Rite Aid 2016 Annual Report Download - page 57

proceeds from the issuance of common stock and excess tax benefit on stock options, partially offset by
a reduction in our zero balance bank accounts.
Cash used in financing activities was $85.8 million in fiscal 2015, which reflects proceeds from the
issuance of our $1,152.3 million Tranche 7 Term Loan due 2020 (‘‘Tranche 7 Term Loan’’), net proceeds
from our revolver of $1,325.0 million (which includes borrowings for the repayment and retirement of
our $1,143.7 million Tranche 7 Term Loan), the repayment of our $1,152.3 million Tranche 6 Term
Loan due 2020 and the redemption of $270.0 million of our 10.25% Senior Secured Notes due 2019.
We also made scheduled payments of $21.1 million on our capital lease obligations and $8.6 million on
our Tranche 7 Term Loan. Additionally, we paid an early redemption premium of $13.8 million in
connection with the redemption of our 10.25% Senior Secured Notes due 2019 and deferred financing
costs of $1.5 million and $18.8 million in connection with our Tranche 7 Term Loan due 2020 and
January 2015 Senior Secured Credit Facility refinancing, respectively. Cash provided by financing
activities also reflects proceeds from the issuance of common stock and excess tax benefit on stock
options and an increase in our zero balance bank accounts.
Cash used in financing activities was $320.2 million in fiscal 2014, which reflects financing fees of
$45.6 million paid for early debt retirement and deferred financing costs of $17.9 million paid in
connection with the issuance of our $500.0 million Tranche 2 Term Loan and $810.0 million of our
6.75% senior notes due 2021 and the corresponding retirement of $500.0 million of our 7.5% senior
secured notes due 2017 and $810.0 million of our 9.5% senior notes due 2017. We also made scheduled
payments of $21.7 million and $8.7 million on our capital lease obligations and our Tranche 6 Term
Loan and we used cash of $21.0 million to repurchase the RALMCO Cumulative Preferred Stock
described above. Also included in cash used in financing activities was a cash inflow of $26.7 million
relating to the excess tax benefit on stock option exercises and restricted stock vesting, which is
completely offset by a cash outflow in cash provided by operating activities.
Capital Expenditures
During the fiscal years ended February 27, 2016, February 28, 2015 and March 1, 2014 capital
expenditures were as follows:
Year Ended
February 27, February 28, March 1,
2016 2015 2014
(52 weeks) (52 weeks) (52 weeks)
New store construction, store relocation and
store remodel projects .................. $311,820 $280,679 $218,454
Technology enhancements, improvements to
distribution centers and other corporate
requirements ........................ 229,527 146,149 115,416
Purchase of prescription files from other retail
pharmacies .......................... 128,648 112,558 87,353
Total capital expenditures ................. $669,995 $539,386 $421,223
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 and after giving effect to limitations in the Merger Agreement, we believe that cash flow
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