Rite Aid 2012 Annual Report Download - page 46

The table below provides information about our financial instruments that are sensitive to changes
in interest rates. The table presents principal payments and the related weighted average interest rates
by expected maturity dates for each fiscal year as of March 3, 2012.
Fair Value at
March 3,
2013 2014 2015 2016 2017 Thereafter Total 2012
(Dollars in thousands)
Long-term debt, including current
portion, excluding capital lease
obligations
Fixed Rate ................. $59,445 $186,345 $ — $469,187 $880,000 $3,134,000 $4,728,977 $4,934,587
Average Interest Rate ........... 8.00% 6.95% 0.00% 9.26% 10.08% 8.62% 8.88%
Variable Rate ............... $ — $ 2,971 $1,044,692 $139,430 $ — $ 326,708 $1,513,801 $1,469,813
Average Interest Rate ........... 0.00% 2.01% 2.01% 5.48% 0.00% 4.50% 2.87%
Our ability to satisfy interest payment obligations on our outstanding debt will depend largely on
our future performance, which, in turn, is subject to prevailing economic conditions and to financial,
business and other factors beyond our control. If we do not have sufficient cash flow to service our
interest payment obligations on our outstanding indebtedness and if we cannot borrow or obtain equity
financing to satisfy those obligations, our business and results of operations could be materially
adversely affected. We cannot be assured that any replacement borrowing or equity financing could be
successfully completed.
The interest rate on our variable rate borrowings, which include our revolving credit facility and
our Tranche 2 Term loans and Tranche 5 Term loans, are all based on LIBOR. However, the interest
rate on our Tranche 5 Term loans has a LIBOR floor of 125 basis points. If the market rates of interest
for LIBOR changed by 100 basis points as of March 3, 2012, our annual interest expense would change
by approximately $10.4 million.
A change in interest rates does not have an impact upon our future earnings and cash flow for
fixed-rate debt instruments. As fixed-rate debt matures, however, and if additional debt is acquired to
fund the debt repayment, future earnings and cash flow may be affected by changes in interest rates.
This effect would be realized in the periods subsequent to the periods when the debt matures.
Increases in interest rates would also impact our ability to refinance existing maturities on favorable
terms.
Item 8. Financial Statements and Supplementary Data
Our consolidated financial statements and notes thereto are included elsewhere in this report and
are incorporated by reference herein. See Item 15 of Part IV.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable
Item 9A. Controls and Procedures
(a) Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial
Officer, has evaluated the effectiveness of disclosure controls and procedures (as such term is defined
in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the
‘‘Exchange Act’’)) as of the end of the period covered by this report. Based on such evaluation, our
Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period,
our disclosure controls and procedures are effective.
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