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RITE AID CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Years Ended March 1, 2014, March 2, 2013 and March 3, 2012
(In thousands, except per share amounts)
17. Commitments, Contingencies and Guarantees (Continued)
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 recorded an appropriate accrual.
In January 2014, the Center for Medicare and Medicaid Services approved a state plan amendment
that excluded certain drugs from the retroactive reimbursement rate reductions effective March 31,
2012. Accordingly, the Company adjusted its accrual to take into account this exclusion at year end. As
pertinent facts and circumstances develop, this accrual may be adjusted further.
18. Supplementary Cash Flow Data
Year Ended
March 1, March 2, March 3,
2014 2013 2012
Cash paid for interest (net of capitalized
amounts of $197, $399 and $315) ........ $ 414,692 $ 482,145 $ 528,894
Cash payments (refund) for income taxes, net . $ 3,191 $ (776) $ 4,913
Equipment financed under capital leases .... $ 18,065 $ 7,906 $ 7,052
Equipment received for noncash consideration $ 2,825 $ 3,285 $ 3,616
Preferred stock dividends paid in additional
shares ............................ $ 8,318 $ 10,528 $ 9,919
Accrued capital expenditures ............. $ 72,841 $ 45,456 $ 45,454
Gross borrowings from revolver ........... $2,668,000 $1,117,000 $2,654,000
Gross repayments to revolver ............. $2,933,000 $ 588,000 $2,546,000
19. Related Party Transactions
There were receivables from related parties of $19 and $23 at March 1, 2014 and March 2, 2013,
respectively.
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.
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