Pep Boys 2006 Annual Report Download - page 127

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Exhibit 12
THE PEP BOYS—MANNY, MOE & JACK AND SUBSIDIARIES
Exhibit 12—Statement Regarding Computation of Ratios of Earnings to Fixed Charges
February 3,
2007
January 28,
2006
January 29,
2005
January 31,
2004
February 1,
2003
(in thousands, except ratios)
Fiscal year
Interest......................... $49,342 $ 49,040 $35,965 $ 38,255 $ 47,237
Interest factor in rental expense . . . 19,984 22,534 20,314 21,269 20,424
Capitalizedinterest.............. 799 867 659 — 44
(a) Fixed charges, as defined. . . . . . . . $70,125 $ 72,441 $56,938 $ 59,524 $ 67,705
(Loss) Earnings from continuing
operations before income taxes and
cumulative effect of change in
accounting principle . . . . . . . . . . . . . $ (6,297) $(56,368) $40,981 $(23,961) $ 61,267
Fixedcharges ................... 70,125 72,441 56,938 59,524 67,705
Capitalizedinterest.............. (799) (867) (659) — (44)
(b) Earnings, as defined . . . . . . . . . . . . $63,029 $ 15,206 $97,260 $ 35,563 $128,928
(c) Ratio of earnings to fixed charges
(b÷a).......................... — — 1.7
x
— 1.9
x
The ratio of earnings to fixed charges is completed by dividing earnings by fixed charges. “Earnings”
consist of earnings before income taxes plus fixed charges (exclusive of capitalized interest costs) plus one-
third of rental expense (which amount is considered representative of the interest factor in rental expense).
Earnings, as defined, were not sufficient to cover fixed charges by approximately $7.1, $57.2 and
$24.0 million for fiscal years ended February 3, 2007, January 28, 2006 and January 31, 2004, respectively.