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Accounts Receivable The Company maintains an allowance for doubtful accounts receivable based upon the expected collectibility of accounts receivable. The allowance for uncollectible accounts at March 3, 20X3, and March 4, 202, was $30,246 and $32,336, respectively. The Company's accounts receivable are due primarily from third-party payors (e.g., pharmacy benefit management companies, insurance companies, or governmental agencies) and are recorded net of any allowances provided for under the respective plans. Since payments due from thirdparty payors are sensitive to payment criteria changes and legislative actions, the allowance is reviewed continually, and adjusted for accounts deemed uncollectible by management. The Company maintains securitization agreements with several multiseller asset-backed commercial paper vehicles ("CPVs"). Under the terms of the securitization agreements, the Company sells substantially all of its eligible third-party pharmaceutical receivables to a bankruptcy remote Special Purpose Entity (SPE) and retains servicing responsibility. The assets of the SPE are not available to satisfy the creditors of any other person, including any of the Company's affiliates. These agreements provide for the Company to sell, and for the SPE to purchase these receivables. The SPE then transfers an interest in these receivables to various CPVs. Transferred outstanding receivables cannot exceed $400,000. The amount of transferred receivables outstanding at any one time is dependent upon a formula that takes into account such factors as default history, obligor concentrations, and potential dilution ("Securitization Formula"). Adjustments to this amount can occur on a weekly basis. At March 3, 20X3, and March 4, 202, the total of outstanding receivables that have been transferred to the CPVs were $350,000 and $330,000, respectively. The Company has determined that the transactions meet the criteria for sales treatment in accordance with (pre-Codification) SFAS No. 140 "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities." \begin{tabular}{|c|c|c|c|c|} \hline \multirow[t]{12}{*}{5} & \begin{tabular}{l} Rite Aid Corporation operates retail drugstores in the United States. It is \\ one of the country's largest retail drugstore chains with 3,333 stores in \\ operation as of March 3,203. The company's drugstores' primary \\ business is pharmacy services. The company also sells a full selection of \\ health and beauty aids and personal care products, seasonal \\ merchandise, and a large private brand product line. \end{tabular} & 3,333 & & \\ \hline & \begin{tabular}{l} The following condensed information was extracted from Rite Aid's \\ Form 10- K for the fiscal year that ended March 3,203 (all dollars in \\ thousands). \end{tabular} & & & \\ \hline & Consolidated Statements of Cash Flows-Operating Activities Section & & & \\ \hline & & Year Ended & & \\ \hline & & 3/3/203 & 3/4/202 & 2/26/201 \\ \hline & Net Income & 26,826 & 1,273,006 & 302,478 \\ \hline & Total noncash charges (credits) & 379,715 & (810,731) & 129,729 \\ \hline & Changes in operating assets and liabilities: & & & \\ \hline & Net proceeds from accounts receivable securitization & 20,000 & 180,000 & 150,000 \\ \hline & Accounts receivable & (39,543) & (51,494) & 36,549 \\ \hline & Net changes in other operating assets and liabilities & (77,853) & (173,616) & (100,310) \\ \hline & Net cash provided by operating activities & 309,145 & 417,165 & 518,446 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|l|}{ Consolidated Statements of Operations } \\ \hline & Year Ended & & \\ \hline & 3/3/203 & 3/4/202 & 2/26/201 \\ \hline Revenues & $17,507,719 & $17,270,968 & $16,816,439 \\ \hline \multicolumn{4}{|l|}{ Costs and expenses } \\ \hline Cost of goods sold & 12,791,597 & 12,571,860 & 12,202,894 \\ \hline Selling, general, and administrative expenses & 4,370,481 & 4,307,421 & 4,127,536 \\ \hline Store closing and impairment charges & 49,317 & 68,692 & 35,655 \\ \hline Interest expense & 275,219 & 277,017 & 294,871 \\ \hline Loss on debt modifications and retirements, net & 18,662 & 9,186 & 19,229 \\ \hline \multirow[t]{2}{*}{ (Gain) loss on sale of assets, net } & (11,139) & (6,462) & 2,247 \\ \hline & 17,494,137 & 17,227,714 & 16,682,432 \\ \hline Income before income taxes & 13,582 & 43,254 & 134,007 \\ \hline Income tax benefit & (13,244) & (1,229,752) & (168,471) \\ \hline Net income & 26,826 & 1,273,006 & 302,478 \\ \hline \multicolumn{4}{|l|}{ Selected Data Pertaining to Accounts Receivable } \\ \hline & Year Ended & & \\ \hline & 3/3/203 & 3/4/202 & 2/26/201 \\ \hline Year-end Accounts receivable, net & 374,493 & 354,949 & 483,455 \\ \hline Allowance for uncollectible accounts at year-end & 30,246 & 32,336 & 31,216 \\ \hline Additions to uncollectible accounts charged to costs and expe & 26,603 & 34,702 & 47,291 \\ \hline \end{tabular} Accounts Receivable The Company maintains an allowance for doubtful accounts receivable based upon the expected collectibility of accounts receivable. The allowance for uncollectible accounts at March 3, 20X3, and March 4, 202, was $30,246 and $32,336, respectively. The Company's accounts receivable are due primarily from third-party payors (e.g., pharmacy benefit management companies, insurance companies, or governmental agencies) and are recorded net of any allowances provided for under the respective plans. Since payments due from thirdparty payors are sensitive to payment criteria changes and legislative actions, the allowance is reviewed continually, and adjusted for accounts deemed uncollectible by management. The Company maintains securitization agreements with several multiseller asset-backed commercial paper vehicles ("CPVs"). Under the terms of the securitization agreements, the Company sells substantially all of its eligible third-party pharmaceutical receivables to a bankruptcy remote Special Purpose Entity (SPE) and retains servicing responsibility. The assets of the SPE are not available to satisfy the creditors of any other person, including any of the Company's affiliates. These agreements provide for the Company to sell, and for the SPE to purchase these receivables. The SPE then transfers an interest in these receivables to various CPVs. Transferred outstanding receivables cannot exceed $400,000. The amount of transferred receivables outstanding at any one time is dependent upon a formula that takes into account such factors as default history, obligor concentrations, and potential dilution ("Securitization Formula"). Adjustments to this amount can occur on a weekly basis. At March 3, 20X3, and March 4, 202, the total of outstanding receivables that have been transferred to the CPVs were $350,000 and $330,000, respectively. The Company has determined that the transactions meet the criteria for sales treatment in accordance with (pre-Codification) SFAS No. 140 "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities." \begin{tabular}{|c|c|c|c|c|} \hline \multirow[t]{12}{*}{5} & \begin{tabular}{l} Rite Aid Corporation operates retail drugstores in the United States. It is \\ one of the country's largest retail drugstore chains with 3,333 stores in \\ operation as of March 3,203. The company's drugstores' primary \\ business is pharmacy services. The company also sells a full selection of \\ health and beauty aids and personal care products, seasonal \\ merchandise, and a large private brand product line. \end{tabular} & 3,333 & & \\ \hline & \begin{tabular}{l} The following condensed information was extracted from Rite Aid's \\ Form 10- K for the fiscal year that ended March 3,203 (all dollars in \\ thousands). \end{tabular} & & & \\ \hline & Consolidated Statements of Cash Flows-Operating Activities Section & & & \\ \hline & & Year Ended & & \\ \hline & & 3/3/203 & 3/4/202 & 2/26/201 \\ \hline & Net Income & 26,826 & 1,273,006 & 302,478 \\ \hline & Total noncash charges (credits) & 379,715 & (810,731) & 129,729 \\ \hline & Changes in operating assets and liabilities: & & & \\ \hline & Net proceeds from accounts receivable securitization & 20,000 & 180,000 & 150,000 \\ \hline & Accounts receivable & (39,543) & (51,494) & 36,549 \\ \hline & Net changes in other operating assets and liabilities & (77,853) & (173,616) & (100,310) \\ \hline & Net cash provided by operating activities & 309,145 & 417,165 & 518,446 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|l|}{ Consolidated Statements of Operations } \\ \hline & Year Ended & & \\ \hline & 3/3/203 & 3/4/202 & 2/26/201 \\ \hline Revenues & $17,507,719 & $17,270,968 & $16,816,439 \\ \hline \multicolumn{4}{|l|}{ Costs and expenses } \\ \hline Cost of goods sold & 12,791,597 & 12,571,860 & 12,202,894 \\ \hline Selling, general, and administrative expenses & 4,370,481 & 4,307,421 & 4,127,536 \\ \hline Store closing and impairment charges & 49,317 & 68,692 & 35,655 \\ \hline Interest expense & 275,219 & 277,017 & 294,871 \\ \hline Loss on debt modifications and retirements, net & 18,662 & 9,186 & 19,229 \\ \hline \multirow[t]{2}{*}{ (Gain) loss on sale of assets, net } & (11,139) & (6,462) & 2,247 \\ \hline & 17,494,137 & 17,227,714 & 16,682,432 \\ \hline Income before income taxes & 13,582 & 43,254 & 134,007 \\ \hline Income tax benefit & (13,244) & (1,229,752) & (168,471) \\ \hline Net income & 26,826 & 1,273,006 & 302,478 \\ \hline \multicolumn{4}{|l|}{ Selected Data Pertaining to Accounts Receivable } \\ \hline & Year Ended & & \\ \hline & 3/3/203 & 3/4/202 & 2/26/201 \\ \hline Year-end Accounts receivable, net & 374,493 & 354,949 & 483,455 \\ \hline Allowance for uncollectible accounts at year-end & 30,246 & 32,336 & 31,216 \\ \hline Additions to uncollectible accounts charged to costs and expe & 26,603 & 34,702 & 47,291 \\ \hline \end{tabular}

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