EXHIBIT 12
RITE AID CORPORATION AND SUBSIDIARIES
STATEMENT REGARDING COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
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. 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.
Year Ended
(Dollars in thousands)
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March 2, March 3, February 27, February 27, February 28,
2002 2001 2000 1999 1998
(52 Weeks) (53 Weeks) (52 Weeks) (52 Weeks) (52 Weeks)
---------- ----------- ------------ ------------ ------------
Fixed charges:
Interest expense ......................... $ 396,064 $ 649,926 $ 542,028 $ 274,826 $ 209,152
Interest portion of net rental expense
(1)..................................... 182,260 159,066 146,852 139,104 121,694
Fixed charges before capitalized interest
and preferred stock dividend
requirements............................ 578,324 808,992 688,880 413,930 330,846
Preferred stock dividend requirement (2) . 42,354 42,445 15,554 965 --
Capitalized interest ..................... 806 1,836 5,292 7,069 4,102
--------- ----------- ----------- --------- ---------
Total fixed charges ...................... $ 621,484 $ 853,273 $ 709,726 $ 421,964 $ 334,948
--------- ----------- ----------- --------- ---------
Earnings:
Loss from continuing operations before
income taxes, extraordinary item and
cumulative effect of accounting change.. $(772,837) $(1,282,807) $(1,123,296) $(665,040) $(173,090)
Share of loss from equity method
investees............................... 12,092 36,675 15,181 448 1,886
Fixed charges before capitalized interest 620,678 851,437 704,434 414,895 330,846
--------- ----------- ----------- --------- ---------
Total adjusted earnings (loss) ........... (140,067) (394,695) (403,681) (249,697) 159,642
--------- ----------- ----------- --------- ---------
Earnings to fixed charges, deficiency .... $(761,551) $(1,247,968) $(1,113,407) $(671,661) $(175,306)
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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 dividend requirement is computed as the pre-tax
earnings that wold be required to cover preferred stock dividends.