EX-12 57 a2180214zex-12.htm RATIO OF EARNINGS TO FIXED CHARGES

Exhibit 12

 

Dollar General Corporation
Ratio of Earnings to Fixed Charges

 

 

 

Historical

 

Pro Forma (4)

 

 

 

Predecessor

 

Successor

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

39

 

February 3,

 

July 7,

 

 

 

39

 

 

 

 

 

 

 

 

 

 

 

 

 

Weeks

 

2007

 

2007

 

Fiscal Year

 

Weeks

 

 

 

Fiscal Year Ended

 

Ended

 

through

 

through

 

Ended

 

Ended

 

 

 

January 31,

 

January 30,

 

January 28,

 

February 3,

 

February 2,

 

November 3,

 

July 6,

 

November 2,

 

February 2,

 

November 2,

 

 

 

2003

 

2004

 

2005

 

2006

 

2007

 

2006

 

2007

 

2007

 

2007

 

2007

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

$

410.3

 

$

476.5

 

$

534.8

 

$

544.6

 

$

220.4

 

$

143.0

 

$

4.0

 

$

(94.6

)

$

219.1

 

$

(91.4

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed Charges, exclusive of  capitalized interest

 

104.1

 

104.0

 

111.8

 

123.1

 

140.7

 

132.2

 

73.5

 

199.1

 

142.0

 

273.4

 

 

 

$

514.4

 

$

580.5

 

$

646.6

 

$

667.7

 

$

361.1

 

$

275.2

 

$

77.5

 

$

104.5

 

$

361.1

 

$

182.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed Charges (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest charged to expense

 

$

46.9

 

$

35.6

 

$

28.8

 

$

26.2

 

$

34.9

 

$

27.0

 

$

10.3

 

$

148.5

 

$

36.2

 

$

159.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest factor on rental expense (2)

 

57.2

 

68.4

 

83.0

 

96.9

 

105.8

 

105.2

 

63.2

 

50.6

 

105.8

 

113.8

 

 

 

104.1

 

104.0

 

111.8

 

123.1

 

140.7

 

132.2

 

73.5

 

199.1

 

142.0

 

273.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest capitalized

 

0.1

 

0.2

 

3.6

 

3.3

 

2.9

 

2.9

 

—

 

—

 

2.9

 

—

 

 

 

$

104.2

 

$

104.2

 

$

115.4

 

$

126.4

 

$

143.6

 

$

135.1

 

$

73.5

 

$

199.1

 

$

144.9

 

$

273.4

 

Ratio of earnings to fixed charges

 

4.9x

 

5.6x

 

5.6x

 

5.3x

 

2.5x

 

2.0x

 

1.1x

 

 

 

2.5x

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Excess of fixed charges over earnings (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(94.6

)

 

 

$

(91.4

)

(1)                                  For purposes of computing the ratio of earnings to fixed charges, (a) earnings consist of income (loss) before income taxes, plus fixed charges less capitalized expenses related to indebtedness (amortization expense for capitalized interest is not significant) and (b) fixed charges consist of interest expense (whether expensed or capitalized), the amortization of debt issuance costs, and the interest portion of rent expense.

 

(2)                                  The portion of rent expense representative of interest is based on the present value of the future lease payments discounted at 10%.

 

(3)                                  For the period from July 7, 2007 through November 2, 2007, fixed charges exceeded earnings by $94.6 million.  For the 39 weeks ended November 2, 2007, pro forma fixed charges exceeded earnings by $91.4 million.

 

(4)                                  To give effect to the increase in interest expense resulting from the portion of the notes proceeds used to retire the $198.3 million of our 8 5/8% unsecured notes due June 10, 2010 as if such transactions had occurred at the beginning of the periods presented.