UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ፤ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Fiscal Year Ended March 2, 2013 OR អ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Transition Period From To Commission File Number 1-5742 RITE AID CORPORATION (Exact name of registrant as specified in its charter) Delaware 23-1614034 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 30 Hunter Lane, Camp Hill, Pennsylvania 17011 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (717) 761-2633 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Common Stock, $1.00 par value New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ፤ No អ Indicate by check mark if the registrant is not required to file reports pursuant to section 13 or section 15(d) of the Exchange Act. Yes អ No ፤ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ፤ No អ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes ፤ No អ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ፤ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of ‘‘Accelerated Filer’’ and ‘‘Large Accelerated Filer’’ in Rule 12b-2 of the Exchange Act. Large Accelerated Filer ፤ Accelerated Filer អ Non-Accelerated Filer អ Smaller reporting company អ (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes អ No ፤ The aggregate market value of the voting and non-voting common stock of the registrant held by non-affiliates of the registrant based on the closing price at which such stock was sold on the New York Stock Exchange on September 1, 2012 was approximately $861,991,122. For purposes of this calculation, executive officers, directors and 5% shareholders are deemed to be affiliates of the registrant. As of April 11, 2013 the registrant had outstanding 904,564,621 shares of common stock, par value $1.00 per share. DOCUMENTS INCORPORATED BY REFERENCE Portions of the proxy statement for the registrant’s annual meeting of stockholders to be held on June 20, 2013 are incorporated by reference into Part III. TABLE OF CONTENTS Page Cautionary Statement Regarding Forward-Looking Statements .......................... 2 PA RT I ITEM 1. Business ..................................................... 3 ITEM 1A. Risk Factors .................................................. 11 ITEM 1B. Unresolved Staff Comments ....................................... 19 ITEM 2. Properties .................................................... 19 ITEM 3. Legal Proceedings .............................................. 21 ITEM 4. Mine Safety Disclosures .......................................... 23 PA RT I I ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ............................... 23 ITEM 6. Selected Financial Data .......................................... 24 ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ................................................. 26 ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk ............... 45 ITEM 8. Financial Statements and Supplementary Data ......................... 46 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure .................................................. 46 ITEM 9A. Controls and Procedures ......................................... 46 ITEM 9B. Other Information .............................................. 49 PART III ITEM 10. Directors, Executive Officers and Corporate Governance .................. ITEM 11. Executive Compensation ......................................... ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ........................................... ITEM 13. Certain Relationships and Related Transactions, and Director Independence .... ITEM 14. Principal Accountant Fees and Services .............................. PA RT I V ITEM 15. Exhibits and Financial Statement Schedule ............................ 49 SIGNATURES ............................................................ 115 1 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This report, as well as our other public filings or public statements, include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward- looking statements are often identified by terms and phrases such as ‘‘anticipate,’’ ‘‘believe,’’ ‘‘intend,’’ ‘‘estimate,’’ ‘‘expect,’’ ‘‘continue,’’ ‘‘should,’’ ‘‘could,’’ ‘‘may,’’ ‘‘plan,’’ ‘‘project,’’ ‘‘predict,’’ ‘‘will’’ and similar expressions and include references to assumptions and relate to our future prospects, developments and business strategies. Factors that could cause actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to: • our high level of indebtedness; • our ability to make interest and principal payments on our debt and satisfy the other covenants contained in our senior secured credit facility and other debt agreements; • general economic conditions (including the impact of continued high unemployment and changing consumer behavior), inflation and interest rate movements; • our ability to improve the operating performance of our stores in accordance with our long term strategy; • our ability to maintain or grow prescription count and realize front-end sales growth; • our ability to retain the business we have gained as a result of the Walgreens / Express Scripts dispute which was settled in September 2012; • our ability to hire and retain qualified personnel; • the continued efforts of private and public third party payors to reduce prescription drug reimbursement and encourage mail order and limit access to payor networks; • competitive pricing pressures, including aggressive promotional activity from our competitors; • decisions to close additional stores and distribution centers or undertake additional refinancing activities, which could result in further charges to our operating statement; • our ability to manage expenses and our investment in working capital; • continued consolidation of the drugstore and the pharmacy benefit management industries; • changes in state or federal legislation or regulations, and the continued impact from the ongoing implementation of the Patient Protection and Affordable Care Act as well as other healthcare reform; • the outcome of lawsuits and governmental investigations; • our ability to maintain the listing of our common stock on the New York Stock Exchange (the ‘‘NYSE’’), and the resulting impact on our indebtedness, results of operations and financial condition; and • other risks and uncertainties described from time to time in our filings with the Securities and Exchange Commission (the ‘‘SEC’’). We undertake no obligation to update or revise the forward-looking statements included in this report, whether as a result of new information, future events or otherwise, after the date of this report. Our actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward-looking statements. Factors that could cause or contribute to such differences are discussed in the sections entitled ‘‘Risk Factors’’ and ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview and Factors Affecting Our Future Prospects’’ included in this annual report on Form 10-K. 2 PART I Item 1. Business Overview Rite Aid is the third largest retail drugstore chain in the United States based on both revenues and number of stores. As of March 2, 2013, we operated 4,623 stores in 31 states across the country and in the District of Columbia. In our stores, we sell prescription drugs and a wide assortment of other merchandise, which we call ‘‘front-end’’ products. In fiscal 2013, prescription drug sales accounted for 67.6% of our total sales. We believe that pharmacy operations will continue to represent a significant part of our business due to favorable industry trends,