Consider the various types of debt the company provides in footnote 10.

i. Explain the difference between rite aids secured and unsecured debt. Why would Rite Aid distinguish between these two kinds of debt?

ii. What is meant by terms "senior," "fixed-rate," and "convertible?"

iii. Speculate as to why Rite Aid has many different types of debt with a range of interest rates.

  
 
 
 
 

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Other intangibles, net Other assets Current assets: Cash and cash equivalents Accounts receivable, net Inventories, net........ Prepaid expenses and other current assets Total current assets Property, plant and equipment, net Goodwill Total assets RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except per share amounts) ASSETS LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Short-term debt and current maturities of convertible notes, long-term debt and lease financing obligations Accounts payable.... Accrued salaries, wages and other current liabilities Total current liabilities Convertible notes Long-term debt, less current maturitics Lease financing obligations, less current maturities Other noncurrent liabilities .... Total liabilities Commitments and contingencies Redeemable preferred stock Stockholders' equity (deficit): Preferred stock, par value $1 per share; liquidation value $100 per share; 20,000 shares authorized; shares issued -4,178 and 3,937 pare Common stock, par value $1 per share; 1,000,000 shares authorized; shares issued and outstanding 516,496 and 515,115 Additional paid-in capital. Accumulated deficit Stock based and deferred compensation Accumulated other comprehensive loss Total stockholders' equity (deficit) Total liabilities and stockholders' equity (deficit).. February 28, 2004 41 $ 334,755 670,004 2,223,171 150,067 3,377,997 1,883,808 684,535 176,672 123,667 $ 6,246,679 $ 23,976 758,290 701,484 1,483,750 246,000 3,451,352 170,338 885,975 6,237,415 417,803 516,496 3,133,277 (4,035,433) (22,879) 9,264 $ 6,246,679 March 1. 2003 $365,321 575,518 2,195,030 108,018 3,243,887 1,868,579 684,535 199,768 136,746 $ 6,133,515 $ 103,715 755,284 707,999 1,566,998 244,500 3,345,365 169,048 900,270 6,226,181 The accompanying notes are an integral part of these consolidated financial statements. 19,663 393,705 515,115 3,119,619 (4,118,119) 5,369 (28,018) (112,329) $ 6,133,515 -191- Other intangibles, net Other assets Current assets: Cash and cash equivalents Accounts receivable, net Inventories, net........ Prepaid expenses and other current assets Total current assets Property, plant and equipment, net Goodwill Total assets RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except per share amounts) ASSETS LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Short-term debt and current maturities of convertible notes, long-term debt and lease financing obligations Accounts payable.... Accrued salaries, wages and other current liabilities Total current liabilities Convertible notes Long-term debt, less current maturitics Lease financing obligations, less current maturities Other noncurrent liabilities .... Total liabilities Commitments and contingencies Redeemable preferred stock Stockholders' equity (deficit): Preferred stock, par value $1 per share; liquidation value $100 per share; 20,000 shares authorized; shares issued -4,178 and 3,937 pare Common stock, par value $1 per share; 1,000,000 shares authorized; shares issued and outstanding 516,496 and 515,115 Additional paid-in capital. Accumulated deficit Stock based and deferred compensation Accumulated other comprehensive loss Total stockholders' equity (deficit) Total liabilities and stockholders' equity (deficit).. February 28, 2004 41 $ 334,755 670,004 2,223,171 150,067 3,377,997 1,883,808 684,535 176,672 123,667 $ 6,246,679 $ 23,976 758,290 701,484 1,483,750 246,000 3,451,352 170,338 885,975 6,237,415 417,803 516,496 3,133,277 (4,035,433) (22,879) 9,264 $ 6,246,679 March 1. 2003 $365,321 575,518 2,195,030 108,018 3,243,887 1,868,579 684,535 199,768 136,746 $ 6,133,515 $ 103,715 755,284 707,999 1,566,998 244,500 3,345,365 169,048 900,270 6,226,181 The accompanying notes are an integral part of these consolidated financial statements. 19,663 393,705 515,115 3,119,619 (4,118,119) 5,369 (28,018) (112,329) $ 6,133,515 -191-

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