10-Q

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TABLE OF CONTENTS

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 2013
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                to

Commission File Number: 1-5742

RITE AID CORPORATION
(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	23-1614034 (I.R.S. Employer Identification No.)
30 Hunter Lane, Camp Hill, Pennsylvania (Address of principal executive offices)	17011 (Zip Code)

Registrant's telephone number, including area code: (717) 761-2633.

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report):

Not Applicable

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

        Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes ý    No o

        Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý Accelerated filer o Non-accelerated filer o
(Do not check if a
smaller reporting company) Smaller reporting company o

        Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange act). Yes o    No ý

        The registrant had 966,525,581 shares of its $1.00 par value common stock outstanding as of December 19, 2013.

RITE AID CORPORATION

TABLE OF CONTENTS

	Cautionary Statement Regarding Forward-Looking Statements	2
PART I FINANCIAL INFORMATION
ITEM 1.	Financial Statements (unaudited):
	Condensed Consolidated Balance Sheets as of November 30, 2013 and March 2, 2013	4
	Condensed Consolidated Statements of Operations for the Thirteen Week Periods Ended November 30, 2013 and December 1, 2012	5
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Thirteen Week Periods Ended November 30, 2013 and December 1, 2012	6
	Condensed Consolidated Statements of Operations for the Thirty-Nine Week Periods Ended November 30, 2013 and December 1, 2012	7
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Thirty-Nine Week Periods Ended November 30, 2013 and December 1, 2012	8
	Condensed Consolidated Statements of Cash Flows for the Thirty-Nine Week Periods Ended November 30, 2013 and December 1, 2012	9
	Notes to Condensed Consolidated Financial Statements	10
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	28
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	38
ITEM 4.	Controls and Procedures	39
PART II OTHER INFORMATION
ITEM 1.	Legal Proceedings	40
ITEM 1A.	Risk Factors	40
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
ITEM 3.	Defaults Upon Senior Securities	41
ITEM 4.	Mine Safety Disclosures	41
ITEM 5.	Other Information	41
ITEM 6.	Exhibits	42

1

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

        This report, as well as our other public filings or public statements, include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are often identified by terms and phrases such as "anticipate," "believe," "intend," "estimate," "expect," "continue," "should," "could," "may," "plan," "project," "predict," "will" and similar expressions and include references to assumptions and relate to our future prospects, developments and business strategies.

        Factors that could cause actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to:

•

our high level of indebtedness;

•

our ability to make interest and principal payments on our debt and satisfy the other covenants contained in our senior secured credit facility, second priority secured term loan facilities and other debt agreements;

•

general economic conditions (including the impact of continued high unemployment and changing consumer behavior), inflation and interest rate movements;

•

our ability to improve the operating performance of our stores in accordance with our long term strategy;

•

our ability to maintain or grow prescription count and realize front-end sales growth;

•

our ability to retain the business we gained as a result of the Walgreens / Express Scripts dispute which settled in September 2012;

•

our ability to hire and retain qualified personnel;

•

the continued impact of private and public third party payors reduction in prescription drug reimbursement and efforts to encourage mail order and limit access to payor networks;

•

competitive pricing pressures, including aggressive promotional activity from our competitors;

•

our inability to offset cost increases for generic drugs;

•

decisions to close additional stores and distribution centers or undertake additional refinancing activities, which could result in further charges to our operating statement;

•

our ability to manage expenses and our investment in working capital;

•

continued consolidation of the drugstore and the pharmacy benefit management industries;

•

changes in state or federal legislation or regulations, and the continued impact from the ongoing implementation of the Patient Protection and Affordable Care Act as well as other healthcare reform;

•

the outcome of lawsuits and governmental investigations; and

•

other risks and uncertainties described from time to time in our filings with the Securities and Exchange Commission (the "SEC").

        We undertake no obligation to update or revise the forward-looking statements included in this report, whether as a result of new information, future events or otherwise, after the date of this report. Our actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward-looking statements. Factors that could cause or contribute to such differences are discussed in the section entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included herein and included in our

2

Annual Report on Form 10-K for the fiscal year ended March 2, 2013 (the "Fiscal 2013 10-K"), which we filed with the SEC on April 23, 2013, our Quarterly Report on Form 10-Q for the thirteen weeks ended June 1, 2013 (the "First Quarter 2014 10-Q"), which we filed on July 5, 2013, and our Quarterly Report on Form 10-Q for the thirteen weeks ended August 31, 2013 (the "Second Quarter 2014 10-Q"), which we filed on October 3, 2013, and under the heading "Risk Factors" in Exhibit 99.2 to our Current Report on Form 8-K, which we filed with the SEC on June 18, 2013. These documents are available on the SEC's website at www.sec.gov.

3

PART I. FINANCIAL INFORMATION

ITEM 1.    Financial Statements

RITE AID CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

(unaudited)

	November 30, 2013			March 2, 2013
ASSETS
Current assets:
Cash and cash equivalents	$	183,212		$	129,452
Accounts receivable, net		850,249			929,476
Inventories, net of LIFO reserve of $975,241 and $915,241		3,301,103			3,154,742
Prepaid expenses and other current assets		111,689			195,377
Total current assets		4,446,253			4,409,047
Property, plant and equipment, net		1,957,584			1,895,650
Other intangibles, net		438,281			464,404
Other assets		296,049			309,618
Total assets	$	7,138,167		$	7,078,719
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current maturities of long-term debt and lease financing obligations	$	47,753		$	37,311
Accounts payable		1,397,093			1,384,644
Accrued salaries, wages and other current liabilities		1,120,238			1,156,315
Total current liabilities		2,565,084			2,578,270
Long-term debt, less current maturities		5,825,816			5,904,370
Lease financing obligations, less current maturities		78,857			91,850
Other noncurrent liabilities		897,235			963,663
Total liabilities		9,366,992			9,538,153
Commitments and contingencies		—			—
Stockholders' deficit:
Preferred stock—series G, par value $1 per share, liquidation value $100 per share; 0 and 2,000 shares authorized; shares issued 0 and ..007		—			1
Preferred stock—series H, par value $1 per share, liquidation value $100 per share; 0 and 2,000 shares authorized; shares issued 0 and 1,821		—			182,097
Common stock, par value $1 per share; 1,500,000 authorized; shares issued and outstanding 965,411 and 904,268		965,411			904,268
Additional paid-in capital		4,434,570			4,280,831
Accumulated deficit		(7,571,225	)		(7,765,262	)
Accumulated other comprehensive loss		(57,581	)		(61,369	)
Total stockholders' deficit		(2,228,825	)		(2,459,434	)
Total liabilities and stockholders' deficit	$	7,138,167		$	7,078,719

See accompanying notes to condensed consolidated financial statements.

4

RITE AID CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(unaudited)

	Thirteen Week Period Ended
	November 30, 2013			December 1, 2012
Revenues	$	6,357,732		$	6,237,847
Costs and expenses:
Cost of goods sold		4,557,066			4,426,526
Selling, general and administrative expenses		1,632,299			1,612,198
Lease termination and impairment charges		1,672			14,366
Interest expense		102,819			128,371
Loss on debt retirements, net		271			—
Gain on sale of assets, net		(9,331	)		(6,262	)
		6,284,796			6,175,199
Income before income taxes		72,936			62,648
Income tax expense		1,388			777
Net income	$	71,548		$	61,871
Computation of income attributable to common stockholders:
Net income	$	71,548		$	61,871
Accretion of redeemable preferred stock		(26	)		(26	)
Cumulative preferred stock dividends		(2,814	)		(2,651	)
Conversion of Series G and H preferred stock		(25,603	)		—
Income attributable to common stockholders—basic		43,105			59,194
Add back-interest on convertible notes		—			1,334
Income attributable to common stockholders—diluted	$	43,105		$	60,528
Basic income per share	$	0.05		$	0.07
Diluted income per share	$	0.04		$	0.07

See accompanying notes to condensed consolidated financial statements.

5

RITE AID CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(unaudited)

	Thirteen Week Period Ended
	November 30, 2013		December 1, 2012
Net income	$	71,548	$	61,871
Other comprehensive income:
Defined benefit pension plans:
Amortization of prior service cost, net transition obligation and net actuarial losses included in net periodic pension cost		1,263		1,020
Total other comprehensive income		1,263		1,020
Comprehensive income	$	72,811	$	62,891

See accompanying notes to condensed consolidated financial statements.

6

RITE AID CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(unaudited)

	Thirty-Nine Week Period Ended
	November 30, 2013			December 1, 2012
Revenues	$	18,928,954		$	18,937,018
Costs and expenses:
Cost of goods sold		13,490,936			13,666,505
Selling, general and administrative expenses		4,844,491			4,918,433
Lease termination and impairment charges		24,034			34,292
Interest expense		322,599			388,013
Loss on debt retirements, net		62,443			17,842
Gain on sale of assets, net		(16,396	)		(19,267	)
		18,728,107			19,005,818
Income (loss) before income taxes		200,847			(68,800	)
Income tax expense (benefit)		6,810			(63,818	)
Net income (loss)	$	194,037		$	(4,982	)
Computation of income (loss) attributable to common stockholders:
Net income (loss)	$	194,037		$	(4,982	)
Accretion of redeemable preferred stock		(77	)		(77	)
Cumulative preferred stock dividends		(8,318	)		(7,837	)
Conversion of Series G and H preferred stock		(25,603	)		—
Income (loss) attributable to common stockholders—basic and diluted	$	160,039		$	(12,896	)
Basic income (loss) per share	$	0.18		$	(0.01	)
Diluted income (loss) per share	$	0.17		$	(0.01	)

See accompanying notes to condensed consolidated financial statements.

7

RITE AID CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(unaudited)

	Thirty-Nine Week Period Ended
	November 30, 2013		December 1, 2012
Net income (loss)	$	194,037	$	(4,982	)
Other comprehensive income:
Defined benefit pension plans:
Amortization of prior service cost, net transition obligation and net actuarial losses included in net periodic pension cost		3,788		3,059
Total other comprehensive income		3,788		3,059
Comprehensive income (loss)	$	197,825	$	(1,923	)

See accompanying notes to condensed consolidated financial statements.

8

RITE AID CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)

	Thirty-Nine Week Period Ended
	November 30, 2013			December 1, 2012
Operating activities:
Net income (loss)	$	194,037		$	(4,982	)
Adjustments to reconcile to net cash provided by operating activities:
Depreciation and amortization		301,681			311,160
Lease termination and impairment charges		24,034			34,292
Gain from lease termination		(8,750	)		—
LIFO charges		60,000			27,502
Gain on sale of assets, net		(16,396	)		(19,267	)
Stock-based compensation expense		12,194			12,872
Loss on debt retirements, net		62,443			17,842
Changes in operating assets and liabilities:
Accounts receivable		79,895			95,732
Inventories		(206,408	)		13,055
Accounts payable		25,160			55,498
Other assets and liabilities, net		(19,972	)		55,533
Net cash provided by operating activities		507,918			599,237
Investing activities:
Payments for property, plant and equipment		(255,269	)		(233,195	)
Intangible assets acquired		(64,605	)		(45,659	)
Proceeds from sale-leaseback transactions		3,989			6,355
Proceeds from dispositions of assets and investments		14,157			27,744
Proceeds from lease termination		8,750			—
Proceeds from insured loss		6,138			—
Net cash used in investing activities		(286,840	)		(244,755	)
Financing activities:
Proceeds from issuance of long-term debt		1,310,000			426,263
Net payments to revolver		(75,000	)		(136,000	)
Principal payments on long-term debt		(1,332,528	)		(479,147	)
Change in zero balance cash accounts		(10,161	)		(43,507	)
Net proceeds from issuance of common stock		24,881			1,103
Payments for the repurchase of preferred stock		(21,034	)		—
Financing fees paid for early debt redemption		(45,636	)		(11,069	)
Deferred financing costs paid		(17,840	)		(10,769	)
Net cash used in financing activities		(167,318	)		(253,126	)
Increase in cash and cash equivalents		53,760			101,356
Cash and cash equivalents, beginning of period		129,452			162,285
Cash and cash equivalents, end of period	$	183,212		$	263,641
Supplementary cash flow data:
Cash paid for interest (net of capitalized amounts of $163 and $319, respectively)	$	313,302		$	311,026
Cash payments of income taxes, net of refunds	$	2,283		$	3,515
Equipment financed under capital leases	$	15,023		$	7,251
Equipment received for noncash consideration	$	1,588		$	2,636
Reduction in lease financing obligation	$	—		$	—
Preferred stock dividends paid in additional shares	$	8,318		$	7,837
Gross borrowings from revolver	$	1,915,000		$	293,000
Gross repayments to revolver	$	1,990,000		$	429,000

See accompanying notes to condensed consolidated financial statements.

9

RITE AID CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Thirteen and Thirty-Nine Week Periods Ended November 30, 2013 and December 1, 2012

(Dollars and share information in thousands, except per share amounts)

(unaudited)

1. Basis of Presentation

        The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X and therefore do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete annual financial statements. The accompanying financial information reflects all adjustments which are of a recurring nature and, in the opinion of management, are necessary for a fair presentation of the results for the interim periods. The results of operations for the thirteen and thirty-nine week periods ended November 30, 2013 are not necessarily indicative of the results to be expected for the full year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Rite Aid Corporation and Subsidiaries (the "Company") Fiscal 2013 10-K.

New Accounting Pronouncements

        In July 2013, the FASB issued ASU No. 2013-11, Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. ASU No. 2013-11 requires an entity to present unrecognized tax benefits as a reduction to deferred tax assets when a net operating loss carryforward, similar tax loss or a tax credit carryforward exists, with limited exceptions. ASU No. 2013-11 is effective for fiscal years beginning on or after December 15, 2013, and for interim periods within those fiscal years. This pronouncement will have no effect on the financial statements as the Company has historically presented uncertain tax positions in accordance with ASU No. 2013-11.

2. Income (Loss) Per Share

        Basic income (loss) per share is computed by dividing income (loss) available to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted income (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

10

RITE AID CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Thirteen and Thirty-Nine Week Periods Ended November 30, 2013 and December 1, 2012

(Dollars and share information in thousands, except per share amounts)

(unaudited)

2. Income (Loss) Per Share (Continued)

issuance of common stock that then shared in the income of the Company subject to anti-dilution limitations.

	Thirteen Week Period Ended						Thirty-Nine Week Period Ended
	November 30, 2013			December 1, 2012			November 30, 2013			December 1, 2012
Numerator for income (loss) per share:
Net income (loss)	$	71,548		$	61,871		$	194,037		$	(4,982	)
Accretion of redeemable preferred stock		(26	)		(26	)		(77	)		(77	)
Cumulative preferred stock dividends		(2,814	)		(2,651	)		(8,318	)		(7,837	)
Conversion of Series G and H preferred stock		(25,603	)		—			(25,603	)		—
Income (loss) attributable to common stockholders—basic	$	43,105		$	59,194		$	160,039		$	(12,896	)
Add back—interest on convertible notes		—			1,334			—			—
Income (loss) attributable to common stockholders—diluted	$	43,105		$	60,528		$	160,039		$	(12,896	)
Denominator:
Basic weighted average shares		938,994			891,031			911,608			889,187
Outstanding options and restricted shares, net		48,843			1,977			41,227			—
Convertible notes		—			24,800			—			—
Diluted weighted average shares		987,837			917,808			952,835			889,187
Basic income (loss) per share	$	0.05		$	0.07		$	0.18		$	(0.01	)
Diluted income (loss) per share	$	0.04		$	0.07		$	0.17		$	(0.01	)

        Due to their antidilutive effect, the following potential common shares have been excluded from the computation of diluted income (loss) per share as of November 30, 2013 and December 1, 2012:

	Thirteen Week Period Ended				Thirty-Nine Week Period Ended
	November 30, 2013		December 1, 2012		November 30, 2013		December 1, 2012
Stock options		23,564		70,868		32,433		83,169
Convertible notes		24,800		—		24,800		24,800
Convertible preferred stock		—		32,619		—		32,619
		48,364		103,487		57,233		140,588

        Also excluded from the computation of diluted income (loss) per share for the thirty-nine week periods ended November 30, 2013 and December 1, 2012 are restricted shares and restricted stock units of 0 and 12,753, respectively, which are included in shares outstanding.

11

RITE AID CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Thirteen and Thirty-Nine Week Periods Ended November 30, 2013 and December 1, 2012

(Dollars and share information in thousands, except per share amounts)

(unaudited)

3. Lease Termination and Impairment Charges

        Lease termination and impairment charges consist of amounts as follows:

	Thirteen Week Period Ended				Thirty-Nine Week Period Ended
	November 30, 2013		December 1, 2012		November 30, 2013		December 1, 2012
Impairment charges	$	335	$	339	$	5,201	$	882
Lease termination charges		1,337		14,027		18,833		33,410
	$	1,672	$	14,366	$	24,034	$	34,292

Impairment Charges

        These amounts include the write-down of long-lived assets at locations that were assessed for impairment because of management's intention to relocate or close the location or because of changes in circumstances that indicated the carrying value of an asset may not be recoverable.

Lease Termination Charges

        As part of the Company's ongoing business activities, the Company assesses stores and distribution centers for potential closure or relocation. Decisions to close or relocate stores or distribution centers in future periods would result in lease termination charges, lease exit costs and inventory liquidation charges, as well as impairment of assets at these locations. During November 2013, the Company sold its lease rights for one store for a gain of $8,750, which is included as a reduction to lease termination charges and is reflected in the table below as a component of cash payments, net of sublease income. The following table reflects the closed store and distribution center charges that relate to new closures, changes in assumptions and interest accretion:

	Thirteen Week Period Ended						Thirty-Nine Week Period Ended
	November 30, 2013			December 1, 2012			November 30, 2013			December 1, 2012
Balance—beginning of period	$	303,637		$	345,271		$	323,758		$	367,865
Provision for present value of noncancellable lease payments of closed stores		4,522			7,270			10,896			11,522
Changes in assumptions about future sublease income, terminations and changes in interest rates		(8,112	)		1,062			(7,899	)		4,388
Interest accretion		5,225			5,729			16,133			17,655
Cash payments, net of sublease income		(10,127	)		(23,866	)		(47,743	)		(65,964	)
Balance—end of period	$	295,145		$	335,466		$	295,145		$	335,466

12

RITE AID CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Thirteen and Thirty-Nine Week Periods Ended November 30, 2013 and December 1, 2012

(Dollars and share information in thousands, except per share amounts)

(unaudited)

4. Fair Value Measurements

        The Company utilizes the three-level valuation hierarchy for the recognition and disclosure of fair value measurements. The categorization of assets and liabilities within this hierarchy is based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy consist of the following:

•

Level 1—Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

•

Level 2—Inputs to the valuation methodology are quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active or inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument.

•

Level 3—Inputs to the valuation methodology are unobservable inputs based upon management's best estimate of inputs market participants could use in pricing the asset or liability at the measurement date, including assumptions about risk.

Non-Financial Assets Measured on a Non-Recurring Basis

        Long-lived non-financial assets are measured at fair value on a nonrecurring basis for purposes of calculating impairment using Level 2 and Level 3 inputs as defined in the fair value hierarchy. The fair value of long-lived assets using Level 2 inputs is determined by evaluating the current economic conditions in the geographic area for similar use assets. The fair value of long-lived assets using Level 3 inputs is determined by estimating the amount and timing of net future cash flows (which are unobservable inputs) and discounting them using a risk-adjusted rate of interest (which is Level 1). The Company estimates future cash flows based on its experience and knowledge of the market in which the store is located. Significant increases or decreases in actual cash flows may result in valuation changes. During the thirty-nine week period ended November 30, 2013, long-lived assets from continuing operations with a carrying value of $18,587, primarily store assets, were written down to their fair value of $13,386, resulting in an impairment charge of $5,201 of which $335 relates to the thirteen-week period ended November 30, 2013. During the thirty-nine week period ended December 1, 2012, long-lived assets from continuing operations with a carrying value of $2,632, primarily store assets, were written down to their fair value of $1,750, resulting in an impairment charge of $882 of which $339 relates to the thirteen-week period ended December 1, 2012. If our actual future cash flows differ from our projections materially, certain stores that are either not impaired or partially impaired in the current period may be further impaired in future periods.

13

RITE AID CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Thirteen and Thirty-Nine Week Periods Ended November 30, 2013 and December 1, 2012

(Dollars and share information in thousands, except per share amounts)

(unaudited)

4. Fair Value Measurements (Continued)

        The following table presents fair values for those assets measured at fair value on a non-recurring basis at November 30, 2013 and December 1, 2012:

	Fair Value Measurement Using
	Level 1		Level 2		Level 3		Total as of November 30, 2013
Long-lived assets held for use	$	—	$	—	$	955	$	955
Long-lived assets held for sale		—		12,431		—		12,431
Total	$	—	$	12,431	$	955	$	13,386

	Level 1		Level 2		Level 3		Total as of December 1, 2012
Long-lived assets held for use	$	—	$	975	$	775	$	1,750
Long-lived assets held for sale		—		—		—		—
Total	$	—	$	975	$	775	$	1,750

        As of November 30, 2013 and December 1, 2012, the Company did not have any financial assets measured on a recurring basis.

Other Financial Instruments

        Financial instruments other than long-term indebtedness include cash and cash equivalents, accounts receivable and accounts payable. These instruments are recorded at book value, which we believe approximate their fair values due to their short term nature.

        The fair value for LIBOR-based borrowings under the Company's senior secured credit facility and first and second lien term loans are estimated based on the quoted market price of the financial instrument which is considered Level 1 of the fair value hierarchy. The fair values of substantially all of the Company's other long-term indebtedness are estimated based on quoted market prices of the financial instruments which are considered Level 1 of the fair value hierarchy. The carrying amount and estimated fair value of the Company's total long-term indebtedness was $5,842,694 and $6,211,376, respectively, as of November 30, 2013. There were no outstanding derivative financial instruments as of November 30, 2013 and March 2, 2013.

5. Income Taxes

        The Company recorded an income tax expense of $1,388 and $777 for the thirteen week periods ended November 30, 2013 and December 1, 2012, respectively, and an income tax expense of $6,810 and an income tax benefit of $63,818 for the thirty-nine week periods ended November 30, 2013 and December 1, 2012, respectively. The income tax expense or benefit is recorded net of adjustments to maintain a full valuation allowance against the Company's net deferred tax assets.

14

RITE AID CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Thirteen and Thirty-Nine Week Periods Ended November 30, 2013 and December 1, 2012

(Dollars and share information in thousands, except per share amounts)

(unaudited)

5. Income Taxes (Continued)

        The income tax expense for the thirteen and thirty-nine week periods ended November 30, 2013 is primarily attributable to the accrual of federal, state and local taxes and adjustments to unrecognized tax benefits offset by adjustments to the valuation allowance of $(28,389) and $(63,081), respectively.

        The income tax expense for the thirteen week period ended December 1, 2012 was primarily attributable to an accrual of federal, state and local taxes and adjustments to unrecognized tax benefits offset by adjustments to the valuation allowance of $(24,717).

        The income tax benefit for the thirty-nine week period ended December 1, 2012 was primarily attributable to the recognition of previously unrecognized tax benefits resulting from the appellate settlements of the Brooks Eckerd Internal Revenue Service (IRS) Audit of fiscal years 2004 - 2007 as well as the Commonwealth of Massachusetts Audit of fiscal years 2005 - 2007. These amounts were offset by a reversal of the related tax indemnification asset which was recorded in selling, general and administrative expenses as these audits were related to pre-acquisition periods. The accrual of federal, state and local taxes for the thirty-nine week period ended December 1, 2012 included adjustments to the valuation allowance of $18,128.

        The Company is indemnified by Jean Coutu Group for certain tax liabilities incurred for all years ended up to and including June 4, 2007, related to the June 2007 Brooks Eckerd acquisition. Although the Company is indemnified by Jean Coutu Group, the Company remains the primary obligor to the tax authorities with respect to any tax liability arising for the years prior to the acquisition. Accordingly, as of November 30, 2013 and March 2, 2013 the Company had recoverable indemnification assets of $32,550 and $30,710 from Jean Coutu Group, respectively, included in the 'Other Assets' line of the Consolidated Balance Sheets, to reflect the indemnification for such liabilities.

        The Company recognizes tax liabilities in accordance with the guidance for uncertain tax positions and management adjusts these liabilities with changes in judgment as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of the tax liabilities.

        Over the next 12 months, the Company believes that it is reasonably possible that the amount of unrecognized tax positions including interest and penalties could decrease tax liabilities by approximately $32,827, which would impact the effective tax rate if the company's tax positions are sustained upon audit or the controlling statute of limitations expires. The primary driver of the decrease is contingent upon the statute of limitations expiring. The corresponding indemnification asset will reverse concurrently in selling, general and administrative expenses.

        The valuation allowances as of November 30, 2013 and March 2, 2013 apply to the net deferred tax assets of the Company. The Company continues to maintain a full valuation allowance of $2,160,594 and $2,223,675 against net deferred tax assets at November 30, 2013 and March 2, 2013, respectively.

15

RITE AID CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Thirteen and Thirty-Nine Week Periods Ended November 30, 2013 and December 1, 2012

(Dollars and share information in thousands, except per share amounts)

(unaudited)

6. Intangible Assets

        The Company's intangible assets are finite-lived and amortized over their useful lives. Following is a summary of the Company's amortizable intangible assets as of November 30, 2013 and March 2, 2013.

	November 30, 2013							March 2, 2013
	Gross Carrying Amount		Accumulated Amortization			Remaining Weighted Average Amortization Period		Gross Carrying Amount		Accumulated Amortization			Remaining Weighted Average Amortization Period
Favorable leases and other	$	635,095	$	(441,542	)		9 years	$	623,541	$	(413,556	)		10 years
Prescription files		1,333,771		(1,089,043	)		4 years		1,286,087		(1,031,668	)		4 years
Total	$	1,968,866	$	(1,530,585	)			$	1,909,628	$	(1,445,224	)

        Also included in other non-current liabilities as of November 30, 2013 and March 2, 2013 are unfavorable lease intangibles with a net carrying amount of $64,522 and $70,195, respectively. These intangible liabilities are amortized over their remaining lease terms.

        Amortization expense for these intangible assets and liabilities was $28,961 and $89,767 for the thirteen and thirty-nine week periods ended November 30, 2013, respectively. Amortization expense for these intangible assets and liabilities was $31,143 and $95,972 for the thirteen and thirty-nine week periods ended December 1, 2012, respectively. The anticipated annual amortization expense for these intangible assets and liabilities is 2014—$111,702; 2015—$100,399; 2016—$88,857; 2017—$75,596 and 2018—$37,687.

16

RITE AID CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Thirteen and Thirty-Nine Week Periods Ended November 30, 2013 and December 1, 2012

(Dollars and share information in thousands, except per share amounts)

(unaudited)

7. Indebtedness and Credit Agreements

        Following is a summary of indebtedness and lease financing obligations at November 30, 2013 and March 2, 2013:

	November 30, 2013			March 2, 2013
Secured Debt:
Senior secured revolving credit facility due February 2018	$	590,000		$	665,000
Tranche 6 Term Loan due February 2020		1,155,195			1,161,000
7.5% senior secured notes (second lien) due March 2017		—			500,000
10.25% senior secured notes (second lien) due October 2019 ($270,000 face value less unamortized discount of $1,211 and $1,364)		268,789			268,636
8.00% senior secured notes (senior lien) due August 2020		650,000			650,000
Tranche 1 Term Loan (second lien) due August 2020		470,000			470,000
Tranche 2 Term Loan (second lien) due June 2021		500,000			—
Other secured		5,267			5,298
		3,639,251			3,719,934
Guaranteed Unsecured Debt:
9.5% senior notes due June 2017 ($810,000 face value less unamortized discount of $5,529)		—			804,471
9.25% senior notes due March 2020 ($902,000 face value plus unamortized premium of $4,255 and $4,759)		906,255			906,759
6.75% senior notes due June 2021		810,000			—
		1,716,255			1,711,230
Unguaranteed Unsecured Debt:
8.5% convertible notes due May 2015		64,188			64,188
7.7% notes due February 2027		295,000			295,000
6.875% fixed-rate senior notes due December 2028		128,000			128,000
		487,188			487,188
Lease financing obligations		109,732			115,179
Total debt		5,952,426			6,033,531
Current maturities of long-term debt and lease financing obligations		(47,753	)		(37,311	)
Long-term debt and lease financing obligations, less current maturities	$	5,904,673		$	5,996,220

Credit Facility

        The Company has a senior secured credit facility that consists of a $1,795,000 revolving credit facility and a $1,155,195 senior secured term loan (the "Tranche 6 Term Loan"). Borrowings under the revolving credit facility bear interest at a rate per annum between LIBOR plus 2.25% and LIBOR plus 2.75%, if the Company chooses to make LIBOR borrowings, or between Citibank's base rate plus 1.25% and Citibank's base rate plus 1.75% in each case based upon the amount of revolver availability

17

RITE AID CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Thirteen and Thirty-Nine Week Periods Ended November 30, 2013 and December 1, 2012

(Dollars and share information in thousands, except per share amounts)

(unaudited)

7. Indebtedness and Credit Agreements (Continued)

as defined in the senior secured credit facility. The Company is required to pay fees between 0.375% and 0.50% per annum on the daily unused amount of the revolver, depending on the amount of revolver availability. Amounts drawn under the revolver become due and payable on February 21, 2018. The Tranche 6 Term Loan matures on February 21, 2020 and currently bears interest at a rate per annum equal to LIBOR plus 3.00%, if the Company chooses to make LIBOR borrowings, or at Citibank's base rate plus 2.00%. The Tranche 6 Term Loan is subject to a 1.00% LIBOR floor per annum.

        The Company's ability to borrow under the revolver is based upon a specified borrowing base consisting of accounts receivable, inventory and prescription files. At November 30, 2013, the Company had $590,000 of borrowings outstanding under the revolver and had letters of credit outstanding against the revolver of $87,949, which resulted in additional borrowing capacity of $1,117,051.

        The senior secured credit facility contains certain restrictions on the ability of the Company and the subsidiary guarantors to accumulate cash on hand, and under certain circumstances, requires the funds in the Company's deposit accounts to be applied first to the repayment of outstanding revolving loans under the senior secured credit facility and then to be held as collateral for the senior obligations.

        The senior credit facility restricts the amount of secured and unsecured debt the Company may have outstanding. The senior secured credit facility allows the Company to incur an unlimited amount of unsecured debt with a maturity beyond May 21, 2020. However, the Company's second priority secured term loan facilities and the indentures that govern the Company's secured and guaranteed unsecured notes contain restrictions on the amount of additional secured and unsecured debt that can be incurred by the Company. Pursuant to certain of the Company's existing indentures, the Company could not incur any additional secured debt assuming a fully drawn revolver and the outstanding letters of credit. The ability to issue additional unsecured debt under the second priority secured term loan facilities and the indentures is generally governed by an interest coverage ratio test. As of November 30, 2013, the Company had the ability to issue additional unsecured debt under the second lien credit facilities and other indentures.

        The senior secured credit facility contains additional covenants which place restrictions on the incurrence of debt, the payments of dividends, sale of assets, mergers and acquisitions and the granting of liens. The credit facility has a financial covenant, which is the maintenance of a fixed charge coverage ratio. The covenant requires that, if availability on the revolving credit facility is less than $150,000, the Company must maintain a minimum fixed charge coverage ratio of 1.00 to 1.00. As of November 30, 2013, availability under the revolving credit facility was in excess of $150,000 and, therefore, the financial covenant was not applicable. The senior secured credit facility also provides for customary events of default.

        The Company also has a second priority secured term loan facility, which includes a $470,000 second priority secured term loan (the "Tranche 1 Term Loan"). The Tranche 1 Term Loan matures on August 21, 2020 and currently bears interest at a rate per annum equal to LIBOR plus 4.75%, if the Company chooses to make LIBOR borrowings, or at Citibank's base rate plus 3.75%. The Tranche 1 Term Loan is subject to a 1.00% LIBOR floor per annum.

18

RITE AID CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Thirteen and Thirty-Nine Week Periods Ended November 30, 2013 and December 1, 2012

(Dollars and share information in thousands, except per share amounts)

(unaudited)

7. Indebtedness and Credit Agreements (Continued)

        On June 21, 2013, the Company entered into a new second priority secured term loan facility, which includes a $500,000 second priority secured term loan (the "Tranche 2 Term Loan"). The Tranche 2 Term Loan matures on June 21, 2021 and currently bears interest at a rate per annum equal to LIBOR plus 3.875% with a LIBOR floor of 1.00%, if the Company chooses to make LIBOR borrowings, or at Citibank's base rate plus 2.875%.

        Substantially all of Rite Aid Corporation's 100 percent owned subsidiaries guarantee the obligations under the senior secured credit facility, second priority secured term loan facilities, secured guaranteed notes and unsecured guaranteed notes. The senior secured credit facility, second priority secured term loan facilities and secured guaranteed notes are secured, on a senior or second priority basis, as applicable, by a lien on, among other things, accounts receivable, inventory and prescription files of the subsidiary guarantors. The subsidiary guarantees related to the Company's senior secured credit facility, second priority secured term loan facilities and secured guaranteed notes and, on an unsecured basis, the unsecured guaranteed notes are full and unconditional and joint and several, and there are no restrictions on the ability of the Company to obtain funds from its subsidiaries. Also, the Company has no independent assets or operations, and subsidiaries not guaranteeing the credit facility, second priority secured term loan facilities and applicable notes are minor. Accordingly, condensed consolidating financial information for the Company and subsidiaries is not presented.

Other Transactions

        In June 2013, the Company completed a tender offer for its 7.5% senior secured notes due 2017 in which $419,237 aggregate principal amount of the outstanding 7.5% notes were tendered and repurchased. In July 2013, the Company redeemed the remaining 7.5% notes for $85,154, which included the call premium and interest to the redemption date. The tender offer for, and redemption of, the 7.5% notes were funded using the proceeds from the Tranche 2 Term Loan, borrowings under the Company's revolving credit facility and available cash.

        On July 2, 2013, the Company issued $810,000 of its 6.75% senior notes due 2021. The Company's obligations under the notes are fully and unconditionally guaranteed, jointly and severally, on an unsubordinated basis, by all of its subsidiaries that guarantee the Company's obligations under the senior secured credit facility, the second priority secured term loan facilities and the outstanding 8.00% senior secured notes due 2020, 10.25% senior secured notes due 2019 and 9.25% senior notes due 2020. The Company used the net proceeds of the 6.75% notes, borrowings under its revolving credit facility and available cash to repurchase and repay all of the Company's outstanding $810,000 aggregate principal of 9.5% senior notes due 2017.

        In July 2013, the Company completed a tender offer for its 9.5% notes in which $739,642 aggregate principal amount of the outstanding 9.5% notes were tendered and repurchased. In August 2013, the Company redeemed the remaining 9.5% notes for $73,440, which included the call premium and interest to the redemption date.

19

RITE AID CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Thirteen and Thirty-Nine Week Periods Ended November 30, 2013 and December 1, 2012

(Dollars and share information in thousands, except per share amounts)

(unaudited)

7. Indebtedness and Credit Agreements (Continued)

        In connection with these refinancing transactions, the Company recorded a loss on debt retirement, including tender and call premium and interest, unamortized debt issue costs and unamortized discount of $62,172.

        As of March 2, 2013, Rite Aid Lease Management Company, a 100 percent owned subsidiary of the Company, had 213,000 shares of its Cumulative Preferred Stock, Class A, par value $100 per share ("RALMCO Cumulative Preferred Stock"), outstanding. The carrying amount of the RALMCO Cumulative Preferred Stock as of November 29, 2013 was $20,763 and was recorded in Other Noncurrent Liabilities. On November 29, 2013, the Company repurchased all of the outstanding RALMCO Cumulative Preferred Stock for $21,034. In connection with this transaction, the Company recorded a loss on debt retirement of $271.

Maturities

        The aggregate annual principal payments of long-term debt for the remainder of fiscal 2014 and thereafter are as follows: 2014—$8,170; 2015—$11,610; 2016—$75,798; 2017—$11,610; 2018—$601,610 and $5,130,852 thereafter.

8. Stock Options and Stock Awards

        The Company recognizes share-based compensation expense over the requisite service period of the award, net of an estimate for the impact of forfeitures. Operating results for the thirty-nine week periods ended November 30, 2013 and December 1, 2012 include $12,194 and $12,872, respectively, of compensation costs related to the Company's stock-based compensation arrangements.

        The total number and type of newly awarded grants and the related weighted average fair value for the thirty-nine week periods ended November 30, 2013 and December 1, 2012 are as follows:

	November 30, 2013				December 1, 2012
	Shares		Weighted Average Fair Value		Shares		Weighted Average Fair Value
Stock options granted		4,828	$	1.91		12,020	$	0.91
Stock awards granted		2,743	$	2.79		5,450	$	1.31
Total awards		7,571				17,470

        Typically, stock options granted vest, and are subsequently exercisable in equal annual installments over a four-year period for employees. Stock awards granted to non-employee directors vest 80% in year one, 10% in year two and 10% in year three.

20

RITE AID CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Thirteen and Thirty-Nine Week Periods Ended November 30, 2013 and December 1, 2012

(Dollars and share information in thousands, except per share amounts)

(unaudited)

8. Stock Options and Stock Awards (Continued)

        The Company calculates the fair value of stock options using the Black- Scholes-Merton option pricing model. The following assumptions were used in the Black-Scholes-Merton option pricing model:

	Thirty-Nine Week Period Ended
	November 30, 2013			December 1, 2012
Expected stock price volatility		85	%		85	%
Expected dividend yield		0	%		0	%
Risk-free interest rate		1.4	%		0.7	%
Expected option life		5.5 years			5.5 years

        As of November 30, 2013, the total unrecognized pre-tax compensation costs related to unvested stock options and restricted stock grants, net of estimated forfeitures and the weighted average period of cost amortization are as follows:

	November 30, 2013
	Unvested stock options		Unvested restricted stock
Unrecognized pre-tax costs	$	17,625	$	10,913
Weighted average amortization period		2.5 years		2.0 years

9. Reclassifications from Accumulated Other Comprehensive Loss

        The following table summarizes the components of accumulated other comprehensive loss and the changes in balances of each component of accumulated other comprehensive loss, net of tax as

21

RITE AID CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Thirteen and Thirty-Nine Week Periods Ended November 30, 2013 and December 1, 2012

(Dollars and share information in thousands, except per share amounts)

(unaudited)

9. Reclassifications from Accumulated Other Comprehensive Loss (Continued)

applicable, for the thirteen and thirty-nine week periods ended November 30, 2013 and December 1, 2012:

	Thirteen week period ended November 30, 2013						Thirteen Week Period Ended December 1,2012						Thirty-Nine Week Period Ended November 30, 2013						Thirty-Nine Week Period Ended December 1,2012
	Defined benefit pension plans			Accumulated other comprehensive loss			Defined benefit pension plans			Accumulated other comprehensive loss			Defined benefit pension plans			Accumulated other comprehensive loss			Defined benefit pension plans			Accumulated other comprehensive loss
Accumulated other comprehensive loss
Balance-beginning of period	$	(58,844	)	$	(58,844	)	$	(50,595	)	$	(50,595	)	$	(61,369	)	$	(61,369	)	$	(52,634	)	$	(52,634	)
Amounts reclassified from accumulated other comprehensive loss to net income (loss)		1,263			1,263			1,020			1,020			3,788			3,788			3,059			3,059
Balance-end of period	$	(57,581	)	$	(57,581	)	$	(49,575	)	$	(49,575	)	$	(57,581	)	$	(57,581	)	$	(49,575	)	$	(49,575	)

        The following table summarizes the effects on net income (loss) of significant amounts classified out of each component of accumulated other comprehensive loss for the thirteen and thirty-nine week periods ended November 30, 2013 and December 1, 2012:

	Thirteen Week Periods Ended November 30, 2013 and December 1, 2012
	Amount reclassified from accumulated other comprehensive loss
Details about accumulated other comprehensive loss components	November 30, 2013			December 1, 2012			Affected line item in the condensed consolidated statements of operations
Defined benefit pension plans
Amortization of unrecognized prior service cost(a)	$	(60	)	$	(60	)	Selling, general and administrative expenses
Amortization of unrecognized net loss(a)		(1,203	)		(960	)	Selling, general and administrative expenses
		(1,263	)		(1,020	)	Total before income tax expense
		—			—		Income tax expense(b)
	$	(1,263	)	$	(1,020	)	Net of income tax expense

22

RITE AID CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Thirteen and Thirty-Nine Week Periods Ended November 30, 2013 and December 1, 2012

(Dollars and share information in thousands, except per share amounts)

(unaudited)

9. Reclassifications from Accumulated Other Comprehensive Loss (Continued)

	Thirty-Nine Week Periods Ended November 30, 2013 and December 1, 2012
	Amount reclassified from accumulated other comprehensive loss
Details about accumulated other comprehensive loss components	November 30, 2013			December 1, 2012			Affected line item in the condensed consolidated statements of operations
Defined benefit pension plans
Amortization of unrecognized prior service cost(a)	$	(180	)	$	(180	)	Selling, general and administrative expenses
Amortization of unrecognized net loss(a)		(3,608	)		(2,879	)	Selling, general and administrative expenses
		(3,788	)		(3,059	)	Total before income tax expense
		—			—		Income tax expense(b)
	$	(3,788	)	$	(3,059	)	Net of income tax expense

(a)—See Note 10, Retirement Plans for additional details.

(b)—Income tax expense is $0 due to the valuation allowance. See Note 5, Income Taxes for additional details.

10. Retirement Plans

        Net periodic pension expense recorded in the thirteen and thirty-nine week periods ended November 30, 2013 and December 1, 2012, for the Company's defined benefit plans includes the following components:

	Defined Benefit Pension Plan						Nonqualified Executive Retirement Plans				Defined Benefit Pension Plan						Nonqualified Executive Retirement Plans
	Thirteen Week Period Ended										Thirty-Nine Week Period Ended
	November 30, 2013			December 1, 2012			November 30, 2013		December 1, 2012		November 30, 2013			December 1, 2012			November 30, 2013		December 1, 2012
Service cost	$	830		$	868		$	—	$	—	$	2,490		$	2,603		$	—	$	—
Interest cost		1,551			1,566			136		154		4,653			4,697			407		462
Expected return on plan assets		(1,780	)		(1,749	)		—		—		(5,338	)		(5,246	)		—		—
Amortization of unrecognized prior service cost		60			60			—		—		180			180			—		—
Amortization of unrecognized net loss		1,203			960			—		—		3,608			2,879			—		—
Net pension expense	$	1,864		$	1,705		$	136	$	154	$	5,593		$	5,113		$	407	$	462

        During the thirteen and thirty-nine week periods ended November 30, 2013 the Company contributed $402 and $1,220, respectively, to the Nonqualified Executive Retirement Plans. During the remainder of fiscal 2014, the Company expects to contribute $435 to the Nonqualified Executive Retirement Plans and $8,000 to the Defined Benefit Pension Plan.

23

RITE AID CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Thirteen and Thirty-Nine Week Periods Ended November 30, 2013 and December 1, 2012

(Dollars and share information in thousands, except per share amounts)

(unaudited)

11. Commitments and Contingencies

Legal Matters

        The Company is a party to legal proceedings, investigations and claims in the ordinary course of its business, including the matters described below. The Company records accruals for outstanding legal matters when it believes it is probable that a loss will be incurred and the amount can be reasonably estimated. The Company evaluates, on a quarterly basis, developments in legal matters that could affect the amount of any accrual and developments that would make a loss contingency both probable and reasonably estimable. If a loss contingency is not both probable and estimable, the Company does not establish an accrued liability.

        The Company's contingencies are subject to significant uncertainties, including, among other factors: (i) proceedings are in early stages; (ii) whether class or collective action status is sought and the likelihood of a class being certified; (iii) the outcome of pending appeals or motions; (iv) the extent of potential damages, fines or penalties, which are often unspecified or indeterminate; (v) the impact of discovery on the matter; (vi) whether novel or unsettled legal theories are at issue; (vii) there are significant factual issues to be resolved; and/or (viii) in the case of certain government agency investigations, whether a sealed qui tam lawsuit ("whistleblower" action) has been filed and whether the government agency makes a decision to intervene in the lawsuit following investigation.

        The Company has been named in a collective and class action lawsuit, Indergit v. Rite Aid Corporation et al pending in the United States District Court for the Southern District of New York, filed purportedly on behalf of current and former store managers working in the Company's stores at various locations around the country. The lawsuit alleges that the Company failed to pay overtime to store managers as required under the FLSA and under certain New York state statutes. The lawsuit also seeks other relief, including liquidated damages, punitive damages, attorneys' fees, costs and injunctive relief arising out of state and federal claims for overtime pay. On April 2, 2010, the Court conditionally certified a nationwide collective group of individuals who worked for the Company as store managers since March 31, 2007. The Court ordered that Notice of the Indergit action be sent to the purported members of the collective group (approximately 7,000 current and former store managers) and approximately 1,550 joined the Indergit action. Discovery as to certification issues has been completed. On September 26, 2013, the Court granted Rule 23 class certification of the New York store manager claims as to liability only, but denied it as to damages, and denied the Company's motion for decertification of the nationwide collective action claims. The Company has filed a motion seeking reconsideration of the Court's September 26, 2013 decision and briefing on that motion is complete and awaiting a ruling. Once approved by the Court, notice of the Rule 23 class certification as to liability only will be sent to approximately 1,750 current and former store managers in the state of New York. At this time, the Company is not able to either predict the outcome of this lawsuit or estimate a potential range of loss with respect to the lawsuit. The Company's management believes, however, that this lawsuit is without merit and not appropriate for collective or class action treatment and is vigorously defending this lawsuit.

        The Company is currently a defendant in several putative class action lawsuits filed in state courts in California alleging violations of California wage and hour laws, rules and regulations pertaining primarily to failure to pay overtime, pay for missed meals and rest periods and failure to provide

24

RITE AID CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Thirteen and Thirty-Nine Week Periods Ended November 30, 2013 and December 1, 2012

(Dollars and share information in thousands, except per share amounts)

(unaudited)

11. Commitments and Contingencies (Continued)

employee seating. These suits purport to be class actions and seek substantial damages. At this time, the Company is not able to either predict the outcome of these lawsuits or estimate a potential range of loss with respect to the lawsuits. The Company's management believes, however, that the plaintiffs' allegations are without merit and that their claims are not appropriate for class action treatment. The Company is vigorously defending all of these claims.

        The Company was served with a United States Department of Health and Human Services Office of the Inspector General ("OIG") subpoena dated March 5, 2010 in connection with an investigation being conducted by the OIG and the United States Attorney's Office for the Central District of California. The subpoena requests records related to any gift card inducement programs for customers who transferred prescriptions for drugs or medicines to the Company's pharmacies, and whether any customers who receive federally funded prescription benefits (e.g. Medicare and Medicaid) may have benefited from those programs. The Company has substantially completed its production of records in response to the subpoena. In June 2013, the government contacted the Company, and the Company is involved in ongoing discussions with the government regarding the matter.

        The Company received a subpoena dated May 9, 2011 from certain California counties seeking information regarding compliance with environmental regulations governing the management of hazardous waste. The Company cooperated fully in this matter with California regulators and has reached a settlement resolving potential claims on a statewide basis. A proposed final judgment negotiated by the parties was filed in the Superior Court of San Joaquin County and approved by the Court on September 24, 2013. As part of this settlement, the Company paid civil penalties, supplemental environmental project payments and costs aggregating $12.3 million, and has consented to injunctive provisions regarding future compliance with California hazardous materials laws. The aggregate payment with respect to the civil penalties, supplemental environmental projects and cost reimbursement had been previously accrued, will not impact the Company's current fiscal year results of operations and will not be material to the Company's financial condition.

        The Company was served with a Civil Investigative Demand Subpoena Duces Tecum dated August 26, 2011 by the United States Attorney's Office for the Eastern District of Michigan. The subpoena requests records regarding Rite Aid's Rx Savings Program and the reporting of usual and customary charges to publicly funded health programs. In connection with the same investigation, the Company was served with a Civil Subpoena Duces Tecum dated February 22, 2013 by the State of Indiana Office of the Attorney General. The Company has substantially completed its response to both of the subpoenas and is unable to predict the timing or outcome of any review by the government of such information.

        In April 2012, the Company received an administrative subpoena from the Drug Enforcement Administration ("DEA"), Albany, New York District Office, requesting information regarding the Company's sale of products containing pseudoephedrine ("PSE"). In April 2012, it also received a communication from the United States Attorneys Office ("USAO") for the Northern District of New York concerning an investigation of possible civil violations of the Combat Methamphetamine Epidemic Act of 2005 ("CMEA"). In April 2013, the Company received additional administrative subpoenas from DEA concerning certain retail PSE transactions at New York stores and the USAO commenced

25

RITE AID CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Thirteen and Thirty-Nine Week Periods Ended November 30, 2013 and December 1, 2012

(Dollars and share information in thousands, except per share amounts)

(unaudited)

11. Commitments and Contingencies (Continued)

discussions with the Company regarding whether, from 2009 (upon implementation of an electronic PSE transaction logbook system) through the present, the Company sold products containing PSE in violation of the CMEA. Violations of the CMEA could result in the imposition of administrative, civil and/or criminal penalties against the Company. The Company is cooperating with the government and has provided information responsive to the subpoenas.

        The Company received an additional administrative subpoena from the DEA in December 2013 requesting information in connection with an investigation of violations of the CMEA in West Virginia.

        In January 2013, the DEA, Los Angeles District Office, served an administrative subpoena on the Company seeking documents related to prescriptions by a certain prescriber. The USAO, Central District of California, also contacted the Company about a related investigation into allegations that Rite Aid pharmacies filled certain controlled substance prescriptions for a number of practitioners after their DEA registrations had expired or otherwise become invalid in violation of the federal Controlled Substances Act and DEA regulations. The Company responded to the administrative subpoena and subsequent informal requests for information from the USAO. The Company is cooperating with the government's investigation.

        The Company cannot predict the timing or outcome of any of the aforementioned reviews by the DEA or the USAO of any such information.

        The Company was served with a Civil Investigative Demand dated June 21, 2013 by the USAO for the Eastern District of California. The CID requests records and responses to interrogatories regarding Rite Aid's Drug Utilization Review and prescription dispensing protocol and the dispensing of drugs designated "Code 1" by the State of California. The Company is in the process of producing responsive documents and interrogatory responses and is unable to predict the timing or outcome of any review by the government of such information.

        In addition to the above described matters, the Company is subject from time to time to various claims and lawsuits and governmental investigations arising in the ordinary course of business. While the Company's management cannot predict the outcome of any of the claims, the Company's management does not believe that the outcome of any of these legal matters will be material to the Company's consolidated financial position. It is possible, however, that the Company's results of operations or cash flows in a particular fiscal period could be materially affected by an unfavorable resolution of pending litigation or contingencies.

Contingencies

        The California Department of Health Care Services ("DHCS"), the agency responsible for administering the State of California Medicaid program, implemented retroactive reimbursement rate reductions effective June 1, 2011, impacting the medical provider community in California, including pharmacies. Numerous medical providers, including representatives of both chain and independent pharmacies, filed suits against DHCS in federal district court in California and obtained preliminary injunctions against the rate cuts, subject to a trial on the merits. DHCS appealed the preliminary injunctions to the Ninth Circuit Court of Appeals, which Court vacated the injunctions. Based upon the

26

RITE AID CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Thirteen and Thirty-Nine Week Periods Ended November 30, 2013 and December 1, 2012

(Dollars and share information in thousands, except per share amounts)

(unaudited)

11. Commitments and Contingencies (Continued)

actions of DHCS and the decision of the appeals court, the Company has recorded an appropriate accrual. As pertinent facts and circumstances develop, this accrual may be adjusted.

12. Related Party Transactions

        On July 22, 2013, the Jean Coutu Group announced that it had sold all of its 65,401,162 shares of Rite Aid's common stock. As a result of this sale, the Jean Coutu Group was required to cause its last designee to resign from Rite Aid's board of directors and, accordingly, Francois J. Coutu resigned from Rite Aid's board of directors effective November 8, 2013.

        On September 26, 2013, the Company agreed to exchange eight shares of 7% Series G Convertible Preferred Stock (the "Series G preferred stock") and 1,876,013 shares of 6% Series H Convertible Preferred Stock (the "Series H preferred stock", collectively the "Preferred Stock") of the Company (the "Exchange"), held by Green Equity Investors III, L.P. ("LGP") for 40,000,000 shares of the Company's common stock, par value $1.00 per share, with a market value of $190,400 at the $4.76 per share closing price on the Settlement Date (as hereinafter defined), pursuant to an individually negotiated exchange transaction. The Exchange settled on September 30, 2013 (the "Settlement Date"). The Preferred Stock, including additional shares representing earned but unpaid dividends as of the Settlement Date, was redeemable by the Company for cash at 105% of the Preferred Stock's $100 per share liquidation preference or $199,937. The Company agreed to the Exchange as it was prohibited under several of its debt instruments from using cash flow or new debt to effect the redemption of the Preferred Stock. Following the Settlement Date, no shares of the Series G preferred stock or Series H preferred stock remained outstanding and the Company's restated certificate of incorporation was amended to eliminate all references to the Series G preferred stock and Series H preferred stock. In accordance with the terms of the Exchange, John M. Baumer, a member of the board of directors of the Company and a limited partner of Leonard Green & Partners, L.P., an affiliate of the LGP, resigned from the Company's board of directors.

        The Series G preferred stock had a liquidation preference of $100 per share and paid quarterly dividends in additional shares at 7% of liquidation preference and could be redeemed at the Company's election. The Series H preferred stock paid quarterly dividends in additional shares at 6% of liquidation preference and could be redeemed at the Company's election. The Series G preferred stock and Series H preferred stock were convertible into common stock of the Company, at the holder's option, at a conversion rate of $5.50 per share.

        As of the Settlement Date, LGP held 1,904,161 shares of Series G preferred stock and Series H preferred stock, which included 28,140 shares of earned and unpaid dividends. The Series G preferred stock and Series H preferred stock would have converted into 34,621,117 shares of common stock at the contracted conversion rate of $5.50 per share. Accordingly, income attributable to common stockholders is reduced by $25,603, or $0.03 per diluted share, the value of the additional 5,378,883 shares of common stock issued upon conversion at the $4.76 per share closing price on the Settlement Date.

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ITEM 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview

        Net income for the thirteen and thirty-nine week periods ended November 30, 2013 was $71.5 million and $194.0 million, respectively, compared to a net income of $61.9 million and net loss of $5.0 million for the thirteen and thirty-nine week periods ended December 1, 2012, respectively. The improvement in the thirteen week operating results was driven primarily by lower interest expense and lease termination and impairment charges, partially offset by a higher LIFO charge and an $18.1 million benefit from the settlement of interchange fee litigation in the prior year. The improvement in the thirty-nine week operating results was driven primarily by higher gross profit from generic drugs, lower selling, general and administrative expenses ("SG&A"), and lower interest expense, partially offset by continued reimbursement rate pressures and a higher loss on debt retirement.

        Adjusted EBITDA for the thirteen and thirty-nine week periods ended November 30, 2013 was $282.3 million and $968.6 million, respectively, compared to $295.3 million and $788.1 million for the thirteen and thirty-nine week periods ended December 1, 2012, respectively. Prior year Adjusted EBITDA included an $18.1 million benefit from the settlement of interchange fee litigation. The current quarter's Adjusted EBITDA benefited from an increase in pharmacy gross profit, driven by script count growth, generic purchasing efficiencies, and strong SG&A expense control, offset by a decrease in front-end gross profit. The improvement in Adjusted EBITDA for the thirty-nine week period ended November 30, 2013 was largely driven by increased pharmacy gross profit due to the continued benefit of generic introductions on pharmacy gross margin.

Results of Operations

Revenues and Other Operating Data

	Thirteen Week Period Ended						Thirty-Nine Week Period Ended
	November 30, 2013			December 1, 2012			November 30, 2013			December 1, 2012
	(dollars in thousands)
Revenues	$	6,357,732		$	6,237,847		$	18,928,954		$	18,937,018
Revenue growth (decline)		1.9	%		(1.2	)%		0.0	%		(0.2	)%
Same store sales growth (decline)		2.3	%		(1.5	)%		0.3	%		0.3	%
Pharmacy sales growth (decline)		3.0	%		(3.2	)%		0.0	%		(1.1	)%
Same store prescription count increase		0.7	%		3.6	%		0.2	%		3.5	%
Same store pharmacy sales growth (decline)		3.5	%		(2.7	)%		0.4	%		(0.4	)%
Pharmacy sales as a % of total sales		68.6	%		67.8	%		68.0	%		67.9	%
Third party sales as a % of total pharmacy sales		97.1	%		96.5	%		97.0	%		96.6	%
Front-end sales (decline) growth		(0.4	)%		0.7	%		(0.2	)%		1.2	%
Same store front-end sales (decline) growth		(0.2	)%		1.1	%		0.0	%		1.7	%
Front-end sales as a % of total sales		31.4	%		32.2	%		32.0	%		32.1	%
Adjusted EBITDA(*)	$	282,262		$	295,284		$	968,629		$	788,102
Store data:
Total stores (beginning of period)		4,604			4,643			4,623			4,667
New stores		—			—			—			—
Store acquisitions		—			—			1			—
Closed stores		(9	)		(10	)		(29	)		(34	)
Total stores (end of period)		4,595			4,633			4,595			4,633
Relocated stores		4			3			9			9
Remodeled and expanded stores		95			114			312			404

(*)

See Adjusted EBITDA and Other Non-GAAP Measures for additional details

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Revenues

        Revenues increased 1.9% for the thirteen weeks ended November 30, 2013 compared to a decrease of 1.2% for the thirteen weeks ended December 1, 2012. The increase in revenues for the thirteen week period ended November 30, 2013 was primarily a result of an increase in pharmacy same store sales. Pharmacy same store sales increased by 3.5% for the thirteen week period ended November 30, 2013 due primarily to brand drug inflation and the 0.7% increase in same store prescription count, partially offset by an approximate 0.9% negative impact from generic introductions and continued lower reimbursement rates. Front-end same store sales decreased by 0.2% in the thirteen week period ended November 30, 2013.

        Revenues were flat and decreased 0.2% in the thirty-nine week periods ended November 30, 2013 and December 1, 2012, respectively. Revenue in the current year was favorably impacted by an increase in same store sales of 0.3% and same store prescription count increase of 0.2%, offset by store closings.

        We include in same store sales all stores that have been open at least one year. Stores in liquidation are considered closed. Relocation stores are not included in same store sales until one year has lapsed.

Costs and Expenses

	Thirteen Week Period Ended						Thirty-Nine Week Period Ended
	November 30, 2013			December 1, 2012			November 30, 2013			December 1, 2012
	(dollars in thousands)
Cost of goods sold	$	4,557,066		$	4,426,526		$	13,490,936		$	13,666,505
Gross profit		1,800,666			1,811,321			5,438,018			5,270,513
Gross margin		28.3	%		29.0	%		28.7	%		27.8	%
Selling, general and administrative expenses		1,632,299			1,612,198			4,844,491			4,918,433
Selling, general and administrative expenses as a percentage of revenues		25.7	%		25.9	%		25.6	%		26.0	%
Lease termination and impairment charges		1,672			14,366			24,034			34,292
Interest expense		102,819			128,371			322,599			388,013

Cost of Goods Sold

        Gross profit decreased $10.7 million for the thirteen week period ended November 30, 2013. Gross profit was negatively impacted by a higher LIFO charge. Pharmacy gross profit was higher due to the continued benefit of generic drug introductions, inflation on brand drugs, purchasing efficiencies on generic drugs and the 0.7% increase in same store prescription count, partially offset by continued reimbursement rate pressures. Front-end gross profit was lower due to lower sales and higher promotional markdowns.

        Gross profit increased $167.5 million for the thirty-nine week period ended November 30, 2013. Pharmacy gross profit was higher due to the benefit of generic drug introductions and the 0.2% increase in same store prescription count, partially offset by continued reimbursement rate pressures. Front-end gross profit was lower due to higher tier discounts from our wellness + customer loyalty program and other markdowns, partially offset by higher vendor promotional funding. Gross profit was also positively impacted by a $23.5 million prescription drug antitrust litigation settlement in the first quarter, offset by a higher estimated LIFO charge due to higher estimated pharmacy inflation rates.

        Gross margin was 28.3% and 28.7% of sales for the thirteen and thirty-nine week periods ended November 30, 2013, respectively, compared to 29.0% and 27.8% of sales for the thirteen and thirty-nine week periods ended December 1, 2012, respectively. The decline in gross margin for the thirteen week

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period was due primarily to higher promotional markdowns, continued reimbursement rate pressures and a higher LIFO charge. The improvement in gross margin for the thirty-nine week period was due primarily from generic drug introductions and higher vendor promotional funding. Offsetting these factors were continued reimbursement rate pressures, a higher LIFO expense, and increased promotional markdowns.

        We use the last-in, first-out ("LIFO") method of inventory valuation, which is estimated on a quarterly basis and is finalized at year end when inflation rates and inventory levels are final. Therefore, LIFO costs for interim period financial statements are estimated. LIFO charges were $25.0 million and $60.0 million for the thirteen and thirty-nine week periods ended November 30, 2013 compared to no LIFO charge and a $27.5 million charge for the thirteen and thirty-nine week periods ended December 1, 2012. The higher estimated LIFO charge for this year relates to higher expected pharmacy inflation rates.

Selling, General and Administrative Expenses

        SG&A as a percentage of revenues was 25.7% in the thirteen week period ended November 30, 2013 compared to 25.9% in the thirteen week period ended December 1, 2012. The decrease in SG&A as a percentage of revenues was due primarily to lower advertising expense, depreciation and amortization, and lower salaries as a percentage of revenues, partially offset by the prior year $18.1 million favorable settlement related to the payment card interchange fee litigation.

        SG&A as a percentage of revenues was 25.6% in the thirty-nine week period ended November 30, 2013 compared to 26.0% in the thirty-nine week period ended December 1, 2012. The decrease in SG&A as a percentage of revenues for the thirty-nine week period was due primarily to the prior year reversal of $60.2 million of tax indemnification asset resulting from our settlement with the IRS associated with a pre-acquisition Brooks Eckerd tax audit, which was offset by an income tax benefit. In addition, SG&A decreased in the current year due to lower advertising, depreciation and amortization, and lower legal fees and litigation costs. These amounts are partially offset by increased salary and benefit costs.

Lease Termination and Impairment Charges

        Lease termination and impairment charges consist of amounts as follows:

	Thirteen Week Period Ended				Thirty-Nine Week Period Ended
	November 30, 2013		December 1, 2012		November 30, 2013		December 1, 2012
Impairment charges	$	335	$	339	$	5,201	$	882
Lease termination charges		1,337		14,027		18,833		33,410
	$	1,672	$	14,366	$	24,034	$	34,292

        Impairment Charges:    These amounts include the write-down of long- lived assets at locations that were assessed for impairment because of management's intention to relocate or close the location or because of changes in circumstances that indicated the carrying value of an asset may not be recoverable.

        Please refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations—Impairment Charges" included in our Fiscal 2013 10-K for a detailed description of our impairment methodology.

        Lease Termination Charges:    Charges to close a store, which principally consist of continuing lease obligations, are recorded at the time the store is closed and all inventory is liquidated, pursuant to the

30

guidance set forth in ASC 420, "Exit or Disposal Cost Obligations." We calculate our liability for closed stores on a store-by-store basis. The calculation includes the discounted effect of future minimum lease payments and related ancillary costs, from the date of closure to the end of the remaining lease term, net of estimated cost recoveries that may be achieved through subletting properties or through favorable lease terminations. We evaluate these assumptions each quarter and adjust the liability accordingly. As part of our ongoing business activities, we assess stores and distribution centers for potential closure and relocation. Decisions to close or relocate stores or distribution centers in future periods would result in charges for lease exit costs and liquidation of inventory, as well as impairment of assets at these locations.

Interest Expense

        Interest expense was $102.8 million and $322.6 million for the thirteen and thirty-nine week periods ended November 30, 2013, respectively, compared to $128.4 million and $388.0 million for the thirteen and thirty-nine week periods ended December 1, 2012, respectively. The decrease in interest expense was the result of recent financings during the fourth quarter of fiscal 2013 and the first and second quarters of fiscal 2014. The weighted average interest rates on our indebtedness for the thirty-nine week periods ended November 30, 2013 and December 1, 2012 were 6.6% and 7.4%, respectively.

Income Taxes

        We recorded an income tax expense of $1.4 million and $0.8 million for the thirteen week periods ended November 30, 2013 and December 1, 2012, respectively, and an income tax expense of $6.8 million and an income tax benefit of $63.8 million for the thirty-nine week periods ended November 30, 2013 and December 1, 2012, respectively. The income tax expense or benefit is recorded net of adjustments to maintain a full valuation allowance against our net deferred tax assets.

        The income tax expense for the thirteen and thirty-nine week periods ended November 30, 2013 is primarily attributable to the accrual of federal, state and local taxes and adjustments to unrecognized tax benefits offset by adjustments to the valuation allowance of $(28.4) million and $(63.1) million, respectively.

        The income tax expense for the thirteen week period ended December 1, 2012 was primarily attributable to an accrual of federal, state and local taxes and adjustments to unrecognized tax benefits offset by adjustments to the valuation allowance of $(24.7) million.

        The income tax benefit for the thirty-nine week period ended December 1, 2012 was primarily attributable to the recognition of previously unrecognized tax benefits resulting from the appellate settlements of the Brooks Eckerd Internal Revenue Service (IRS) Audit of fiscal years 2004 - 2007 as well as the Commonwealth of Massachusetts Audit of fiscal years 2005 - 2007. The settlements with the IRS and the Commonwealth of Massachusetts did not impact our net financial position, results of operations or cash flows. Furthermore, the settlements resulted in the resolution of tax contingencies associated with these tax years which had impacted the effective rate by decreasing tax expense in the first and second quarters by $66.7 million. This amount was offset by a reversal of the related tax indemnification asset which was recorded in selling, general and administrative expenses. The accrual of federal, state and local taxes for the thirty-nine week period ended December 1, 2012 included adjustments to the valuation allowance of $18.1 million.

        We recognize tax liabilities in accordance with the guidance for uncertain tax positions and management adjusts these liabilities with changes in judgment as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of the tax liabilities.

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        Over the next 12 months, we believe that it is reasonably possible that the amount of unrecognized tax positions including interest and penalties could decrease tax liabilities by approximately $32.8 million which would impact the effective tax rate if our tax positions are sustained upon audit or the controlling statute of limitations expires. The primary driver of the decrease is contingent upon the statute of limitations expiring. The corresponding indemnification asset will reverse concurrently in selling, general and administrative expenses.

        We evaluate our deferred tax assets on a regular basis to determine if a valuation allowance against the net deferred tax assets is required. A cumulative loss in recent years is significant negative evidence in considering whether deferred tax assets are realizable. Based on the negative evidence, we are precluded from relying on projections of future taxable income to support the recognition of deferred tax assets. The ultimate realization of deferred tax assets is dependent upon the existence of sufficient taxable income generated in the carryforward periods.

Liquidity and Capital Resources

General

        We have two primary sources of liquidity: (i) cash provided by operating activities and (ii) borrowings under the revolving credit facility of our senior secured credit facility. Our principal uses of cash are to provide working capital for operations, to service our obligations to pay interest and principal on debt and to fund capital expenditures. Total liquidity as of November 30, 2013 was $1,128.3 million.

Credit Facility

        Our senior secured credit facility consists of a $1.795 billion revolving credit facility and a $1.155 billion Tranche 6 Term Loan. Borrowings under the revolving credit facility bear interest at a rate per annum between LIBOR plus 2.25% and LIBOR plus 2.75%, if we choose to make LIBOR borrowings, or between Citibank's base rate plus 1.25% and Citibank's base rate plus 1.75% in each case based upon the amount of revolver availability as defined in the senior secured credit facility. We are required to pay fees between 0.375% and 0.50% per annum on the daily unused amount of the revolver, depending on the amount of revolver availability. Amounts drawn under the revolver become due and payable on February 21, 2018.

        Our ability to borrow under the revolver is based upon a specified borrowing base consisting of accounts receivable, inventory and prescription files. At November 30, 2013, we had $590.0 million of borrowings outstanding under the revolver and had letters of credit outstanding against the revolver of $87.9 million, which resulted in additional borrowing capacity of $1,117.1 million.

        The credit facility also includes our $1.155 billion senior secured term loan (the "Tranche 6 Term Loan"). The Tranche 6 Term Loan matures on February 21, 2020 and currently bears interest at a rate per annum equal to LIBOR plus 3.00% with a LIBOR floor of 1.00%, if we choose to make LIBOR borrowings, or at Citibank's base rate plus 2.00%. We must make mandatory prepayments of the Tranche 6 Term Loan with the proceeds of certain asset dispositions and casualty events (subject to certain limitations), and with the proceeds of certain issuances of debt (subject to certain exceptions). If at any time there is a shortfall in our borrowing base under our senior secured credit facility, prepayment of the Tranche 6 Term Loan may also be required.

        The senior secured credit facility restricts us and the subsidiary guarantors from accumulating cash on hand in excess of $200.0 million at any time when revolving loans are outstanding (not including cash located in our store deposit accounts, cash necessary to cover our current liabilities and certain other exceptions) and from accumulating cash on hand with revolver borrowings in excess of $100.0 million over three consecutive business days. The senior secured credit facility also states that if

32

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 (a) an event of default exists under our senior secured credit facility or (b) the sum of revolver availability under our senior secured credit facility and certain amounts held on deposit with the senior collateral agent in a concentration account is less than $100.0 million for three consecutive business days (a "cash sweep period"), the funds in our 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 senior secured credit facility, and then held as collateral for the senior obligations until such cash sweep period is rescinded pursuant to the terms of our senior secured credit facility.

        The senior secured credit facility allows us to have outstanding, at any time, up to $1.5 billion in secured second priority debt and unsecured debt in addition to borrowings under the senior secured credit facility and existing indebtedness, provided that not in excess of $750.0 million of such secured second priority debt and unsecured debt shall mature or require scheduled payments of principal prior to May 21, 2020. The senior secured credit facility allows us to incur an unlimited amount of unsecured debt with a maturity beyond May 21, 2020; however, certain of our other outstanding indebtedness limits the amount of unsecured debt that can be incurred if certain interest coverage levels are not met at the time of incurrence of said debt or other exemptions are not available. The senior secured credit facility also contains certain restrictions on the amount of secured first priority debt we are able to incur. The senior secured facility also allows, so long as the senior secured credit facility is not in default and we maintain availability on the revolving credit facility of more than $100.0 million, for the voluntary repurchase of any debt and the mandatory repurchase of our 8.5% convertible notes due 2015.

        Our senior secured credit facility contains covenants which place restrictions on the incurrence of debt beyond the restrictions described above, the payment of dividends, sale of assets, mergers and acquisitions and the granting of liens. Our credit facility also has one financial covenant, which is the maintenance of a fixed charge coverage ratio. The covenant requires that, if availability on the revolving credit facility is less than $150.0 million, we maintain a minimum fixed charge coverage ratio of 1.00 to 1.00. As of November 30, 2013, availability under the revolving credit facility was in excess of $150.0 million and, therefore, the financial covenant was not applicable.

        The senior secured credit facility provides for customary events of default including nonpayment, misrepresentation, breach of covenants and bankruptcy. It is also an event of default if we fail to make any required payment on debt having a principal amount in excess of $50.0 million 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 repurchase of such debt. The mandatory repurchase of the 8.5% convertible notes due 2015 is excluded from this event of default.

        On February 21, 2013, we entered into a second priority secured term loan facility, which includes a $470.0 million second priority secured term loan (the "Tranche 1 Term Loan"). The Tranche 1 Term Loan matures on August 21, 2020 and currently bears interest at a rate per annum equal to LIBOR plus 4.75% with a LIBOR floor of 1.00%, if we choose to make LIBOR borrowings, or at Citibank's base rate plus 3.75%.

        On June 21, 2013, we entered into a new second priority secured term loan facility, which includes a $500.0 million second priority secured term loan (the "Tranche 2 Term Loan"). The Tranche 2 Term Loan matures on June 21, 2021 and currently bears interest at a rate per annum equal to LIBOR plus 3.875% with a LIBOR floor of 1.00%, if we choose to make LIBOR borrowings, or at Citibank's base rate plus 2.875%.

        The second priority secured term loan facilities and the indentures that govern our secured and guaranteed unsecured notes contain restrictions on the amount of additional secured and unsecured

33

debt that can be incurred by us. As of November 30, 2013, the amount of additional secured debt that could be incurred under the most restrictive covenant of the second priority secured term loan facilities and these indentures was approximately $1.185 billion (which amount does not include the ability to enter into certain sale and leaseback transactions). However, we currently cannot incur any additional secured debt assuming a fully drawn revolver and the outstanding letters of credit. The ability to issue additional unsecured debt under these indentures is generally governed by an interest coverage ratio test. As of November 30, 2013, we had the ability to issue additional unsecured debt under the second lien credit facility and other indentures.

Other Transactions

        In June 2013, $419.2 million aggregate principal amount of the outstanding 7.5% senior secured notes due 2017 were tendered and repurchased by us. In July 2013, we redeemed the remaining 7.5% notes for $85.2 million which included the call premium and interest to the redemption date. The tender offer for, and redemption of, the 7.5% notes were funded using the proceeds from the Tranche 2 Term Loan, borrowings under our revolving credit facility and available cash.

        On July 2, 2013, we issued $810.0 million of our 6.75% senior notes due 2021. Our obligations under the notes are fully and unconditionally guaranteed, jointly and severally, on an unsubordinated basis, by all of our subsidiaries that guarantee our obligations under our senior secured credit facility, our second priority secured term loan facilities and our outstanding 8.00% senior secured notes due 2020, 10.25% senior secured notes due 2019 and 9.25% senior notes due 2020. We used the net proceeds of the 6.75% notes, borrowings under our revolving credit facility and available cash to repurchase and repay all of our outstanding $810.0 million aggregate principal of 9.5% senior notes due 2017.

        In July 2013, $739.6 million aggregate principal amount of the outstanding 9.5% notes were tendered and repurchased by us. In August 2013, we redeemed the remaining 9.5% notes for $73.4 million, which included call premium and interest to the redemption date.

        In connection with these refinancing transactions, we recorded a loss on debt retirement, including tender and call premium and interest, unamortized debt issue costs and unamortized discount of $62.2 million during the second quarter of fiscal 2014.

        On September 26, 2013, we agreed to exchange eight shares of 7% Series G Convertible Preferred Stock (the "Series G preferred stock") and 1,876,013 shares of 6% Series H Convertible Preferred Stock (the "Series H preferred stock", collectively the "Preferred Stock") of the Company (the "Exchange"), held by Green Equity Investors III, L.P. ("LGP") for 40,000,000 shares of our common stock, par value $1.00 per share with a market value of $190.4 million at the $4.76 per share closing price on the Settlement Date (as hereinafter defined), pursuant to an individually negotiated exchange transaction. The Exchange settled on September 30, 2013 (the "Settlement Date"). The Preferred Stock, including additional shares representing earned but unpaid dividends as of the Settlement Date, was redeemable by us for cash at 105% of the Preferred Stock's $100 per share liquidation preference or $200.0 million. We agreed to the Exchange as we were prohibited under several of our debt instruments from using cash flow or new debt to effect the redemption of the Preferred Stock. Following the Settlement Date, no shares of the Series G preferred stock or Series H preferred stock remained outstanding and the restated certificate of incorporation was amended to eliminate all references to the Series G preferred stock and Series H preferred stock. In accordance with the terms of the Exchange, John M. Baumer, a member of our the board of directors and a limited partner of Leonard Green & Partners, L.P., an affiliate of the LGP, resigned from our board of directors.

        The Series G preferred stock had a liquidation preference of $100 per share and paid quarterly dividends in additional shares at 7% of liquidation preference and could be redeemed at our election. The Series H preferred stock paid quarterly dividends in additional shares at 6% of liquidation

34

preference and could be redeemed at our election. The Series G preferred stock and Series H preferred stock were convertible into common stock, at the holder's option, at a conversion rate of $5.50 per share.

        As of the Settlement Date, LGP held 1,904,161 shares of Series G preferred stock and Series H preferred stock, which included 28,140 shares of earned and unpaid dividends. The Series G preferred stock and Series H preferred stock would have converted into 34,621,117 shares of common stock at the contracted conversion rate of $5.50 per share. Accordingly, income attributable to common stockholders is reduced by $25.6 million, or $0.03 per diluted share, the value of the additional 5,378,883 shares of common stock issued upon conversion at the $4.76 per share closing price on the Settlement Date.

        As of March 2, 2013, Rite Aid Lease Management Company, a 100 percent owned subsidiary, had 213,000 shares of its Cumulative Preferred Stock, Class A, par value $100 per share ("RALMCO Cumulative Preferred Stock"), outstanding. The carrying amount of the RALMCO Cumulative Preferred Stock as of November 29, 2013 was $20.8 million and was recorded in Other Noncurrent Liabilities. On November 29, 2013, we repurchased all of the outstanding RALMCO Cumulative Preferred Stock for $21.0 million. In connection with this transaction, we recorded a loss on debt retirement of $0.3 million.

Net Cash Provided by/Used in Operating, Investing and Financing Activities

        Cash flow provided by operating activities was $507.9 million and $599.2 million in the thirty-nine week periods ended November 30, 2013 and December 1, 2012, respectively. Operating cash flow was positively impacted by net income, a decrease in accounts receivable relating to the timing of payments from third party payors, and an increase in accounts payable due to the timing of payments, partially offset by uses of cash in connection with increases in inventory and a use of cash in other assets and liabilities, net, primarily due to reductions of prepaid rent.

        Cash used in investing activities was $286.8 million and $244.8 million for the thirty-nine week periods ended November 30, 2013 and December 1, 2012, respectively. Cash used for the purchase of property, plant, equipment and prescription files were higher than in the prior year due to a higher investment in Wellness store remodels and prescription file buys. Proceeds from the sale of assets were lower as compared to the prior year. Also reflected in investing activities are proceeds from the sale of lease rights of $8.8 million relating to one specific store, and insurance settlement proceeds of $6.1 million relating to buildings and equipment that were destroyed during hurricane Sandy.

        Cash used in financing activities was $167.3 million and $253.1 million for the thirty-nine week periods ended November 30, 2013 and December 1, 2012, respectively. Cash used in financing activities for the thirty-nine weeks ended November 30, 2013 reflects financing fees paid for early debt retirement and deferred financing costs paid in connection with the issuance of our Tranche 2 Term Loan and 6.75% senior notes due 2021 and the corresponding retirement of our 7.5% senior secured notes due 2017 and our 9.5% senior notes due 2017. Also, we used cash of $21.0 million to repurchase the RALMCO Cumulative Preferred Stock described above.

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Capital Expenditures

        During the thirteen and thirty-nine week periods ended November 30, 2013 and December 1, 2012 capital expenditures were as follows:

	Thirteen Week Period Ended				Thirty-Nine Week Period Ended
	November 30, 2013		December 1, 2012		November 30, 2013		December 1, 2012
New store construction, store relocation and store remodel projects	$	60,135	$	54,666	$	169,929	$	156,481
Technology enhancements, improvements to distribution centers and other corporate requirements		24,284		30,318		85,340		76,714
Purchase of prescription files from other retail pharmacies		28,954		25,692		64,605		45,659
Total capital expenditures	$	113,373	$	110,676	$	319,874	$	278,854

        We have completed 1,117 Wellness store remodels as of November 30, 2013. We plan on making total capital expenditures of approximately $415.0 million during fiscal 2014, consisting of approximately 53% related to store relocations and remodels and new store construction, 28% related to infrastructure and maintenance requirements and 19% related to prescription file purchases. Management expects that these capital expenditures will be financed primarily with cash flow from operating activities.

Future Liquidity

        We are highly leveraged. Our high level of indebtedness could: (i) limit our ability to obtain additional financing; (ii) limit our flexibility in planning for, or reacting to, changes in our business and the industry; (iii) place us at a competitive disadvantage relative to our competitors with less debt; (iv) render us more vulnerable to general adverse economic and industry conditions; and (v) require us to dedicate a substantial portion of our cash flow to service our debt. Based upon our current levels of operations, we believe that cash flow from operations together with available borrowings under the revolving credit facility and other sources of liquidity will be adequate to meet our requirements for working capital, debt service and capital expenditures at least for the next twelve months. Based on our liquidity position, which we expect to remain strong throughout the year, we do not expect to be subject to the fixed charge covenant in our senior secured credit facility in the next twelve months. We will continue to assess our liquidity position and potential sources of supplemental liquidity in light of our operating performance, and other relevant circumstances. Although it is not likely, should we determine, at any time, that it is necessary to obtain additional short-term liquidity, we will evaluate our alternatives and take appropriate steps to obtain sufficient additional funds. There can be no assurance that any such supplemental funding, if sought, could be obtained or if obtained, would be on terms acceptable to us. From time to time, we may seek deleveraging transactions, including entering into transactions to exchange debt for shares of common stock, issuance of equity (including preferred stock and convertible securities), repurchase outstanding indebtedness, or seek to refinance our outstanding debt or may otherwise seek transactions to reduce interest expense and extend debt maturities. Any of these transactions could impact our financial results.

Critical Accounting Policies and Estimates

        For a description of the critical accounting policies that require the use of significant judgments and estimates by management, refer to "Management's Discussion and Analysis of Financial Condition

36

and Results of Operations—Critical Accounting Policies and Estimates" included in our Fiscal 2013 10-K.

Factors Affecting Our Future Prospects

        For a discussion of risks related to our financial condition, operations and industry, refer to "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Fiscal 2013 10-K, our First Quarter Fiscal 2014 10-Q, our Second Quarter Fiscal 2014 10-Q and under the heading "Risk Factors" in Exhibit 99.2 to our Current Report on Form 8-K, which we filed with the SEC on June 18, 2013.

Adjusted EBITDA and Other Non-GAAP Measures

        In addition to net income determined in accordance with GAAP, we use certain non-GAAP measures, such as "Adjusted EBITDA", in assessing our operating performance. We believe the non-GAAP metrics serve as an appropriate measure to be used in evaluating the performance of our business. We define Adjusted EBITDA as net income (loss) excluding the impact of income taxes (and any corresponding adjustments to tax indemnification asset), interest expense, depreciation and amortization, LIFO adjustments, charges or credits for facility closing and impairment, inventory write-downs related to store closings, stock-based compensation expense, debt retirements, sale of assets and investments, revenue deferrals related to customer loyalty program and other items. We reference this particular non-GAAP financial measure frequently in our decision-making because it provides supplemental information that facilitates internal comparisons to the historical operating performance of prior periods and external comparisons to competitors' historical operating performance. In addition, incentive compensation is based on Adjusted EBITDA and we base certain of our forward-looking estimates on Adjusted EBITDA to facilitate quantification of planned business activities and enhance subsequent follow-up with comparisons of actual to planned Adjusted EBITDA.

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        The following is a reconciliation of Adjusted EBITDA to our net income (loss) for the thirteen and thirty-nine week periods ended November 30, 2013 and December 1, 2012:

	Thirteen Week Period Ended						Thirty-Nine Week Period Ended
	November 30, 2013			December 1, 2012			November 30, 2013			December 1, 2012
	(dollars in thousands)
Net income (loss)	$	71,548		$	61,871		$	194,037		$	(4,982	)
Interest expense		102,819			128,371			322,599			388,013
Income tax expense (benefit)		1,388			777			6,810			(63,818	)
Adjustments to tax indemnification asset(1)		(613	)		—			(1,840	)		60,237
Depreciation and amortization expense		101,188			102,790			301,681			311,160
LIFO charges		25,000			—			60,000			27,502
Lease termination and impairment charges		1,672			14,366			24,034			34,292
Stock-based compensation expense		4,117			4,219			12,194			12,872
Gain on sale of assets, net		(9,331	)		(6,262	)		(16,396	)		(19,267	)
Loss on debt retirements, net		271			—			62,443			17,842
Closed facility liquidation expense		1,058			1,396			2,848			4,263
Severance costs		—			—			—			(72	)
Customer loyalty card program revenue deferral		(16,950	)		(11,746	)		(822	)		16,247
Other		95			(498	)		1,041			3,813
Adjusted EBITDA	$	282,262		$	295,284		$	968,629		$	788,102

(1)

Note: The income tax benefit from the IRS settlement described in Note 5 in our condensed consolidated financial statements and the corresponding reduction of the tax indemnification asset had no net effect on Adjusted EBITDA.

        In addition to Adjusted EBITDA, we occasionally refer to several other Non-GAAP measures, on a less frequent basis, in order to describe certain components of our business and how we utilize them to describe our results. These measures include but are not limited to Adjusted EBITDA Gross Margin and Gross Profit (gross margin/gross profit excluding non-Adjusted EBITDA items), Adjusted EBITDA SG&A (SG&A expenses excluding non-Adjusted EBITDA items), FIFO Gross Margin (gross margin before LIFO charges) and Free Cash Flow (Adjusted EBITDA less cash paid for interest, rent on closed stores, capital expenditures and the change in working capital).

        We include these non-GAAP financial measures in our earnings announcements and guidance in order to provide transparency to our investors and enable investors to better compare our operating performance with the operating performance of our competitors including with those of our competitors having different capital structures. Adjusted EBITDA or other non-GAAP measures should not be considered in isolation from, and are not intended to represent an alternative measure of, operating results or of cash flows from operating activities, as determined in accordance with GAAP. Our definition of these non-GAAP measures may not be comparable to similarly titled measurements reported by other companies.

ITEM 3.    Quantitative and Qualitative Disclosures About Market Risk

        Our future earnings, cash flow and fair values relevant to financial instruments are dependent upon prevalent market rates. Market risk is the risk of loss from adverse changes in market prices and interest rates. Our major market risk exposure is changing interest rates. Increases in interest rates would increase our interest expense. We enter into debt obligations to support capital expenditures, acquisitions, working capital needs and general corporate purposes. Our policy is to manage interest

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rates through the use of a combination of variable-rate credit facilities, fixed-rate long-term obligations and derivative transactions. We currently do not have any derivative transactions outstanding.

        The table below provides information about our financial instruments that are sensitive to changes in interest rates. The table presents principal payments and the related weighted average interest rates by expected maturity dates as of November 30, 2013.

Fiscal Year	2014			2015			2016			2017			2018			Thereafter			Total			Fair Value at 11/30/2013
	(dollars in thousands)
Long-term debt, including current portion, excluding capital lease obligations
Fixed Rate	$	5,268		$	—		$	64,188		$	—		$	—		$	3,055,000		$	3,124,456		$	3,503,936
Average Interest Rate		1.20	%		0.00	%		8.50	%		0.00	%		0.00	%		8.16	%		8.16	%
Variable Rate	$	2,902		$	11,610		$	11,610		$	11,610		$	601,610		$	2,075,852		$	2,715,194		$	2,707,440
Average Interest Rate		4.0	%		4.0	%		4.00	%		4.00	%		2.50	%		4.61	%		4.13	%

        Our ability to satisfy interest payment obligations on our outstanding debt will depend largely on our future performance, which, in turn, is subject to prevailing economic conditions and to financial, business and other factors beyond our control. If we do not have sufficient cash flow to service our interest payment obligations on our outstanding indebtedness and if we cannot borrow or obtain equity financing to satisfy those obligations, our business and results of operations could be materially adversely affected. We cannot be assured that any replacement borrowing or equity financing could be successfully completed.

        The interest rate on our variable rate borrowings, which include our revolving credit facility, our Tranche 6 Term Loan, our Tranche 1 Term Loan and our Tranche 2 Term Loan, are all based on LIBOR. However, the interest rate on our Tranche 6 Term Loan, Tranche 1 Term Loan and Tranche 2 Term Loan have a LIBOR floor of 100 basis points. If the market rates of interest for LIBOR changed by 100 basis points as of November 30, 2013, our annual interest expense would change by approximately $9.5 million.

        A change in interest rates does not have an impact upon our future earnings and cash flow for fixed-rate debt instruments. As fixed-rate debt matures, however, and if additional debt is acquired to fund the debt repayment, future earnings and cash flow may be affected by changes in interest rates. This effect would be realized in the periods subsequent to the periods when the debt matures. Increases in interest rates would also impact our ability to refinance existing maturities on favorable terms.

ITEM 4.    Controls and Procedures

(a)

Disclosure Controls and Procedures

        Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, our disclosure controls and procedures are effective.

(b)

Changes in Internal Control over Financial Reporting

        There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1.    Legal Proceedings

        Certain legal proceedings in which we are involved are discussed in Part I. Item 3 of our Annual Report on Form 10-K (the "10-K") for the year ended March 2, 2013 and our quarterly reports on Form 10-Q for the periods ended June 1, 2013 (the "First Quarter 10-Q") and August 31, 2013 (the "Second Quarter 10-Q"), respectively. The following discussion is limited to certain recent developments concerning our legal proceedings and should be read in conjunction with the 10-K, the First Quarter 10-Q and the Second Quarter 10-Q:

        With respect to Indergit v. Rite Aid Corporation, on September 26, 2013, the Court granted Rule 23 class certification of the New York store manager claims as to liability only, but denied it as to damages, and denied our motion for decertification of the nationwide collective action claims. We have filed a motion seeking reconsideration of the Court's September 26, 2013 decision and briefing on that motion is complete and awaiting a ruling. Once approved by the Court, notice of the Rule 23 class certification as to liability only will be sent to approximately 1,750 current and former store managers in the state of New York.

        With respect to the investigation of possible civil violations of the CMEA by the DEA, we received an additional administrative subpoena from the DEA in December 2013 requesting information in connection with an investigation of violations of the CMEA in West Virginia.

        In January 2013, the DEA, Los Angeles District Office, served an administrative subpoena on us seeking documents related to prescriptions by a certain prescriber. The USAO, Central District of California, also contacted us about a related investigation into allegations that Rite Aid pharmacies filled certain controlled substance prescriptions for a number of practitioners after their DEA registrations had expired or otherwise become invalid in violation of the federal Controlled Substances Act and DEA regulations. We responded to the administrative subpoena and subsequent informal requests for information from the USAO.

        We are cooperating with the government's investigation. We cannot predict the timing or outcome of any of the pending reviews by the DEA or the USAO of any requested information.

ITEM 1A.    Risk Factors

        In addition to the information set forth in this Quarterly Report, you should carefully consider the factors discussed in Part I, Item 1A, "Risk Factors" in our Fiscal 2013 10-K, and in Exhibit 99.2 to our Current Report on Form 8-K, filed on June 18, 2013, under the heading "Risk Factors," which could materially affect our business, financial condition or future results.

ITEM 2.    Unregistered Sales of Equity Securities and Use of Proceeds

        Issuer Repurchases of Equity Securities.    The table below is a listing of repurchases of Common Stock during the third quarter of fiscal 2014.

Fiscal period:	Total Number of Shares Repurchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that may yet be Purchased under the Plans or Programs
September 1 to September 28, 2013(1)		—		—		—		—
September 29 to October 26, 2013		573	$	2.07		—		—
October 27 to November 30, 2013		—		—		—		—

(1)

Represents shares withheld by the Company, at the election of certain holders of vested restricted stock, with a market value approximating the amount of withholding taxes due.

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ITEM 3.    Defaults Upon Senior Securities

        Not applicable.

ITEM 4.    Mine Safety Disclosures

        Not applicable.

ITEM 5.    Other Information

        Not applicable.

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ITEM 6.    Exhibits

(a)

The following exhibits are filed as part of this report.

Exhibit Numbers		Description	Incorporation By Reference To
	3.1	Restated Certificate of Incorporation, dated December 12, 1996	Exhibit 3(i) to Form 8-K, filed on November 2, 1999
	3.2	Certificate of Amendment to the Restated Certificate of Incorporation, dated February 22, 1999	Exhibit 3(ii) to Form 8-K, filed on November 2, 1999
	3.3	Certificate of Amendment to the Restated Certificate of Incorporation, dated June 27, 2001	Exhibit 3.4 to Registration Statement on Form S-1, File No. 333-64950, filed on July 12, 2001
	3.4	Certificate of Amendment to the Restated Certificate of Incorporation, dated June 4, 2007	Exhibit 4.4 to Registration Statement on Form S-8, File No. 333-146531, filed on October 5, 2007
	3.5	Certificate of Amendment to the Restated Certificate of Incorporation, dated June 25, 2009	Exhibit 3.5 to Form 10-Q, filed on July 8, 2009
	3.6	Amended and Restated By-Laws	Exhibit 3.1 to Form 8-K, filed on January 27, 2010
	4.1	Indenture, dated as of October 26, 2009, among Rite Aid Corporation, as issuer, the subsidiary guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee, related to the Company's 10.25% Senior Secured Notes due 2019	Exhibit 4.1 to Form 8-K, filed on October 29, 2009
	4.2	Indenture, dated as of August 16, 2010, among Rite Aid Corporation, as issuer, the subsidiary guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee, related to the Company's 8.00% Senior Secured Notes due 2020	Exhibit 4.1 to Form 8-K, filed on August 19, 2010
	4.3	Indenture, dated as of February 27, 2012, among Rite Aid Corporation, as issuer, the subsidiary guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee, related to the Company's 9.25% Senior Notes due 2020	Exhibit 4.1 to Form 8-K, filed on February 27, 2012
	4.4	First Supplemental Indenture, dated as of May 15, 2012, among Rite Aid Corporation, the subsidiaries named therein and The Bank of New York Mellon Trust Company, N.A. to the Indenture, dated as of February 27, 2012, among Rite Aid Corporation, the subsidiary guarantors named therein and The Bank of New York Trust Company, N.A., related to the Company's 9.25% Senior Notes due 2020	Exhibit 4.23 to the Registration Statement on Form S-4, File No. 181651, filed on May 24, 2012

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Exhibit Numbers		Description	Incorporation By Reference To
	4.5	Indenture, dated as of July 2, 2013, among Rite Aid Corporation, as issuer, the subsidiary guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee, related to the Company's 6.75% Senior Notes due 2021	Exhibit 4.1 to Form 8-K, filed on July 2, 2013
	4.6	Indenture, dated as of August 1, 1993, between Rite Aid Corporation, as issuer, and Morgan Guaranty Trust Company of New York, as trustee, related to the Company's 7.70% Notes due 2027 and 6.875% Senior Debentures due 2013	Exhibit 4A to Registration Statement on Form S-3, File No. 033-63794, filed on June 3, 1993
	4.7	Supplemental Indenture, dated as of February 3, 2000, between Rite Aid Corporation and U.S. Bank Trust National Association (as successor trustee to Morgan Guaranty Trust Company of New York) to the Indenture dated as of August 1, 1993, between Rite Aid Corporation and Morgan Guaranty Trust Company of New York, relating to the Company's 7.70% Notes due 2027 and 6.875% Senior Debentures due 2013	Exhibit 4.1 to Form 8-K filed on February 7, 2000
	4.8	Indenture, dated as of December 21, 1998, between Rite Aid Corporation, as issuer, and Harris Trust and Savings Bank, as trustee, related to the Company's 6.875% Notes due 2028	Exhibit 4.1 to Registration Statement on Form S-4, File No. 333-74751, filed on March 19, 1999
	4.9	Supplemental Indenture, dated as of February 3, 2000, between Rite Aid Corporation and Harris Trust and Savings Bank to the Indenture, dated December 21, 1998, between Rite Aid Corporation and Harris Trust and Savings Bank, related to the Company's 6.875% Notes due 2028	Exhibit 4.4 to Form 8-K, filed on February 7, 2000
	4.10	Indenture, dated as of May 29, 2008, between Rite Aid Corporation, as issuer, and The Bank of New York Trust Company, N.A., as trustee, related to the Company's Senior Debt Securities	Exhibit 4.1 to Form 8-K, filed on June 2, 2008

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Exhibit Numbers		Description	Incorporation By Reference To
	4.11	First Supplemental Indenture, dated as of May 29, 2008, among Rite Aid Corporation and The Bank of New York Trust Company, N.A. to the Indenture, dated as of May 29, 2008, between Rite Aid Corporation and The Bank of New York Trust Company, N.A., related to the Company's 8.5% Convertible Notes due 2015	Exhibit 4.2 to Form 8-K, filed on June 2, 2008
	10.1	Exchange Agreement, dated as of September 26, 2013, between Rite Aid Corporation and Green Equity Investors III, L.P.	Exhibit 10.3 to Form 10-Q, filed on October 3, 2013
	11	Statement regarding computation of earnings per share (See Note 2 to the condensed consolidated financial statements)	Filed herewith
	31.1	Certification of CEO pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended	Filed herewith
	31.2	Certification of CFO pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended	Filed herewith
	32	Certification of CEO and CFO pursuant to 18 United States Code, Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith
	101.	The following materials are formatted in Extensible Business Reporting Language (XBRL): (i) Condensed Consolidated Balance Sheets at November 30, 2013 and March 2, 2013, (ii) Condensed Consolidated Statements of Operations for the thirteen and thirty-nine week periods ended November 30, 2013 and December 1, 2012, (iii) Condensed Consolidated Statements of Comprehensive Income (Loss) for the thirteen and thirty-nine week periods ended November 30, 2013 and December 1, 2012, (iv) Condensed Consolidated Statements of Cash Flows for the thirty-nine week periods ended November 30, 2013 and December 1, 2012 and (v) Notes to Condensed Consolidated Financial Statements, tagged in detail.

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SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: January 8, 2014	RITE AID CORPORATION
	By:	/s/ MARC A. STRASSLER Marc A. Strassler Executive Vice President and General Counsel
Date: January 8, 2014	By:	/s/ FRANK G. VITRANO Frank G. Vitrano Senior Executive Vice President, Chief Financial Officer and Chief Administrative Officer

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EX-31.1

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Exhibit 31.1

Certification of Chief Executive Officer

I, John T. Standley, Chairman and Chief Executive Officer, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of Rite Aid Corporation (the "Registrant");

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.

The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.

Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.

Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

5.

The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors:

a.

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

Date: January 8, 2014

By: /s/ JOHN T. STANDLEY
John T. Standley
Chairman and Chief Executive Officer

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Exhibit 31.1

Certification of Chief Executive Officer

EX-31.2

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Exhibit 31.2

Certification of Chief Financial Officer

I, Frank G. Vitrano, Senior Executive Vice President, Chief Financial Officer and Chief Administrative Officer, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of Rite Aid Corporation (the "Registrant");

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.

The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.

Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

d.

Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

5.

The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors:

a.

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

Date: January 8, 2014

By: /s/ FRANK G. VITRANO
Frank G. Vitrano
Senior Executive Vice President, Chief Financial Officer and Chief Administrative Officer

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Exhibit 31.2

Certification of Chief Financial Officer

EX-32

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Exhibit 32

Certification of CEO and CFO Pursuant to
18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

        In connection with the Quarterly Report on Form 10-Q of Rite Aid Corporation (the "Company") for the quarterly period ended November 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), John T. Standley, as Chief Executive Officer of the Company, and Frank G. Vitrano, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and



(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ JOHN T. STANDLEY
Name:	John T. Standley
Title:	Chairman and Chief Executive Officer
Date:	January 8, 2014
/s/ FRANK G. VITRANO
Name:	Frank G. Vitrano
Title:	Senior Executive Vice President, Chief Financial Officer and Chief Administrative Officer
Date:	January 8, 2014

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Exhibit 32

Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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Retirement Plans

9 Months Ended

Nov. 30, 2013

Retirement Plans

Retirement Plans

10. Retirement Plans

        Net periodic pension expense recorded in the thirteen and thirty-nine week periods ended November 30, 2013 and December 1, 2012, for the Company's defined benefit plans includes the following components:

	Defined Benefit Pension Plan						Nonqualified Executive Retirement Plans				Defined Benefit Pension Plan						Nonqualified Executive Retirement Plans
	Thirteen Week Period Ended										Thirty-Nine Week Period Ended
	November 30, 2013			December 1, 2012			November 30, 2013		December 1, 2012		November 30, 2013			December 1, 2012			November 30, 2013		December 1, 2012
Service cost	$	830		$	868		$	—	$	—	$	2,490		$	2,603		$	—	$	—
Interest cost		1,551			1,566			136		154		4,653			4,697			407		462
Expected return on plan assets		(1,780	)		(1,749	)		—		—		(5,338	)		(5,246	)		—		—
Amortization of unrecognized prior service cost		60			60			—		—		180			180			—		—
Amortization of unrecognized net loss		1,203			960			—		—		3,608			2,879			—		—
Net pension expense	$	1,864		$	1,705		$	136	$	154	$	5,593		$	5,113		$	407	$	462

        During the thirteen and thirty-nine week periods ended November 30, 2013 the Company contributed $402 and $1,220, respectively, to the Nonqualified Executive Retirement Plans. During the remainder of fiscal 2014, the Company expects to contribute $435 to the Nonqualified Executive Retirement Plans and $8,000 to the Defined Benefit Pension Plan.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Nov. 30, 2013	Dec. 01, 2012	Nov. 30, 2013	Dec. 01, 2012
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Revenues	$ 6,357,732	$ 6,237,847	$ 18,928,954	$ 18,937,018
Costs and expenses:
Cost of goods sold	4,557,066	4,426,526	13,490,936	13,666,505
Selling, general and administrative expenses	1,632,299	1,612,198	4,844,491	4,918,433
Lease termination and impairment charges	1,672	14,366	24,034	34,292
Interest expense	102,819	128,371	322,599	388,013
Loss on debt retirements, net	271		62,443	17,842
Gain on sale of assets, net	(9,331)	(6,262)	(16,396)	(19,267)
Total costs and expenses	6,284,796	6,175,199	18,728,107	19,005,818
Income (loss) before income taxes	72,936	62,648	200,847	(68,800)
Income tax expense (benefit)	1,388	777	6,810	(63,818)
Net income (loss)	71,548	61,871	194,037	(4,982)
Computation of income (loss) attributable to common stockholders:
Net income (loss)	71,548	61,871	194,037	(4,982)
Accretion of redeemable preferred stock	(26)	(26)	(77)	(77)
Cumulative preferred stock dividends	(2,814)	(2,651)	(8,318)	(7,837)
Conversion of Series G and H preferred stock	(25,603)		(25,603)
Income (loss) attributable to common stockholders-basic	43,105	59,194	160,039	(12,896)
Add back-interest on convertible notes		1,334
Income (loss) attributable to common stockholders-diluted	$ 43,105	$ 60,528	$ 160,039	$ (12,896)
Basic income (loss) per share (in dollars per share)	$ 0.05	$ 0.07	$ 0.18	$ (0.01)
Diluted income (loss) per share (in dollars per share)	$ 0.04	$ 0.07	$ 0.17	$ (0.01)

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Lease Termination and Impairment Charges

9 Months Ended

Nov. 30, 2013

Lease Termination and Impairment Charges

Lease Termination and Impairment Charges

3. Lease Termination and Impairment Charges

        Lease termination and impairment charges consist of amounts as follows:

	Thirteen Week Period Ended				Thirty-Nine Week Period Ended
	November 30, 2013		December 1, 2012		November 30, 2013		December 1, 2012
Impairment charges	$	335	$	339	$	5,201	$	882
Lease termination charges		1,337		14,027		18,833		33,410
	$	1,672	$	14,366	$	24,034	$	34,292

Impairment Charges

        These amounts include the write-down of long-lived assets at locations that were assessed for impairment because of management's intention to relocate or close the location or because of changes in circumstances that indicated the carrying value of an asset may not be recoverable.

Lease Termination Charges

        As part of the Company's ongoing business activities, the Company assesses stores and distribution centers for potential closure or relocation. Decisions to close or relocate stores or distribution centers in future periods would result in lease termination charges, lease exit costs and inventory liquidation charges, as well as impairment of assets at these locations. During November 2013, the Company sold its lease rights for one store for a gain of $8,750, which is included as a reduction to lease termination charges and is reflected in the table below as a component of cash payments, net of sublease income. The following table reflects the closed store and distribution center charges that relate to new closures, changes in assumptions and interest accretion:

	Thirteen Week Period Ended						Thirty-Nine Week Period Ended
	November 30, 2013			December 1, 2012			November 30, 2013			December 1, 2012
Balance—beginning of period	$	303,637		$	345,271		$	323,758		$	367,865
Provision for present value of noncancellable lease payments of closed stores		4,522			7,270			10,896			11,522
Changes in assumptions about future sublease income, terminations and changes in interest rates		(8,112	)		1,062			(7,899	)		4,388
Interest accretion		5,225			5,729			16,133			17,655
Cash payments, net of sublease income		(10,127	)		(23,866	)		(47,743	)		(65,964	)
Balance—end of period	$	295,145		$	335,466		$	295,145		$	335,466

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Intangible Assets (Tables)

9 Months Ended

Nov. 30, 2013

Intangible Assets

Summary of the Company's amortizable intangible assets

	November 30, 2013							March 2, 2013
	Gross Carrying Amount		Accumulated Amortization			Remaining Weighted Average Amortization Period		Gross Carrying Amount		Accumulated Amortization			Remaining Weighted Average Amortization Period
Favorable leases and other	$	635,095	$	(441,542	)		9 years	$	623,541	$	(413,556	)		10 years
Prescription files		1,333,771		(1,089,043	)		4 years		1,286,087		(1,031,668	)		4 years
Total	$	1,968,866	$	(1,530,585	)			$	1,909,628	$	(1,445,224	)

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Commitments and Contingencies

9 Months Ended

Nov. 30, 2013

Commitments and Contingencies.

Commitments and Contingencies

11. Commitments and Contingencies

• Legal Matters

        The Company is a party to legal proceedings, investigations and claims in the ordinary course of its business, including the matters described below. The Company records accruals for outstanding legal matters when it believes it is probable that a loss will be incurred and the amount can be reasonably estimated. The Company evaluates, on a quarterly basis, developments in legal matters that could affect the amount of any accrual and developments that would make a loss contingency both probable and reasonably estimable. If a loss contingency is not both probable and estimable, the Company does not establish an accrued liability.

        The Company's contingencies are subject to significant uncertainties, including, among other factors: (i) proceedings are in early stages; (ii) whether class or collective action status is sought and the likelihood of a class being certified; (iii) the outcome of pending appeals or motions; (iv) the extent of potential damages, fines or penalties, which are often unspecified or indeterminate; (v) the impact of discovery on the matter; (vi) whether novel or unsettled legal theories are at issue; (vii) there are significant factual issues to be resolved; and/or (viii) in the case of certain government agency investigations, whether a sealed qui tam lawsuit ("whistleblower" action) has been filed and whether the government agency makes a decision to intervene in the lawsuit following investigation.

        The Company has been named in a collective and class action lawsuit, Indergit v. Rite Aid Corporation et al pending in the United States District Court for the Southern District of New York, filed purportedly on behalf of current and former store managers working in the Company's stores at various locations around the country. The lawsuit alleges that the Company failed to pay overtime to store managers as required under the FLSA and under certain New York state statutes. The lawsuit also seeks other relief, including liquidated damages, punitive damages, attorneys' fees, costs and injunctive relief arising out of state and federal claims for overtime pay. On April 2, 2010, the Court conditionally certified a nationwide collective group of individuals who worked for the Company as store managers since March 31, 2007. The Court ordered that Notice of the Indergit action be sent to the purported members of the collective group (approximately 7,000 current and former store managers) and approximately 1,550 joined the Indergit action. Discovery as to certification issues has been completed. On September 26, 2013, the Court granted Rule 23 class certification of the New York store manager claims as to liability only, but denied it as to damages, and denied the Company's motion for decertification of the nationwide collective action claims. The Company has filed a motion seeking reconsideration of the Court's September 26, 2013 decision and briefing on that motion is complete and awaiting a ruling. Once approved by the Court, notice of the Rule 23 class certification as to liability only will be sent to approximately 1,750 current and former store managers in the state of New York. At this time, the Company is not able to either predict the outcome of this lawsuit or estimate a potential range of loss with respect to the lawsuit. The Company's management believes, however, that this lawsuit is without merit and not appropriate for collective or class action treatment and is vigorously defending this lawsuit.

        The Company is currently a defendant in several putative class action lawsuits filed in state courts in California alleging violations of California wage and hour laws, rules and regulations pertaining primarily to failure to pay overtime, pay for missed meals and rest periods and failure to provide employee seating. These suits purport to be class actions and seek substantial damages. At this time, the Company is not able to either predict the outcome of these lawsuits or estimate a potential range of loss with respect to the lawsuits. The Company's management believes, however, that the plaintiffs' allegations are without merit and that their claims are not appropriate for class action treatment. The Company is vigorously defending all of these claims.

        The Company was served with a United States Department of Health and Human Services Office of the Inspector General ("OIG") subpoena dated March 5, 2010 in connection with an investigation being conducted by the OIG and the United States Attorney's Office for the Central District of California. The subpoena requests records related to any gift card inducement programs for customers who transferred prescriptions for drugs or medicines to the Company's pharmacies, and whether any customers who receive federally funded prescription benefits (e.g. Medicare and Medicaid) may have benefited from those programs. The Company has substantially completed its production of records in response to the subpoena. In June 2013, the government contacted the Company, and the Company is involved in ongoing discussions with the government regarding the matter.

        The Company received a subpoena dated May 9, 2011 from certain California counties seeking information regarding compliance with environmental regulations governing the management of hazardous waste. The Company cooperated fully in this matter with California regulators and has reached a settlement resolving potential claims on a statewide basis. A proposed final judgment negotiated by the parties was filed in the Superior Court of San Joaquin County and approved by the Court on September 24, 2013. As part of this settlement, the Company paid civil penalties, supplemental environmental project payments and costs aggregating $12.3 million, and has consented to injunctive provisions regarding future compliance with California hazardous materials laws. The aggregate payment with respect to the civil penalties, supplemental environmental projects and cost reimbursement had been previously accrued, will not impact the Company's current fiscal year results of operations and will not be material to the Company's financial condition.

        The Company was served with a Civil Investigative Demand Subpoena Duces Tecum dated August 26, 2011 by the United States Attorney's Office for the Eastern District of Michigan. The subpoena requests records regarding Rite Aid's Rx Savings Program and the reporting of usual and customary charges to publicly funded health programs. In connection with the same investigation, the Company was served with a Civil Subpoena Duces Tecum dated February 22, 2013 by the State of Indiana Office of the Attorney General. The Company has substantially completed its response to both of the subpoenas and is unable to predict the timing or outcome of any review by the government of such information.

        In April 2012, the Company received an administrative subpoena from the Drug Enforcement Administration ("DEA"), Albany, New York District Office, requesting information regarding the Company's sale of products containing pseudoephedrine ("PSE"). In April 2012, it also received a communication from the United States Attorneys Office ("USAO") for the Northern District of New York concerning an investigation of possible civil violations of the Combat Methamphetamine Epidemic Act of 2005 ("CMEA"). In April 2013, the Company received additional administrative subpoenas from DEA concerning certain retail PSE transactions at New York stores and the USAO commenced discussions with the Company regarding whether, from 2009 (upon implementation of an electronic PSE transaction logbook system) through the present, the Company sold products containing PSE in violation of the CMEA. Violations of the CMEA could result in the imposition of administrative, civil and/or criminal penalties against the Company. The Company is cooperating with the government and has provided information responsive to the subpoenas.

        The Company received an additional administrative subpoena from the DEA in December 2013 requesting information in connection with an investigation of violations of the CMEA in West Virginia.

        In January 2013, the DEA, Los Angeles District Office, served an administrative subpoena on the Company seeking documents related to prescriptions by a certain prescriber. The USAO, Central District of California, also contacted the Company about a related investigation into allegations that Rite Aid pharmacies filled certain controlled substance prescriptions for a number of practitioners after their DEA registrations had expired or otherwise become invalid in violation of the federal Controlled Substances Act and DEA regulations. The Company responded to the administrative subpoena and subsequent informal requests for information from the USAO. The Company is cooperating with the government's investigation.

        The Company cannot predict the timing or outcome of any of the aforementioned reviews by the DEA or the USAO of any such information.

        The Company was served with a Civil Investigative Demand dated June 21, 2013 by the USAO for the Eastern District of California. The CID requests records and responses to interrogatories regarding Rite Aid's Drug Utilization Review and prescription dispensing protocol and the dispensing of drugs designated "Code 1" by the State of California. The Company is in the process of producing responsive documents and interrogatory responses and is unable to predict the timing or outcome of any review by the government of such information.

        In addition to the above described matters, the Company is subject from time to time to various claims and lawsuits and governmental investigations arising in the ordinary course of business. While the Company's management cannot predict the outcome of any of the claims, the Company's management does not believe that the outcome of any of these legal matters will be material to the Company's consolidated financial position. It is possible, however, that the Company's results of operations or cash flows in a particular fiscal period could be materially affected by an unfavorable resolution of pending litigation or contingencies.

• Contingencies

        The California Department of Health Care Services ("DHCS"), the agency responsible for administering the State of California Medicaid program, implemented retroactive reimbursement rate reductions effective June 1, 2011, impacting the medical provider community in California, including pharmacies. Numerous medical providers, including representatives of both chain and independent pharmacies, filed suits against DHCS in federal district court in California and obtained preliminary injunctions against the rate cuts, subject to a trial on the merits. DHCS appealed the preliminary injunctions to the Ninth Circuit Court of Appeals, which Court vacated the injunctions. Based upon the actions of DHCS and the decision of the appeals court, the Company has recorded an appropriate accrual. As pertinent facts and circumstances develop, this accrual may be adjusted.

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Retirement Plans (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Nov. 30, 2013	Dec. 01, 2012	Nov. 30, 2013	Dec. 01, 2012
Defined Benefit Pension Plan
Net periodic pension expense
Service cost	$ 830	$ 868	$ 2,490	$ 2,603
Interest cost	1,551	1,566	4,653	4,697
Expected return on plan assets	(1,780)	(1,749)	(5,338)	(5,246)
Amortization of unrecognized prior service cost	60	60	180	180
Amortization of unrecognized net loss	1,203	960	3,608	2,879
Net pension expense	1,864	1,705	5,593	5,113
Expected employer contribution during the remainder of fiscal 2014			8,000
Nonqualified Executive Retirement Plan
Net periodic pension expense
Interest cost	136	154	407	462
Net pension expense	136	154	407	462
Employer contributions	402		1,220
Expected employer contribution during the remainder of fiscal 2014			$ 435

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Reclassifications from Accumulated Other Comprehensive Loss (Tables)

9 Months Ended

Nov. 30, 2013

Reclassifications from Accumulated Other Comprehensive Loss

Summary of components of accumulated other comprehensive loss and the changes in balances of each component of accumulated other comprehensive loss, net of tax

	Thirteen week period ended November 30, 2013						Thirteen Week Period Ended December 1,2012						Thirty-Nine Week Period Ended November 30, 2013						Thirty-Nine Week Period Ended December 1,2012
	Defined benefit pension plans			Accumulated other comprehensive loss			Defined benefit pension plans			Accumulated other comprehensive loss			Defined benefit pension plans			Accumulated other comprehensive loss			Defined benefit pension plans			Accumulated other comprehensive loss
Accumulated other comprehensive loss
Balance-beginning of period	$	(58,844	)	$	(58,844	)	$	(50,595	)	$	(50,595	)	$	(61,369	)	$	(61,369	)	$	(52,634	)	$	(52,634	)
Amounts reclassified from accumulated other comprehensive loss to net income (loss)		1,263			1,263			1,020			1,020			3,788			3,788			3,059			3,059
Balance-end of period	$	(57,581	)	$	(57,581	)	$	(49,575	)	$	(49,575	)	$	(57,581	)	$	(57,581	)	$	(49,575	)	$	(49,575	)

Summary of effects on net income (loss) of significant amounts classified out of each component of accumulated other comprehensive loss

	Thirteen Week Periods Ended November 30, 2013 and December 1, 2012
	Amount reclassified from accumulated other comprehensive loss
Details about accumulated other comprehensive loss components	November 30, 2013			December 1, 2012			Affected line item in the condensed consolidated statements of operations
Defined benefit pension plans
Amortization of unrecognized prior service cost(a)	$	(60	)	$	(60	)	Selling, general and administrative expenses
Amortization of unrecognized net loss(a)		(1,203	)		(960	)	Selling, general and administrative expenses
		(1,263	)		(1,020	)	Total before income tax expense
		—			—		Income tax expense(b)
	$	(1,263	)	$	(1,020	)	Net of income tax expense

	Thirty-Nine Week Periods Ended November 30, 2013 and December 1, 2012
	Amount reclassified from accumulated other comprehensive loss
Details about accumulated other comprehensive loss components	November 30, 2013			December 1, 2012			Affected line item in the condensed consolidated statements of operations
Defined benefit pension plans
Amortization of unrecognized prior service cost(a)	$	(180	)	$	(180	)	Selling, general and administrative expenses
Amortization of unrecognized net loss(a)		(3,608	)		(2,879	)	Selling, general and administrative expenses
		(3,788	)		(3,059	)	Total before income tax expense
		—			—		Income tax expense(b)
	$	(3,788	)	$	(3,059	)	Net of income tax expense

(a)—See Note 10, Retirement Plans for additional details.

(b)—Income tax expense is $0 due to the valuation allowance. See Note 5, Income Taxes for additional details.

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Stock Options and Stock Awards (Tables)

9 Months Ended

Nov. 30, 2013

Stock Options and Stock Awards

Schedule of total number and type of newly awarded grants and the related weighted average fair value

	November 30, 2013				December 1, 2012
	Shares		Weighted Average Fair Value		Shares		Weighted Average Fair Value
Stock options granted		4,828	$	1.91		12,020	$	0.91
Stock awards granted		2,743	$	2.79		5,450	$	1.31
Total awards		7,571				17,470

Schedule of assumptions used for options granted

	Thirty-Nine Week Period Ended
	November 30, 2013			December 1, 2012
Expected stock price volatility		85	%		85	%
Expected dividend yield		0	%		0	%
Risk-free interest rate		1.4	%		0.7	%
Expected option life		5.5 years			5.5 years

Schedule of unrecognized pre-tax compensation costs, net of estimated forfeitures and the weighted average period of cost amortization

	November 30, 2013
	Unvested stock options		Unvested restricted stock
Unrecognized pre-tax costs	$	17,625	$	10,913
Weighted average amortization period		2.5 years		2.0 years

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Indebtedness and Credit Agreements (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended	9 Months Ended				0 Months Ended		9 Months Ended		9 Months Ended												9 Months Ended		0 Months Ended									9 Months Ended				0 Months Ended						0 Months Ended
	Nov. 30, 2013	Nov. 30, 2013	Dec. 01, 2012	Mar. 02, 2013	Mar. 02, 2013 Rite Aid Lease Management Company	Nov. 29, 2013 Class A Cumulative Preferred Stock Rite Aid Lease Management Company	Mar. 02, 2013 Class A Cumulative Preferred Stock Rite Aid Lease Management Company	Nov. 30, 2013 Senior secured credit facility	Mar. 02, 2013 Senior secured credit facility	Nov. 30, 2013 Senior secured credit facility Minimum	Nov. 30, 2013 Senior secured credit facility Maximum	Nov. 30, 2013 Senior secured credit facility LIBOR	Nov. 30, 2013 Senior secured credit facility LIBOR Minimum	Nov. 30, 2013 Senior secured credit facility LIBOR Maximum	Nov. 30, 2013 Senior secured credit facility Citibank's base rate	Nov. 30, 2013 Senior secured credit facility Citibank's base rate Minimum	Nov. 30, 2013 Senior secured credit facility Citibank's base rate Maximum	Nov. 30, 2013 Senior secured revolving credit facility due February 2018	Mar. 02, 2013 Senior secured revolving credit facility due February 2018	Nov. 30, 2013 Tranche 6 Term Loan due February 2020	Mar. 02, 2013 Tranche 6 Term Loan due February 2020	Nov. 30, 2013 Tranche 6 Term Loan due February 2020 LIBOR	Nov. 30, 2013 Tranche 6 Term Loan due February 2020 Citibank's base rate	Jul. 31, 2013 7.5% senior secured notes (second lien) due March 2017	Jun. 30, 2013 7.5% senior secured notes (second lien) due March 2017	Mar. 02, 2013 7.5% senior secured notes (second lien) due March 2017	Nov. 30, 2013 10.25% senior secured notes (second lien) due October 2019 ($270,000 face value less unamortized discount of $1,211 and $1,364)	Mar. 02, 2013 10.25% senior secured notes (second lien) due October 2019 ($270,000 face value less unamortized discount of $1,211 and $1,364)	Nov. 30, 2013 8.00% senior secured notes (senior lien) due August 2020	Mar. 02, 2013 8.00% senior secured notes (senior lien) due August 2020	Nov. 30, 2013 Tranche 1 Term Loan (second lien) due August 2020	Mar. 02, 2013 Tranche 1 Term Loan (second lien) due August 2020	Nov. 30, 2013 Tranche 1 Term Loan (second lien) due August 2020 LIBOR	Nov. 30, 2013 Tranche 1 Term Loan (second lien) due August 2020 Citibank's base rate	Nov. 30, 2013 Tranche 2 Term Loan (second lien) due June 2021	Jun. 21, 2013 Tranche 2 Term Loan (second lien) due June 2021	Jun. 21, 2013 Tranche 2 Term Loan (second lien) due June 2021 LIBOR	Jun. 21, 2013 Tranche 2 Term Loan (second lien) due June 2021 Citibank's base rate	Nov. 30, 2013 Other secured	Mar. 02, 2013 Other secured	Nov. 30, 2013 Guaranteed Unsecured Debt	Mar. 02, 2013 Guaranteed Unsecured Debt	Aug. 31, 2013 9.5% senior notes due June 2017	Jul. 31, 2013 9.5% senior notes due June 2017	Mar. 02, 2013 9.5% senior notes due June 2017	Nov. 30, 2013 9.25% senior notes due March 2020	Mar. 02, 2013 9.25% senior notes due March 2020	Nov. 30, 2013 6.75% senior notes due June 2021	Jul. 02, 2013 6.75% senior notes due June 2021	Nov. 30, 2013 Unguaranteed Unsecured Debt	Mar. 02, 2013 Unguaranteed Unsecured Debt	Nov. 30, 2013 8.5% convertible notes due May 2015	Mar. 02, 2013 8.5% convertible notes due May 2015	Nov. 30, 2013 7.7% notes due February 2027	Mar. 02, 2013 7.7% notes due February 2027	Nov. 30, 2013 6.875% fixed-rate senior notes due December 2028	Mar. 02, 2013 6.875% fixed-rate senior notes due December 2028
Indebtedness and credit agreements
Long-term debt								$ 3,639,251	$ 3,719,934									$ 590,000	$ 665,000	$ 1,155,195	$ 1,161,000					$ 500,000	$ 268,789	$ 268,636	$ 650,000	$ 650,000	$ 470,000	$ 470,000			$ 500,000				$ 5,267	$ 5,298	$ 1,716,255	$ 1,711,230			$ 804,471	$ 906,255	$ 906,759	$ 810,000		$ 487,188	$ 487,188	$ 64,188	$ 64,188	$ 295,000	$ 295,000	$ 128,000	$ 128,000
Lease financing obligations	109,732	109,732		115,179
Total debt	5,952,426	5,952,426		6,033,531
Current maturities of long-term debt and lease financing obligations	(47,753)	(47,753)		(37,311)
Long-term debt and lease financing obligations, less current maturities	5,904,673	5,904,673		5,996,220
Face value																											270,000	270,000								500,000									810,000	902,000	902,000		810,000
Unamortized discount																											1,211	1,364																	5,529
Unamortized premium																																														4,255	4,759
Debt instrument, stated interest rate (as a percent)																									7.50%	7.50%	10.25%	10.25%	8.00%	8.00%															9.50%	9.25%	9.25%	6.75%	6.75%			8.50%	8.50%	7.70%	7.70%	6.875%	6.875%
Credit facility
Revolving credit facility								1,795,000
Reference rate for variable interest rate												LIBOR			Citibank's base rate							LIBOR	Citibank's base rate										LIBOR	Citibank's base rate			LIBOR	Citibank's base rate
Percentage points added to the reference rate													2.25%	2.75%		1.25%	1.75%					3.00%	2.00%										4.75%	3.75%			3.875%	2.875%
Percentage of fee payable on daily unused revolver availability										0.375%	0.50%
LIBOR floor (as a percent)																						1.00%											1.00%				1.00%
Outstanding borrowings																		590,000
Letters of credit outstanding																		87,949
Additional borrowing capacity																		1,117,051
Threshold availability on revolving credit facility to trigger fixed charge coverage requirements								150,000
Minimum fixed charge coverage ratio (as a percent)								1.00
Available revolving credit facility										150,000
Ownership interest (as a percent)	100.00%	100.00%			100.00%
Repurchase of debt																									419,237																			739,642
Repayment of senior secured notes, including call premium and interest																								85,154
Repayment of senior notes, including call premium and interest																																											73,440
Preferred stock outstanding (in shares)							213,000
Par value (in dollars per share)							$ 100
Preferred stock value included in other non-current liabilities						20,763
Repurchase of preferred stock, value						21,034
Loss on debt retirement	271	62,443	17,842			271
Maturities
Remainder of fiscal 2014	8,170	8,170
2015	11,610	11,610
2016	75,798	75,798
2017	11,610	11,610
2018	601,610	601,610
Thereafter	$ 5,130,852	$ 5,130,852

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Related Party Transactions (Details) (USD $) In Thousands, except Share data, unless otherwise specified	0 Months Ended	3 Months Ended	9 Months Ended		0 Months Ended			0 Months Ended			0 Months Ended			0 Months Ended
	Sep. 30, 2013	Nov. 30, 2013	Nov. 30, 2013	Mar. 02, 2013	Sep. 30, 2013 Series G preferred stock	Nov. 30, 2013 Series G preferred stock	Mar. 02, 2013 Series G preferred stock	Sep. 30, 2013 Series H preferred stock	Nov. 30, 2013 Series H preferred stock	Mar. 02, 2013 Series H preferred stock	Sep. 30, 2013 Preferred Stock (Series G and H)	Sep. 30, 2013 Green Equity Investors III, L.P. ("LGP") Preferred Stock (Series G and H)	Jul. 22, 2013 Jean Coutu Group	Sep. 30, 2013 Leonard Green & Partners, L. P. Green Equity Investors III, L.P. ("LGP") Common Stock	Sep. 30, 2013 Leonard Green & Partners, L. P. Green Equity Investors III, L.P. ("LGP") Series G preferred stock	Sep. 30, 2013 Leonard Green & Partners, L. P. Green Equity Investors III, L.P. ("LGP") Series H preferred stock
Related Party Transactions
Number of shares sold													65,401,162
Number of shares agreed to be exchanged															8	1,876,013
Common stock issued upon redemption of preferred stock (in shares)														40,000,000
Par value of common stock (in dollars per share)	$ 1.00	$ 1	$ 1	$ 1
Market value of common stock issued upon redemption of preferred stock														$ 190,400
Closing price per share (in dollars per share)	$ 4.76
Redemption percentage of the liquidation preference per share	105.00%
Liquidation preference	199,937
Preferred stock outstanding (in shares)											0	1,904,161
Liquidation preference (in dollars per share)	$ 100				$ 100	$ 100	$ 100		$ 100	$ 100
Quarterly dividend (as a percent)					7.00%			6.00%
Contracted conversion rate (in dollars per share)											$ 5.5
Shares of earned and unpaid dividends												28,140
Total common stock shares issuable at contracted conversion rate												34,621,117
Conversion of Series G and H preferred stock	$ 25,603	$ 25,603	$ 25,603
Diluted earning per share due to conversion of preferred stock (in dollars per share)												$ 0.03
Additional common stock issued upon redemption of preferred stock (in shares)												5,378,883

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Fair Value Measurements (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Nov. 30, 2013	Dec. 01, 2012	Nov. 30, 2013	Dec. 01, 2012	Mar. 02, 2013
Fair Value Measurements
Carrying value of long-lived assets	$ 18,587	$ 2,632	$ 18,587	$ 2,632
Fair value of long-lived assets	13,386	1,750	13,386	1,750
Impairment charges	335	339	5,201	882
Non-financial assets measured on a non-recurring basis
Outstanding derivative financial instruments	0		0		0
Nonrecurring basis | Level 1
Non-financial assets measured on a non-recurring basis
Carrying value of total long-term indebtedness	5,842,694		5,842,694
Estimated fair value of total long-term indebtedness	6,211,376		6,211,376
Nonrecurring basis | Level 2
Non-financial assets measured on a non-recurring basis
Fair value of long-lived assets held for use		975		975
Fair value of Long-lived assets held for sale	12,431		12,431
Fair value of Total	12,431	975	12,431	975
Nonrecurring basis | Level 3
Non-financial assets measured on a non-recurring basis
Fair value of long-lived assets held for use	955	775	955	775
Fair value of Total	955	775	955	775
Nonrecurring basis | Total
Non-financial assets measured on a non-recurring basis
Fair value of long-lived assets held for use	955	1,750	955	1,750
Fair value of Long-lived assets held for sale	12,431		12,431
Fair value of Total	$ 13,386	$ 1,750	$ 13,386	$ 1,750

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Indebtedness and Credit Agreements (Tables)

9 Months Ended

Nov. 30, 2013

Indebtedness and Credit Agreements

Summary of indebtedness and lease financing obligations

	November 30, 2013			March 2, 2013
Secured Debt:
Senior secured revolving credit facility due February 2018	$	590,000		$	665,000
Tranche 6 Term Loan due February 2020		1,155,195			1,161,000
7.5% senior secured notes (second lien) due March 2017		—			500,000
10.25% senior secured notes (second lien) due October 2019 ($270,000 face value less unamortized discount of $1,211 and $1,364)		268,789			268,636
8.00% senior secured notes (senior lien) due August 2020		650,000			650,000
Tranche 1 Term Loan (second lien) due August 2020		470,000			470,000
Tranche 2 Term Loan (second lien) due June 2021		500,000			—
Other secured		5,267			5,298
		3,639,251			3,719,934
Guaranteed Unsecured Debt:
9.5% senior notes due June 2017 ($810,000 face value less unamortized discount of $5,529)		—			804,471
9.25% senior notes due March 2020 ($902,000 face value plus unamortized premium of $4,255 and $4,759)		906,255			906,759
6.75% senior notes due June 2021		810,000			—
		1,716,255			1,711,230
Unguaranteed Unsecured Debt:
8.5% convertible notes due May 2015		64,188			64,188
7.7% notes due February 2027		295,000			295,000
6.875% fixed-rate senior notes due December 2028		128,000			128,000
		487,188			487,188
Lease financing obligations		109,732			115,179
Total debt		5,952,426			6,033,531
Current maturities of long-term debt and lease financing obligations		(47,753	)		(37,311	)
Long-term debt and lease financing obligations, less current maturities	$	5,904,673		$	5,996,220

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Nov. 30, 2013	Dec. 01, 2012
Operating activities:
Net income (loss)	$ 194,037	$ (4,982)
Adjustments to reconcile to net cash provided by operating activities:
Depreciation and amortization	301,681	311,160
Lease termination and impairment charges	24,034	34,292
Gain from lease termination	(8,750)
LIFO charges	60,000	27,502
Gain on sale of assets, net	(16,396)	(19,267)
Stock-based compensation expense	12,194	12,872
Loss on debt retirements, net	62,443	17,842
Changes in operating assets and liabilities:
Accounts receivable	79,895	95,732
Inventories	(206,408)	13,055
Accounts payable	25,160	55,498
Other assets and liabilities, net	(19,972)	55,533
Net cash provided by operating activities	507,918	599,237
Investing activities:
Payments for property, plant and equipment	(255,269)	(233,195)
Intangible assets acquired	(64,605)	(45,659)
Proceeds from sale-leaseback transactions	3,989	6,355
Proceeds from dispositions of assets and investments	14,157	27,744
Proceeds from lease termination	8,750
Proceeds from insured loss	6,138
Net cash used in investing activities	(286,840)	(244,755)
Financing activities:
Proceeds from issuance of long-term debt	1,310,000	426,263
Net payments to revolver	(75,000)	(136,000)
Principal payments on long-term debt	(1,332,528)	(479,147)
Change in zero balance cash accounts	(10,161)	(43,507)
Net proceeds from issuance of common stock	24,881	1,103
Payments for the repurchase of preferred stock	(21,034)
Financing fees paid for early debt redemption	(45,636)	(11,069)
Deferred financing costs paid	(17,840)	(10,769)
Net cash used in financing activities	(167,318)	(253,126)
Increase in cash and cash equivalents	53,760	101,356
Cash and cash equivalents, beginning of period	129,452	162,285
Cash and cash equivalents, end of period	183,212	263,641
Supplementary cash flow data:
Cash paid for interest (net of capitalized amounts of $163 and $319, respectively)	313,302	311,026
Cash payments of income taxes, net of refunds	2,283	3,515
Equipment financed under capital leases	15,023	7,251
Equipment received for noncash consideration	1,588	2,636
Preferred stock dividends paid in additional shares	8,318	7,837
Gross borrowings from revolver	1,915,000	293,000
Gross repayments to revolver	$ 1,990,000	$ 429,000

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Basis of Presentation

9 Months Ended

Nov. 30, 2013

Basis of Presentation

Basis of Presentation

1. Basis of Presentation

        The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X and therefore do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete annual financial statements. The accompanying financial information reflects all adjustments which are of a recurring nature and, in the opinion of management, are necessary for a fair presentation of the results for the interim periods. The results of operations for the thirteen and thirty-nine week periods ended November 30, 2013 are not necessarily indicative of the results to be expected for the full year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Rite Aid Corporation and Subsidiaries (the "Company") Fiscal 2013 10-K.

New Accounting Pronouncements

        In July 2013, the FASB issued ASU No. 2013-11, Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. ASU No. 2013-11 requires an entity to present unrecognized tax benefits as a reduction to deferred tax assets when a net operating loss carryforward, similar tax loss or a tax credit carryforward exists, with limited exceptions. ASU No. 2013-11 is effective for fiscal years beginning on or after December 15, 2013, and for interim periods within those fiscal years. This pronouncement will have no effect on the financial statements as the Company has historically presented uncertain tax positions in accordance with ASU No. 2013-11.

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Fair Value Measurements

9 Months Ended

Nov. 30, 2013

Fair Value Measurements

Fair Value Measurements

4. Fair Value Measurements

        The Company utilizes the three-level valuation hierarchy for the recognition and disclosure of fair value measurements. The categorization of assets and liabilities within this hierarchy is based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy consist of the following:

• •

  Level 1—Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

  •

  Level 2—Inputs to the valuation methodology are quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active or inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument.

  •

  Level 3—Inputs to the valuation methodology are unobservable inputs based upon management's best estimate of inputs market participants could use in pricing the asset or liability at the measurement date, including assumptions about risk.

Non-Financial Assets Measured on a Non-Recurring Basis

        Long-lived non-financial assets are measured at fair value on a nonrecurring basis for purposes of calculating impairment using Level 2 and Level 3 inputs as defined in the fair value hierarchy. The fair value of long-lived assets using Level 2 inputs is determined by evaluating the current economic conditions in the geographic area for similar use assets. The fair value of long-lived assets using Level 3 inputs is determined by estimating the amount and timing of net future cash flows (which are unobservable inputs) and discounting them using a risk-adjusted rate of interest (which is Level 1). The Company estimates future cash flows based on its experience and knowledge of the market in which the store is located. Significant increases or decreases in actual cash flows may result in valuation changes. During the thirty-nine week period ended November 30, 2013, long-lived assets from continuing operations with a carrying value of $18,587, primarily store assets, were written down to their fair value of $13,386, resulting in an impairment charge of $5,201 of which $335 relates to the thirteen-week period ended November 30, 2013. During the thirty-nine week period ended December 1, 2012, long-lived assets from continuing operations with a carrying value of $2,632, primarily store assets, were written down to their fair value of $1,750, resulting in an impairment charge of $882 of which $339 relates to the thirteen-week period ended December 1, 2012. If our actual future cash flows differ from our projections materially, certain stores that are either not impaired or partially impaired in the current period may be further impaired in future periods.

        The following table presents fair values for those assets measured at fair value on a non-recurring basis at November 30, 2013 and December 1, 2012:

	Fair Value Measurement Using
	Level 1		Level 2		Level 3		Total as of November 30, 2013
Long-lived assets held for use	$	—	$	—	$	955	$	955
Long-lived assets held for sale		—		12,431		—		12,431
Total	$	—	$	12,431	$	955	$	13,386

	Level 1		Level 2		Level 3		Total as of December 1, 2012
Long-lived assets held for use	$	—	$	975	$	775	$	1,750
Long-lived assets held for sale		—		—		—		—
Total	$	—	$	975	$	775	$	1,750

        As of November 30, 2013 and December 1, 2012, the Company did not have any financial assets measured on a recurring basis.

Other Financial Instruments

        Financial instruments other than long-term indebtedness include cash and cash equivalents, accounts receivable and accounts payable. These instruments are recorded at book value, which we believe approximate their fair values due to their short term nature.

        The fair value for LIBOR-based borrowings under the Company's senior secured credit facility and first and second lien term loans are estimated based on the quoted market price of the financial instrument which is considered Level 1 of the fair value hierarchy. The fair values of substantially all of the Company's other long-term indebtedness are estimated based on quoted market prices of the financial instruments which are considered Level 1 of the fair value hierarchy. The carrying amount and estimated fair value of the Company's total long-term indebtedness was $5,842,694 and $6,211,376, respectively, as of November 30, 2013. There were no outstanding derivative financial instruments as of November 30, 2013 and March 2, 2013.

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Income (Loss) Per Share

9 Months Ended

Nov. 30, 2013

Income (Loss) Per Share

Income (Loss) Per Share

2. Income (Loss) Per Share

        Basic income (loss) per share is computed by dividing income (loss) available to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted income (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the income of the Company subject to anti-dilution limitations.

	Thirteen Week Period Ended						Thirty-Nine Week Period Ended
	November 30, 2013			December 1, 2012			November 30, 2013			December 1, 2012
Numerator for income (loss) per share:
Net income (loss)	$	71,548		$	61,871		$	194,037		$	(4,982	)
Accretion of redeemable preferred stock		(26	)		(26	)		(77	)		(77	)
Cumulative preferred stock dividends		(2,814	)		(2,651	)		(8,318	)		(7,837	)
Conversion of Series G and H preferred stock		(25,603	)		—			(25,603	)		—
Income (loss) attributable to common stockholders—basic	$	43,105		$	59,194		$	160,039		$	(12,896	)
Add back—interest on convertible notes		—			1,334			—			—
Income (loss) attributable to common stockholders—diluted	$	43,105		$	60,528		$	160,039		$	(12,896	)
Denominator:
Basic weighted average shares		938,994			891,031			911,608			889,187
Outstanding options and restricted shares, net		48,843			1,977			41,227			—
Convertible notes		—			24,800			—			—
Diluted weighted average shares		987,837			917,808			952,835			889,187
Basic income (loss) per share	$	0.05		$	0.07		$	0.18		$	(0.01	)
Diluted income (loss) per share	$	0.04		$	0.07		$	0.17		$	(0.01	)

        Due to their antidilutive effect, the following potential common shares have been excluded from the computation of diluted income (loss) per share as of November 30, 2013 and December 1, 2012:

	Thirteen Week Period Ended				Thirty-Nine Week Period Ended
	November 30, 2013		December 1, 2012		November 30, 2013		December 1, 2012
Stock options		23,564		70,868		32,433		83,169
Convertible notes		24,800		—		24,800		24,800
Convertible preferred stock		—		32,619		—		32,619
		48,364		103,487		57,233		140,588

        Also excluded from the computation of diluted income (loss) per share for the thirty-nine week periods ended November 30, 2013 and December 1, 2012 are restricted shares and restricted stock units of 0 and 12,753, respectively, which are included in shares outstanding.

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Retirement Plans (Tables)

9 Months Ended

Nov. 30, 2013

Retirement Plans

Summary of net periodic pension expense for the defined benefit plans

	Defined Benefit Pension Plan						Nonqualified Executive Retirement Plans				Defined Benefit Pension Plan						Nonqualified Executive Retirement Plans
	Thirteen Week Period Ended										Thirty-Nine Week Period Ended
	November 30, 2013			December 1, 2012			November 30, 2013		December 1, 2012		November 30, 2013			December 1, 2012			November 30, 2013		December 1, 2012
Service cost	$	830		$	868		$	—	$	—	$	2,490		$	2,603		$	—	$	—
Interest cost		1,551			1,566			136		154		4,653			4,697			407		462
Expected return on plan assets		(1,780	)		(1,749	)		—		—		(5,338	)		(5,246	)		—		—
Amortization of unrecognized prior service cost		60			60			—		—		180			180			—		—
Amortization of unrecognized net loss		1,203			960			—		—		3,608			2,879			—		—
Net pension expense	$	1,864		$	1,705		$	136	$	154	$	5,593		$	5,113		$	407	$	462

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Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Nov. 30, 2013	Dec. 01, 2012	Nov. 30, 2013	Dec. 01, 2012	Mar. 02, 2013
Income Taxes
Income tax expense (benefit)	$ 1,388	$ 777	$ 6,810	$ (63,818)
Adjustments to valuation allowance	(28,389)	(24,717)	(63,081)	18,128
Recoverable indemnification asset from Jean Coutu Group	32,550		32,550		30,710
Portion of unrecognized tax benefits which would impact the effective tax rate	32,827		32,827
Valuation allowance against net deferred tax assets	$ 2,160,594		$ 2,160,594		$ 2,223,675

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Reclassifications from Accumulated Other Comprehensive Loss (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Nov. 30, 2013	Dec. 01, 2012	Nov. 30, 2013	Dec. 01, 2012
Reclassification from accumulated other comprehensive loss
Income (loss) before income taxes	$ (72,936)	$ (62,648)	$ (200,847)	$ 68,800
Income tax expense (benefit)	1,388	777	6,810	(63,818)
Net of income tax expense	(71,548)	(61,871)	(194,037)	4,982
Defined benefit pension plans | Reclassification from accumulated other comprehensive loss
Reclassification from accumulated other comprehensive loss
Income (loss) before income taxes	(1,263)	(1,020)	(3,788)	(3,059)
Net of income tax expense	(1,263)	(1,020)	(3,788)	(3,059)
Defined benefit pension plans | Reclassification from accumulated other comprehensive loss | Selling, general and administrative expenses
Reclassification from accumulated other comprehensive loss
Amortization of unrecognized prior service cost	(60)	(60)	(180)	(180)
Amortization of unrecognized net loss	$ (1,203)	$ (960)	$ (3,608)	$ (2,879)

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Nov. 30, 2013	Mar. 02, 2013
Inventories, LIFO reserve (in dollars)	$ 975,241	$ 915,241
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shares authorized	1,500,000,000	1,500,000,000
Common stock, shares issued	965,411,000	904,268,000
Common stock, shares outstanding	965,411,000	904,268,000
Preferred Stock-Series G
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred stock, liquidation value (in dollars per share)	$ 100	$ 100
Preferred stock, shares authorized	0	2,000,000
Preferred stock, shares issued	0	7
Preferred Stock-Series H
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred stock, liquidation value (in dollars per share)	$ 100	$ 100
Preferred stock, shares authorized	0	2,000,000
Preferred stock, shares issued	0	1,821,000

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Indebtedness and Credit Agreements

9 Months Ended

Nov. 30, 2013

Indebtedness and Credit Agreements

Indebtedness and Credit Agreements

7. Indebtedness and Credit Agreements

        Following is a summary of indebtedness and lease financing obligations at November 30, 2013 and March 2, 2013:

	November 30, 2013			March 2, 2013
Secured Debt:
Senior secured revolving credit facility due February 2018	$	590,000		$	665,000
Tranche 6 Term Loan due February 2020		1,155,195			1,161,000
7.5% senior secured notes (second lien) due March 2017		—			500,000
10.25% senior secured notes (second lien) due October 2019 ($270,000 face value less unamortized discount of $1,211 and $1,364)		268,789			268,636
8.00% senior secured notes (senior lien) due August 2020		650,000			650,000
Tranche 1 Term Loan (second lien) due August 2020		470,000			470,000
Tranche 2 Term Loan (second lien) due June 2021		500,000			—
Other secured		5,267			5,298
		3,639,251			3,719,934
Guaranteed Unsecured Debt:
9.5% senior notes due June 2017 ($810,000 face value less unamortized discount of $5,529)		—			804,471
9.25% senior notes due March 2020 ($902,000 face value plus unamortized premium of $4,255 and $4,759)		906,255			906,759
6.75% senior notes due June 2021		810,000			—
		1,716,255			1,711,230
Unguaranteed Unsecured Debt:
8.5% convertible notes due May 2015		64,188			64,188
7.7% notes due February 2027		295,000			295,000
6.875% fixed-rate senior notes due December 2028		128,000			128,000
		487,188			487,188
Lease financing obligations		109,732			115,179
Total debt		5,952,426			6,033,531
Current maturities of long-term debt and lease financing obligations		(47,753	)		(37,311	)
Long-term debt and lease financing obligations, less current maturities	$	5,904,673		$	5,996,220

Credit Facility

        The Company has a senior secured credit facility that consists of a $1,795,000 revolving credit facility and a $1,155,195 senior secured term loan (the "Tranche 6 Term Loan"). Borrowings under the revolving credit facility bear interest at a rate per annum between LIBOR plus 2.25% and LIBOR plus 2.75%, if the Company chooses to make LIBOR borrowings, or between Citibank's base rate plus 1.25% and Citibank's base rate plus 1.75% in each case based upon the amount of revolver availability as defined in the senior secured credit facility. The Company is required to pay fees between 0.375% and 0.50% per annum on the daily unused amount of the revolver, depending on the amount of revolver availability. Amounts drawn under the revolver become due and payable on February 21, 2018. The Tranche 6 Term Loan matures on February 21, 2020 and currently bears interest at a rate per annum equal to LIBOR plus 3.00%, if the Company chooses to make LIBOR borrowings, or at Citibank's base rate plus 2.00%. The Tranche 6 Term Loan is subject to a 1.00% LIBOR floor per annum.

        The Company's ability to borrow under the revolver is based upon a specified borrowing base consisting of accounts receivable, inventory and prescription files. At November 30, 2013, the Company had $590,000 of borrowings outstanding under the revolver and had letters of credit outstanding against the revolver of $87,949, which resulted in additional borrowing capacity of $1,117,051.

        The senior secured credit facility contains certain restrictions on the ability of the Company and the subsidiary guarantors to accumulate cash on hand, and under certain circumstances, requires the funds in the Company's deposit accounts to be applied first to the repayment of outstanding revolving loans under the senior secured credit facility and then to be held as collateral for the senior obligations.

        The senior credit facility restricts the amount of secured and unsecured debt the Company may have outstanding. The senior secured credit facility allows the Company to incur an unlimited amount of unsecured debt with a maturity beyond May 21, 2020. However, the Company's second priority secured term loan facilities and the indentures that govern the Company's secured and guaranteed unsecured notes contain restrictions on the amount of additional secured and unsecured debt that can be incurred by the Company. Pursuant to certain of the Company's existing indentures, the Company could not incur any additional secured debt assuming a fully drawn revolver and the outstanding letters of credit. The ability to issue additional unsecured debt under the second priority secured term loan facilities and the indentures is generally governed by an interest coverage ratio test. As of November 30, 2013, the Company had the ability to issue additional unsecured debt under the second lien credit facilities and other indentures.

        The senior secured credit facility contains additional covenants which place restrictions on the incurrence of debt, the payments of dividends, sale of assets, mergers and acquisitions and the granting of liens. The credit facility has a financial covenant, which is the maintenance of a fixed charge coverage ratio. The covenant requires that, if availability on the revolving credit facility is less than $150,000, the Company must maintain a minimum fixed charge coverage ratio of 1.00 to 1.00. As of November 30, 2013, availability under the revolving credit facility was in excess of $150,000 and, therefore, the financial covenant was not applicable. The senior secured credit facility also provides for customary events of default.

        The Company also has a second priority secured term loan facility, which includes a $470,000 second priority secured term loan (the "Tranche 1 Term Loan"). The Tranche 1 Term Loan matures on August 21, 2020 and currently bears interest at a rate per annum equal to LIBOR plus 4.75%, if the Company chooses to make LIBOR borrowings, or at Citibank's base rate plus 3.75%. The Tranche 1 Term Loan is subject to a 1.00% LIBOR floor per annum.

        On June 21, 2013, the Company entered into a new second priority secured term loan facility, which includes a $500,000 second priority secured term loan (the "Tranche 2 Term Loan"). The Tranche 2 Term Loan matures on June 21, 2021 and currently bears interest at a rate per annum equal to LIBOR plus 3.875% with a LIBOR floor of 1.00%, if the Company chooses to make LIBOR borrowings, or at Citibank's base rate plus 2.875%.

        Substantially all of Rite Aid Corporation's 100 percent owned subsidiaries guarantee the obligations under the senior secured credit facility, second priority secured term loan facilities, secured guaranteed notes and unsecured guaranteed notes. The senior secured credit facility, second priority secured term loan facilities and secured guaranteed notes are secured, on a senior or second priority basis, as applicable, by a lien on, among other things, accounts receivable, inventory and prescription files of the subsidiary guarantors. The subsidiary guarantees related to the Company's senior secured credit facility, second priority secured term loan facilities and secured guaranteed notes and, on an unsecured basis, the unsecured guaranteed notes are full and unconditional and joint and several, and there are no restrictions on the ability of the Company to obtain funds from its subsidiaries. Also, the Company has no independent assets or operations, and subsidiaries not guaranteeing the credit facility, second priority secured term loan facilities and applicable notes are minor. Accordingly, condensed consolidating financial information for the Company and subsidiaries is not presented.

Other Transactions

        In June 2013, the Company completed a tender offer for its 7.5% senior secured notes due 2017 in which $419,237 aggregate principal amount of the outstanding 7.5% notes were tendered and repurchased. In July 2013, the Company redeemed the remaining 7.5% notes for $85,154, which included the call premium and interest to the redemption date. The tender offer for, and redemption of, the 7.5% notes were funded using the proceeds from the Tranche 2 Term Loan, borrowings under the Company's revolving credit facility and available cash.

        On July 2, 2013, the Company issued $810,000 of its 6.75% senior notes due 2021. The Company's obligations under the notes are fully and unconditionally guaranteed, jointly and severally, on an unsubordinated basis, by all of its subsidiaries that guarantee the Company's obligations under the senior secured credit facility, the second priority secured term loan facilities and the outstanding 8.00% senior secured notes due 2020, 10.25% senior secured notes due 2019 and 9.25% senior notes due 2020. The Company used the net proceeds of the 6.75% notes, borrowings under its revolving credit facility and available cash to repurchase and repay all of the Company's outstanding $810,000 aggregate principal of 9.5% senior notes due 2017.

        In July 2013, the Company completed a tender offer for its 9.5% notes in which $739,642 aggregate principal amount of the outstanding 9.5% notes were tendered and repurchased. In August 2013, the Company redeemed the remaining 9.5% notes for $73,440, which included the call premium and interest to the redemption date.

        In connection with these refinancing transactions, the Company recorded a loss on debt retirement, including tender and call premium and interest, unamortized debt issue costs and unamortized discount of $62,172.

        As of March 2, 2013, Rite Aid Lease Management Company, a 100 percent owned subsidiary of the Company, had 213,000 shares of its Cumulative Preferred Stock, Class A, par value $100 per share ("RALMCO Cumulative Preferred Stock"), outstanding. The carrying amount of the RALMCO Cumulative Preferred Stock as of November 29, 2013 was $20,763 and was recorded in Other Noncurrent Liabilities. On November 29, 2013, the Company repurchased all of the outstanding RALMCO Cumulative Preferred Stock for $21,034. In connection with this transaction, the Company recorded a loss on debt retirement of $271.

Maturities

        The aggregate annual principal payments of long-term debt for the remainder of fiscal 2014 and thereafter are as follows: 2014—$8,170; 2015—$11,610; 2016—$75,798; 2017—$11,610; 2018—$601,610 and $5,130,852 thereafter.

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Nov. 30, 2013	Dec. 01, 2012	Nov. 30, 2013	Dec. 01, 2012
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Net income (loss)	$ 71,548	$ 61,871	$ 194,037	$ (4,982)
Defined benefit pension plans:
Amortization of prior service cost, net transition obligation and net actuarial losses included in net periodic pension cost	1,263	1,020	3,788	3,059
Total other comprehensive income	1,263	1,020	3,788	3,059
Comprehensive income (loss)	$ 72,811	$ 62,891	$ 197,825	$ (1,923)

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Nov. 30, 2013	Mar. 02, 2013
Current assets:
Cash and cash equivalents	$ 183,212	$ 129,452
Accounts receivable, net	850,249	929,476
Inventories, net of LIFO reserve of $975,241 and $915,241	3,301,103	3,154,742
Prepaid expenses and other current assets	111,689	195,377
Total current assets	4,446,253	4,409,047
Property, plant and equipment, net	1,957,584	1,895,650
Other intangibles, net	438,281	464,404
Other assets	296,049	309,618
Total assets	7,138,167	7,078,719
Current liabilities:
Current maturities of long-term debt and lease financing obligations	47,753	37,311
Accounts payable	1,397,093	1,384,644
Accrued salaries, wages and other current liabilities	1,120,238	1,156,315
Total current liabilities	2,565,084	2,578,270
Long-term debt, less current maturities	5,825,816	5,904,370
Lease financing obligations, less current maturities	78,857	91,850
Other noncurrent liabilities	897,235	963,663
Total liabilities	9,366,992	9,538,153
Commitments and contingencies
Stockholders' deficit:
Common stock, par value $1 per share; 1,500,000 authorized; shares issued and outstanding 965,411 and 904,268	965,411	904,268
Additional paid-in capital	4,434,570	4,280,831
Accumulated deficit	(7,571,225)	(7,765,262)
Accumulated other comprehensive loss	(57,581)	(61,369)
Total stockholders' deficit	(2,228,825)	(2,459,434)
Total liabilities and stockholders' deficit	7,138,167	7,078,719
Preferred Stock-Series G
Stockholders' deficit:
Preferred stock		1
Preferred Stock-Series H
Stockholders' deficit:
Preferred stock		$ 182,097

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Income (Loss) Per Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	0 Months Ended	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Nov. 30, 2013	Dec. 01, 2012	Nov. 30, 2013	Dec. 01, 2012
Numerator for income (loss) per share:
Net income (loss)		$ 71,548	$ 61,871	$ 194,037	$ (4,982)
Accretion of redeemable preferred stock		(26)	(26)	(77)	(77)
Cumulative preferred stock dividends		(2,814)	(2,651)	(8,318)	(7,837)
Conversion of Series G and H preferred stock	(25,603)	(25,603)		(25,603)
Income (loss) attributable to common stockholders-basic		43,105	59,194	160,039	(12,896)
Add back-interest on convertible notes			1,334
Income (loss) attributable to common stockholders-diluted		$ 43,105	$ 60,528	$ 160,039	$ (12,896)
Denominator:
Basic weighted average shares		938,994	891,031	911,608	889,187
Outstanding options and restricted shares, net (in shares)		48,843	1,977	41,227
Convertible notes (in shares)			24,800
Diluted weighted average shares		987,837	917,808	952,835	889,187
Basic income (loss) per share (in dollars per share)		$ 0.05	$ 0.07	$ 0.18	$ (0.01)
Diluted income (loss) per share (in dollars per share)		$ 0.04	$ 0.07	$ 0.17	$ (0.01)
Antidilutive securities excluded from computation of earnings per share
Potential common shares excluded from the computation of diluted income (loss) per share		48,364	103,487	57,233	140,588
Stock options
Antidilutive securities excluded from computation of earnings per share
Potential common shares excluded from the computation of diluted income (loss) per share		23,564	70,868	32,433	83,169
Convertible notes
Antidilutive securities excluded from computation of earnings per share
Potential common shares excluded from the computation of diluted income (loss) per share		24,800		24,800	24,800
Convertible preferred stock
Antidilutive securities excluded from computation of earnings per share
Potential common shares excluded from the computation of diluted income (loss) per share			32,619		32,619
Restricted shares and restricted stock units
Antidilutive securities excluded from computation of earnings per share
Potential common shares excluded from the computation of diluted income (loss) per share				0	12,753

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Fair Value Measurements (Tables)

9 Months Ended

Nov. 30, 2013

Fair Value Measurements

Schedule of fair value of assets measured on non-recurring basis

	Fair Value Measurement Using
	Level 1		Level 2		Level 3		Total as of November 30, 2013
Long-lived assets held for use	$	—	$	—	$	955	$	955
Long-lived assets held for sale		—		12,431		—		12,431
Total	$	—	$	12,431	$	955	$	13,386

	Level 1		Level 2		Level 3		Total as of December 1, 2012
Long-lived assets held for use	$	—	$	975	$	775	$	1,750
Long-lived assets held for sale		—		—		—		—
Total	$	—	$	975	$	775	$	1,750

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Commitments and Contingencies (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Nov. 30, 2013 Management of hazardous waste	Nov. 30, 2013 Indergit StoreManager	Sep. 26, 2013 Indergit StoreManager
Commitments and contingencies
Number of current and former store managers to whom notice has been sent		7,000	1,750
Number of current and former store managers who joined the action		1,550
Payment of legal settlement	$ 12.3

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Stock Options and Stock Awards (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	9 Months Ended
	Nov. 30, 2013	Dec. 01, 2012
Stock options and stock award Plans
Stock-based compensation costs	$ 12,194	$ 12,872
Total awards (in shares)	7,571	17,470
Stock options
Stock options and stock award Plans
Options granted (in shares)	4,828	12,020
Options granted, Weighted Average Fair Value (in dollars per share)	$ 1.91	$ 0.91
Vesting period	4 years
Fair value assumptions
Expected stock price volatility (as a percent)	85.00%	85.00%
Expected dividend yield (as a percent)	0.00%	0.00%
Risk-free interest rate (as a percent)	1.40%	0.70%
Expected option life	5 years 6 months	5 years 6 months
Unrecognized pre-tax compensation costs related to unvested stock options and restricted stock grants
Unrecognized pre-tax costs	17,625
Weighted average amortization period	2 years 6 months
Stock awards
Stock options and stock award Plans
Awards granted (in shares)	2,743	5,450
Awards granted, Weighted Average Fair Value (in dollars per share)	$ 2.79	$ 1.31
Stock awards | Non-employee director | Year one
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures
Vesting percentage	80.00%
Stock awards | Non-employee director | Year two
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures
Vesting percentage	10.00%
Stock awards | Non-employee director | Year three
Share-based Compensation Arrangement by Share-based Payment Award, Additional General Disclosures
Vesting percentage	10.00%
Restricted stock
Unrecognized pre-tax compensation costs related to unvested stock options and restricted stock grants
Unrecognized pre-tax costs	$ 10,913
Weighted average amortization period	2 years

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Reclassifications from Accumulated Other Comprehensive Loss (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Nov. 30, 2013	Dec. 01, 2012	Nov. 30, 2013	Dec. 01, 2012
Accumulated other comprehensive loss
Balance - beginning of period	$ (58,844)	$ (50,595)	$ (61,369)	$ (52,634)
Amounts reclassified from accumulated other comprehensive loss to net income (loss)	1,263	1,020	3,788	3,059
Balance - end of period	(57,581)	(49,575)	(57,581)	(49,575)
Defined benefit pension plans
Accumulated other comprehensive loss
Balance - beginning of period	(58,844)	(50,595)	(61,369)	(52,634)
Amounts reclassified from accumulated other comprehensive loss to net income (loss)	1,263	1,020	3,788	3,059
Balance - end of period	$ (57,581)	$ (49,575)	$ (57,581)	$ (49,575)

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Intangible Assets

9 Months Ended

Nov. 30, 2013

Intangible Assets

Intangible Assets

6. Intangible Assets

        The Company's intangible assets are finite-lived and amortized over their useful lives. Following is a summary of the Company's amortizable intangible assets as of November 30, 2013 and March 2, 2013.

	November 30, 2013							March 2, 2013
	Gross Carrying Amount		Accumulated Amortization			Remaining Weighted Average Amortization Period		Gross Carrying Amount		Accumulated Amortization			Remaining Weighted Average Amortization Period
Favorable leases and other	$	635,095	$	(441,542	)		9 years	$	623,541	$	(413,556	)		10 years
Prescription files		1,333,771		(1,089,043	)		4 years		1,286,087		(1,031,668	)		4 years
Total	$	1,968,866	$	(1,530,585	)			$	1,909,628	$	(1,445,224	)

        Also included in other non-current liabilities as of November 30, 2013 and March 2, 2013 are unfavorable lease intangibles with a net carrying amount of $64,522 and $70,195, respectively. These intangible liabilities are amortized over their remaining lease terms.

        Amortization expense for these intangible assets and liabilities was $28,961 and $89,767 for the thirteen and thirty-nine week periods ended November 30, 2013, respectively. Amortization expense for these intangible assets and liabilities was $31,143 and $95,972 for the thirteen and thirty-nine week periods ended December 1, 2012, respectively. The anticipated annual amortization expense for these intangible assets and liabilities is 2014—$111,702; 2015—$100,399; 2016—$88,857; 2017—$75,596 and 2018—$37,687.

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Lease Termination and Impairment Charges (Details) (USD $) In Thousands, unless otherwise specified	1 Months Ended	3 Months Ended		9 Months Ended
	Nov. 30, 2013 store	Nov. 30, 2013	Dec. 01, 2012	Nov. 30, 2013	Dec. 01, 2012
Lease termination and impairment charges
Lease termination and impairment charges		$ 1,672	$ 14,366	$ 24,034	$ 34,292
Gain on sale of lease rights				8,750
Impairment charges
Lease termination and impairment charges
Lease termination and impairment charges		335	339	5,201	882
Lease termination charges
Lease termination and impairment charges
Lease termination and impairment charges		1,337	14,027	18,833	33,410
Number of stores for which lease rights were sold	1
Gain on sale of lease rights	8,750
Closed store and distribution center charges
Balance-beginning of period		303,637	345,271	323,758	367,865
Provision for present value of noncancellable lease payments of closed stores		4,522	7,270	10,896	11,522
Changes in assumptions about future sublease income, terminations and changes in interest rates		(8,112)	1,062	(7,899)	4,388
Interest accretion		5,225	5,729	16,133	17,655
Cash payments, net of sublease income		(10,127)	(23,866)	(47,743)	(65,964)
Balance-end of period	$ 295,145	$ 295,145	$ 335,466	$ 295,145	$ 335,466

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Reclassifications from Accumulated Other Comprehensive Loss

9 Months Ended

Nov. 30, 2013

Reclassifications from Accumulated Other Comprehensive Loss

Reclassifications from Accumulated Other Comprehensive Loss

9. Reclassifications from Accumulated Other Comprehensive Loss

        The following table summarizes the components of accumulated other comprehensive loss and the changes in balances of each component of accumulated other comprehensive loss, net of tax as applicable, for the thirteen and thirty-nine week periods ended November 30, 2013 and December 1, 2012:

	Thirteen week period ended November 30, 2013						Thirteen Week Period Ended December 1,2012						Thirty-Nine Week Period Ended November 30, 2013						Thirty-Nine Week Period Ended December 1,2012
	Defined benefit pension plans			Accumulated other comprehensive loss			Defined benefit pension plans			Accumulated other comprehensive loss			Defined benefit pension plans			Accumulated other comprehensive loss			Defined benefit pension plans			Accumulated other comprehensive loss
Accumulated other comprehensive loss
Balance-beginning of period	$	(58,844	)	$	(58,844	)	$	(50,595	)	$	(50,595	)	$	(61,369	)	$	(61,369	)	$	(52,634	)	$	(52,634	)
Amounts reclassified from accumulated other comprehensive loss to net income (loss)		1,263			1,263			1,020			1,020			3,788			3,788			3,059			3,059
Balance-end of period	$	(57,581	)	$	(57,581	)	$	(49,575	)	$	(49,575	)	$	(57,581	)	$	(57,581	)	$	(49,575	)	$	(49,575	)

        The following table summarizes the effects on net income (loss) of significant amounts classified out of each component of accumulated other comprehensive loss for the thirteen and thirty-nine week periods ended November 30, 2013 and December 1, 2012:

	Thirteen Week Periods Ended November 30, 2013 and December 1, 2012
	Amount reclassified from accumulated other comprehensive loss
Details about accumulated other comprehensive loss components	November 30, 2013			December 1, 2012			Affected line item in the condensed consolidated statements of operations
Defined benefit pension plans
Amortization of unrecognized prior service cost(a)	$	(60	)	$	(60	)	Selling, general and administrative expenses
Amortization of unrecognized net loss(a)		(1,203	)		(960	)	Selling, general and administrative expenses
		(1,263	)		(1,020	)	Total before income tax expense
		—			—		Income tax expense(b)
	$	(1,263	)	$	(1,020	)	Net of income tax expense

	Thirty-Nine Week Periods Ended November 30, 2013 and December 1, 2012
	Amount reclassified from accumulated other comprehensive loss
Details about accumulated other comprehensive loss components	November 30, 2013			December 1, 2012			Affected line item in the condensed consolidated statements of operations
Defined benefit pension plans
Amortization of unrecognized prior service cost(a)	$	(180	)	$	(180	)	Selling, general and administrative expenses
Amortization of unrecognized net loss(a)		(3,608	)		(2,879	)	Selling, general and administrative expenses
		(3,788	)		(3,059	)	Total before income tax expense
		—			—		Income tax expense(b)
	$	(3,788	)	$	(3,059	)	Net of income tax expense

(a)—See Note 10, Retirement Plans for additional details.

(b)—Income tax expense is $0 due to the valuation allowance. See Note 5, Income Taxes for additional details.

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Income Taxes

9 Months Ended

Nov. 30, 2013

Income Taxes

Income Taxes

5. Income Taxes

        The Company recorded an income tax expense of $1,388 and $777 for the thirteen week periods ended November 30, 2013 and December 1, 2012, respectively, and an income tax expense of $6,810 and an income tax benefit of $63,818 for the thirty-nine week periods ended November 30, 2013 and December 1, 2012, respectively. The income tax expense or benefit is recorded net of adjustments to maintain a full valuation allowance against the Company's net deferred tax assets.

        The income tax expense for the thirteen and thirty-nine week periods ended November 30, 2013 is primarily attributable to the accrual of federal, state and local taxes and adjustments to unrecognized tax benefits offset by adjustments to the valuation allowance of $(28,389) and $(63,081), respectively.

        The income tax expense for the thirteen week period ended December 1, 2012 was primarily attributable to an accrual of federal, state and local taxes and adjustments to unrecognized tax benefits offset by adjustments to the valuation allowance of $(24,717).

        The income tax benefit for the thirty-nine week period ended December 1, 2012 was primarily attributable to the recognition of previously unrecognized tax benefits resulting from the appellate settlements of the Brooks Eckerd Internal Revenue Service (IRS) Audit of fiscal years 2004 - 2007 as well as the Commonwealth of Massachusetts Audit of fiscal years 2005 - 2007. These amounts were offset by a reversal of the related tax indemnification asset which was recorded in selling, general and administrative expenses as these audits were related to pre-acquisition periods. The accrual of federal, state and local taxes for the thirty-nine week period ended December 1, 2012 included adjustments to the valuation allowance of $18,128.

        The Company is indemnified by Jean Coutu Group for certain tax liabilities incurred for all years ended up to and including June 4, 2007, related to the June 2007 Brooks Eckerd acquisition. Although the Company is indemnified by Jean Coutu Group, the Company remains the primary obligor to the tax authorities with respect to any tax liability arising for the years prior to the acquisition. Accordingly, as of November 30, 2013 and March 2, 2013 the Company had recoverable indemnification assets of $32,550 and $30,710 from Jean Coutu Group, respectively, included in the 'Other Assets' line of the Consolidated Balance Sheets, to reflect the indemnification for such liabilities.

        The Company recognizes tax liabilities in accordance with the guidance for uncertain tax positions and management adjusts these liabilities with changes in judgment as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of the tax liabilities.

        Over the next 12 months, the Company believes that it is reasonably possible that the amount of unrecognized tax positions including interest and penalties could decrease tax liabilities by approximately $32,827, which would impact the effective tax rate if the company's tax positions are sustained upon audit or the controlling statute of limitations expires. The primary driver of the decrease is contingent upon the statute of limitations expiring. The corresponding indemnification asset will reverse concurrently in selling, general and administrative expenses.

        The valuation allowances as of November 30, 2013 and March 2, 2013 apply to the net deferred tax assets of the Company. The Company continues to maintain a full valuation allowance of $2,160,594 and $2,223,675 against net deferred tax assets at November 30, 2013 and March 2, 2013, respectively.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Nov. 30, 2013	Dec. 01, 2012
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Cash paid for interest, capitalized amounts	$ 163	$ 319

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Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended			9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended
	Nov. 30, 2013	Dec. 01, 2012	Nov. 30, 2013	Dec. 01, 2012	Mar. 02, 2013	Nov. 30, 2013 Favorable leases and other	Mar. 02, 2013 Favorable leases and other	Nov. 30, 2013 Prescription files	Mar. 02, 2013 Prescription files
Finite-lived intangible assets
Gross carrying amount	$ 1,968,866		$ 1,968,866		$ 1,909,628	$ 635,095	$ 623,541	$ 1,333,771	$ 1,286,087
Accumulated amortization	(1,530,585)		(1,530,585)		(1,445,224)	(441,542)	(413,556)	(1,089,043)	(1,031,668)
Remaining weighted average amortization period						9 years	10 years	4 years	4 years
Unfavorable lease intangibles	64,522		64,522		70,195
Amortization expense for intangible assets and liabilities	28,961	31,143	89,767	95,972
Anticipated annual amortization expense for intangible assets and liabilities
2014	111,702		111,702
2015	100,399		100,399
2016	88,857		88,857
2017	75,596		75,596
2018	$ 37,687		$ 37,687

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Related Party Transactions

9 Months Ended

Nov. 30, 2013

Related Party Transactions

Related Party Transactions

12. Related Party Transactions

        On July 22, 2013, the Jean Coutu Group announced that it had sold all of its 65,401,162 shares of Rite Aid's common stock. As a result of this sale, the Jean Coutu Group was required to cause its last designee to resign from Rite Aid's board of directors and, accordingly, Francois J. Coutu resigned from Rite Aid's board of directors effective November 8, 2013.

        On September 26, 2013, the Company agreed to exchange eight shares of 7% Series G Convertible Preferred Stock (the "Series G preferred stock") and 1,876,013 shares of 6% Series H Convertible Preferred Stock (the "Series H preferred stock", collectively the "Preferred Stock") of the Company (the "Exchange"), held by Green Equity Investors III, L.P. ("LGP") for 40,000,000 shares of the Company's common stock, par value $1.00 per share, with a market value of $190,400 at the $4.76 per share closing price on the Settlement Date (as hereinafter defined), pursuant to an individually negotiated exchange transaction. The Exchange settled on September 30, 2013 (the "Settlement Date"). The Preferred Stock, including additional shares representing earned but unpaid dividends as of the Settlement Date, was redeemable by the Company for cash at 105% of the Preferred Stock's $100 per share liquidation preference or $199,937. The Company agreed to the Exchange as it was prohibited under several of its debt instruments from using cash flow or new debt to effect the redemption of the Preferred Stock. Following the Settlement Date, no shares of the Series G preferred stock or Series H preferred stock remained outstanding and the Company's restated certificate of incorporation was amended to eliminate all references to the Series G preferred stock and Series H preferred stock. In accordance with the terms of the Exchange, John M. Baumer, a member of the board of directors of the Company and a limited partner of Leonard Green & Partners, L.P., an affiliate of the LGP, resigned from the Company's board of directors.

        The Series G preferred stock had a liquidation preference of $100 per share and paid quarterly dividends in additional shares at 7% of liquidation preference and could be redeemed at the Company's election. The Series H preferred stock paid quarterly dividends in additional shares at 6% of liquidation preference and could be redeemed at the Company's election. The Series G preferred stock and Series H preferred stock were convertible into common stock of the Company, at the holder's option, at a conversion rate of $5.50 per share.

        As of the Settlement Date, LGP held 1,904,161 shares of Series G preferred stock and Series H preferred stock, which included 28,140 shares of earned and unpaid dividends. The Series G preferred stock and Series H preferred stock would have converted into 34,621,117 shares of common stock at the contracted conversion rate of $5.50 per share. Accordingly, income attributable to common stockholders is reduced by $25,603, or $0.03 per diluted share, the value of the additional 5,378,883 shares of common stock issued upon conversion at the $4.76 per share closing price on the Settlement Date.

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Stock Options and Stock Awards

9 Months Ended

Nov. 30, 2013

Stock Options and Stock Awards

Stock Options and Stock Awards

8. Stock Options and Stock Awards

        The Company recognizes share-based compensation expense over the requisite service period of the award, net of an estimate for the impact of forfeitures. Operating results for the thirty-nine week periods ended November 30, 2013 and December 1, 2012 include $12,194 and $12,872, respectively, of compensation costs related to the Company's stock-based compensation arrangements.

        The total number and type of newly awarded grants and the related weighted average fair value for the thirty-nine week periods ended November 30, 2013 and December 1, 2012 are as follows:

	November 30, 2013				December 1, 2012
	Shares		Weighted Average Fair Value		Shares		Weighted Average Fair Value
Stock options granted		4,828	$	1.91		12,020	$	0.91
Stock awards granted		2,743	$	2.79		5,450	$	1.31
Total awards		7,571				17,470

        Typically, stock options granted vest, and are subsequently exercisable in equal annual installments over a four-year period for employees. Stock awards granted to non-employee directors vest 80% in year one, 10% in year two and 10% in year three.

        The Company calculates the fair value of stock options using the Black- Scholes-Merton option pricing model. The following assumptions were used in the Black-Scholes-Merton option pricing model:

	Thirty-Nine Week Period Ended
	November 30, 2013			December 1, 2012
Expected stock price volatility		85	%		85	%
Expected dividend yield		0	%		0	%
Risk-free interest rate		1.4	%		0.7	%
Expected option life		5.5 years			5.5 years

        As of November 30, 2013, the total unrecognized pre-tax compensation costs related to unvested stock options and restricted stock grants, net of estimated forfeitures and the weighted average period of cost amortization are as follows:

	November 30, 2013
	Unvested stock options		Unvested restricted stock
Unrecognized pre-tax costs	$	17,625	$	10,913
Weighted average amortization period		2.5 years		2.0 years

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Lease Termination and Impairment Charges (Tables)

9 Months Ended

Nov. 30, 2013

Lease Termination and Impairment Charges

Schedule of amounts relating to lease termination and impairment charges

	Thirteen Week Period Ended				Thirty-Nine Week Period Ended
	November 30, 2013		December 1, 2012		November 30, 2013		December 1, 2012
Impairment charges	$	335	$	339	$	5,201	$	882
Lease termination charges		1,337		14,027		18,833		33,410
	$	1,672	$	14,366	$	24,034	$	34,292

Schedule of closed store and distribution center charges related to new closures, changes in assumptions and interest accretion

	Thirteen Week Period Ended						Thirty-Nine Week Period Ended
	November 30, 2013			December 1, 2012			November 30, 2013			December 1, 2012
Balance—beginning of period	$	303,637		$	345,271		$	323,758		$	367,865
Provision for present value of noncancellable lease payments of closed stores		4,522			7,270			10,896			11,522
Changes in assumptions about future sublease income, terminations and changes in interest rates		(8,112	)		1,062			(7,899	)		4,388
Interest accretion		5,225			5,729			16,133			17,655
Cash payments, net of sublease income		(10,127	)		(23,866	)		(47,743	)		(65,964	)
Balance—end of period	$	295,145		$	335,466		$	295,145		$	335,466

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Basis of Presentation (Policies)

9 Months Ended

Nov. 30, 2013

Basis of Presentation

New Accounting Pronouncements

New Accounting Pronouncements

        In July 2013, the FASB issued ASU No. 2013-11, Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. ASU No. 2013-11 requires an entity to present unrecognized tax benefits as a reduction to deferred tax assets when a net operating loss carryforward, similar tax loss or a tax credit carryforward exists, with limited exceptions. ASU No. 2013-11 is effective for fiscal years beginning on or after December 15, 2013, and for interim periods within those fiscal years. This pronouncement will have no effect on the financial statements as the Company has historically presented uncertain tax positions in accordance with ASU No. 2013-11.

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Document and Entity Information	9 Months Ended
	Nov. 30, 2013	Dec. 19, 2013
Document and Entity Information
Entity Registrant Name	RITE AID CORP
Entity Central Index Key	0000084129
Document Type	10-Q
Document Period End Date	Nov. 30, 2013
Amendment Flag	false
Current Fiscal Year End Date	--03-01
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		966,525,581
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3

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Income (Loss) Per Share (Tables)

9 Months Ended

Nov. 30, 2013

Income (Loss) Per Share

Schedule of calculation of basic and diluted income (loss) per share

	Thirteen Week Period Ended						Thirty-Nine Week Period Ended
	November 30, 2013			December 1, 2012			November 30, 2013			December 1, 2012
Numerator for income (loss) per share:
Net income (loss)	$	71,548		$	61,871		$	194,037		$	(4,982	)
Accretion of redeemable preferred stock		(26	)		(26	)		(77	)		(77	)
Cumulative preferred stock dividends		(2,814	)		(2,651	)		(8,318	)		(7,837	)
Conversion of Series G and H preferred stock		(25,603	)		—			(25,603	)		—
Income (loss) attributable to common stockholders—basic	$	43,105		$	59,194		$	160,039		$	(12,896	)
Add back—interest on convertible notes		—			1,334			—			—
Income (loss) attributable to common stockholders—diluted	$	43,105		$	60,528		$	160,039		$	(12,896	)
Denominator:
Basic weighted average shares		938,994			891,031			911,608			889,187
Outstanding options and restricted shares, net		48,843			1,977			41,227			—
Convertible notes		—			24,800			—			—
Diluted weighted average shares		987,837			917,808			952,835			889,187
Basic income (loss) per share	$	0.05		$	0.07		$	0.18		$	(0.01	)
Diluted income (loss) per share	$	0.04		$	0.07		$	0.17		$	(0.01	)

Schedule of antidilutive effect of potential common shares, excluded from computation of diluted income (loss) per share

	Thirteen Week Period Ended				Thirty-Nine Week Period Ended
	November 30, 2013		December 1, 2012		November 30, 2013		December 1, 2012
Stock options		23,564		70,868		32,433		83,169
Convertible notes		24,800		—		24,800		24,800
Convertible preferred stock		—		32,619		—		32,619
		48,364		103,487		57,233		140,588