The Company has two reportable segments, its retail drug stores (“Retail Pharmacy”), and its pharmacy services (“Pharmacy Services”) segments.

The Retail Pharmacy segment’s primary business is the sale of prescription drugs and related consultation to its customers. Additionally, the Retail Pharmacy segment sells a full selection of health and beauty aids and personal care products, seasonal merchandise and a large private brand product line. The Pharmacy Services segment offers a full range of PBM services including plan design and administration, on both a transparent pass-through model and traditional model, formulary management and claims processing. Additionally, the Pharmacy Services segment offers specialty and mail order services, infertility treatment, and drug benefits to eligible beneficiaries under the federal government’s Medicare Part D program.

The Company’s chief operating decision makers are its Chief Executive Officer, Chief Operating Officer, Chief Financial Officer and the President—Pharmacy Services (collectively the “CODM”). The CODM has ultimate responsibility for enterprise decisions. The CODM determines, in particular, resource allocation for, and monitors performance of, the consolidated enterprise, the Retail Pharmacy segment and the Pharmacy Services segment. The Retail Pharmacy and Pharmacy Services segment managers have responsibility for operating decisions, allocating resources and assessing performance within their respective segments. The CODM relies on internal management reporting that analyzes enterprise results on certain key performance indicators, namely, revenues, gross profit and Adjusted EBITDA.

The following is balance sheet information for the Company’s reportable segments:

(1)

As of February 29, 2020 and March 2, 2019, intersegment eliminations include netting of the Pharmacy Services segment long-term deferred tax liability of $0 against the Retail Pharmacy segment long-term deferred tax asset for consolidation purposes in accordance with ASC 740, and intersegment accounts receivable of $14,564 and $14,459, 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.

The following table is a reconciliation of the Company’s business segments to the consolidated financial statements for the fiscal years ended February 29, 2020, March 2, 2019 and March 3, 2018:


	Retail		Pharmacy		Intersegment
	Pharmacy		Services		Eliminations(1)		Consolidated
February 29, 2020:
Revenues	$	15,616,186	$	6,559,560	$	(247,353)	$	21,928,393
Gross Profit		4,274,836		451,922		—		4,726,758
Adjusted EBITDA(2)		370,435		167,776		—		538,211
Additions to property and equipment and intangible assets		192,489		21,897		—		214,386
March 2, 2019:
Revenues	$	15,757,152	$	6,093,688	$	(211,283)	$	21,639,557
Gross Profit		4,258,716		417,636		—		4,676,352
Adjusted EBITDA(2)		405,206		158,238		—		563,444
Additions to property and equipment and intangible assets		228,079		16,610		—		244,689
March 3, 2018:
Revenues	$	15,832,625	$	5,896,669	$	(200,326)	$	21,528,968
Gross Profit		4,372,373		407,732		—		4,780,105
Adjusted EBITDA(2)		388,320		171,534		—		559,854
Additions to property and equipment and intangible assets		199,437		15,327		—		214,764

(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 the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Continuing Operations—Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share and Other Non-GAAP Measures” for additional details.

The following is a reconciliation of net (loss) income to Adjusted EBITDA for fiscal 2020, 2019 and 2018:


	February 29,		March 2,		March 3,
	2020		2019		2018
	(52 weeks)		(52 weeks)		(52 weeks)
Net loss from continuing operations	$	(469,219)	$	(666,954)	$	(349,532)
Interest expense		229,657		227,728		202,768
Income tax expense		387,607		77,477		305,987
Depreciation and amortization		328,277		357,882		386,057
LIFO (credit) charge		(64,804)		23,354		(28,827)
Lease termination and impairment charges		42,843		107,994		58,765
Goodwill and intangible asset impairment charges		—		375,190		261,727
(Gain) loss on debt retirements, net		(55,692)		554		—
Merger and Acquisition-related costs		3,599		37,821		24,283
Stock-based compensation expense		16,087		12,115		25,793
Restructuring-related costs		105,642		4,704		—
Inventory write-downs related to store closings		4,652		13,487		7,586
Litigation settlement		—		18,000		—
Loss (gain) on sale of assets, net		4,226		(38,012)		(25,872)
Walgreens Boots Alliance merger termination fee		—		—		(325,000)
Other		5,336		12,104		16,119
Adjusted EBITDA from continuing operations	$	538,211	$	563,444	$	559,854