EXHIBIT 12 STATEMENT RE: COMPUTATION OF RATIOS TOLL BROTHERS, INC. AND SUBSIDIARIES RATIO OF EARNINGS TO FIXED CHARGES (Amounts in thousands, except ratios) Three Months Year Ended October 31, Ended ------------------------------------------------------------ January 31, 1995 1996 1997 1998 1999 2000 -------- -------- -------- -------- -------- ------ Earnings: Income before income taxes and extraordinary loss and change in accounting ....................... $ 79,739 $ 85,793 $107,646 $134,293 $162,750 $35,328 Homebuilding: Interest expense: .................................... 22,473 24,646 29,746 36,052 40,378 8,986 Rent expense ......................................... 93 151 193 293 425 120 Amortization ......................................... 801 705 667 610 618 158 Collateralized mortgage financing: Interest expense ..................................... 376 300 233 184 119 23 Amortization ......................................... 29 -- -- -- -- -- -------- -------- -------- -------- -------- ------- $103,511 $111,595 $138,485 $171,432 $204,290 $44,615 ======== ======== ======== ======== ======== ======= Fixed charges: Homebuilding: Interest incurred: ................................... $ 25,780 $ 27,695 $ 35,242 $ 38,331 $ 51,396 14,193 Rent expense ......................................... 93 151 193 293 425 120 Amortization ........................................... 801 705 667 610 618 158 Collateralized mortgage financing: Interest incurred .................................... 376 300 233 184 119 23 Amortization ......................................... 29 -- -- -- -- -- -------- -------- -------- -------- -------- ------- $ 27,079 $ 28,851 $ 36,335 $ 39,418 $ 52,558 $14,494 ======== ======== ======== ======== ======== ======= Ratio, including collateralized mortgage financing(1)... 3.82 3.87 3.81 4.35 3.89 3.08 ======== ======== ======== ======== ======== ======= - ---------- (1) For purposes of computing the ratio of earnings to fixed charges, earnings consist of income before income taxes, extraordinary loss and change in accounting plus interest expense and fixed charges except interest incurred. Fixed charges consist of interest incurred (whether expensed or capitalized), the portion of rent expense that is representative of the interest factor, and amortization of debt discount and issuance costs.