As discussed in Note 1, during the fourth quarter of 2017, Fred’s Board of Directors approved a plan to actively market its specialty pharmacy business. Accordingly, the specialty pharmacy business met the criteria for “Assets Held for Sale” in accordance with ASC 360 as of February 3, 2018. The results of operations for the specialty pharmacy business have been presented as discontinued operations in accordance with ASC 205-20 for all periods presented. The results of the specialty pharmacy business were previously allocated to the Pharmacy segment within the sales mix. Certain corporate overhead and other costs previously allocated to the specialty pharmacy segment for reporting purposes did not qualify for classification within discontinued operations and have been reallocated to continuing operations.

The specialty pharmacy recorded a loss from discontinued operations, net of the tax line item, of $11.5 million for 2017. In addition, during the fourth quarter of 2017 a charge of $0.6 million was recorded as an impairment of the trade name and $10.8 million was recorded as an impairment of the goodwill related to the specialty pharmacy.

The Specialty Buyer paid Fred’s $40.0 million for the purchased assets (plus up to an additional $5.5 million for inventory). The Company recorded a loss on the sale of $0.4 million. On June 1, 2018, the sale of the specialty pharmacy assets was completed, as such, the Specialty Pharmacy assets and liabilities are no longer reflected as “held for sale” on the consolidated balance sheets as of February 2, 2019.

On September 7, 2018 the Company entered into an Asset Purchase Agreement with Walgreen Co., an Illinois corporation. On October 23, 2018, the Company entered into an amendment to the Asset Purchase Agreement (the “Amendment”). Under such Asset Purchase Agreement, as amended by the Amendment (the “Amended WBA Asset Purchase Agreement”), the Company agreed to sell certain prescription files and related data and records, retail pharmaceutical inventory, and certain other assets from 179 of the Company’s 346 retail pharmacy stores (such assets from such 179 retail pharmacy stores collectively referred to as “Retail Pharmacy”) for a cash purchase price of approximately $157 million plus an amount equal to the value of the inventory included in the Retail Pharmacy assets up to an approximately $35 million cap, in each case subject to certain adjustments. During the third quarter of 2018, the assets therefore met the criteria for Assets held for sale in accordance with ASC 360. Such assets have been reflected as “held for sale” on the consolidated balance sheets for the current and historical periods, in accordance with ASC 360. The results of the Retail Pharmacy business were previously allocated to the Pharmacy segment within the sales mix. In addition, the results of such operations have been presented as discontinued operations in accordance with ASC 205-20, Results of Operations – Discontinued Operations for all periods presented.

As of January 17, 2019, the Company had closed the transactions contemplated by the Amended WBA Asset Purchase Agreement, and the Company had received cash proceeds of approximately $156.1 million, plus approximately $20.6 million for the inventory sold in the transaction, in each case after adjustment as described in the Amended Asset Purchase Agreement. The Company recorded a gain of $145.7 million related to the Retail Pharmacy sale. The Company used the proceeds received in the transaction to pay down the Company’s existing indebtedness or for general corporate purposes.

During the fourth quarter of 2018, the Board approved a plan to actively market its headquarters building located in Memphis, TN. As a result, the Company has reclassified the headquarters building to assets held for sale in accordance with ASC 360 – Assets held for sale. The building has been reclassified to held for sale on the consolidated balance sheet and the depreciation associated with the asset has concluded. The Company has assessed the fair value of the building base on the selling price of other assets within the surrounding area. The market price is reasonable in relation to the current selling price of similar assets on the market. See Note 2: Assets Held for Sale and Discontinued Operations for additional information.

Summarized Discontinued Operations and Assets Held for Sale Financial Information

The following table provides a reconciliation of the carrying amounts of major classes of assets and liabilities which are included in assets and liabilities held for sale in the accompanying consolidated balance sheet for each of the periods presented:

	Specialty Pharmacy				Retail Pharmacy				Headquarters Building				Total Assets Held for Sale
	February 2,		February 3,		February 2,		February 3,		February 2,		February 3,		February 2,		February 3,
	2019		2018		2019		2018		2019		2018		2019		2018
(in thousands)
Current assets:
Receivables, less allowance for doubtful accounts	$	—	$	15,983	$	—	$	—	$	—	$	—	$	—	$	15,983
Inventories		—		3,756		—		15,344		—		—		—		19,100
Other non-trade receivables		—		152		—		—		—		—		—		152
Prepaid expenses and other current assets		—		12		—		—		—		—		—		12
Total current assets held for sale	$	—	$	19,903	$	—	$	15,344	$	—	$	—	$	—	$	35,247

Property and equipment, less accumulated depreciation and amortization		—		1,036		—		—		4,839		4,927		4,839		5,963
Goodwill		—		30,609		—		—		—		—		—		30,609
Intangible assets, net		—		9,533		—		20,541		—		—		—		30,074
Other noncurrent assets, net		—		539		—		—		—		—		—		539
Total noncurrent assets held for sale	$	—	$	41,717	$	—	$	20,541	$	4,839	$	4,927	$	4,839	$	67,185

Current liabilities:
Accounts payable		—		22,045		—		—		—		—		—		22,045
Accrued expenses and other		—		4,527		—		—		—		—		—		4,527
Total current liabilities held for sale	$	—	$	26,572	$	—	$	—	$	—	$	—	$	—	$	26,572

Deferred income taxes		—		—		—		—		—		—		—		—
Other noncurrent liabilities		—		48		—		—		—		—		—		48
Total noncurrent liabilities held For sale	$	—	$	48	$	—	$	—	$	—	$	—	$	—	$	48

The following table summarizes the results of discontinued operations for the years ended February 2, 2019 and February 3, 2018, respectively.