Rite Aid 2015 Annual Report Download - page 38

On February 28, 2015, our 66.5 million shares of potentially issuable common stock consisted of
the following (shares in thousands):
Outstanding
Stock Convertible
Strike price Options(a) Notes Total
$0.99 and under .......................... 1,002 — 1,002
$1.00 to $1.99 ............................ 30,309 — 30,309
$2.00 to $2.99 ............................ 4,401 24,792 29,193
$3.00 to $3.99 ............................ 338 — 338
$4.00 to $4.99 ............................ 1,144 — 1,144
$5.00 to $5.99 ............................ 3 — 3
$6.00 to $6.99 ............................ 1,694 — 1,694
$7.00 and over ........................... 2,777 — 2,777
Total issuable shares ....................... 41,668 24,792 66,460
(a) The exercise of these options would provide cash of $87.3 million.
The above table does not reflect approximately 27.9 million shares of our common stock to be
issued in connection with our pending acquisition of EnvisionRx.
Liquidity and Capital Resources
General
We have two primary sources of liquidity: (i) cash provided by operating activities and
(ii) borrowings under our senior secured revolving credit facility. Our principal uses of cash are to
provide working capital for operations, to service our obligations to pay interest and principal on debt
and to fund capital expenditures. Total liquidity as of February 28, 2015 was $1,204.1 million, which
consisted of revolver borrowing capacity of $1,203.9 million and invested cash of $0.2 million.
Credit Facility
On January 13, 2015, we amended and restated our senior secured credit facility (‘‘Amended and
Restated Senior Secured Credit Facility’’ or ‘‘revolver’’), which, among other things, increased
borrowing capacity from $1.795 billion to $3.0 billion (increasing to $3.7 billion upon the repayment of
our 8.00% senior secured notes due August 2020 (‘‘8.00% Notes’’)), and extended the maturity to
January 2020 from February 2018. We used borrowings under the revolver to repay and retire all of the
$1.144 billion outstanding under our Tranche 7 Senior Secured Term Loan due 2020, along with
associated fees and expenses. Borrowings under the revolver bear interest at a rate per annum between
LIBOR plus 1.50% and LIBOR plus 2.00% based upon the average revolver availability (as defined in
the Amended and Restated Senior Secured Credit Facility). We are required to pay fees between
0.250% and 0.375% per annum on the daily unused amount of the revolver, depending on the Average
Revolver Availability (as defined in the Amended and Restated Senior Secured Credit Facility).
Amounts drawn under the revolver become due and payable on January 13, 2020.
On February 10, 2015, we amended the Amended and Restated Senior Secured Credit Facility to,
among other things, increase the flexibility of Rite Aid to incur and/or issue unsecured indebtedness,
including in connection with the arrangements contemplated by the merger agreement executed in
connection with the Pending Acquisition, and made certain other modifications to the covenants
applicable to Rite Aid and its subsidiaries.
Our ability to borrow under the revolver is based upon a specified borrowing base consisting of
accounts receivable, inventory and prescription files. At February 28, 2015, we had $1,725.0 million of
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