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

6 Months Ended

Sep. 01, 2018

Guarantor and Non-Guarantor Condensed Consolidating Financial Information

Schedule of condensed consolidating balance sheet

	Rite Aid Corporation
	Condensed Consolidating Balance Sheet
	September 1, 2018
	(unaudited)
	Rite Aid				Non-
	Corporation (Parent		Subsidiary		Guarantor
	Company Only)		Guarantors		Subsidiaries		Eliminations			Consolidated
	(in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	103,349	$	29,119	$	—		$	132,468
Accounts receivable, net		—		1,565,035		474,570		—			2,039,605
Intercompany receivable		—		310,291		—		(310,291)	(a)		—
Inventories, net of LIFO reserve of $0 , $594,413,  $0,  $0, and $594,413		—		1,848,287		—		—			1,848,287
Prepaid expenses and other current assets		—		167,078		2,235		—			169,313
Current assets held for sale		—		181,989		—		—			181,989
Total current assets		—		4,176,029		505,924		(310,291)			4,371,662
Property, plant and equipment, net		—		1,350,735		—		—			1,350,735
Goodwill		—		1,108,135		—		—			1,108,135
Other intangibles, net		—		430,342		50,178		—			480,520
Deferred tax assets		—		635,127		—		—			635,127
Investment in subsidiaries		8,661,543		53,443		—		(8,714,986)	(b)		—
Intercompany receivable		—		3,709,374		—		(3,709,374)	(a)		—
Other assets		—		212,272		7,217		—			219,489
Total assets	$	8,661,543	$	11,675,457	$	563,319	$	(12,734,651)		$	8,165,668
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt and lease financing obligations	$	90	$	18,578	$	—	$	—		$	18,668
Accounts payable		—		1,726,014		7,975		—			1,733,989
Intercompany payable		—		—		310,291		(310,291)	(a)		—
Accrued salaries, wages and other current liabilities		14,388		751,080		173,472		—			938,940
Total current liabilities		14,478		2,495,672		491,738		(310,291)			2,691,597
Long-term debt, less current maturities		3,481,741		—		—		—			3,481,741
Lease financing obligations, less current maturities		—		26,537		—		—			26,537
Intercompany payable		3,709,374		—		—		(3,709,374)	(a)		—
Other noncurrent liabilities		—		491,705		18,138		—			509,843
Total liabilities		7,205,593		3,013,914		509,876		(4,019,665)			6,709,718
Commitments and contingencies		—		—		—		—			—
Total stockholders’ equity		1,455,950		8,661,543		53,443		(8,714,986)	(b)		1,455,950
Total liabilities and stockholders’ equity	$	8,661,543	$	11,675,457	$	563,319	$	(12,734,651)		$	8,165,668

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

(b)Elimination of investments in consolidated subsidiaries.

	Rite Aid Corporation
	Condensed Consolidating Balance Sheet
	March 3, 2018
	(unaudited)
	Rite Aid				Non-
	Corporation (Parent		Subsidiary		Guarantor
	Company Only)		Guarantors		Subsidiaries		Eliminations			Consolidated
	(in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	441,244	$	6,090	$	—		$	447,334
Accounts receivable, net		—		1,502,507		366,593		—			1,869,100
Intercompany receivable				223,413		—		(223,413)	(a)		—
Inventories, net of LIFO reserve of $0 , $581,090,  $0,  $0, and $581,090		—		1,799,539		—		—			1,799,539
Prepaid expenses and other current assets		—		176,678		4,503		—			181,181
Current assets held for sale		—		438,137		—		—			438,137
Total current assets		—		4,581,518		377,186		(223,413)			4,735,291
Property, plant and equipment, net		—		1,431,246		—		—			1,431,246
Goodwill		—		1,421,120		—		—			1,421,120
Other intangibles, net		—		539,115		51,328		—			590,443
Deferred tax assets		—		594,019		—		—			594,019
Investment in subsidiaries		8,745,390		54,076		—		(8,799,466)	(b)		—
Intercompany receivable		—		3,189,419		—		(3,189,419)	(a)		—
Other assets		—		209,926		7,282		—			217,208
Total assets	$	8,745,390	$	12,020,439	$	435,796	$	(12,212,298)		$	8,989,327
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt and lease financing obligations	$	90	$	20,671	$	—	$	—		$	20,761
Accounts payable		—		1,641,676		9,687		—			1,651,363
Intercompany payable		—		—		223,413		(223,413)	(a)		—
Accrued salaries, wages and other current liabilities		65,223		1,031,379		135,134		—			1,231,736
Current liabilities held for sale		549,549		10,656		—		—			560,205
Total current liabilities		614,862		2,704,382		368,234		(223,413)			3,464,065
Long-term debt, less current maturities		3,340,099		—		—		—			3,340,099
Lease financing obligations, less current maturities		—		30,775		—		—			30,775
Intercompany payable		3,189,419		—		—		(3,189,419)	(a)		—
Other noncurrent liabilities		—		539,892		13,486		—			553,378
Total liabilities		7,144,380		3,275,049		381,720		(3,412,832)			7,388,317
Commitments and contingencies		—		—		—		—			—
Total stockholders’ equity		1,601,010		8,745,390		54,076		(8,799,466)	(b)		1,601,010
Total liabilities and stockholders’ equity	$	8,745,390	$	12,020,439	$	435,796	$	(12,212,298)		$	8,989,327

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

(b)Elimination of investments in consolidated subsidiaries.

Schedule of condensed consolidating statement of operations

	Rite AidCorporation
	Condensed Consolidating Statement of Operations
	For the Thirteen Weeks Ended September 1, 2018
	(unaudited)
	Rite Aid
	Corporation				Non-
	(Parent		Subsidiary		Guarantor
	CompanyOnly)		Guarantors		Subsidiaries		Eliminations			Consolidated
	(in thousands)
Revenues	$	—	$	5,347,051	$	101,900	$	(27,589)	(a)	$	5,421,362
Costs and expenses:
Cost of revenues		—		4,193,129		94,470		(27,388)	(a)		4,260,211
Selling, general and administrative expenses		—		1,147,491		6,701		(201)	(a)		1,153,991
Lease termination and impairment expenses		—		39,609		—		—			39,609
Goodwill and intangible asset impairment charges		—		375,190		—		—			375,190
Interest expense		52,365		3,811		57		—			56,233
Gain on sale of assets, net		—		(4,965)		—		—			(4,965)
Equity in earnings of subsidiaries, net of tax		288,700		(852)		—		(287,848)	(b)		—
		341,065		5,753,413		101,228		(315,437)			5,880,269
(Loss) income from continuing operations before income taxes		(341,065)		(406,362)		672		287,848			(458,907)
Income tax benefit		—		(106,379)		(180)		—			(106,559)
Net (loss) income from continuing operations		(341,065)		(299,983)		852		287,848			(352,348)
Net (loss) income from discontinued operations		(18,075)		11,283		—		—			(6,792)
Net (loss) income	$	(359,140)	$	(288,700)	$	852	$	287,848	(b)	$	(359,140)
Total other comprehensive income (loss)		364		364		—		(364)			364
Comprehensive (loss) income	$	(358,776)	$	(288,336)	$	852	$	287,484		$	(358,776)

(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 September 2, 2017
	(unaudited)
	Rite Aid
	Corporation				Non-
	(Parent		Subsidiary		Guarantor
	Company Only)		Guarantors		Subsidiaries		Eliminations			Consolidated
	(in thousands)
Revenues	$	—	$	5,323,340	$	41,877	$	(20,206)	(a)	$	5,345,011
Costs and expenses:
Cost of revenues		—		4,164,126		39,961		(20,749)	(a)		4,183,338
Selling, general and administrative expenses		—		1,139,825		1,476		543	(a)		1,141,844
Lease termination and impairment expenses		—		3,113		—		—			3,113
Interest expense		45,529		5,341		(13)		—			50,857
Walgreen Boots Alliance, Inc. termination fee		(325,000)		—		—		—			(325,000)
Gain on sale of assets, net		—		(14,951)		—		—			(14,951)
Equity in earnings of subsidiaries, net of tax		48,351		(456)		—		(47,895)	(b)		—
		(231,120)		5,296,998		41,424		(68,101)			5,039,201
Earnings from continuing operations before income taxes		231,120		26,342		453		47,895			305,810
Income tax expense (benefit)		—		117,453		(3)		—			117,450
Net income (loss) from continuing operations		231,120		(91,111)		456		47,895			188,360
Net (loss) income from discontinued operations		(60,404)		42,760		—		—			(17,644)
Net income (loss)	$	170,716	$	(48,351)	$	456	$	47,895	(b)	$	170,716
Total other comprehensive income (loss)		515		515		—		(515)			515
Comprehensive income (loss)	$	171,231	$	(47,836)	$	456	$	47,380		$	171,231

(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 September 1, 2018
	(unaudited)
	Rite Aid
	Corporation				Non-
	(Parent		Subsidiary		Guarantor
	Company Only)		Guarantors		Subsidiaries		Eliminations			Consolidated
	(in thousands)
Revenues	$	—	$	10,668,075	$	197,485	$	(55,708)	(a)	$	10,809,852
Costs and expenses:
Cost of revenues		—		8,351,757		183,502		(55,307)	(a)		8,479,952
Selling, general and administrative expenses		—		2,292,321		14,698		(401)	(a)		2,306,618
Lease termination and impairment expenses		—		49,468		—		—			49,468
Goodwill and intangible asset impairment charges		—		375,190		—		—			375,190
Interest expense		112,304		6,756		(35)		—			119,025
Loss on debt retirements, net		—		554		—		—			554
Gain on sale of assets, net		—		(10,824)		—		—			(10,824)
Equity in earnings of subsidiaries, net of tax		9,730		633		—		(10,363)	(b)		—
		122,034		11,065,855		198,165		(66,071)			11,319,983
(Loss) income from continuing operations before income taxes		(122,034)		(397,780)		(680)		10,363			(510,131)
Income tax benefit		—		(116,009)		(47)		—			(116,056)
Net (loss) income from continuing operations		(122,034)		(281,771)		(633)		10,363			(394,075)
Net (loss) income from discontinued operations		(22,690)		272,041		—		—			249,351
Net (loss) income	$	(144,724)	$	(9,730)	$	(633)	$	10,363	(b)	$	(144,724)
Total other comprehensive income (loss)		728		728		—		(728)			728
Comprehensive (loss) income	$	143,996	$	(9,002)	$	(633)	$	9,635		$	(143,996)

(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 September 2, 2017
	(unaudited)
	Rite Aid
	Corporation				Non-
	(Parent		Subsidiary		Guarantor
	Company Only)		Guarantors		Subsidiaries		Eliminations			Consolidated
		(in thousands)
Revenues	$	—	$	10,738,468	$	81,327	$	(38,261)	(a)	$	10,781,534
Costs and expenses:
Cost of revenues		—		8,419,328		77,863		(39,273)	(a)		8,457,918
Selling, general and administrative expenses		—		2,297,095		4,677		1,012	(a)		2,302,784
Lease termination and impairment expenses		—		7,151		—		—			7,151
Interest expense		91,976		9,856		25		—			101,857
Walgreens Boots Alliance, Inc. termination fee		(325,000)		—		—		—			(325,000)
Gain on sale of assets, net		—		(20,828)		—		—			(20,828)
Equity in earnings of subsidiaries, net of tax		18,316		856		—		(19,172)	(b)		—
		(214,708)		10,713,458		82,565		(57,433)			10,523,882
Income (loss) from continuing operations before income taxes		214,708		25,010		(1,238)		19,172			257,652
Income tax expense (benefit)		—		105,711		(382)		—			105,329
Net income (loss) from continuing operations		214,708		(80,701)		(856)		19,172			152,323
Net (loss) income from discontinued operations		(119,341)		62,385		—		—			(56,956)
Net income (loss)	$	95,367	$	(18,316)	$	(856)	$	19,172	(b)	$	95,367
Total other comprehensive income (loss)		1,029		1,029		—		(1,029)			1,029
Comprehensive income (loss)	$	96,396	$	(17,287)	$	(856)	$	18,143		$	96,396

(a) Elimination of intercompany revenues and expenses.

(b) Elimination of equity in earnings of subsidiaries.

Schedule of condensed consolidating statement of cash flows

	Rite Aid Corporation
	Condensed Consolidating Statement of Cash Flows
	For the Twenty-Six Weeks Ended September 1, 2018
	(unaudited)
	Rite Aid
	Corporation
	(Parent				Non-
	Company		Subsidiary		Guarantor
	Only)		Guarantors		Subsidiaries		Eliminations		Consolidated
	(in thousands)
Operating activities:
Net cash used in operating activities	$	(158,413)	$	(165,518)	$	23,029	$	—	$	(300,902)
Investing activities:
Payments for property, plant and equipment		—		(92,565)		—		—		(92,565)
Intangible assets acquired		—		(20,519)		—		—		(20,519)
Intercompany activity		—		(597,415)		—		597,415		—
Proceeds from dispositions of assets and investments		—		15,729		—		—		15,729
Proceeds from sale-leaseback transactions		—		2,587		—		—		2,587
Net cash (used in) provided by investing activities		—		(692,183)		—		597,415		(94,768)
Financing activities:
Net proceeds from revolver		1,335,000		—		—		—		1,335,000
Principal payments on long-term debt		(426,307)		(7,439)		—		—		(433,746)
Change in zero balance cash accounts		—		(17,101)		—		—		(17,101)
Net proceeds from issuance of common stock		1,302		—		—		—		1,302
Financing fees paid for early debt redemption		—		(13)		—		—		(13)
Payments for taxes related to net share settlement of equity awards		—		(2,244)		—		—		(2,244)
Intercompany activity		597,415		—		—		(597,415)		—
Net cash provided by (used in) financing activities		1,507,410		(26,797)		—		(597,415)		883,198
Cash flows of discontinued operations:
Operating activities of discontinued operations		(4,615)		(57,388)		—		—		(62,003)
Investing activities of discontinued operations		—		603,402		—		—		603,402
Financing activities of discontinued operations		(1,344,382)		589		—		—		(1,343,793)
Net cash (used in) provided by discontinued operations		(1,348,997)		546,603		—		—		(802,394)
(Decrease) increase in cash and cash equivalents		—		(337,895)		23,029		—		(314,866)
Cash and cash equivalents, beginning of period		—		441,244		6,090		—		447,334
Cash and cash equivalents, end of period	$	—	$	103,349	$	29,119	$	—	$	132,468

	Rite Aid Corporation
	Condensed Consolidating Statement of Cash Flows
	For the Twenty-Six Weeks Ended September 2, 2017
	(unaudited)
	Rite Aid
	Corporation
	(Parent				Non-
	Company		Subsidiary		Guarantor
	Only)		Guarantors		Subsidiaries		Eliminations		Consolidated
	(in thousands)
Operating activities:
Net cash provided by operating activities	$	182,377	$	106,402	$	6,694	$	—	$	295,473
Investing activities:
Payments for property, plant and equipment		—		(79,116)		—		—		(79,116)
Intangible assets acquired		—		(9,679)		—		—		(9,679)
Intercompany activity		—		(66,345)		—		66,345		—
Proceeds from insured loss		—		3,627		—		—		3,627
Proceeds from dispositions of assets and investments		—		17,407		—		—		17,407
Net cash (used in) provided by investing activities		—		(134,106)		—		66,345		(67,761)
Financing activities:
Net proceeds from revolver		(190,000)		—		—		—		(190,000)
Principal payments on long-term debt		—		(4,386)		—		—		(4,386)
Change in zero balance cash accounts		—		10,189		—		—		10,189
Net proceeds from issuance of common stock		215		—		—		—		215
Excess tax benefit on stock options and restricted stock		—		(4,071)		—		—		(4,071)
Intercompany activity		66,345		—		—		(66,345)		—
Net cash (used in) provided by financing activities		(123,440)		1,732		—		(66,345)		(188,053)
Cash flows of discontinued operations:
Operating activities of discontinued operations		(58,937)		61,295		—		—		2,358
Investing activities of discontinued operations		—		(44,739)		—		—		(44,739)
Financing activities of discontinued operations		—		(3,710)		—		—		(3,710)
Net cash (used in) provided by discontinued operations		(58,937)		12,846		—		—		(46,091)
(Decrease) increase  in cash and cash equivalents		—		(13,126)		6,694		—		(6,432)
Cash and cash equivalents, beginning of period		—		213,104		32,306		—		245,410
Cash and cash equivalents, end of period	$	—	$	199,978	$	39,000	$	—	$	238,978