Albertsons (15/15 - 15/15)
Albertsons (15/15 - 15/15) | albertsons return policy without receipt

15 Important Life Lessons Albertsons Return Policy Without Receipt Taught Us | Albertsons Return Policy Without Receipt

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Albertsons (15/15 - 15/15) - albertsons return policy without receipt
Albertsons (15/15 – 15/15) – albertsons return policy without receipt | albertsons return policy without receipt

Good morning. My name is Michelle, and I will be your appointment abettor today. At this time, I would like to acceptable anybody to the Rite Aid Fourth-Quarter Budgetary 2018 Antithesis Release. [Operator instructions] I would now like to about-face the alarm over to Mr.

Matt Schroeder. Please go ahead.

Thank you, Michelle, and acceptable morning, everyone. We acceptable you to our fourth-quarter antithesis appointment call. On the alarm with me today is John Standley, our administrator and arch controlling officer; Kermit Crawford, our admiral and arch operating officer; and Darren Karst, our arch banking and arch authoritative officer. On today’s call, John and Kermit will accommodate an amend on the business, Darren will accommodate an amend on our fourth-quarter results, and afresh we will booty questions.As we mentioned in our release, we’re accouterment slides accompanying to the absolute we will be discussing today.

These slides are provided on our website, www.riteaid.com, beneath the Broker Relations advice tab. We will not be apropos to them in our remarks. We achievement you’ll accretion them accessible as they abridge some of the key credibility fabricated on the call. Afore we start, I’d like to admonish you that today’s appointment alarm includes assertive advanced statements.

These advanced statements are presented in the ambience of assertive accident and uncertainties that can account absolute after-effects to differ. These risks and uncertainties are declared in our columnist absolution and Account 1A of our best contempo anniversary address on Anatomy 10-K and added abstracts that we book or accouter to the Balance and Barter Commission. Also, we’ll be application assertive non-GAAP measures in our release. The ogue of these non-GAAP measures, forth with the adaptation to the accompanying GAAP measure, are declared in our columnist release.

Also included in our slides are the non-GAAP banking measures of adapted EBITDA gross accumulation and adapted EBITDA SG&A and the reconciliations of those measures to their specific GAAP measure. With these remarks, I’d now like to about-face it over to John.

John T. Standley — Administrator and Arch Controlling Officer

Thanks, Matt, and acknowledgment to anybody for aing us on the alarm this morning. During the fourth quarter, we fabricated cogent advance in a cardinal of areas. Our retail pharmacy articulation delivered able results, with an admission in adapted EBITDA over the above-mentioned year. Our pharmacy casework articulation is off to a able alpha in the new bartering affairs season.

And anon afterwards the division ended, we completed our auction of the 1,932 aliment to Walgreens. However, our best cogent development was that we entered into a absolute alliance acceding with Albertsons to actualize a absolutely differentiated baton in food, health, and wellness. We’re absolutely aflame about the merger. It makes faculty for us strategically and financially.

The alliance will transform Rite Aid by accretion geographic presence, abacus new levers for advance and solidifying our banking strength. As a result, the alliance has the abeyant to actualize acute bulk for our barter and shareholders. Our lath and administering accept this alliance is the best value-enhancing addition accessible for the aggregation and our shareholders. Afore I get into added specifics about the merger, let me absorb a few account talking about our fourth-quarter results.

Our fourth-quarter pro forma adapted EBITDA from continuing operations was $173.2 million, compared to $180.8 actor in the prior-year period. Pro forma adapted EBITDA from continuing operations is a new metric that we are introducing today. It takes our adapted EBITDA and adds fees we would accept acceptable on the Walgreens TSA if all the aliment awash to Walgreens were actuality accurate beneath the TSA for the absolute corresponding aeon and backs out after-effects for the added anniversary in budgetary 2017. In acceding of these results, a key highlight was the advance of our retail pharmacy articulation adapted EBITDA compared to the above-mentioned year, which was due, in ample part, to stronger gross allowance and acceptable bulk control.

Adjusted EBITDA decreased in the pharmacy casework segment, primarily due to a abatement in bartering business and changes in the acceding of our Medicare Allotment D membership. As I mentioned earlier, we are seeing aboriginal success in our bartering and bloom plan businesses this affairs season. Fourth-quarter net accident from continuing operations was $483.7 million, compared to $25.1 actor in the prior-year period. A key agency was a $325 actor assets tax bulk apropos to the revaluation of our deferred-tax assets in affiliation with the 2017 tax act.

Another key agency was a goodwill-impairment allegation of $191 million, net of tax, to acclimatize the book bulk of our pharmacy casework articulation to the bulk we paid for EnvisionRxOptions aback we acquired it in 2015. Both of these items were noncash charges. Fourth-quarter adapted net accident from continuing operations was $10.2 million, or $0.01 per adulterated share, compared to adapted net assets of $0.02 per adulterated allotment in aftermost year’s fourth quarter. Darren will accommodate added advice apropos our banking achievement in aloof a few moments.

Our aggregation did a amazing job of accomplishing stronger after-effects in ytical areas at a time aback we were additionally appointment a majority of the 1,932 aliment and accompanying assets to Walgreens. As of March 27, we auspiciously completed the abundance alteration action in barter for banknote accretion of about $4.2 billion. These put our alignment in a abundant bigger banking position branch forward. For example, as of March 3, our debt from continuing operations, net of cash, was about $2.9 billion.

Overall, the alteration action went actual well, and we are currently acknowledging these aliment through the TSA. In addition, alteration of the three advanced appear administering centers and accompanying account is accepted to activate afterwards September 1. As we’ve discussed on antecedent calls, the asset auction was a cogent footfall in accession Rite Aid to be a financially stronger alignment with an alike bigger arrangement of aliment in adorable positions in key markets. As we abide to focus on architecture momentum, we’re additionally awful focused on authoritative the best of the transformational befalling to advance our action through our alliance with Albertsons.

As a whole, the accumulated aggregation is accepted to accomplish about 4,900 stores, including added than 4,300 pharmacies and over 300 bloom clinics, confined over 40 actor barter a anniversary and breeding pro forma accumulated revenues at $83 billion. Adapted pro forma EBITDA is accepted to be about $3.7 billion, including abounding run-rate bulk synergies. As advanced announced, best of Albertsons grocery abundance pharmacies will be rebranded as Rite Aid, accouterment us with about 1,800 added pharmacy counters, forth with admission to new markets and a stronger attendance in the markets breadth we currently operate. Through our accumulated abundance networks, EnvisionRxOptions and RediClinics, we can allure added high-value pharmacy customers, who are the best admired barter in aliment retail.

The alliance will additionally accommodate us new levers for growth, like the befalling to advantage Albertsons adeptness in aliment and consumables and their accomplishment capabilities to added transform the advanced end of our stores. We can use own-brand adeptness of both companies to actualize a best-in-class portfolio that increases sales and improves margins. We can use our absolute adherence programs to advantage added ytics that actualize stronger relationships with our customers. We can additionally actualize a world-class omnichannel belvedere that meets barter when, where, and how they appetite to boutique through our assorted abundance formats, aliment and decree commitment options, and online and adaptable capabilities.

And finally, Rite Aid and Albertsons administering accept articular about $375 actor in abeyant run-rate bulk synergies that we accept can be accomplished by February 26, 2022, with associated ancient bulk of about $400 million. Rite Aid and Albertsons administering accept additionally articular about $3.6 billion in abeyant anniversary acquirement opportunities that we both accept can additionally be accomplished by February 26, 2022, with associated ancient bulk of about $300 million. We afresh took an important footfall adjoin commutual the alliance with the cessation of the cat-and-mouse aeon beneath the Hart-Scott-Rodino Act. The alliance charcoal accountable to added accepted closing conditions, including the approval of Rite Aid shareholders, and we will be ambience a date and time for a appropriate actor affair in the advancing months.

Subject to these approvals, we apprehend the alliance to aing in the aboriginal allotment of the added bisected of agenda 2018. We are additionally admiring to see the after-effects that Albertsons appear yesterday, which showed able advance in commensurable sales and adapted EBITDA for the fourth quarter. As we attending to accomplish the best of this befalling to anatomy a able accumulated with Albertsons, we additionally accept a lot of agitative developments beneath way to strengthen our business at Rite Aid. At this time, I’d like to about-face it over to our admiral and COO, Kermit Crawford, for an amend on key initiatives in our advanced end, pharmacy, and healthcare businesses.

Kermit?

Kermit Crawford — Admiral and Arch Operating Officer

Thank you, John, and acknowledgment to anybody for aing us today. As John said, in the fourth quarter, we delivered stronger achievement in key areas of our business and fabricated important advance in deploying our action for the new Rite Aid. One of our best able offerings is our wellness rewards program, which has been a d banker for our business aback its aboriginal barrage in 2010. Overall, with added affiliate agenda use and new affiliate advance in our wellness rewards program, our able-bodied chump database has helped us to accomplish bigger decisions on pricing, artefact mix, and promotions based on the expectations of our best customers.

In January, we alien BonusCash Rewards, a simplified new cardholder account that has replaced the arising of Plenti cards and now a key disciplinarian in our contempo promotional program. Barter accept responded absolutely to this awful acute bulk proposition, which has resulted in added assurance from our best customers. We abide to be focused on award new means to accomplish this awful accepted affairs alike stronger. We accept chip adult new accoutrement and technology which absorb apparatus acquirements and enables us to action our barter multichannel, hyperpersonalized offers in accession to our account promotional program.

As we abide our change to accommodate added one-on-one marketing, we will not alone enhance our chump assimilation but additionally account our supplier ally by alms added targeted and able means to adeptness affianced customers. We’re absolutely aflame about how our business mix is evolving and how these new enhancements to our wellness rewards affairs are allowance us abound our business by both cardinal and profitably affective forward, benefiting both our pharmacy and front-end businesses. At the aforementioned time, we additionally abide to see absolute after-effects from our wellness abundance format, as these aliment abide to beat the blow of the alternation in acceding of front-end, same-store sales and calligraphy count. In my 35 years of experience, these are the best-looking aliment in our industry, and they now accomplish up about two-thirds of our retail footprint.

We will abide converting added aliment to the wellness architecture while consistently arduous ourselves to drive addition in these stores. Addition key antecedence is growing our own private-label brand. In the fourth quarter, own-brand assimilation for aliment in our go-forward arrangement added by 6 abject credibility to 18.94% compared to the prior-year period, and we’re alive aggressively to abound that number. As John alluded to, this is an breadth of our business that we’re absolutely aflame about in acceding of a abeyant accumulated with Albertsons.

Food plays such a ytical role in bloom and wellness, and we had a amazing befalling to advantage Albertsons’ aliment adeptness in accouterment advantageous choices that differentiate our offering, drive chump loyalty, and abound advantage in the advanced end. In the pharmacy, we abide to accomplish advance on the key initiatives we discussed, including ytic programs like immunizations and medication adherence. We had an outstanding year with both flu shots and absolute immunization. In budgetary 2018, we set an best aggregation almanac for absolute immunization with 4.4 million, and our go-forward aliment administered added than 2.7 actor of these vaccinations.

This is a big win for our team, and we abide to accent the bulk of the non-flu immunizations we offer, which assure adjoin bloom altitude like shingles, pneumonia, and whooping cough. Our success with immunizations highlights the important role our pharmacists comedy above bushing prescriptions. At Rite Aid, our primary cold in the pharmacy is to serve as the trusted adviser for our patients, like with alone consultation, acknowledging medication apprenticeship and adherence to advice patients break on track, managing and convalescent their health. To advice accomplish this goal, we abide awful focused on bigger leveraging added technology like our redesigned adaptable app, OneTripRefills program, and argument messaging alerts.

These capabilities not alone accomplish it easier for patients to accede with their medication therapy, they additionally advice us to accomplish added efficiently, absolution up time for our pharmacists to accommodate added casework like one-on-one counseling and absolutely acceptable the trusted advisors. At the aforementioned time, one of our best actual priorities had been to ensure we accept abiding economics for bushing prescriptions. I’m admiring to address that we abide to accomplish advance in agreeable with our payer partners, and all above affairs accept been active for budgetary year 2019. We accept bigger adequation on acceding ante and access, and, added importantly, our pharmacy allowance bigger division over quarter.

We’ve additionally amorphous accepting conversations with plan sponsors to potentially participate in added Medicare Allotment D adopted arrangement in agenda 2019. We’ve additionally accomplished the action for award the best abiding options for finer managing our biologic purchasing cost. As we body drive in the pharmacy, we abide to abide awful focused on calligraphy growth, decidedly through book buys and by added amalgam our healthcare businesses into our retail network. As a reminder, we will absolutely aeon cogent plan exclusions by the end of the added division and appropriately apprehend same-store decree calculation to be stronger in the aback bisected of the budgetary year.

On our third-quarter call, we additionally discussed our cogent advance with Medicare Allotment D acceptance for our PBM EnvisionRxOptions. Through these efforts, we added about 188,000 new lives year over year as of January. We abide to see able acceptance for the lock-in aeon to date through April 1, 2018, and advanced abiding month-over-month advance through the of the year. We abide to see added calligraphy accumulated as a adopted pharmacy in Envision’s Medicare network.

Our bartering and bloom plan businesses are seeing aboriginal successes this affairs season, with over 200,000 new lives already secured. We advanced this sales drive to abide as the year progresses, as RFP accumulated is up 20% compared to the aforementioned aeon in 2017. To capitalize on the advance in the PBM, we are additionally ablution chip business campaigns that advantage Envision’s PBM abstracts and our wellness adherence abstracts aimed at active Envision assembly to our stores. Specialty pharmacy continues to be an important befalling in our go-forward strategy, and we accept apparent able advance in this key breadth of our business.

Envision’s specialty acquirement for the fourth division added by 14% compared to the aforementioned aeon aftermost year. We additionally are leveraging Bloom Dialog’s predictive ytic capabilities to yze the best befalling to advance medication adherence for patients and bear absolute bloom outcomes, which enhances our bulk hypothesis in payer-driven achievement networks. And finally, RediClinic continues to accommodate affection affliction in acceptable retail settings. Our best-performing locations accept historically been in grocery stores, and we see amazing abeyant to aggrandize this business through our proposed accumulated with Albertsons.

As I’ve said earlier, we fabricated important advance during the fourth quarter, both in acceding of our achievement in key operational areas and the connected beheading of our go-forward strategy. With a stronger arrangement of aliment and adorable positions in key markets, we accept amazing aplomb in our action for the new Rite Aid. At the aforementioned time, we are aflame about the abeyant to advance this action by accumulation with Albertsons to actualize a absolutely differentiated baton in food, health, and wellness. Acknowledge you for your time.

Now I will about-face it over to Darren Karst for added advice on our banking results. Darren?

Darren Karst — Arch Banking Administrator and Arch Authoritative Officer

Thanks, Kermit, and acceptable morning, everyone. Today, I will airing through our fourth-quarter banking after-effects and ysis our budgetary 2019 guidance. I will additionally epitomize our advance on the WBA asset auction and the accompanying use of accretion as able-bodied as blow on the contempo abortion of our tax allowances canning plan. As of March 27, we completed the auction and alteration of all 1,932 aliment to WBA beneath the adapted and restated asset-purchase acceding and accustomed banknote accretion accretion about $4.2 billion.

This bulk does not accommodate about $220 billion that would be accustomed afterwards we advertise the three administering centers to WBA ancient afterwards September 1, 2018. The accretion accustomed to date accept been acclimated to pay off all of our $970 actor of appellation loans. We additionally completed a $900 actor excess-proceeds offer, which resulted in an accumulated claim of about $49 actor beneath our 2020 notes, our 2021 notes, and our 2023 notes. That has freed up banknote accretion to acquiesce us to alarm the actual arch on our 9.25% bonds due 2020, which we apprehend to pay off today.

We additionally assuredly bargain our blaster borrowing commitments from $3.7 billion to $3 billion to reflect our bargain borrowing needs. The cancellation of accretion and paydown of debt in the fourth division gave us a debt antithesis from continuing operations, net of cash, of about $2.9 billion as of anniversary and a pro forma advantage arrangement of 4.6 times. With the achievement of the auction of aliment to WBA, our lath of admiral concluded the tax allowances canning plan that had been originally adopted on January 3, 2018, because it has finer served its purpose. As a aftereffect of the plan, we adequate about $2.2 billion of Rite Aid’s net operating losses.

I’ll now about-face to a ysis of our fourth-quarter results, which reflect the aliment that abide as allotment of continuing operations. Revenues for the fourth division were $5.4 billion, which was a abatement of $509 actor from the prior-year fourth quarter. Excluding revenues of $312 actor accompanying to the added anniversary included in aftermost year, absolute revenues decreased $197 million, or 3.5%. Net assets for the absolute aggregation was $767.1 million, or $0.73 per share, against a net accident of $21.1 million, or $0.02 accident per share, in aftermost year’s fourth quarter.

Net accident from continuing operations was $483.7 million, against a net accident of $25.1 actor in the above-mentioned year. The primary drivers of this aberration were an assets tax allegation of $325 actor apropos to the revaluation of our deferred-tax asset as a aftereffect of the 2017 tax act and a goodwill-impairment allegation of $191 million, net of tax. The aftereffect of the goodwill-impairment allegation was to acclimatize the book bulk of the pharmacy casework articulation to $2.1 billion, which is according to the abject in the articulation at the date of acquisition. Both of these accuse were noncash charges.

Adjusted net accident in the accepted division was $10.3 million, or $0.01 accident per share, against adapted net assets of $19.8 million, or $0.02 per share, in the above-mentioned year’s fourth quarter. Adapted EBITDA was $157.4 actor in the accepted quarter, compared to $167.6 actor in the above-mentioned year’s quarter. Our after-effects from continuing operations are absolutely abounding for accumulated administering costs that abutment both continuing operations and discontinued operations. This is afterwards attention to the actuality that we will accept payments from WBA beneath our alteration casework agreement, or TSA, to awning a allocation of our accumulated administering costs.

Fiscal 2018 and budgetary 2017 annual after-effects from continuing operations do not accommodate $15.8 actor and $24 actor of fees, respectively, that would accept been acceptable if all the aliment awash to WBA were actuality accurate beneath the TSA for the absolute corresponding period. Pro forma adapted EBITDA was $173.2 million, compared to $180.8 actor in the above-mentioned year, adapted in both periods for the abounding admittance of TSA fees and adapted to abstract the appulse of the added anniversary on the prior-year results. This is a new metric that we are accouterment to accommodate greater allegory in our results. The abatement in adapted EBITDA is primarily due to a abatement in our — in EBITDA in our PBM.

In our retail pharmacy segment, our after-effects bigger year over year as we accomplished some stabilization of pharmacy margins while advancement ascendancy of our costs. Retail pharmacy articulation acquirement for the division was $4 billion, which was $135.6 million, or 3.3%, lower than aftermost year’s fourth quarter, adapted to abstract the appulse of the added anniversary in aftermost year’s results. The abatement was due to lower pharmacy and front-end sales. Overall, same-store sales decreased 1.7% in the quarter.

Front-end same-store sales decreased by 0.6%, while pharmacy same-store sales decreased by 2.3%. Pharmacy same-store calligraphy calculation was bottomward 1.8% on a 30-day adapted basis, which was caused, in part, by actuality afar from assertive pharmacy networks breadth we were able to participate in aftermost year. Retail pharmacy articulation adapted EBITDA in the division was $124.1 million, or 3.1% of revenues, which was $1.1 actor college than aftermost year’s fourth-quarter adapted EBITDA of $123 million. Absolute retail pharmacy articulation gross-profit dollars in the division were $76.4 actor lower than aftermost year’s fourth quarter, but gross allowance was 122 abject credibility college as a percent of revenues.

Excluding gross accumulation of $82.8 actor accompanying to the added anniversary aftermost year, gross accumulation added $6.4 million. Adapted EBITDA gross accumulation was abortive to aftermost year’s fourth division by $91.9 actor due to the added anniversary aftermost year but 77 abject credibility bigger as a percent of revenues. The advance in gross allowance was due to bigger generic-drug purchasing and a stabilization of acceding rates. Retail pharmacy articulation SG&A costs for the division were lower by $78.1 actor compared to aftermost year’s third — aftermost year’s fourth quarter, while SG&A amount as a percent of sales added by 100 abject points.

Excluding SG&A costs of $75.1 actor accompanying to the added anniversary aftermost year, SG&A was $3 actor higher. Adapted EBITDA SG&A was $92.7 actor bigger than the above-mentioned year due to the added anniversary aftermost year but 44 abject credibility worse, primarily due to the abrogating bulk advantage from bargain sales. We did a acceptable job of all-embracing bulk ascendancy but still absent some bulk advantage due to our lower sales base. Adapted EBITDA for the pharmacy casework articulation of $33.3 actor was $11.3 actor lower than aftermost year’s fourth-quarter adapted EBITDA of $44.6 million.

The abatement is, in part, due to a abridgement in acquirement and an admission in SG&A bulk as we advance for approaching growth. The pharmacy casework articulation had revenues of $1.4 billion, which was a abatement of $65.4 million, or 4.3%, primarily due to a abatement in bartering business and changes in the acceding of our Medicare Allotment D membership. The changes in our Medicare Allotment D business is accompanying to our cardinal accommodation to abate our accord aural the low-income subsidy bazaar in assertive Medicare Allotment D regions in agenda 2017 and to focus instead on accretion our mix of chooser members, which we apprehend to be a added assisting book of business in the best term. In the abbreviate run, this cardinal about-face is constant in an advance of college operating costs as we body added chooser membership, but we advanced this is the appropriate abiding move for our Medicare Allotment D business.

As we declared on our aftermost antithesis call, we had a actual acknowledged 2018 Medicare Allotment D bid and abide to see able enrollments aback January. We added about 188,000 lives year over year as of January 2018 and are now accoutrement over 500,000 lives. We apprehend to abound this abject of covered lives throughout the of the year as we add enrollments throughout the advance of agenda 2018. Our banknote breeze account for the division shows a net antecedent of banknote from operating activities of $87 million, as compared to a use of $13.9 actor in aftermost year’s fourth quarter.

The aberration is primarily due to bargain account and added alive basic timing changes. Net banknote acclimated in advance activities for the division was $44.8 million, against $53.5 actor aftermost year. During the fourth quarter, we adapted 38 aliment and relocated six stores. At the end of the quarter, we operated 1,651 wellness aliment aural our continuing operations, which is about 65% of the abundance base.

For the fourth quarter, front-end same-store sales in our wellness aliment that accept been adapted in the accomplished 24 months were about 173 abject credibility college than our non-wellness stores, and calligraphy advance in these aliment was 259 abject credibility higher. During the quarter, we accustomed accretion of about $3.3 billion from the auction of 1,554 aliment to WBA. These accretion are apparent as a antecedent of banknote from advance activities in discontinued operations on the banknote breeze statement. The accompanying abridgement in our blaster borrowings is apparent as a use of banknote from costs activities in discontinued operations.

As I mentioned earlier, our pro forma advantage arrangement is 4.6 times. Now let’s about-face to our budgetary 2019 guidance. Our advice reflects our expectations for connected acceding amount burden and generic-purchasing allowances as able-bodied as the connected advancing allowances of our wellness acclimate affairs and added initiatives to abound sales and drive operational efficiencies that Kermit covered earlier. Additionally, our advice does not accord aftereffect to our awaiting alliance with Albertsons.

We apprehend absolute sales to be amid $21.7 billion and $22.1 billion and adapted EBITDA to be amid $615 actor and $675 actor for budgetary 2019. Same-store sales are accepted to be in a ambit from blockage collapsed at 0% to an admission of 1%. Key items that we apprehend to drive the advance in comp-store sales accommodate the cycling of plan exclusions in the added bisected of the year, ytic initiatives, and calligraphy book buys. As a result, we apprehend the aboriginal bisected of the year to lag these ranges somewhat and the aback bisected of the year to be stronger.

We apprehend adapted net assets to be in a ambit of $18 actor to $61 actor and adapted net assets per allotment to be in a ambit of $0.02 to $0.06 per allotment for budgetary 2019. Our budgetary 2019 basic amount plan is to absorb about $250 million, which includes $60 actor for calligraphy book buys. We are planning to accessible two new stores, complete three relocations, and acclimate 132 wellness aliment in budgetary 2019. We additionally plan on closing 43 aliment during the year.

That completes my allocation of the presentation, and I would now like to about-face it aback to John. John?

John T. Standley — Administrator and Arch Controlling Officer

Thanks, Darren. Afore we activate demography questions, I’d like to acknowledge our Rite Aid aggregation for their amazing efforts during the division and as we activate a new budgetary year. The fourth division was a active time for our organization, and from our administration to our front-line associates, we’ve done a amazing job of blockage focused to accommodated our cardinal priorities and bear a consistently outstanding chump acquaintance to our customers. In fact, during this active time, all-embracing chump achievement has added this year compared to the previous, which is a attestation to aloof how committed our teams are to above the expectations of our customers.

That concludes our able animadversion for this morning. We’ll now accessible up the buzz curve for your questions.

Operator

[Operator instructions] Your aboriginal catechism comes from Robert Jones from Goldman Sachs. Your band is open.

Nathan Rich — Goldman Sachs — Analyst

Hi. This is Nathan Rich on for Bob this morning. Acknowledgment for demography the questions. So I aloof capital to alpha with acceding rates.

Definitely auspicious to apprehend that you guys accept your above PBM affairs bound in for budgetary ’19. I’d accept those ante are now absolutely cogitating of the new abundance cast column the asset denial to Walgreens? So first, aloof capital to get a faculty of how those ante in the new affairs yze to your ante above-mentioned to the abundance divestitures. And afresh as we advanced about action forward, the above pharmacy cast that you’ll accept afterward the accumulated with Albertsons, accept you started to appoint with PBMs and payers about what blazon of acceding ante and — will attending like affectionate of afterward the aing of the deal?

John T. Standley — Administrator and Arch Controlling Officer

So I can acknowledgment the aftermost allotment of the catechism first, which is no, and we can’t accept any conversations with any ally about acceding ante until afterwards the aing of the deal. So that’s not commodity we can do until we get there. But Kermit, do you appetite to allocution about the ’19 contracts?

Kermit Crawford — Admiral and Arch Operating Officer

Sure. So, Nathan, I would acquaint you that our acceding has counterbalanced division over quarter, abnormally the aftermost two quarters. And aback we advanced about the new footprint, we are accepting as acceptable or bigger after-effects as we did before. If you advanced about the old Rite Aid, we were in assertive markets breadth we were No.

3 or No. 4 in bazaar share. And that absolutely didn’t accord us the affectionate of advantage that a payer needs. So aback you advanced about the new footprint, we accept absorption in our stores.

That could actual able-bodied be added with the Albertsons acquisition. And therefore, we feel actual acceptable about the affairs we accept in abode and our adeptness to abide to administer our acceding action forward.

Nathan Rich — Goldman Sachs — Analyst

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How To Read Your Grocery Receipt – albertsons return policy without receipt | albertsons return policy without receipt

OK. That’s helpful. And afresh maybe aloof one on the same-store sales advice for ’19. You mentioned, I guess, cycling the exclusion from assertive networks that impacted volumes in budgetary ’18.

I was apprehensive if you could aloof accord us a faculty of how abundant of a annoyance that absolutely was to your calligraphy volumes in budgetary ’18. And does the advice for aing year contemplate a acknowledgment to absolute calligraphy volumes, I guess, by the aback bisected of the year?

John T. Standley — Administrator and Arch Controlling Officer

So I advanced the — in acceding of the impact, it’s a big allotment of our abatement currently, is arrangement exclusions. That affectionate of got us to breadth we are in calligraphy count. It’s the bigger allotment of that decline. In acceding of the aback half, Kermit?

Kermit Crawford — Admiral and Arch Operating Officer

Yes. We would aeon those exclusions at the end of the added quarter. And I would acquaint you that the aback half, we do advanced absolute decree advance in the aback bisected of our business.

Operator

Your aing catechism comes from the band of John Heinbockel from Guggenheim. Your band is open.

John Heinbockel — Guggenheim Ally — Managing Director

So John, let me alpha with acceding environment, right, and accepting these affairs done. I apperceive in the past, your ally had exerted some appealing cogent burden on you. Do you advanced there has been a change — a from your altered footprint, a change in relationship, their approach? Because I advanced there had been some frustration, right, on your allotment about that pressure, decidedly on generics. Is there now a altered mindset in the chat you’re accepting with them, such that this stabilization or normalization, whatever you appetite to alarm it, is affectionate of actuality for the best term?

John T. Standley — Administrator and Arch Controlling Officer

Tough catechism to answer. I mean, I advanced a brace of thoughts, John. I advanced 1) if I looked at others in my amplitude and looked at their allowance over the aftermost brace of years, it has suffered as well. I mean, we affectionate of apparently should apprehend array of criterion ourselves based on accessible information.

I advanced one of the frustrations on our ancillary is that as that allowance eroded, we absolutely didn’t accept some of the aforementioned opportunities, I think, to accretion admission to added customers. That’s apparently breadth it — the Walgreens alliance overhang absolutely embodied itself, I think, in our results. And in fact, we absent a brace of networks that we got to aeon our way about here. I don’t advanced that the acceding amount ambiance in the continued appellation is action to be great.

We’re abiding or whatever, I advanced it’s consistently a challenge. And aback we allocution about pharmacy margins stabilizing, we accept some acceding amount loss, but Kermit and the aggregation accept additionally done a abundant job on the purchasing side. And as you know, our claiming is consistently aggravating to get those two things to bout up. Can we accretion abundant bulk on the purchasing ancillary to account what’s accident in the exchange in acceding of amount erosion? So amount abrasion continues but not at the aforementioned amount appropriate now that — in acceding of what’s been apprenticed for budgetary ’19 that we saw in budgetary ’17 and 18.

So in that sense, it’s added stable. And we begin some acceptable bulk backward aftermost year action into this year that’s absolutely allowance us on the generic-purchasing side. As I attending forward, I still see it as a actual aggressive exchange with repayers who are aing to 70% of our business who can still affectionate of at their whim apply a lot of admission over us. So it still charcoal a arduous environment.

But I do think, as Kermit aloof talked about, the affectionate of refocused abundance base, accomplish the conversations a little clearer in acceding of what our bulk is to their networks against breadth I advanced it may accept been a little bit abashed before. So in that sense, I advanced the conversations are a little bit better.

John Heinbockel — Guggenheim Ally — Managing Director

Then maybe as a segue to that, right? And so as allotment of the Albertsons S-4, right, you accept your all-embracing anticipation out there, which are appealing robust. Maybe aloof aerial level. Aback you advanced about decidedly growing the top band at those affectionate of rates, is that — that about has to be apprenticed by PBM advance as against to amount retail. Or do you absolutely advanced your amount retail can abound a lot faster than it has, maybe not aloof in the aftermost year or two but alike action aback bristles years?

John T. Standley — Administrator and Arch Controlling Officer

Yes. I advanced — we advanced there’s some advance befalling for amount retail, but the PBM is the bigger driver.

Operator

Your aing catechism comes from Charles Rhyee from Cowen. Your band is open.

Charles Rhyee — Cowen & Aggregation — Managing Director

Yes. Acknowledgment for demography the questions. Aloof had a quick catechism about array of — you mentioned that all-encompassing purchasing — all-encompassing acquirement was absolute in the quarter. Can you maybe busy a little bit added on that and altercate maybe your accord with how — with McKesson at the moment and conceivably how those discussions accept afflicted now with the Albertsons deal?

John T. Standley — Administrator and Arch Controlling Officer

Yes. Well, I advanced Kermit can accommodate some blush on all-encompassing purchasing in the quarter. In acceding of breadth we are with McKesson, we’re accepting a chat with them, as you’d expect, about how we can go forward. You apparently accept to ask McKesson their appearance on how the Albertsons transaction affectionate of stirs into that.

But from our perspective, it does, over time, accord us added calibration from a purchasing perspective, which we’re action to do our best to advantage as we go forward.

Kermit Crawford — Admiral and Arch Operating Officer

And Charles, the alone affair I’d add, I advanced our — the way we’re alive with McKesson and payers were to date, if you advanced about the — from a McKesson point of view, they didn’t apperceive if Rite Aid was action to be about as a allotment of the Walgreens deal. And now we’ve gotten aback to accepting effective conversations, compassionate that we do accept an advantage to enhance our purchasing. But we’re attractive to accretion the best, best bread-and-er antecedent for us to buy our drugs action forward, both cast and generic.[Crosstalk]

Charles Rhyee — Cowen & Aggregation — Managing Director

OK. Is that — I’m sorry. Go ahead.

John T. Standley — Administrator and Arch Controlling Officer

And I would aloof animadversion we do advanced there’s a abeyant purchasing synergy accompanying to Albertsons bottomward the band actuality aback we can get to it.

Charles Rhyee — Cowen & Aggregation — Managing Director

Right. OK. Thanks. And aloof addition question.

You talked about the cardinal of aliment you relocated and new ones you’ve opened. Can you affectionate of admonish us what array of — how abounding aliment do you see as opportunities for relocation? And how does that change now with Albertsons advancing into the mix that — array of what your action actuality is?

John T. Standley — Administrator and Arch Controlling Officer

I don’t advanced it changes it dramatically. We still accept — I don’t know, I don’t accept the exact cardinal off the top of my head, but we still accept some aliment we charge to relocate. It’s still a acceptable befalling for us. We still accept some aliment that charge to get to the wellness format.

We are alive our way through the abundance base. So as we attending at what’s left, it is a accumulation of alteration opportunities, accumulated with acclimate opportunities. But there’s some of both there for us still, some acceptable allotment to be made, some acceptable investments to make.

Darren Karst — Arch Banking Administrator and Arch Authoritative Officer

Yes. I mean, the affair I would add is, we’ve got about 65% of the absolute abundance abject that are wellness stores. Apparently by the time we get through budgetary — the accepted budgetary year, we’re apparently afterpiece to 70%. So a allotment of that 30% is a alteration opportunity, so there are still some added acclimate opportunities.

So I advanced that we’ll get to that in due time.

John T. Standley — Administrator and Arch Controlling Officer

Right. And I advanced if you appetite to affectionate of band Albertsons on top of it, I advanced what comes out of that is the befalling to maybe get to some freestanding drugstores and some new markets as we move forward. So we get into some appealing agitative new geographies in Arizona, Texas, Chicago. There are some appealing acute markets there for us to advanced about in acceding of breadth we appetite to invest.

Charles Rhyee — Cowen & Aggregation — Managing Director

OK, and that’s helpful. And maybe my aftermost question. Can you admonish us again? I bethink you acclimated to accord metrics about the advance in same-store sales from the new wellness architecture stores. Are those metrics still — would you say those are still accordant in acceding of how we advanced about array of the advance in achievement as you about-face the architecture or backpack stores?

Darren Karst — Arch Banking Administrator and Arch Authoritative Officer

Yes. I advanced those are still relevant. I absolutely advanced I mentioned it in my comments. The advanced end, I think, was like 170-some abject points, and the calligraphy advance was about 250 abject credibility college in the wellness aliment than — against the non-wellness stores.

And that’s been appealing constant division over quarter.

Operator

Your aing catechism comes from Ross Muken from Evercore. Your band is open.

Elizabeth Anderson — Evercore ISI — Vice President

Hi. This is Elizabeth Anderson in for Ross. I was apprehensive if you could busy on some of your annotation in acceding of the advanced end for budgetary ’19. I saw that acutely it counterbalanced array of Q-over-Q, but I aloof capital to array of accept that outlook.

It would be accessible in giving that annotation on the calligraphy side.

John T. Standley — Administrator and Arch Controlling Officer

Well, we advanced we’re action to abide to account from added investments in wellness stores. I know, Kermit, you mentioned, I think, in your allocution in acceding of wellness and the agitative things that we have.

Kermit Crawford — Admiral and Arch Operating Officer

So I advanced there’s a cardinal of things. We talked about cycling affairs that we’ve been afar from. We talked about added programs, added ytic programs like our immunization program. We had a badly acknowledged flu division aftermost year.

We’re additionally accomplishing actual able-bodied on our non-flu immunizations, things like shingles and pneumonia and whooping cough. We accept the adeptness to accommodate all 17 CDC-approved vaccinations in the states that acquiesce it, so that helps to abound our business. Things like medication adherence, we’re alive actual carefully with Bloom Dialog in our predictive ytics to drive bigger all-embracing adherence. We’ve additionally done some technology improvements with our OneTripRefills and application our adaptable app, so all of these things are active bigger all-embracing assimilation of our business and in our — and advice calligraphy growth.

John T. Standley — Administrator and Arch Controlling Officer

So as I affectionate of arch that to the advanced end that the headwind of the advanced end, a allotment of it has been — we’ve had some chump accident in the pharmacy, and those are appealing acceptable front-end customers. So we’ve had a little bit of a headwind there. So as we appear about the aback bisected of the year and we aeon that impact, that puts us, I think, in a bigger position to appearance — to accomplish some absolute comps there. But again, wellness has got the BonusCash affairs that we’re launching.

We’re continuing to assignment on affairs efforts. We’ve got the wellness stores. We’ve got, I think, a cardinal of agitative things that we’re additionally alive on in the advanced end of the store.

Elizabeth Anderson — Evercore ISI — Vice President

OK, perfect. That’s absolutely helpful. And afresh how are you cerebration about retail SG&A action forward? Obviously, the abundance abject afflicted a little bit. It’s crept up as a allotment of sales.

So on a per auction — per-store basis, it aloof remained steadier. Is that commodity you’re attractive to accomplish array of changes to? Are you array of blessed with levels of how things are now?

John T. Standley — Administrator and Arch Controlling Officer

Yes. I mean, I advanced a brace — I’ll accord you a brace of comments there. One is we deleveraged ourselves a little bit actuality with the top-line challenges. So as we get into the aback bisected of the year and get some advance aback in the sales, that will advice a little bit in acceding of a — as a percent.

I advanced on the dollar side, we’re consistently attractive for means to run our business added efficiently. And we’ve got some initiatives to assignment through this year on the bulk side. We’ve done some things operationally in acceding of how we accommodate administration to the aliment and acreage anatomy and things like that, that will account this budgetary year, but we’re additionally adverse some headwinds in acceding of allowance rates. We’ve got some allowance increases that we’ll see above assorted markets, and so we’ve got some things congenital into our plan for that as well.

Darren Karst — Arch Banking Administrator and Arch Authoritative Officer

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There’s absolutely nothing, annihilation out of the ordinary, adequately constant with the past, but we’ve absolutely got some opportunities to abide booty costs out of the system.

Operator

And your aing catechism comes from the band of Lisa Gill from J.P.Morgan. Your band is open.

Michael Minchak — J.P.Morgan — Vice President

It’s absolutely Mike Minchak in for Lisa. Acknowledgment for demography the questions. So just, first, action aback to the generic-purchasing efficiencies actuality a tailwind to budgetary ’19. From a timing standpoint, does that accept that you accomplished the accommodation with commendations to drug-purchasing affairs at some point in budgetary ’19 and those economics accept flowed through as it relates to that budgetary ’19 outlook? Or is that added of a budgetary 2020 opportunity? Aloof any blush there you can accommodate will be helpful.

John T. Standley — Administrator and Arch Controlling Officer

That’s added of a budgetary 2020 opportunity, yes.

Michael Minchak — J.P.Morgan — Vice President

Got it. And afresh PBM operating accumulation was bottomward appealing decidedly year over year. Can you allocution about the capital disciplinarian there? It seemed like it was added on the opex ancillary against our expectations. Aloof array of a new run amount we should advanced action forward.

Or is there some of those costs that can go abroad over time?

John T. Standley — Administrator and Arch Controlling Officer

Yes. So I advanced there’s affectionate of two dynamics at assignment there. One, I advanced we talked a little bit about as we were affectionate of blind about on the Walgreens deal, we had a boxy affairs division aftermost year to put new lives into the PBM this year. I advanced bodies were aloof affectionate of cat-and-mouse to accept what the approaching of the PBM was.

As we accept appear out of that overhang into this year’s affairs season, we are — as we mentioned, I think, on our allocution actuality a few moments ago, we’re seeing some actual able-bodied action action and some aboriginal wins that are actual auspicious advancing out of the gate, acutely with no assurances in acceding of how the affairs division will accomplishment out, but we are off to a actual able alpha in the affairs season. And accordingly, we accept congenital a lot of added basement at Envision for advance and additionally to advance acquiescence and chump account and a cardinal of things as we’ve invested in the asset. So we are accustomed some SG& in there, but we advanced it’s important SG&A to advice us abound the business and accommodate the akin of account that’s action to advice differentiate us in the marketplace. So I advanced if we assignment our way through this budgetary year on a year-over-year basis, the PBM will be beneath a little bit of pressure, but we achievement to appearance that we’re accepting lives that will drive acquirement in the afterward year.

So it’s absolutely an advance for aing year.

Darren Karst — Arch Banking Administrator and Arch Authoritative Officer

And we congenital all that into our all-embracing guidance.

Operator

Your aing catechism comes from George Hill from RBC. Your band is open.

George Hill — RBC Basic Markets — Managing Director

Hey, acceptable morning, guys. I advanced a lot of my affectionate of housekeeping questions accept been answered. John, I capital to ask about how are you guys cerebration about how — I assumption how activating that market’s been the aftermost several months and I assumption the role that clinics are action to comedy in the accumulated aggregation action advanced accustomed the vertical industry tie-ups that we’re seeing? And afresh I’ve got a quick aftereffect on the PBM.

John T. Standley — Administrator and Arch Controlling Officer

Yes. It’s absolutely a very, I think, activating aeon of time in the industry. The big takeaway for me from a lot of this, and I advanced I’ve mentioned it before, is aloof I advanced a ability of the bulk that we actualize in acceding of how we collaborate with barter and patients every day. A lot of the bulk that we actualize manifests itself about bottomward the band based on whoever’s demography accident on the life.

Clearly, there’s a lot of focus on admission to lives with a lot of this alliance in the marketplace. And so I advanced it’s not alone important that we accept PBM, but it’s additionally important that we’re a abundant accomplice as we move advanced actuality for payers and others who own lives. And so I advanced the clinics do comedy a ytical role in that in accumulated with added pharmacies. We accept an outstanding befalling at Albertsons there.

There’s a lot of dispensary amplitude that absolutely aren’t congenital out at Albertsons. And so as we accompany the transaction to a close, we’re action to accept befalling adequately quickly. We’ll accept to do a little bit of assignment on that space, but we’ll be able to get some added clinics accessible and absolutely abound our dispensary business, accretion admission to new barter and have, I think, an important batten in discussions or an important adequacy in discussions with assorted ally as we go forward.

George Hill — RBC Basic Markets — Managing Director

OK. That’s helpful. And afresh I assumption as we advanced about the PBM business and I say if we accept that the deals that we see in the bazaar appear to close, breadth do you advanced becomes the alcove for the Envision PBM business? And I assumption do you advanced of it added as a government-facing PBM business? Or is — or are there specific niches on the bartering side? Or do you feel like you can accomplishment and the companies got a adventitious to booty bazaar allotment accustomed the — accustomed affectionate of what we’re seeing in the market?

John T. Standley — Administrator and Arch Controlling Officer

Yes. So our alcove today is absolutely affectionate of more, I’d say, primarily in the midsize market. We win and attempt actual finer for bloom affairs and bartering business in that space, and I advanced that bazaar is still actual abundant accessible to us. I advanced there’s action to be a lot of audience who don’t appetite to accept — necessarily accept arranged healthcare allowance and pharmacy advantage in the aforementioned plan.

So I advanced there’s action to be a cardinal of bloom affairs who will potentially attending at these big aggregated entities and say, “Well, I advanced I’d rather be absolute from them in acceding of how I go to market.” So I advanced there’s action to be lots of spots actuality for us to be actual aggressive in the exchange and differentiate ourselves in acceding of the actuality that we’re a absolutely capable, freestanding, affectionate of unaffiliated, if you will, PBM in the marketplace.

Operator

Your aing catechism comes from William Reuter from Bank of America. Your band is open.

William Reuter — Bank of America Merrill Lynch — Analyst

Good morning. Aback I attending at your advice for 2019 adapted EBITDA, it’s almost flattish year over year. I was apprehensive if you could allocution a little bit about the puts and takes amid the retail ancillary and the pharmacy-services ancillary of the business. And I assumption which one maybe we ability apprehend advance against declines in?

Darren Karst — Arch Banking Administrator and Arch Authoritative Officer

Yes. I assumption the pharmacy-services business is bottomward a little bit, and the — in general, the retail business is up a little bit. So that’s apparently the mix amid those two things. We’ve got a little bit of the sales growth, obviously, congenital into the retail ancillary of the business, so that’s accessible in acceding of active advantage in that allotment of the business.

John T. Standley — Administrator and Arch Controlling Officer

It’s an important year for us to not alone show, I think, some adherence from an antithesis angle but as we get to the aback bisected of the year to appearance growth. That’s absolutely the affair in this advice that’s critical.

Darren Karst — Arch Banking Administrator and Arch Authoritative Officer

Right. And to some — the pharmacy-services business is a little bit of a architecture year.

John T. Standley — Administrator and Arch Controlling Officer

Exactly.

Darren Karst — Arch Banking Administrator and Arch Authoritative Officer

And we’ve talked about how we’re off to a appealing acceptable alpha in the affairs season, so we apprehend that to affectionate of abound over the year. And really, we’re apparently attractive above that into the afterward year as a cogent affectionate of advance year.

John T. Standley — Administrator and Arch Controlling Officer

Manifest itself in 2020 what we get done this year.

Darren Karst — Arch Banking Administrator and Arch Authoritative Officer

Yes.

William Reuter — Bank of America Merrill Lynch — Analyst

Right. Yes. No, it sounds like, continued term, that’s absolutely breadth you guys accept the befalling is and alike in 2020 as well. OK.

And afresh in acceding of the auction accretion from the DCs which will be in the abatement of this year, do you accept thoughts on what you ability be application that $220 actor for?

Darren Karst — Arch Banking Administrator and Arch Authoritative Officer

Well, I mean, the aboriginal absorbed was to abide to aloof accord that. So I don’t advanced we accept a altered angle on that at this point.

William Reuter — Bank of America Merrill Lynch — Analyst

OK. And afresh aloof lastly, earlier, you mentioned that the acceding amount pressures that you’re action to acquaintance this year will not be as abundant as 2017 and 2018. I don’t accept a faculty at all for aloof what blazon of altitude of that we’re talking about. Is there annihilation you can accommodate in acceding of what it was in ’17 and ’18 or what you apprehend for 2019?

John T. Standley — Administrator and Arch Controlling Officer

I mean, I guess, what I would aloof acquaint you is we see a added abiding allowance ambiance this year breadth we saw abundant declines the aftermost two years. That’s apparently the best way you can go attending at it.

William Reuter — Bank of America Merrill Lynch — Analyst

OK. But in acceding of numbers, there’s annihilation that you guys accept talked about or that you could accommodate to us?

John T. Standley — Administrator and Arch Controlling Officer

No. I would aloof say if you looked at our EBITDA declines the aftermost brace of years, it’s actual abundant apprenticed by the abatement in acceding ante that we’ve seen. So if you appetite to quantify the impact, that’s the distinct bigger disciplinarian of the burden we’ve apparent on EBITDA.

Operator

Your aing catechism comes from Joe Stauff from Susquehanna Investments. Your band is open.

Joseph Stauff — Susquehanna International Accumulation — Analyst

I capital to ask — aloof I apprehend this is an antithesis alarm accurately to Rite Aid. But as you know, your stock, obviously, is geared to the bulk of the pro forma company. And as a aftereffect of that, I advanced there is absolutely some adversity attractive aloof how your b has behaved aback array of the announcement. There is some adversity accepting your easily about basically the absolute organization, that is investors.

And I was apprehensive aback or what you guys plan to do to absolutely try to accomplish the case with account to the pro forma aggregation and the allowances and how that accrues or apparatus into the stock.

John T. Standley — Administrator and Arch Controlling Officer

Sure. So I mean, I advanced a brace of thoughts. I mean, one is, as you know, we’re alive our way through a action here. So we accept got an S-4 on book which has a lot of abundant information, I think, about the accumulated aggregation included in it.

We’ve got some abundant broker advice on our website. Now that we accept all the advice with this antithesis absolution year affectionate of in the marketplace, we’ll be accomplishing our assignment affectionate of on the broker relations ancillary actuality to affectionate of get out and acquaint our adventure in acceding of the bulk this creates for our shareholders and why we accept this makes sense. And so we’ll be accomplishing some assignment actuality over the aing brace of months to do that.

Joseph Stauff — Susquehanna International Accumulation — Analyst

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OK. And I assumption the accepted aing for the transaction, I apperceive you’ve historically said end of the summer. Let’s say for illustration, it’s September 1. Would the actor vote finer afresh be, say, planned in mid- to backward July? Or would you apprehend that to action earlier?

Darren Karst — Arch Banking Administrator and Arch Authoritative Officer

So I mean, in acceding of action here, we’ve got an S-4 on file. It goes through a ysis process. We will accept to amend that certificate as our numbers get stale. Some were apparently already stale.

Some are accepting stale. So we’re action to get — we’ve got to get a 10-K filed, which will get done actuality in the aing brace of weeks. We’ll amend that S-4 and refile it with those numbers. And already austere by the SEC, we can afresh move to proxy phase, get a proxy printed and beatific out.

And we’ve got a cat-and-mouse aeon for everybody to accept a adventitious to ysis the proxy and whatnot. And so aloof aback you array of time the accomplished affair out, yes, that actor vote is apparently out in July somewhere, aloof roughly, depending on how things array of comedy out. We can aing already the actor vote is done.

Operator

And your final catechism today will appear from Carla Casella from J.P.Morgan. Your band is open.

Carla Casella — J.P.Morgan — Managing Director

Hi. Can you apprehend me all right?

John T. Standley — Administrator and Arch Controlling Officer

Yes.

Darren Karst — Arch Banking Administrator and Arch Authoritative Officer

Yes.

Carla Casella — J.P.Morgan — Managing Director

OK, great. You talked about debt paydown with all of the asset auction proceeds. Can you accord us any added blush on the timing of the 2021 or ’23 addendum and whether those ’23 addendum would be refinanced alike if Albertsons accord were not to close?

Darren Karst — Arch Banking Administrator and Arch Authoritative Officer

Yes. So we apparently will be, in the not-too-distant future, action out with addition asset auction accretion action because we still accept some asset auction proceeds. So that’s commodity that I doubtable you can expect. But above that, I don’t advanced we’re absolutely commenting on what we’re accomplishing in acceding of advantageous off those added two securities.

Carla Casella — J.P.Morgan — Managing Director

OK, great. And afresh the DC transfer. If you alpha that September 1, is that commodity that takes like a month? Or is that a six-month? How continued is that process, typically?

Darren Karst — Arch Banking Administrator and Arch Authoritative Officer

Well, what we’ve said is that we apprehend that afterwards September of 2018. It’s absolutely up to WBA aback they are able to booty those DCs, and so it could technically — I advanced somebody referred to it occurring in fall. It may or may not appear in fall. It’s aloof we accept about said is afterwards September, so it could be several months or alike best than that.

And I don’t advanced they all accept to go as one or one at a time.

Carla Casella — J.P.Morgan — Managing Director

And the abundance closures, are those abounding to added the advanced or end of the — or aback bisected of the year? And I’m d they’re all at lease-renewal period.

Darren Karst — Arch Banking Administrator and Arch Authoritative Officer

They’re added in the advanced of the year, Carla. And I advanced it’s a accumulated of face-lifting aeon and maybe some adept closures in the portfolio.

Carla Casella — J.P.Morgan — Managing Director

OK. And afresh you gave a pro forma, or you gave a tax appraisal in your guidance, but did you accord a tax amount that you apprehend action forward?

Darren Karst — Arch Banking Administrator and Arch Authoritative Officer

So I advanced the banknote taxes be actual basal action forward, Carla. From a amount standpoint, I advanced it’s apparently commodity afterpiece to affectionate of a accepted bordering rate. So —

John T. Standley — Administrator and Arch Controlling Officer

It can get bounced around.

Darren Karst — Arch Banking Administrator and Arch Authoritative Officer

Yes. But it can get bounced around. I’m a little afraid to accord you an exact number. Definitely, I advanced our amount is apparently 28%, 30%, but it can animation about because of detached item, right? And our — apparently the added accordant account is our banknote taxes, which is in the ambit of about $10 actor to $15 million.

We still accept an NOL larboard alike afterwards all the sales.

Carla Casella — J.P.Morgan — Managing Director

OK. That’s helpful. And afresh aloof one clarification. You got some questions already on the pharmacy purchasing.

What’s the timing on a accommodation to use either the Walgreens arrangement or renegotiating with McKesson?

John T. Standley — Administrator and Arch Controlling Officer

Well, our McKesson acceding goes through March of 2019. So unless we’re action to reup with McKesson, we apparently won’t be authoritative the change until afterwards the McKesson arrangement expires.

Carla Casella — J.P.Morgan — Managing Director

OK, great. And afresh one aftermost housekeeping. Do you accept an appraisal or about a pro forma hire bulk afterwards you’ve awash all of the aliment to Walgreens?

John T. Standley — Administrator and Arch Controlling Officer

Got that?

Darren Karst — Arch Banking Administrator and Arch Authoritative Officer

Yes. I don’t alike accept it at the top of my head. I mean, that, honestly, will be in our 10-K. Aback we book in a brace of weeks, we’ll accept it.

And actually, we accept a adapt 10-K that we put out there with — forth with the S-4, that has hire from continuing operations. So I advanced that number, if you go to that footnote, will accord you a appealing appropriate idea.

Carla Casella — J.P.Morgan — Managing Director

Oh, right. OK. Sorry, I absent that.

John T. Standley — Administrator and Arch Controlling Officer

OK, great. Well, thanks, everybody, for aing us this morning. We acknowledge it. Acknowledge you.

Operator

[Operator signoff]

Duration: 66 minutes

Matt Shroeder — Senior Vice President, Arch Accounting Administrator and Treasurer

John T. Standley — Administrator and Arch Controlling Officer

Kermit Crawford — Admiral and Arch Operating Officer

Darren Karst — Arch Banking Administrator and Arch Authoritative Officer

Nathan Rich — Goldman Sachs — Analyst

John Heinbockel — Guggenheim Ally — Managing Director

Charles Rhyee — Cowen & Aggregation — Managing Director

Elizabeth Anderson — Evercore ISI — Vice President

Michael Minchak — J.P.Morgan — Vice President

George Hill — RBC Basic Markets — Managing Director

William Reuter — Bank of America Merrill Lynch — Analyst

Joseph Stauff — Susquehanna International Accumulation — Analyst

Carla Casella — J.P.Morgan — Managing Director

More RAD ysis

This commodity is a archetype of this appointment alarm produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not accept any albatross for your use of this content, and we acerb animate you to do your own research, including alert to the alarm yourself and account the company’s SEC filings. Please see our Acceding and Altitude for added details, including our Obligatory Capitalized Disclaimers of Liability.

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