Segment Reporting (Tables)

6 Months Ended

Sep. 02, 2017

Segment Reporting

Schedule of reconciliation of the Company's business segments to the condensed consolidated financial statements

	Retail Pharmacy		Pharmacy Services		Intersegment Eliminations (1)			Consolidated
Thirteen Week Period Ended
September 2, 2017:
Revenues	$	6,267,929	$	1,492,831	$	(81,857	)	$	7,678,903
Gross Profit	1,683,741		103,262		—			1,787,003
Adjusted EBITDA(2)	163,995		49,275		—			213,270
August 27, 2016:
Revenues	$	6,485,482	$	1,634,876	$	(90,552	)	$	8,029,806
Gross Profit	1,819,349		97,394		—			1,916,743
Adjusted EBITDA(2)	262,643		50,010		—			312,653
Twenty-Six Week Period Ended
September 2, 2017:
Revenues	$	12,618,137	$	3,006,072	$	(163,853	)	$	15,460,356
Gross Profit	3,337,803		208,234		—			3,546,037
Adjusted EBITDA(2)	307,960		97,874		—			405,834
August 27, 2016:
Revenues	$	13,161,030	$	3,237,235	$	(184,278	)	$	16,213,987
Gross Profit	3,624,716		186,327		—			3,811,043
Adjusted EBITDA(2)	507,470		91,185		—			598,655

(1) Intersegment eliminations include intersegment revenues and corresponding cost of revenues that occur when Pharmacy Services segment customers use Retail Pharmacy segment stores to purchase covered products. When this occurs, both the Retail Pharmacy and Pharmacy Services segments record the revenue on a stand-alone basis.

(2) See “Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share and Other Non-GAAP Measures” in MD&A for additional details.

Schedule of reconciliation of net income to Adjusted EBITDA

	Thirteen Week Period Ended					Twenty-Six Week Period Ended
	September 2, 2017			August 27, 2016		September 2, 2017			August 27, 2016
	(dollars in thousands)
Net income	$	170,716		$	14,773	$	95,367		$	10,185
Interest expense	111,261			105,388		221,198			210,501
Income tax expense	107,087			10,928		71,878			4,619
Depreciation and amortization expense	132,012			142,051		274,104			280,839
LIFO charge	5,632			13,760		22,506			27,511
Lease termination and impairment charges	3,128			7,233		7,214			13,014
Walgreens Boots Alliance merger termination fee	(325,000		)	—		(325,000		)	—
Other	8,434			18,520		38,567			51,986
Adjusted EBITDA	$	213,270		$	312,653	$	405,834		$	598,655

Schedule of balance sheet information for the Company's reportable segments

	Retail Pharmacy		Pharmacy Services		Eliminations (2)			Consolidated
September 2, 2017:
Total Assets	$	8,503,384	$	3,163,941	$	(169,017	)	$	11,498,308
Goodwill	76,124		1,639,355		—			1,715,479
Additions to property and equipment and intangible assets	126,816		6,718		—			133,534
March 4, 2017:
Total Assets	$	8,664,216	$	3,087,143	$	(157,607	)	$	11,593,752
Goodwill	76,124		1,639,355		—			1,715,479
Additions to property and equipment and intangible assets(1)	468,386		12,725		—			481,111

(1) Includes additions to property and equipment and intangible assets for the fifty-three week period ended March 4, 2017.

(2) As of September 2, 2017 and March 4, 2017, intersegment eliminations include netting of the Pharmacy Services segment long-term deferred tax liability of $150,690 and $140,865, respectively, against the Retail Pharmacy segment long-term deferred tax asset for consolidation purposes in accordance with ASC 740, and intersegment accounts receivable of $18,327 and $16,742, respectively, that represents amounts owed from the Pharmacy Services segment to the Retail Pharmacy segment that are created when Pharmacy Services segment customers use Retail Pharmacy segment stores to purchase covered products.