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RITE AID CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Years Ended February 26, 2011, February 27, 2010 and February 28, 2009
(In thousands, except per share amounts)
11. Leases (Continued)
Following is a summary of lease finance obligations at February 26, 2011 and February 27, 2010:
2011 2010
Obligations under financing leases ..................... $128,994 $141,387
Sale-leaseback obligations ........................... 11,303 11,304
Less current obligation ............................. (18,003) (19,131)
Long-term lease finance obligations .................... $122,294 $133,560
Following are the minimum lease payments for all properties under a lease agreement that will
have to be made in each of the years indicated based on non-cancelable leases in effect as of
February 26, 2011:
Lease Financing
Fiscal year Obligations Operating Leases
2012 ................................... 29,585 1,003,775
2013 ................................... 21,707 969,258
2014 ................................... 21,528 921,575
2015 ................................... 21,096 867,278
2016 ................................... 20,907 809,246
Later years ............................... 78,769 4,897,615
Total minimum lease payments ................ 193,592 9,468,747
Amount representing interest ................. (53,295)
Present value of minimum lease payments ........ 140,297
12. Redeemable Preferred Stock
In March 1999 and February 1999, Rite Aid Lease Management Company, a wholly owned
subsidiary of the Company, issued 63,000 and 150,000 shares of Cumulative Preferred Stock, Class A,
par value $100 per share, respectively. The Class A Cumulative Preferred Stock is mandatorily
redeemable on April 1, 2019 at a redemption price of $100 per share plus accumulated and unpaid
dividends. The Class A Cumulative Preferred Stock pays dividends quarterly at a rate of 7.0% per
annum of the par value of $100 per share when, as and if declared by the Board of Directors of Rite
Aid Lease Management Company in its sole discretion. The amount of dividends payable in respect of
the Class A Cumulative Preferred Stock may be adjusted under certain events. The outstanding shares
of the Class A Preferred Stock were recorded at their estimated fair value of $19,253 for the fiscal 2000
issuances, which equaled the sale price on the date of issuance. Because the fair value of the Class A
Preferred Stock was less than the mandatory redemption amount at issuance, periodic accretions to
expense using the interest method are made so that the carrying amount equals the redemption amount
on the mandatory redemption date. Accretion was $102 in fiscal 2011, 2010 and 2009. The amount of
this instrument is $20,481 and $20,379 and is recorded in Other Non-Current Liabilities as of
February 26, 2011 and February 27, 2010, respectively.
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