Restructuring

12 Months Ended

Feb. 29, 2020

Restructuring

Restructuring

2. Restructuring

Beginning in fiscal 2019, the Company initiated a series of restructuring plans designed to reorganize its executive management team, reduce managerial layers, and consolidate roles. The Company also initiated restructuring plans with regard to its future strategy and brand identification, which includes building tools to work with regional health plans to improve patient health outcomes, rationalizing SKU’s in its front-end offering to free up working capital, assessing its pricing and promotional strategy, rebranding its retail pharmacy and EnvisionRxOptions business, implementing executive team enhancements, further reducing SG&A and headcount, separating the front-end and retail pharmacy teams into separate units, integrating the Pharmacy Services segment both within the segment and across Rite Aid, including a detailed review of the EnvisionRxOptions cost structure and action plans to streamline.

For the year ended February 29, 2020, the Company incurred total restructuring-related costs of $105,642, which are included as a component of SG&A. These costs are as follows:

	Retail Pharmacy		Pharmacy
	segment		Services segment		Total
Restructuring-related costs
Severance and related costs associated with ongoing reorganization efforts (a)	$	47,154	$	11,339	$	58,493
Non-executive retention costs associated with the March 2019 reorganization (b)		8,927		4,243		13,170
Professional and other fees relating to restructuring activities (c)		31,657		2,322		33,979
Total restructuring-related costs	$	87,738	$	17,904	$	105,642

For the year ended March 2, 2019, the Company incurred total restructuring-related costs of $4,704, which are included as a component of SG&A. These costs are as follows:

	Retail Pharmacy		Pharmacy
	segment		Services segment		Total
Restructuring-related costs
Severance and related costs associated with ongoing reorganization efforts (a)	$	—	$	—	$	—
Non-executive retention costs associated with the March 2019 reorganization (b)		3,224		1,480		4,704
Professional and other fees relating to restructuring activities (c)		—		—		—
Total restructuring-related costs	$	3,224	$	1,480	$	4,704

A summary of activity for the year ended February 29, 2020 in the restructuring-related liabilities associated with the programs noted above, which is included in accrued salaries, wages and other current liabilities, is as follows:

	Severance and related				Professional and
	costs (a)		Retention costs (b)		other fees (c)		Total
Balance at March 2, 2019	$	—	$	4,704	$	—	$	4,704
Additions charged to expense		27,076		6,664		9,610		43,350
Cash payments		(4,653)		(242)		(9,610)		(14,505)
Balance at June 1, 2019	$	22,423	$	11,126	$	—	$	33,549
Additions charged to expense		8,381		4,087		12,677		25,145
Cash payments		(4,580)		(11,200)		(6,768)		(22,548)
Balance at August 31, 2019	$	26,224	$	4,013	$	5,909	$	36,146
Additions charged to expense		17,320		1,268		6,687		25,275
Cash payments		(5,036)		—		(5,088)		(10,124)
Balance at November 30, 2019	$	38,508	$	5,281	$	7,508	$	51,297
Additions charged to expense		5,716		1,151		5,005		11,872
Cash payments		(7,996)		—		(10,119)		(18,115)
Balance at February 29, 2020	$	36,228	$	6,432	$	2,394	$	45,054

(a) – Severance and related costs reflect severance accruals, executive search fees, outplacement services and other similar charges associated with ongoing reorganization efforts.

(b) – As part of its March 2019 reorganization, the Company incurred costs with the implementation of a retention plan for certain of its key associates.

(c) – Professional and other fees include costs incurred in connection with the identification and implementation of initiatives associated with restructuring activities.

The Company anticipates incurring approximately $60,000 during fiscal 2021 in connection with its continued restructuring activities.