Rite Aid 2013 Annual Report Download - page 42

Cash provided by financing activities was $25.8 million in fiscal 2012 and was primarily due to
increased revolver borrowings coupled with the February 2012 issuance of $481.0 million of our 9.25%
senior notes due March 15, 2020 and concurrent repurchase of $404.8 million of our 8.625% senior
notes due March 2015. The remaining $54.2 million of the 8.625% senior notes due March 2015 were
repurchased in March 2012.
Cash used in financing activities was $251.7 million in fiscal 2011 and was primarily due to the
refinancing activity that occurred during the second quarter of fiscal 2011, the repurchase of
$93.8 million of the Convertible Notes, other scheduled debt repayments and a small decrease in our
zero balance cash accounts.
Capital Expenditures
During the fifty-two week period ended March 2, 2013, we spent $383.0 million on capital
expenditures, consisting of $200.1 million related to new store construction, store relocation and store
remodel projects, $115.8 million related to technology enhancements, improvements to distribution
centers and other corporate requirements, and $67.1 million related to the purchase of prescription
files from other retail pharmacies. We plan on making total capital expenditures of approximately
$400.0 million during fiscal 2014, consisting of approximately 55% related to store relocations and
remodels and new store construction, 29% related to infrastructure and maintenance requirements and
16% related to prescription file purchases. We expect that these capital expenditures will be financed
primarily with cash flow from operating activities.
Future Liquidity
We are highly leveraged. Our high level of indebtedness could: (i) limit our ability to obtain
additional financing; (ii) limit our flexibility in planning for, or reacting to, changes in our business and
the industry; (iii) place us at a competitive disadvantage relative to our competitors with less debt;
(iv) render us more vulnerable to general adverse economic and industry conditions; and (v) require us
to dedicate a substantial portion of our cash flow to service our debt. Based upon our current levels of
operations, we believe that cash flow from operations together with available borrowings under the
senior secured revolving credit facility and other sources of liquidity will be adequate to meet our
requirements for working capital, debt service and capital expenditures at least for the next twelve
months. Based on our liquidity position, which we expect to remain strong throughout the year, we do
not expect the restriction on our senior secured credit facility, that could result if we fail to meet the
fixed charge covenant in our senior secured credit facility, to impact our business in the next twelve
months. We will continue to assess our liquidity position and potential sources of supplemental liquidity
in light of our operating performance, and other relevant circumstances. It is our belief that although it
is not likely, should we determine, at any time, that it is necessary to obtain additional short-term
liquidity, we will evaluate our alternatives and take appropriate steps to obtain sufficient additional
funds. There can be no assurance that any such supplemental funding, if sought, could be obtained or
if obtained, would be on terms acceptable to us. From time to time, we may seek deleveraging
transactions, including entering into transactions to exchange debt for shares of common stock, issuance
of equity (including preferred stock and convertible securities), repurchase outstanding indebtedness, or
seek to refinance our outstanding debt or may otherwise seek transactions to reduce interest expense
and extend debt maturities. Any of these transactions could impact our financial results.
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