Rite Aid 2015 Annual Report Download - page 91

Download and view the complete annual report

Please find page 91 of the 2015 Rite Aid annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 131

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131

RITE AID CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Years Ended February 28, 2015, March 1, 2014 and March 2, 2013
(In thousands, except per share amounts)
10. Property, Plant and Equipment
Following is a summary of property, plant and equipment, including capital lease assets, at
February 28, 2015 and March 1, 2014:
2015 2014
Land ...................................... $ 232,785 $ 233,098
Buildings ................................... 761,262 753,633
Leasehold improvements ........................ 2,078,974 1,890,369
Equipment .................................. 2,377,481 2,194,339
Construction in progress ........................ 95,672 69,388
5,546,174 5,140,827
Accumulated depreciation ....................... (3,454,805) (3,183,498)
Property, plant and equipment, net ................. $2,091,369 $ 1,957,329
Depreciation expense, which included the depreciation of assets recorded under capital leases, was
$298,523, $284,603 and $286,374 in fiscal 2015, 2014 and 2013, respectively.
Included in property, plant and equipment was the carrying amount, which approximates fair value,
of assets to be disposed of totaling $6,317 and $1,887 at February 28, 2015 and March 1, 2014,
respectively.
11. Goodwill and Other Intangibles
Goodwill is not amortized, but is instead evaluated for impairment on an annual basis at the end
of the fiscal year, or more frequently if events or circumstances indicate that impairment may be more
likely. When evaluating goodwill for possible impairment, the Company performs a qualitative
assessment in the fourth quarter of the fiscal year to determine if it is more likely than not that the
carrying value of the goodwill exceeds the fair value of the goodwill. During the Company’s qualitative
assessment it makes significant estimates, assumptions, and judgments, including, but not limited to, the
overall economy, industry and market conditions, financial performance of the Company, changes in
the Company’s share price, and forecasts of revenue, profit, working capital requirements, and cash
flows. The Company considers the sole reporting unit’s historical results and operating trends when
determining these assumptions. If the Company determines that it is more likely than not that the
carrying value of the goodwill exceeds the fair value of the goodwill, it performs the first step of the
impairment process, which compares the fair value of the reporting unit to its carrying amount,
including the goodwill. The Company estimates the fair value of its reporting unit using a combination
of a future discounted cash flow valuation model and a comparable market transaction model. If the
carrying value of the reporting unit exceeds the fair value, the second step of the impairment process is
performed and the implied fair value of the reporting unit is compared to the carrying amount of the
goodwill. The implied fair value of the goodwill is determined the same way as the goodwill recognized
in a business combination. The Company assigns the fair value of a reporting unit to all of the assets
and liabilities of that unit (including unrecognized intangible assets) and any excess goes to the goodwill
(its implied fair value). Any excess carrying amount of the goodwill over the implied fair value of the
goodwill, is the amount of the impairment loss recognized.
91