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RITE AID CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended February 27, 2010, February 28, 2009 and March 1, 2008
(In thousands, except per share amounts)
1. Summary of Significant Accounting Policies
Description of Business
The Company is a Delaware corporation and through its wholly-owned subsidiaries, operates retail
drugstores in the United States of America. It is one of the largest retail drugstore chains in the United
States, with 4,780 stores in operation as of February 27, 2010. The Company’s drugstores’ primary
business is pharmacy services. The Company also sells a full selection of health and beauty aids and
personal care products, seasonal merchandise and a large private brand product line.
The Company’s operations consist solely of the retail drug segment. Revenues are as follows:
Year Ended
February 27, February 28, March 1,
2010 2009 2008
(52 Weeks) (52 Weeks) (52 Weeks)
Pharmacy sales .................... $17,355,964 $17,604,284 $16,179,170
Front end sales .................... 8,213,388 8,581,115 8,049,446
Other revenue ..................... 99,765 103,869 98,230
$25,669,117 $26,289,268 $24,326,846
Sales of prescription drugs represented approximately 67.9%, 67.2%, and 66.7% of the Company’s
total sales in fiscal years 2010, 2009 and 2008, respectively. The Company’s principal classes of products
in fiscal 2010 were the following:
Percentage
Product Class of Sales
Prescription drugs ......................................... 67.9%
Over-the-counter medications and personal care ................... 9.4%
Health and beauty aids ..................................... 5.0%
General merchandise and other ............................... 17.7%
Fiscal Year
The Company’s fiscal year ends on the Saturday closest to February 29 or March 1. The fiscal
years ended February 27, 2010, February 28, 2009 and March 1, 2008 included 52 weeks.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and all of its wholly
owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in
consolidation.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand and highly liquid investments, which are readily
convertible to known amounts of cash and which have original maturities of three months or less when
purchased.
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