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

6 Months Ended

Aug. 31, 2019

Guarantor and Non-Guarantor Condensed Consolidating Financial Information

Schedule of condensed consolidating balance sheet

	Rite Aid Corporation
	Condensed Consolidating Balance Sheet
	August 31, 2019
	(unaudited)
	Rite Aid
	Corporation				Non-
	(Parent		Subsidiary		Guarantor
	Company Only)		Guarantors		Subsidiaries		Eliminations			Consolidated
	(in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	122,321	$	19,860	$	—		$	142,181
Accounts receivable, net		—		1,349,635		595,965		—			1,945,600
Intercompany receivable		—		563,908		—		(563,908)	(a)		—
Inventories, net of LIFO reserve of $0, $619,437, $0, $0, and $619,437		—		1,968,937		—		—			1,968,937
Prepaid expenses and other current assets		—		180,331		3,097		—			183,428
Current assets held for sale		—		145,213		—		—			145,213
Total current assets		—		4,330,345		618,922		(563,908)			4,385,359
Property, plant and equipment, net		—		1,270,467		—		—			1,270,467
Operating lease right-of-use assets		—		2,944,651		—		—			2,944,651
Goodwill		—		1,108,136		—		—			1,108,136
Other intangibles, net		—		333,491		47,878		—			381,369
Deferred tax assets		10,828		381,315		(10,038)		—			382,105
Investment in subsidiaries		8,171,685		57,488		—		(8,229,173)	(b)		—
Intercompany receivable		—		3,372,868		—		(3,372,868)	(a)		—
Other assets		46		194,136		6,944		—			201,126
Total assets	$	8,182,559	$	13,992,897	$	663,706	$	(12,165,949)		$	10,673,213
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt and lease financing obligations	$	—	$	10,704	$	—	$	—		$	10,704
Accounts payable		—		1,560,560		9,618		—			1,570,178
Intercompany payable		—		—		563,908		(563,908)	(a)		—
Accrued salaries, wages and other current liabilities		14,500		693,595		24,692		—			732,787
Current portion of operating lease liabilities		—		502,706		—		—			502,706
Current liabilities held for sale		—		43,364		—		—			43,364
Total current liabilities		14,500		2,810,929		598,218		(563,908)			2,859,739
Long-term debt, less current maturities		3,834,605		—		—		—			3,834,605
Long-term operating lease liabilities		—		2,745,598		—		—			2,745,598
Lease financing obligations, less current maturities		—		22,540		—		—			22,540
Intercompany payable		3,372,868		—		—		(3,372,868)	(a)		—
Other noncurrent liabilities		—		242,145		8,000		—			250,145
Total liabilities		7,221,973		5,821,212		606,218		(3,936,776)			9,712,627
Commitments and contingencies		—		—		—		—			—
Total stockholders’ equity		960,586		8,171,685		57,488		(8,229,173)	(b)		960,586
Total liabilities and stockholders’ equity	$	8,182,559	$	13,992,897	$	663,706	$	(12,165,949)		$	10,673,213

(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 2, 2019
	Rite Aid
	Corporation				Non-
	(Parent		Subsidiary		Guarantor
	Company Only)		Guarantors		Subsidiaries		Eliminations			Consolidated
		(in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	122,134	$	22,219	$	—		$	144,353
Accounts receivable, net		—		1,377,342		411,370		—			1,788,712
Intercompany receivable		—		400,526		—		(400,526)	(a)		—
Inventories, net of LIFO reserve of $0, $604,444, $0, $0, and $604,444		—		1,871,941		—		—			1,871,941
Prepaid expenses and other current assets		—		172,448		6,684		—			179,132
Current assets held for sale		—		117,581		—		—			117,581
Total current assets		—		4,061,972		440,273		(400,526)			4,101,719
Property, plant and equipment, net		—		1,308,514		—		—			1,308,514
Goodwill		—		1,108,136		—		—			1,108,136
Other intangibles, net		—		399,678		49,028		—			448,706
Deferred tax assets		—		419,122		(10,038)		—			409,084
Investment in subsidiaries		8,294,315		55,109		—		(8,349,424)	(b)		—
Intercompany receivable		—		3,639,035		—		(3,639,035)	(a)		—
Other assets		—		208,018		7,190		—			215,208
Total assets	$	8,294,315	$	11,199,584	$	486,453	$	(12,388,985)		$	7,591,367
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt and lease financing obligations	$	—	$	16,111	$	—	$	—		$	16,111
Accounts payable		—		1,612,181		6,404		—			1,618,585
Intercompany payable		—		—		400,526		(400,526)	(a)		—
Accrued salaries, wages and other current liabilities		14,005		778,020		16,414		—			808,439
Total current liabilities		14,005		2,406,312		423,344		(400,526)			2,443,135
Long-term debt, less current maturities		3,454,585		—		—		—			3,454,585
Lease financing obligations, less current maturities		—		24,064		—		—			24,064
Intercompany payable		3,639,035		—		—		(3,639,035)	(a)		—
Other noncurrent liabilities		—		474,893		8,000		—			482,893
Total liabilities		7,107,625		2,905,269		431,344		(4,039,561)			6,404,677
Commitments and contingencies		—		—		—		—			—
Total stockholders’ equity		1,186,690		8,294,315		55,109		(8,349,424)	(b)		1,186,690
Total liabilities and stockholders’ equity	$	8,294,315	$	11,199,584	$	486,453	$	(12,388,985)		$	7,591,367

(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 Aid Corporation
	Condensed Consolidating Statement of Operations
	Thirteen Week Period Ended August 31, 2019
	(unaudited)
	Rite Aid
	Corporation				Non-
	(Parent		Subsidiary		Guarantor
	Company Only)		Guarantors		Subsidiaries		Eliminations			Consolidated
		(in thousands)
Revenues	$	—	$	5,268,112	$	103,167	$	(5,015)	(a)	$	5,366,264
Costs and expenses:
Cost of revenues		—		4,131,064		95,679		(4,918)	(a)		4,221,825
Selling, general and administrative expenses		—		1,129,058		6,569		(97)	(a)		1,135,530
Lease termination and impairment charges		—		1,471		—		—			1,471
Interest expense		56,863		3,404		(165)		—			60,102
Gain on sale of assets, net		—		(1,587)		—		—			(1,587)
Equity in earnings of subsidiaries, net of tax		22,416		(1,084)		—		(21,332)	(b)		—
		79,279		5,262,326		102,083		(26,347)			5,417,341
(Loss) income from continuing operations before income taxes		(79,279)		5,786		1,084		21,332			(51,077)
Income tax expense		—		27,628		—		—			27,628
Net (loss) income from continuing operations	$	(79,279)	$	(21,842)	$	1,084	$	21,332		$	(78,705)
Net loss from discontinued operations		—		(574)		—		—			(574)
Net (loss) income		(79,279)		(22,416)		1,084		21,332	(b)		(79,279)
Total other comprehensive income (loss)		398		415		—		(415)			398
Comprehensive (loss) income	$	(78,881)	$	(22,001)	$	1,084	$	20,917		$	(78,881)

(a) Elimination of intercompany revenues and expenses.

(b) Elimination of equity in earnings of subsidiaries.

	Rite Aid Corporation
	Condensed Consolidating Statement of Operations
	Thirteen Week Period Ended September 1, 2018
	(unaudited)
	Rite Aid
	Corporation				Non-
	(Parent		Subsidiary		Guarantor
	Company Only)		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 charges		—		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
	Twenty-Six Week Period Ended August 31, 2019
	(unaudited)
	Rite Aid
	Corporation				Non-
	(Parent		Subsidiary		Guarantor
	Company Only)		Guarantors		Subsidiaries		Eliminations			Consolidated
	(in thousands)
Revenues	$	—	$	10,549,436	$	207,588	$	(18,171)	(a)	$	10,738,853
Costs and expenses:
Cost of revenues		—		8,293,206		192,462		(17,977)	(a)		8,467,691
Selling, general and administrative expenses		—		2,285,284		13,092		(194)	(a)		2,298,182
Lease termination and impairment expenses		—		1,949		—		—			1,949
Interest expense		111,818		6,899		(345)		—			118,372
Gain on sale of assets, net		—		(4,299)		—		—			(4,299)
Equity in earnings of subsidiaries, net of tax		67,120		(2,379)		—		(64,741)	(b)		—
		178,938		10,580,660		205,209		(82,912)			10,881,895
(Loss) income before income taxes		(178,938)		(31,224)		2,379		64,741			(143,042)
Income tax expense		—		35,002		—		—			35,002
Net (loss) income from continuing operations		(178,938)		(66,226)		2,379		64,741			(178,044)
Net loss from discontinued operations		—		(894)		—		—			(894)
Net (loss) income	$	(178,938)	$	(67,120)	$	2,379	$	64,741	(b)	$	(178,938)
Total other comprehensive income (loss)		157		157		—		(157)			157
Comprehensive (loss) income	$	(178,781)	$	(66,963)	$	2,379	$	64,584		$	(178,781)

(a) Elimination of intercompany revenues and expenses.

(b) Elimination of equity in earnings of subsidiaries.

	Rite Aid Corporation
	Condensed Consolidating Statement of Operations
	Twenty-Six Week Period 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 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.

Schedule of condensed consolidating statement of cash flows

	Rite Aid Corporation
	Condensed Consolidating Statement of Cash Flows
	Twenty-Six Week Period Ended August 31, 2019
	(unaudited)
	Rite Aid
	Corporation				Non-
	(Parent		Subsidiary		Guarantor
	Company Only)		Guarantors		Subsidiaries		Eliminations		Consolidated
	(in thousands)
Operating activities:
Net cash used in operating activities	$	(106,302)	$	(221,377)	$	(2,359)	$	—	$	(330,038)
Investing activities:
Payments for property, plant and equipment		—		(84,060)		—		—		(84,060)
Intangible assets acquired		—		(15,708)		—		—		(15,708)
Intercompany activity		—		271,864		—		(271,864)		—
Proceeds from dispositions of assets and investments		—		4,423		—		—		4,423
Net cash provided by (used in) investing activities		—		176,519		—		(271,864)		(95,345)
Financing activities:
Net proceeds from revolver		375,000		—		—		—		375,000
Principal payments on long-term debt		3,481		(6,932)		—		—		(3,451)
Change in zero balance cash accounts		—		54,712		—		—		54,712
Payments for taxes related to net share settlement of equity awards		—		(986)		—		—		(986)
Deferred financing costs paid		(315)		—		—		—		(315)
Intercompany activity		(271,864)		—		—		271,864		—
Net cash provided by financing activities		106,302		46,794		—		271,864		424,960
Cash flows of discontinued operations:
Operating activities of discontinued operations		—		(2,272)		—		—		(2,272)
Investing activities of discontinued operations		—		523		—		—		523
Financing activities of discontinued operations		—		—		—		—		—
Net cash used in discontinued operations		—		(1,749)		—		—		(1,749)
Increase (decrease) in cash and cash equivalents		—		187		(2,359)		—		(2,172)
Cash and cash equivalents, beginning of period		—		122,134		22,219		—		144,353
Cash and cash equivalents, end of period	$	—	$	122,321	$	19,860	$	—	$	142,181

	Rite Aid Corporation
	Condensed Consolidating Statement of Cash Flows
	Twenty-Six Week Period 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) provided by 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
Payments for taxes related to net share settlement of equity awards		—		(2,244)		—		—		(2,244)
Financing fees paid for early redemption		—		(13)		—		—		(13)
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