Guarantor and Non-Guarantor Condensed Consolidating Financial Information (Tables)

6 Months Ended

Aug. 27, 2016

Guarantor and Non-Guarantor Condensed Consolidating Financial Information

Schedule of condensed consolidated balance sheet

	Rite Aid Corporation
	Condensed Consolidating Balance Sheet
	August 27, 2016
	(unaudited)
	Rite Aid Corporation (Parent Company Only)		Subsidiary Guarantors		Non- Guarantor Subsidiaries		Eliminations			Consolidated
	(in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	102,801	$	33,292	$	—		$	136,093
Accounts receivable, net	—		1,447,099		381,542		—			1,828,641
Intercompany receivable			298,167		—		(298,167		)(a)	—
Inventories, net of LIFO reserve of $0, $1,033,907, $0, $0, and $1,033,907	—		2,827,018		—		—			2,827,018
Prepaid expenses and other current assets	—		137,346		9,418		—			146,764
Total current assets	—		4,812,431		424,252		(298,167		)	4,938,516
Property, plant and equipment, net	—		2,281,392		—		—			2,281,392
Goodwill	—		1,715,479		—		—			1,715,479
Other intangibles, net	—		866,570		54,778		—			921,348
Deferred tax assets	—		1,538,604		—		—			1,538,604
Investment in subsidiaries	15,067,909		54,460		—		(15,122,369		)(b)	—
Intercompany receivable	—		7,211,877		—		(7,211,877		)(a)	—
Other assets	—		215,630		—		—			215,630

	Rite Aid Corporation
	Condensed Consolidating Balance Sheet
	August 27, 2016
	(unaudited)
	Rite Aid Corporation (Parent Company Only)		Subsidiary Guarantors		Non- Guarantor Subsidiaries		Eliminations			Consolidated
	(in thousands)
Total assets	$	15,067,909	$	18,696,443	$	479,030	$	(22,632,413	)	$	11,610,969
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt and lease financing obligations	$	90	$	24,309	$	—	$	—		$	24,399
Accounts payable	—		1,694,122		1,718		—			1,695,840
Intercompany payable	—		—		298,167		(298,167		)(a)	—
Accrued salaries, wages and other current liabilities	65,617		1,157,106		108,984		—			1,331,707
Total current liabilities	65,707		2,875,537		408,869		(298,167		)	3,051,946
Long-term debt, less current maturities	7,173,656		—		—		—			7,173,656
Lease financing obligations, less current maturities	—		46,641		—		—			46,641
Intercompany payable	7,211,877		—		—		(7,211,877		)(a)	—
Other noncurrent liabilities	—		706,356		15,701		—			722,057
Total liabilities	14,451,240		3,628,534		424,570		(7,510,044		)	10,994,300
Commitments and contingencies	—		—		—		—			—
Total stockholders’ equity	616,669		15,067,909		54,460		(15,122,369		)(b)	616,669
Total liabilities and stockholders’ equity	$	15,067,909	$	18,696,443	$	479,030	$	(22,632,413	)	$	11,610,969

(a) Elimination of intercompany accounts receivable and accounts payable amounts.

(b) Elimination of investments in consolidated subsidiaries.

	Rite Aid Corporation Condensed Consolidating Balance Sheet February 27, 2016
	Rite Aid Corporation (Parent Company Only)		Subsidiary Guarantors		Non- Guarantor Subsidiaries		Eliminations			Consolidated
	(in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	90,569	$	33,902	$	—		$	124,471
Accounts receivable, net	—		1,316,797		284,211		—			1,601,008
Intercompany receivable	—		224,220		—		(224,220		)(a)	—
Inventories, net of LIFO reserve of $0, $1,006,396, $0, $0, and $1,006,396	—		2,697,104		—		—			2,697,104
Prepaid expenses and other current assets	—		121,684		6,460		—			128,144
Total current assets	—		4,450,374		324,573		(224,220		)	4,550,727
Property, plant and equipment, net	—		2,255,398		—		—			2,255,398
Goodwill	—		1,713,475		—		—			1,713,475
Other intangibles, net	—		948,451		55,928		—			1,004,379
Deferred tax assets	—		1,539,141		—		—			1,539,141
Investment in subsidiaries	14,832,523		57,167		—		(14,889,690		)(b)	—
Intercompany receivable	—		7,270,869		—		(7,270,869		)(a)	—
Other assets	—		207,821		6,069		—			213,890
Total assets	$	14,832,523	$	18,442,696	$	386,570	$	(22,384,779	)	$	11,277,010

	Rite Aid Corporation Condensed Consolidating Balance Sheet February 27, 2016
	Rite Aid Corporation (Parent Company Only)		Subsidiary Guarantors		Non- Guarantor Subsidiaries		Eliminations			Consolidated
	(in thousands)
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt and lease financing obligations	$	90	$	26,758	$	—	$	—		$	26,848
Accounts payable	—		1,541,984		813		—			1,542,797
Intercompany payable	—		—		224,220		(224,220		)(a)	—
Accrued salaries, wages and other current liabilities	65,743		1,274,074		87,433		—			1,427,250
Total current liabilities	65,833		2,842,816		312,466		(224,220		)	2,996,895
Long-term debt, less current maturities	6,914,393		—		—		—			6,914,393
Lease financing obligations, less current maturities	—		52,895		—		—			52,895
Intercompany payable	7,270,869		—		—		(7,270,869		)(a)	—
Other noncurrent liabilities	—		714,462		16,937		—			731,399
Total liabilities	14,251,095		3,610,173		329,403		(7,495,089		)	10,695,582
Commitments and contingencies	—		—		—		—			—
Total stockholders’ equity	581,428		14,832,523		57,167		(14,889,690		)(b)	581,428
Total liabilities and stockholders’ equity	$	14,832,523	$	18,442,696	$	386,570	$	(22,384,779	)	$	11,277,010

(a) Elimination of intercompany accounts receivable and accounts payable amounts.

(b) Elimination of investments in consolidated subsidiaries.

Schedule of condensed consolidated statements of operations

	Rite Aid Corporation Condensed Consolidating Statement of Operations For the Thirteen Weeks Ended August 27, 2016 (unaudited)
	Rite Aid Corporation (Parent Company Only)			Subsidiary Guarantors		Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	—		$	7,995,349	$	60,581		$	(26,124	)(a)	$	8,029,806
Costs and expenses:
Cost of revenues	—			6,080,299		57,767			(25,003		)(a)	6,113,063
Selling, general and administrative expenses	—			1,776,135		3,233			(1,121		)(a)	1,778,247
Lease termination and impairment expenses	—			7,233		—			—			7,233
Interest expense	100,933			4,447		8			—			105,388
Loss on sale of assets, net	—			174		—			—			174
Equity in earnings of subsidiaries, net of tax	(115,706		)	593		—			115,113		(b)	—
	(14,773		)	7,868,881		61,008			88,989			8,004,105
Income (loss) before income taxes	14,773			126,468		(427		)	(115,113		)	25,701
Income tax expense	—			10,762		166			—			10,928
Net income (loss)	$	14,773		$	115,706	$	(593	)	$	(115,113	)	$	14,773
Total other comprehensive income (loss)	681			681		—			(681		)	681
Comprehensive income (loss)	$	15,454		$	116,387	$	(593	)	$	(115,794	)	$	15,454

(a)Elimination of intercompany revenues and expenses.

(b)Elimination of equity in earnings of subsidiaries.

	Rite Aid Corporation
	Condensed Consolidating Statement of Operations
	For the Thirteen Weeks Ended August 29, 2015
	(unaudited)
	Rite Aid Corporation (Parent Company Only)			Subsidiary Guarantors		Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	—		$	7,641,439	$	44,365		$	(21,028	)(a)	$	7,664,776
Costs and expenses:
Cost of revenues	—			5,720,403		42,752			(20,670		)(a)	5,742,485
Selling, general and administrative expenses	—			1,724,067		2,117			(358		)(a)	1,725,826
Lease termination and impairment expenses	—			9,637		—			—			9,637
Interest expense	110,529			4,884		(3		)	—			115,410
Loss on debt retirement, net	33,205			—		—			—			33,205
Loss on sale of assets, net	—			281		—			—			281
Equity in earnings of subsidiaries	(181,666		)	501		—			181,165		(b)	—
	(37,932		)	7,459,773		44,866			160,137			7,626,844
Income (loss) before income taxes	37,932			181,666		(501		)	(181,165		)	37,932
Income tax expense (benefit)	16,463			16,463		186			(16,649		)	16,463
Net income (loss)	$	21,469		$	165,203	$	(687	)	$	(164,516	)	$	21,469
Total other comprehensive income	598			598		—			(598		)	598
Comprehensive income (loss)	$	22,067		$	165,801	$	(687	)	$	(165,114	)	$	22,067

(a) Elimination of intercompany revenues and expenses.

(b) Elimination of equity in earnings of subsidiaries.

	Rite Aid Corporation Condensed Consolidating Statement of Operations For the Twenty-Six Weeks Ended August 27, 2016 (unaudited)
	Rite Aid Corporation (Parent Company Only)			Subsidiary Guarantors		Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	—		$	16,163,541	$	119,109		$	(68,663	)(a)	$	16,213,987
Costs and expenses:
Cost of revenues	—			12,355,746		113,613			(66,415		)(a)	12,402,944
Selling, general and administrative expenses	—			3,567,772		5,970			(2,248		)(a)	3,571,494
Lease termination and impairment expenses	—			13,014		—			—			13,014
Interest expense	201,380			9,114		7			—			210,501
Loss on sale of assets, net	—			1,230		—			—			1,230
Equity in earnings of subsidiaries, net of tax	(211,565		)	645		—			210,920		(b)	—
	(10,185		)	15,947,521		119,590			142,257			16,199,183
Income (loss) before income taxes	10,185			216,020		(481		)	(210,920		)	14,804
Income tax expense	—			4,455		164			—			4,619
Net income (loss)	$	10,185		$	211,565	$	(645	)	$	(210,920	)	$	10,185
Total other comprehensive income (loss)	1,362			1,362		—			(1,362		)	1,362
Comprehensive income (loss)	$	11,547		$	212,927	$	(645	)	$	(212,282	)	$	11,547

(a) Elimination of intercompany revenues and expenses.

(b) Elimination of equity in earnings of subsidiaries.

	Rite Aid Corporation
	Condensed Consolidating Statement of Operations
	For the Twenty-Six Weeks Ended August 29, 2015
	(unaudited)
	Rite Aid Corporation (Parent Company Only)			Subsidiary Guarantors		Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Revenues	$	—		$	14,289,000	$	44,365		$	(21,028	)(a)	$	14,312,337
Costs and expenses:
Cost of revenues	—			10,508,434		42,752			(20,670		)(a)	10,530,516
Selling, general and administrative expenses	—			3,423,652		2,117			(358		)(a)	3,425,411
Lease termination and impairment expenses	—			14,659		—			—			14,659
Interest expense	213,894			25,126		(3		)	—			239,017
Loss on debt retirement, net	33,205			—		—			—			33,205
Loss on sale of assets, net	—			320		—			—			320
Equity in earnings of subsidiaries	(316,308		)	501		—			315,807		(b)	—
	(69,209		)	13,972,692		44,866			294,779			14,243,128
Income (loss) before income taxes	69,209			316,308		(501		)	(315,807		)	69,209
Income tax expense (benefit)	28,904			28,904		186			(29,090		)	28,904
Net (loss) income	$	40,305		$	287,404	$	(687	)	$	(286,717	)	$	40,305
Total other comprehensive income	1,195			1,195		—			(1,195		)	1,195
Comprehensive income (loss)	$	41,500		$	288,599	$	(687	)	$	(287,912	)	$	41,500

(a) Elimination of intercompany revenues and expenses.

(b) Elimination of equity in earnings of subsidiaries.

Schedule of condensed consolidated statements of cash flows

	Rite Aid Corporation Condensed Consolidating Statement of Cash Flows For the Twenty-Six Weeks Ended August 27, 2016 (unaudited)
	Rite Aid Corporation (Parent Company Only)			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(in thousands)
Operating activities:
Net cash (used in) provided by operating activities	$	(192,321	)	$	205,797		$	(610	)	$	—		$	12,866
Investing activities:
Payments for property, plant and equipment	—			(225,718		)	—			—			(225,718		)
Intangible assets acquired	—			(28,869		)	—			—			(28,869		)
Intercompany activity	—			61,637			—			(61,637		)	—
Proceeds from dispositions of assets and investments	—			6,833			—			—			6,833
Net cash (used in) provided by investing activities	—			(186,117		)	—			(61,637		)	(247,754		)
Financing activities:
Net proceeds from revolver	250,000			—			—			—			250,000
Principal payments on long-term debt	—			(11,230		)	—			—			(11,230		)
Change in zero balance cash accounts	—			534			—			—			534
Net proceeds from issuance of common stock	3,958			—			—			—			3,958
Excess tax benefit on stock options and restricted stock	—			3,248			—			—			3,248
Intercompany activity	(61,637		)	—			—			61,637			—
Net cash provided by (used in) financing activities	192,321			(7,448		)	—			61,637			246,510
Increase (decrease) in cash and cash equivalents	—			12,232			(610		)	—			11,622
Cash and cash equivalents, beginning of period	—			90,569			33,902			—			124,471
Cash and cash equivalents, end of period	$	—		$	102,801		$	33,292		$	—		$	136,093

	Rite Aid Corporation
	Condensed Consolidating Statement of Cash Flows
	For the Twenty Six Weeks Ended August 29, 2015
	(unaudited)
	Rite Aid Corporation (Parent Company Only)			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations		Consolidated
	(in thousands)
Operating activities:
Net cash (used in) provided by operating activities	$	(162,122	)	$	512,340		$	(8,646	)	$	—	$	341,572
Investing activities:
Payments for property, plant and equipment	—			(271,683		)	—			—		(271,683		)
Intangible assets acquired	—			(43,462		)	—			—		(43,462		)
Acquisition of businesses, net of cash acquired	(1,779,571		)	—			—			—		(1,779,571		)
Intercompany activity	(103,834		)	(220,138		)	—			323,972		—
Proceeds from dispositions of assets and investments	—			6,081			—			—		6,081
Net cash (used in) provided by investing activities	(1,883,405		)	(529,202		)	—			323,972		(2,088,635		)
Financing activities:
Proceeds from issuance of long-term debt	1,800,000			—			—			—		1,800,000
Net proceeds from revolver	728,000			—			—			—		728,000
Principal payments on long-term debt	(650,079		)	(11,138		)	—			—		(661,217		)

	Rite Aid Corporation
	Condensed Consolidating Statement of Cash Flows
	For the Twenty Six Weeks Ended August 29, 2015
	(unaudited)
	Rite Aid Corporation (Parent Company Only)			Subsidiary Guarantors			Non- Guarantor Subsidiaries		Eliminations			Consolidated
	(in thousands)
Change in zero balance cash accounts	—			(51,309		)	—		—			(51,309		)
Net proceeds from issuance of common stock	8,105			—			—		—			8,105
Financing fees paid for early debt redemption	(26,003		)	—			—		—			(26,003		)
Excess tax benefit on stock options and restricted stock	—			20,869			—		—			20,869
Deferred financing costs paid	(34,634		)	—			—		—			(34,634		)
Intercompany activity	220,138			63,446			40,388		(323,972		)	—
Net cash provided by (used in) financing activities	2,045,527			21,868			40,388		(323,972		)	1,783,811
Increase in cash and cash equivalents	—			5,006			31,742		—			36,748
Cash and cash equivalents, beginning of period	—			115,899			—		—			115,899
Cash and cash equivalents, end of period	$	—		$	120,905		$	31,742	$	—		$	152,647