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RITE AID CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Years Ended March 2, 2013, March 3, 2012 and February 26, 2011
(In thousands, except per share amounts)
4. Fair Value Measurements
The Company utilizes the three-level valuation hierarchy as described in Note 3, Lease Termination
and Impairment Charges, for the recognition and disclosure of fair value measurements.
As of March 2, 2013 and March 3, 2012, the Company did not have any financial assets measured
on a recurring basis. Please see Note 3 for fair value measurements of non-financial assets measured on
a non-recurring basis.
Other Financial Instruments
Financial instruments other than long-term indebtedness include cash and cash equivalents,
accounts receivable and accounts payable. These instruments are recorded at book value, which we
believe approximate their fair values due to their short term nature.
The fair value for LIBOR-based borrowings under the credit facility, term loans and term notes
are estimated based on the quoted market price of the financial instrument which is considered Level 1
of the fair value hierarchy. The fair values of substantially all of the Company’s other long-term
indebtedness are estimated based on quoted market prices of the financial instruments which are
considered Level 1 of the fair value hierarchy. The carrying amount and estimated fair value of the
Company’s total long-term indebtedness was $5,918,352 and $6,188,597, respectively, as of March 2,
2013. The carrying amount and estimated fair value of the Company’s total long-term indebtedness was
$6,201,217 and $6,404,400, respectively, as of March 3, 2012. There were no outstanding derivative
financial instruments as of March 2, 2013 and March 3, 2012.
5. Income Taxes
The provision for income taxes was as follows:
Year Ended
March 2, March 3, February 26,
2013 2012 2011
(52 Weeks) (53 Weeks) (52 Weeks)
Current tax expense (benefit):
Federal ............................. $ (6,305) $ 0 $ (36)
State .............................. 7,928 3,654 9,348
1,623 3,654 9,312
Deferred tax expense (benefit):
Federal ............................. (61,544) 1,729 1,959
State .............................. (50,679) (29,069) (1,429)
(112,223) (27,340) 530
Total income tax expense (benefit) ........... $(110,600) $(23,686) $ 9,842
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