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EXHIBIT 12.1
STATEMENT REGARDING COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In thousands, except ratios)
SIX MONTHS ENDED MAY 31, YEARS ENDED NOVEMBER 30,
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2004 2003 2003 2002 2001 2000 1999
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Earnings
Pretax Income ......................... $ 263,214 $ 200,313 $ 553,464 $ 469,250 $ 324,517 $ 297,660 $ 226,869
Less undistributed income of
unconsolidated joint ventures ....... 3,099 353 1,590 3,677 2,958 496 712
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Pretax income as adjusted ............. 266,313 200,666 555,054 472,927 327,475 298,156 227,581
Add:
Interest incurred ................... 66,276 64,600 124,790 110,994 119,421 110,924 90,137
Distributions on mandatorily
redeemable preferred securities ... -- -- -- -- 11,385 15,180 15,180
Portion of rent expense considered
to be interest .................... 7,657 6,173 13,297 11,277 12,252 11,831 10,297
Amortization of previously
capitalized interest .............. 34,500 30,214 69,399 68,808 64,025 40,679 44,258
Deduct:
Interest capitalized ................ (53,474) (45,136) (95,044) (68,370) (61,974) (62,722) (49,701)
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$ 321,272 $ 256,517 $ 667,496 $ 595,636 $ 472,584 $ 414,048 $ 337,752
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Fixed Charges:
Interest incurred ................... $ 66,276 $ 64,600 $ 124,790 $ 110,994 $ 119,421 $ 110,924 $ 90,137
Distributions on mandatorily
redeemable preferred securities ... -- -- -- -- 11,385 15,180 15,180
Portion of rent expense considered
to be interest .................... 7,657 6,173 13,297 11,277 12,252 11,831 10,297
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$ 73,933 $ 70,773 $ 138,087 $ 122,271 $ 143,058 $ 137,935 $ 115,614
========== ========== ========== ========== ========== ========== ==========
Ratio of earnings to fixed charges ...... 4.35x 3.62x 4.83x 4.87x 3.30x 3.00x 2.92x
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We compute earnings by adding fixed charges (except capitalized interest) and
amortization of previously capitalized interest to pretax earnings (excluding
undistributed earnings of unconsolidated joint ventures). We compute fixed
charges by adding interest expense and capitalized interest and the portion of
rental expense we consider to be interest. Beginning July 7, 1998, our fixed
charges have also included distributions on mandatorily redeemable preferred
securities. On August 16, 2001, all of the mandatorily redeemable preferred
securities were retired. No preferred stock was outstanding during any of the
periods presented in the above table.
In computing the ratios appearing above, we exclude from our interest expense
interest incurred by our wholly owned limited purpose financing subsidiaries on
their outstanding collateralized mortgage obligations. If we included interest
on those collateralized mortgage obligations, the ratio of earnings to fixed
charges for the six months ended May 31, 2004 and May 31, 2003 and the years
ended November 30, 2003, 2002, 2001, 2000 and 1999 would have been 4.34x,
3.60x, 4.81x, 4.82x, 3.27x, 2.96x and 2.84x, respectively.
The amount of earnings we used in the calculation of the ratio of earnings to
fixed charges for the year ended November 30, 1999 reflects an $18.2 million
pretax secondary market trading loss we recorded in the third quarter of fiscal
1999. If we excluded the secondary market trading loss, the ratio of earnings to
fixed charges would have been 3.08x for the year ended November 30, 1999. If we
excluded the secondary market trading loss but included interest on the
collateralized mortgage obligations of our limited purpose financing
subsidiaries, the ratio of earnings to fixed charges would have been 2.99x for
the year ended November 30, 1999.
The amount of earnings used in the calculation of the ratio of earnings to
fixed charges for the year ended November 30, 2000 includes a $39.6 million gain
on the issuance in France of common stock by Kaufman & Broad S.A., a majority
owned subsidiary, recorded in the first quarter of fiscal 2000. We sometimes
refer to this stock issuance as the "French IPO". If the French IPO gain were
excluded, the ratio of earnings to fixed charges would have been 2.71x for the
year ended November 30, 2000. If we excluded the French IPO gain but included
interest on the collateralized mortgage obligations of our limited purpose
financing subsidiaries, the ratio of earnings to fixed charges would have been
2.68x for the year ended November 30, 2000.