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

9 Months Ended

Dec. 01, 2018

Guarantor and Non-Guarantor Condensed Consolidating Financial Information

Schedule of condensed consolidating balance sheet

	Rite Aid Corporation
	Condensed Consolidating Balance Sheet
	December 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	$	—	$	128,474	$	281,569	$	—		$	410,043
Accounts receivable, net		—		1,500,494		217,336		—			1,717,830
Intercompany receivable		—		316,323		—		(316,323)	(a)		—
Inventories, net of LIFO reserve of $0 , $600,401,  $0,  $0, and $600,401		—		1,894,274		—		—			1,894,274
Prepaid expenses and other current assets		—		175,083		1,356		—			176,439
Current assets held for sale		—		131,892		—		—			131,892
Total current assets		—		4,146,540		500,261		(316,323)			4,330,478
Property, plant and equipment, net		—		1,335,740		—		—			1,335,740
Goodwill		—		1,108,135		—		—			1,108,135
Other intangibles, net		—		412,759		49,603		—			462,362
Deferred tax assets		—		645,544		(10,128)		—			635,416
Investment in subsidiaries		8,627,332		54,001		—		(8,681,333)	(b)		—
Intercompany receivable		—		3,730,494		—		(3,730,494)	(a)		—
Other assets		—		203,619		7,208		—			210,827
Total assets	$	8,627,332	$	11,636,832	$	546,944	$	(12,728,150)		$	8,082,958
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt and lease financing obligations	$	90	$	15,976	$	—	$	—		$	16,066
Accounts payable		—		1,700,939		6,303		—			1,707,242
Intercompany payable		—		—		316,323		(316,323)	(a)		—
Accrued salaries, wages and other current liabilities		48,868		785,832		162,317		—			997,017
Total current liabilities		48,958		2,502,747		484,943		(316,323)			2,720,325
Long-term debt, less current maturities		3,394,466		—		—		—			3,394,466
Lease financing obligations, less current maturities		—		26,200		—		—			26,200
Intercompany payable		3,730,494		—		—		(3,730,494)	(a)		—
Other noncurrent liabilities		—		480,553		8,000		—			488,553
Total liabilities		7,173,918		3,009,500		492,943		(4,046,817)			6,629,544
Commitments and contingencies		—		—		—		—			—
Total stockholders’ equity		1,453,414		8,627,332		54,001		(8,681,333)	(b)		1,453,414
Total liabilities and stockholders’ equity	$	8,627,332	$	11,636,832	$	546,944	$	(12,728,150)		$	8,082,958

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

(b) Elimination of investments in consolidated subsidiaries.

	Rite Aid Corporation
	Condensed Consolidating Balance Sheet
	December 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	$	—	$	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 December 1, 2018
	(unaudited)
	Rite Aid
	Corporation				Non-
	(Parent		Subsidiary		Guarantor
	CompanyOnly)		Guarantors		Subsidiaries		Eliminations			Consolidated
	(in thousands)
Revenues	$	—	$	5,375,923	$	101,726	$	(27,589)	(a)	$	5,450,060
Costs and expenses:
Cost of revenues		—		4,200,109		95,251		(27,388)	(a)		4,267,972
Selling, general and administrative expenses		—		1,136,461		6,295		(201)	(a)		1,142,555
Lease termination and impairment expenses		—		2,628		—		—			2,628
Interest expense		47,454		8,922		(368)		—			56,008
Gain on sale of assets, net		—		(382)		—		—			(382)
Equity in earnings of subsidiaries, net of tax		(42,944)		(558)		—		43,502	(b)		—
		4,510		5,347,180		101,178		15,913			5,468,781
(Loss) income from continuing operations before income taxes		(4,510)		28,743		548		(43,502)			(18,721)
Income tax benefit		—		(1,461)		(10)		—			(1,471)
Net (loss) income from continuing operations		(4,510)		30,204		558		(43,502)			(17,250)
Net (loss) income from discontinued operations		—		12,740		—		—			12,740
Net (loss) income	$	(4,510)	$	42,944	$	558	$	(43,502)	(b)	$	(4,510)
Total other comprehensive income (loss)		364		364		—		(364)			364
Comprehensive (loss) income	$	(4,146)	$	43,308	$	558	$	(43,866)		$	(4,146)

(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 December 2, 2017
	(unaudited)
	Rite Aid
	Corporation				Non-
	(Parent		Subsidiary		Guarantor
	Company Only)		Guarantors		Subsidiaries		Eliminations			Consolidated
	(in thousands)
Revenues	$	—	$	5,331,788	$	47,064	$	(25,682)	(a)	$	5,353,170
Costs and expenses:
Cost of revenues		—		4,146,272		45,063		(24,888)	(a)		4,166,447
Selling, general and administrative expenses		—		1,162,416		4,892		(794)	(a)		1,166,514
Lease termination and impairment expenses		—		3,939		—		—			3,939
Interest expense		45,586		5,040		(318)		—			50,308
Loss on sale of assets, net		—		205		—		—			205
Equity in earnings of subsidiaries, net of tax		(186,073)		1,793		—		184,280	(b)		—
		(140,487)		5,319,665		49,637		158,598			5,387,413
Earnings from continuing operations before income taxes		140,487		12,123		(2,573)		(184,280)			(34,243)
Income tax benefit		—		(15,281)		(780)		—			(16,061)
Net income (loss) from continuing operations		140,487		27,404		(1,793)		(184,280)			(18,182)
Net (loss) income from discontinued operations		(59,456)		158,669		—		—			99,213
Net income (loss)	$	81,031	$	186,073	$	(1,793)	$	(184,280)	(b)	$	81,031
Total other comprehensive income (loss)		514		514		—		(514)			514
Comprehensive income (loss)	$	81,545	$	186,587	$	(1,793)	$	(184,794)		$	81,545

(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 Thirty-Nine Weeks Ended December 1, 2018
	(unaudited)
	Rite Aid
	Corporation				Non-
	(Parent		Subsidiary		Guarantor
	Company Only)		Guarantors		Subsidiaries		Eliminations			Consolidated
	(in thousands)
Revenues	$	—	$	16,016,409	$	299,211	$	(55,708)	(a)	$	16,259,912
Costs and expenses:
Cost of revenues		—		12,524,479		278,752		(55,307)	(a)		12,747,924
Selling, general and administrative expenses		—		3,428,581		20,993		(401)	(a)		3,449,173
Lease termination and impairment expenses		—		52,096		—		—			52,096
Goodwill and intangible asset impairment charges		—		375,190		—		—			375,190
Interest expense		159,758		15,678		(403)		—			175,033
Loss on debt retirements, net		—		554		—		—			554
Gain on sale of assets, net		—		(11,206)		—		—			(11,206)
Equity in earnings of subsidiaries, net of tax		(15,139)		75		—		15,064	(b)		—
		144,619		16,385,447		299,342		(40,644)			16,788,764
(Loss) income from continuing operations before income taxes		(144,619)		(369,038)		(131)		(15,064)			(528,852)
Income tax benefit		—		(117,471)		(56)		—			(117,527)
Net (loss) income from continuing operations		(144,619)		(251,567)		(75)		(15,064)			(411,325)
Net (loss) income from discontinued operations		(4,615)		266,706		—		—			262,091
Net (loss) income	$	(149,234)	$	15,139	$	(75)	$	(15,064)	(b)	$	(149,234)
Total other comprehensive income (loss)		1,092		1,092		—		(1,092)			1,092
Comprehensive (loss) income	$	(148,142)	$	16,231	$	(75)	$	(16,156)		$	(148,142)

(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 Thirty-Nine Weeks Ended December 2, 2017
	(unaudited)
	Rite Aid
	Corporation				Non-
	(Parent		Subsidiary		Guarantor
	Company Only)		Guarantors		Subsidiaries		Eliminations			Consolidated
		(in thousands)
Revenues	$	—	$	16,070,256	$	128,391	$	(63,943)	(a)	$	16,134,704
Costs and expenses:
Cost of revenues		—		12,565,600		122,926		(64,161)	(a)		12,624,365
Selling, general and administrative expenses		—		3,459,511		9,569		218	(a)		3,469,298
Lease termination and impairment expenses		—		11,090		—		—			11,090
Interest expense		137,562		14,896		(293)		—			152,165
Walgreens Boots Alliance, Inc. termination fee		(325,000)		—		—		—			(325,000)
Gain on sale of assets, net		—		(20,623)		—		—			(20,623)
Equity in earnings of subsidiaries, net of tax		(167,757)		2,649		—		165,108	(b)		—
		(355,195)		16,033,123		132,202		101,165			15,911,295
Income (loss) from continuing operations before income taxes		355,195		37,133		(3,811)		(165,108)			223,409
Income tax expense (benefit)		—		90,430		(1,162)		—			89,268
Net income (loss) from continuing operations		355,195		(53,297)		(2,649)		(165,108)			134,141
Net (loss) income from discontinued operations		(178,797)		221,054		—		—			42,257
Net income (loss)	$	176,398	$	167,757	$	(2,649)	$	(165,108)	(b)	$	176,398
Total other comprehensive income (loss)		1,543		1,543		—		(1,543)			1,543
Comprehensive income (loss)	$	177,941	$	169,300	$	(2,649)	$	(166,651)		$	177,941

(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 Thirty-Nine Weeks Ended December 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	$	(168,662)	$	(56,598)	$	275,479	$	—	$	50,219
Investing activities:
Payments for property, plant and equipment		—		(139,218)		—		—		(139,218)
Intangible assets acquired		—		(31,573)		—		—		(31,573)
Intercompany activity		—		(697,584)		—		697,584		—
Proceeds from dispositions of assets and investments		—		15,801		—		—		15,801
Proceeds from sale-leaseback transactions		—		2,587		—		—		2,587
Net cash (used in) provided by investing activities		—		(849,987)		—		697,584		(152,403)
Financing activities:
Net proceeds from revolver		1,245,000		—		—		—		1,245,000
Principal payments on long-term debt		(427,219)		(10,378)		—		—		(437,597)
Change in zero balance cash accounts		—		(15,964)		—		—		(15,964)
Net proceeds from issuance of common stock		2,294		—		—		—		2,294
Financing fees paid for early debt redemption		—		(13)		—		—		(13)
Payments for taxes related to net share settlement of equity awards		—		(2,419)		—		—		(2,419)
Intercompany activity		697,584		—		—		(697,584)		—
Net cash provided by (used in) financing activities		1,517,659		(28,774)		—		(697,584)		791,301
Cash flows of discontinued operations:
Operating activities of discontinued operations		(4,615)		(42,653)		—		—		(47,268)
Investing activities of discontinued operations		—		664,653		—		—		664,653
Financing activities of discontinued operations		(1,344,382)		589		—		—		(1,343,793)
Net cash (used in) provided by discontinued operations		(1,348,997)		622,589		—		—		(726,408)
(Decrease) increase in cash and cash equivalents		—		(312,770)		275,479		—		(37,291)
Cash and cash equivalents, beginning of period		—		441,244		6,090		—		447,334
Cash and cash equivalents, end of period	$	—	$	128,474	$	281,569	$	—	$	410,043

	Rite Aid Corporation
	Condensed Consolidating Statement of Cash Flows
	For the Thirty-Nine Weeks Ended December 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	$	229,578	$	220,721	$	(25,849)	$	—	$	424,450
Investing activities:
Payments for property, plant and equipment		—		(140,816)		—		—		(140,816)
Intangible assets acquired		—		(20,201)		—		—		(20,201)
Intercompany activity		—		(449,803)		—		449,803		—
Proceeds from insured loss		—		3,627		—		—		3,627
Proceeds from dispositions of assets and investments		—		19,254		—		—		19,254
Net cash (used in) provided by investing activities		—		(587,939)		—		449,803		(138,136)
Financing activities:
Net proceeds from revolver		(264,080)		—		—		—		(264,080)
Principal payments on long-term debt		—		(7,292)		—		—		(7,292)
Change in zero balance cash accounts		—		27,594		—		—		27,594
Net proceeds from issuance of common stock		4,416		—		—		—		4,416
Payments for taxes related to net share settlement of equity awards		—		(4,103)		—		—		(4,103)
Intercompany activity		449,803		—		—		(449,803)		—
Net cash (used in) provided by financing activities		190,139		16,199		—		(449,803)		(243,465)
Cash flows of discontinued operations:
Operating activities of discontinued operations		(178,797)		116,503		—		—		(62,294)
Investing activities of discontinued operations		—		189,175		—		—		189,175
Financing activities of discontinued operations		(240,920)		(4,420)		—		—		(245,340)
Net cash (used in) provided by discontinued operations		(419,717)		301,258		—		—		(118,459)
(Decrease) increase  in cash and cash equivalents		—		(49,761)		(25,849)		—		(75,610)
Cash and cash equivalents, beginning of period		—		213,104		32,306		—		245,410
Cash and cash equivalents, end of period	$	—	$	163,343	$	6,457	$	—	$	169,800