Rite Aid 2015 Annual Report Download - page 82

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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)
5. Lease Termination and Impairment Charges (Continued)
The Company recorded impairment charges of $14,438 in fiscal 2015, $13,077 in fiscal 2014 and
$24,892 in fiscal 2013. The Company’s methodology for recording impairment charges has been
consistently applied in the periods presented.
At February 28, 2015, $1.978 billion of the Company’s long-lived assets, including intangible assets,
were associated with 4,570 active operating stores.
If an operating store’s estimated future undiscounted cash flows are not sufficient to cover its
carrying value, its carrying value is reduced to fair value which is its estimated future discounted cash
flows. The discount rate is commensurate with the risks associated with the recovery of a similar asset.
An impairment charge is recorded in the period that the store does not meet its original return on
investment and/or has an operating loss for the last 2 years and its projected cash flows do not exceed
its current asset carrying value. The amount of the impairment charge is the entire difference between
the current asset carrying value and the estimated fair value of the assets using discounted future cash
flows. Most stores are fully impaired in the period that the impairment charge is originally recorded.
The Company recorded impairment charges for active stores of $12,126 in fiscal 2015, $11,748 in
fiscal 2014 and $23,973 in fiscal 2013.
The Company reviews key performance results for active stores on a quarterly basis and approves
certain stores for closure. Impairment for closed stores, if any (many stores are closed on lease
expiration), are recorded in the quarter the closure decision is approved. Closure decisions are made
on an individual store or regional basis considering all of the macro-economic, industry and other
factors, in addition to, the active store’s individual operating results. The Company recorded
impairment charges for closed facilities of $2,312 in fiscal 2015, $1,329 in fiscal 2014 and $919 in fiscal
2013.
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