EXHIBIT 12
STATEMENT REGARDING COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
We have calculated the ratio of earnings to fixed charges in the following table by dividing earnings by fixed charges. For this purpose, earnings include pre-tax income from continuing operations plus fixed charges, before capitalized interest. Fixed charges include interest, whether expensed or capitalized, amortization of debt expense, preferred stock dividend requirement and that portion of rental expense which is representative of the interest factor in those rentals.
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| Thirty-Nine |
| Year Ended |
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| Weeks Ended |
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| February |
| February |
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| December 2, |
| March 4, |
| 26, |
| 28, |
| March 1, |
| March 2, |
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| (Dollars in thousands) |
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Fixed charges: |
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Interest expense |
| $ | 205,703 |
| $ | 277,017 |
| $ | 294,871 |
| $ | 313,498 |
| $ | 330,020 |
| $ | 396,064 |
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Interest portion of net rental expense(1) |
| 145,250 |
| 189,756 |
| 185,313 |
| 184,391 |
| 189,528 |
| 181,493 |
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Fixed charges before capitalized interest and preferred stock dividend requirements |
| 350,953 |
| 466,773 |
| 480,184 |
| 497,889 |
| 519,548 |
| 577,557 |
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Preferred stock dividend requirement(2) |
| 46,988 |
| 65,446 |
| 54,194 |
| 37,074 |
| 49,540 |
| 42,354 |
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Capitalized interest |
| 1,027 |
| 934 |
| 250 |
| 133 |
| 301 |
| 806 |
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Total fixed charges |
| $ | 398,968 |
| $ | 533,153 |
| $ | 534,628 |
| $ | 535,096 |
| $ | 569,389 |
| $ | 620,717 |
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Earnings: |
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Income (loss) before income taxes |
| $ | 13,417 |
| $ | 43,254 |
| $ | 134,007 |
| $ | 34,584 |
| $ | (154,482 | ) | $ | (837,385 | ) |
Share of loss from equity method investees |
| — |
| — |
| — |
| — |
| — |
| 12,092 |
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Preferred stock dividend requirement |
| (46,988 | ) | (65,446 | ) | (54,194 | ) | (37,074 | ) | (49,540 | ) | (42,354 | ) | ||||||
Fixed charges before capitalized interest |
| 397,941 |
| 532,219 |
| 534,378 |
| 534,963 |
| 569,088 |
| 619,911 |
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Total adjusted earnings (loss) |
| 364,370 |
| 510,027 |
| 614,191 |
| 532,473 |
| 365,066 |
| (247,736 | ) | ||||||
Earnings to fixed charges (deficiency) excess |
| $ | (34,598 | ) | $ | (23,126 | ) | $ | 79,563 |
| $ | (2,623 | ) | $ | (204,323 | ) | $ | (868,453 | ) |
Ratio of earnings to fixed charges |
| — |
| — |
| 1.15 | x | — |
| — |
| — |
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(1) The interest portion of net rental expense is estimated to be equal to one-third of the minimum rental expense for the period.
(2) The preferred stock divided requirement is computed as the pre-tax earnings that would be required to cover preferred stock dividends.
12-1