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 Rite Aid Reports Fiscal 2017 Fourth Quarter and Full Year Results
   Tuesday, April 25, 2017 7:00:08 AM ET

--Fourth Quarter Adjusted Net Loss Per Diluted Share of $0.00, Compared to the Prior Year Adjusted Net Income Per Diluted Share of $0.07; Full Year Adjusted Net Income Per Diluted Share of $0.06, Compared to the Prior Year of $0.24

--Adjusted EBITDA of $264.3 Million for the Fourth Quarter, Compared to the Prior Year Adjusted EBITDA of $383.0 Million; Full Year Adjusted EBITDA of $1,137.1 Million, Compared to the Prior Year of $1,402.3 Million

Rite Aid Corporation (RAD ) today reported operating results for its fourteen week fourth quarter and fifty-three week fiscal year ended March 4, 2017.

For the fourth quarter, the company reported revenues of $8.5 billion, net loss of $21.1 million, or $0.02 per diluted share, Adjusted net loss of $3.2 million, or $0.00 per diluted share and Adjusted EBITDA of $264.3 million, or 3.1 percent of revenues. For the full year, the company reported revenues of $32.8 billion, net income of $4.1 million, or $0.00 per diluted share, Adjusted net income of $66.8 million or $0.06 per diluted share and Adjusted EBITDA of $1,137.1 million, or 3.5 percent of revenues. The fiscal 2017 fourth quarter and full year results benefited from the extra week in fiscal 2017.



Commenting on Rite Aid’s fourth-quarter and full-year results, Chairman and CEO John Standley said: "We remain confident that the completion of our proposed merger with Walgreens Boots Alliance is in the best interest of Rite Aid shareholders, customers and associates. However, despite our team’s continued focus on growing our business, the extended duration of the merger process is having a negative impact on our results. In addition, we continue to face reimbursement rate challenges that we have been unable to offset with drug cost reductions. As we remain actively engaged in discussions with the Federal Trade Commission to gain regulatory approval for the merger, we are also taking steps to review our ongoing strategy, reduce costs and make necessary changes to our business to improve our performance going forward."

Fourth Quarter Summary

Revenues for the quarter were $8.5 billion compared to revenues of $8.3 billion in the prior year’s fourth quarter, an increase of $271.2 million or 3.3 percent. Retail Pharmacy Segment revenues were $7.1 billion and increased 4.3 percent compared to the prior year period primarily as a result of the extra week in the fourth quarter, partially offset by a decrease in same store sales. Revenues in the company’s Pharmacy Services Segment were $1.5 billion and decreased 1.3 percent compared to the prior year period.

Same store sales for the quarter decreased 3.0 percent over the prior year, consisting of a 4.3 percent decrease in pharmacy sales and a 0.3 percent decrease in front-end sales. Pharmacy sales included an approximate 246 basis point negative impact from new generic introductions. The number of prescriptions filled in same stores, adjusted to 30-day equivalents, decreased 0.3 percent over the prior year period. Prescription sales accounted for 67.1 percent of total drugstore sales, and third party prescription revenue was 98.4 percent of pharmacy sales.

Net loss was $21.1 million or $0.02 per diluted share compared to last year’s fourth quarter net income of $65.6 million or $0.06 per diluted share. The decline in operating results is due primarily to a decline in Adjusted EBITDA, partially offset by a higher LIFO credit.

Adjusted EBITDA (which is reconciled to net income in the attached tables) was $264.3 million or 3.1 percent of revenues for the fourth quarter compared to $383.0 million or 4.6 percent of revenues for the same period last year. The decline in Adjusted EBITDA is due to a decrease of $129.1 million in the Retail Pharmacy Segment, resulting primarily from lower pharmacy gross profit, which decreased because of lower reimbursement rates and script count, partially offset by good cost control and the benefit from the extra week in the quarter. The decline in Retail Pharmacy Segment Adjusted EBITDA was partially offset by an increase of $10.4 million of Pharmacy Services Segment Adjusted EBITDA, as a result of higher gross profit in the segment.

In the fourth quarter, the company opened 2 stores, relocated 5 stores, remodeled 89 stores and expanded 2 stores, bringing the total number of wellness stores chainwide to 2,418. The company closed 13 stores, resulting in a total store count of 4,536 at the end of the fourth quarter. The company also opened 7 clinics in the fourth quarter, bringing the total to 99.

Full Year Results

For the fiscal year ended March 4, 2017, Rite Aid had revenues of $32.8 billion compared to revenues of $30.7 billion in the prior year, an increase of $2.1 billion or 6.9 percent. Retail Pharmacy Segment revenues were $26.8 billion which were flat compared to the prior year primarily as a result of the extra week this year, offset by a decrease in same store sales. Revenues in the company’s Pharmacy Services Segment, which was acquired on June 24, 2015, were $6.4 billion.

Same store sales for the year decreased 2.2 percent consisting of a 3.2 percent decrease in pharmacy sales and a 0.2 percent increase in front end sales. Pharmacy sales included an approximate 182 basis point negative impact from new generic introductions. The number of prescriptions filled in same stores, adjusted to 30-day equivalents, increased 0.1 percent over the prior year period. Prescription sales accounted for 68.3 percent of total drugstore sales, and third party prescription revenue was 98.2 percent of pharmacy sales.

Net income for fiscal 2017 was $4.1 million or $0.00 per diluted share compared to last year’s net income of $165.5 million or $0.16 per diluted share. The decline in operating results is due primarily to a decline in Adjusted EBITDA and an increase in Pharmacy Services Segment amortization expense, partially offset by lower income tax expense, a $33.2 million loss on debt retirement in the prior year and lower interest expense.

Adjusted EBITDA was $1,137.1 million or 3.5 percent of revenues for the year compared to $1,402.3 million or 4.6 percent of revenues for last year. The decline in Adjusted EBITDA is due to a decrease of $352.1 million in the Retail Pharmacy Segment, resulting from lower pharmacy gross profit due to lower reimbursement rates and script count. The decline in Retail Pharmacy Segment Adjusted EBITDA was partially offset by an increase of $86.9 million of Pharmacy Services Segment Adjusted EBITDA. This increase was due to strong operating results in the current year and the fact that the prior year’s Pharmacy Services Segment results do not reflect a full year’s ownership of EnvisionRx.

For the year, the company relocated 24 stores, acquired 3 stores, remodeled 348 stores, expanded 2 stores, opened 12 stores, and closed 40 stores. The company also opened 21 clinics during the fiscal year.

Rite Aid Merger with Walgreens Boots Alliance

As announced on January 30, 2017, Walgreens Boots Alliance, Inc. ("WBA") and Rite Aid entered into an amendment to the original merger agreement dated as of October 27, 2015. Under the terms of the amendment, WBA and Rite Aid agreed to reduce the price for each share of Rite Aid common stock to be paid by WBA. In addition, WBA will be required to divest up to 1,200 Rite Aid stores and certain additional related assets if required to obtain regulatory approval. The exact per share merger consideration will be determined based on the number of retail stores that WBA agrees to divest in connection with the parties’ efforts to obtain the required regulatory approvals for the merger, with the price set at $7.00 per share if 1,000 retail stores or fewer retail stores are required to be divested and at $6.50 per share if 1,200 retail stores are required to be divested (or more, if WBA agrees to sell more). Additionally, WBA and Rite Aid agreed to extend the end date to July 31, 2017. While WBA and Rite Aid continue to be actively engaged in discussions with the Federal Trade Commission regarding the transaction and are working toward a close of the merger by July 31, 2017, there can be no assurance that the requisite regulatory approvals will be obtained, or that the merger will be completed within the time period contemplated by the merger agreement on the current terms, if at all. The transaction is subject to approval by the holders of Rite Aid’s common stock, the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other customary closing conditions.

Rite Aid is one of the nation’s leading drugstore chains with 4,536 stores in 31 states and the District of Columbia. Information about Rite Aid, including corporate background and press releases, is available through Rite Aid’s website at www.riteaid.com.

Cautionary Statement Regarding Forward Looking Statements

Statements in this release that are not historical and statements regarding the expected timing of the closing of the proposed merger with WBA, the closing of the proposed sale of stores and assets to Fred’s and the ability of the parties to complete such transactions considering the various closing conditions and any assumptions underlying any of the foregoing, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements regarding the expected timing of the closing of the merger with WBA and sale of stores and assets to Fred’s; the ability of the parties to complete the transactions considering the various closing conditions; the outcome of legal and regulatory matters, including with respect to the outcome of discussions with the Federal Trade Commission and otherwise in connection with the pending acquisition of Rite Aid by WBA; the number of stores divested in connection with such pending acquisition and the terms, timing and likelihood of consummation of such transactions; the expected benefits of the transaction such as improved operations, enhanced revenues and cash flow, growth potential, market profile and financial strength; the competitive ability and position of WBA following completion of the proposed transaction; and any assumptions underlying any of the foregoing. Words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," and "will" and variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and involve risks, assumptions and uncertainties, including, but not limited to, our high level of indebtedness and our ability to make interest and principal payments on our debt and satisfy the other covenants contained in our debt agreements; general economic, industry, market, competitive, regulatory and political conditions; our ability to improve the operating performance of our stores in accordance with our long term strategy; the impact of private and public third-party payers continued reduction in prescription drug reimbursements and efforts to encourage mail order; our ability to manage expenses and our investments in working capital; outcomes of legal and regulatory matters; changes in legislation or regulations, including healthcare reform; our ability to achieve the benefits of our efforts to reduce the costs of our generic and other drugs; risks related to the proposed transactions, including the possibility that the transactions may not close, including because one or more closing conditions to the transactions, including certain regulatory approvals, may not be satisfied or waived, on a timely basis or otherwise, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transactions, or may require conditions, limitations or restrictions in connection with such approvals, including the risk that the Federal Trade Commission may not approve the transaction despite the changes the parties to the merger agreement, as amended, and the asset purchase agreement, are willing to make, or that the required approval of the amended merger agreement by the stockholders of Rite Aid may not be obtained; the risk that stockholders may receive the bottom of the price range for the per share merger consideration; the risk that the merger agreement may be terminated in certain circumstances that require Rite Aid to pay WBA a termination fee of $325 million; the risk that the parties to the asset purchase agreement, dated as of December 19, 2016, by and among Rite Aid, WBA, Fred’s, Inc. and AFAE, LLC may not receive regulatory approval or be able to complete the transactions contemplated thereby considering the various closing conditions; the risk that there may be a material adverse change of Rite Aid or the stores proposed to be sold to Fred’s, or the business of Rite Aid or the stores proposed to be sold to Fred’s may suffer as a result of uncertainty surrounding the transactions; risks related to the ability to realize the anticipated benefits of the proposed transactions; risks associated with the financing of the proposed transactions; disruption from the proposed transactions making it more difficult to maintain business and operational relationships; the continuing effect of the merger, including the effect of the announcement of the merger agreement amendment, on Rite Aid’s business relationships (including, without limitation, customers and suppliers), operating results and business generally; risks related to diverting management’s or employees’ attention from ongoing business operations; the risk that Rite Aid’s stock price may decline significantly if the merger is not completed; significant transaction costs; unknown liabilities; the risk of litigation and/or regulatory actions related to the proposed transactions; potential changes to our strategy in the event the proposed transactions do not close, which may include delaying or reducing capital or other expenditures, selling assets or other operations, attempting to restructure or refinance our debt, or seeking additional capital, and other business effects. These and other risks, assumptions and uncertainties are more fully described in Item 1A (Risk Factors) of our most recent Annual Report on Form 10-K, in the preliminary proxy statement, as it may be amended, that we filed with the Securities and Exchange Commission on March 3, 2017 in connection with the proposed merger, and in other documents that we file or furnish with the Securities and Exchange Commission, which you are encouraged to read. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Additionally, there can be no assurance that the requisite regulatory approvals for the proposed merger and proposed sale of stores and assets to Fred’s will be obtained, or that the proposed transactions will be completed within the required time period or at all, or that the expected benefits of the proposed transactions will be realized. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Rite Aid expressly disclaims any current intention to update publicly any forward-looking statement after the distribution of this release, whether as a result of new information, future events, changes in assumptions or otherwise.

Additional Information and Where to Find It

In connection with the proposed strategic combination with WBA, as amended, Rite Aid prepared a preliminary proxy statement on Schedule 14A that has been filed with the SEC on March 3, 2017. The preliminary proxy statement is not yet final and will be amended. Following the filing of the definitive proxy statement with the SEC, Rite Aid will mail the definitive proxy statement and a proxy card to each stockholder entitled to vote at the special meeting relating to the proposed merger. INVESTORS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. Investors may obtain the proxy statement, as well as other filings containing information about Rite Aid, free of charge, from the SEC’s Web site (www.sec.gov). Investors may also obtain Rite Aid’s SEC filings in connection with the transaction, free of charge, from Rite Aid’s Web site (www.RiteAid.com) under the link "Investor Relations" and then under the tab "SEC Filings," or by directing a request to Rite Aid, Byron Purcell, Attention: Senior Director, Treasury Services & Investor Relations.

Participants in the Merger Solicitation

The directors, executive officers and employees of Rite Aid and other persons may be deemed to be participants in the solicitation of proxies in respect of the transaction. Information regarding Rite Aid’s directors and executive officers is available in its definitive proxy statement for its 2016 annual meeting of stockholders filed with the SEC on May 13, 2016. This document can be obtained free of charge from the sources indicated above. Other information regarding the interests of the participants in the proxy solicitation is set forth in the preliminary proxy statement, as it may be amended, that has been filed with the SEC on March 3, 2017. This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Reconciliation of Non-GAAP Financial Measures

The company separately reports financial results on the basis of Adjusted Net Income, Adjusted Net Income per diluted share, and Adjusted EBITDA, which are non-GAAP financial measures. See the attached tables for a reconciliation of Adjusted Net Income, Adjusted Net Income per diluted share and Adjusted EBITDA to net income, and net income per diluted share, which are the most directly comparable GAAP financial measures. Adjusted Net Income and Adjusted Net Income per diluted share exclude amortization of EnvisionRx intangible assets, merger and acquisition-related costs, loss on debt retirements and LIFO adjustments. Adjusted EBITDA is defined as net income excluding the impact of income taxes, interest expense, depreciation and amortization, LIFO adjustments, charges or credits for facility closing and impairment, inventory write-downs related to store closings, debt retirements and other items (including stock-based compensation expense, merger and acquisition-related costs, severance and costs related to distribution center closures, gain or loss on sale of assets and revenue deferrals related to our customer loyalty program).

                                                                                                                                      
                                                                                                                  RITE AID CORPORATION AND SUBSIDIARIES
                                                                                                                                                                                                                                                    
                                                                                                                       CONSOLIDATED BALANCE SHEETS
                                                                                                                         (Dollars in thousands)
                                                                                                                               (unaudited)
                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                    
                                                                                                                                        March 4, 2017                                                                                February 27, 2016
                                                                                                                    -----------------------------------------------------                                          -----------------------------------------------------
ASSETS
Current assets:
     Cash and cash equivalents                                                                                                         $    245,410                                                                                   $    124,471
     Accounts receivable, net                                                                                                             1,771,126                                                                                      1,601,008
     Inventories, net of LIFO reserve of $999,776 and $1,006,396                                                                          2,837,211                                                                                      2,697,104
     Prepaid expenses and other current assets                                                                           211,541                                                  128,144  
                                                                                                                    -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
          Total current assets                                                                                                            5,065,288                                                                                      4,550,727
Property, plant and equipment, net                                                                                                        2,251,692                                                                                      2,255,398
Goodwill                                                                                                                                  1,715,479                                                                                      1,713,475
Other intangibles, net                                                                                                                      835,795                                                                                      1,004,379
Deferred tax assets                                                                                                                       1,505,564                                                                                      1,539,141
Other assets                                                                                                             219,934                                                  213,890  
                                                                                                                    -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
          Total assets                                                                                                                 $ 11,593,752                                                                $ 11,277,010  
                                                                                                                    ==================== ========== ====================                                           ==================== ========== ====================
                                                                                                                                                                                                                                                    
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
     Current maturities of long-term debt and lease financing obligations                                                              $     21,335                                                                                   $     26,848
     Accounts payable                                                                                                                     1,613,909                                                                                      1,542,797
     Accrued salaries, wages and other current liabilities                                                             1,370,004                                                1,427,250  
                                                                                                                    -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
          Total current liabilities                                                                                                       3,005,248                                                                                      2,996,895
Long-term debt, less current maturities                                                                                                   7,263,288                                                                                      6,914,393
Lease financing obligations, less current maturities                                                                                         44,070                                                                                         52,895
Other noncurrent liabilities                                                                                             667,076                                                  731,399  
                                                                                                                    -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
          Total liabilities                                                                                                              10,979,682                                                                                     10,695,582
                                                                                                                                                                                                                                                    
Commitments and contingencies                                                                                                                     -                                                                                              -
Stockholders’ equity:
     Common stock                                                                                                                         1,053,690                                                                                      1,047,754
     Additional paid-in capital                                                                                                           4,839,854                                                                                      4,822,665
     Accumulated deficit                                                                                                                 (5,237,157 )                                                                                   (5,241,210 )
     Accumulated other comprehensive loss                                                                                (42,317 )                                                                   (47,781 )
                                                                                                                    -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
          Total stockholders’ equity                                                                                     614,070                                                  581,428  
                                                                                                                    -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
          Total liabilities and stockholders’ equity                                                                                   $ 11,593,752                                                                $ 11,277,010  
                                                                                                                    ==================== ========== ====================                                           ==================== ========== ====================
                                                                                                                                                                                                                                                    
                                                                                                                                      
                                                                                                                 RITE AID CORPORATION AND SUBSIDIARIES
                                                                                                                                                                                                                                                   
                                                                                                                 CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                                                           (Dollars in thousands, except per share amounts)
                                                                                                                              (unaudited)
                                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                                   
                                                                                                                                     Fourteen weeks ended                                                                          Thirteen weeks ended
                                                                                                                                         March 4, 2017                                                                               February 27, 2016
                                                                                                                     -------------------------------------------------                                             -------------------------------------------------
Revenues                                                                                                                                $ 8,541,360                                                                                   $ 8,270,136
Costs and expenses:
     Cost of revenues                                                                                                                     6,473,198                                                                                     6,228,581
     Selling, general and administrative expenses                                                                                         1,897,003                                                                                     1,810,288
     Lease termination and impairment charges                                                                                                35,015                                                                                        26,753
     Interest expense                                                                                                                       115,181                                                                                       103,678
     Gain on sale of assets, net                                                                                          (5,755 )                                                                     (348 )
                                                                                                                     -------------------- --------- --------------------                                           -------------------- --------- --------------------
                                                                                                                                                                                                                                                   
                                                                                                                       8,514,642                                               8,168,952  
                                                                                                                     -------------------- --------- --------------------                                           -------------------- --------- --------------------
                                                                                                                                                                                                                                                   
Income before income taxes                                                                                                                   26,718                                                                                       101,184
Income tax expense                                                                                                        47,860                                                  35,567  
                                                                                                                     -------------------- --------- --------------------                                           -------------------- --------- --------------------
     Net (loss) income                                                                                                                  $   (21,142 )                                                                                 $    65,617  
                                                                                                                     ==================== ========= ====================                                           ==================== ========= ====================
                                                                                                                                                                                                                                                   
Basic and diluted (loss) earnings per share:
                                                                                                                                                                                                                                                   
Numerator for (loss) earnings per share:
     (Loss) income attributable to common stockholders - basic and diluted                                                              $   (21,142 )                                                                                 $    65,617  
                                                                                                                     ==================== ========= ====================                                           ==================== ========= ====================
                                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                                   
Denominator:
     Basic weighted average shares                                                                                                        1,045,929                                                                                     1,041,157
     Outstanding options and restricted shares, net                                                                            -                                                  17,357  
                                                                                                                     -------------------- --------- --------------------                                           -------------------- --------- --------------------
                                                                                                                                                                                                                                                   
     Diluted weighted average shares                                                                                   1,045,929                                               1,058,514  
                                                                                                                     ==================== ========= ====================                                           ==================== ========= ====================
                                                                                                                                                                                                                                                   
     Basic and diluted (loss) income per share                                                                                          $     (0.02 )                                                                                 $      0.06
                                                                                                                                                                                                                                                   
                                                                                                                                
                                                                                                         RITE AID CORPORATION AND SUBSIDIARIES
                                                                                                                                                                                                                                   
                                                                                                         CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                                                   (Dollars in thousands, except per share amounts)
                                                                                                                      (unaudited)
                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                   
                                                                                                                             Fifty-three weeks ended                                                                    Fifty-two weeks ended
                                                                                                                                  March 4, 2017                                                                           February 27, 2016
                                                                                                              --------------------------------------------------                                             ----------------------------------------
Revenues                                                                                                                         $ 32,845,073                                                                                   $           30,736,657
Costs and expenses:
     Cost of revenues                                                                                                              25,071,008                                                                                               22,910,402
     Selling, general and administrative expenses                                                                                   7,242,359                                                                                                7,013,346
     Lease termination and impairment charges                                                                                          55,294                                                                                                   48,423
     Interest expense                                                                                                                 431,991                                                                                                  449,574
     Loss on debt retirements, net                                                                                                          -                                                                                                   33,205
     (Gain) loss on sale of assets, net                                                                             (4,024 )                                                                               3,303
                                                                                                              -------------------- ---------- --------------------                                           -------------------- --------------------
                                                                                                                                                                                                                                   
                                                                                                                32,796,628                                                         30,458,253
                                                                                                              -------------------- ---------- --------------------                                           -------------------- --------------------
                                                                                                                                                                                                                                   
Income before income taxes                                                                                                             48,445                                                                                                  278,404
Income tax expense                                                                                                  44,392                                                            112,939
                                                                                                              -------------------- ---------- --------------------                                           -------------------- --------------------
     Net income                                                                                                                  $      4,053                                                                $              165,465
                                                                                                              ==================== ========== ====================                                           ==================== ====================
                                                                                                                                                                                                                                   
Basic and diluted earnings per share:
                                                                                                                                                                                                                                   
Numerator for earnings per share:
     Income attributable to common stockholders - basic and diluted                                                              $      4,053                                                                $              165,465
                                                                                                              ==================== ========== ====================                                           ==================== ====================
                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                   
Denominator:
     Basic weighted average shares                                                                                                  1,044,427                                                                                                1,024,377
     Outstanding options and restricted shares, net                                                                 16,399                                                             17,985
                                                                                                              -------------------- ---------- --------------------                                           -------------------- --------------------
                                                                                                                                                                                                                                   
     Diluted weighted average shares                                                                             1,060,826                                                          1,042,362
                                                                                                              ==================== ========== ====================                                           ==================== ====================
                                                                                                                                                                                                                                   
     Basic and diluted income per share                                                                                          $       0.00                                                                                   $                 0.16
                                                                                                                                                                                                                                   
                                                                                                                                      
                                                                                                                RITE AID CORPORATION AND SUBSIDIARIES
                                                                                                                                                                                                                                                
                                                                                                       CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
                                                                                                                           (In thousands)
                                                                                                                             (unaudited)
                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                
                                                                                                                                      Fourteen weeks ended                                                                       Thirteen weeks ended
                                                                                                                                          March 4, 2017                                                                            February 27, 2016
                                                                                                                       -----------------------------------------------                                             ----------------------------------------------
Net (loss) income                                                                                                                         $ (21,142 )                                                                                 $ 65,617
Other comprehensive income (loss):
     Defined benefit pension plans:
          Amortization of prior service cost, net transition obligation and                                                3,421                                               (3,723 )
          net actuarial losses included in net periodic pension cost, net of
          $2,247 tax expense and $2,875 tax benefit
                                                                                                                       -------------------- ------- --------------------                                           -------------------- ------ --------------------
     Total other comprehensive income (loss)                                                                               3,421                                               (3,723 )
                                                                                                                       -------------------- ------- --------------------                                           -------------------- ------ --------------------
Comprehensive (loss) income                                                                                                               $ (17,721 )                                                                                 $ 61,894  
                                                                                                                       ==================== ======= ====================                                           ==================== ====== ====================
                                                                                                                                                                                                                                                
                                                                                                                     
                                                                                                        RITE AID CORPORATION AND SUBSIDIARIES
                                                                                                                                                                                                   
                                                                                                   CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                                                                                                   (In thousands)
                                                                                                                     (unaudited)
                                                                                                                                                                                                   
                                                                                                                                                                                                   
                                                                                                                            Fifty-three weeks ended                                                              Fifty-two weeks ended
                                                                                                                                 March 4, 2017                                                                     February 27, 2016
                                                                                                                       -------------------------------                                            -----------------------------------------------
Net income                                                                                                                                $       4,053                                                              $ 165,465
Other comprehensive income (loss):
     Defined benefit pension plans:
          Amortization of prior service cost, net transition obligation and                                                    5,464                                              (1,931 )
          net actuarial losses included in net periodic pension cost, net of
          $3,600 tax expense and $1,681 tax benefit
                                                                                                                       -------------------- -----------                                           -------------------- ------- --------------------
     Total other comprehensive income (benefit)                                                                                5,464                                              (1,931 )
                                                                                                                       -------------------- -----------                                           -------------------- ------- --------------------
Comprehensive income                                                                                                                      $       9,517                                                              $ 163,534  
                                                                                                                       ==================== ===========                                           ==================== ======= ====================
                                                                                                                                                                                                                                
                                                                                                                                
                                                                                                              RITE AID CORPORATION AND SUBSIDIARIES
                                                                                                                                                                                                                                             
                                                                                                           SUPPLEMENTAL SEGMENT OPERATING INFORMATION
                                                                                                                     (Dollars in thousands)
                                                                                                                           (unaudited)
                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                             
                                                                                                                               Fourteen weeks ended                                                                          Thirteen weeks ended
                                                                                                                                   March 4, 2017                                                                               February 27, 2016
                                                                                                               -------------------------------------------------                                             -------------------------------------------------
                                                                                                                                                                                                                                             
Retail Pharmacy Segment
     Revenues (a)                                                                                                                 $ 7,120,364                                                                                   $ 6,826,984
     Cost of revenues (a)                                                                                        5,155,550                                               4,873,484  
                                                                                                               -------------------- --------- --------------------                                           -------------------- --------- --------------------
     Gross profit                                                                                                                   1,964,814                                                                                     1,953,500
     LIFO credit                                                                                                   (47,881 )                                                                   (6,796 )
                                                                                                               -------------------- --------- --------------------                                           -------------------- --------- --------------------
     FIFO gross profit                                                                                                              1,916,933                                                                                     1,946,704
                                                                                                                                                                                                                                             
     Gross profit as a percentage of revenues                                                                                           27.59 %                                                                                       28.61 %
     LIFO credit as a percentage of revenues                                                                                            -0.67 %                                                                                       -0.10 %
     FIFO gross profit as a percentage of revenues                                                                                      26.92 %                                                                                       28.51 %
                                                                                                                                                                                                                                             
     Selling, general and administrative expenses                                                                                   1,815,699                                                                                     1,737,759
     Selling, general and administrative expenses as a percentage of                                                                    25.50 %                                                                                       25.45 %
     revenues
                                                                                                                                                                                                                                             
     Cash interest expense                                                                                                            109,584                                                                                        98,081
     Non-cash interest expense                                                                                       5,639                                                   5,342  
                                                                                                               -------------------- --------- --------------------                                           -------------------- --------- --------------------
     Total interest expense                                                                                                           115,223                                                                                       103,423
                                                                                                                                                                                                                                             
     Adjusted EBITDA                                                                                                                  219,720                                                                                       348,785
     Adjusted EBITDA as a percentage of revenues                                                                                         3.09 %                                                                                        5.11 %
                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                             
Pharmacy Services Segment
     Revenues (a)                                                                                                                 $ 1,510,814                                                                                   $ 1,530,729
     Cost of revenues (a)                                                                                        1,407,466                                               1,442,674  
                                                                                                               -------------------- --------- --------------------                                           -------------------- --------- --------------------
     Gross profit                                                                                                                     103,348                                                                                        88,055
                                                                                                                                                                                                                                             
     Gross profit as a percentage of revenues                                                                                            6.84 %                                                                                        5.75 %
                                                                                                                                                                                                                                             
     Adjusted EBITDA                                                                                                                   44,619                                                                                        34,224
     Adjusted EBITDA as a percentage of revenues                                                                                         2.95 %                                                                                        2.24 %
                                                                                                                                                                                                                                             
(a) -   Revenues and cost of revenues include $89,818 and $87,577 of
                           inter-segment activity for the fourteen weeks ended March 4, 2017
                           and the thirteen weeks ended February 27, 2016, respectively, that
                           is eliminated in consolidation.
                            
                                                                                                                                 
                                                                                                               RITE AID CORPORATION AND SUBSIDIARIES
                                                                                                                                                                                                                                               
                                                                                                            SUPPLEMENTAL SEGMENT OPERATING INFORMATION
                                                                                                                      (Dollars in thousands)
                                                                                                                            (unaudited)
                                                                                                                                                                                                                                               
                                                                                                                                                                                                                                               
                                                                                                                              Fifty-three weeks ended                                                                         Fifty-two weeks ended
                                                                                                                                   March 4, 2017                                                                                February 27, 2016
                                                                                                               --------------------------------------------------                                             --------------------------------------------------
                                                                                                                                                                                                                                               
Retail Pharmacy Segment
     Revenues (a)                                                                                                                 $ 26,816,669                                                                                   $ 26,865,931
     Cost of revenues (a)                                                                                        19,435,336                                               19,270,502  
                                                                                                               -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
     Gross profit                                                                                                                    7,381,333                                                                                      7,595,429
     LIFO charge                                                                                                     (6,620 )                                                                    11,163  
                                                                                                               -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
     FIFO gross profit                                                                                                               7,374,713                                                                                      7,606,592
                                                                                                                                                                                                                                               
     Gross profit as a percentage of revenues                                                                                            27.53 %                                                                                        28.27 %
     LIFO charge as a percentage of revenues                                                                                             -0.02 %                                                                                         0.04 %
     FIFO gross profit as a percentage of revenues                                                                                       27.50 %                                                                                        28.31 %
                                                                                                                                                                                                                                               
     Selling, general and administrative expenses                                                                                    6,948,860                                                                                      6,824,698
     Selling, general and administrative expenses as a percentage of                                                                     25.91 %                                                                                        25.40 %
     revenues
                                                                                                                                                                                                                                               
     Cash interest expense                                                                                                             410,386                                                                                        412,133
     Non-cash interest expense                                                                                       21,612                                                   37,170  
                                                                                                               -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
     Total interest expense                                                                                                            431,998                                                                                        449,303
                                                                                                                                                                                                                                               
     Adjusted EBITDA                                                                                                                   948,906                                                                                      1,300,905
     Adjusted EBITDA as a percentage of revenues                                                                                          3.54 %                                                                                         4.84 %
                                                                                                                                                                                                                                               
                                                                                                                                                                                                                                               
Pharmacy Services Segment
     Revenues (a)                                                                                                                 $  6,393,884                                                                                   $  4,103,513
     Cost of revenues (a)                                                                                         6,001,152                                                3,872,687  
                                                                                                               -------------------- ---------- --------------------                                           -------------------- ---------- --------------------
     Gross profit                                                                                                                      392,732                                                                                        230,826
                                                                                                                                                                                                                                               
     Gross profit as a percentage of revenues                                                                                             6.14 %                                                                                         5.63 %
                                                                                                                                                                                                                                               
     Adjusted EBITDA                                                                                                                   188,235                                                                                        101,357
     Adjusted EBITDA as a percentage of revenues                                                                                          2.94 %                                                                                         2.47 %
                                                                                                                                                                                                                                               
(a) -   Revenues and cost of revenues include $365,480 and $232,787 of
                           inter-segment activity for the fifty-three weeks ended March 4,
                           2017 and fifty-two weeks ended February 27, 2016, respectively,
                           that is eliminated in consolidation.
                            
                                                                                                                     
                                                                                                        RITE AID CORPORATION AND SUBSIDIARIES
                                                                                                              SUPPLEMENTAL INFORMATION
                                                                                               RECONCILIATION OF NET (LOSS) INCOME TO ADJUSTED EBITDA
                                                                                                                   (In thousands)
                                                                                                                     (unaudited)
                                                                                                                                                                                                                                
                                                                                                                                                                                                                                
                                                                                                                     Fourteen weeks ended                                                                        Thirteen weeks ended
                                                                                                                         March 4, 2017                                                                             February 27, 2016
                                                                                                      -----------------------------------------------                                             -----------------------------------------------
                                                                                                                                                                                                                                
                                                                                                                                                                                                                                
Reconciliation of net (loss) income to adjusted EBITDA:
     Net (loss) income                                                                                                   $ (21,142 )                                                                                 $  65,617
     Adjustments:
          Interest expense                                                                                                 115,181                                                                                     103,678
          Income tax expense                                                                                                33,157                                                                                      61,925
          Income tax valuation allowance increase/(release)                                                                 14,703                                                                                     (26,358 )
          Depreciation and amortization                                                                                    144,147                                                                                     135,430
          LIFO credit                                                                                                      (47,881 )                                                                                    (6,796 )
          Lease termination and impairment charges                                                                          35,015                                                                                      26,753
          Other                                                                                          (8,841 )                                                                 22,760  
                                                                                                      -------------------- ------- --------------------                                           -------------------- ------- --------------------
               Adjusted EBITDA                                                                                           $ 264,339                                                                $ 383,009  
                                                                                                      ==================== ======= ====================                                           ==================== ======= ====================
               Percent of revenues                                                                                            3.09 %                                                                                      4.63 %
                                                                                                                                                                                                                                
                                                                                                                       
                                                                                                          RITE AID CORPORATION AND SUBSIDIARIES
                                                                                                                SUPPLEMENTAL INFORMATION
                                                                                                     RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
                                                                                                                     (In thousands)
                                                                                                                       (unaudited)
                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                    
                                                                                                                     Fifty-three weeks ended                                                                        Fifty-two weeks ended
                                                                                                                          March 4, 2017                                                                               February 27, 2016
                                                                                                      -------------------------------------------------                                             -------------------------------------------------
                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                    
Reconciliation of net income to adjusted EBITDA:
     Net income                                                                                                          $     4,053                                                                                   $   165,465
     Adjustments:
          Interest expense                                                                                                   431,991                                                                                       449,574
          Income tax expense                                                                                                  29,689                                                                                       139,297
          Income tax valuation allowance increase/(release)                                                                   14,703                                                                                       (26,358 )
          Depreciation and amortization                                                                                      568,231                                                                                       509,212
          LIFO (credit) charge                                                                                                (6,620 )                                                                                      11,163
          Lease termination and impairment charges                                                                            55,294                                                                                        48,423
          Loss on debt retirements, net                                                                                            -                                                                                        33,205
          Other                                                                                            39,800                                                  72,281  
                                                                                                      -------------------- --------- --------------------                                           -------------------- --------- --------------------
               Adjusted EBITDA                                                                                           $ 1,137,141                                                                $ 1,402,262  
                                                                                                      ==================== ========= ====================                                           ==================== ========= ====================
               Percent of revenues                                                                                              3.46 %                                                                                        4.56 %
                                                                                                                                                                                                                                    
                                                                                                                            
                                                                                                            RITE AID CORPORATION AND SUBSIDIARIES
                                                                                                                  SUPPLEMENTAL INFORMATION
                                                                                                                 ADJUSTED NET (LOSS) INCOME
                                                                                                      (Dollars in thousands, except per share amounts)
                                                                                                                         (unaudited)
                                                                                                                                                                                                                                         
                                                                                                                                                                                                                                         
                                                                                                                           Fourteen weeks ended                                                                          Thirteen weeks ended
                                                                                                                               March 4, 2017                                                                               February 27, 2016
                                                                                                           -------------------------------------------------                                             -------------------------------------------------
                                                                                                                                                                                                                                         
Net (loss) income                                                                                                             $   (21,142 )                                                                                 $    65,617
     Add back - Income tax expense                                                                              47,860                                                  35,567  
                                                                                                           -------------------- --------- --------------------                                           -------------------- --------- --------------------
               Income before income taxes                                                                                          26,718                                                                                       101,184
                                                                                                                                                                                                                                         
     Adjustments:
          Amortization of EnvisionRx intangible assets                                                                             20,805                                                                                        17,310
          LIFO credit                                                                                                             (47,881 )                                                                                      (6,796 )
          Merger and Acquisition-related costs                                                                   7,944                                                   5,686  
                                                                                                           -------------------- --------- --------------------                                           -------------------- --------- --------------------
                                                                                                                                                                                                                                         
               Adjusted income before income taxes                                                                                  7,586                                                                                       117,384
                                                                                                                                                                                                                                         
               Adjusted income tax expense (a)                                                                  10,766                                                  43,549  
                                                                                                           -------------------- --------- --------------------                                           -------------------- --------- --------------------
               Adjusted net (loss) income                                                                                     $    (3,180 )                                                                                 $    73,835  
                                                                                                           ==================== ========= ====================                                           ==================== ========= ====================
                                                                                                                                                                                                                                         
     Adjusted net (loss) income per diluted share:
                                                                                                                                                                                                                                         
     Numerator for adjusted net (loss) income per diluted share:
          Adjusted net (loss) income                                                                                          $    (3,180 )                                                                                 $    73,835  
                                                                                                           ==================== ========= ====================                                           ==================== ========= ====================
                                                                                                                                                                                                                                         
                                                                                                                                                                                                                                         
                                                                                                                                                                                                                                         
     Denominator:
          Basic weighted average shares                                                                                         1,045,929                                                                                     1,041,157
          Outstanding options and restricted shares, net                                                             -                                                  17,357  
                                                                                                           -------------------- --------- --------------------                                           -------------------- --------- --------------------
                                                                                                                                                                                                                                         
          Diluted weighted average shares                                                                    1,045,929                                               1,058,514  
                                                                                                           ==================== ========= ====================                                           ==================== ========= ====================
                                                                                                                                                                                                                                         
               Net (loss) income per diluted share                                                                            $     (0.02 )                                                                                 $      0.06
                                                                                                                                                                                                                                         
               Adjusted net (loss) income per diluted share                                                                   $     (0.00 )                                                                                 $      0.07
                                                                                                                                                                                                                                         
(a)   The fiscal year 2017 and 2016 annual effective tax rates, adjusted
                         to exclude amortization of EnvisionRx intangible assets, LIFO
                         credits and Merger and Acquisition-related costs from book income,
                         are used for the fourteen weeks ended March 4, 2017 and the
                         thirteen weeks ended February 27, 2016, respectively.
                          
                                                                                                                     
                                                                                                    RITE AID CORPORATION AND SUBSIDIARIES
                                                                                                          SUPPLEMENTAL INFORMATION
                                                                                                             ADJUSTED NET INCOME
                                                                                              (Dollars in thousands, except per share amounts)
                                                                                                                 (unaudited)
                                                                                                                                                                                                                        
                                                                                                                                                                                                                        
                                                                                                                   Fifty-three weeks ended                                                                   Fifty-two weeks ended
                                                                                                                        March 4, 2017                                                                          February 27, 2016
                                                                                                    -------------------------------------------------                                             ----------------------------------------
                                                                                                                                                                                                                        
Net income                                                                                                             $     4,053                                                                                   $              165,465
     Add back - Income tax expense                                                                       44,392                                                            112,939
                                                                                                    -------------------- --------- --------------------                                           -------------------- --------------------
               Income before income taxes                                                                                   48,445                                                                                                  278,404
                                                                                                                                                                                                                        
     Adjustments:
          Amortization of EnvisionRx intangible assets                                                                      83,022                                                                                                   55,527
          LIFO (credit) charge                                                                                              (6,620 )                                                                                                 11,163
          Loss on debt retirements, net                                                                                          -                                                                                                   33,205
          Merger and Acquisition-related costs                                                           14,066                                                             27,482
                                                                                                    -------------------- --------- --------------------                                           -------------------- --------------------
                                                                                                                                                                                                                        
               Adjusted income before income taxes                                                                         138,913                                                                                                  405,781
                                                                                                                                                                                                                        
               Adjusted income tax expense (a)                                                           72,096                                                            150,545
                                                                                                    -------------------- --------- --------------------                                           -------------------- --------------------
               Adjusted net income                                                                                     $    66,817                                                                $              255,236
                                                                                                    ==================== ========= ====================                                           ==================== ====================
                                                                                                                                                                                                                        
     Adjusted net income per diluted share:
                                                                                                                                                                                                                        
     Numerator for adjusted net income per diluted share:
          Adjusted net income                                                                                          $    66,817                                                                $              255,236
                                                                                                    ==================== ========= ====================                                           ==================== ====================
                                                                                                                                                                                                                        
                                                                                                                                                                                                                        
                                                                                                                                                                                                                        
     Denominator:
          Basic weighted average shares                                                                                  1,044,427                                                                                                1,024,377
          Outstanding options and restricted shares, net                                                 16,399                                                             17,985
                                                                                                    -------------------- --------- --------------------                                           -------------------- --------------------
                                                                                                                                                                                                                        
          Diluted weighted average shares                                                             1,060,826                                                          1,042,362
                                                                                                    ==================== ========= ====================                                           ==================== ====================
                                                                                                                                                                                                                        
               Net income per diluted share                                                                            $      0.00                                                                                   $                 0.16
                                                                                                                                                                                                                        
               Adjusted net income per diluted share                                                                   $      0.06                                                                                   $                 0.24
                                                                                                                                                                                                                        
(a)   The fiscal year 2017 and 2016 annual effective tax rates, adjusted
                         to exclude amortization of EnvisionRx intangible assets, LIFO
                         (credits) charges, loss on debt retirements and Merger and
                         Acquisition-related costs from book income, are used for the
                         fifty-three weeks ended March 4, 2017 and the fifty-two weeks
                         ended February 27, 2016, respectively.
                          
 
                                                                                                            RITE AID CORPORATION AND SUBSIDIARIES
                                                                                                                             
                                                                                                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                                                   (Dollars in thousands)
                                                                                                                         (unaudited)
                                                                                                                                                                                                                                         
                                                                                                                                                                                                                                         
                                                                                                                            Fourteen weeks ended                                                                         Thirteen weeks ended
                                                                                                                                March 4, 2017                                                                              February 27, 2016
                                                                                                             ------------------------------------------------                                             ------------------------------------------------
                                                                                                                                                                                                                                         
                                                                                                                                                                                                                                         
OPERATING ACTIVITIES:
Net (loss) income                                                                                                               $  (21,142 )                                                                                 $   65,617
Adjustments to reconcile to net cash provided by operating
activities:
     Depreciation and amortization                                                                                                 144,147                                                                                      135,430
     Lease termination and impairment charges                                                                                       35,015                                                                                       26,753
     LIFO credit                                                                                                                   (47,881 )                                                                                     (6,796 )
     Gain on sale of assets, net                                                                                                    (5,755 )                                                                                       (348 )
     Stock-based compensation expense                                                                                              (13,284 )                                                                                     11,419
     Changes in deferred taxes                                                                                                      28,873                                                                                       28,793
     Excess tax benefit on stock options and restricted stock                                                                        3,266                                                                                       (1,448 )
     Changes in operating assets and liabilities:
          Accounts receivable                                                                                                      (55,897 )                                                                                    (24,239 )
          Inventories                                                                                                              158,031                                                                                      181,619
          Accounts payable                                                                                                        (195,750 )                                                                                   (110,817 )
          Other assets and liabilities, net                                                                      30,787                                                 21,882  
                                                                                                             -------------------- -------- --------------------                                           -------------------- -------- --------------------
               Net cash provided by operating activities                                                                            60,410                                                                                      327,865
INVESTING ACTIVITIES:
     Payments for property, plant and equipment                                                                                    (90,501 )                                                                                   (127,009 )
     Intangible assets acquired                                                                                                     (8,017 )                                                                                    (31,036 )
     Proceeds from sale-leaseback transactions                                                                                           -                                                                                       36,732
     Proceeds from dispositions of assets and investments                                                         6,635                                                  1,085  
                                                                                                             -------------------- -------- --------------------                                           -------------------- -------- --------------------
               Net cash used in investing activities                                                                               (91,883 )                                                                                   (120,228 )
FINANCING ACTIVITIES:
     Net proceeds from (payments to) revolver                                                                                       50,000                                                                                     (280,000 )
     Principal payments on long-term debt                                                                                           (4,813 )                                                                                     (5,750 )
     Change in zero balance cash accounts                                                                                           12,395                                                                                      (27,867 )
     Net proceeds from the issuance of common stock                                                                                  2,539                                                                                        2,751
     Excess tax benefit on stock options and restricted stock                                                    (3,266 )                                                                   1,448  
                                                                                                             -------------------- -------- --------------------                                           -------------------- -------- --------------------
               Net cash provided by (used in) financing activities                                               56,855                                               (309,418 )
                                                                                                             -------------------- -------- --------------------                                           -------------------- -------- --------------------
Increase (decrease) in cash and cash equivalents                                                                                    25,382                                                                                     (101,781 )
Cash and cash equivalents, beginning of period                                                                  220,028                                                226,252  
                                                                                                             -------------------- -------- --------------------                                           -------------------- -------- --------------------
Cash and cash equivalents, end of period                                                                                        $  245,410                                                                $  124,471  
                                                                                                             ==================== ======== ====================                                           ==================== ======== ====================
                                                                                                                                                                                                                                         
                                                                                                                                                                                                                                         
SUPPLEMENTAL CASH FLOW INFORMATION
                                                                                                                                                                                                                                         
     Payments for property, plant and equipment                                                                                 $   90,501                                                                                   $  127,009
     Intangible assets acquired                                                                                   8,017                                                 31,036  
                                                                                                             -------------------- -------- --------------------                                           -------------------- -------- --------------------
     Total cash capital expenditures                                                                                                98,518                                                                                      158,045
     Equipment received for noncash consideration                                                                                        -                                                                                        1,000
     Equipment financed under capital leases                                                                      3,670                                                  6,115  
                                                                                                             -------------------- -------- --------------------                                           -------------------- -------- --------------------
     Gross capital expenditures                                                                                                 $  102,188                                                                $  165,160  
                                                                                                             ==================== ======== ====================                                           ==================== ======== ====================
                                                                                                                                                                                                                                         
                                                                                                                        
                                                                                                           RITE AID CORPORATION AND SUBSIDIARIES
                                                                                                                                                                                                                                      
                                                                                                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                                                  (Dollars in thousands)
                                                                                                                        (unaudited)
                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                      
                                                                                                                      Fifty-three weeks ended                                                                        Fifty-two weeks ended
                                                                                                                           March 4, 2017                                                                               February 27, 2016
                                                                                                        ------------------------------------------------                                             --------------------------------------------------
                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                      
OPERATING ACTIVITIES:
Net income                                                                                                                 $    4,053                                                                                   $    165,465
Adjustments to reconcile to net cash provided by operating
activities:
     Depreciation and amortization                                                                                            568,231                                                                                        509,212
     Lease termination and impairment charges                                                                                  55,294                                                                                         48,423
     LIFO (credit) charge                                                                                                      (6,620 )                                                                                       11,163
     (Gain) loss on sale of assets, net                                                                                        (4,024 )                                                                                        3,303
     Stock-based compensation expense                                                                                          23,482                                                                                         37,948
     Loss on debt retirements, net                                                                                                  -                                                                                         33,205
     Changes in deferred taxes                                                                                                 35,038                                                                                         79,488
     Excess tax benefit on stock options and restricted stock                                                                    (543 )                                                                                      (22,884 )
     Changes in operating assets and liabilities:
          Accounts receivable                                                                                                (166,765 )                                                                                      291,659
          Inventories                                                                                                        (133,543 )                                                                                      181,958
          Accounts payable                                                                                                     29,528                                                                                        (21,187 )
          Other assets and liabilities, net                                                               (178,268 )                                                                  (320,351 )
                                                                                                        -------------------- -------- --------------------                                           -------------------- ---------- --------------------
               Net cash provided by operating activities                                                                      225,863                                                                                        997,402
INVESTING ACTIVITIES:
     Payments for property, plant and equipment                                                                              (424,289 )                                                                                     (541,347 )
     Intangible assets acquired                                                                                               (56,822 )                                                                                     (128,648 )
     Acquisition of businesses, net of cash acquired                                                                                -                                                                                     (1,778,377 )
     Proceeds from sale-leaseback transactions                                                                                      -                                                                                         36,732
     Proceeds from dispositions of assets and investments                                                   16,852                                                    9,782  
                                                                                                        -------------------- -------- --------------------                                           -------------------- ---------- --------------------
               Net cash used in investing activities                                                                         (464,259 )                                                                                   (2,401,858 )
FINANCING ACTIVITIES:
     Proceeds from issuance of long-term debt                                                                                       -                                                                                      1,800,000
     Net proceeds from revolver                                                                                               330,000                                                                                        375,000
     Principal payments on long-term debt                                                                                     (21,239 )                                                                                     (672,717 )
     Change in zero balance cash accounts                                                                                      43,080                                                                                        (62,878 )
     Net proceeds from the issuance of common stock                                                                             6,951                                                                                         11,376
     Financing fees paid for early debt redemption                                                                                  -                                                                                        (26,003 )
     Excess tax benefit on stock options and restricted stock                                                                     543                                                                                         22,884
     Deferred financing costs paid                                                                               -                                                  (34,634 )
                                                                                                        -------------------- -------- --------------------                                           -------------------- ---------- --------------------
               Net cash provided by financing activities                                                   359,335                                                1,413,028  
                                                                                                        -------------------- -------- --------------------                                           -------------------- ---------- --------------------
Increase in cash and cash equivalents                                                                                         120,939                                                                                          8,572
Cash and cash equivalents, beginning of period                                                             124,471                                                  115,899  
                                                                                                        -------------------- -------- --------------------                                           -------------------- ---------- --------------------
Cash and cash equivalents, end of period                                                                                   $  245,410                                                                $    124,471  
                                                                                                        ==================== ======== ====================                                           ==================== ========== ====================
                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                      
SUPPLEMENTAL CASH FLOW INFORMATION
                                                                                                                                                                                                                                      
     Payments for property, plant and equipment                                                                            $  424,289                                                                                   $    541,347
     Intangible assets acquired                                                                             56,822                                                  128,648  
                                                                                                        -------------------- -------- --------------------                                           -------------------- ---------- --------------------
     Total cash capital expenditures                                                                                          481,111                                                                                        669,995
     Equipment received for noncash consideration                                                                                 746                                                                                          3,011
     Equipment financed under capital leases                                                                 7,551                                                    9,614  
                                                                                                        -------------------- -------- --------------------                                           -------------------- ---------- --------------------
     Gross capital expenditures                                                                                            $  489,408                                                                $    682,620  
                                                                                                        ==================== ======== ====================                                           ==================== ========== ====================
                                                                                                                                                                                                                                      

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170425005820r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20170425005820/en/

SOURCE: Rite Aid Corporation

Rite Aid Corporation 
INVESTORS: 
Matt Schroeder, 717-214-8867 
investor@riteaid.com 
or 
MEDIA: 
Susan Henderson, 717-730-7766


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