SEC 10K Project: Statement of Cash Flows

Respond to one or more question(s) from each of the three categories below. Category: Operating Activities 1. State whether your corporation uses the direct or indirect method of preparing the Statement of Cash Flows and describe how the Statement would be different under these two methods. 2. What are the largest increases and decreases in the operating activities section of your corporation's Statement of Cash Flows? 3. Given the industry your corporation operates in and the current economic environment, explain any unexpected operating activities that caused cash flow to decrease. Category: Investing and Financing Activities 1. Explain similarities and or differences in preparing the Statement of Cash Flows using International Financial Reporting Standards (IFRS). 2. Describe investments reported on your corporation's Statement of Cash Flows in the current and most recent past year. 3. Review your corporation's Statement of Cash Flows over the past 3 years and explain any financing trends. Category: Analysis 1. Calculate the following ratio for the most recent two years and comment on the results of your ratio analysis. How does the result for your corporation compare to the industry average? a. Free cash flow

RITE AID CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)

		Year Ended
		March 3, 2018 (52 Weeks)			March 4, 2017 (53 Weeks)			February 27, 2016 (52 Weeks)
OPERATING ACTIVITIES:
Net income		$	943,470		$	4,053		$	165,465
Net income (loss) from discontinued operations, net of tax			1,293,002			(27	)		63,377
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Net (loss) income from continuing operations		$	(349,532	)	$	4,080		$	102,088
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Adjustments to reconcile to net cash provided by operating activities:
Depreciation and amortization			386,057			407,366			361,134
Lease termination and impairment charges			58,765			45,778			40,477
Goodwill impairment			261,727
LIFO (credit) charge			(28,827	)		(3,721	)		7,892
Gain on sale of assets, net			(25,872	)		(6,649	)		(606	)
Stock-based compensation expense			25,793			23,482			37,948
Loss on debt retirements, net									33,205
Changes in deferred taxes			260,411			35,038			79,488
Excess tax benefit on stock options and restricted stock						(543	)		(22,884	)
Changes in operating assets and liabilities:
Accounts receivable			(349,481	)		(159,590	)		264,525
Inventories			18,835			(49,381	)		136,823
Accounts payable			211,511			39,542			(480	)
Other assets and liabilities, net			42,083			(152,375	)		(329,267	)
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Net cash provided by operating activities of continuing operations			511,470			183,027			710,343
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INVESTING ACTIVITIES:
Payments for property, plant and equipment			(185,879	)		(254,149	)		(391,199	)
Intangible assets acquired			(28,885	)		(39,648	)		(89,874	)
Acquisition of businesses, net of cash acquired									(1,778,377	)
Proceeds from insured loss			4,239
Proceeds from sale-leaseback transactions									26,953
Proceeds from dispositions of assets and investments			27,586			16,852			9,773
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Net cash used in investing activities of continuing operations			(182,939	)		(276,945	)		(2,222,724	)
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FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt									1,800,000
Net (payments to) proceeds from revolver			(265,000	)		330,000			375,000
Principal payments on long-term debt			(9,882	)		(16,588	)		(667,494	)
Change in zero balance cash accounts			35,605			43,080			(62,878	)
Net proceeds from the issuance of common stock			5,796			6,951			11,376
Financing fees paid for early debt redemption									(26,003	)
Excess tax benefit on stock options and restricted stock						543			22,884
Deferred financing costs paid									(34,634	)
Payment for taxes related to net share settlement of equity awards			(4,103	)		(6,254	)		(17,506	)
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Net cash (used in) provided by financing activities of continuing operations			(237,584	)		357,732			1,400,745
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Cash flows from discontinued operations:
Operating activities of discontinued operations			(245,126	)		49,090			304,565
Investing activities of discontinued operations			3,496,222			(187,314	)		(179,134	)
Financing activities of discontinued operations			(3,140,119	)		(4,651	)		(5,223	)
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Net cash provided by (used in) discontinued operations			110,977			(142,875	)		120,208
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Increase in cash and cash equivalents			201,924			120,939			8,572
Cash and cash equivalents, beginning of year			245,410			124,471			115,899
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Cash and cash equivalents, end of year		$	447,334		$	245,410		$	124,471
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