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

9 Months Ended

Nov. 30, 2019

Guarantor and Non-Guarantor Condensed Consolidating Financial Information

Schedule of condensed consolidating balance sheet

	Rite Aid Corporation
	Condensed Consolidating Balance Sheet
	November 30, 2019
	(unaudited)
	Rite Aid
	Corporation				Non-
	(Parent		Subsidiary		Guarantor
	Company Only)		Guarantors		Subsidiaries		Eliminations			Consolidated
	(in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	178,233	$	111,265	$	—		$	289,498
Accounts receivable, net		—		1,268,251		421,587		—			1,689,838
Intercompany receivable		—		483,960		—		(483,960)	(a)		—
Inventories, net of LIFO reserve of $0, $611,997, $0, $0, and $611,997		—		1,957,045		—		—			1,957,045
Prepaid expenses and other current assets		—		177,254		1,038		—			178,292
Current assets held for sale		—		101,594		—		—			101,594
Total current assets		—		4,166,337		533,890		(483,960)			4,216,267
Property, plant and equipment, net		—		1,254,234		—		—			1,254,234
Operating lease right-of-use assets		—		2,935,104		—		—			2,935,104
Goodwill		—		1,108,136		—		—			1,108,136
Other intangibles, net		—		327,357		47,303		—			374,660
Deferred tax assets		10,828		381,315		(10,038)		—			382,105
Investment in subsidiaries		8,225,073		58,008		—		(8,283,081)	(b)		—
Intercompany receivable		—		3,609,141		—		(3,609,141)	(a)		—
Other assets		16		151,230		7,039		—			158,285
Total assets	$	8,235,917	$	13,990,862	$	578,194	$	(12,376,182)		$	10,428,791
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt and lease financing obligations	$	—	$	9,486	$	—	$	—		$	9,486
Accounts payable		—		1,525,000		9,302		—			1,534,302
Intercompany payable		—		—		483,960		(483,960)	(a)		—
Accrued salaries, wages and other current liabilities		44,657		743,158		18,924		—			806,739
Current portion of operating lease liabilities		—		493,699		—		—			493,699
Current liabilities held for sale		—		42,422		—		—			42,422
Total current liabilities		44,657		2,813,765		512,186		(483,960)			2,886,648
Long-term debt, less current maturities		3,566,261		—		—		—			3,566,261
Long-term operating lease liabilities		—		2,732,339		—		—			2,732,339
Lease financing obligations, less current maturities		—		20,607		—		—			20,607
Intercompany payable		3,609,141		—		—		(3,609,141)	(a)		—
Other noncurrent liabilities		—		199,078		8,000		—			207,078
Total liabilities		7,220,059		5,765,789		520,186		(4,093,101)			9,412,933
Commitments and contingencies		—		—		—		—			—
Total stockholders’ equity		1,015,858		8,225,073		58,008		(8,283,081)	(b)		1,015,858
Total liabilities and stockholders’ equity	$	8,235,917	$	13,990,862	$	578,194	$	(12,376,182)		$	10,428,791

(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 November 30, 2019
	(unaudited)
	Rite Aid
	Corporation				Non-
	(Parent		Subsidiary		Guarantor
	Company Only)		Guarantors		Subsidiaries		Eliminations			Consolidated
		(in thousands)
Revenues	$	—	$	5,362,141	$	115,907	$	(15,750)	(a)	$	5,462,298
Costs and expenses:
Cost of revenues		—		4,179,543		109,431		(15,651)	(a)		4,273,323
Selling, general and administrative expenses		—		1,128,847		6,106		(99)	(a)		1,134,854
Lease termination and impairment charges		—		166		—		—			166
Interest expense		54,774		3,231		(149)		—			57,856
Gain on debt retirements		—		(55,692)		—		—			(55,692)
Gain on sale of assets, net		—		(1,371)		—		—			(1,371)
Equity in earnings of subsidiaries, net of tax		(106,259)		(519)		—		106,778	(b)		—
		(51,485)		5,254,205		115,388		91,028			5,409,136
Income (loss) from continuing operations before income taxes		51,485		107,936		519		(106,778)			53,162
Income tax expense		—		876		—		—			876
Net income (loss) from continuing operations	$	51,485	$	107,060	$	519	$	(106,778)		$	52,286
Net loss from discontinued operations		—		(801)		—		—			(801)
Net income (loss)		51,485		106,259		519		(106,778)	(b)		51,485
Total other comprehensive income (loss)		501		415		—		(415)			501
Comprehensive income (loss)	$	51,986	$	106,674	$	519	$	(107,193)		$	51,986

(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 December 1, 2018
	(unaudited)
	Rite Aid
	Corporation				Non-
	(Parent		Subsidiary		Guarantor
	Company Only)		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 charges		—		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 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
	Thirty-Nine Week Period Ended November 30, 2019
	(unaudited)
	Rite Aid
	Corporation				Non-
	(Parent		Subsidiary		Guarantor
	Company Only)		Guarantors		Subsidiaries		Eliminations			Consolidated
	(in thousands)
Revenues	$	—	$	15,911,576	$	323,496	$	(33,921)	(a)	$	16,201,151
Costs and expenses:
Cost of revenues		—		12,472,749		301,893		(33,628)	(a)		12,741,014
Selling, general and administrative expenses		—		3,414,132		19,197		(293)	(a)		3,433,036
Lease termination and impairment expenses		—		2,115		—		—			2,115
Interest expense		166,592		10,129		(493)		—			176,228
Gain on debt retirements		—		(55,692)		—		—			(55,692)
Gain on sale of assets, net		—		(5,670)		—		—			(5,670)
Equity in earnings of subsidiaries, net of tax		(39,139)		(2,899)		—		42,038	(b)		—
		127,453		15,834,864		320,597		8,117			16,291,031
(Loss) income from continuing operations before income taxes		(127,453)		76,712		2,899		(42,038)			(89,880)
Income tax expense		—		35,878		—		—			35,878
Net (loss) income from continuing operations		(127,453)		40,834		2,899		(42,038)			(125,758)
Net loss from discontinued operations		—		(1,695)		—		—			(1,695)
Net (loss) income	$	(127,453)	$	39,139	$	2,899	$	(42,038)	(b)	$	(127,453)
Total other comprehensive income (loss)		658		1,245		—		(1,245)			658
Comprehensive (loss) income	$	(126,795)	$	40,384	$	2,899	$	(43,283)		$	(126,795)

(a) Elimination of intercompany revenues and expenses.

(b) Elimination of equity in earnings of subsidiaries.

	Rite Aid Corporation
	Condensed Consolidating Statement of Operations
	Thirty-Nine Week Period 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.

Schedule of condensed consolidating statement of cash flows

	Rite Aid Corporation
	Condensed Consolidating Statement of Cash Flows
	Thirty-Nine Week Period Ended November 30, 2019
	(unaudited)
	Rite Aid
	Corporation				Non-
	(Parent		Subsidiary		Guarantor
	Company Only)		Guarantors		Subsidiaries		Eliminations		Consolidated
	(in thousands)
Operating activities:
Net cash (used in) provided by operating activities	$	(127,650)	$	132,279	$	89,046	$	—	$	93,675
Investing activities:
Payments for property, plant and equipment		—		(129,135)		—		—		(129,135)
Intangible assets acquired		—		(33,435)		—		—		(33,435)
Intercompany activity		—		37,416		—		(37,416)		—
Proceeds from dispositions of assets and investments		—		55,971		—		—		55,971
Net cash used in investing activities		—		(69,183)		—		(37,416)		(106,599)
Financing activities:
Net proceeds from revolver		260,000		—		—		—		260,000
Principal payments on long-term debt		(94,619)		(10,083)		—		—		(104,702)
Change in zero balance cash accounts		—		(11,749)		—		—		(11,749)
Financing fees paid for early debt redemption		—		(518)		—		—		(518)
Payments for taxes related to net share settlement of equity awards		—		(1,573)		—		—		(1,573)
Deferred financing costs paid		(315)		—		—		—		(315)
Intercompany activity		(37,416)		—		—		37,416		—
Net cash provided by (used in) financing activities		127,650		(23,923)		—		37,416		141,143
Cash flows of discontinued operations:
Operating activities of discontinued operations		—		(7,148)		—		—		(7,148)
Investing activities of discontinued operations		—		24,074		—		—		24,074
Financing activities of discontinued operations		—		—		—		—		—
Net cash provided by discontinued operations		—		16,926		—		—		16,926
Increase in cash and cash equivalents		—		56,099		89,046		—		145,145
Cash and cash equivalents, beginning of period		—		122,134		22,219		—		144,353
Cash and cash equivalents, end of period	$	—	$	178,233	$	111,265	$	—	$	289,498

	Rite Aid Corporation
	Condensed Consolidating Statement of Cash Flows
	Thirty-Nine Week Period 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) provided by 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
Payments for taxes related to net share settlement of equity awards		—		(2,419)		—		—		(2,419)
Financing fees paid for early redemption		—		(13)		—		—		(13)
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