Rite Aid Sends Letter to Shareholders

Rite Aid Corporation (NYSE: RAD) today announced that it has issued a
letter to shareholders in connection with its proposed merger with
Albertsons Companies Inc. (“Albertsons”). The letter details the merits
of the proposed merger with Albertsons and highlights the Company’s
recommendation that shareholders vote FOR the transaction.

The full letter to shareholders is available at https://bit.ly/2J6apEY
and the text is included below.


Dear Fellow Rite Aid Shareholder:

Rite Aid will hold a Special Meeting of Stockholders on August 9, 2018
to vote on the proposed merger with Albertsons Companies (“Albertsons”).
We ask for your support by voting your shares FOR
the merger to accelerate Rite Aid’s strategic and financial
transformation and to realize the significant value we anticipate
through ownership in a stronger, better-positioned company.

As the retail healthcare landscape continues to evolve, we have taken
critical steps to improve Rite Aid’s competitive position through our
innovative Wellness store format, enhanced customer loyalty program and
expanded health and wellness offerings. We have also had robust
discussions over the past several years, including with an extensive
list of third parties, around a range of strategic options and
considered Rite Aid’s strategic position as an independent enterprise.
Our work has led us to conclude that the merger with Albertsons is the
best way to achieve our key strategic priorities of growing front-end
sales, serving as a trusted advisor to our pharmacy customers, building
a winning value proposition for payors and providers, and delivering
compelling long-term value to our shareholders.

Based on the growth and value creation opportunities presented by the
proposed combination with Albertsons, we are confident that the merger
represents the right combination, with the right partner,
at the right time.

For additional information about the proposed merger and how to vote
your shares, please visit www.riteaid-albertsons.com.

Enhancing Rite Aid’s Ability to Compete in Today’s Evolving

As the ongoing consolidation across our industry continues, it’s clear
that our business environment is changing faster than ever before. These
changes further emphasize the importance of completing our proposed
merger with Albertsons in order to accelerate the pace of our
transformation. As a top-five food and drug retailer following the
merger, Rite Aid will benefit from improved scale, a more diversified
business and a stronger market position. Together, our unique pharmacy
and grocery combination will allow us to better leverage important
assets such as our EnvisionRxOptions integrated pharmacy benefit
manager, RediClinic convenient care offering and Health Dialog
population health management solution across a broader customer base to
deliver a compelling value proposition for payors and providers and
improved relationships with customers. In addition, our increased local
market scale, greater density in key existing markets, including #1 or
#2 positions in 66% of combined metropolitan markets, and enhanced
omni-channel capabilities will enable us to meet our customers’ needs
where, when and how they want to shop.

A graphical representation of the pro forma combined company’s local
presence in attractive markets is available here: https://bit.ly/2J7Uk1x

Financial Transformation

In addition to accelerating our strategic transformation, the merger is
expected to transform Rite Aid’s pro forma financial profile in terms of
scale, growth, profitability and financial strength.

Your Vote Is Important

No matter how many shares you own, please sign and return the
enclosed proxy card and vote FOR the
proposal to approve this highly compelling combination with Albertsons.
Your vote is important, as a failure to vote will have the same effect
as a vote AGAINST the merger proposal. In order to pass, the merger
proposal requires the affirmative vote of the holders of a majority of
the outstanding shares of Rite Aid common stock.

2. Locate the Control Number on your proxy card or voting
instruction form

3. Access the web address of the voting site

4. Enter your Control Number and follow the instructions to vote

2. Dial the phone number provided on the proxy card or voting
instruction form

3. Follow the instructions to enter your Control Number and your

2. Return your proxy card or voting instruction form in the
postage-paid envelope provided

Please vote using your proxy card today, either online, by phone or by
mail. For questions about how to vote your shares, please contact Morrow
Sodali, our proxy solicitor at (800) 662-5200 or RAD.info@morrowsodali.com.

Thank you for your continued support and investment in Rite Aid.


John StandleyChairman and Chief Executive Officer, Rite Aid

Michael ReganLead Independent Director, Rite Aid Corporation

About Rite Aid Corporation

Rite Aid Corporation (NYSE: RAD) is one of the nation’s leading
drugstore chains with fiscal 2018 annual revenues of $21.5 billion. The
company also owns EnvisionRxOptions, a multi-faceted healthcare and
pharmacy benefit management (PBM) company supporting a membership base
of more than 22 million members; RediClinic, a convenient care clinic
operator with locations in Delaware, New Jersey, Pennsylvania, Texas and
Washington; and Health Dialog, a leading provider of population health
management solutions including analytics, a multi-channel coaching
platform and shared decision-making tools. Information about Rite Aid,
including corporate background and press releases, is available through
the company’s website at www.riteaid.com.

Important Notice Regarding Forward-Looking Statements

This communication contains certain “forward-looking statements” within
the meaning of the Securities Act of 1933 and the Securities Exchange
Act of 1934, both as amended by the Private Securities Litigation Reform
Act of 1995. Statements that are not historical facts, including
statements about the pending merger between Rite Aid Corporation (“Rite
Aid”) and Albertsons Companies, Inc. (“Albertsons”) and the transactions
contemplated thereby, and the parties perspectives and expectations, are
forward looking statements. Such statements include, but are not limited
to, statements regarding the benefits of the proposed merger,
integration plans, expected synergies and revenue opportunities,
anticipated future financial and operating performance and results,
including estimates for growth, the expected management and governance
of the combined company, and the expected timing of the transactions
contemplated by the merger agreement. The words “expect,” “believe,”
“estimate,” “anticipate,” “intend,” “plan” and similar expressions
indicate forward-looking statements. These forward-looking statements
are not guarantees of future performance and are subject to various
risks and uncertainties, assumptions (including assumptions about
general economic, market, industry and operational factors), known or
unknown, which could cause the actual results to vary materially from
those indicated or anticipated. Such risks and uncertainties include,
but are not limited to, risks related to the expected timing and
likelihood of completion of the pending merger, including the risk that
the transaction may not close due to one or more closing conditions to
the transaction not being satisfied or waived, such as the remaining
Ohio Department of Insurance regulatory approval not being obtained, on
a timely basis or otherwise, or that a governmental entity prohibited,
delayed or refused to grant approval for the consummation of the
transaction or required certain conditions, limitations or restrictions
in connection with such approvals, or that the required approval of the
merger agreement by the stockholders of Rite Aid was not obtained; the
occurrence of any event, change or other circumstances that could give
rise to the termination of the merger agreement (including circumstances
requiring Rite Aid to pay Albertsons a termination fee pursuant to the
merger agreement); the risk that there may be a material adverse change
of Rite Aid or Albertsons; risks related to disruption of management
time from ongoing business operations due to the proposed transaction;
the risk that any announcements relating to the proposed transaction
could have adverse effects on the market price of Rite Aid’s common
stock, and the risk that the proposed transaction and its announcement
could have an adverse effect on the ability of Rite Aid to retain
customers and retain and hire key personnel and maintain relationships
with their suppliers and customers and on their operating results and
businesses generally; risks related to successfully integrating the
businesses of the companies, which may result in the combined company
not operating as effectively and efficiently as expected; the risk that
the combined company may be unable to achieve its guidance, its
cost-cutting synergies, its incremental revenue opportunities or it may
take longer or cost more than expected to achieve those synergies and
opportunities; the risk that the market may not value the combined
company at a similar multiple to earnings as that applied to the
companies that Rite Aid and Albertsons believe should be comparable to
the combined company, and risks associated with the financing of the
proposed transaction. A further list and description of risks and
uncertainties can be found in Rite Aid’s Annual Report on Form 10-K for
the fiscal year ended March 3, 2018 filed with the Securities and
Exchange Commission (“SEC”) and in the definitive proxy
statement/prospectus that was filed with the SEC on June 25, 2018 in
connection with the proposed merger, and other documents that the
parties may file or furnish with the SEC, which you are encouraged to
read. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those indicated or anticipated by such forward-looking
statements. Accordingly, you are cautioned not to place undue reliance
on these forward-looking statements. Forward-looking statements relate
only to the date they were made, and Rite Aid undertakes no obligation
to update forward-looking statements to reflect events or circumstances
after the date they were made except as required by law or applicable
regulation. All information regarding Rite Aid assumes completion of
Rite Aid’s previously announced transaction with Walgreens Boots
Alliance, Inc. There can be no assurance that the consummation of such
transaction will be completed on a timely basis, if at all. For further
information on such transaction, see Rite Aid’s Form 8-K filed with the
SEC on March 28, 2018.

The pro forma financial information presented herein has not been
prepared pursuant to Article 11 of Regulation S-X or reviewed by either
company’s auditors. The pro forma financial information that is included
in the definitive proxy statement/prospectus may be materially different
from the pro forma information included herein, as such pro forma
information does not include any potential synergies. The pro forma
information included herein gives effect to certain synergies that Rite
Aid and Albertsons do not expect to be realized in full until February
2022. Expected run-rate cost synergies and revenue opportunities have
associated one-time costs of $400 million and $300 million, respectively.

Additional Information and Where to Find It

In connection with the proposed merger involving Rite Aid and
Albertsons, Rite Aid and Albertsons have prepared a registration
statement on Form S-4 that included a proxy statement/prospectus. The
definitive proxy statement/prospectus was filed with the SEC on June 25,
2018. The registration statement has been declared effective by the SEC.
Rite Aid has mailed the definitive proxy statement/prospectus and a
proxy card to each stockholder entitled to vote at the special meeting
relating to the proposed merger. Rite Aid and Albertsons also plan to
file other relevant documents with the SEC regarding the proposed

Investors and security holders may obtain copies of the Form S-4,
including the proxy statement/prospectus, as well as other filings
containing information about Rite Aid, free of charge, from the SEC’s
website (www.sec.gov).
Investors and security holders may also obtain Rite Aid’s SEC filings in
connection with the transaction, free of charge, from Rite Aid’s website
under the link “Investor Relations” and then under the tab “SEC
Filings,” or by directing a request to Rite Aid, Byron Purcell,
Attention: Senior Director, Treasury Services & Investor Relations.
Copies of documents filed with the SEC by Albertsons will be made
available, free of charge, on the SEC’s website (www.sec.gov)
and on Albertsons’ website at www.albertsonscompanies.com.


This communication shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to buy
any securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any
such jurisdiction. No offer of securities shall be made except by means
of a prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended.

Non-GAAP Measures

This communication includes certain non-GAAP measures, including EBITDA
(Earnings before interest, tax, depreciation, and amortization),
Adjusted EBITDA, free cash flow and net debt (collectively, the
“Non-GAAP Measures”). These Non-GAAP Measures are performance measures
that provide supplemental information that Albertsons and Rite Aid
believe are useful to analysts and investors to evaluate ongoing results
of operations, when considered alongside other GAAP measures such as net
income, operating income and gross profit. These Non-GAAP Measures
exclude the financial impact of items management does not consider in
assessing the ongoing operating performance of Albertsons, Rite Aid or
the combined company, and thereby facilitate review of its operating
performance on a period-to-period basis. Other companies may have
different capital structures or different lease terms, and comparability
to the results of operations of Albertsons, Rite Aid or the combined
company may be impacted by the effects of acquisition accounting on its
depreciation and amortization. As a result of the effects of these
factors and factors specific to other companies, Albertsons and Rite Aid
believe these Non-GAAP measures provide helpful information to analysts
and investors to facilitate a comparison of their operating performance
to that of other companies. A reconciliation of the Non-GAAP Measures to
the most directly comparable GAAP financial measures are included at the
end of this communication. Additional information regarding these
Non-GAAP measures are available in previously disclosed SEC filings of
Albertsons, Albertsons Companies, LLC and Rite Aid. The appearance of
Non-GAAP Measures in this communication should not be construed as an
inference that its future results will be unaffected by unusual or
non-recurring items. Except as otherwise noted herein, a reconciliation
of Non-GAAP Measures has not been provided because such reconciliation
could not be produced without unreasonable effort.

Rite Aid – Reconciliation of Net Loss to Adjusted EBITDA (FY
Ending February 2019 Guidance)1


Albertsons – Reconciliation of Net Income to Adjusted EBITDA
(Q4 and Full Year Ending February 2018)2


Acquisition and integration costs3

Facility closures and related transition costs4


Albertsons – Reconciliation of Operating Income to Adjusted
EBITDA (FY Ending February 2019)


Acquisition and integration costs6

Other adjustments7

1 Source: Rite Aid’s Form 8-K dated April 12, 2018.

2 Source: Albertsons Form 8-K dated April 11, 2018.

3 Primarily includes costs related to acquisitions,
integration of acquired businesses, expenses related to management
fees in connection with acquisition and financing activities,
adjustments to tax indemnification assets and liabilities and
losses on acquired contingencies in connection with the Safeway

4 Includes costs related to facility closures and the
transition to our decentralized operating model.

5 Primarily includes lease adjustments related to
deferred rents and deferred gains on leases. Also includes
amortization of unfavorable leases on acquired Safeway surplus
properties, estimated losses related to the security breach,
changes in our equity method investment in Casa Ley, fair value
adjustments to CVRs, foreign currency translation gains, costs
related to our initial public offering and pension expense in
excess of cash contributions.

6 Primarily includes forecasted costs related to
integration of acquired businesses, acquisitions and amortization
of management fees paid.

7 Primarily includes forecasted LIFO expense and lease
adjustments related to deferred rents and deferred gains on leases
and estimated net costs incurred on acquired surplus properties.

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