Rite Aid 2012 Annual Report Download - page 39

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proceeds of certain asset dispositions (at the option of the noteholder) and include limitations on our
ability to pay dividends, make investments or other restricted payments, incur debt, grant liens, sell
assets and enter into sale-leaseback transactions. The 9.75% senior secured notes due June 2016 were
issued at 98.2% of par.
Off Balance Sheet Obligations
Until October 26, 2009, we maintained securitization agreements (the ‘‘First Lien Facility’’) with
several multi-seller asset-backed commercial paper vehicles (‘‘CPVs’’). Under the terms of the First
Lien Facility, we sold substantially all of our eligible third party pharmaceutical receivables to a
bankruptcy remote Special Purpose Entity (‘‘SPE’’) and retained servicing responsibility. The SPE then
transferred an interest in these receivables to various CPVs. We also maintained a $225.0 million
second priority accounts receivable securitization term loan (‘‘Second Lien Facility’’).
On October 26, 2009, we terminated both accounts receivable securitization facilities and replaced
them with senior secured notes, increased borrowing capacity under our existing senior secured
revolving credit facility and an increase in borrowings under our Tranche 4 Term Loan. As part of this
refinancing, we incurred a prepayment penalty of $2.3 million in relation to the Second Lien Facility
and recognized $3.8 million of unamortized discount related to the Second Lien Facility. These charges
were recorded as a component of selling, general, and administrative expenses.
As of March 3, 2012, we had no material off balance sheet arrangements, other than operating
leases included in the table below.
Contractual Obligations and Commitments
The following table details the maturities of our indebtedness and lease financing obligations as of
March 3, 2012, as well as other contractual cash obligations and commitments.
Payment due by period
Less Than
1 Year 1 to 3 Years 3 to 5 Years After 5 Years Total
(Dollars in thousands)
Contractual Cash Obligations
Long term debt(1) .............. $ 522,824 $2,125,045 $2,237,702 $4,285,670 $ 9,171,241
Capital lease obligations(2) ........ 30,716 43,560 40,897 59,908 175,081
Operating leases(3) ............. 1,002,062 1,880,275 1,639,047 4,304,798 8,826,182
Open purchase orders ........... 432,340 — — — 432,340
Redeemable preferred stock(4) .....———21,300 21,300
Other, primarily self insurance and
retirement plan obligations(5) .... 117,450 154,190 49,520 116,233 437,393
Minimum purchase commitments(6) . 153,894 318,455 248,072 413,765 1,134,186
Total contractual cash obligations . $2,259,286 $4,521,525 $4,215,238 $9,201,674 $20,197,723
Commitments
Lease guarantees(7) ............. $ 26,832 $ 52,680 $ 48,610 $ 53,041 $ 181,163
Outstanding letters of credit ....... 128,190 — — — 128,190
Total commitments ............ $2,414,308 $4,574,205 $4,263,848 $9,254,715 $20,507,076
(1) Includes principal and interest payments for all outstanding debt instruments. Interest was
calculated on variable rate instruments using rates as of March 3, 2012.
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