Rite Aid 2016 Annual Report Download - page 97

RITE AID CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Years Ended February 27, 2016, February 28, 2015 and March 1, 2014
(In thousands, except per share amounts)
1. Summary of Significant Accounting Policies (Continued)
which the adjustment amounts are determined. This amendment requires an acquirer to record the
income statement effects, if any, as a result of the change in provisional amounts in the period’s
financial statements when the adjustment is determined, calculated as if the accounting had been
completed at the acquisition date. This amendment eliminates the requirement to retrospectively
account for provisional adjustments. This ASU is effective for fiscal years beginning after December 15,
2015, and for interim periods within those fiscal years. Early adoption of this ASU is permitted. The
adoption of this guidance in the fiscal fourth quarter of fiscal 2016 did not materially affect the
Company’s financial position, results of operations or cash flows.
In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740)—Balance Sheet
Classification of Deferred Taxes. This ASU requires an entity to classify deferred income tax assets and
liabilities as noncurrent on the entity’s classified statement of financial position. This amendment
eliminates the current requirement to classify deferred tax assets and liabilities as either current or
noncurrent on the entity’s statement of financial position. This amendment may be applied either
prospectively to all deferred tax liabilities and assets or retrospective to all periods presented. If applied
prospectively, the entity should disclose in the first interim and first annual period of change, the
nature of and the reason for the change in accounting principle and a statement that prior periods
were not retrospectively adjusted. If applied retrospectively, the entity should disclose in the first
interim and first annual period of change, the nature of and reason for the change in accounting
principle and quantitative information about the effects of the accounting change on prior periods. This
ASU is effective for fiscal years beginning after December 15, 2016, and for interim periods within
those fiscal years. Earlier application is permitted as of the beginning of an interim or annual reporting
period. The Company has elected to early adopt this ASU and consequently classified deferred income
tax assets and liabilities as noncurrent beginning with the fiscal year ending February 27, 2016.
2. Acquisition
On June 24, 2015, the Company completed its previously announced acquisition of TPG VI
Envision BL, LLC and Envision Topco Holdings, LLC (‘‘EnvisionRx’’), pursuant to the terms of an
agreement (‘‘Agreement’’) dated February 10, 2015. EnvisionRx, which was a portfolio company of TPG
Capital L.P. prior to its acquisition by the Company, is a full-service pharmacy services provider.
EnvisionRx provides both transparent and traditional PBM options through its EnvisionRx and
MedTrak PBMs, respectively. EnvisionRx also offers fully integrated mail-order and specialty pharmacy
services through Orchard Pharmaceutical Services; access to the nation’s largest cash pay infertility
discount drug program via Design Rx; an innovative claims adjudication software platform in Laker
Software; and a national Medicare Part D prescription drug plan through EIC’s EnvisionRx Plus Silver
product for the low income auto-assign market and its Clear Choice product for the chooser market.
EnvisionRx is headquartered in Twinsburg, Ohio and operates as a 100 percent owned subsidiary of the
Company.
Pursuant to the terms of the Agreement, as consideration for the Acquisition, the Company paid
$1,882,211 in cash and issued 27,754 shares of Rite Aid common stock. The Company financed the
cash portion of the Acquisition with borrowings under its Amended and Restated Senior Secured
Revolving Credit Facility, and the net proceeds from the April 2, 2015 issuance of $1,800,000 aggregate
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