharmacy Services Segment to receive purchase discounts from established list prices in one, or a combination, of the following forms: (i) a direct discount at the time of purchase, or (ii) a discount (or rebate) paid subsequent to dispensing when products are purchased indirectly from a manufacturer (e.g., through a wholesaler or retail pharmacy). These rebates are recognized when prescriptions are dispensed and are generally billed within 30 days of the end of each completed quarter. Historically, the effect of adjustments resulting from the reconciliation of rebates recognized to the amounts billed and collected has not been material to the Pharmacy Services Segment’s results of operations. The Pharmacy Services Segment accounts for the effect of any such differences as a change in accounting estimate in the period the reconciliation is completed. The Pharmacy Services Segment also receives additional discounts under its wholesaler and rebate aggregator contracts and fees from pharmaceutical manufacturers for administrative services. Purchase discounts and administrative service fees are recorded as a reduction of cost of revenues. Rebates payable to clients for the Pharmacy Services Segment The Pharmacy Services Segment has contractual arrangements with clients, including health plans, commercial employers, labor groups, and state and local governments, which entitles such clients to a portion of certain rebates received by the Pharmacy Services Segment. Estimated rebates payable to clients are recognized when prescriptions are dispensed and are generally paid to clients up to eight months in arrears. Historically, the effect of adjustments resulting from the reconciliation of estimated rebates payable to clients recognized and the amount actually paid has not been material to the Pharmacy Services Segment’s results of operations. The Pharmacy Services Segment accounts for the effect of any such difference as a change in accounting estimate in the period the reconciliation is completed. Estimated rebates payable to clients are recorded as a reduction of revenues. |
Leases | Leases The Company determines if an arrangement contains a lease at the inception of a contract. Operating lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease right-of-use assets and operating lease liabilities are recognized at the commencement date based on the present value of the remaining future minimum lease payments. As the interest rate implicit in the Company’s leases is not readily determinable, the Company utilizes its incremental borrowing rate, determined by class of underlying asset, to discount the lease payments. The incremental borrowing rate is determined using a portfolio approach based on the rate of interest that we would pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. The Company uses quoted interest rates obtained from financial institutions in an input to derive its incremental borrowing rate as the discount rate for the lease. The ROU asset is equal to the operating lease liability plus lease payments made before commencement, less lease incentives received from the landlord. The Company’s real estate leases typically contain options that permit lease extensions for additional periods of up to five years each. For real estate leases, generally, the renewal periods are not included within the lease term and the associated payments are not included in the measurement of the ROU asset and operating lease liability as the options to extend are not considered reasonably certain to occur at lease commencement. The Company reevaluates each lease on a regular basis to consider the economic and strategic incentives of exercising the renewal options and will include all reasonably certain options in the measurement of its lease term. Generally, the renewal option periods are not included within the lease term and the associated payments are not included in the measurement of the operating lease right-of-use asset and the operating lease liability until the renewals are i) evaluated and ii) determined to be exercised. The Company has an insignificant amount of non-real estate leases however, renewal options are not included in the lease term for non-real estate leases because they are not considered reasonably certain of being exercised at lease commencement. The Company rarely executes leases less than 12 months. For real estate leases, the Company accounts for lease components and non-lease components as a single lease component. Certain real estate leases require additional payments based on sales volume, as well as reimbursement for real estate taxes, common area maintenance and insurance, which are expensed as incurred as variable lease costs. Other real estate leases contain one fixed lease payment that includes real estate taxes, common area maintenance and insurance. These fixed payments are considered part of the lease payment and included in the operating lease right-of-use assets and operating lease liabilities. The Company records rent expense on operating leases on a straight-line basis over the reasonably certain lease term. The Company begins to record rent expense at the time that the Company has the right to use the property. |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses Selling, general and administrative expenses include store and corporate administrative payroll and benefit costs, occupancy costs which include retail store and corporate rent costs, facility and leasehold improvement depreciation and utility costs, advertising, repair and maintenance, insurance, equipment depreciation and professional fees. |
Repairs and Maintenance | Repairs and Maintenance Routine repairs and maintenance are charged to operations as incurred. Improvements and major repairs, which extend the useful life of an asset, are capitalized and depreciated. |
Advertising | Advertising Advertising costs, net of specific vendor advertising allowances, are expensed in the period the advertisement first takes place. Advertising expenses, net of vendor advertising allowances, for fiscal 2023, 2022 and 2021 were $133,379, $146,085 and $122,725, respectively. |
Insurance | Insurance The Company is self-insured for certain general liability and workers’ compensation claims. For claims that are self-insured, stop-loss insurance coverage is maintained for workers’ compensation occurrences exceeding $1,000 and general liability occurrences exceeding $3,000. The Company utilizes actuarial studies as the basis for developing reported claims and estimating claims incurred but not reported relating to the Company’s self-insurance. Workers’ compensation claims are discounted to present value using a risk-free interest rate. The Company is also self-insured for certain employee health and welfare plans. We record the related self-insurance liabilities based on claims incurred and an estimate of claims incurred but not yet reported. |
Benefit Plan Accruals | Benefit Plan Accruals The Company has several defined benefit plans, under which participants earn a retirement benefit based upon a formula set forth in the plan. The Company records expense related to these plans using actuarially determined amounts that are calculated under the provisions of ASC 715, “Compensation—Retirement Benefits.” Key assumptions used in the actuarial valuations include the discount rate, the expected rate of return on plan assets and the rate of increase in future compensation levels. |
Stock-Based Compensation | Stock-Based Compensation The Company has several stock award plans, which are described in detail in Note 18. The Company accounts for stock-based compensation under ASC 718, “Compensation—Stock Compensation.” The Company recognizes expense over the requisite service period of the award, net of an estimate for the impact of award forfeitures. |
Store Pre-opening Expenses | Store Pre-opening Expenses Costs incurred prior to the opening of a new or relocated store, associated with a remodeled store or related to the opening of a distribution facility are charged to operations as incurred. |
Litigation Reserves | Litigation Reserves The Company is involved in litigation on an ongoing basis. The Company accrues its best estimate of the probable loss related to legal claims. Such estimates are developed in consultation with in-house counsel, and are based upon a combination of litigation and settlement strategies. |
Income Taxes | Income Taxes Deferred income taxes are determined based on the difference between the financial reporting and tax basis of assets and liabilities. Deferred income tax expense (benefit) represents the change during the reporting period in the deferred tax assets and deferred tax liabilities, net of the effect of acquisitions and dispositions. Deferred tax assets include tax loss and credit carryforwards and are reduced by a valuation allowance if, based on available evidence, it is more likely than not that some portion of the deferred tax assets will not be realized. Changes in valuation allowances from period to period are included in the tax provision in the period of change. The Company has net operating loss (“NOL”) carryforwards that can be utilized to offset future income for federal and state tax purposes. These NOLs generate a significant deferred tax asset. The Company regularly reviews the deferred tax assets for recoverability considering historical profitability, projected taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies. The Company recognizes tax liabilities in accordance with ASC 740, “Income Taxes” and the Company adjusts these liabilities with changes in judgment as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of the tax liabilities. |
Sales Tax Collected | Sales Tax Collected Sales taxes collected from customers and remitted to various governmental agencies are presented on a net basis (excluded from revenues) in the Company’s statement of operations. |
Use of Estimates | Use of Estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
Significant Concentrations | Significant Concentrations Retail Pharmacy Segment The Company’s pharmacy sales were primarily to customers covered by health plan contracts, which typically contract with a third-party payor that agrees to pay for all or a portion of a customer’s eligible prescription purchases. During fiscal 2023, the top five third-party payors accounted for approximately 83.4% of the Company’s pharmacy sales. The largest third-party payor, Caremark, represented 33.4%, 32.1% and 30.4% of pharmacy sales during fiscal 2023, 2022 and 2021, respectively. Third-party payors are entities such as an insurance company, governmental agency, health maintenance organization or other managed care provider, and typically represent several health care contracts and customers. During fiscal 2023, state sponsored Medicaid agencies and related managed care Medicaid payors accounted for approximately 19.9% of the Company’s pharmacy sales, the largest of which was approximately 6.6% of the Company’s pharmacy sales. During fiscal 2023, approximately 38.8% of the Company’s pharmacy sales were to customers covered by Medicare Part D. Any significant loss of third-party payor business could have a material adverse effect on the Company’s business and results of operations. During fiscal 2023, the Company purchased brand and generic pharmaceuticals, which amounted to approximately 98% of the dollar volume of its prescription drugs from McKesson Corporation (“McKesson”) under its expanded agreement executed on February 17, 2014 and amended in fiscal 2019 for its pharmaceutical purchasing and distribution whereby McKesson assumed responsibility for purchasing essentially all of the brand and generic medications the Company dispenses as well as providing a new direct store delivery model to all of the Company’s stores. If the Company’s relationship with McKesson was disrupted, it could temporarily have difficulty filling prescriptions for brand-named and generic drugs until it executed a replacement wholesaler agreement or developed and implemented self-distribution processes. Pharmacy Services Segment The Company’s Pharmacy Services Segment revenue is currently generated from a limited number of customers. During fiscal 2023, its top five customers accounted for 65.9% of its Pharmacy Services Segment revenue, which includes 6.9% related to a client which termed on January 1, 2023. The largest payor, CMS, represented 43.1%, 41.1% and 36.6% of Pharmacy Services Segment revenue during fiscal 2023, 2022 and 2021, respectively. Pharmacy Services Segment customers are entities such as employers, insurance companies, unions, government employee groups, health plans, Managed Medicaid plans, Medicare plans, and other sponsors of health benefit plans, and individuals throughout the United States. The Pharmacy Services Segment, through its EI subsidiary, participates in the federal government’s Medicare Part D program as a PDP. During fiscal 2023, fiscal 2022 and fiscal 2021, net revenues of $529,025 (2.2% of consolidated revenues), $589,620 (2.4% of consolidated revenues) and $630,104 (2.6% of consolidated revenues), respectively, include insurance premiums earned by the PDP, which are determined based on the PDP’s annual bid and related contractual arrangements with CMS. |
Derivatives | Derivatives The Company may enter into interest rate swap agreements to hedge the exposure to increasing rates with respect to its variable rate debt, when the Company deems it prudent to do so. Upon inception of interest rate swap or cap agreements, or modifications thereto, the Company performs a comprehensive review of the interest rate swap agreements based on the criteria as provided by ASC 815, “Derivatives and Hedging.” |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In March 2020, the issued ASU 2020-04, Reference Rate Reform (Topic 848) : Facilitation of the Effects of Reference Rate Reform on Financial Reporting . This ASU provides optional expedients and exceptions for applying Generally Accepted Accounting Principles (“GAAP”) to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another rate affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of Interbank Offered Rates (“IBORs”) and, particularly, the risk of cessation of LIBOR, regulators have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. This ASU provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. In January 2021, the FASB issued ASU 2021-01, which adds implementation guidance to the above ASU to clarify certain optional expedients and exceptions in Topic 848. The Company adopted ASU 2020-04 effective December 1, 2022 and the adoption of this standard did not have a material impact on the Company’s financial position, results of operations and cash flows. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740) GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This ASU is effective for fiscal years beginning after December 15, 2020 (fiscal 2022). The Company adopted ASU 2019-12 effective February 28, 2021 and the adoption of this standard did not have a material impact on the Company’s financial position. In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement benefits (Topic 715-20) In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Mar. 04, 2023 | |
Summary of Significant Accounting Policies | |
Schedule of revenues | Year Ended March 4, February 26, February 27, 2023 2022 2021 (53 Weeks) (52 Weeks) (52 Weeks) Retail Pharmacy Segment: Pharmacy sales $ 12,582,593 $ 12,152,491 $ 10,915,442 Front-end sales 5,078,820 5,218,182 5,322,943 Other revenue 123,654 124,143 126,875 Total Retail Pharmacy Segment 17,785,067 17,494,816 16,365,260 Pharmacy Services Segment revenue 6,522,299 7,323,125 7,970,137 Intersegment elimination (215,467) (249,686) (292,157) Total revenue $ 24,091,899 $ 24,568,255 $ 24,043,240 |
Schedule of principal classes of products | Percentage Product Class of Sales Prescription drugs 71.2 % Over-the-counter medications and personal care 10.9 % Health and beauty aids 4.3 % General merchandise and other 13.6 % |
Schedule of disaggregation of revenue | March 4, 2023 In thousands (53 Weeks) Retail Pharmacy Segment: Pharmacy sales $ 12,582,593 Front-end sales 5,078,820 Other revenue 123,654 Total Retail Pharmacy Segment 17,785,067 Pharmacy Services Segment 6,522,299 Intersegment elimination (215,467) Total revenue $ 24,091,899 |
Acquisition (Tables)
Acquisition (Tables) | 12 Months Ended |
Mar. 04, 2023 | |
Acquisition | |
Schedule of purchase price allocation | Final purchase price Cash consideration $ 89,724 Total 89,724 Final purchase price allocation Cash and cash equivalents $ 3,494 Accounts receivable 23,860 Inventories 67,745 Prepaid expenses and other current assets 1,857 Total current assets 96,956 Property and equipment 28,229 Operating lease right-of-use assets 143,651 Intangible assets (1) 68,700 Other assets 1,805 Total assets acquired 339,341 Accounts payable 24,166 Accrued salaries, wages and other current liabilities 20,335 Current portion of operating lease liabilities 24,617 Total current liabilities 69,118 Long-term operating lease liabilities 124,023 Other long-term liabilities 166 Total liabilities assumed 193,307 Deferred tax liabilities recorded on purchase 13,951 Net assets acquired 132,083 Bargain purchase gain (42,359) Total purchase price $ 89,724 (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 final 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: |
Schedule of estimated fair value of intangible assets and related useful lives as included in the final purchase price allocation | Estimated Fair Value Estimated Useful Life (In Years) Prescription files $ 54,300 10 Tradename 14,400 Indefinite Total $ 68,700 |
Schedule of unaudited pro forma combined financial data | March 4, February 26, February 27, 2023 2022 2021 (53 Weeks) (52 Weeks) (52 Weeks) Pro forma Pro forma Pro forma Net revenues as reported $ 24,091,899 $ 24,568,255 $ 24,043,240 Supplemental Pro forma revenues $ 24,091,899 $ 24,568,255 $ 24,468,777 Net loss as reported $ (719,188) $ (522,372) $ (90,220) Supplemental Pro forma net loss $ (719,188) $ (522,372) $ (116,040) |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Mar. 04, 2023 | |
Restructuring | |
Schedule of restructuring-related costs | Retail Pharmacy Pharmacy Segment Services Segment Total Restructuring-related costs Severance and related costs associated with ongoing reorganization efforts (a) $ 15,342 $ 4,088 $ 19,430 Professional and other fees relating to restructuring activities (c) 71,142 18,054 89,196 Total restructuring-related costs $ 86,484 $ 22,142 $ 108,626 Retail Pharmacy Pharmacy Segment Services Segment Total Restructuring-related costs Severance and related costs associated with ongoing reorganization efforts (a) $ — $ 2,502 $ 2,502 Professional and other fees relating to restructuring activities (c) 12,237 20,382 32,619 Total restructuring-related costs $ 12,237 $ 22,884 $ 35,121 Retail Pharmacy Pharmacy Segment Services Segment Total Restructuring-related costs Severance and related costs associated with ongoing reorganization efforts (a) $ 13,443 $ 4,353 $ 17,796 Non-executive retention costs associated with the March 2019 reorganization (b) 1,136 (124) 1,012 Professional and other fees relating to restructuring activities (c) 40,053 4,752 44,805 SKU optimization charges (d) 20,939 — 20,939 Total restructuring-related costs $ 75,571 $ 8,981 $ 84,552 |
Schedule of restructuring-related liabilities | Severance and related Professional and costs (a) other fees (c) Total Balance as of February 26, 2022 $ 4,257 $ 4,463 $ 8,720 Additions charged to expense 11,904 10,742 22,646 Cash payments (5,231) (11,727) (16,958) Balance as of May 28, 2022 $ 10,930 $ 3,478 $ 14,408 Additions charged to expense 913 11,892 12,805 Cash payments (2,782) (10,066) (12,848) Balance as of August 27, 2022 $ 9,061 $ 5,304 $ 14,365 Additions charged to expense 4,800 21,700 26,500 Cash payments (4,452) (18,297) (22,749) Balance as of November 26, 2022 $ 9,409 $ 8,707 $ 18,116 Additions charged to expense 1,813 44,862 46,675 Cash payments (3,564) (11,415) (14,979) Balance as of March 4, 2023 $ 7,658 $ 42,154 $ 49,812 (a) – Severance and related costs reflect severance accruals, executive search fees, outplacement services and other similar charges associated with ongoing reorganization efforts. (b) – As part of its March 2019 reorganization, the Company incurred costs with the implementation of a retention plan for certain of its key associates. (c) – Professional and other fees include costs incurred in connection with the identification and implementation of initiatives associated with restructuring activities. (d) – Inventory reserve on product lines the Company is exiting and will no longer carry as part of its rebranding initiative. |
Asset Sale to WBA (Tables)
Asset Sale to WBA (Tables) | 12 Months Ended |
Mar. 04, 2023 | |
Asset Sale to WBA | |
Schedule of assets and operating results of discontinued operations | The operating results of the discontinued operations that are reflected on the consolidated statements of operations within net income from discontinued operations are as follows: March 4, February 26, February 27, 2023 2022 2021 (53 weeks) (52 weeks) (52 weeks) Revenues $ — $ — $ 174 Costs and expenses: Cost of revenues (a) — — 8 Selling, general and administrative expenses (a) — — 871 Interest expense (b) — — — Gain on sale of assets, net — — (14,149) — — (13,270) Income from discontinued operations before income taxes — — 13,444 Income tax expense — — 4,283 Net income from discontinued operations, net of tax $ — $ — $ 9,161 (a) Cost of revenues and selling, general and administrative expenses for the discontinued operations excludes corporate overhead. These charges are reflected in continuing operations. (b) In accordance with ASC 205-20, the operating results for the fifty-two week period ended February 27, 2021, for the discontinued operations include interest expense relating to the outstanding indebtedness repaid with the estimated excess proceeds from the Sale. |
Loss Per Share (Tables)
Loss Per Share (Tables) | 12 Months Ended |
Mar. 04, 2023 | |
Loss Per Share | |
Schedule of calculation of basic and diluted loss per share | March 4, February 26, February 27, 2023 2022 2021 (53 Weeks) (52 Weeks) (52 Weeks) Basic and diluted loss per share: Numerator: Net loss from continuing operations $ (719,188) $ (522,372) $ (99,381) Net income from discontinued operations — — 9,161 Loss attributable to common stockholders — basic and diluted $ (719,188) $ (522,372) $ (90,220) Denominator: Basic and diluted weighted average shares 54,680 54,055 53,653 Basic and diluted loss per share: Continuing operations $ (13.15) $ (9.66) $ (1.86) Discontinued operations — — 0.18 Net basic and diluted loss per share $ (13.15) $ (9.66) $ (1.68) |
Facility Exit and Impairment _2
Facility Exit and Impairment Charges (Tables) | 12 Months Ended |
Mar. 04, 2023 | |
Facility Exit and Impairment Charges | |
Schedule of amounts relating to facility exit and impairment charges | March 4, 2023 February 26, 2022 February 27, 2021 (in thousands, except number of stores) Number Charge Number Charge Number Charge Active stores: Stores previously impaired (1) 44 $ 4,866 118 $ 12,339 174 $ 21,372 New, relocated and remodeled stores (2) 8 4,640 1 538 2 1,519 Remaining stores not meeting the recoverability test (3) 12 4,038 88 43,305 19 6,854 Total impairment charges—active stores 64 13,544 207 56,182 195 29,745 Total impairment charges—closed facilities 194 123,531 147 94,606 33 16,542 Total impairment charges—all locations 258 $ 137,075 354 $ 150,788 228 $ 46,287 (1) These charges are related to stores that were impaired for the first time in prior periods. In an effort to improve the operating results or to meet geographical competition, the Company will often make additional capital additions in stores that were impaired in prior periods. These additions will be impaired in future periods if they are deemed to be unrecoverable. The fiscal 2023 impairment charge includes $3,087 of impairment relating to the ROU and $1,779 of capital additions. The fiscal 2022 impairment charge includes $5,434 of impairment relating to the ROU and $6,905 of capital additions. The fiscal 2021 impairment charge includes $15,459 of impairment relating to the ROU and $5,913 of capital additions. (2) These charges are related to new stores (open at least three years ) and relocated stores (relocated in the last two years ) and significant strategic remodels (remodeled in the last year) that did not meet their recoverability test during the current period. These stores have not met their original return on investment projections and have a historical loss of at least two years . Their future cash flow projections do not recover their current carrying value. The fiscal 2023 impairment charge includes $1,765 of impairment relating to the ROU and $2,875 of capital additions. The fiscal 2022 impairment charge includes $0 of impairment relating to the ROU and $538 of capital additions. The fiscal 2021 impairment charge includes $347 of impairment relating to the ROU and $1,172 of capital additions. (3) These charges are related to the remaining active stores that did not meet the recoverability test during the current period. These stores have a historical loss of at least two years . Their future cash flow projections do not recover their current carrying value. The fiscal 2023 impairment charge includes $1,765 of impairment relating to the ROU and $2,273 of capital additions. The fiscal 2022 impairment charge includes $26,130 of impairment relating to the ROU and $17,175 of capital additions. The fiscal 2021 impairment charge includes $3,177 of impairment relating to the ROU and $3,677 of capital additions. |
Schedule of fair value of long-lived assets measured on non-recurring basis | Fair Values Total as of Charges Level 1 Level 2 Level 3 Impairment Date March 4, 2023 Long-lived assets held for use $ — $ 22,959 $ 42,717 $ 65,676 $ (132,243) Long-lived assets held for sale $ — $ 5,115 $ — $ 5,115 $ (4,832) Total $ — $ 28,074 $ 42,717 $ 70,791 $ (137,075) Fair Values Total as of Charges Level 1 Level 2 Level 3 Impairment Date February 26, 2022 Long-lived assets held for use $ — $ 240,176 $ 23,594 $ 263,770 $ (150,064) Long-lived assets held for sale $ — $ 2,371 $ — $ 2,371 $ (724) Total $ — $ 242,547 $ 23,594 $ 266,141 $ (150,788) |
Schedule of accrued facility exit charges | Year Ended March 4, February 26, February 27, 2023 2022 2021 (53 Weeks) (52 Weeks) (52 Weeks) Balance—beginning of period $ 1,892 $ 2,754 $ 2,253 Provision for facility exit charges 461 162 793 Changes in assumptions and other adjustments — — — Interest accretion — — — Cash payments (125) (1,024) (292) Balance—end of period $ 2,228 $ 1,892 $ 2,754 |
Schedule of revenue, operating expenses, and income before income taxes of stores | Year Ended March 4, February 26, February 27, 2023 2022 2021 Revenues $ 178,030 $ 586,056 $ 639,471 Operating expenses 192,357 640,996 699,662 Gain from sale of assets (46,125) (13,670) (7,954) Other expenses 25,396 52,999 13,057 Income (loss) before income taxes 6,402 (94,269) (65,294) Included in these stores’ income (loss) before income taxes are: Depreciation and amortization 934 3,499 4,535 Inventory liquidation charges (6,369) (1,646) (1,528) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Mar. 04, 2023 | |
Income Taxes | |
Schedule of provision for income tax expense (benefit) from continuing operations | Year Ended March 4, February 26, February 27, 2023 2022 2021 (53 Weeks) (52 Weeks) (52 Weeks) Current tax: Federal $ (6) $ (6) $ (6,758) State 9,082 7,454 4,145 9,076 7,448 (2,613) Deferred tax and other: Federal — (1,301) (12,649) State (15,543) (9,927) (4,895) (15,543) (11,228) (17,544) Total income tax benefit $ (6,467) $ (3,780) $ (20,157) |
Schedule of reconciliation of the expected statutory federal tax and the total income tax expense (benefit) from continuing operations | Year Ended March 4, February 26, February 27, 2023 2022 2021 (53 Weeks) (52 Weeks) (52 Weeks) Federal statutory rate $ (152,388) $ (110,492) $ (25,103) Nondeductible expenses 556 398 588 State income taxes, net 271,306 (45,388) 10,042 Bargain purchase gain — 1,123 (10,018) Decrease of previously recorded liabilities (18,689) (3,798) (2,273) Nondeductible compensation 2,045 1,551 3,764 Qualified fringe disallowance 342 224 313 Nondeductible excise tax — — 1,296 Stock based compensation 2,213 198 2,806 Valuation allowance (112,037) 152,785 (2,222) Other 185 (381) 650 Total income tax benefit $ (6,467) $ (3,780) $ (20,157) |
Schedule of significant components of deferred tax assets and liabilities | 2023 2022 Deferred tax assets: Accounts receivable $ 26,769 $ 22,958 Accrued expenses 143,207 95,421 Pension, retirement and other benefits 40,100 67,686 Long-lived assets 364,618 299,507 Operating lease liabilities 781,721 883,713 Credits 21,955 22,917 Net operating losses 1,200,516 1,487,639 Other 271 225 Total gross deferred tax assets 2,579,157 2,880,066 Valuation allowance (1,636,461) (1,818,069) Total deferred tax assets 942,696 1,061,997 Deferred tax liabilities: Outside basis difference 5,622 5,682 Inventory 244,554 251,221 Operating lease right-of-use assets 680,152 785,023 Total gross deferred tax liabilities 930,328 1,041,926 Net deferred tax assets $ 12,368 $ 20,071 |
Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits from continuing operations | 2023 2022 2021 Unrecognized tax benefits $ 103,629 $ 184,414 $ 198,325 Increases to prior year tax positions 1 24 42 Decreases to tax positions in prior periods (29,432) (294) (807) Increases to current year tax positions — — — Settlements — — — Divestitures — — — Lapse of statute of limitations (27,113) (80,515) (13,146) Unrecognized tax benefits balance $ 47,085 $ 103,629 $ 184,414 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Mar. 04, 2023 | |
Property, Plant and Equipment | |
Schedule of property, plant and equipment, including capital lease assets | 2023 2022 Land $ 69,588 $ 83,485 Buildings 208,681 314,143 Leasehold improvements 1,568,983 1,566,082 Equipment 1,855,083 1,794,937 Software 89,597 92,139 Construction in progress 109,690 97,715 3,901,622 3,948,501 Accumulated depreciation (2,993,851) (2,959,334) Property, plant and equipment, net $ 907,771 $ 989,167 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Mar. 04, 2023 | |
Goodwill and Other Intangible Assets | |
Summary of the changes in the carrying amount of goodwill | Retail Pharmacy Pharmacy Services Total Balance, February 27, 2021 $ 43,492 $ 1,064,644 $ 1,108,136 Goodwill impairment — (229,000) (229,000) Balance, February 26, 2022 43,492 835,644 879,136 Goodwill impairment — (371,200) (371,200) Balance, March 4, 2023 $ 43,492 $ 464,444 $ 507,936 |
Schedule of indefinite-lived intangible assets | March 4, 2023 February 26, 2022 Remaining Remaining Weighted Weighted Gross Average Gross Average Carrying Accumulated Amortization Carrying Accumulated Amortization Amount Amortization Net Period Amount Amortization Net Period Non-compete agreements and other (a) $ 201,919 $ (182,957) $ 18,962 3 years $ 197,651 $ (178,958) $ 18,693 3 years Prescription files 1,029,665 (928,478) 101,187 5 years 1,030,169 (918,773) 111,396 6 years Customer relationships (a) 388,000 (306,139) 81,861 9 years 388,000 (286,090) 101,910 10 years CMS license 57,500 (23,798) 33,702 4 years 57,500 (15,372) 42,128 5 years Claims adjudication and other developed software 58,985 (58,985) — 0 years 58,985 (56,316) 2,669 1 years Total finite $ 1,736,069 $ (1,500,357) 235,712 $ 1,732,305 $ (1,455,509) $ 276,796 Trademarks 14,400 — 14,400 Indefinite 14,400 — 14,400 Indefinite Total $ 1,750,469 $ (1,500,357) $ 250,112 $ 1,746,705 $ (1,455,509) $ 291,196 (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. |
Schedule of finite-lived intangible assets | March 4, 2023 February 26, 2022 Remaining Remaining Weighted Weighted Gross Average Gross Average Carrying Accumulated Amortization Carrying Accumulated Amortization Amount Amortization Net Period Amount Amortization Net Period Non-compete agreements and other (a) $ 201,919 $ (182,957) $ 18,962 3 years $ 197,651 $ (178,958) $ 18,693 3 years Prescription files 1,029,665 (928,478) 101,187 5 years 1,030,169 (918,773) 111,396 6 years Customer relationships (a) 388,000 (306,139) 81,861 9 years 388,000 (286,090) 101,910 10 years CMS license 57,500 (23,798) 33,702 4 years 57,500 (15,372) 42,128 5 years Claims adjudication and other developed software 58,985 (58,985) — 0 years 58,985 (56,316) 2,669 1 years Total finite $ 1,736,069 $ (1,500,357) 235,712 $ 1,732,305 $ (1,455,509) $ 276,796 Trademarks 14,400 — 14,400 Indefinite 14,400 — 14,400 Indefinite Total $ 1,750,469 $ (1,500,357) $ 250,112 $ 1,746,705 $ (1,455,509) $ 291,196 (a) Amortized on an accelerated basis which is determined based on the remaining useful economic lives of the customer relationships that are expected to contribute directly or indirectly to future cash flows. |
Accrued Salaries, Wages and O_2
Accrued Salaries, Wages and Other Current Liabilities (Tables) | 12 Months Ended |
Mar. 04, 2023 | |
Accrued Salaries, Wages and Other Current Liabilities | |
Schedule of accrued salaries, wages and other current liabilities | 2023 2022 Accrued wages, benefits and other personnel costs $ 190,664 $ 291,004 Accrued interest 18,630 18,286 Accrued sales and other taxes payable 86,920 75,068 Accrued store expense 71,398 70,537 Accrued litigation, legal and professional fees 41,205 43,200 Accrued self-insurance 25,760 28,402 Other 275,314 250,062 $ 709,891 $ 776,559 |
Indebtedness and Credit Agree_2
Indebtedness and Credit Agreement (Tables) | 12 Months Ended |
Mar. 04, 2023 | |
Indebtedness and Credit Agreement | |
Summary of indebtedness and lease financing obligations | March 4, February 26, 2023 2022 Secured Debt: Senior secured revolving credit facility due August 2026 ($1,200,000 and $709,000 face value less unamortized debt issuance costs of $16,117 and $18,010) 1,183,883 690,990 FILO Term Loan due August 2026 ($400,000 and $350,000 face value less unamortized debt issuance costs of $2,090 and $2,344) 397,910 347,656 1,581,793 1,038,646 Second Lien Secured Debt: 7.5% senior secured notes due July 2025 ($320,002 and $600,000 face value less unamortized debt issuance costs of $2,529 and $6,824) 317,473 593,176 8.0% senior secured notes due November 2026 ($849,918 face value less unamortized debt issuance costs of $11,259 and $14,397) 838,659 835,521 1,156,132 1,428,697 Unguaranteed Unsecured Debt: 7.7% notes due February 2027 ($185,691 and $237,386 face value less unamortized debt issuance costs of $398 and $642) 185,293 236,744 6.875% fixed-rate senior notes due December 2028 ($2,046 and $29,001 face value less unamortized debt issuance costs of $6 and $102) 2,040 28,899 187,333 265,643 Lease financing obligations 18,912 20,374 Total debt 2,944,170 2,753,360 Current maturities of long-term debt and lease financing obligations (6,332) (5,544) Long-term debt and lease financing obligations, less current maturities $ 2,937,838 $ 2,747,816 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Mar. 04, 2023 | |
Leases | |
Schedule of components of net lease cost | Year Ended March 4, 2023 February 26, 2022 February 27, 2021 Operating lease cost $ 641,394 $ 669,421 $ 651,261 Financing lease cost: Amortization of right-of-use asset 3,471 3,638 4,359 Interest on long-term finance lease liabilities 1,968 2,167 2,505 Total finance lease costs $ 5,439 $ 5,805 $ 6,864 Short-term lease costs 3,126 3,180 3,214 Variable lease costs 178,263 175,697 172,088 Less: sublease income (12,871) (13,510) (14,886) Net lease cost $ 815,351 $ 840,593 $ 818,541 |
Schedule of supplemental cash flow information related to leases | Year Ended March 4, 2023 February 26, 2022 February 27, 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows paid for operating leases $ 706,506 $ 703,326 $ 683,226 Operating cash flows paid for interest portion of finance leases 1,968 2,167 2,505 Financing cash flows paid for principal portion of finance leases 4,019 4,117 4,744 Right-of-use assets obtained in exchange for lease obligations: Operating leases 264,507 350,132 513,215 Finance leases — — — |
Schedule of supplemental balance sheet information related to leases | March 4, February 26, 2023 2022 Operating leases: Operating lease right-of-use asset $ 2,497,206 $ 2,813,535 Short-term operating lease liabilities $ 502,403 $ 575,651 Long-term operating lease liabilities 2,372,943 2,597,090 Total operating lease liabilities $ 2,875,346 $ 3,172,741 Finance leases: Property, plant and equipment, net $ 13,576 $ 13,950 Current maturities of long-term debt and lease financing obligations $ 6,332 $ 5,544 Lease financing obligations, less current maturities 12,580 14,830 Total finance lease liabilities $ 18,912 $ 20,374 Weighted average remaining lease term Operating leases 7.5 7.7 Finance leases 8.0 8.7 Weighted average discount rate Operating leases 6.5 % 6.0 % Finance leases 9.0 % 10.0 % |
Schedule of minimum lease payments, financing leases | March 4, 2023 Finance Operating Fiscal year Leases Leases (1) Total 2024 $ 3,188 $ 677,631 $ 680,819 2025 7,732 593,857 601,589 2026 2,421 507,388 509,809 2027 1,567 426,503 428,070 2028 1,500 351,942 353,442 Thereafter 10,923 1,148,719 1,159,642 Total lease payments 27,331 3,706,040 3,733,371 Less: imputed interest (8,419) (830,694) (839,113) Total lease liabilities $ 18,912 $ 2,875,346 $ 2,894,258 |
Schedule of minimum lease payments, operating leases | March 4, 2023 Finance Operating Fiscal year Leases Leases (1) Total 2024 $ 3,188 $ 677,631 $ 680,819 2025 7,732 593,857 601,589 2026 2,421 507,388 509,809 2027 1,567 426,503 428,070 2028 1,500 351,942 353,442 Thereafter 10,923 1,148,719 1,159,642 Total lease payments 27,331 3,706,040 3,733,371 Less: imputed interest (8,419) (830,694) (839,113) Total lease liabilities $ 18,912 $ 2,875,346 $ 2,894,258 (1) Future operating lease payments have not been reduced by minimum sublease rentals of $24.0 million due in the future under noncancelable leases. |
Stock Option and Stock Award _2
Stock Option and Stock Award Plans (Tables) | 12 Months Ended |
Mar. 04, 2023 | |
Stock Options and Stock Awards | |
Schedule of stock option transactions | Weighted Weighted Average Average Exercise Remaining Aggregate Price Contractual Intrinsic Shares Per Share Term Value Outstanding as of February 29, 2020 1,295 $ 30.29 Granted — N/A Exercised (2) 25.08 Canceled (513) 48.16 Outstanding as of February 27, 2021 780 $ 18.56 Granted — N/A Exercised — N/A Canceled (79) 45.78 Outstanding as of February 26, 2022 701 $ 15.50 Granted — N/A Exercised — N/A Canceled (169) 23.85 Outstanding as of March 4, 2023 532 $ 12.85 0.15 $ 0.00 Vested or expected to vest as of March 4, 2023 532 $ 12.85 0.15 $ 0.00 Exercisable as of March 4, 2023 532 $ 12.85 0.15 $ 0.00 |
Schedule of restricted stock transactions | Weighted Average Grant Date Shares Fair Value Balance as of February 29, 2020 1,253 $ 10.32 Granted 780 17.79 Vested (574) 13.37 Canceled (166) 12.23 Balance as of February 27, 2021 1,293 $ 13.23 Granted 973 15.00 Vested (546) 12.25 Canceled (187) 15.51 Balance as of February 26, 2022 1,533 $ 14.42 Granted 1,662 6.50 Vested (1,349) 12.40 Canceled (370) 10.83 Balance as of March 4, 2023 1,476 $ 8.25 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 12 Months Ended |
Mar. 04, 2023 | |
Retirement Plans | |
Summary of net periodic pension expense for the defined benefit plans | Defined Benefit Pension Plan 2023 2022 2021 Service cost $ 336 $ 425 $ 486 Interest cost 5,036 4,861 4,753 Expected return on plan assets (4,998) (5,194) (4,614) Amortization of unrecognized net loss — 344 3,749 Net periodic pension expense $ 374 $ 436 $ 4,374 Other changes recognized in other comprehensive loss: Unrecognized net gain arising during period $ (585) $ (8,246) $ (20,633) Amortization of unrecognized net (loss) gain — (344) (3,749) Net amount recognized in other comprehensive loss (585) (8,590) (24,382) Net amount recognized in pension expense and other comprehensive loss $ (211) $ (8,154) $ (20,008) |
Schedule of reconciliation for both benefit obligation and plan assets of defined benefit plans, as well as funded status and amounts recognized in balance sheet | Defined Benefit Pension Plan 2023 2022 Change in benefit obligations: Benefit obligation at end of prior year $ 160,133 $ 168,872 Service cost 336 425 Interest cost 5,036 4,861 Distributions (8,328) (8,582) Actuarial gain (26,014) (5,443) Benefit obligation at end of year $ 131,163 $ 160,133 Change in plan assets: Fair value of plan assets at beginning of year $ 149,527 $ 148,412 Employer contributions — 1,700 Actual return on plan assets (20,430) 7,997 Distributions (including expenses paid by the plan) (8,328) (8,582) Fair value of plan assets at end of year $ 120,769 $ 149,527 Funded status $ (10,394) $ (10,606) Net amount recognized $ (10,394) $ (10,606) Amounts recognized in consolidated balance sheets consisted of: Accrued pension liability (10,394) (10,606) Net amount recognized $ (10,394) $ (10,606) Amounts recognized in accumulated other comprehensive loss consist of: Net actuarial loss $ 11,202 $ (11,787) Amount recognized $ 11,202 $ (11,787) |
Schedule of accumulated benefit obligation and fair value of plan assets | Defined Benefit Pension Plan 2023 2022 Accumulated Benefit Obligations $ 131,163 $ 160,133 Fair Value of Plan Assets $ 120,769 $ 149,527 |
Schedule of projected benefit obligation and fair value of plan assets | Defined Benefit Pension Plan 2023 2022 Projected Benefit Obligations $ 131,163 $ 160,133 Fair Value of Plan Assets $ 120,769 $ 149,527 |
Schedules of assumptions used for benefit obligation and cost | Defined Benefit Pension Plan 2023 2022 2021 Discount rate 5.00 % 3.25 % 3.00 % Rate of increase in future compensation levels N/A N/A N/A Expected long-term rate of return on plan assets 6.50 % 5.00 % 5.50 % Defined Benefit Pension Plan 2023 2022 2021 Discount rate 3.25 % 3.00 % 2.75 % Rate of increase in future compensation levels N/A N/A N/A Expected long-term rate of return on plan assets 5.00 % 5.50 % 6.00 % |
Schedule of pension plan asset allocation percentages | March 4, February 26, 2023 2022 Equity securities 30 % 30 % Fixed income securities 59 % 57 % Other 11 % 13 % Total 100 % 100 % |
Schedule of target allocation of plan assets | Target Category Allocation Equity securities 30 % Fixed income securities 62 % Other 8 % Total 100 % |
Summary of the plan's investments measured at fair value on a recurring basis | Fair Value Measurements as of March 4, 2023 Quoted Prices in Active Markets Significant Significant for Identical Observable Unobservable Assets (Level 1) Inputs (Level 2) Inputs (Level 3) Total Equity Securities International equity $ — $ — $ — $ 13,901 Large Cap — — — 18,556 Small-Mid Cap — — — 3,309 Fixed Income Aon High Yield Plus Bond — — — 72 Aon Multi-Asset Credit — — — 4,775 Long-Term Credit Bond Index — — — 41,360 Long-Term U.S. Government Bonds — — — 1,588 20+ Year Treasury STRIPS — — — 12,821 Intermediate Fixed Income — — — 9,781 AGT High Yield Bond — — — — Other types of investments Aon Global Real Estate — — — 11 Aon Core Real Estate Fund — — — 13,479 Short-Term Investments — 1,111 — 1,111 Total $ — $ 1,111 $ — $ 120,764 Fair Value Measurements as of February 26, 2022 Quoted Prices in Active Markets Significant Significant for Identical Observable Unobservable Assets (Level 1) Inputs (Level 2) Inputs (Level 3) Total Equity Securities International equity $ — $ — $ — $ 17,783 Large Cap — — — 23,027 Small-Mid Cap — — — 4,213 Fixed Income Aon High Yield Plus Bond — — — 75 Aon Multi-Asset Credit — — — 7,386 Long-Term Credit Bond Index — — — 47,976 Long-Term U.S. Government Bonds — — — 19,763 20+ Year Treasury STRIPS — — — 483 Intermediate Fixed Income — — — 8,554 AGT High Yield Bond — — — — Other types of investments Aon Global Real Estate — — — 13 Aon Core Real Estate Fund — — — 18,720 Short-Term Investments — 1,532 — 1,532 Total $ — $ 1,532 $ — $ 149,525 |
Schedule of future benefit payments expected to be paid | Defined Benefit Fiscal Year Pension Plan 2024 $ 9,497 2025 9,379 2026 9,373 2027 9,410 2028 9,252 2029 - 2033 44,769 Total $ 91,680 |
Multiemployer Plans that Prov_2
Multiemployer Plans that Provide Pension Benefits (Tables) | 12 Months Ended |
Mar. 04, 2023 | |
Multiemployer Plans that Provide Pension Benefits | |
Schedule of multiemployer defined benefit pension plans | Expiration FIP/ RP Date of Pension Protection Status Collective- Minimum EIN/Pension Act Zone Status Pending/ Contributions of the Company Surcharge Bargaining Funding Pension Plan Number 2023 2022 Implemented 2023 2022 2021 Imposed Agreement Requirements 1199 SEIU Health Care Employees Pension Fund 13-3604862-001 Green— Green— No $ 7,493 $ 9,242 $ 9,613 No 4/18/2025 Contribution rate of 11.3% of gross wages per associate beginning 10/01/2021. Contribution rate of 12.6% of gross wages per associate beginning 09/30/2018. Southern California United Food and Commercial Workers Unions and Drug Employers Pension Fund 51-6029925-001 Green— Red— No 8,131 8,989 8,239 No 7/20/2024 Beginning 01/01/2021, contributions of $1.844 per hour worked for pharmacists and $0.836 per hour worked for non-pharmacists. From 01/01/2020 through 12/31/2020 contributions of $1.758 per hour worked for pharmacists and $0.797 per hour worked for non-pharmacists. UFCW Pharmacists, Clerks and Drug Employers Pension Trust 94-2518312-001 Green— Green— No 2,605 3,224 2,319 No 7/13/2022 Effective 01/01/2020, contribution rate of United Food and Commercial Workers Union-Employer Pension Fund 34-6665155-001 Red— Red— Implemented 954 802 809 No 7/07/2024 Effective 02/06/2022, contribution rate of $2.57 per hour worked. United Food and Commercial Workers Union Local 880—Mercantile Employers Joint Pension Fund 51-6031766-001 Green— Green— No 434 370 399 No 7/07/2024 Effective 10/01/2022 contribution rate of $2.33 per hour worked. Other Funds 2,046 1,887 1,573 $ 21,663 $ 24,514 $ 22,952 |
Schedule of years in which contributions to plan that exceeded more than 5 percent of the total contributions | Year Contributions to Plan Exceeded More Than 5 % of Total Contributions (as of Pension Fund the Plan’s Year-End) UFCW Pharmacists, Clerks and Drug Employers Pension Trust 12/31/2021 and 12/31/2020 Southern California United Food and Commercial Workers Unions and Drug Employers Pension Fund 12/31/2021 and 12/31/2020 United Food & Commercial Workers Union - Employer Pension Fund 9/30/2021 and 9/30/2020 United Food & Commercial Workers Union Local 880—Mercantile Employers Joint Pension Fund 9/30/2021 and 9/30/2020 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Mar. 04, 2023 | |
Segment Reporting | |
Schedule of balance sheet information for the Company's reportable segments | Retail Pharmacy Pharmacy Services Eliminations (1) Consolidated March 4, 2023: Total Assets $ 5,487,845 $ 2,049,107 $ (9,590) $ 7,527,362 Goodwill 43,492 464,444 — 507,936 February 26, 2022: Total Assets $ 6,068,594 $ 2,482,232 $ (21,823) $ 8,529,003 Goodwill 43,492 835,644 — 879,136 (1) As of March 4, 2023 and February 26, 2022, intersegment eliminations include intersegment accounts receivable of $9,590 and $21,823 , respectively, that represent 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. |
Schedule of reconciliation of the Company's business segments to the condensed consolidated financial statements | Retail Pharmacy Intersegment Pharmacy Services Eliminations (1) Consolidated March 4, 2023: Revenues $ 17,785,067 $ 6,522,299 $ (215,467) $ 24,091,899 Gross Profit 4,394,850 409,090 — 4,803,940 Adjusted EBITDA (2) 288,077 141,103 — 429,180 Depreciation and amortization 229,380 47,203 — 276,583 LIFO charge 53,028 — — 53,028 Stock-based compensation expense 10,604 933 — 11,537 Additions to property and equipment and intangible assets 226,563 21,122 — 247,685 February 26, 2022: Revenues $ 17,494,816 $ 7,323,125 $ (249,686) $ 24,568,255 Gross Profit 4,722,075 384,420 — 5,106,495 Adjusted EBITDA (2) 392,633 113,272 — 505,905 Depreciation and amortization 244,122 51,564 — 295,686 LIFO charge 1,314 — — 1,314 Stock-based compensation expense 12,282 768 — 13,050 Additions to property and equipment and intangible assets 202,386 18,327 — 220,713 February 27, 2021: — — Revenues $ 16,365,260 $ 7,970,137 $ (292,157) $ 24,043,240 Gross Profit 4,255,791 448,531 — 4,704,322 Adjusted EBITDA (2) 279,896 157,769 — 437,665 Depreciation and amortization 269,985 57,139 — 327,124 LIFO credit (51,692) — — (51,692) Stock-based compensation expense 11,594 1,409 — 13,003 Restructuring-related costs–SKU optimization charges 20,939 — — 20,939 Additions to property and equipment and intangible assets 204,290 20,651 — 224,941 (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 the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Continuing Operations—Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share and Other Non-GAAP Measures” for additional details. |
Schedule of reconciliation of net loss to Adjusted EBITDA | March 4, February 26, February 27, 2023 2022 2021 (53 weeks) (52 weeks) (52 weeks) Net loss from continuing operations $ (719,188) $ (522,372) $ (99,381) Interest expense 224,399 191,601 201,388 Income tax benefit (6,467) (3,780) (20,157) Depreciation and amortization 276,583 295,686 327,124 LIFO charge (credit) 53,028 1,314 (51,692) Facility exit and impairment charges 180,637 164,084 57,714 Goodwill and intangible asset impairment charges 371,200 229,000 29,852 (Gain) loss on debt modifications and retirements, net (80,142) 3,235 (5,274) Merger and Acquisition-related costs — 12,797 10,549 Stock-based compensation expense 11,537 13,050 13,003 Restructuring-related costs 108,626 35,121 84,552 Inventory write-downs related to store closings 14,270 5,298 3,709 Litigation and other contractual settlements 53,882 50,212 — (Gain) loss on sale of assets, net (68,586) 5,505 (69,300) Loss (gain) on Bartell acquisition — 5,346 (47,705) Change in estimate related to manufacturer rebate receivables — 15,068 — Other 9,401 4,740 3,283 Adjusted EBITDA from continuing operations $ 429,180 $ 505,905 $ 437,665 |
Supplementary Cash Flow Data (T
Supplementary Cash Flow Data (Tables) | 12 Months Ended |
Mar. 04, 2023 | |
Supplementary Cash Flow Data | |
Schedule of supplementary cash flow data | March 4, February 26, February 27, 2023 2022 2021 Cash paid for interest (a) $ 212,355 $ 180,583 $ 181,634 Cash (refunds) payments for income taxes, net (a) $ (5,309) $ 6,233 $ 7,535 Equipment financed under capital leases $ 3,334 $ 1,698 $ 1,849 Accrued capital expenditures $ 18,711 $ 45,465 $ 19,904 Gross borrowings from revolver (a) $ 3,510,000 $ 5,131,000 $ 7,912,000 Gross repayments to revolver (a) $ 3,019,000 $ 5,272,000 $ 7,712,000 (a)–Amounts are presented on a total company basis. |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Mar. 04, 2023 | |
Financial Instruments | |
Schedule of carrying amounts and fair values of financial instruments | 2023 2022 Carrying Fair Carrying Fair Amount Value Amount Value Variable rate indebtedness $ 1,581,793 $ 1,600,000 $ 1,038,646 $ 1,059,000 Fixed rate indebtedness $ 1,343,465 $ 768,328 $ 1,694,340 $ 1,602,122 |
Revision of Previously Issued_2
Revision of Previously Issued Consolidated Financial Statements (Tables) | 12 Months Ended |
Mar. 04, 2023 | |
Revision of Previously Issued Consolidated Financial Statements | |
Summary of revisions to the previously reported financial statements | Previously As (In 000’s, except per share amounts ) Reported Adjustment Revised Balance Sheet: Accrued salaries, wages, and other current liabilities $ 724,529 $ (14,638) $ 709,891 Total current liabilities 2,727,875 (14,638) 2,713,237 Other noncurrent liabilities 130,482 (32,905) 97,577 Total liabilities 8,169,138 (47,543) 8,121,595 Accumulated deficit (6,601,517) (47,543) (6,553,974) Total stockholders’ (deficit) equity (641,776) (47,543) (594,233) Statements of Operations and Comprehensive Loss: Facility exit and impairment charges $ 211,385 $ (30,748) $ 180,637 Loss from continuing operations before income taxes (756,403) 30,748 (725,655) Net loss from continuing operations (749,936) 30,748 (719,188) Net loss (749,936) 30,748 (719,188) Comprehensive loss (749,351) 30,748 (718,603) Basic and diluted loss per share from continuing operations (13.71) 0.56 (13.15) Net basic and diluted loss per share (13.71) 0.56 (13.15) Statement of Cash Flows: Net loss $ (749,936) $ 30,748 $ (719,188) Net loss from continuing operations (749,936) 30,748 (719,188) Facility exit and impairment charges 211,385 (30,748) 180,637 Previously As (In 000’s, except per share amounts) Reported Adjustment Revised Balance Sheet: Accrued salaries, wages, and other current liabilities $ 780,632 $ (4,073) $ 776,559 Total current liabilities 2,933,088 (4,073) 2,929,015 Other noncurrent liabilities 151,976 (12,722) 139,254 Total liabilities 8,429,970 (16,795) 8,413,175 Accumulated deficit (5,851,581) 16,795 (5,834,786) Total stockholders’ (deficit) equity 99,033 16,795 115,828 Statements of Operations and Comprehensive Loss: Facility exit and impairment charges $ 180,190 $ (16,106) $ 164,084 Loss from continuing operations before income taxes (542,258) 16,106 (526,152) Net loss from continuing operations (538,478) 16,106 (522,372) Net loss (538,478) 16,106 (522,372) Comprehensive loss (529,861) 16,106 (513,755) Basic and diluted loss per share from continuing operations (9.96) 0.30 (9.66) Net basic and diluted loss per share (9.96) 0.30 (9.66) Statement of Cash Flows: Net loss $ (538,478) $ 16,106 $ (522,372) Net loss from continuing operations (538,478) 16,106 (522,372) Facility exit and impairment charges 180,190 (16,106) 164,084 Previously As (In 000’s, except per share amounts) Reported Adjustment Revised Balance Sheet: Accrued salaries, wages, and other current liabilities $ 642,364 $ 854 $ 643,218 Total current liabilities 2,602,946 854 2,603,800 Other noncurrent liabilities 208,213 (1,543) 206,670 Total liabilities 8,720,250 (689) 8,719,561 Accumulated deficit (5,313,103) 689 (5,312,414) Total stockholders’ (deficit) equity 615,154 689 615,843 Statements of Operations and Comprehensive Loss: Facility exit and impairment charges $ 58,403 $ (689) $ 57,714 Loss from continuing operations before income taxes (120,227) 689 (119,538) Net loss from continuing operations (100,070) 689 (99,381) Net loss (90,909) 689 (90,220) Comprehensive loss (66,065) 689 (65,376) Basic and diluted loss per share from continuing operations (1.87) 0.01 (1.86) Net basic and diluted loss per share (1.69) 0.01 (1.68) Statement of Cash Flows: Net loss $ (90,909) $ 689 $ (90,220) Net loss from continuing operations (100,070) 689 (99,381) Facility exit and impairment charges 58,403 (689) 57,714 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Description of Business, Asset Sale (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 USD ($) store | May 29, 2021 USD ($) | Mar. 04, 2023 USD ($) store item segment | Sep. 18, 2017 USD ($) store item | Jun. 28, 2017 item | |
Description of Business | |||||
Number of reportable segments | segment | 2 | ||||
Number of stores | 2,309 | ||||
Assets held for sale | Sale Of Assets To Walgreens Boots Alliance WBA And Buyer [Member] | |||||
Description of Business | |||||
Number of stores | 1,932 | ||||
Number of distribution centers | item | 3 | 3 | |||
Purchase price per agreement | $ | $ 4,375,000 | ||||
Discontinued Operations, Disposed of by Sale [Member] | Sale Of Assets To Walgreens Boots Alliance WBA And Buyer [Member] | |||||
Description of Business | |||||
Number of stores | 1,932 | 1,932 | |||
Number of distribution centers | item | 3 | ||||
Proceeds from assets sold | $ | $ 4,156,686 | $ 94,289 | $ 4,375,000 | ||
Walgreens | Walgreens Boots Alliance WBA [Member] | |||||
Description of Business | |||||
Ownership interest (as a percent) | 100% | ||||
Rite Aid Lease Management Company | |||||
Description of Business | |||||
Ownership interest (as a percent) | 100% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Sales (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Product Class | |||
Revenues | $ 24,091,899 | $ 24,568,255 | $ 24,043,240 |
Intersegment elimination | |||
Product Class | |||
Revenues | (215,467) | (249,686) | (292,157) |
Front end sales | |||
Product Class | |||
Revenues | 5,078,820 | ||
Retail Pharmacy Segment | |||
Product Class | |||
Other revenue | 123,654 | 124,143 | 126,875 |
Revenues | 17,785,067 | 17,494,816 | 16,365,260 |
Retail Pharmacy Segment | Pharmacy sales | |||
Product Class | |||
Revenues | 12,582,593 | 12,152,491 | 10,915,442 |
Retail Pharmacy Segment | Front end sales | |||
Product Class | |||
Revenues | $ 5,078,820 | $ 5,218,182 | $ 5,322,943 |
Retail Pharmacy Segment | Prescription drugs | Revenue from Contract with Customer, Segment Benchmark [Member] | Product Concentration Risk [Member] | |||
Product Class | |||
Percentage of sales | 71.20% | 70% | 66.70% |
Retail Pharmacy Segment | Over-the-counter medications and personal care | Revenue from Contract with Customer, Segment Benchmark [Member] | Product Concentration Risk [Member] | |||
Product Class | |||
Percentage of sales | 10.90% | ||
Retail Pharmacy Segment | Health and beauty aids | Revenue from Contract with Customer, Segment Benchmark [Member] | Product Concentration Risk [Member] | |||
Product Class | |||
Percentage of sales | 4.30% | ||
Retail Pharmacy Segment | General merchandise and other | Revenue from Contract with Customer, Segment Benchmark [Member] | Product Concentration Risk [Member] | |||
Product Class | |||
Percentage of sales | 13.60% | ||
Pharmacy Services Segment | |||
Product Class | |||
Revenues | $ 6,522,299 | $ 7,323,125 | $ 7,970,137 |
Pharmacy Services Segment | Pharmacy sales | |||
Product Class | |||
Revenues | $ 12,582,593 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - FY thru Revenues (Details) | 12 Months Ended | ||||
Feb. 27, 2022 USD ($) Point | Dec. 20, 2020 | Mar. 04, 2023 USD ($) | Feb. 26, 2022 USD ($) | Feb. 27, 2021 USD ($) | |
Fiscal Year | |||||
Length of reporting period | 371 days | 364 days | 364 days | ||
Deferred Financing Costs | |||||
Amortization expenses of deferred financing costs | $ 9,993,000 | $ 10,927,000 | $ 11,201,000 | ||
Revenue Recognition | |||||
Accrued contract liabilities | $ 2,030,000 | ||||
Noncompete agreements and other | |||||
Intangible Assets | |||||
Finite-lived intangible assets amortization period | 3 years | 3 years | |||
Prescription files | |||||
Intangible Assets | |||||
Estimated useful life, acquired intangible assets | 10 years | ||||
Amortization period of intangible assets | 5 years | ||||
Finite-lived intangible assets amortization period | 5 years | 6 years | |||
Customer relationships | |||||
Intangible Assets | |||||
Finite-lived intangible assets amortization period | 9 years | 10 years | |||
Customer relationships | Minimum | |||||
Intangible Assets | |||||
Estimated useful life, acquired intangible assets | 10 years | ||||
Customer relationships | Maximum | |||||
Intangible Assets | |||||
Estimated useful life, acquired intangible assets | 20 years | ||||
CMS license | |||||
Intangible Assets | |||||
Finite-lived intangible assets amortization period | 4 years | 5 years | |||
CMS license | Pharmacy Services Segment | |||||
Intangible Assets | |||||
Amortization period of intangible assets | 12 years | ||||
Finite-lived intangible assets amortization period | 4 years | ||||
Claims adjudication and other developed software | |||||
Intangible Assets | |||||
Finite-lived intangible assets amortization period | 0 years | 1 year | |||
Trademarks | |||||
Intangible Assets | |||||
Amortization period of intangible assets | 10 years | ||||
Buildings | Minimum | |||||
Fiscal Year | |||||
Useful life | 30 years | ||||
Buildings | Maximum | |||||
Fiscal Year | |||||
Useful life | 45 years | ||||
Equipment | Minimum | |||||
Fiscal Year | |||||
Useful life | 3 years | ||||
Equipment | Maximum | |||||
Fiscal Year | |||||
Useful life | 15 years | ||||
Internal-use software | |||||
Fiscal Year | |||||
Capitalized costs | $ 5,099,000 | $ 13,388,000 | $ 12,669,000 | ||
Wellness plus program | |||||
Revenue Recognition | |||||
Loyalty discount eligibility period | 6 months | ||||
Rite aid rewards program | Retail Pharmacy Segment | |||||
Revenue Recognition | |||||
Value of each reward point earned | $ 0.002 | ||||
Minimum points required for conversion into rewards | Point | 1,000 | ||||
Threshold period for expiry of unconverted points | 90 days | ||||
Threshold period for expiry of unredeemed rewards | 30 days | ||||
Accrued contract liabilities | $ 2,030,000 | $ 0 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Cost of Revenue thru Estimates (Details) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 USD ($) item | Feb. 26, 2022 USD ($) | Feb. 27, 2021 USD ($) | |
Leases | |||
Maximum additional period for lease extension | 5 years | ||
Number of fixed lease payment | item | 1 | ||
Advertising | |||
Advertising expenses, net of vendor advertising allowances | $ 133,379 | $ 146,085 | $ 122,725 |
Insurance | |||
Self-insurance, minimum occurrence, workers' compensation | 1,000 | ||
Self-insurance, minimum occurrence, general liability | $ 3,000 | ||
Pharmacy Services Segment | |||
Vendor Rebates and Allowances and Purchase Discounts | |||
Period for rebates dispensed to manufacturers | 30 days | ||
Rebates paid to clients, period in arrears | 8 months |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Significant Concentrations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Revenue from Contract with Customer, Segment Benchmark [Member] | Customers | Top five third party payors | Pharmacy sales | |||
Significant Concentrations | |||
Percentage of concentration risk | 83.40% | ||
Revenue from Contract with Customer, Segment Benchmark [Member] | Customers | Largest third party payor | Caremark | Pharmacy sales | |||
Significant Concentrations | |||
Percentage of concentration risk | 33.40% | 32.10% | 30.40% |
Revenue from Contract with Customer, Segment Benchmark [Member] | Customers | Medicaid agencies and related managed care Medicaid payors | Pharmacy sales | |||
Significant Concentrations | |||
Percentage of concentration risk | 19.90% | ||
Revenue from Contract with Customer, Segment Benchmark [Member] | Customers | Largest Medicaid agency | Pharmacy sales | |||
Significant Concentrations | |||
Percentage of concentration risk | 6.60% | ||
Revenue from Contract with Customer, Segment Benchmark [Member] | Customers | Medicare PartD | Pharmacy sales | |||
Significant Concentrations | |||
Percentage of concentration risk | 38.80% | ||
Purchases | Suppliers | McKesson Corp. | Pharmacy sales | |||
Significant Concentrations | |||
Percentage of concentration risk | 98% | ||
Pharmacy Services Segment | Medicare PartD | |||
Significant Concentrations | |||
Net revenues | $ 529,025 | $ 589,620 | $ 630,104 |
Pharmacy Services Segment | Revenue from Contract with Customer, Segment Benchmark [Member] | Customers | Top Five Customers [Member] | |||
Significant Concentrations | |||
Percentage of concentration risk | 65.90% | ||
Pharmacy Services Segment | Revenue from Contract with Customer, Segment Benchmark [Member] | Customers | Previously Disclosed Client Loss [Member] | |||
Significant Concentrations | |||
Percentage of concentration risk | 6.90% | ||
Pharmacy Services Segment | Revenue from Contract with Customer, Segment Benchmark [Member] | Customers | Largest Payor [Member] | |||
Significant Concentrations | |||
Percentage of concentration risk | 43.10% | 41.10% | 36.60% |
Pharmacy Services Segment | Consolidated revenues | Customers | Medicare PartD | |||
Significant Concentrations | |||
Percentage of concentration risk | 2.20% | 2.40% | 2.60% |
Acquisition (Details)
Acquisition (Details) - Bartell Drug Company $ in Thousands | 2 Months Ended | |
Dec. 18, 2020 USD ($) store Center | Feb. 27, 2021 USD ($) | |
Business Acquisition [Line Items] | ||
Cash consideration | $ 89,724 | |
Number of stores acquired | store | 67 | |
Number of distribution centers | Center | 1 | |
Percentage of ownership in subsidiary | 100% | |
Revenues | $ 101,083 |
Acquisition - Purchase price al
Acquisition - Purchase price allocation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 18, 2020 | Feb. 26, 2022 | Feb. 27, 2021 | |
Final purchase price allocation | |||
Business Combination, Bargain Purchase, Gain, Statement of Income or Comprehensive Income [Extensible Enumeration] | Gain (Loss) on Acquisition of Business | ||
Bartell Drug Company | |||
Final purchase price | |||
Cash consideration | $ 89,724 | ||
Total purchase price | 89,724 | ||
Final purchase price allocation | |||
Cash and cash equivalents | 3,494 | ||
Accounts receivable | 23,860 | ||
Inventories | 67,745 | ||
Prepaid expenses and other current assets | 1,857 | ||
Total current assets | 96,956 | ||
Property and equipment | 28,229 | ||
Operating lease right-of-use assets | 143,651 | ||
Intangible assets | 68,700 | ||
Other assets | 1,805 | ||
Total assets acquired | 339,341 | ||
Accounts payable | 24,166 | ||
Accrued salaries, wages and other current liabilities | 20,335 | ||
Current portion of operating lease liabilities | 24,617 | ||
Total current liabilities | 69,118 | ||
Long-term operating lease liabilities | 124,023 | ||
Other long-term liabilities | 166 | ||
Total liabilities assumed | 193,307 | ||
Deferred tax liabilities recorded on purchase | 13,951 | ||
Net assets acquired | 132,083 | ||
Bargain purchase gain | (42,359) | $ (42,359) | $ (47,705) |
Total purchase price | $ 89,724 |
Acquisition - Intangible assets
Acquisition - Intangible assets acquired (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 18, 2020 | Mar. 04, 2023 | |
Prescription files | ||
Business Acquisition [Line Items] | ||
Estimated Useful Life | 10 years | |
Bartell Drug Company | ||
Business Acquisition [Line Items] | ||
Intangible assets acquired | $ 68,700 | |
Bartell Drug Company | Trademarks | ||
Business Acquisition [Line Items] | ||
Intangible assets acquired | 14,400 | |
Bartell Drug Company | Prescription files | ||
Business Acquisition [Line Items] | ||
Intangible assets acquired | $ 54,300 | |
Estimated Useful Life | 10 years |
Acquisition - Acquisition costs
Acquisition - Acquisition costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 18, 2020 | Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Business Acquisition [Line Items] | ||||
Acquisition costs | $ 12,797 | $ 10,549 | ||
Bartell Drug Company | ||||
Business Acquisition [Line Items] | ||||
Bargain purchase gain | $ 42,359 | 42,359 | 47,705 | |
Loss on Bartell acquisition | 5,346 | |||
Acquisition costs | $ 0 | $ 12,797 | $ 10,549 |
Acquisition - Proforma informat
Acquisition - Proforma information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Business Acquisition [Line Items] | |||
Net revenues as reported | $ 24,091,899 | $ 24,568,255 | $ 24,043,240 |
Net loss | (719,188) | (522,372) | (90,220) |
Bartell Drug Company | |||
Business Acquisition [Line Items] | |||
Net revenues as reported | 24,091,899 | 24,568,255 | 24,043,240 |
Supplemental Pro forma revenues | 24,091,899 | 24,568,255 | 24,468,777 |
Net loss | (719,188) | (522,372) | (90,220) |
Supplemental Pro forma net loss | $ (719,188) | $ (522,372) | $ (116,040) |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||
Mar. 04, 2023 | Nov. 26, 2022 | Aug. 27, 2022 | May 28, 2022 | May 30, 2020 | Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Restructuring related costs | ||||||||
Total restructuring-related costs | $ 108,626 | $ 35,121 | $ 84,552 | |||||
Impairment of intangible assets | $ 29,852 | |||||||
Trademarks | ||||||||
Restructuring related costs | ||||||||
Impairment of intangible assets | 29,852 | |||||||
Selling, general and administrative expenses | ||||||||
Restructuring related costs | ||||||||
Total restructuring-related costs | 63,613 | |||||||
Cost of revenues | ||||||||
Restructuring related costs | ||||||||
Total restructuring-related costs | 20,939 | |||||||
Total restructuring-related costs | Selling, general and administrative expenses | ||||||||
Restructuring related costs | ||||||||
Total restructuring-related costs | 108,626 | 35,121 | 84,552 | |||||
Total restructuring-related costs | Accrued salaries, wages and other current liabilities | ||||||||
Restructuring related costs | ||||||||
Balance-beginning of period | $ 18,116 | $ 14,365 | $ 14,408 | $ 8,720 | 8,720 | |||
Additions charged to expense | 46,675 | 26,500 | 12,805 | 22,646 | ||||
Cash payments | (14,979) | (22,749) | (12,848) | (16,958) | ||||
Balance-end of period | 49,812 | 18,116 | 14,365 | 14,408 | 49,812 | 8,720 | ||
Severance and related costs | Selling, general and administrative expenses | ||||||||
Restructuring related costs | ||||||||
Total restructuring-related costs | 19,430 | 2,502 | 17,796 | |||||
Severance and related costs | Accrued salaries, wages and other current liabilities | ||||||||
Restructuring related costs | ||||||||
Balance-beginning of period | 9,409 | 9,061 | 10,930 | 4,257 | 4,257 | |||
Additions charged to expense | 1,813 | 4,800 | 913 | 11,904 | ||||
Cash payments | (3,564) | (4,452) | (2,782) | (5,231) | ||||
Balance-end of period | 7,658 | 9,409 | 9,061 | 10,930 | 7,658 | 4,257 | ||
Non-executive retention costs | Selling, general and administrative expenses | ||||||||
Restructuring related costs | ||||||||
Total restructuring-related costs | 1,012 | |||||||
Professional and other fees | Selling, general and administrative expenses | ||||||||
Restructuring related costs | ||||||||
Total restructuring-related costs | 89,196 | 32,619 | 44,805 | |||||
Professional and other fees | Accrued salaries, wages and other current liabilities | ||||||||
Restructuring related costs | ||||||||
Balance-beginning of period | 8,707 | 5,304 | 3,478 | 4,463 | 4,463 | |||
Additions charged to expense | 44,862 | 21,700 | 11,892 | 10,742 | ||||
Cash payments | (11,415) | (18,297) | (10,066) | (11,727) | ||||
Balance-end of period | $ 42,154 | $ 8,707 | $ 5,304 | $ 3,478 | 42,154 | 4,463 | ||
SKU Optimization Charges [Member] | ||||||||
Restructuring related costs | ||||||||
Total restructuring-related costs | 20,939 | |||||||
SKU Optimization Charges [Member] | Cost of revenues | ||||||||
Restructuring related costs | ||||||||
Total restructuring-related costs | 20,939 | |||||||
Retail Pharmacy Segment | Total restructuring-related costs | Selling, general and administrative expenses | ||||||||
Restructuring related costs | ||||||||
Total restructuring-related costs | 86,484 | 12,237 | 75,571 | |||||
Retail Pharmacy Segment | Severance and related costs | Selling, general and administrative expenses | ||||||||
Restructuring related costs | ||||||||
Total restructuring-related costs | 15,342 | 13,443 | ||||||
Retail Pharmacy Segment | Non-executive retention costs | Selling, general and administrative expenses | ||||||||
Restructuring related costs | ||||||||
Total restructuring-related costs | 1,136 | |||||||
Retail Pharmacy Segment | Professional and other fees | Selling, general and administrative expenses | ||||||||
Restructuring related costs | ||||||||
Total restructuring-related costs | 71,142 | 12,237 | 40,053 | |||||
Retail Pharmacy Segment | SKU Optimization Charges [Member] | Cost of revenues | ||||||||
Restructuring related costs | ||||||||
Total restructuring-related costs | 20,939 | |||||||
Pharmacy Services Segment | Total restructuring-related costs | Selling, general and administrative expenses | ||||||||
Restructuring related costs | ||||||||
Total restructuring-related costs | 22,142 | 22,884 | 8,981 | |||||
Pharmacy Services Segment | Severance and related costs | Selling, general and administrative expenses | ||||||||
Restructuring related costs | ||||||||
Total restructuring-related costs | 4,088 | 2,502 | 4,353 | |||||
Pharmacy Services Segment | Non-executive retention costs | Selling, general and administrative expenses | ||||||||
Restructuring related costs | ||||||||
Total restructuring-related costs | (124) | |||||||
Pharmacy Services Segment | Professional and other fees | Selling, general and administrative expenses | ||||||||
Restructuring related costs | ||||||||
Total restructuring-related costs | $ 18,054 | $ 20,382 | $ 4,752 |
Asset Sale to WBA (Details)
Asset Sale to WBA (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2018 USD ($) store | May 29, 2021 USD ($) | Mar. 04, 2023 USD ($) store item | Feb. 26, 2022 USD ($) | Feb. 27, 2021 USD ($) | Sep. 18, 2017 USD ($) store item | Jun. 28, 2017 item | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of stores | store | 2,309 | ||||||
Assets held for sale | Sale Of Assets To Walgreens Boots Alliance WBA And Buyer [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of stores | store | 1,932 | ||||||
Number of distribution centers | item | 3 | 3 | |||||
Purchase price per agreement | $ 4,375,000 | ||||||
Discontinued Operations, Disposed of by Sale [Member] | Sale Of Assets To Walgreens Boots Alliance WBA And Buyer [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of stores | store | 1,932 | 1,932 | |||||
Number of distribution centers | item | 3 | ||||||
Proceeds from assets sold | $ 4,156,686 | $ 94,289 | $ 4,375,000 | ||||
Pre-tax gain on sale | $ 12,690 | ||||||
Period of transition | 3 years | ||||||
Payments for inventory and selling, general and administrative activities | $ 0 | $ 0 | |||||
TSA fees | $ 0 | $ 0 | $ 1,467 |
Asset Sale to WBA - Operating r
Asset Sale to WBA - Operating results of discontinued operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Costs and expenses: | |||
Net income from discontinued operations, net of tax | $ 9,161 | ||
Discontinued Operations, Disposed of by Sale [Member] | Sale Of Assets To Walgreens Boots Alliance WBA And Buyer [Member] | |||
Income statement disclosures | |||
Revenues | 174 | ||
Costs and expenses: | |||
Cost of revenues | |||
Net credit to cost of revenues | 8 | ||
Selling, general and administrative expenses | 871 | ||
Interest expense | |||
Gain on sale of assets, net | (14,149) | ||
Net expenses and non-operating income | (13,270) | ||
Income from discontinued operations before income taxes | 13,444 | ||
Income tax (benefit) expense, discontinued operation | 4,283 | ||
Net income from discontinued operations, net of tax | $ 9,161 |
Loss Per Share (Details)
Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Numerator: | |||
Net loss from continuing operations - basic | $ (719,188) | $ (522,372) | $ (99,381) |
Loss from continuing operations attributable to common stockholders - diluted | (719,188) | (522,372) | (99,381) |
Income from discontinued operations attributable to common stockholders-basic | 9,161 | ||
Income from discontinued operations attributable to common stockholders-diluted | 9,161 | ||
Net loss attributable to common stockholders - basic | (719,188) | (522,372) | (90,220) |
Net loss attributable to common stockholders - diluted | $ (719,188) | $ (522,372) | $ (90,220) |
Denominator: | |||
Basic weighted average shares | 54,680 | 54,055 | 53,653 |
Diluted weighted average shares | 54,680 | 54,055 | 53,653 |
Basic loss per share: | |||
Continuing operations | $ (13.15) | $ (9.66) | $ (1.86) |
Discontinued operations | 0.18 | ||
Net basic loss per share | (13.15) | (9.66) | (1.68) |
Diluted loss per share: | |||
Continuing operations | (13.15) | (9.66) | (1.86) |
Discontinued operations | 0.18 | ||
Net diluted loss per share | $ (13.15) | $ (9.66) | $ (1.68) |
Incentive Stock options | |||
Antidilutive securities excluded from computation of income per share | |||
Shares excluded from the computation of diluted income (loss) per share | 532 | 701 | 780 |
Unvested Restricted stock | |||
Antidilutive securities excluded from computation of income per share | |||
Shares excluded from the computation of diluted income (loss) per share | 1,476 | 1,533 | 1,293 |
Facility Exit and Impairment _3
Facility Exit and Impairment Charges (Details) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 USD ($) store location | Feb. 26, 2022 USD ($) store | Feb. 27, 2021 USD ($) store location | |
Lease termination and impairment charges | |||
Facility exit and impairment charges | $ 180,637 | $ 164,084 | $ 57,714 |
Period considered for impairment of relocated stores | 2 years | ||
Total number of impaired locations | 258 | 354 | 228 |
Number of stores | store | 2,309 | ||
Operating lease right-of-use assets | $ 2,497,206 | $ 2,813,535 | |
Impairment charges | 132,243 | 150,064 | |
Impairment charges, closed facilities | $ 4,832 | $ 724 | |
Active Stores [Member] | |||
Lease termination and impairment charges | |||
Total number of impaired locations | store | 64 | 207 | 195 |
Number of stores | store | 2,309 | ||
Operating lease right-of-use assets | $ 2,300,000 | ||
Impairment charges | 13,544 | $ 56,182 | $ 29,745 |
Carrying value of long-lived assets | $ 717,200 | ||
Retail Sites New, Relocated And Remodeled-Active Stores [Member] | |||
Lease termination and impairment charges | |||
Total number of impaired locations | store | 8 | 1 | 2 |
ROU assets impairment | $ 1,765 | $ 0 | $ 347 |
Capital asset impairment | $ 2,875 | 538 | 1,172 |
Period considered for impairment of relocated stores | 2 years | ||
Impairment charges | $ 4,640 | $ 538 | $ 1,519 |
Retail Sites Previously Impaired-Active Stores [Member] | |||
Lease termination and impairment charges | |||
Total number of impaired locations | store | 44 | 118 | 174 |
ROU assets impairment | $ 3,087 | $ 5,434 | $ 15,459 |
Capital asset impairment | 1,779 | 6,905 | 5,913 |
Impairment charges | $ 4,866 | $ 12,339 | $ 21,372 |
Retail Sites In Closed Status [Member] | |||
Lease termination and impairment charges | |||
Total number of impaired locations | store | 194 | 147 | 33 |
Impairment charges, closed facilities | $ 123,531 | $ 94,606 | $ 16,542 |
Remaining Stores Not Meeting The Recoverability Test [Member] | |||
Lease termination and impairment charges | |||
Total number of impaired locations | store | 12 | 88 | 19 |
ROU assets impairment | $ 1,765 | $ 26,130 | $ 3,177 |
Capital asset impairment | 2,273 | 17,175 | 3,677 |
Impairment charges | $ 4,038 | $ 43,305 | $ 6,854 |
Minimum | |||
Lease termination and impairment charges | |||
Period considered for impairment of relocated stores | 2 years | ||
Minimum | Retail Sites New, Relocated And Remodeled-Active Stores [Member] | |||
Lease termination and impairment charges | |||
Period considered for impairment of relocated stores | 2 years | ||
Period considered for impairment of new stores | 3 years |
Facility Exit and Impairment _4
Facility Exit and Impairment Charges - Fair value (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Fair value of Long-lived assets held for use | $ 65,676 | $ 263,770 | $ 65,676 | $ 263,770 | ||
Fair value of Long-lived assets held for sale | 5,115 | 2,371 | 5,115 | 2,371 | ||
Total | 70,791 | 266,141 | 70,791 | 266,141 | ||
Long-lived assets held, impairment charges | $ (132,243) | $ (150,064) | ||||
Impairment, Long-Lived Asset, Held-for-Use, Statement of Income or Comprehensive Income [Extensible Enumeration] | Lease Termination And Long-Lived Asset Impairment Charges | Lease Termination And Long-Lived Asset Impairment Charges | ||||
Long-lived assets held for sale, impairment charges | $ (4,832) | $ (724) | ||||
Total | (59,573) | (99,416) | $ (31,057) | (137,075) | (150,788) | $ (46,287) |
Nonrecurring basis | Level 1 | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Fair value of Long-lived assets held for use | ||||||
Fair value of Long-lived assets held for sale | ||||||
Total | ||||||
Nonrecurring basis | Level 2 | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Fair value of Long-lived assets held for use | 22,959 | 240,176 | 22,959 | 240,176 | ||
Fair value of Long-lived assets held for sale | 5,115 | 2,371 | 5,115 | 2,371 | ||
Total | 28,074 | 242,547 | 28,074 | 242,547 | ||
Nonrecurring basis | Level 3 | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Fair value of Long-lived assets held for use | 42,717 | 23,594 | 42,717 | 23,594 | ||
Total | $ 42,717 | $ 23,594 | $ 42,717 | $ 23,594 |
Facility Exit and Impairment _5
Facility Exit and Impairment Charges - accrued facility exit charges roll forward (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Lease termination and impairment charges | |||
Facility exit charges | $ 43,562 | $ 13,296 | $ 11,427 |
Facility Exit Charges | |||
Closed store liability | |||
Balance-beginning of period | 1,892 | 2,754 | 2,253 |
Provision for facility exit charges | 461 | 162 | 793 |
Cash payments | (125) | (1,024) | (292) |
Balance-end of period | $ 2,228 | $ 1,892 | $ 2,754 |
Facility Exit and Impairment _6
Facility Exit and Impairment Charges - Results from closed stores (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Lease termination and impairment charges | |||
Income (loss) before income taxes | $ (725,655) | $ (526,152) | $ (119,538) |
Depreciation and amortization | 276,583 | 295,686 | 327,124 |
Retail Sites In Closed Or Approved For Closure Status [Member] | |||
Lease termination and impairment charges | |||
Revenues | 178,030 | 586,056 | 639,471 |
Operating expenses | 192,357 | 640,996 | 699,662 |
Gain from sale of assets | (46,125) | (13,670) | (7,954) |
Other expenses | 25,396 | 52,999 | 13,057 |
Income (loss) before income taxes | 6,402 | (94,269) | (65,294) |
Depreciation and amortization | 934 | 3,499 | 4,535 |
Inventory liquidation charges | $ (6,369) | $ (1,646) | $ (1,528) |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Mar. 04, 2023 | Feb. 26, 2022 |
Other Financial Instruments | ||
Held to maturity investments | $ 7,457 | $ 7,406 |
Level 1 | ||
Other Financial Instruments | ||
Carrying value of total long-term indebtedness | 2,925,258 | 2,732,986 |
Estimated fair value of total long-term indebtedness | $ 2,368,328 | $ 2,661,122 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Current tax: | |||
Federal | $ (6) | $ (6) | $ (6,758) |
State | 9,082 | 7,454 | 4,145 |
Total current tax expense (benefit) | 9,076 | 7,448 | (2,613) |
Deferred tax and other: | |||
Federal | (1,301) | (12,649) | |
State | (15,543) | (9,927) | (4,895) |
Total deferred tax expense (benefit) | (15,543) | (11,228) | (17,544) |
Total income tax (benefit) expense | $ (6,467) | $ (3,780) | $ (20,157) |
State | Minimum | |||
Income tax examination | 3 years | ||
State | Maximum | |||
Income tax examination | 5 years |
Income Taxes - Rate reconciliat
Income Taxes - Rate reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Reconciliation of the expected statutory federal tax and the total income tax expense (benefit) | |||
Federal statutory rate | $ (152,388) | $ (110,492) | $ (25,103) |
Nondeductible expenses | 556 | 398 | 588 |
State income taxes, net | 271,306 | (45,388) | 10,042 |
Bargain purchase gain | 1,123 | (10,018) | |
Decrease of previously recorded liabilities | (18,689) | (3,798) | (2,273) |
Nondeductible compensation | 2,045 | 1,551 | 3,764 |
Qualified fringe disallowance | 342 | 224 | 313 |
Nondeductible excise tax | 1,296 | ||
Stock based compensation | 2,213 | 198 | 2,806 |
Valuation allowance | (112,037) | 152,785 | (2,222) |
Other | 185 | (381) | 650 |
Total income tax (benefit) expense | (6,467) | $ (3,780) | $ (20,157) |
Income tax benefit offset amount | $ 256,411 | ||
Overall tax rate impact percent | 8.40% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 04, 2023 | Feb. 26, 2022 |
Deferred tax assets: | ||
Accounts receivable | $ 26,769 | $ 22,958 |
Accrued expenses | 143,207 | 95,421 |
Pension, retirement and other benefits | 40,100 | 67,686 |
Long-lived assets | 364,618 | 299,507 |
Operating lease liabilities | 781,721 | 883,713 |
Credits | 21,955 | 22,917 |
Net operating losses | 1,200,516 | 1,487,639 |
Other | 271 | 225 |
Total gross deferred tax assets | 2,579,157 | 2,880,066 |
Valuation allowance | (1,636,461) | (1,818,069) |
Total deferred tax assets | 942,696 | 1,061,997 |
Deferred tax liabilities: | ||
Outside basis difference | 5,622 | 5,682 |
Inventory | 244,554 | 251,221 |
Operating lease right of use assets | 680,152 | 785,023 |
Total gross deferred tax liabilities | 930,328 | 1,041,926 |
Net deferred tax assets | $ 12,368 | $ 20,071 |
Income Taxes - Unrecognized Ben
Income Taxes - Unrecognized Benefit (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Reconciliation of beginning and ending amount of unrecognized tax benefits | |||
Unrecognized tax benefits at beginning of the period | $ 103,629 | $ 184,414 | $ 198,325 |
Increases to prior year tax positions | 1 | 24 | 42 |
Decreases to tax positions in prior periods | (29,432) | (294) | (807) |
Lapse of statute of limitations | (27,113) | (80,515) | (13,146) |
Unrecognized tax benefits balance at end of the period | 47,085 | 103,629 | 184,414 |
Unrecognized tax benefits which would impact effective tax rate, if recognized | 1,498 | $ 18,737 | $ 20,923 |
Decrease in unrecognized tax benefits related to state exposures | $ 4,001 |
Income Taxes - Tax Contingencie
Income Taxes - Tax Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Income Taxes | |||
Interest and penalties related to tax contingencies recognized as income tax expense / (benefit) | $ (6,006) | $ (183) | $ (123) |
Accrued income tax-related interest and penalties | $ 490 | $ 6,496 |
Income Taxes - Net Operating Lo
Income Taxes - Net Operating Losses and Tax Credits (Details) - USD ($) $ in Thousands | Mar. 04, 2023 | Feb. 26, 2022 |
Valuation Allowance | ||
Valuation allowance | $ 1,636,461 | $ 1,818,069 |
Federal | ||
Net Operating Losses and Tax Credits | ||
Net operating loss carryforwards | 2,133,742 | |
Federal business tax credit carryforwards | 11,363 | |
Federal | Tax Period Between Fiscal 2029 And 2031 [Member] | ||
Net Operating Losses and Tax Credits | ||
Net operating losses subject to expiration | 884,668 | |
Federal | Tax Period Between Fiscal 2032 and 2038 | ||
Net Operating Losses and Tax Credits | ||
Net operating losses subject to expiration | 193,961 | |
State | ||
Net Operating Losses and Tax Credits | ||
Net operating loss carryforwards | 12,279,752 | |
Net tax effect of state carryforwards | $ 754,483 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 04, 2023 | Feb. 26, 2022 |
Accounts Receivable | ||
Allowance for uncollectible accounts | $ 53,453 | $ 28,069 |
Medicare Part D (Details)
Medicare Part D (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||
Feb. 03, 2023 | Oct. 13, 2022 | Jan. 24, 2022 | Aug. 12, 2021 | Feb. 18, 2021 | Nov. 12, 2020 | Mar. 04, 2023 | Nov. 26, 2022 | Feb. 26, 2022 | Aug. 28, 2021 | Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | Dec. 31, 2022 | |
Statutory Accounting Practices [Line Items] | ||||||||||||||
Accounts receivable, net | $ 1,149,958 | $ 1,343,496 | $ 1,149,958 | $ 1,343,496 | ||||||||||
Medicare Part D | ||||||||||||||
Remaining receivable for receivables sold to third party | 22,362 | 34,898 | 22,362 | 34,898 | ||||||||||
Loss on sale of receivable | $ 13,713 | |||||||||||||
Loss (gain) on sale of assets, net | (68,586) | 5,505 | $ (69,300) | |||||||||||
Goodwill, impairment charges | 371,200 | 229,000 | $ 0 | |||||||||||
November 2020 Receivable Purchase Agreement | ||||||||||||||
Medicare Part D | ||||||||||||||
Amount of receivables sold under Receivable Purchase Agreement | $ 464,019 | |||||||||||||
Sale price for receivables sold | 444,812 | |||||||||||||
Receipts from sale of receivables | 412,795 | |||||||||||||
Loss on sale of receivable | $ 19,207 | |||||||||||||
August 2021 Receivable Purchase Agreement | ||||||||||||||
Medicare Part D | ||||||||||||||
Amount of receivables sold under Receivable Purchase Agreement | $ 271,829 | |||||||||||||
Sale price for receivables sold | 258,116 | |||||||||||||
Receipts from sale of receivables | $ 239,360 | |||||||||||||
February 2021 Receivable Purchase Agreement | ||||||||||||||
Medicare Part D | ||||||||||||||
Amount of receivables sold under Receivable Purchase Agreement | $ 300,015 | |||||||||||||
Sale price for receivables sold | 290,613 | |||||||||||||
Receipts from sale of receivables | 269,912 | |||||||||||||
Loss on sale of receivable | $ 9,403 | |||||||||||||
October 2022 Receivable Purchase Agreement | ||||||||||||||
Statutory Accounting Practices [Line Items] | ||||||||||||||
Accounts receivable, net | 13,488 | 13,488 | ||||||||||||
Medicare Part D | ||||||||||||||
Amount of receivables sold under Receivable Purchase Agreement | $ 195,487 | |||||||||||||
Sale price for receivables sold | 180,405 | |||||||||||||
Receipts from sale of receivables | $ 166,917 | |||||||||||||
Loss on sale of receivable | $ 1,937 | |||||||||||||
Loss (gain) on sale of assets, net | $ 15,082 | |||||||||||||
January 2022 Receivable Purchase Agreement | ||||||||||||||
Medicare Part D | ||||||||||||||
Amount of receivables sold under Receivable Purchase Agreement | $ 400,680 | |||||||||||||
Sale price for receivables sold | 387,035 | |||||||||||||
Receipts from sale of receivables | $ 359,388 | |||||||||||||
Loss on sale of receivable | 13,645 | |||||||||||||
February 2023 Receivable Purchase Agreement | ||||||||||||||
Statutory Accounting Practices [Line Items] | ||||||||||||||
Accounts receivable, net | 19,209 | 19,209 | ||||||||||||
Medicare Part D | ||||||||||||||
Amount of receivables sold under Receivable Purchase Agreement | $ 278,390 | |||||||||||||
Sale price for receivables sold | 261,771 | |||||||||||||
Receipts from sale of receivables | $ 242,562 | |||||||||||||
Loss on sale of receivable | 16,619 | |||||||||||||
Most Current Receivable Purchase Agreement | ||||||||||||||
Medicare Part D | ||||||||||||||
Loss on sale of receivable | 2,573 | |||||||||||||
EI (Elixir Insurance) | ||||||||||||||
Statutory Accounting Practices [Line Items] | ||||||||||||||
Minimum amount of capital and surplus required by regulatory requirements | $ 10,693 | |||||||||||||
Accounts receivable, net | $ 45,201 | $ 63,203 | $ 45,201 | $ 63,203 |
Manufacturer Rebates Receivab_2
Manufacturer Rebates Receivables (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Feb. 26, 2022 | Mar. 04, 2023 | |
Manufacturer Rebates Receivables | ||
Allowance for uncollectible accounts | $ 28,069 | $ 53,453 |
Pharmacy Services Segment | ||
Manufacturer Rebates Receivables | ||
Manufacturer rebates receivables | 535,620 | 357,699 |
Manufacturers Rebates Receivables | Pharmacy Services Segment | ||
Manufacturer Rebates Receivables | ||
Allowance for uncollectible accounts | 18,796 | $ 8,680 |
Increase in allowances for accounts receivable | $ 15,068 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Inventory | |||
Amount by which LIFO value is lower than FIFO value | $ 539,932 | $ 487,173 | |
LIFO charge (credit) | 53,028 | 1,314 | $ (51,692) |
Amount of decrease in the cost of revenues due to the effect of LIFO inventory liquidation | $ 31,857 | $ 13,090 | $ 26,861 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 3,901,622 | $ 3,948,501 | |
Accumulated depreciation | (2,993,851) | (2,959,334) | |
Property, plant and equipment, net | 907,771 | 989,167 | |
Depreciation expense | 202,559 | 217,639 | $ 238,104 |
Carrying amount of assets to be disposed | 3,972 | 1,463 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 69,588 | 83,485 | |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 208,681 | 314,143 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 1,568,983 | 1,566,082 | |
Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 1,855,083 | 1,794,937 | |
Software | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 89,597 | 92,139 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 109,690 | $ 97,715 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Mar. 04, 2023 | Aug. 27, 2022 | May 30, 2020 | Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Goodwill, impairment charges | $ 371,200 | $ 229,000 | $ 0 | |||
Goodwill and intangible asset impairment charges | 371,200 | 229,000 | $ 29,852 | |||
Impairment of intangible assets | $ 29,852 | |||||
Pharmacy Services Segment | ||||||
Accumulated impairment losses | $ 1,174,912 | 1,174,912 | 803,712 | |||
Goodwill, impairment charges | $ 119,000 | $ 252,200 | $ 371,200 | $ 229,000 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 04, 2023 | Aug. 27, 2022 | Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Carrying amount of goodwill | |||||
Beginning Balance | $ 879,136 | $ 1,108,136 | |||
Goodwill impairment | (371,200) | (229,000) | $ 0 | ||
Ending Balance | $ 507,936 | 507,936 | 879,136 | 1,108,136 | |
Retail Pharmacy Segment | |||||
Carrying amount of goodwill | |||||
Beginning Balance | 43,492 | 43,492 | |||
Goodwill impairment | |||||
Ending Balance | 43,492 | 43,492 | 43,492 | 43,492 | |
Pharmacy Services Segment | |||||
Carrying amount of goodwill | |||||
Beginning Balance | 835,644 | 1,064,644 | |||
Goodwill impairment | (119,000) | $ (252,200) | (371,200) | (229,000) | |
Ending Balance | $ 464,444 | $ 464,444 | $ 835,644 | $ 1,064,644 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Intangibles (Details) - USD ($) $ in Thousands | Mar. 04, 2023 | Feb. 26, 2022 | Feb. 25, 2022 |
Finite Lived And Indefinite Lived Intangible Assets By Major Class | |||
Gross Carrying Amount, Finite | $ 1,736,069 | $ 1,732,305 | |
Total Accumulated Amortization, Finite | (1,500,357) | (1,455,509) | |
Total Net, finite | 235,712 | 276,796 | |
Gross Carrying Amount, Total | 1,750,469 | 1,746,705 | |
Net, Total | 250,112 | 291,196 | |
Trademarks | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class | |||
Total Accumulated Amortization, Finite | |||
Gross Carrying Amount, Indefinite Lived | 14,400 | 14,400 | |
Noncompete agreements and other | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class | |||
Gross Carrying Amount, Finite | 201,919 | 197,651 | |
Total Accumulated Amortization, Finite | (182,957) | (178,958) | |
Total Net, finite | $ 18,962 | $ 18,693 | |
Remaining Weighted Average Amortization Period | 3 years | 3 years | |
Prescription files | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class | |||
Gross Carrying Amount, Finite | $ 1,029,665 | $ 1,030,169 | |
Total Accumulated Amortization, Finite | (928,478) | (918,773) | |
Total Net, finite | $ 101,187 | $ 111,396 | |
Remaining Weighted Average Amortization Period | 5 years | 6 years | |
Amortization period of intangible assets | 5 years | ||
Customer relationships | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class | |||
Gross Carrying Amount, Finite | $ 388,000 | $ 388,000 | |
Total Accumulated Amortization, Finite | (306,139) | (286,090) | |
Total Net, finite | $ 81,861 | $ 101,910 | |
Remaining Weighted Average Amortization Period | 9 years | 10 years | |
CMS license | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class | |||
Gross Carrying Amount, Finite | $ 57,500 | $ 57,500 | |
Total Accumulated Amortization, Finite | (23,798) | (15,372) | |
Total Net, finite | $ 33,702 | $ 42,128 | |
Remaining Weighted Average Amortization Period | 4 years | 5 years | |
Claims adjudication and other developed software | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class | |||
Gross Carrying Amount, Finite | $ 58,985 | $ 58,985 | |
Total Accumulated Amortization, Finite | (58,985) | (56,316) | |
Total Net, finite | $ 2,669 | ||
Remaining Weighted Average Amortization Period | 0 years | 1 year | |
Trademarks | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class | |||
Amortization period of intangible assets | 10 years | ||
EI (Elixir Insurance) | CMS license | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class | |||
Remaining Weighted Average Amortization Period | 5 years | 19 years |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Unfavorable lease intangibles and amortization expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Goodwill and Other Intangible Assets | |||
Amortization expense for intangible assets and liabilities | $ 74,024 | $ 78,047 | $ 89,020 |
Anticipated annual amortization expense for intangible assets and liabilities | |||
2025 | 61,343 | ||
2026 | 50,209 | ||
2027 | 39,771 | ||
2028 | 32,779 | ||
2028 | $ 25,299 |
Accrued Salaries, Wages and O_3
Accrued Salaries, Wages and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 |
Accrued Salaries, Wages and Other Current Liabilities | |||
Accrued wages, benefits and other personnel costs | $ 190,664 | $ 291,004 | |
Accrued interest | 18,630 | 18,286 | |
Accrued sales and other taxes payable | 86,920 | 75,068 | |
Accrued store expense | 71,398 | 70,537 | |
Accrued litigation, legal and professional fees | 41,205 | 43,200 | |
Accrued self insurance | 25,760 | 28,402 | |
Other | 275,314 | 250,062 | |
Accrued salaries, wages and other current liabilities | $ 709,891 | $ 776,559 | $ 643,218 |
Indebtedness and Credit Agree_3
Indebtedness and Credit Agreement - Indebtedness and lease financing obligations (Details) - USD ($) $ in Thousands | Mar. 04, 2023 | Dec. 09, 2022 | Nov. 30, 2022 | Nov. 03, 2022 | Jun. 29, 2022 | Jun. 13, 2022 | Feb. 26, 2022 | May 28, 2021 | Jul. 24, 2020 | Jul. 10, 2020 | Jul. 09, 2020 | Jun. 25, 2020 | Dec. 20, 2018 |
Indebtedness and credit agreements | |||||||||||||
Debt instrument, stated interest rate (as a percent) | 6.125% | ||||||||||||
Lease financing obligations | $ 18,912 | $ 20,374 | |||||||||||
Total debt | 2,944,170 | 2,753,360 | |||||||||||
Less: Current maturities of long-term debt and lease financing obligations | (6,332) | (5,544) | |||||||||||
Long-term debt and lease financing obligations, less current maturities | 2,937,838 | 2,747,816 | |||||||||||
Less: Cash and cash equivalents | (157,151) | (39,721) | |||||||||||
Senior Secured Debt | |||||||||||||
Indebtedness and credit agreements | |||||||||||||
Long-term debt | $ 1,581,793 | 1,038,646 | |||||||||||
6.125% senior notes due April 2023 | |||||||||||||
Indebtedness and credit agreements | |||||||||||||
Debt instrument, stated interest rate (as a percent) | 6.125% | 6.125% | 6.125% | 6.125% | |||||||||
Senior secured revolving credit facility due August 2026 | |||||||||||||
Indebtedness and credit agreements | |||||||||||||
Long-term debt | $ 1,183,883 | 690,990 | |||||||||||
Principal | 1,200,000 | 709,000 | |||||||||||
Unamortized debt issuance costs | 16,117 | 18,010 | |||||||||||
FILO term loan due August 2026 | |||||||||||||
Indebtedness and credit agreements | |||||||||||||
Long-term debt | 397,910 | 347,656 | |||||||||||
Principal | 400,000 | 350,000 | |||||||||||
Unamortized debt issuance costs | 2,090 | 2,344 | |||||||||||
Second Lien Secured Debt | |||||||||||||
Indebtedness and credit agreements | |||||||||||||
Long-term debt | 1,156,132 | 1,428,697 | |||||||||||
7.5% senior secured notes due July 2025 | |||||||||||||
Indebtedness and credit agreements | |||||||||||||
Long-term debt | $ 317,473 | $ 593,176 | |||||||||||
Debt instrument, stated interest rate (as a percent) | 7.50% | 7.50% | 7.50% | 7.50% | 7.50% | 7.50% | 7.50% | ||||||
Principal | $ 320,002 | $ 600,000 | |||||||||||
Unamortized debt issuance costs | 2,529 | 6,824 | |||||||||||
8.0% senior secured notes due November 2026 | |||||||||||||
Indebtedness and credit agreements | |||||||||||||
Long-term debt | $ 838,659 | $ 835,521 | |||||||||||
Debt instrument, stated interest rate (as a percent) | 8% | 8% | 8% | 8% | 8% | 8% | |||||||
Principal | $ 849,918 | $ 849,918 | $ 849,918 | $ 600,000 | |||||||||
Unamortized debt issuance costs | 11,259 | 14,397 | |||||||||||
FILO term loan due December 2023 | |||||||||||||
Indebtedness and credit agreements | |||||||||||||
Principal | $ 450,000 | ||||||||||||
Unguaranteed Unsecured Debt | |||||||||||||
Indebtedness and credit agreements | |||||||||||||
Long-term debt | 187,333 | 265,643 | |||||||||||
7.7% notes due February 2027 | |||||||||||||
Indebtedness and credit agreements | |||||||||||||
Long-term debt | $ 185,293 | $ 236,744 | |||||||||||
Debt instrument, stated interest rate (as a percent) | 7.70% | 7.70% | 7.70% | ||||||||||
Principal | $ 185,691 | $ 237,386 | |||||||||||
Unamortized debt issuance costs | 398 | 642 | |||||||||||
6.875% fixed-rate senior notes due December 2028 | |||||||||||||
Indebtedness and credit agreements | |||||||||||||
Long-term debt | $ 2,040 | $ 28,899 | |||||||||||
Debt instrument, stated interest rate (as a percent) | 6.875% | 6.875% | 6.875% | ||||||||||
Principal | $ 2,046 | $ 29,001 | |||||||||||
Unamortized debt issuance costs | $ 6 | $ 102 |
Indebtedness and Credit Agree_4
Indebtedness and Credit Agreement - Credit Facility (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||||
Dec. 01, 2022 | Aug. 20, 2021 | Mar. 04, 2023 | May 28, 2021 | Jul. 24, 2020 | Jul. 10, 2020 | Jun. 25, 2020 | Dec. 20, 2018 | |
Credit facility | ||||||||
Debt instrument, stated interest rate (as a percent) | 6.125% | |||||||
Rite Aid Lease Management Company | ||||||||
Credit facility | ||||||||
Ownership interest (as a percent) | 100% | |||||||
Senior secured revolving credit facility due December 2023 | ||||||||
Credit facility | ||||||||
Maximum borrowing capacity | $ 2,700,000 | |||||||
FILO term loan due December 2023 | ||||||||
Credit facility | ||||||||
Maximum borrowing capacity | 450,000 | |||||||
FILO term loan due August 2026 | ||||||||
Credit facility | ||||||||
Maximum borrowing capacity | $ 400,000 | $ 350,000 | ||||||
FILO term loan due August 2026 | Maximum | ||||||||
Credit facility | ||||||||
Threshold availability on the third consecutive business day | $ 257,500 | |||||||
FILO term loan due August 2026 | LIBOR | ||||||||
Credit facility | ||||||||
Percentage points added to the reference rate | 2.75% | |||||||
FILO term loan due August 2026 | Citibank's base rate | ||||||||
Credit facility | ||||||||
Percentage points added to the reference rate | 2% | 1.75% | ||||||
FILO term loan due August 2026 | SOFR | ||||||||
Credit facility | ||||||||
Percentage points added to the reference rate | 3% | |||||||
Senior secured revolving credit facility due August 2026 | ||||||||
Credit facility | ||||||||
Maximum borrowing capacity | $ 2,850,000 | $ 2,800,000 | ||||||
Period triggering springing maturity | 91 days | |||||||
Outstanding borrowings | 1,600,000 | |||||||
Letters of credit outstanding | 208,698 | |||||||
Additional borrowing capacity | 1,403,996 | |||||||
Maximum amount of accumulated cash on hand | 200,000 | |||||||
Amount of debt allowed to be outstanding | 1,500,000 | |||||||
Cash sweep, 3-day minimum threshold | 283,250 | |||||||
Cash sweep, 1-day minimum threshold | 206,000 | |||||||
Threshold amount of debt | $ 750,000 | |||||||
Number of days relating to debt threshold | 90 days | |||||||
Minimum principal balance for which non-payment causes default | $ 50,000 | |||||||
Senior secured revolving credit facility due August 2026 | Minimum | ||||||||
Credit facility | ||||||||
Credit facility commitment fee (as a percent) | 0.25% | |||||||
Additional borrowing capacity | $ 375,950 | |||||||
Fixed charge coverage ratio | 1 | |||||||
Threshold availability on thirtieth consecutive day | $ 257,500 | |||||||
Senior secured revolving credit facility due August 2026 | Maximum | ||||||||
Credit facility | ||||||||
Credit facility commitment fee (as a percent) | 0.375% | |||||||
Threshold availability on revolving credit facility to trigger fixed charge coverage requirements | $ 206,000 | |||||||
Senior secured revolving credit facility due August 2026 | LIBOR | Minimum | ||||||||
Credit facility | ||||||||
Percentage points added to the reference rate | 1.25% | |||||||
Senior secured revolving credit facility due August 2026 | LIBOR | Maximum | ||||||||
Credit facility | ||||||||
Percentage points added to the reference rate | 1.75% | |||||||
Senior secured revolving credit facility due August 2026 | Citibank's base rate | Minimum | ||||||||
Credit facility | ||||||||
Percentage points added to the reference rate | 0.25% | |||||||
Senior secured revolving credit facility due August 2026 | Citibank's base rate | Maximum | ||||||||
Credit facility | ||||||||
Percentage points added to the reference rate | 0.75% | |||||||
Senior secured revolving credit facility due January 2020 | ||||||||
Credit facility | ||||||||
Maximum borrowing capacity | $ 2,700,000 | |||||||
6.125% senior notes due April 2023 | ||||||||
Credit facility | ||||||||
Debt instrument, stated interest rate (as a percent) | 6.125% | 6.125% | 6.125% | 6.125% |
Indebtedness and Credit Agree_5
Indebtedness and Credit Agreement - Transactions and Maturity (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||||||||||||
Dec. 09, 2022 | Dec. 01, 2022 | Jun. 13, 2022 | Aug. 20, 2021 | May 28, 2021 | Jul. 24, 2020 | Jul. 10, 2020 | Jun. 25, 2020 | Jun. 20, 2020 | Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | Nov. 30, 2022 | Nov. 03, 2022 | Jun. 29, 2022 | Jul. 09, 2020 | |
Indebtedness and credit agreements | ||||||||||||||||
Debt instrument, stated interest rate (as a percent) | 6.125% | |||||||||||||||
Gain (loss) on debt modifications and retirements, net | $ (41,312) | $ 80,142 | $ (3,235) | $ 5,274 | ||||||||||||
Maturities | ||||||||||||||||
2025 | 0 | |||||||||||||||
2026 | 0 | |||||||||||||||
2027 | 320,002 | |||||||||||||||
2028 | 2,635,609 | |||||||||||||||
2028 and thereafter | $ 2,046 | |||||||||||||||
Annual weighted average rate (as a percent) | 7.20% | 5.60% | 5.40% | |||||||||||||
6.125% senior notes due April 2023 | ||||||||||||||||
Indebtedness and credit agreements | ||||||||||||||||
Notes redeemed and discharged | $ 1,125,000 | $ 750,000 | $ 750,000 | |||||||||||||
Debt instrument, stated interest rate (as a percent) | 6.125% | 6.125% | 6.125% | 6.125% | ||||||||||||
Early redemption of debt | $ 1,062,682 | |||||||||||||||
(Gain) loss on debt retirements, net | $ 396 | |||||||||||||||
Proceeds from issuance of debt | 206,373 | $ 145,500 | ||||||||||||||
Gain on debt modification | $ 5,274 | |||||||||||||||
Percentage of outstanding principal amount redeemed | 100% | |||||||||||||||
6.875% fixed-rate senior notes due December 2028 | ||||||||||||||||
Indebtedness and credit agreements | ||||||||||||||||
Debt instrument, stated interest rate (as a percent) | 6.875% | 6.875% | 6.875% | |||||||||||||
Face amount of debt repurchased | $ 26,955 | |||||||||||||||
7.7% notes due February 2027 | ||||||||||||||||
Indebtedness and credit agreements | ||||||||||||||||
Debt instrument, stated interest rate (as a percent) | 7.70% | 7.70% | 7.70% | |||||||||||||
Face amount of debt repurchased | $ 51,695 | |||||||||||||||
7.5% senior secured notes due July 2025 | ||||||||||||||||
Indebtedness and credit agreements | ||||||||||||||||
Debt instrument, stated interest rate (as a percent) | 7.50% | 7.50% | 7.50% | 7.50% | 7.50% | 7.50% | 7.50% | |||||||||
Debt instrument, sun cap amount | $ 100,000 | |||||||||||||||
Gain (loss) on debt modifications and retirements, net | $ (38,978) | |||||||||||||||
Face amount of debt repurchased | $ 4,559 | $ 150,000 | $ 160,497 | $ 200,000 | $ 114,942 | |||||||||||
7.70% senior secured notes due 2027 | ||||||||||||||||
Indebtedness and credit agreements | ||||||||||||||||
Debt instrument, stated interest rate (as a percent) | 7.70% | |||||||||||||||
6.875% senior secured notes due 2028 | ||||||||||||||||
Indebtedness and credit agreements | ||||||||||||||||
Debt instrument, stated interest rate (as a percent) | 6.875% | |||||||||||||||
8.0% senior secured notes due November 2026 | ||||||||||||||||
Indebtedness and credit agreements | ||||||||||||||||
Debt instrument, stated interest rate (as a percent) | 8% | 8% | 8% | 8% | 8% | 8% | ||||||||||
Senior secured credit facility | ||||||||||||||||
Indebtedness and credit agreements | ||||||||||||||||
Gain (loss) on debt modifications and retirements, net | $ (100,000) | $ 148 | ||||||||||||||
(Gain) loss on debt retirements, net | $ 2,839 | |||||||||||||||
FILO term loan due August 2026 | ||||||||||||||||
Indebtedness and credit agreements | ||||||||||||||||
Maximum borrowing capacity | 400,000 | 350,000 | ||||||||||||||
Senior secured revolving credit facility due August 2026 | ||||||||||||||||
Indebtedness and credit agreements | ||||||||||||||||
Maximum borrowing capacity | $ 2,850,000 | $ 2,800,000 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Operating lease cost | $ 641,394 | $ 669,421 | $ 651,261 |
Financing lease cost: | |||
Amortization of right-of-use asset | 3,471 | 3,638 | 4,359 |
Interest on long-term finance lease liabilities | 1,968 | 2,167 | 2,505 |
Total finance lease costs | 5,439 | 5,805 | 6,864 |
Short-term lease costs | 3,126 | 3,180 | 3,214 |
Variable lease costs | 178,263 | 175,697 | 172,088 |
Less: sublease income | (12,871) | (13,510) | (14,886) |
Net lease cost | $ 815,351 | $ 840,593 | $ 818,541 |
Buildings | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Initial terms of noncancellable operating leases | 5 years | ||
Initial terms of noncancellable finance leases | 5 years | ||
Buildings | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Initial terms of noncancellable operating leases | 22 years | ||
Initial terms of noncancellable finance leases | 22 years | ||
Equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Initial terms of noncancellable operating leases | 3 years | ||
Equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Initial terms of noncancellable operating leases | 10 years |
Leases - Supplemental cash flow
Leases - Supplemental cash flow information related to leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows paid for operating leases | $ 706,506 | $ 703,326 | $ 683,226 |
Operating cash flows paid for interest portion of finance leases | 1,968 | 2,167 | 2,505 |
Financing cash flows paid for principal portion of finance leases | 4,019 | 4,117 | 4,744 |
Right-of-use assets obtained in exchange for lease obligations: | |||
Operating leases | 264,507 | 350,132 | 513,215 |
Finance leases |
Leases - Supplemental BS Inform
Leases - Supplemental BS Information (Details) $ in Thousands | 12 Months Ended | |
Mar. 04, 2023 USD ($) store | Feb. 26, 2022 USD ($) | |
Operating leases: | ||
Operating lease right-of-use assets | $ 2,497,206 | $ 2,813,535 |
Short-term operating lease liabilities | 502,403 | 575,651 |
Long-term operating lease liabilities | 2,372,943 | 2,597,090 |
Total operating lease liabilities | 2,875,346 | 3,172,741 |
Finance leases: | ||
Property, plant and equipment, net | 907,771 | 989,167 |
Current maturities of lease financing obligations | $ 6,332 | $ 5,544 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Long-term Debt and Capital Lease Obligations, Current | Long-term Debt and Capital Lease Obligations, Current |
Lease financing obligations, less current maturities | $ 12,580 | $ 14,830 |
Total finance lease liabilities | $ 18,912 | $ 20,374 |
Weighted average remaining lease term | ||
Operating leases (in years) | 7 years 6 months | 7 years 8 months 12 days |
Finance leases (in years) | 8 years | 8 years 8 months 12 days |
Weighted average discount rate | ||
Operating leases (as a percent) | 6.50% | 6% |
Finance leases (as a percent) | 9% | 10% |
Number of former stores with lease guarantee obligations | store | 676 | |
Finance Leased Assets | ||
Finance leases: | ||
Property, plant and equipment, net | $ 13,576 | $ 13,950 |
Leases - Maturity of lease liab
Leases - Maturity of lease liabilities under finance and operating leases (Details) - USD ($) $ in Thousands | Mar. 04, 2023 | Feb. 26, 2022 |
Finance Leases | ||
2025 | $ 3,188 | |
2026 | 7,732 | |
2027 | 2,421 | |
2028 | 1,567 | |
2029 | 1,500 | |
Thereafter | 10,923 | |
Total lease payments | 27,331 | |
Less: imputed interest | (8,419) | |
Total finance lease liabilities | 18,912 | $ 20,374 |
Operating Leases | ||
2025 | 677,631 | |
2026 | 593,857 | |
2027 | 507,388 | |
2028 | 426,503 | |
2029 | 351,942 | |
Thereafter | 1,148,719 | |
Total lease payments | 3,706,040 | |
Less: imputed interest | (830,694) | |
Total operating lease liabilities | 2,875,346 | $ 3,172,741 |
Minimum sublease rentals | 24,000 | |
Finance and Operating Leases | ||
2025 | 680,819 | |
2026 | 601,589 | |
2027 | 509,809 | |
2028 | 428,070 | |
2028 | 353,442 | |
Thereafter | 1,159,642 | |
Total lease payments | 3,733,371 | |
Less: imputed interest | (839,113) | |
Total lease liabilities | $ 2,894,258 |
Leases - Sale Leaseback (Detail
Leases - Sale Leaseback (Details) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 USD ($) item store | Feb. 26, 2022 USD ($) item | Feb. 27, 2021 USD ($) item | |
Sale Leaseback Transaction | |||
Number of facilities in sale/leaseback | 12 | 20 | 11 |
Number of stores sold | 7 | ||
Number of stores | store | 2,309 | ||
Sale/leaseback proceeds | $ | $ 73,344 | $ 57,498 | $ 177,892 |
Leaseback term | 15 years | ||
Gain (loss) on sale-leaseback transactions | $ | $ 38,214 | $ 8,600 | $ 93,841 |
Minimum | |||
Sale Leaseback Transaction | |||
Leaseback term | 15 years | ||
Maximum | |||
Sale Leaseback Transaction | |||
Leaseback term | 20 years | ||
Retail Store | |||
Sale Leaseback Transaction | |||
Number of stores | 10 | ||
Leaseback term | 15 years | ||
Distribution Center | |||
Sale Leaseback Transaction | |||
Leaseback term | 3 years |
Stock Option and Stock Awards P
Stock Option and Stock Awards Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||||||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2020 | Jun. 30, 2014 | Jun. 30, 2012 | Jun. 30, 2010 | |
Stock Options and Stock Awards | |||||||||
Stock-based compensation costs (benefit) | $ 11,537 | $ 13,050 | $ 13,003 | ||||||
Shares of common stock available for grant | 3,628 | 3,250 | |||||||
Maximum | |||||||||
Stock Options and Stock Awards | |||||||||
Term of options | 10 years | ||||||||
Performance based awards | |||||||||
Stock Options and Stock Awards | |||||||||
Stock-based compensation costs (benefit) | $ (3,080) | $ 2,143 | $ 3,278 | ||||||
2010 Omnibus Equity Plan | |||||||||
Stock Options and Stock Awards | |||||||||
Shares of common stock authorized under stock-based compensation plans | 1,750 | ||||||||
2012 Omnibus Equity Plan | |||||||||
Stock Options and Stock Awards | |||||||||
Shares of common stock authorized under stock-based compensation plans | 1,425 | ||||||||
2014 Omnibus Equity Plan | |||||||||
Stock Options and Stock Awards | |||||||||
Shares of common stock authorized under stock-based compensation plans | 2,900 | ||||||||
2014 Omnibus Equity Plan | Incentive Stock options | Maximum | |||||||||
Stock Options and Stock Awards | |||||||||
Shares of common stock authorized under stock-based compensation plans | 1,250 | ||||||||
Amended And Restated 2020 Omnibus Equity Plan | |||||||||
Stock Options and Stock Awards | |||||||||
Shares of common stock available for grant | 4,562 | ||||||||
Omnibus Equity Plan 2020 | |||||||||
Stock Options and Stock Awards | |||||||||
Shares of common stock available for grant | 3,350 |
Stock Option and Stock Award _3
Stock Option and Stock Award Plans - Options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Stock Options and Stock Awards | |||
Weighted average fair value of options granted (in dollars per share) | $ 0 | $ 0 | $ 0 |
Options, Shares | |||
Outstanding at the beginning of the period (in shares) | 701 | 780 | 1,295 |
Granted (in shares) | |||
Exercised (in shares) | (2) | ||
Canceled (in shares) | (169) | (79) | (513) |
Outstanding at the end of the period (in shares) | 532 | 701 | 780 |
Vested or expected to vest at the end of the period (in shares) | 532 | ||
Exercisable at the end of the period (in shares) | 532 | ||
Options, Weighted Average Fair Value | |||
Outstanding at the beginning of the period (in dollars per share) | $ 15.50 | $ 18.56 | $ 30.29 |
Granted (in dollars per share) | |||
Exercised (in dollars per share) | 25.08 | ||
Canceled (in dollars per share) | 23.85 | 45.78 | 48.16 |
Outstanding at the end of the period (in dollars per share) | 12.85 | $ 15.50 | $ 18.56 |
Vested or expected to vest at the end of the period (in dollars per share) | 12.85 | ||
Exercisable at the end of the period (in dollars per share) | $ 12.85 | ||
Options, Additional Disclosures | |||
Contractual term, Outstanding at the end of the period | 1 month 24 days | ||
Contractual term, Vested or expected to vest at the end of the period | 1 month 24 days | ||
Contractual term, Exercisable at the end of the period | 1 month 24 days | ||
Intrinsic value, Outstanding at the end of the period | $ 0 | ||
Intrinsic value, Vested or expected to vest at the end of the period | 0 | ||
Intrinsic value, Exercisable at the end of the period | 0 | ||
Additional General Disclosures | |||
Total intrinsic value of options exercised | 0 | $ 0 | $ 10 |
Incentive Stock options | |||
Unrecognized pre-tax compensation costs related to unvested stock options, restricted stock grants and performance shares | |||
Unrecognized pre-tax costs | $ 0 | ||
Weighted average amortization period | 0 years | ||
Additional General Disclosures | |||
Cash received from stock option exercises | $ 0 | 0 | 53 |
Income tax benefit from stock options | $ 0 | $ 0 | $ 1 |
Vesting period | 4 years |
Stock Option and Stock Award _4
Stock Option and Stock Award Plans - Restricted Stock (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Additional General Disclosures | |||
Stock-based compensation costs (benefit) | $ 11,537 | $ 13,050 | $ 13,003 |
Unvested Restricted stock | |||
Stock Options and Stock Awards | |||
Vesting period | 3 years | ||
Restricted stock, Shares | |||
Outstanding at the beginning of the period (in shares) | 1,533 | 1,293 | 1,253 |
Granted (in shares) | 1,662 | 973 | 780 |
Vested (in shares) | (1,349) | (546) | (574) |
Canceled (in shares) | (370) | (187) | (166) |
Outstanding at the end of the period (in shares) | 1,476 | 1,533 | 1,293 |
Restricted stock, Weighted Average Fair Value | |||
Outstanding at the beginning of the period (in dollars per share) | $ 14.42 | $ 13.23 | $ 10.32 |
Granted (in dollars per share) | 6.50 | 15 | 17.79 |
Vested (in dollars per share) | 12.40 | 12.25 | 13.37 |
Canceled (in dollars per share) | 10.83 | 15.51 | 12.23 |
Outstanding at the end of the period (in dollars per share) | $ 8.25 | $ 14.42 | $ 13.23 |
Unrecognized pre-tax compensation costs related to unvested stock options, restricted stock grants and performance shares | |||
Unrecognized pre-tax costs | $ 9,719 | ||
Weighted average amortization period | 1 year 8 months 12 days | ||
Restricted stock, Additional disclosures | |||
Total fair value of awards vested during the period | $ 16,746 | $ 6,677 | $ 7,670 |
Performance based awards | |||
Additional General Disclosures | |||
Stock-based compensation costs (benefit) | $ (3,080) | $ 2,143 | $ 3,278 |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Defined Benefit Pension Plan | |||
Retirement Plans | |||
Employer match of employee contributions up to 3% of pretax annual compensation to 401 (k) defined contribution plan (as a percent) | 100% | ||
Percentage of participant's pretax annual compensation matched 100% by employer | 3% | ||
Employer match of employee contributions of additional 2% of pretax annual compensation to 401 (k) defined contribution plan (as a percent) | 50% | ||
Percentage of participant's pretax annual compensation matched 50% by employer | 2% | ||
Total expense recognized | $ 44,504 | $ 41,528 | $ 36,270 |
Employer contributions | $ 0 | $ 1,700 | $ 6,305 |
Discount rate (as a percent) | 5% | 3.25% | 3% |
Supplemental Retirement Plan | |||
Retirement Plans | |||
Total expense recognized | $ 0 | $ 0 | $ 0 |
Vesting period | 5 years |
Retirement Plans - Net periodic
Retirement Plans - Net periodic cost (Details) - Defined Benefit Pension Plan - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Net periodic pension expense | |||
Service cost | $ 336 | $ 425 | $ 486 |
Interest cost | 5,036 | 4,861 | 4,753 |
Expected return on plan assets | (4,998) | (5,194) | (4,614) |
Amortization of unrecognized net loss | (344) | (3,749) | |
Net periodic pension expense (income) | 374 | 436 | 4,374 |
Employer contributions | 0 | 1,700 | 6,305 |
Expected employer contribution during the remainder of fiscal year | 0 | ||
Other changes recognized in other comprehensive loss: | |||
Unrecognized net gain arising during period | (585) | (8,246) | (20,633) |
Amortization of unrecognized net (loss) gain | (344) | (3,749) | |
Net amount recognized in other comprehensive loss | (585) | (8,590) | (24,382) |
Net amount recognized in pension expense and other comprehensive loss | $ (211) | $ (8,154) | $ (20,008) |
Retirement Plans - Benefit obli
Retirement Plans - Benefit obligation and funded status (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Estimated amounts that will be amortized from accumulated other comprehensive loss into net periodic pension expense | |||
Net actuarial loss | $ 0 | ||
Prior service cost | 0 | ||
Defined Benefit Pension Plan | |||
Change in benefit obligations: | |||
Benefit obligation at end of prior year | 160,133 | $ 168,872 | |
Service cost | 336 | 425 | $ 486 |
Interest cost | 5,036 | 4,861 | 4,753 |
Distributions | (8,328) | (8,582) | |
Actuarial gain | (26,014) | (5,443) | |
Benefit obligation at end of year | 131,163 | 160,133 | 168,872 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 149,527 | 148,412 | |
Employer contributions | 0 | 1,700 | 6,305 |
Actual return on plan assets | (20,430) | 7,997 | |
Distributions (including expenses paid by the plan) | (8,328) | (8,582) | |
Fair value of plan assets at end of year | 120,769 | 149,527 | $ 148,412 |
Funded status | (10,394) | (10,606) | |
Amounts recognized in consolidated balance sheets consisted of: | |||
Accrued pension liability | (10,394) | (10,606) | |
Net amount recognized in balance sheet | (10,394) | (10,606) | |
Amounts recognized in accumulated other comprehensive loss consist of: | |||
Net actuarial loss | 11,202 | (11,787) | |
Amount recognized in other comprehensive income | 11,202 | (11,787) | |
Estimated amounts that will be amortized from accumulated other comprehensive loss into net periodic pension expense | |||
Accumulated benefit obligation | $ 131,163 | $ 160,133 |
Retirement Plans - Accumulated
Retirement Plans - Accumulated benefit obligation and fair value of plan assets (Details) - Defined Benefit Pension Plan - USD ($) $ in Thousands | Mar. 04, 2023 | Feb. 26, 2022 |
Defined Benefit Plan with Accumulated Benefit Obligation in Excess of Plan Assets | ||
Accumulated Benefit Obligations | $ 131,163 | $ 160,133 |
Fair Value of Plan Assets | $ 120,769 | $ 149,527 |
Retirement Plans - Projected be
Retirement Plans - Projected benefit obligation and fair value of plan assets (Details) - Defined Benefit Pension Plan - USD ($) $ in Thousands | Mar. 04, 2023 | Feb. 26, 2022 |
Pension Plan with Project Benefit Obligation in Excess of Plan Assets | ||
Projected Benefit Obligations | $ 131,163 | $ 160,133 |
Fair Value of Plan Assets | $ 120,769 | $ 149,527 |
Retirement Plans - Assumptions
Retirement Plans - Assumptions and assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Significant actuarial assumptions used for all defined benefit plans to determine the benefit obligation | |||
Expected long-term rate of return on plan assets | 5% | 5.50% | 6% |
Asset allocations | |||
Actual allocation (as a percent) | 100% | 100% | |
Target allocation of plan assets | |||
Target allocation (as a percent) | 100% | ||
Equity Securities | |||
Asset allocations | |||
Actual allocation (as a percent) | 30% | 30% | |
U.S. equities | |||
Target allocation of plan assets | |||
Target allocation (as a percent) | 30% | ||
Fixed Income | |||
Asset allocations | |||
Actual allocation (as a percent) | 59% | 57% | |
Target allocation of plan assets | |||
Target allocation (as a percent) | 62% | ||
Other | |||
Asset allocations | |||
Actual allocation (as a percent) | 11% | 13% | |
Target allocation of plan assets | |||
Target allocation (as a percent) | 8% | ||
Defined Benefit Pension Plan | |||
Significant actuarial assumptions used for all defined benefit plans to determine the benefit obligation | |||
Discount rate (as a percent) | 5% | 3.25% | 3% |
Rate of increase in future compensation levels (as a percent) | |||
Expected long-term rate of return on plan assets | 6.50% | 5% | 5.50% |
Weighted average assumptions used to determine net cost | |||
Discount rate (as a percent) | 3.25% | 3% | 2.75% |
Rate of increase in future compensation levels (as a percent) | |||
Expected long-term rate of return on plan assets (as a percent) | 5% | 5.50% | 6% |
Defined benefit plans estimated future employer contributions | |||
Expected employer contribution during next fiscal year | $ 0 |
Retirement Plans - Fair Value (
Retirement Plans - Fair Value (Details) - Recurring - USD ($) $ in Thousands | Mar. 04, 2023 | Feb. 26, 2022 |
Retirement Plans | ||
Total assets at fair value | $ 120,764 | $ 149,525 |
International equity | ||
Retirement Plans | ||
Total assets at fair value | 13,901 | 17,783 |
Large Cap | ||
Retirement Plans | ||
Total assets at fair value | 18,556 | 23,027 |
Small-Mid Cap | ||
Retirement Plans | ||
Total assets at fair value | 3,309 | 4,213 |
Aon High Yield Plus Bond | ||
Retirement Plans | ||
Total assets at fair value | 72 | 75 |
Aon Multi-Asset Credit | ||
Retirement Plans | ||
Total assets at fair value | 4,775 | 7,386 |
Long Term Credit Bond Index | ||
Retirement Plans | ||
Total assets at fair value | 41,360 | 47,976 |
Long Term US Government Bonds | ||
Retirement Plans | ||
Total assets at fair value | 1,588 | 19,763 |
20+ Year Treasury STRIPS | ||
Retirement Plans | ||
Total assets at fair value | 12,821 | 483 |
Intermediate Fixed Income | ||
Retirement Plans | ||
Total assets at fair value | 9,781 | 8,554 |
AGT High Yield Bond | ||
Retirement Plans | ||
Total assets at fair value | ||
Aon Global Real Estate | ||
Retirement Plans | ||
Total assets at fair value | 11 | 13 |
Aon Core Real Estate Fund | ||
Retirement Plans | ||
Total assets at fair value | 13,479 | 18,720 |
Short Term Investments | ||
Retirement Plans | ||
Total assets at fair value | 1,111 | 1,532 |
Level 1 | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 1 | International equity | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 1 | Large Cap | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 1 | Small-Mid Cap | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 1 | Fixed Income | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 1 | Aon High Yield Plus Bond | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 1 | Aon Multi-Asset Credit | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 1 | Long Term Credit Bond Index | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 1 | Long Term US Government Bonds | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 1 | 20+ Year Treasury STRIPS | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 1 | Intermediate Fixed Income | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 1 | AGT High Yield Bond | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 1 | Aon Global Real Estate | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 1 | Aon Core Real Estate Fund | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 1 | Short Term Investments | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 2 | ||
Retirement Plans | ||
Total assets at fair value | 1,111 | 1,532 |
Level 2 | International equity | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 2 | Large Cap | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 2 | Small-Mid Cap | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 2 | Fixed Income | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 2 | Aon High Yield Plus Bond | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 2 | Aon Multi-Asset Credit | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 2 | Long Term Credit Bond Index | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 2 | Long Term US Government Bonds | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 2 | 20+ Year Treasury STRIPS | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 2 | Intermediate Fixed Income | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 2 | AGT High Yield Bond | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 2 | Aon Global Real Estate | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 2 | Aon Core Real Estate Fund | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 2 | Short Term Investments | ||
Retirement Plans | ||
Total assets at fair value | 1,111 | 1,532 |
Level 3 | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 3 | International equity | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 3 | Large Cap | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 3 | Small-Mid Cap | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 3 | Fixed Income | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 3 | Aon High Yield Plus Bond | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 3 | Aon Multi-Asset Credit | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 3 | Long Term Credit Bond Index | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 3 | Long Term US Government Bonds | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 3 | 20+ Year Treasury STRIPS | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 3 | Intermediate Fixed Income | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 3 | AGT High Yield Bond | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 3 | Aon Global Real Estate | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 3 | Aon Core Real Estate Fund | ||
Retirement Plans | ||
Total assets at fair value | ||
Level 3 | Short Term Investments | ||
Retirement Plans | ||
Total assets at fair value |
Retirement Plans - Future Benef
Retirement Plans - Future Benefit Payments (Details) - Defined Benefit Pension Plan $ in Thousands | Mar. 04, 2023 USD ($) |
Future benefit payments expected to be paid in Fiscal Year | |
2024 | $ 9,497 |
2025 | 9,379 |
2026 | 9,373 |
2027 | 9,410 |
2028 | 9,252 |
2029 - 2033 | 44,769 |
Total | $ 91,680 |
Multiemployer Plans that Prov_3
Multiemployer Plans that Provide Pension Benefits (Details) $ in Thousands | 12 Months Ended | |||||||||||||
Feb. 06, 2022 $ / h | Feb. 01, 2022 $ / h | Oct. 01, 2021 $ / h | Feb. 07, 2021 $ / h | Jan. 01, 2021 $ / h | Oct. 01, 2020 $ / h | Feb. 02, 2020 $ / h | Jan. 01, 2020 $ / h | Sep. 30, 2018 | Sep. 01, 2014 $ / h | Mar. 04, 2023 USD ($) | Feb. 26, 2022 USD ($) | Feb. 27, 2021 USD ($) | Dec. 31, 2020 $ / h | |
Multiemployer Plans that Provide Pension Benefits | ||||||||||||||
Contributions by employer | $ | $ 21,663 | $ 24,514 | $ 22,952 | |||||||||||
Minimum | ||||||||||||||
Multiemployer Plans that Provide Pension Benefits | ||||||||||||||
Funded percentage, green zone | 80% | |||||||||||||
Maximum | ||||||||||||||
Multiemployer Plans that Provide Pension Benefits | ||||||||||||||
Funded percentage, red zone | 65% | |||||||||||||
Funded percentage, yellow zone | 80% | |||||||||||||
1199 SEIU Health Care Employees Pension Fund | ||||||||||||||
Multiemployer Plans that Provide Pension Benefits | ||||||||||||||
Contributions by employer | $ | $ 7,493 | 9,242 | 9,613 | |||||||||||
Minimum funding requirements (as a percent) | 11.30% | 12.60% | ||||||||||||
Southern California United Food and Commercial Workers Unions and Drug Employers Pension Fund | ||||||||||||||
Multiemployer Plans that Provide Pension Benefits | ||||||||||||||
Contributions by employer | $ | 8,131 | 8,989 | 8,239 | |||||||||||
Minimum funding requirements for pharmacists (in dollars per hour) | $ / h | 1.844 | 1.758 | ||||||||||||
Minimum funding requirements for clerks (in dollars per hour) | $ / h | 0.836 | 0.797 | ||||||||||||
UFCW Pharmacists, Clerks and Drug Employers Pension Trust | ||||||||||||||
Multiemployer Plans that Provide Pension Benefits | ||||||||||||||
Contributions by employer | $ | 2,605 | 3,224 | 2,319 | |||||||||||
Minimum funding requirements for pharmacists (in dollars per hour) | $ / h | 1.239 | |||||||||||||
Minimum funding requirements for clerks (in dollars per hour) | $ / h | 0.855 | |||||||||||||
Minimum funding requirements for associates (in dollars per hour) | $ / h | 0.55 | |||||||||||||
United Food and Commercial Workers Union-Employer Pension Fund | ||||||||||||||
Multiemployer Plans that Provide Pension Benefits | ||||||||||||||
Contributions by employer | $ | 954 | 802 | 809 | |||||||||||
Minimum funding requirements for associates (in dollars per hour) | $ / h | 2.57 | 2.43 | 2.30 | |||||||||||
United Food and Commercial Workers Union Local 880 - Mercantile Employers Joint Pension Fund | ||||||||||||||
Multiemployer Plans that Provide Pension Benefits | ||||||||||||||
Contributions by employer | $ | 434 | 370 | 399 | |||||||||||
Minimum funding requirements for associates (in dollars per hour) | $ / h | 2.33 | 2.24 | 2.15 | |||||||||||
Other Funds | ||||||||||||||
Multiemployer Plans that Provide Pension Benefits | ||||||||||||||
Contributions by employer | $ | $ 2,046 | $ 1,887 | $ 1,573 |
Segment Reporting - Balance She
Segment Reporting - Balance Sheet information (Details) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 USD ($) segment | Feb. 26, 2022 USD ($) | Feb. 27, 2021 USD ($) | |
Segment Reporting | |||
Number of reportable segments | segment | 2 | ||
Total Assets | $ 7,527,362 | $ 8,529,003 | |
Goodwill | 507,936 | 879,136 | $ 1,108,136 |
Accounts receivable | 1,149,958 | 1,343,496 | |
Retail Pharmacy Segment | |||
Segment Reporting | |||
Goodwill | 43,492 | 43,492 | 43,492 |
Pharmacy Services Segment | |||
Segment Reporting | |||
Goodwill | 464,444 | 835,644 | $ 1,064,644 |
Operating Segments | Retail Pharmacy Segment | |||
Segment Reporting | |||
Total Assets | 5,487,845 | 6,068,594 | |
Goodwill | 43,492 | 43,492 | |
Operating Segments | Pharmacy Services Segment | |||
Segment Reporting | |||
Total Assets | 2,049,107 | 2,482,232 | |
Goodwill | 464,444 | 835,644 | |
Intersegment elimination | |||
Segment Reporting | |||
Total Assets | (9,590) | (21,823) | |
Goodwill | |||
Accounts receivable | $ 9,590 | $ 21,823 |
Segment Reporting - Revenues (D
Segment Reporting - Revenues (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Segment Reporting | |||
Revenues | $ 24,091,899 | $ 24,568,255 | $ 24,043,240 |
Gross Profit | 4,803,940 | 5,106,495 | 4,704,322 |
Adjusted EBITDA | 429,180 | 505,905 | 437,665 |
Depreciation and amortization | 276,583 | 295,686 | 327,124 |
LIFO charge (credit) | 53,028 | 1,314 | (51,692) |
Stock-based compensation expense | 11,537 | 13,050 | 13,003 |
Restructuring-related costs | 108,626 | 35,121 | 84,552 |
Additions to property and equipment and intangible assets | 247,685 | 220,713 | 224,941 |
SKU Optimization Charges [Member] | |||
Segment Reporting | |||
Restructuring-related costs | 20,939 | ||
Retail Pharmacy Segment | |||
Segment Reporting | |||
Revenues | 17,785,067 | 17,494,816 | 16,365,260 |
Operating Segments | Retail Pharmacy Segment | |||
Segment Reporting | |||
Revenues | 17,785,067 | 17,494,816 | 16,365,260 |
Gross Profit | 4,394,850 | 4,722,075 | 4,255,791 |
Adjusted EBITDA | 288,077 | 392,633 | 279,896 |
Depreciation and amortization | 229,380 | 244,122 | 269,985 |
LIFO charge (credit) | 53,028 | 1,314 | (51,692) |
Stock-based compensation expense | 10,604 | 12,282 | 11,594 |
Additions to property and equipment and intangible assets | 226,563 | 202,386 | 204,290 |
Operating Segments | Retail Pharmacy Segment | SKU Optimization Charges [Member] | |||
Segment Reporting | |||
Restructuring-related costs | 20,939 | ||
Operating Segments | Pharmacy Services Segment | |||
Segment Reporting | |||
Revenues | 6,522,299 | 7,323,125 | 7,970,137 |
Gross Profit | 409,090 | 384,420 | 448,531 |
Adjusted EBITDA | 141,103 | 113,272 | 157,769 |
Depreciation and amortization | 47,203 | 51,564 | 57,139 |
LIFO charge (credit) | |||
Stock-based compensation expense | 933 | 768 | 1,409 |
Additions to property and equipment and intangible assets | 21,122 | 18,327 | 20,651 |
Operating Segments | Pharmacy Services Segment | SKU Optimization Charges [Member] | |||
Segment Reporting | |||
Restructuring-related costs | |||
Intersegment elimination | |||
Segment Reporting | |||
Revenues | (215,467) | (249,686) | (292,157) |
Gross Profit | |||
Adjusted EBITDA | |||
Depreciation and amortization | |||
LIFO charge (credit) | |||
Stock-based compensation expense | |||
Additions to property and equipment and intangible assets | |||
Intersegment elimination | SKU Optimization Charges [Member] | |||
Segment Reporting | |||
Restructuring-related costs |
Segment Reporting - Adjusted EB
Segment Reporting - Adjusted EBITDA (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jun. 13, 2022 | Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Segment Reporting | ||||
Net loss from continuing operations | $ (719,188) | $ (522,372) | $ (99,381) | |
Interest expense | 224,399 | 191,601 | 201,388 | |
Income tax expense | (6,467) | (3,780) | (20,157) | |
Depreciation and amortization | 276,583 | 295,686 | 327,124 | |
LIFO charge (credit) | 53,028 | 1,314 | (51,692) | |
Facility exit and impairment charges | 180,637 | 164,084 | 57,714 | |
Goodwill and intangible asset impairment charges | 371,200 | 229,000 | 29,852 | |
(Gain) loss on debt modifications and retirements, net | $ 41,312 | (80,142) | 3,235 | (5,274) |
Merger and Acquisition-related costs | 12,797 | 10,549 | ||
Stock-based compensation expense | 11,537 | 13,050 | 13,003 | |
Restructuring-related costs | 108,626 | 35,121 | 84,552 | |
Inventory write-downs related to store closings | 14,270 | 5,298 | 3,709 | |
Litigation and other contractual settlements | 53,882 | 50,212 | ||
(Gain) loss on sale of assets, net | (68,586) | 5,505 | (69,300) | |
Loss (gain) on Bartell acquisition | 5,346 | (47,705) | ||
Change in estimate related to manufacturer rebate receivables | 15,068 | |||
Other | 9,401 | 4,740 | 3,283 | |
Adjusted EBITDA | $ 429,180 | $ 505,905 | $ 437,665 |
Commitments, Contingencies an_2
Commitments, Contingencies and Guarantees (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Apr. 22, 2022 USD ($) | Dec. 31, 2022 USD ($) | Aug. 31, 2022 USD ($) | Mar. 04, 2023 lawsuit state | |
California Employment Litigation Claims Related To Reimbursement For Cell phone and Mileage Expenses | ||||
Commitments, Contingencies and Guarantees | ||||
Amount awarded to other party | $ 1,290 | |||
California Employment Litigation Claims Related To Wages And Hour Class Action | ||||
Commitments, Contingencies and Guarantees | ||||
Amount awarded to other party | $ 800 | |||
New York Employment Litigation Claims Related To Wages And Hour Class Action | ||||
Commitments, Contingencies and Guarantees | ||||
Amount awarded to other party | $ 6,450 | |||
Blue Cross Blue Shield Litigation | ||||
Commitments, Contingencies and Guarantees | ||||
Number of claims | lawsuit | 2 | |||
Number of states in which operated | state | 8 | |||
Humana Litigation | ||||
Commitments, Contingencies and Guarantees | ||||
Amount awarded to other party | $ 122,600 | |||
Prejudgment interest awarded | $ 40,700 |
Supplementary Cash Flow Data (D
Supplementary Cash Flow Data (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Supplementary Cash Flow Data | |||
Cash paid for interest | $ 212,355 | $ 180,583 | $ 181,634 |
Cash payments (refunds) for income taxes, net | (5,309) | 6,233 | 7,535 |
Equipment financed under capital leases | 3,334 | 1,698 | 1,849 |
Accrued capital expenditures | 18,711 | 45,465 | 19,904 |
Gross borrowings from revolver | 3,510,000 | 5,131,000 | 7,912,000 |
Gross repayments to revolver | 3,019,000 | 5,272,000 | 7,712,000 |
Significant components of cash provided by (used in) Other Liabilities (Other Assets) | |||
Other Liabilities | (111,021) | 68,558 | (50,947) |
Other Assets | 36,478 | $ 33,737 | $ 80,975 |
Accruals related to compensation and benefit | 100,340 | ||
Changes in accrued store expenses | $ 11,426 |
Financial Instruments (Details)
Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 04, 2023 | Feb. 26, 2022 |
Financial instruments | ||
Investment at amortized cost | $ 7,457 | $ 7,406 |
Carrying Amount | ||
Financial instruments | ||
Variable rate indebtedness | 1,581,793 | 1,038,646 |
Fixed rate indebtedness | 1,343,465 | 1,694,340 |
Fair Value | ||
Financial instruments | ||
Variable rate indebtedness | 1,600,000 | 1,059,000 |
Fixed rate indebtedness | $ 768,328 | $ 1,602,122 |
Revision of Previously Issued_3
Revision of Previously Issued Consolidated Financial Statements (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | Feb. 29, 2020 | |
Revision of Previously Issued Consolidated Financial Statements | ||||
Accrued salaries, wages and other current liabilities | $ 709,891 | $ 776,559 | $ 643,218 | |
Total current liabilities | 2,713,237 | 2,929,015 | 2,603,800 | |
Other noncurrent liabilities | 97,577 | 139,254 | 206,670 | |
Total liabilities | 8,121,595 | 8,413,175 | 8,719,561 | |
Accumulated deficit | (6,553,974) | (5,834,786) | (5,312,414) | |
Total stockholders' (deficit) equity | (594,233) | 115,828 | 615,843 | $ 674,527 |
Facility exit and impairment charges | 180,637 | 164,084 | 57,714 | |
Loss from continuing operations before income taxes | (725,655) | (526,152) | (119,538) | |
Net loss from continuing operations | (719,188) | (522,372) | (99,381) | |
Net loss | (719,188) | (522,372) | (90,220) | |
Comprehensive loss | $ (718,603) | $ (513,755) | $ (65,376) | |
Basic loss per share from continuing operations | $ (13.15) | $ (9.66) | $ (1.86) | |
Diluted loss per share from continuing operations | (13.15) | (9.66) | (1.86) | |
Net basic loss per share | (13.15) | (9.66) | (1.68) | |
Net diluted loss per share | $ (13.15) | $ (9.66) | $ (1.68) | |
As Previously Reported | ||||
Revision of Previously Issued Consolidated Financial Statements | ||||
Accrued salaries, wages and other current liabilities | $ 724,529 | $ 780,632 | $ 642,364 | |
Total current liabilities | 2,727,875 | 2,933,088 | 2,602,946 | |
Other noncurrent liabilities | 130,482 | 151,976 | 208,213 | |
Total liabilities | 8,169,138 | 8,429,970 | 8,720,250 | |
Accumulated deficit | (6,601,517) | (5,851,581) | (5,313,103) | |
Total stockholders' (deficit) equity | (641,776) | 99,033 | 615,154 | |
Facility exit and impairment charges | 211,385 | 180,190 | 58,403 | |
Loss from continuing operations before income taxes | (756,403) | (542,258) | (120,227) | |
Net loss from continuing operations | (749,936) | (538,478) | (100,070) | |
Net loss | (749,936) | (538,478) | (90,909) | |
Comprehensive loss | $ (749,351) | $ (529,861) | $ (66,065) | |
Basic loss per share from continuing operations | $ (13.71) | $ (9.96) | $ (1.87) | |
Net basic loss per share | $ (13.71) | $ (9.96) | $ (1.69) | |
Adjustment | ||||
Revision of Previously Issued Consolidated Financial Statements | ||||
Accrued salaries, wages and other current liabilities | $ (14,638) | $ (4,073) | $ 854 | |
Total current liabilities | (14,638) | (4,073) | 854 | |
Other noncurrent liabilities | (32,905) | (12,722) | (1,543) | |
Total liabilities | (47,543) | (16,795) | (689) | |
Accumulated deficit | (47,543) | 16,795 | 689 | |
Total stockholders' (deficit) equity | (47,543) | 16,795 | 689 | |
Facility exit and impairment charges | (30,748) | (16,106) | (689) | |
Loss from continuing operations before income taxes | 30,748 | 16,106 | 689 | |
Net loss from continuing operations | 30,748 | 16,106 | 689 | |
Net loss | 30,748 | 16,106 | 689 | |
Comprehensive loss | $ 30,748 | $ 16,106 | $ 689 | |
Basic loss per share from continuing operations | $ 0.56 | $ 0.30 | $ 0.01 | |
Net basic loss per share | $ 0.56 | $ 0.30 | $ 0.01 |
SCHEDULE II-VALUATION AND QUA_2
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS (Details) - Allowances deducted from accounts receivable for estimated uncollectible amounts: - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 04, 2023 | Feb. 26, 2022 | Feb. 27, 2021 | |
Allowances deducted from accounts receivable for estimated uncollectible amounts: | |||
Balance at Beginning of Period | $ 46,865 | $ 24,854 | $ 12,849 |
Additions Charged to Costs and Expenses | 63,373 | 106,113 | 43,855 |
Deductions | 48,105 | 84,102 | 31,850 |
Balance at End of Period | $ 62,133 | $ 46,865 | $ 24,854 |