Exhibit 12
RITE AID CORPORATION AND SUBSIDIARIES
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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| 26 Week Period Ended |
| Fiscal Year Ended |
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| August 29, |
| August 30, |
| February 28, |
| March 1, |
| March 2, |
| March 3, |
| February 26, |
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| (Dollars in Thousands) |
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Fixed charges: |
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Interest expense |
| $ | 239,017 |
| $ | 201,770 |
| $ | 397,612 |
| $ | 424,591 |
| $ | 515,421 |
| $ | 529,255 |
| $ | 547,581 |
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Interest portion of net rental expense(1) |
| 160,783 |
| 158,502 |
| 321,495 |
| 317,592 |
| 317,080 |
| 325,631 |
| 321,888 |
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Fixed charges before capitalized interest |
| 399,800 |
| 360,272 |
| 719,107 |
| 742,183 |
| 832,501 |
| 854,886 |
| 869,469 |
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Capitalized interest |
| 87 |
| 90 |
| 145 |
| 197 |
| 399 |
| 315 |
| 509 |
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Total fixed charges |
| 399,887 |
| 360,362 |
| 719,252 |
| 742,380 |
| 832,900 |
| 855,201 |
| 869,978 |
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Preferred stock dividend requirement(2) |
| — |
| — |
| — |
| 16,636 |
| 21,056 |
| 19,838 |
| 18,692 |
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Total combined fixed charges and preferred stock dividends |
| $ | 399,887 |
| $ | 360,362 |
| $ | 719,252 |
| $ | 759,016 |
| $ | 853,956 |
| $ | 875,039 |
| $ | 888,670 |
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Earnings: |
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Income (loss) before income taxes |
| $ | 69,209 |
| $ | 201,036 |
| $ | 426,820 |
| $ | 250,218 |
| $ | 7,505 |
| $ | (392,257 | ) | $ | (545,582 | ) |
Fixed charges before capitalized interest |
| 399,800 |
| 360,272 |
| 719,107 |
| 742,183 |
| 832,501 |
| 854,886 |
| 869,469 |
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Total earnings and fixed charges |
| 469,009 |
| 561,308 |
| 1,145,927 |
| 992,401 |
| 840,006 |
| 462,629 |
| 323,887 |
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Ratio of earnings to fixed charges |
| 1.17 | x | 1.56 | x | 1.59 | x | 1.31 | x | — |
| — |
| — |
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Excess (deficiency) of earnings to combined fixed charges and preferred stock dividends |
| $ | 69,122 |
| $ | 200,946 |
| $ | 426,675 |
| $ | 233,385 |
| $ | (13,950 | ) | $ | (412,410 | ) | $ | (564,783 | ) |
(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 dividend requirement is computed as the pre- tax earnings that would be required to cover preferred stock dividends.