EX-12 2 ex12.htm EXHIBIT 12

Exhibit 12

RATIO OF EARNINGS TO FIXED CHARGES

For purposes of computing the ratio of earnings to fixed charges and the ratio of earnings to combined fixed charges and preferred stock dividends, earnings consist of earnings from continuing operations before income taxes and income or loss from equity investees, plus fixed charges and distributed income of equity investees, less interest capitalized. Combined fixed charges and preferred stock dividends consist of fixed charges and preferred stock dividends declared.

|  |  |  |  | Year Ended |
(Dollars in thousands) |  | October 31, 2016 |  |  | October 31, 2015 |  |  | October 31, 2014 |  |  | October 31, 2013 |  |  | October 31, 2012 |
Income (loss) before income taxes |  | $2,436 |  |  | $(21,765 | ) |  | $20,180 |  |  | $21,935 |  |  | $(101,248 | )
Add: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest expense, homebuilding (a) |  | 183,358 |  |  | 151,448 |  |  | 141,344 |  |  | 143,574 |  |  | 152,433 |
Interest expense, financial services |  | 2,912 |  |  | 2,143 |  |  | 1,835 |  |  | 3,008 |  |  | 2,514 |
Interest pertaining to rent expense (b) |  | 5,936 |  |  | 5,548 |  |  | 5,538 |  |  | 5,199 |  |  | 5,663 |
Distribution of earnings from unconsolidated joint ventures, net of equity in income (loss) |  | 5,348 |  |  | 4,269 |  |  | (1,853 | ) |  | (9,700 | ) |  | (3,611 | )
Amortization |  | 5,261 |  |  | 5,460 |  |  | 10,320 |  |  | 7,843 |  |  | 6,862 |
Total earnings |  | $205,251 |  |  | $147,103 |  |  | $177,364 |  |  | $171,859 |  |  | $62,613 |
Fixed Charges: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest incurred, homebuilding |  | $166,824 |  |  | $166,188 |  |  | $145,409 |  |  | $132,611 |  |  | $147,048 |
Interest incurred, financial services |  | 2,912 |  |  | 2,143 |  |  | 1,835 |  |  | 3,008 |  |  | 2,434 |
Interest pertaining to rent expense |  | 5,936 |  |  | 5,548 |  |  | 5,538 |  |  | 5,199 |  |  | 5,663 |
Amortization |  | 5,261 |  |  | 5,460 |  |  | 10,320 |  |  | 7,843 |  |  | 6,862 |
Total fixed charges |  | $180,933 |  |  | $179,339 |  |  | $163,102 |  |  | $148,661 |  |  | $162,007 |
Ratio of earnings to fixed charges |  | 1.1 |  |  | (c) |  |  | 1.1 |  |  | 1.2 |  |  | (c) |

RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS

|  |  |  |  | Year Ended |
(Dollars in thousands) |  | October 31, 2016 |  |  | October 31, 2015 |  |  | October 31, 2014 |  |  | October 31, 2013 |  |  | October 31, 2012 |
Total earnings – above |  | $205,251 |  |  | $147,103 |  |  | $177,364 |  |  | $171,859 |  |  | $62,613 |
Total fixed charges – above |  | $180,933 |  |  | $179,339 |  |  | $163,102 |  |  | $148,661 |  |  | $162,007 |
Preferred stock dividends (adjusted to pretax dollars) |  | - |  |  | - |  |  | - |  |  | - |  |  | - |
Total combined fixed charges and preferred stock dividends |  | $180,933 |  |  | $179,339 |  |  | $163,102 |  |  | $148,661 |  |  | $162,007 |
Ratio of earnings to combined fixed charges and preferred stock dividends |  | 1.1 |  |  | (d) |  |  | 1.1 |  |  | 1.2 |  |  | (d) |

(a) | Includes the amortization and expensing of debt expenses that were not capitalized during the period.
(b) | Management has determined the interest component of rent expense to be 33%.
(c) | Earnings for the years ended October 31, 2015 and 2012 were insufficient to cover fixed charges for such period by $32.2 million and $105.1 million, respectively.
(d) | Earnings for the years ended October 31, 2015 and 2012 were insufficient to cover fixed charges and preferred stock dividends for such period by $32.2 million and $105.1 million, respectively. Due to restrictions in our debt instruments, we are currently prohibited from paying dividends on our preferred stock and did not make any dividend payments in fiscal 2016, 2015, 2014, 2013 and 2012.