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RITE AID CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Years Ended March 2, 2013, March 3, 2012 and February 26, 2011
(In thousands, except per share amounts)
3. Lease Termination and Impairment Charges (Continued)
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 and total losses as
of March 2, 2013 and March 3, 2012:
Quoted Prices in Significant Fair Values
Active Markets Other Significant as of Total Charges
for Identical Observable Unobservable Impairment March 2,
Assets (Level 1) Inputs (Level 2) Inputs (Level 3) Date 2013
Long-lived assets held and
used ................. $— $1,018 $21,739 $22,757 $(24,298)
Long-lived assets held for sale — 1,842 — 1,842 (594)
Total .................. $— $2,860 $21,739 $24,599 $(24,892)
Quoted Prices in Significant Fair Values
Active Markets Other Significant as of Total Charges
for Identical Observable Unobservable Impairment March 3,
Assets (Level 1) Inputs (Level 2) Inputs (Level 3) Date 2012
Long-lived assets held and
used ................. $— $23,254 $36,485 $59,739 $(50,718)
Long-lived assets held for sale — 5,407 — 5,407 (1,280)
Total .................. $— $28,661 $36,485 $65,146 $(51,998)
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 guidance set forth in ASC
420, ‘‘Exit or Disposal Cost Obligations.’’ The Company calculates the 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 or favorable lease terminations. The
Company evaluates these assumptions each quarter and adjusts the liability accordingly.
In fiscal 2013, 2012 and 2011, the Company recorded lease termination charges of $45,967, $48,055
and $95,772. These charges related to changes in future assumptions, interest accretion and provisions
for 14 stores in fiscal 2013, 23 stores in fiscal 2012, and 52 stores and one distribution center in fiscal
2011.
As part of its ongoing business activities, the Company assesses stores and distribution centers for
potential closure. Decisions to close or relocate stores or distribution centers in future periods would
result in lease termination charges for lease exit costs and liquidation of inventory, as well as
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