Exhibit 12
STEWART ENTERPRISES, INC.
AND SUBSIDIARIES
Calculation of Ratio of Earnings to Fixed Charges
(Dollars in thousands)
(Unaudited)
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| | | | | | | | | | | | | | | | | | | | | | | | Nine Months |
| | | | Years Ended October 31, | | Ended |
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| | July 31, |
| | | | 1997 | | 1998 | | 1999 | | 2000 | | 2001 | | 2002 |
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| Earnings (loss) from operations |
| before income taxes | | $ | 106,477 | (2) | | $ | 64,964 | (3) | | $ | 142,551 | (4) | | $ | 105,187 | | | $ | (187,181 | )(5)(6) | | $ | 36,768 | (7) |
| Fixed charges: | | | | | | | | | | | | | | | | | | | | | | | | |
| | Interest charges(1) | | | 38,031 | | | | 44,107 | | | | 55,543 | | | | 62,748 | | | | 64,235 | | | | 48,631 | |
| | Interest portion of lease expense | | | 2,181 | | | | 2,814 | | | | 2,859 | | | | 3,379 | | | | 2,882 | | | | 1,736 | |
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| Total fixed charges | | | 40,212 | | | | 46,921 | | | | 58,402 | | | | 66,127 | | | | 67,117 | | | | 50,367 | |
Earnings (loss) from operations before
income taxes and fixed charges, less |
| capitalized interest | | $ | 146,689 | (2) | | $ | 111,599 | (3) | | $ | 200,118 | (4) | | $ | 169,960 | | | $ | (120,727 | )(5)(6) | | $ | 86,893 | (7) |
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| Ratio of earnings to fixed charges | | | 3.65 | (2) | | | 2.38 | (3) | | | 3.43 | (4) | | | 2.57 | | | | — | (5)(6) | | | 1.73 | (7) |
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| (1) | | Includes capitalized interest expense of $0, $286, $835, $1,354, $663 and $242 for 1997, 1998, 1999, 2000, 2001 and the nine months ended July 31, 2002, respectively. |
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| (2) | | Excludes cumulative effect of change in accounting principles of $2,324 (net of a $2,230 income tax benefit). |
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| (3) | | Includes a nonrecurring, noncash charge of $76,762 recorded in connection with the vesting of the Company’s performance-based stock options. Excluding the charge, the Company’s ratio of earnings to fixed charges for fiscal year 1998 would have been 4.01. |
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| (4) | | Excludes cumulative effect of change in accounting principle of $50,101 (net of a $28,798 income tax benefit). |
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| (5) | | Excludes extraordinary item of $5,472 (net of a $3,648 income tax benefit) and the cumulative effect of change in accounting principles of $250,004 (net of a $166,669 income tax benefit). |
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| (6) | | Includes a nonrecurring, noncash charge of $269,158 recorded in connection with the writedowns of assets held for sale and other charges. As a result of this charge, the Company’s earnings for fiscal year 2001 were insufficient to cover its fixed charges, and an additional $187,844 in pretax earnings would have been required to eliminate the coverage deficiency. Excluding the charge, the early extinguishment of debt and the cumulative effect of the change in accounting principles, the Company’s ratio of earnings to fixed charges would have been 2.21. |
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| (7) | | Includes a nonrecurring, noncash charge of $18,500 recorded in connection with the writedown of assets held for sale. Excluding the charge, the Company’s ratio of earnings to fixed charges for the nine months ended July 31, 2002 would have been 2.09. |
During the periods presented the Company had no preferred stock outstanding. Therefore, the ratio of earnings to combined fixed charges and preference dividends was the same as the ratio of earnings to fixed charges for each of the periods presented.
