Rite Aid 2011 Annual Report Download - page 76

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RITE AID CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Years Ended February 26, 2011, February 27, 2010 and February 28, 2009
(In thousands, except per share amounts)
3. Lease Termination and Impairment Charges (Continued)
Long-lived 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 and discounting them using a
risk-adjusted rate of interest. The Company estimates future cash flows based on its experience and
knowledge of the market in which the store is located.
The table below sets forth by level within the fair value hierarchy the long-lived assets as of the
impairment measurement date for which an impairment assessment was performed.
Quoted Prices in Significant Fair Values
Active Markets Other Significant as of Total Charges
for Identical Observable Unobservable Impairment February 26,
Assets (Level 1) Inputs (Level 2) Inputs (Level 3) Date 2011
Long-lived assets held and used . . $— $21,822 $43,129 $64,951 $(114,330)
Long-lived assets held for sale . . . — 2,479 — 2,479 (791)
Total ...................... $— $24,301 $43,129 $67,430 $(115,121)
Quoted Prices in Significant Fair Values
Active Markets Other Significant as of Total Charges
for Identical Observable Unobservable Impairment February 27,
Assets (Level 1) Inputs (Level 2) Inputs (Level 3) Date 2010
Long-lived assets held and used . . $— $20,274 $4,262 $24,536 $(64,469)
Long-lived assets held for sale . . . — 14,927 — 14,927 (11,006)
Total ...................... $— $35,201 $4,262 $39,463 $(75,475)
4. Discontinued Operations
During the fourth quarter of fiscal 2008, the Company entered into agreements to sell the
prescription files of 28 of its stores in the Las Vegas, Nevada area. The Company owned four of these
stores and the remaining stores were leased. The Company assigned the lease rights of 17 of those
stores to other entities and closed the remaining leased stores. The Company has sold three of the
owned stores and plans to sell the remaining one owned store. The sale and transfer of the prescription
files has been completed and the inventory at the stores has been liquidated.
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