EX-12 7 file004.htm COMPUTATION OF RATIO EARNINGS

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, 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.


  Year Ended
(Dollar in thousand)
  February 26,
2005
(52 Weeks)
February 28,
2004
(52 Weeks)
March 1,
2003
(52 Weeks)
March 2,
2002
(52 Weeks)
March 3,
2001
(53 Weeks)
                               
Fixed charges:                              
Interest expense $ 294,871   $ 313,498   $ 330,020   $ 396,064     649,926  
Interest portion of net rental expense (1)   185,313     184,391     189,528     181,493     159,247  
Fixed charges before capitalized interest and preferred stock dividend requirements   480,184     497,889     519,548     577,557     809,173  
Preferred stock dividend requirement (2)   54,194     37,074     49,540     42,354     42,445  
Capitalized interest   250     133     301     806     1,836  
Total fixed charges $ 534,628   $ 535,096   $ 569,389   $ 620,717   $ 853,454  
Earnings:                              
Income (loss) from continuing operations before income taxes, and cumulative effect
of accounting change
$ 134,007   $ 34,584   $ (154,482 $ (837,385 $ (1,283,602
Share of loss from equity method investees               12,092     36,675  
Preferred stock dividend requirement   (54,194   (37,074   (49,540   (42,354   (42,445
Fixed charges before capitalized interest   534,378     534,963     569,088     619,911     851,618  
Total adjusted earnings (loss)   614,191     532,473     365,066     (247,736   (437,754
Earnings to fixed charges excess (deficiency) $ 79,563   $ (2,623 $ (204,323 $ (868,453 $ (1,291,208
Ratio of earnings to fixed charges   1.15                  
(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.