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<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
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<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="center" style="font-size: 10pt; margin-top: 0pt"><b></b>
</div>
<div align="left">
</div>
<div align="center" style="font-size: 10pt"><b></b></div>
<div align="center" style="font-size: 10pt"><b></b></div>
<div align="center" style="font-size: 10pt"></div>
<div align="left" style="font-size: 10pt; margin-top: 10pt"><b>1. Basis of Presentation</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The accompanying Consolidated Financial Statements of Cavco Industries, Inc., and its
subsidiaries (collectively, the “Company” or “Cavco”), have been prepared without audit pursuant to
the rules and regulations of the Securities and Exchange Commission (“SEC”) for Quarterly Reports
on Form 10-Q and Article 10 of SEC Regulation S-X. Accordingly, certain information and footnote
disclosures normally included in financial statements prepared in accordance with generally
accepted accounting principles (“GAAP”) in the United States of America have been condensed or
omitted pursuant to such rules and regulations.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">In the opinion of management, these statements include all of the normal recurring adjustments
necessary to fairly state the Company’s Consolidated Financial Statements. The Consolidated
Statements of Operations and Consolidated Statements of Cash Flows for the interim periods are not
necessarily indicative of the results or cash flows for the full year. Certain prior period amounts
have been reclassified to conform to current period classification. The Company has evaluated
subsequent events after the balance sheet date of September 30, 2011 through the date of the filing
of this report with the SEC and other than sale of the Buda, Texas facility discussed below; there
were no disclosable subsequent events. The Company suggests that these Consolidated Financial
Statements be read in conjunction with the audited Consolidated Financial Statements and the Notes
to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K filed
with the SEC on June 3, 2011 (the “Form 10-K”).
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">During fiscal year 2010, the Company and an investment partner, Third Avenue Value Fund
(“Third Avenue”), formed Fleetwood Homes, Inc. (“Fleetwood Homes”), with a contribution of $35.0
million each for equal fifty-percent ownership interests. On August 17, 2009, Fleetwood Homes (i)
acquired seven operating manufactured housing plants, two idle factories, all related equipment,
accounts receivable, inventory, certain trademarks and trade names, intellectual property, and
specified contracts and leases; and (ii) assumed express warranty liabilities pertaining to certain
of the previous operations of a predecessor company.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The results of the Fleetwood Homes operations have been included in the Consolidated Financial
Statements and the related Notes in accordance with the provisions of Financial Accounting
Standards Board Accounting Standards Codification (“FASB ASC”) 810, <i>Consolidation </i>(“ASC 810”).
Management has determined that, under GAAP, although Fleetwood Homes is only fifty-percent owned by
the Company, Cavco has a controlling interest and is required to fully consolidate the results of
Fleetwood Homes. The primary factors that contributed to this determination were Cavco’s board and
management control of Fleetwood Homes. To that end, members of Cavco’s management hold all of the
seats on the board of directors of Fleetwood Homes. In addition, as part of a management services
agreement among Cavco, Fleetwood Homes and Third Avenue, Cavco provides all executive-level
management services to Fleetwood Homes including, among other things, general management oversight,
marketing and customer relations, accounting and cash management. Third Avenue’s financial
interest in Fleetwood Homes is considered a “redeemable noncontrolling interest,” and is designated
as such in the Consolidated Financial Statements (see Note 22).
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">During fiscal year 2011, Fleetwood Homes, through its wholly-owned subsidiary, Palm Harbor
Homes, Inc., a Delaware corporation (“Palm Harbor” or “Palm Harbor Delaware”), entered into an
agreement (the “Purchase Agreement”) with Palm Harbor Homes, Inc., a Florida corporation, and
certain of its subsidiaries (collectively “Palm Harbor Florida”) to purchase substantially all of
the assets and assume specified liabilities of Palm Harbor Florida, pursuant to an auction process
under Section 363 of the U.S. Bankruptcy Code. The effective date of the transaction was April 23,
2011 (the “Acquisition Date”), except for Palm Harbor’s acquisition of the stock of Standard
Casualty Co. The aggregate gross purchase price was $83.9 million and is exclusive of transaction
costs, specified liabilities assumed and post-closing adjustments. Approximately $45.3 million of
the purchase price was used to retire the Debtor-In-Possession (“DIP”) loan previously made by
Fleetwood Homes to Palm Harbor Florida. The purchase price was funded by Fleetwood Homes’ cash
on hand, along with equal contributions of $36.0 million each from the Company and Third Avenue.
On June 7, 2011, regulatory approval of the acquisition of Standard Casualty Co. was received from
the Texas Department of Insurance and on June 10, 2011 (the “SCC Acquisition Date”), Palm Harbor
Delaware completed the purchase of the insurance subsidiary.
</div>
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<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Palm Harbor Delaware acquired five operating manufactured housing production facilities, idled
factories in nine locations, 49 operating retail locations, one office building, real estate, all
related equipment, accounts receivable, customer deposits, inventory, certain trademarks and trade
names, intellectual property, and specified contracts and leases. In addition, as of the
Acquisition Date, Palm Harbor Delaware purchased all of the outstanding shares of CountryPlace
Acceptance Corp., CountryPlace Mortgage, Ltd. and their wholly-owned finance subsidiaries
(collectively, “CountryPlace”). Palm Harbor Delaware also acquired all of the outstanding shares of
Standard Casualty Co., Standard Insurance Agency, Inc. and its subsidiary (collectively,
“Standard”). Further, Palm Harbor Delaware assumed certain liabilities of Palm Harbor Florida,
including primarily debt facilities of the finance subsidiaries (see Note 21). The results of the
Palm Harbor operations since the Acquisition Date and SCC Acquisition Date have been included in
the Consolidated Financial Statements and the related Notes in accordance with the provisions of
ASC 810.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">During the quarter ended September 30, 2011, the Company sold an idled production facility in
Arabi, Georgia for $495,000 and real estate in Waxahachie, Texas for $600,000 resulting in an insignificant effect on the Consolidated Statements of
Operations. Subsequent to September 30, the Company sold an idled manufacturing facility located
at Buda, Texas for $1.3 million.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Standard is domiciled in Texas and is primarily a specialty writer of manufactured home
physical damage insurance. Standard holds insurance licenses in multiple states; however, a
significant portion of its writings occurs in Texas. In addition to writing direct policies,
Standard assumes and cedes reinsurance in the ordinary course of business (see Note 12).
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">CountryPlace originates single-family residential mortgages secured by manufactured and site-built homes, and services, for itself and others, conforming mortgages,
non-conforming land-home mortgages and manufactured homes chattel loans. CountryPlace is authorized
by the U.S. Department of Housing and Urban Development (“HUD”) to directly endorse Federal Housing
Administration (“FHA”) Title I and Title II mortgage insurance, is approved by the Government
National Mortgage Association (“GNMA” or “Ginnie Mae”) to issue GNMA-insured mortgage-backed
securities, and is authorized to sell mortgages to, and service mortgages for, the Federal National
Mortgage Association (“FNMA” or “Fannie Mae”). A
conforming mortgage or loan is one that conforms to the guidelines of
a government-sponsored enterprise, such as Fannie Mae, or a government agency, such as FHA; a
non-conforming mortgage or loan does not conform to these guidelines.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><i>Revenue Recognition. </i>Revenue from homes sold to independent retailers is generally recognized
when the home is shipped, at which time title passes to the independent retailer, and
collectability is reasonably assured. Homes sold to independent retailers are generally either
paid for prior to shipment or floorplan financed by the independent retailer through standard
industry arrangements, which include repurchase agreements. Manufacturing sales financed under
repurchase agreements are reduced by a provision for estimated repurchase obligations (see Note
14). The recognition of revenue from homes sold under inventory finance programs involving funds
provided by the Company is deferred until such time that payment for the related inventory finance
note receivable is received by the Company (see Note 6). Retail sales by Company-owned retail
locations are recognized when funding is reasonably assured, the customer has entered into a
legally binding sales contract, title has transferred and the home is accepted by the customer,
delivered and permanently located at the customer’s site.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">At the Acquisition Date, management evaluated consumer loans receivable held for investment by
CountryPlace to determine whether there was evidence of deterioration of credit quality and if it
was probable that CountryPlace would be unable to collect all amounts due according to the loans’
contractual terms. The Company also considered expected prepayments and estimated the amount and
timing of undiscounted expected principal, interest and other cash flows. The Company determined
the excess of the loan pool’s scheduled contractual principal and contractual interest payments
over the undiscounted cash flows expected as of the Acquisition Date as an amount that cannot be
accreted into interest income (the non-accretable
difference). The remaining difference is accreted into interest income over the remaining
life of the loans (referred to as accretable yield). Interest income on consumer loans receivable
is recognized as net sales.
</div>
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<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">For loans originated by CountryPlace and held for sale, loan origination fees and gains or
losses on sales are recognized upon sale of the loans.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Premium income from insurance policies is recognized on an as-earned basis. Premium amounts
collected are amortized on a straight-line basis into net sales over the life of the policy.
Premiums earned are net of reinsurance ceded. Policy acquisition costs are also amortized as cost
of sales over the life of the policy.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><i>Consumer Loans Receivable. </i>Consumer loans receivable consists of manufactured
housing loans originated by CountryPlace (securitized, held for investment, or held for sale) and
construction advances on mortgages. CountryPlace was acquired on April 23, 2011 in
conjunction with the Palm Harbor transaction. The fair value of consumer loans receivable was
calculated as of the Acquisition Date, as determined by the present value of expected future cash
flows, with no allowance for loan loss recorded. The difference between the undiscounted cash flows
expected and the investment in the loan is recognized as interest income on a level-yield method
over the life of the loan. Increases in expected cash flows subsequent to the acquisition are
recognized prospectively through adjustment of the yield on the loans over the remaining life.
Decreases in expected cash flows subsequent to the acquisition are recognized as an allowance for
loan loss. Interest income on consumer loans receivable is recognized in net sales.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Loans held for investment consist of loan contracts collateralized by the borrowers’ homes
and, in some instances, related land. Construction loans in progress are stated at the aggregate
amount of cumulative funded advances. Loans held for sale consist of loan contracts collateralized
by single-family residential mortgages. Loans held for sale are stated at the lower of cost or
market on an aggregate basis. Loans held for sale are loans that, at the time of origination, are
originated with the intent to resell in the mortgage market to investors, such as Fannie Mae, with
which the Company has pre-existing purchase agreements, or to sell as part of a Ginnie Mae insured
pool of loans. Certain direct loan origination costs for loans held for sale are expensed as
incurred.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Prior to being acquired by the Company, on July 12, 2005 and March 22, 2007, CountryPlace
completed two securitizations of factory-built housing loan receivables. These two securitizations
were accounted for as financings, which use the portfolio method of accounting in accordance with
ASC 310, <i>Receivables — Nonrefundable Fees and Other </i>(“ASC 310”). The securitizations included
provisions for removal of accounts, retention of certain credit loss risk by CountryPlace and other factors that preclude sale accounting
of the securitizations under ASC 860, <i>Transfers and Servicing</i>. Both securitizations were accounted
for as securitized borrowings; therefore, the related consumer loans receivable and securitized
financings were included in CountryPlace’s financial statements. The Company acquired these
balances during the first quarter of fiscal 2012 as a part of the Palm Harbor transaction. Since
the Acquisition Date, the acquired consumer loans receivable and securitized financings are
accounted for in a manner similar to ASC 310-30, <i>Loans and Debt Securities Acquired with
Deteriorated Credit Quality </i>(“ASC 310-30”).
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><i>Allowance for Loan Losses. </i>The primary portion of the allowance for loan losses reflects the Company’s
judgment of the probable loss exposure on our inventory finance receivable as of the end of the
reporting period. The allowance for loan loss is developed at a portfolio level. A range of
probable losses is calculated and the Company makes a determination of the best estimate within the
range of loan losses. The Company has historically been able to resell repossessed homes, thereby
mitigating loss experience. If a default occurs and collateral is lost, the Company is exposed to
loss of the full value of the home loan. If the Company determines that it is probable that a
borrower will default, a specific reserve is determined and recorded within the estimated allowance
for loan loss. The Company recorded an allowance for loan loss of $185,000 and $169,000 at
September 30, 2011 and March 31, 2011, respectively (see Note 6).
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Another portion of the allowance for loan losses relates to consumer loans receivable originated by
CountryPlace after the Acquisition Date. This allowance for loan losses reflects CountryPlace’s
judgment of the probable loss exposure on its loans originated since the Acquisition Date in the
held for investment portfolio as of the end of the reporting period.
</div>
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<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">CountryPlace accounts for the loans that were in existence at the Acquisition Date in a manner
similar to ASC 310-30. Management evaluated such loans as of the Acquisition Date to determine
whether there was evidence of deterioration of credit quality and if it was probable that
CountryPlace would be unable to collect all amounts due according to the loans’ contractual terms.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Over the life of the loans, CountryPlace continues to estimate cash flows expected to be
collected. CountryPlace evaluates at the balance sheet date whether the present value of its
loans, determined using the effective interest rate, has decreased and, if so, recognizes an
allowance for loan loss subsequent to the Acquisition Date. The present value of any subsequent
increase in the loan pool’s actual cash flows expected to be collected is used first to reverse any
existing allowance for loan loss. Any remaining increase in cash flows expected to be collected
adjusts the amount of accretable yield recognized on a prospective basis over the loan pool’s
remaining life (see Note 5).
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">CountryPlace has modified payment amounts and/or interest rates for borrowers that, in
management’s judgment, exhibited the willingness and ability to continue to pay and met certain
other conditions. A modified loan is considered a troubled debt restructuring when two conditions
are met: (i) the borrower is experiencing financial difficulty, and (ii) concessions are made by
CountryPlace that it would not otherwise consider for a borrower with similar risk characteristics.
These modified loans were considered to be troubled debt restructurings. CountryPlace no longer
considers modified loans to be troubled debt restructurings once the modified loan is seasoned for
six months, is not delinquent under the modified terms and is at a market rate of interest at the
modification date.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><i>Investment Securities. </i>Management determines the appropriate classification of its investment
securities at the time of purchase. The Company’s investments include marketable debt and equity
securities that are held as available-for-sale. All investments classified as available-for-sale
are recorded at fair value with any unrealized gains and losses reported in accumulated other
comprehensive income (loss), net of tax if applicable. Realized gains and losses from the sale of
securities are determined using the specific identification method.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Management regularly makes an assessment to determine whether a decline in value of an
individual security is other-than-temporary. The Company considers the following factors when
making its assessment: (i) the Company’s ability and intent to hold the investment to maturity, or
a period of time sufficient to allow for a recovery in market value; (ii) whether it is probable
that the Company will be able to collect the amounts contractually due; and (iii) whether any
decision has been made to dispose of the investment prior to the balance sheet date. Investments
on which there is an unrealized loss that is deemed to be other-than-temporary are written down to
fair value with the loss recorded in earnings.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><i>Goodwill and Other Intangibles. </i>The Company accounts for goodwill and other intangible assets
in accordance with the provisions of FASB ASC 350, <i>Intangibles—Goodwill and Other </i>(“ASC 350”). As
such, the Company tests goodwill annually for impairment by reporting unit and records an
impairment charge if the implied fair value of a reporting unit, including goodwill, is less than
its carrying value. As of September 30, 2011, all of the Company’s goodwill of $67.3 million is
attributable to its manufacturing reporting unit. Certain intangibles are considered
indefinite-lived and others are subject to amortization over their useful lives. Intangible assets
are tested annually for impairment. In conjunction with the Palm Harbor transaction, the Company
acquired $15.3 million of intangible assets (see Note 8).
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><i>Reserve for Property-Liability Insurance Claims and Claims Expense. </i>Standard establishes
reserves for claims and claims expense (“loss”) on reported and unreported claims of insured
losses. Standard’s reserving process takes into account known facts and interpretations of
circumstances and factors, including Standard’s experience with similar cases, actual claims paid,
historical trends involving claim payment patterns and pending levels of unpaid claims, loss
management programs, product mix and contractual terms, changes in law and regulation, judicial
decisions, and economic conditions. In the normal course of business, Standard may also supplement
its claims processes by utilizing third party adjusters, appraisers, engineers, inspectors, and
other professionals and information sources to assess and settle catastrophe and non-catastrophe
related claims. The effects of inflation are implicitly considered in the reserving process.
The applicable reserve balance was $977,000 as of September 30, 2011.
</div>
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<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><i>Incurred But Not Reported Liabilities. </i>Because reserves are estimates of unpaid portions of
losses that have occurred, including incurred but not reported (“IBNR”) losses, the establishment
of appropriate reserves, including reserves for catastrophes, is an inherently uncertain and
complex process. The ultimate cost of losses may vary from recorded amounts, which are based on
management’s best estimates. The highest degree of uncertainty is associated with reserves for
losses incurred in the current reporting period as it contains the greatest proportion of losses
that have not been reported or settled. Standard regularly updates its reserve estimates as new
information becomes available and as events unfold that may affect the resolution of unsettled
claims. Changes in prior year reserve estimates are recorded in the period such changes are
determined. The applicable reserve balance was $126,000 as of September 30, 2011.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><i>Other Income. </i>Other income totals $255,000 and $266,000 for the three months ended September
30, 2011 and 2010, respectively. For the six months ended September 30, 2011 and 2010, other
income totaled $615,000 and $446,000, respectively. In fiscal 2012, other income consists of
interest related to Debtor-in-Possession note receivable and inventory finance receivable balances,
and of interest income earned on cash balances.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><i>Accumulated other comprehensive income (loss). </i>Accumulated other comprehensive income (loss)
is comprised of unrealized gains and losses on available-for-sale investments.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><i>Recent Accounting Pronouncements. </i>In July 2010, the FASB issued Accounting Standards Update
(“ASU”) 2010-20, <i>Receivables (Topic 310): Disclosures about the Credit Quality of Financing
Receivables and the Allowance for Credit Losses</i>, which requires entities to provide new disclosures
in their financial statements about their financing receivables, including credit risk exposures
and the allowance for credit losses on a disaggregated basis. In April 2011, the FASB issued ASU
2011-02, <i>A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring</i>.
ASU 2011-02 clarifies when creditors should classify loan modifications as troubled debt
restructurings. In addition, ASU 2011-02 deferred the effective date of the disclosures about
troubled debt restructurings in ASU 2010-20 to periods beginning after June 15, 2011. As of
September 30, 2011, the Company has adopted all of the aforementioned provisions of ASU 2010-20 and
ASU 2011-02.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">In December 2010, the FASB issued ASU 2010-29, <i>Business Combinations (Topic 805): Disclosure
of Supplementary Pro Forma Information for Business Combinations</i>. The amendments in this update are
effective prospectively for business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after December 15, 2010. The
amendments affected the Company’s disclosures of pro forma information surrounding the Palm Harbor
acquisition (see Note 21).
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">In May 2011, the FASB issued ASU 2011-04, <i>Fair Value Measurement (Topic 820): Amendments to
Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS. </i>The
amendments are effective for public companies for interim and annual periods beginning after
December 15, 2011. This update changes the wording used to describe many of the requirements for
measuring fair value and for disclosing information about fair value measurements. The amendments
in this update result in common fair value measurement and disclosure requirements in GAAP and
International Financial Reporting Standards (“IFRS”). The Company is currently evaluating the
effect ASU 2011-04 will have on the Company’s disclosures in the Notes to Consolidated Financial
Statements.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">In June 2011, the FASB issued ASU 2011-05, <i>Comprehensive Income (Topic 220): Presentation of
Comprehensive Income</i>. The amendments in this update are effective for public companies for fiscal
years, and interim periods within those years, beginning after December 15, 2011. In this update,
an entity has the option to present the total of comprehensive income, the components of net
income, and the components of other comprehensive income either in a single continuous statement of
comprehensive income or in two separate but consecutive statements. In both choices, an entity is
required to present each component of net income along with total net income, each component of
other comprehensive income along with a total for other comprehensive income, and a total amount
for comprehensive income. This update eliminates the option to present the components of other
comprehensive income as part of the statement of changes in stockholders’
equity. The Company is currently evaluating the effect ASU 2011-05 will have on the Company’s
Consolidated Financial Statements and disclosures.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">In September 2011, the FASB issued ASU 2011-08, <i>Intangibles—Goodwill and Other (Topic 350):
Testing Goodwill for Impairment. </i>The amendments in this update are effective for public companies
for fiscal years beginning after December 15, 2011. In this update, an entity has the option to
first assess qualitative factors to determine that it is more likely than not that the fair value
of a reporting unit is less than its carrying amount. If, after assessing the totality of events
or circumstances, an entity determines it is more likely than not that the fair value of a
reporting unit is less than its carrying amount, then it is required to perform the first step of
the two-step impairment test. However, if an entity concludes otherwise, then performing the
two-step impairment test is unnecessary. Early adoption is permitted. The Company is currently
evaluating the effect ASU 2011-08 will have on the Company’s disclosures in the Notes to
Consolidated Financial Statements.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">For a description of other significant accounting policies used by the Company in the
preparation of its Consolidated Financial Statements, please refer to Note 1 of the Notes to
Consolidated Financial Statements in the Form 10-K.
</div>
</div>
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<!-- Begin Block Tagged Note 2 - us-gaap:CashAndCashEquivalentsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt"><b>2. Restricted Cash</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Restricted cash consists of the following (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">March 31,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cash related to CountryPlace customer payments in
escrow
accounts to be remitted to third parties
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,868</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Cash related to CountryPlace customers’ principal and
interest payments on securitized loans to be remitted to bondholders
</div></td>
<td> </td>
<td> </td>
<td align="right">2,059</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cash related to retail homebuyer deposits held in trust
</div></td>
<td> </td>
<td> </td>
<td align="right">1,952</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">436</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Other restricted cash
</div></td>
<td> </td>
<td> </td>
<td align="right">641</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">7,520</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">436</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
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<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt"><b>3. Investments</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Available-for-sale securities were acquired during the first quarter of fiscal 2012 as a part
of the Palm Harbor acquisition. In accordance with ASC 805, <i>Business Combinations </i>(“ASC 805”), the
individual securities were valued at fair value as of the Acquisition Date and, therefore, no
individual security has been in a continuous unrealized loss position for longer than 12 months as
of September 30, 2011. The following table summarizes the Company’s available-for-sale investment
securities, gross unrealized gains and losses and fair value, aggregated by investment category (in
thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000">September 30, 2011</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gross</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gross</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Amortized</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Unrealized</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Unrealized</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Fair</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Cost</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Gains</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Losses</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">U.S. Treasury and Government
Agencies
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,287</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">10</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">1,296</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Mortgage-backed securities
</div></td>
<td> </td>
<td> </td>
<td align="right">4,948</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">20</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(18</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">4,950</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">States and political subdivisions
</div></td>
<td> </td>
<td> </td>
<td align="right">1,197</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">27</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,224</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Corporate debt securities
</div></td>
<td> </td>
<td> </td>
<td align="right">4,041</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(34</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">4,010</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Marketable equity securities
</div></td>
<td> </td>
<td> </td>
<td align="right">5,397</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(446</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">4,962</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">16,870</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">71</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(499</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">16,442</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Based on the Company’s ability and intent to hold the investments for a reasonable period
of time sufficient for a forecasted recovery of fair value, the Company does not consider any
investments to be other-than-temporarily impaired at September 30, 2011.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Company’s investments in marketable equity securities consist of investments in common
stock of bank trust, insurance, and public utility companies ($2.5 million of the total fair value
and $46,000 of the total unrealized losses) and industrial and other companies ($2.5 million of the
total fair value and $400,000 of the total unrealized losses).
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The amortized cost and fair value of the Company’s investment securities, by contractual
maturity, are shown in the table below (in thousands). Expected maturities will differ from
contractual maturities because borrowers may have the right to call or prepay obligations with or
without call or prepayment penalties.
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">September 30, 2011</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Amortized</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Fair</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Cost</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Due in less than one year
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">645</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">646</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Due after one year through five years
</div></td>
<td> </td>
<td> </td>
<td align="right">6,655</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,666</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Due after five years through ten years
</div></td>
<td> </td>
<td> </td>
<td align="right">511</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">520</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Due after ten years
</div></td>
<td> </td>
<td> </td>
<td align="right">3,662</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,648</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Marketable equity securities
</div></td>
<td> </td>
<td> </td>
<td align="right">5,397</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,962</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">16,870</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">16,442</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Realized gains and losses from the sale of securities are determined using the specific
identification method. Gross gains realized on the sales of investment securities for the three
and six months ended September 30, 2011 were approximately $11,000 and $20,000, respectively.
Gross losses realized were approximately $18,000 and $20,000 for the three and six months ended
September 30, 2011, respectively.
</div>
</div>
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<!-- Begin Block Tagged Note 4 - us-gaap:InventoryDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt"><b>4. Inventories</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Inventories consist of the following (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">March 31,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Raw materials
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">17,758</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">10,208</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Work in process
</div></td>
<td> </td>
<td> </td>
<td align="right">4,627</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,499</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Finished goods and other
</div></td>
<td> </td>
<td> </td>
<td align="right">41,463</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,329</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">63,848</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">16,036</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 5 - us-gaap:FinancingReceivablesTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt"><b>5. Consumer Loans Receivable</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Company acquired consumer loans receivable during the first quarter of fiscal 2012 as a
part of the Palm Harbor transaction. Acquired consumer loans receivable held for investment were
acquired at fair value and subsequently are accounted for in a manner similar to ASC 310-30.
Consumer loans receivable held for
sale are carried at the lower of cost or market value. The following table summarizes
consumer loans receivable (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="86%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 30,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Consumer loans receivable held for investment
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">115,683</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Consumer loans receivable held for sale
</div></td>
<td> </td>
<td> </td>
<td align="right">4,122</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Construction advances on non-conforming mortgages
</div></td>
<td> </td>
<td> </td>
<td align="right">4,308</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Consumer loans receivable
</div></td>
<td> </td>
<td> </td>
<td align="right">124,113</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Deferred financing fees and other, net
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(322</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Consumer loans receivable, net
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">123,791</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">As of the Acquisition Date, management evaluated consumer loans receivable held for investment
by CountryPlace to determine whether there was evidence of deterioration of credit quality and if
it was probable that CountryPlace would be unable to collect all amounts due according to the
loan’s contractual terms. The Company also considered expected prepayments and estimated the
amount and timing of undiscounted expected principal, interest and other cash flows. The Company
determined the excess of the loan pool’s scheduled contractual principal and contractual interest
payments over all cash flows expected as of the Acquisition Date as an amount that cannot be
accreted into interest income (the non-accretable difference). The remaining difference is
accreted into interest income over the remaining life of the loans (referred to as accretable
yield). Interest income on consumer loans receivable is recognized as net sales.
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">April 23,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Consumer loans receivable held for investment —
contractual amount
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">311,020</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">339,166</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Purchase Discount
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Accretable
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(111,381</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(118,335</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Non-accretable
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(83,502</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(100,151</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Allowance for loan losses
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Less consumer loans receivable reclassified as other assets
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(454</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total consumer loans receivable held for investment, net
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">115,683</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">120,680</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Over the life of the loans, the Company continues to estimate cash flows expected to be
collected by CountryPlace. The Company evaluates at the balance sheet date whether the present
value of its loans determined using the effective interest rate has decreased and, if so,
recognizes an allowance for loan loss subsequent to the Acquisition Date. The present value of any
subsequent increase in the loan pool’s actual cash flows expected to be collected is used first to
reverse any existing allowance for loan loss. Any remaining increase in cash flows expected to be
collected adjusts the amount of accretable yield recognized on a prospective basis over the loan
pool’s remaining life.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The changes in accretable yield on acquired consumer loans receivable held for investment were
as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Three Months Ended</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Six Months Ended</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 30,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at the beginning of the
period
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">115,471</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Additions
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">118,335</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Accretion
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,090</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6,954</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at the end of the period
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">111,381</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">111,381</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">CountryPlace’s consumer loans receivable consists of fixed-rate, fixed-term,
fully-amortizing single-family home loans. These loans are either secured by a manufactured home,
excluding the land upon which the home is located (chattel property loans and retail installment
sale contracts), or by a combination of the home and the land upon which the home is located (real
property mortgage loans). The real property mortgage loans are primarily for manufactured homes.
Combined land and home loans are further disaggregated by the type of loan documentation: those
conforming to the requirements of Government-Sponsored Enterprises (GSEs), and those that are
non-conforming. In most instances, CountryPlace’s loans are secured by a first-lien position and
are provided for the consumer purchase of a home. In rare instances CountryPlace may provide other
types of loans in second-lien or unsecured positions. Accordingly, CountryPlace classifies its
loans receivable as follows: chattel loans, conforming mortgages, non-conforming mortgages, and
other loans.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">In measuring credit quality within each segment and class, CountryPlace uses commercially
available credit scores (“FICO”). At the time of each loan’s origination, CountryPlace obtained
credit scores from each of the three primary credit bureaus, if available. To evaluate credit
quality of individual loans, CountryPlace uses the mid-point of the available credit scores, or if
only two scores are available, the Company uses the lower of the two. CountryPlace does not update credit bureau scores after the time of origination.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The
following table disaggregates CountryPlace’s gross consumer loans receivable for each class by portfolio segment and
credit quality indicator as of September 30, 2011 (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="28%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000">Consumer Loans Held for Investment</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Consumer</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Securitized</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Securitized</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Construction</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Loans Held</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2005</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2007</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Unsecuritized</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Advances</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">For Sale</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Total</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Asset Class
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Credit Quality Indicator
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Chattel loans
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">0-619
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,490</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">989</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">943</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,422</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">620-719
</div></td>
<td> </td>
<td> </td>
<td align="right">21,832</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14,802</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,300</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">37,934</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">720+
</div></td>
<td> </td>
<td> </td>
<td align="right">25,230</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17,139</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">789</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">43,158</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Subtotal
</div></td>
<td> </td>
<td align="left"> </td>
<td align="right">48,552</td>
<td> </td>
<td> </td>
<td align="left"> </td>
<td align="right">32,930</td>
<td> </td>
<td> </td>
<td align="left"> </td>
<td align="right">3,032</td>
<td> </td>
<td> </td>
<td align="left"> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left"> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left"> </td>
<td align="right">84,514</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Conforming mortgages
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">0-619
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">419</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">663</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">594</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,676</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">620-719
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">988</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,079</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,175</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,242</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">720+
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">112</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,566</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,353</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,031</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Subtotal
</div></td>
<td> </td>
<td align="left"> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left"> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left"> </td>
<td align="right">1,519</td>
<td> </td>
<td> </td>
<td align="left"> </td>
<td align="right">4,308</td>
<td> </td>
<td> </td>
<td align="left"> </td>
<td align="right">4,122</td>
<td> </td>
<td> </td>
<td align="left"> </td>
<td align="right">9,949</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Non-conforming mortgages
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">0-619
</div></td>
<td> </td>
<td> </td>
<td align="right">97</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">869</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,945</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,911</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">620-719
</div></td>
<td> </td>
<td> </td>
<td align="right">2,240</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,928</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,468</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,636</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">720+
</div></td>
<td> </td>
<td> </td>
<td align="right">2,356</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,178</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,550</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,084</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Subtotal
</div></td>
<td> </td>
<td align="left"> </td>
<td align="right">4,693</td>
<td> </td>
<td> </td>
<td align="left"> </td>
<td align="right">14,975</td>
<td> </td>
<td> </td>
<td align="left"> </td>
<td align="right">9,963</td>
<td> </td>
<td> </td>
<td align="left"> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left"> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left"> </td>
<td align="right">29,631</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Other loans
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Subtotal
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">53,245</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">47,905</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">14,533</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4,308</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4,122</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">124,113</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Loan contracts secured by collateral that is geographically concentrated could experience
higher rates of delinquencies, default and foreclosure losses than loan contracts secured by
collateral that is more geographically dispersed. Consumer loans receivable secured by
factory-built homes are located in the key states shown below with the corresponding
percentage of loans aged 61 days or more:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="58%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="center" colspan="12" style="border-bottom: 1px solid #000000">September 30, 2011 </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Aging 61 days or more</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Portfolio</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Percent of state’s</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Percent of total</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000">State</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">concentration</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">loan balance</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">loan balance</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Texas
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">43.2</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">1.10</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">0.47</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">New Mexico
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">6.6</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">0.59</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">0.04</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Arizona
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">6.6</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">3.93</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">0.26</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Florida
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">6.4</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">1.14</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">0.07</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">California
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">2.1</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">3.37</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">0.07</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">All others
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">35.1</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">1.73</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">0.67</td>
<td nowrap="nowrap">%</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">100.0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">1.58</td>
<td nowrap="nowrap">%</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The States of California, Florida and Arizona, and to a lesser degree Texas, have
experienced economic weakness resulting from the decline in real estate values. The risks created
by these concentrations have been considered by management in the determination of the accretable
yield and the adequacy of any allowance for loan losses. Other than Texas, no other states had concentrations in
excess of 10% of the principal balance of the consumer loans receivable as of September 30, 2011.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 6 - cvco:InventoryFinanceReceivablesAndAllowanceForLoanLossTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt"><b>6. Inventory Finance Receivables and Allowance for Loan Loss</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Company’s inventory finance receivables balance consists of two classes: (i) amounts
loaned by the Company under participation inventory financing programs; and (ii) direct inventory
financing arrangements for the home product inventory needs of our independent distribution base.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Under the terms of the participation programs, the Company provides loans to independent
financial institutions representing a significant portion of the funds that such financiers then
lend to retailers to finance their inventory purchases of our products. The participation
inventory finance receivables are unsecured general obligations of the independent floorplan
lenders.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Under the terms of the direct inventory finance arrangements, the Company provides all of the
inventory finance funds. The notes are secured by the inventory collateral and other security
depending on the borrower’s (retailer’s) circumstances. The other terms of direct inventory
finance arrangements vary depending on the needs of the borrower and the opportunity for the
Company, but generally follow the same tenets as the participation programs.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Inventory finance receivables, net, consist of the following by class of financing receivable
(in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">March 31,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Direct inventory finance receivables
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">12,972</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">12,157</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Participation inventory finance
receivables
</div></td>
<td> </td>
<td> </td>
<td align="right">6,681</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,771</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Allowance for loan loss
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(185</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(169</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">19,468</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">17,759</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Company evaluates the potential for loss from its participation inventory finance
programs based on the independent lender’s overall financial stability and has determined that an
applicable allowance for loan loss was not needed at either September 30, 2011 or March 31, 2011.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">With respect to the direct inventory finance notes receivable, the risk of loss is spread over
numerous borrowers. Borrower inventory levels and activity are monitored in conjunction with
third-party service providers, where applicable, to estimate the potential for loss on the related
notes receivable, considering potential exposures including repossession costs, remarketing
expenses, impairment of value and the risk of collateral loss. The Company has historically been
able to resell repossessed unused homes, thereby mitigating loss experience. If a default occurs
and collateral is lost, the Company is exposed to loss of the full value of the home loan. If the
Company determines that it is probable that a borrower will default, a specific reserve is
determined and recorded within the estimated allowance for loan loss. The Company recorded an
allowance for loan loss of $185,000 and $169,000 at September 30, 2011 and March 31, 2011,
respectively. The following table represents changes in the estimated allowance for loan losses,
including related additions and deductions to the allowance for loan loss applicable to the direct
inventory finance receivables (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Three Months Ended</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Six Months Ended</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">September 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">September 30,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at beginning of period
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">173</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">149</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">169</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">40</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Provision for credit losses
</div></td>
<td> </td>
<td> </td>
<td align="right">12</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">32</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">137</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Loans charged off, net of
recoveries
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at end of period
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">185</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">181</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">185</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">181</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The following table disaggregates inventory finance notes receivable and the estimated
allowance for loan loss for each class of financing receivable by evaluation methodology (in
thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Direct Inventory Finance</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Participation Inventory Finance</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">March 31,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">March 31,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Inventory finance notes receivable:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Collectively evaluated for impairment
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">12,228</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">11,116</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Individually evaluated for impairment
</div></td>
<td> </td>
<td> </td>
<td align="right">744</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,041</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,681</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,771</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">12,972</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">12,157</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">6,681</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,771</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Allowance for loan loss:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Collectively evaluated for impairment
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(185</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(169</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Individually evaluated for impairment
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(185</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(169</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Loans are subject to regular review and are given management’s attention whenever a
problem situation appears to be developing. Loans with indicators of potential performance
problems are placed on watch list status and are subject to additional monitoring and scrutiny.
Nonperforming status includes loans accounted for on a non-accrual basis and accruing loans with
principal payments past due 90 days or more. The Company’s policy is to place loans on nonaccrual
status when interest is past due and remains unpaid 90 days or more or when there is a clear
indication that the borrower has the inability or unwillingness to meet payments as they become
due. Payments received on nonaccrual loans are recorded on a cash basis, first to interest and
then to principal. Charge-offs occur when it becomes probable that outstanding amounts will not be
recovered. At September 30, 2011, the Company did not have any loans on nonaccrual status and was
not aware of any potential problem loans that would have a material effect on the inventory finance
receivables balance. The following table disaggregates the Company’s inventory finance receivables
by class and credit quality indicator (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Direct Inventory Finance</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Participation Inventory Finance</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September, 30</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">March 31,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September, 30</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">March 31,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Risk profile based
on payment
activity:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Performing
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">12,878</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">11,995</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">6,681</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,771</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Watch list
</div></td>
<td> </td>
<td> </td>
<td align="right">94</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">162</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Nonperforming
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">12,972</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">12,157</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">6,681</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,771</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Company has concentrations of inventory finance notes receivable related to
factory-built homes located in the following states, measured as a percentage of inventory finance
receivables principal balance outstanding as of September 30, 2011 and March 31, 2011:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">March 31,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Arizona
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">23.3</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">21.9</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Texas
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">14.5</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">18.0</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">California
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">4.3</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">9.0</td>
<td nowrap="nowrap">%</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The States of California, Arizona, and to a lesser degree Texas, have experienced
economic weakness. The risks created by these concentrations have been considered in the
determination of the adequacy of the allowance for loan losses. The Company did not have
concentrations in excess of 10% of the principal balance of the inventory finance receivables in
any other states as of September 30, 2011 or March 31, 2011, respectively.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 7 - us-gaap:PropertyPlantAndEquipmentDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt"><b>7. Property, Plant and Equipment</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Property, plant and equipment are carried at cost. Depreciation is calculated using the
straight-line method over the estimated useful lives of each asset. Estimated useful lives for
significant classes of assets are as follows: buildings and improvements 10 to 39 years, and
machinery and equipment 3 to 25 years. Repairs and maintenance charges are expensed as incurred.
Property, plant and equipment consist of the following (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">March 31,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Property, plant and equipment, at cost:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Land
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">20,036</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">16,046</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Buildings and improvements
</div></td>
<td> </td>
<td> </td>
<td align="right">26,839</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19,672</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Machinery and equipment
</div></td>
<td> </td>
<td> </td>
<td align="right">15,803</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,453</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right">62,678</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">47,171</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Accumulated depreciation
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(12,168</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,178</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Property, plant and equipment, net
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">50,510</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">35,993</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 8 - us-gaap:GoodwillAndIntangibleAssetsDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt"><b>8. Goodwill and Other Intangibles</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Intangible assets principally consist of goodwill, trademarks and trade names, state insurance
licenses, customer relationships, technology, insurance business in force, and policies and renewal
rights. Goodwill, trademarks and trade names and state insurance licenses are indefinite-lived
intangible assets and are tested for impairment annually and whenever events or circumstances
indicate that more likely than not impairment has occurred. During the six months ended September
30, 2011 and 2010, no impairment expense was recorded. The remaining intangibles are amortized over
their estimated useful lives and are reviewed for possible impairment whenever events or changes in
circumstances indicate that carrying amounts may not be recoverable. The value of customer
relationships is amortized over 4 to 11 years, technology over 7 to 10 years, insurance business in
force over one year and insurance policies and renewal rights over 15 years.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Goodwill and other intangibles consist of the following as of September 30, 2011 and March 31,
2011 (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="28%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="7%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000">September 30, 2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000">March 31, 2011</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gross</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Net</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Gross</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Net</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Carrying</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Accumulated</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Carrying</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Carrying</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Accumulated</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Carrying</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Amount</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Amortization</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Amount</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Amount</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Amortization</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Amount</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Goodwill
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">67,346</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">67,346</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">67,346</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">67,346</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Trademarks and trade names
</div></td>
<td> </td>
<td> </td>
<td align="right">6,250</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,250</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">800</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">800</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">State insurance licenses
</div></td>
<td> </td>
<td> </td>
<td align="right">1,100</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,100</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total indefinite-lived
intangible assets
</div></td>
<td> </td>
<td> </td>
<td align="right">74,696</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">74,696</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">68,146</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">68,146</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Customer relationships
</div></td>
<td> </td>
<td> </td>
<td align="right">6,200</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(617</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">5,583</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">800</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(87</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">713</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Insurance business in force
</div></td>
<td> </td>
<td> </td>
<td align="right">2,070</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,107</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">963</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Technology
</div></td>
<td> </td>
<td> </td>
<td align="right">900</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(39</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">861</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Insurance policies and
renewal rights
</div></td>
<td> </td>
<td> </td>
<td align="right">374</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(10</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">364</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total goodwill and other
intangible assets
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">84,240</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,773</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">82,467</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">68,946</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(87</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">68,859</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Amortization expense recognized on intangible assets during the three and six months
ended September 30, 2011 was $1.3 million and $1.7 million, respectively. Amortization expense of
$13,000 and $26,000 was recognized during the three and six months ended September 30, 2010,
respectively.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 9 - us-gaap:AccountsPayableAndAccruedLiabilitiesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt"><b>9. Accrued Liabilities</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Accrued liabilities consist of the following (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">March 31,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Estimated warranties
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">10,809</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">9,371</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Customer deposits
</div></td>
<td> </td>
<td> </td>
<td align="right">9,863</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,857</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Salaries, wages and benefits
</div></td>
<td> </td>
<td> </td>
<td align="right">9,606</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,342</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Unearned premiums
</div></td>
<td> </td>
<td> </td>
<td align="right">5,842</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Deferred margin
</div></td>
<td> </td>
<td> </td>
<td align="right">4,365</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,305</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Accured taxes
</div></td>
<td> </td>
<td> </td>
<td align="right">3,233</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">707</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Accrued insurance
</div></td>
<td> </td>
<td> </td>
<td align="right">3,077</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,731</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Accrued volume rebates
</div></td>
<td> </td>
<td> </td>
<td align="right">1,940</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">885</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Insurance loss reserves
</div></td>
<td> </td>
<td> </td>
<td align="right">1,103</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Reserve for repurchase commitments
</div></td>
<td> </td>
<td> </td>
<td align="right">815</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">597</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other (various)
</div></td>
<td> </td>
<td> </td>
<td align="right">10,852</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,450</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">61,505</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">26,245</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
</div>
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<!-- Begin Block Tagged Note 10 - us-gaap:ProductWarrantyDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt"><b>10. Warranties</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Homes are generally warranted against manufacturing defects for a period of one year
commencing at the time of sale to the retail customer. Estimated costs relating to home warranties
are provided at the date of sale. The Company has recorded a liability for estimated future
warranty costs relating to homes sold based upon management’s assessment of historical experience
factors, an estimate of the amount of homes in the distribution channel and current industry
trends. Activity in the liability for estimated warranties was as follows (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Three Months Ended</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Six Months Ended</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">September 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">September 30,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at beginning of
period
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">11,483</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">12,991</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">9,371</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">13,891</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Liability assumed with
Palm Harbor
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,932</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Charged to costs and
expenses
</div></td>
<td> </td>
<td> </td>
<td align="right">2,456</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,073</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,462</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,286</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Payments and deductions
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,130</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,173</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,956</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,286</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at end of period
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">10,809</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">11,891</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">10,809</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">11,891</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 11 - us-gaap:DebtDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt"><b>11. Debt Obligations</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Company acquired securitized financings during the first quarter of fiscal 2012 as a part
of the Palm Harbor acquisition. Acquired securitized financings were acquired at fair value, which
resulted in a discount, and subsequently are accounted for a manner similar to ASC 310-30 to
accrete the discount.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Company considers expected prepayments and estimates the amount and timing of undiscounted
expected principal, interest and other cash flows for consumer loans receivable held for investment
to determine the expected cash flows on securitized financings and the contractual payments. The
amount of contractual principal and contractual interest payments due on the securitized financings
in excess of all cash flows expected as of the Acquisition Date cannot be accreted into interest
expense (the non-accretable difference). The remaining amount is accreted into interest expense
over the remaining life of the obligation (referred to as accretable yield).
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">April 23,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Securitized financings — contractual
amount
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">125,917</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">134,205</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Purchase Discount
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Accretable
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(29,779</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(32,072</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Non-accretable (1)
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total securitized financings, net
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">96,138</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">102,133</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr style="font-size: 6pt">
<td width="3%"> </td>
<td width="1%"> </td>
<td width="96%"> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top">(1)</sup></td>
<td> </td>
<td>Because the contractual payments on securitized financing are determined by
actual cash flows, the Company expects that there will not be a non-accretable difference.</td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Over the life of the loans, the Company continues to estimate cash flows expected to be paid
on securitized financings. The Company evaluates at the balance sheet date whether the present
value of its securitized financings determined using the effective interest rate, has increased or decreased.
The present value of any subsequent change in cash flows expected to be paid adjusts the amount
of accretable yield recognized on a prospective basis over the securitized financing’s remaining
life.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The changes in accretable yield on securitized financings were as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Three Months Ended</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Six Months Ended</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 30,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at the beginning of the period
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">31,346</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Additions
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">32,072</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Accretion
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,567</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,293</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance at the end of the period
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">29,779</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">29,779</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">On July 12, 2005, prior to the acquisition of Palm Harbor and CountryPlace, CountryPlace
completed its initial securitization (2005-1) for approximately $141.0 million of loans, which was
funded by issuing bonds totaling approximately $118.4 million. The bonds were issued in four
different classes: Class A-1 totaling $36.3 million with a coupon rate of 4.23%; Class A-2
totaling $27.4 million with a coupon rate of 4.42%; Class A-3 totaling $27.3 million with a coupon
rate of 4.80%; and Class A-4 totaling $27.4 million with a coupon rate of 5.20%. Maturity of the
bonds is at varying dates beginning in 2006 through 2015 and were issued with an expected weighted
average maturity of 4.66 years. For accounting purposes, this transaction was structured as a
securitized borrowing.
As of September 30, 2011, the Class A-1 and Class A-2 bonds had been retired.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">On March 22, 2007, CountryPlace, completed its second securitization (2007-1) for
approximately $116.5 million of loans, which was funded by issuing bonds totaling approximately
$101.9 million. The bonds were issued in four classes: Class A-1 totaling $28.9 million with a
coupon rate of 5.484%; Class A-2 totaling $23.4 million with a coupon rate of 5.232%; Class A-3
totaling $24.5 million with a coupon rate of 5.593%; and Class A-4 totaling $25.1 million with a
coupon rate of 5.846%. The bonds mature at varying dates beginning in 2008 through 2017 and were
issued with an expected weighted average maturity of 4.86 years. For accounting purposes, this
transaction was also structured as a securitized borrowing.
As of September 30, 2011, the Class A-1 and Class A-2 bonds had been retired.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 12 - us-gaap:ReinsuranceTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt"><b>12. Reinsurance</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Standard
is primarily a specialty writer of manufactured home physical damage insurance.
Certain of Standard’s premiums and benefits are assumed from and ceded to other insurance
companies under various reinsurance agreements. The ceded reinsurance agreements provide Standard
with increased
capacity to write larger risks and maintain its exposure to loss within its capital resources.
Standard remains obligated for amounts ceded in the event that the reinsurers do not meet their
obligations. Substantially all of Standard’s assumed reinsurance is with one entity.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The effects of reinsurance on premiums written and earned are as follows (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Three Months Ended</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">SCC Acquisition Date to</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">September 30, 2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">September 30, 2011</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Written</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Earned</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Written</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Earned</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Direct premiums
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">436</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">324</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">629</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">411</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Assumed premiums —
nonaffiliate
</div></td>
<td> </td>
<td> </td>
<td align="right">2,572</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,434</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,481</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,214</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Ceded premiums — nonaffiliate
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(398</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(398</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(513</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(513</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net premiums
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,610</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,360</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,597</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,112</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Typical insurance policies written or assumed by Standard have a maximum coverage of
$300,000 per claim, of which Standard cedes $240,000 of the risk of loss per reinsurance.
Therefore, Standard maintains risk of loss limited to $60,000 per claim on typical policies.
Amounts are recoverable by Standard through reinsurance for catastrophic losses in excess of $500,000 per occurrence up to a maximum
of $7.5 million in the aggregate.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 13 - us-gaap:IncomeTaxDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt"><b>13. Income Taxes</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Company’s deferred tax assets primarily result from financial statement accruals not
currently deductible for tax purposes and differences in the acquired basis of certain assets, and
its deferred tax liabilities primarily result from tax amortization of goodwill and other
intangible assets. The Company complies with the provisions of FASB ASC 740, <i>Income Taxes </i>(“ASC
740”), which clarifies the accounting for income taxes by prescribing a minimum recognition
threshold a tax position is required to meet before being recognized in the financial statements.
ASC 740 also provides guidance on derecognizing, measurement, classification, interest and
penalties, accounting in interim periods, disclosure and transition. The Company has recorded an
insignificant amount of unrecognized tax benefits and there would be an insignificant effect on the
effective tax rate if all unrecognized tax benefits were recognized. The Company classifies
interest and penalties related to unrecognized tax benefits in tax expense.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Income tax returns are filed in the U.S. federal jurisdiction and in several state
jurisdictions. In July 2011, the Internal Revenue Service (“IRS”) completed its examination of the
Company’s federal income tax return for the fiscal year ended March 31, 2009. The examination
resulted in an insignificant payment of additional taxes. The Company is no longer subject to
examination by the IRS for years before fiscal year 2007. The Company believes that its income
tax filing positions and deductions will be sustained on audit and does not anticipate any
adjustments that will result in a material change to the Company’s financial position. The total
amount of unrecognized tax benefit related to any particular tax position is not anticipated to
change significantly within the next 12 months. The provision for income taxes generally
represents income taxes paid or payable for the current year plus the change in deferred taxes
during the year.
</div>
</div>
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<!-- Begin Block Tagged Note 14 - us-gaap:CommitmentsAndContingenciesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt"><b>14. Commitments and Contingencies</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><i>Repurchase Contingencies</i>. The Company is contingently liable under terms of repurchase
agreements with financial institutions providing inventory financing for retailers of its products.
These arrangements, which are customary in the industry, provide for the repurchase of products
sold to retailers in the event of default by the retailer. The risk of loss under these agreements
is spread over numerous retailers. The price the Company is obligated to pay generally declines
over the period of the agreement (generally 18 to 36 months, calculated from the date of sale to
the retailer) and the risk of loss is further reduced by the resale value of the homes. The maximum
amount for which the Company was contingently liable under such agreements approximated $12.1
million at September 30, 2011, without reduction for the resale value of the homes. The Company
applies FASB ASC 460, <i>Guarantees </i>(“ASC 460”), and FASB ASC 450-20, <i>Loss Contingencies</i>
(“ASC 450-20”), to account for its liability for repurchase commitments. Under the provisions
of ASC 460, the Company records the greater of the estimated value of the non-contingent obligation
or a contingent liability for each repurchase arrangement under the provisions of ASC 450-20. The
Company recorded an estimated liability of $815,000 and $597,000 at September 30, 2011 and March
31, 2011, respectively, related to these commitments.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><i>Letters of Credit. </i>The Company maintains a $100,000 outstanding letter of credit with
J.P. Morgan Chase Bank N.A. issued to satisfy the remaining requirements of the self-funded
workers’ compensation program which concluded on September 30, 2006. To secure certain reinsurance
contracts, Standard has an irrevocable letter of credit of $5.0 million outstanding at September
30, 2011 related to assumed premiums as assurance that Standard will fulfill its reinsurance
obligations. This letter of credit is secured by certain of the Company’s investments. Standard also
maintains an irrevocable standby letter of credit of
$2.0 million related to a supply bond for a
construction project for Palm Harbor Homes. CountryPlace maintains an irrevocable standby letter
of credit of $100,000 related to state licensing requirements. There have been no draws on any of
the aforementioned letters of credit.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><i>Construction-Period Mortgages. </i>CountryPlace funds construction-period mortgages through
periodic advances during the period of home construction. At the time of initial funding,
CountryPlace commits to fully fund the loan contract in accordance with a predetermined schedule.
Subsequent advances are contingent upon the performance of contractual obligations by the seller of
the home and the borrower. Construction-period mortgages are carried in the consolidated balance
sheet at the actual amount of cumulative advances, which are included in consumer loans receivable.
The total loan contract amount, less cumulative advances, represents an off-balance sheet
contingent commitment of CountryPlace to fund future advances.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Loan contracts with off-balance sheet commitments are summarized below (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="86%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 30,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Construction loan contract amount
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">9,185</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Cumulative advances
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,308</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Remaining construction contingent commitment
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">4,877</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><i>Representations and Warranties of Mortgages Sold</i>. CountryPlace sells loans to GSEs and
whole-loan purchasers. In connection with these activities, CountryPlace provides to the GSEs and
whole-loan purchasers, representations and warranties related to the loans sold. These
representations and warranties generally relate to the ownership of the loan, the validity of the
lien securing the loan, the loan’s compliance with the criteria for inclusion in the sale
transactions, including compliance with underwriting standards or loan criteria established by the
buyer, and CountryPlace’s ability to deliver documentation in compliance with applicable laws.
Generally, representations and warranties may be enforced at any time over the life of the loan.
Upon a breach of a representation, CountryPlace may be required to repurchase the loan or to
indemnify a party for incurred losses. Repurchase demands and claims for indemnification payments
are reviewed on a loan-by-loan basis to validate if there has been a breach requiring repurchase.
CountryPlace manages the risk of repurchase through underwriting and quality assurance practices
and by servicing the mortgage loans to investor standards. CountryPlace maintains a reserve for
these contingent repurchase and indemnification obligations. This reserve of $272,000 as of
September 30, 2011, included in accrued liabilities, reflects management’s estimate of probable
loss. CountryPlace considers a variety of assumptions, including borrower performance (both actual
and estimated future defaults), historical repurchase demands and loan defect rates to estimate the
liability for loan repurchases and indemnifications. There were no claim requests during the six
months ended September 30, 2011, and no claims open for review as of September 30, 2011.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><i>Interest Rate Lock Commitments. </i>In originating loans for sale, CountryPlace issues interest
rate lock commitments (“IRLCs”) to prospective borrowers and third-party originators. These IRLCs
represent an agreement to extend credit to a loan applicant, or an agreement to purchase a loan
from a third-party originator,
whereby the interest rate on the loan is set prior to loan closing or sale. These IRLCs bind
CountryPlace to fund the approved loan at the specified rate regardless of whether interest rates
or market prices for similar loans have changed between the commitment date and the closing date.
As such, outstanding IRLCs are subject to interest rate risk and related loan sale price risk
during the period from the date of the IRLC through the earlier of the loan sale date or IRLC
expiration date. The loan commitments generally range between 30 and 180 days; however, borrowers
are not obligated to close the related loans. As a result, CountryPlace is subject to fallout risk
related to IRLCs, which is realized if approved borrowers choose not to close on the loans within
the terms of the IRLCs. CountryPlace maintains a reserve for loan price adjustments related to this
interest rate risk. The recorded reserve was $618,000 as of September 30, 2011. In determining the adequacy of this reserve, CountryPlace considers recent fallout
rate experience by type of origination source and forward loan pricing information provided by
investors for various loan types and terms.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><i>Legal Matters</i>. The Company is party to certain legal proceedings that arise in the ordinary
course and are incidental to its business. Certain of the claims pending against the Company in
these proceedings allege, among other things, breach of contract and warranty, product liability
and personal injury. Although litigation is inherently uncertain, based on past experience and the
information currently available, management does not believe that the currently pending and
threatened litigation or claims will have a material adverse effect on the Company’s consolidated
financial position, liquidity or results of operations. However, future events or circumstances
currently unknown to management will determine whether the resolution of pending or threatened
litigation or claims will ultimately have a material effect on the Company’s consolidated financial
position, liquidity or results of operations in any future reporting periods.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 15 - us-gaap:StockholdersEquityNoteDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt"><b>15. Stockholders’ Equity</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The
following table represents changes in stockholders’ equity attributable
to Cavco’s stockholders and redeemable non-controlling interest for the six months ended September
30, 2011 (dollars in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="23%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="6%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000">Equity Attributable to Cavco Stockholders</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Redeemable</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Additional</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Accumulated</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Noncontrolling</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">Common Stock</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Paid-in</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Retained</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Other</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Interest</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Shares</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Amount</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Capital</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Earnings</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Loss</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Total</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance, March 31, 2011
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">35,819</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,817,606</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">68</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">129,211</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">21,390</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">150,669</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Stock option exercises and
associated tax benefits
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">72,590</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,447</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,448</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Share-based compensation
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">456</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">456</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Note payable conversion
</div></td>
<td> </td>
<td> </td>
<td align="right">36,173</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income
</div></td>
<td> </td>
<td> </td>
<td align="right">11,953</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,907</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,907</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Other comprehensive loss
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(141</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(141</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(141</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Balance, September 30, 2011
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">83,804</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,890,196</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">69</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">131,114</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">33,297</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(141</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">164,339</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 16 - us-gaap:ComprehensiveIncomeNoteTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt"><b>16. Other Comprehensive Income</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The difference between net income and total comprehensive income for the three and six months
ended September 30, 2011 and September 30, 2010 is as follows (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Three Months Ended</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Six Months Ended</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">September 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">September 30,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">3,172</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,199</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">23,860</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,049</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Unrealized loss on
available-for-sale
investments, net of tax
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(219</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(282</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Comprehensive income
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,953</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,199</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">23,578</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,049</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 17 - us-gaap:DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt"><b>17. Stock-Based Compensation</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Company maintains stock incentive plans whereby stock option grants or awards of
restricted stock may be made to certain officers, directors and key employees. The plans, which
are shareholder approved, permit the award of up to 1,350,000 shares of the Company’s common stock,
of which 272,026 shares were still available for grant at September 30, 2011. When options are
exercised, new shares of the Company’s common stock are issued. Stock options may not be granted
below 100% of the fair market value of the Company’s common stock at the date of grant and
generally expire seven years from the date of grant. Stock options and awards of restricted stock
vest over a period determined by the plan administrator, typically a one to five year period. The
stock incentive plans provide for accelerated vesting of stock options and removal of restrictions
on restricted stock awards upon a change in control (as defined in the plans).
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Stock-based compensation cost charged against income for the three and six months ended
September 30, 2011, was approximately $271,000 and $456,000, respectively. The Company recorded
stock-based compensation expense of $189,000 and $327,000 for the three and six months ended
September 30, 2010, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">As of September 30, 2011, total unrecognized compensation cost related to stock options was
approximately $2.4 million and the related weighted-average period over which it is expected to be
recognized is approximately 2.5 years.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The following table summarizes the option activity within the Company’s stock-based
compensation plans for the six months ended September 30, 2011:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="86%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Number</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">of Shares</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Outstanding at March 31, 2011
</div></td>
<td> </td>
<td> </td>
<td align="right">401,500</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Granted
</div></td>
<td> </td>
<td> </td>
<td align="right">77,100</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Exercised
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(72,250</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Outstanding at September 30, 2011
</div></td>
<td> </td>
<td> </td>
<td align="right">406,350</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Exercisable at September 30, 2011
</div></td>
<td> </td>
<td> </td>
<td align="right">164,500</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">A summary of restricted stock activity within the Company’s share-based compensation
plans and changes for the six months ended September 30, 2011 is as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="86%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Number</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">of Shares</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Nonvested at March 31, 2011
</div></td>
<td> </td>
<td> </td>
<td align="right">498</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Vested
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(340</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Nonvested at September 30, 2011
</div></td>
<td> </td>
<td> </td>
<td align="right">158</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 18 - us-gaap:EarningsPerShareTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt"><b>18. Earnings Per Share</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Basic earnings per common share is computed based on the weighted-average number of common
shares outstanding during the reporting period. Diluted earnings per common share is computed based
on the combination of dilutive common share equivalents, comprised of shares issuable under the
Company’s share-based compensation plans and the weighted-average number of common shares
outstanding during the reporting period. Dilutive common share equivalents include the dilutive
effect of in-the-money options to purchase shares, which is calculated based on the average share
price for each period using the treasury stock method. The following table sets forth the
computation of basic and diluted earnings per share:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Three Months Ended</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Six Months Ended</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">September 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">September 30,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income attributable to Cavco
common stockholders
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,685</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">680</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">11,907</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,198</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Weighted average shares outstanding:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Basic
</div></td>
<td> </td>
<td> </td>
<td align="right">6,890,122</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,541,951</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,864,427</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,541,846</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Common stock
equivalents — treasury stock method
</div></td>
<td> </td>
<td> </td>
<td align="right">47,685</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">205,165</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">57,031</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">221,174</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Diluted
</div></td>
<td> </td>
<td> </td>
<td align="right">6,937,807</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,747,116</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,921,458</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,763,020</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income per share attributable
to Cavco
common stockholders:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Basic
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">0.24</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.10</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1.73</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.18</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Diluted
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">0.24</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.10</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1.72</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.18</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Anti-dilutive common stock equivalents excluded from the computation of diluted earnings
per share for the three months ended September 30, 2011 and 2010 were 16,609 and 9,376,
respectively. There were 7,387 and 1,856 anti-dilutive common stock equivalents excluded from the
computation of diluted earnings per share for the six months ended September 30, 2011 and 2010,
respectively.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 19 - us-gaap:FairValueDisclosuresTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt"><b>19. Fair Value Measurements</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The book value and estimated fair value of the Company’s financial instruments are as follows
(in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">September 30, 2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">March 31, 2011</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Book</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Estimated</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Book</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Estimated</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Fair Value</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Value</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Fair Value</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cash and cash equivalents (1)
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">35,219</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">35,219</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">76,513</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">76,513</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Restricted cash (1)
</div></td>
<td> </td>
<td> </td>
<td align="right">7,520</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,520</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">436</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">436</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Investments (2)
</div></td>
<td> </td>
<td> </td>
<td align="right">16,442</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,442</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Consumer loans receivable (3)
</div></td>
<td> </td>
<td> </td>
<td align="right">123,791</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">123,127</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Inventory finance receivable
(4)
</div></td>
<td> </td>
<td> </td>
<td align="right">19,468</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19,468</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17,759</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17,759</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Construction lending line (1)
</div></td>
<td> </td>
<td> </td>
<td align="right">4,528</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,528</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Securitized financings (5)
</div></td>
<td> </td>
<td> </td>
<td align="right">96,138</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">99,671</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr style="font-size: 6pt">
<td width="3%"> </td>
<td width="1%"> </td>
<td width="96%"> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top">(1)</sup></td>
<td> </td>
<td>The fair value approximates book value due to the instruments’ short term
maturity.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top">(2)</sup></td>
<td> </td>
<td>The fair value is based on market prices.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top">(3)</sup></td>
<td> </td>
<td>Includes consumer loans receivable held for investment, held for sale and
construction advances. The fair value of the loans held for investment is based on the
discounted value of the remaining principal and interest cash flows. The fair value of the
loans held for sale approximates book value since the sales price of these loans is known
as of September 30, 2011.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top">(4)</sup></td>
<td> </td>
<td>The fair value approximates book value based on current market rates and the
revolving nature of the loan portfolio.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top">(5)</sup></td>
<td> </td>
<td>The fair value is estimated using recent transactions of asset-backed securities.</td>
</tr>
</table>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">In accordance with ASC 820, <i>Fair Value Measurements and Disclosures </i>(“ASC 820”), fair value is
defined as the exchange price that would be received for an asset or paid to transfer a liability
(an exit price) in the principal or most advantageous market for the asset or liability in an
orderly transaction between market participants on the measurement date. ASC 820 also establishes
a fair value hierarchy which requires an entity to maximize the use of observable inputs and
minimize the use of unobservable inputs when measuring fair value. The standard describes three
levels of inputs that may be used to measure fair value:
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left">Level 1 —</td>
<td width="1%"> </td>
<td>Quoted prices in active markets for identical assets or liabilities.</td>
</tr>
</table>
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left">Level 2 —</td>
<td width="1%"> </td>
<td>Observable inputs other than Level 1 prices, such as quoted prices for similar
assets or liabilities; quoted prices in markets that are not active; or other inputs that
are observable or can be corroborated by observable market data for substantially the full
term of the assets or liabilities.</td>
</tr>
</table>
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left">Level 3 —</td>
<td width="1%"> </td>
<td>Unobservable inputs that are supported by little or no market activity and that
are significant to the fair value of the assets or liabilities. The Company had no level 3
securities as of September 30, 2011.</td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Company utilizes the market approach to measure fair value for its financial assets and
liabilities. The market approach uses prices and other relevant information generated by market
transactions involving identical or comparable assets or liabilities.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Assets measured at fair value on a recurring basis are summarized below (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000">As of September 30, 2011</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Total</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Level 1</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Level 2</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Level 3</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Securities issued by the U.S Treasury and Government (1)
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,296</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,296</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Mortgage-backed securities (1)
</div></td>
<td> </td>
<td> </td>
<td align="right">4,950</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,950</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Securities issued by states and political subdivisions
(1)
</div></td>
<td> </td>
<td> </td>
<td align="right">1,224</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,224</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Corporate debt securities (1)
</div></td>
<td> </td>
<td> </td>
<td align="right">4,010</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,010</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Marketable equity securities (1)
</div></td>
<td> </td>
<td> </td>
<td align="right">4,962</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,962</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr style="font-size: 6pt">
<td width="3%"> </td>
<td width="1%"> </td>
<td width="96%"> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top">(1)</sup></td>
<td> </td>
<td>Unrealized gains or losses on investments are recorded in accumulated other
comprehensive loss at each measurement date.</td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">No significant transfers between Level 1 and Level 2 occurred during the six months ended
September 30, 2011. The Company’s policy regarding the recording of transfers between levels is to
record any such transfers at the end of the reporting period.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Assets and liabilities measured at fair value on a non-recurring basis are summarized below
(in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000">As of September 30, 2011</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Total</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Level 1</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Level 2</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Level 3</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Loans held for investment
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">116,536</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">116,536</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Loans held for sale
</div></td>
<td> </td>
<td> </td>
<td align="right">4,437</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,437</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Construction advances
</div></td>
<td> </td>
<td> </td>
<td align="right">2,154</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,154</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Inventory finance
receivable
</div></td>
<td> </td>
<td> </td>
<td align="right">19,468</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19,468</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Construction lending
facility
</div></td>
<td> </td>
<td> </td>
<td align="right">4,528</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,528</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Securitized financings
</div></td>
<td> </td>
<td> </td>
<td align="right">99,671</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">99,671</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Company records impairment losses on long-lived assets held for sale when the fair
value of such long-lived assets is below their carrying values. The Company records impairment
charges on long-lived assets used in operations when events and circumstances indicate that
long-lived assets might be impaired and the undiscounted cash flows estimated to be generated by
those assets are less than their carrying amounts. The Company recorded no impairment charges on
assets held for sale or used in operations during either the three or six months ended September
30, 2011.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Assets measured on a nonrecurring basis also include impaired loans (nonaccrual loans)
disclosed in Note 5 and loans held for sale. No recent sales have been executed in an orderly
market of manufactured home loan portfolios with comparable product features, credit
characteristics, or performance. Impaired loans are measured using Level 3 inputs that are
calculated using discounted future cash flows. Loans held for sale are measured at the lower of
cost or fair value using Level 1 inputs that consist of commitments on hand from investors. These
loans are held for relatively short periods, typically no more than 45 days. As a result, changes
in loan-specific credit risk are not a significant component of the change in fair value. The cost
of loans held for sale is currently lower than the fair value.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">ASC 825, <i>Financial Instruments </i>(“ASC 825”), requires disclosure of fair value information
about financial instruments, whether or not recognized in the balance sheet, for which it is
practicable to estimate fair value. Fair value estimates are made as of a specific point in time
based on the characteristics of the financial
instruments and the relevant market information. Where available, quoted market prices are
used. In other cases, fair values are based on estimates using other valuation techniques. These
techniques involve uncertainties and are significantly affected by the assumptions used and the
judgments made regarding risk characteristics of various financial instruments, discount rates,
estimates of future cash flows, future expected loss experience, and other factors. Changes in
assumptions could significantly affect these estimates and the resulting fair values. Derived fair
value estimates cannot be substantiated by comparison to independent markets and, in many cases,
could not be realized in an immediate sale of the instrument. Also, because of differences in
methodologies and assumptions used to estimate fair values, the Company’s fair values should not be
compared to those of other companies.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Under ASC 825, fair value estimates are based on existing financial instruments without
attempting to estimate the value of anticipated future business and the value of assets and
liabilities that are not considered financial instruments. Accordingly, the aggregate fair value
amounts presented do not represent the underlying market value of the Company.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 20 - cvco:DebtorInPossessionNoteReceivableTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt"><b>20. Debtor-In-Possession Note Receivable</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">On November 29, 2010, Fleetwood Homes, Inc. entered into a DIP Revolving Credit Agreement (the
“DIP Agreement”) and a Security Agreement (the “DIP Security Agreement”) with Palm Harbor Florida
and certain of its subsidiaries. Palm Harbor Florida was a manufacturer and marketer of
factory-built housing and a provider of related financing and insurance. Also on November 29, 2010,
Fleetwood Homes’ newly-formed subsidiary, Palm Harbor Delaware, entered into an Asset Purchase
Agreement (the “Purchase Agreement”) with Palm Harbor Florida.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Palm Harbor Florida and those of its subsidiaries that were parties to the DIP Agreement and
the Purchase Agreement filed for chapter 11 bankruptcy protection on November 29, 2010. Pursuant to
the terms and conditions of the DIP Agreement, Fleetwood Homes agreed to provide up to $55.0
million for a debtor-in-possession credit facility to finance Palm Harbor’s reorganization under
chapter 11 of the U.S. Bankruptcy Code. The DIP loan facility bore interest at 7% per annum. Palm
Harbor Florida’s obligations under the DIP Agreement were secured by a first position lien on
substantially all of Palm Harbor Florida’s assets. The credit facility was partially used by Palm
Harbor Florida to extinguish its Textron Financial Corporation debt facility and to fund
post-petition operations, commitments to customers, and employee obligations.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">On April 23, 2011, the DIP credit facility was retired in conjunction with the closing of the
acquisition of Palm Harbor Florida, discussed further below.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 21 - us-gaap:BusinessCombinationDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt"><b>21. Acquisition of Palm Harbor Homes, Inc.</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><i>Description of the Acquisition. </i>Fleetwood Homes, through its wholly-owned subsidiary, Palm
Harbor Delaware, entered into the Purchase Agreement with Palm Harbor Florida to purchase
substantially all of the assets, and assume specified liabilities, of Palm Harbor Florida, pursuant
to an auction process under Section 363 of the U.S. Bankruptcy Code. On March 1, 2011, Palm Harbor
Delaware was selected as the successful bidder in the court auction. The transaction was approved
and a sale order entered by the U.S. Bankruptcy Court on March 4, 2011.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">During the first quarter of fiscal year 2012, Palm Harbor Delaware completed the purchase of
the Palm Harbor Florida assets and the assumption of specified liabilities pursuant to the Amended
and Restated Asset Purchase Agreement dated March 1, 2011. The effective date of the transaction
was April 23, 2011 (the “Acquisition Date”), except for Palm Harbor’s acquisition of the stock of
Standard Casualty Co., which occurred on June 10, 2011. The aggregate gross purchase price was
$83.9 million and is exclusive of transaction costs, specified liabilities assumed and post-closing
adjustments. Of the purchase price, (i) approximately $45.3 million was used to retire the
debtor-in-possession loan previously made by Fleetwood Homes to Palm Harbor Florida; and (ii) $13.4
million was deposited in escrow pending regulatory approval to transfer the stock of Standard
Casualty Co. to Acquisition Co., at which time the escrowed funds were released to the Palm Harbor
Florida estate. The purchase price was funded by Fleetwood Homes’ cash on hand, along with
contributions of $36.0 million each from the Company and Third Avenue (see Note 23).
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Palm Harbor Delaware acquired five operating manufactured housing production facilities, idled
factories in nine locations, 49 operating retail locations, one office building, real estate, all
related equipment, accounts receivable, customer deposits, inventory, certain trademarks and trade
names, intellectual property, and specified contracts and leases. In addition, as of the
Acquisition Date, Palm Harbor Delaware purchased all of the outstanding shares of CountryPlace
Acceptance Corp., CountryPlace Mortgage, Ltd. and their wholly-owned finance subsidiaries. Palm
Harbor Delaware also acquired all of the outstanding shares of Standard Insurance Agency, Inc. and
its wholly-owned insurance agency subsidiary. On June 7, 2011, regulatory approval of the
acquisition of Standard Casualty Co. was received from the Texas Department of Insurance and on
June 10, 2011 (the “SCC Acquisition Date”), Palm Harbor Delaware completed the purchase of Standard
Casualty Co. Further, Acquisition Co. assumed certain liabilities of Palm Harbor Florida,
including primarily debt facilities of the finance subsidiaries.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The foregoing descriptions of the DIP Agreement, DIP Security Agreement, and Purchase
Agreement do not purport to be complete and are qualified in their entirety by reference to the DIP
Agreement, the DIP Security Agreement, and the Purchase Agreement which were filed as Exhibits
10.1, 10.2, and 10.3, respectively, to the Company’s Current Report on Form 8-K filed with the SEC
on November 29, 2010.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The purchase of the Palm Harbor Florida assets provides further operating capacity, increased
home distribution, and entry into financial and insurance businesses specific to the Company’s
industry. The transaction further expanded the Company’s geographic reach at a national level by
adding factories and retail locations serving the Northwest, South Central, Southeast and
Mid-Atlantic regions. The Company believes it will have the opportunity to achieve certain
synergies and cost reductions by eliminating redundant processes and overhead.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><i>Acquisition Date Fair Value of Consideration Transferred. </i>The following table details the
Acquisition Date fair value of the consideration transferred to acquire Palm Harbor (in thousands),
of which $74.0 million was in cash:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="86%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Acquisition Date</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Fair Value</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cash advanced to Palm Harbor under DIP financing, credited to
purchase
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">44,117</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Paid-in-kind interest on DIP financing, credited to purchase price
</div></td>
<td> </td>
<td> </td>
<td align="right">1,184</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Additional cash consideration
</div></td>
<td> </td>
<td> </td>
<td align="right">29,917</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Amounts credited for customer deposits acquired at closing
</div></td>
<td> </td>
<td> </td>
<td align="right">8,682</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total consideration transferred
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">83,900</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><i>Recording of Assets Acquired and Liabilities Assumed. </i>The acquisition has been accounted
for using the acquisition method of accounting which requires, among other things, that assets
acquired and liabilities assumed be recognized at their fair values as of the acquisition date.
The following table summarizes the provisional amounts recognized for assets acquired and
liabilities assumed as of the Acquisition Date. Certain estimated values are not yet finalized
(see below) and are subject to change, which could be significant. The allocation of the purchase
price is still preliminary due to the short duration since the Acquisition Date and will be
finalized upon completion of the analysis of the fair values of Palm Harbor’s assets and specified
liabilities. The Company will finalize the amounts recognized as we obtain the information
necessary to complete the analysis. We expect to finalize these amounts as soon as possible but no
later than one year from the Acquisition Date.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The following table summarizes the provisional estimated fair values of the assets acquired
and liabilities assumed at the acquisition dates (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="58%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Initial</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Revised</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Estimate</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Adjustments (3)</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Estimate</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cash and cash equivalents
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">15,077</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">15,077</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Restricted cash
</div></td>
<td> </td>
<td> </td>
<td align="right">5,924</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,924</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Investments
</div></td>
<td> </td>
<td> </td>
<td align="right">16,636</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,636</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Accounts receivable (1)
</div></td>
<td> </td>
<td> </td>
<td align="right">3,219</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,219</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Inventories
</div></td>
<td> </td>
<td> </td>
<td align="right">42,034</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,195</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">47,229</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Prepaid expenses and other assets
</div></td>
<td> </td>
<td> </td>
<td align="right">2,781</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,781</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Property, plant and equipment
</div></td>
<td> </td>
<td> </td>
<td align="right">13,782</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13,782</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Assets held for sale
</div></td>
<td> </td>
<td> </td>
<td align="right">9,278</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,278</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Consumer loans receivable
</div></td>
<td> </td>
<td> </td>
<td align="right">126,030</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">126,030</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Deferred income tax assets
</div></td>
<td> </td>
<td> </td>
<td align="right">14,532</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14,532</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Intangible assets (2)
</div></td>
<td> </td>
<td> </td>
<td align="right">15,294</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15,294</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total identifiable assets acquired
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">264,587</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,195</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">269,782</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Accounts payable of the finance
subsidiaries
</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,917</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,917</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Accrued liabilities
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(27,503</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(27,503</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Construction lending line
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,974</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,974</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Securitized financings
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(101,786</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(101,786</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Debt of the finance subsidiaries
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(19,456</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(19,456</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Deferred income tax liabilities
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(7,271</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,966</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9,237</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total liabilities assumed
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(161,907</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,966</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(163,873</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net identifiable assets acquired
</div></td>
<td> </td>
<td> </td>
<td align="right">102,680</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,229</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">105,909</td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Bargain purchase recognized
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(18,780</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,229</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(22,009</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Net assets acquired
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">83,900</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">83,900</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr style="font-size: 6pt">
<td width="3%"> </td>
<td width="1%"> </td>
<td width="96%"> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top">(1)</sup></td>
<td> </td>
<td>The fair value of accounts receivables acquired is $3,219, with the gross
contractual amount being $3,601. The Company determined that $382 would be uncollectible.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top">(2)</sup></td>
<td> </td>
<td>Of the $15,294 of acquired intangible assets, $5,450 was assigned to trademarks
and trade names and $1,100 was assigned to state insurance licenses, which are considered
indefinite-lived intangible assets and are not subject to amortization and $8,744 was
assigned to customer-related intangibles, technology and insurance business in force,
policies and renewal rights, subject to a weighted-average useful life of approximately 5
years.</td>
</tr>
<tr style="font-size: 3pt">
<td> </td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top">(3)</sup></td>
<td> </td>
<td>Accounting standards require that when the fair value of the net assets acquired
exceeds the purchase price, resulting in a bargain purchase gain, the acquirer must
reassess the reasonableness of the values assigned to all of the net assets acquired,
liabilities assumed and consideration transferred. The Company has performed such a
reassessment and has concluded that the values assigned for the Palm Harbor acquisition are
reasonable. In the first quarter ended June 30, 2011, the Company originally reported a
gain of $18.8 million which has been retrospectively adjusted to $22.0 million as reflected
in the table above, representing a $0.23 increase in first quarter and year-to-date basic and diluted earnings per share. The increase in the gain is the result of a $5.2 million revision to the
value of retail finished goods. The gain on bargain purchase was not taxable, causing a variation in the customary relationship between income before income taxes and income tax expense for the six month period ended September 30, 2011.</td>
</tr>
</table>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">In connection with the acquisition of Palm Harbor, approximately $30 million was transferred
from Fleetwood Homes to the Palm Harbor Florida estate at closing of the Palm Harbor transaction on
April 23, 2011 and $19.5 million was used to retire a certain debt obligation of the Company’s new
subsidiary, CountryPlace, on May 10, 2011 (including payoff of the loan,
prepayment penalty and related legal fees).
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">During the three and six months ended September 30, 2011, the Company recognized
acquisition-related costs of $120,000 and $864,000, respectively. These costs were expensed as
incurred. During the year ended March 31, 2011, the Company recognized $272,000 of
acquisition-related costs. These costs were recognized in selling, general and administrative
expenses on the Consolidated Statement of Operations. We anticipate additional acquisition-related
costs in fiscal year ended March 31, 2012 related to the purchase of the Palm Harbor assets.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Because the Company purchased Palm Harbor out of bankruptcy, the fair value of identifiable
assets acquired and specified liabilities assumed exceeded the fair value of the consideration
transferred. In accordance with ASC 805, <i>Business Combinations, </i>the Company consequently
reassessed the recognition and measurement of identifiable assets acquired and specified
liabilities assumed and concluded that the valuation procedures and resulting measures were
appropriate. As a result, the Company recognized a gain on bargain purchase of $22.0 million in
its consolidated statements of operations for the six months ended September 30, 2011.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The recorded amounts are provisional and subject to change primarily as follows:
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>Amounts for inventory and property and equipment are pending completion of certain
confirmation of physical existence, condition and valuation efforts.</td>
</tr>
</table>
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>Amounts for intangibles, property held for sale, consumer loans receivable, securitized
financing obligation, deferred income taxes and accrued liabilities are pending finalization
of valuation efforts.</td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">A single estimate of fair value results from a complex series of judgments about future events
and uncertainties and relies heavily on estimates and assumptions. Judgments used to determine the
estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as
asset lives, can materially impact results of operations.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">For the three months ended September 30, 2011, Palm Harbor contributed net sales of $79.9
million and net income of $1.6 million. For
the period from the acquisition dates through September 30, 2011, the amounts included in the
Company’s consolidated statement of operations were $132.9 million in net sales and net income of
$22.4 million, which included $22.0 million related to gain on bargain purchase.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><i>Pro Forma Impact of Acquisition (unaudited). </i>The following table presents supplemental
pro forma information as if the acquisition of Palm Harbor had occurred on April 1, 2010 (in
thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14">Unaudited Pro Forma</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000">Consolidated Results</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Three Months Ended</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Six Months Ended</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">September 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">September 30,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff; padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Revenues
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">130,008</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">117,478</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">243,490</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">241,713</td>
<td> </td>
</tr>
<tr valign="bottom" style="padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Net income (loss) attributable to Cavco common stockholders
</div></td>
<td> </td>
<td> </td>
<td align="right">2,299</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(238</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">716</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,215</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff; padding-top: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px">Diluted net income (loss) per share attributable
to Cavco common stockholders
</div></td>
<td> </td>
<td> </td>
<td align="right">0.33</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(0.04</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">0.10</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.51</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<!-- Folio -->
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</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The unaudited pro forma consolidated results were prepared using the acquisition method of
accounting and are based on the historical financial information of Cavco and Palm Harbor,
reflecting both Cavco and Palm Harbor results of operations for the three and six months ended
September 30, 2011 and 2010, respectively. The historical financial information has been adjusted
to give effect to the pro forma events that are: (i) directly attributable to the acquisition; (ii)
factually supportable; and (iii) expected to have a continuing impact on the combined results. The
unaudited pro forma consolidated results are not necessarily indicative of what our consolidated
results of operations actually would have been had we completed the acquisition on April 1, 2010.
In addition, the unaudited pro forma consolidated results do not purport to project the future
results of operations of the combined company nor do they reflect the expected realization of any
cost savings associated with the acquisition, including the elimination of overhead costs. The
results reflect primarily the following pro forma pre-tax adjustments:
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>Reclassification of amounts to conform to Cavco’s accounting policies resulted in no
impact to net income/(loss). Classification of income statement amounts were not impacted
for the three months ended September 30, 2011. For the six months ended September 30, 2011,
net sales were grossed up by $1.2 million, cost of sales were grossed up by $1.1 million,
SG&A decreased by $428,000, interest expense increased by $44,000, and other income
decreased by $445,000. For the three months ended September 30, 2010, net sales were grossed
up by $5.4 million, cost of sales were grossed up by $5.5 million, SG&A decreased by $1.1
million, interest expense increased by $174,000, and other income decreased by $931,000. For
the six months ended September 30, 2010, net sales were grossed up by $10.5 million, cost of
sales were grossed up by $9.5 million, SG&A decreased by $786,000, interest expense
increased by $336,000, and other income decreased by $1.5 million.</td>
</tr>
</table>
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>Reclassification of amounts to conform to Cavco’s accounting policies for revenue
recognition in the retail sales process, resulting in the reclassification of net sales and
cost of sales among periods. These revenue recognition adjustments resulted in decreases of
net sales and cost of sales of $203,000 and $166,000 for the six months ended September 30,
2011 and increases of $8.0 million and $5.2 million of net sales and cost of sales for the
six months ended September 30, 2010, net of adjustments for amounts deferred under Cavco’s
revenue recognition policy.</td>
</tr>
</table>
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>Elimination of Palm Harbor’s historical interest expense related to Senior Convertible
Notes discharged in bankruptcy, a note payable settled prior to the bankruptcy and a credit
agreement that has been terminated and will not be a part of the Company’s capitalization
going forward. ($239,000 and $4.9 million in the six months ended September 30, 2011 and
2010, respectively).</td>
</tr>
</table>
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>Elimination of $1.9 million of costs incurred and $187,000 of interest income in the six
months ended September 30, 2011. These are directly attributable to the bankruptcy and
subsequent acquisition, and which do not have a continuing impact on the combined company’s
operating results. Included in these costs are advisory, legal and regulatory costs incurred
by both legacy Cavco and legacy Palm Harbor and income and costs related to the
debtor-in-possession financing that has been terminated.</td>
</tr>
</table>
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>Additional amortization expense (approximately $111,000 and $1.7 million for the six
months ended September 30, 2011 and 2010, respectively) related to the fair value of
identifiable intangible assets acquired.</td>
</tr>
</table>
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>Reduction in depreciation expense (approximately $269,000 and $943,000
for the six months ended September 30, 2011 and 2010, respectively)
related to the fair value adjustment to property, plant and equipment
acquired.</td>
</tr>
</table>
</div>
<div style="margin-top: 10pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="4%" style="background: transparent"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>Elimination of operating activities related to closed manufacturing
facilities and retail locations that (i) were not purchased in the
transaction or (ii) are held for sale as of the Date of Acquisition.
The amounts eliminated included sales of $2.7 million and $19.6
million, cost of sales of $1.3 million and $17.9 million, and SG&A of
$558,000 and $6.5 million for the six months ended September 30, 2011
and 2010, respectively.</td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">In addition, all of the above adjustments were adjusted for the applicable tax impact.
</div>
</div>
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<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt"><b>22. Redeemable Noncontrolling Interest</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><i>Redeemable Noncontrolling Interest. </i>During fiscal year 2010, the Company and an investment
partner, Third Avenue formed Fleetwood Homes, Inc., with an initial contribution of $35.0 million
each for equal fifty-percent ownership interests. On July 21, 2009, Fleetwood Homes entered into an
asset purchase agreement with Fleetwood Enterprises, Inc. and certain of its subsidiaries to
purchase certain assets and liabilities of its manufactured housing business.
</div>
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</div>
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<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Company and Third Avenue subsequently contributed $36.0 million each in anticipation of
the purchase of Palm Harbor, which was completed during the first quarter of fiscal year 2012. See
Notes 21 and 23 for further information.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The results of the Fleetwood Homes and Palm Harbor operations have been included in the
Consolidated Financial Statements and the related Notes since the respective acquisition dates in
accordance with the provisions of ASC 810. Management has determined that, under GAAP, although
Fleetwood Homes is only fifty-percent owned by the Company, Cavco has a controlling interest and is
required to fully consolidate the results of Fleetwood Homes. The primary factors that contributed
to this determination were Cavco’s board and management control of Fleetwood Homes. To that end,
members of Cavco’s management hold all of the seats on the board of directors of Fleetwood Homes.
In addition, as part of a management services agreement among Cavco, Fleetwood Homes and Third
Avenue, Cavco provides all executive-level management services to Fleetwood Homes including, among
other things, general management oversight, marketing and customer relations, accounting and cash
management. Third Avenue’s financial interest in Fleetwood Homes is considered a “redeemable
noncontrolling interest,” and is designated as such in the Consolidated Financial Statements.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"><i>Temporary Equity Classification. </i>ASC 480, <i>Distinguishing Liabilities from Equity, </i>includes
guidance regarding the classification and measurement of redeemable securities, including a
requirement that equity instruments that are not required to be classified as liabilities be
classified as temporary equity and outside of permanent equity if they are redeemable (i) at a
fixed or determinable price on a fixed or determinable date, (ii) at the option of the holder, or
(iii) upon the occurrence of an event that is not solely within the control of the issuer.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">In accordance with the Shareholder Agreement entered into among Fleetwood Homes and its
shareholders (Cavco and Third Avenue), as amended on November 30, 2010 (the “Shareholder
Agreement”), after the fifth anniversary of the Fleetwood Acquisition Date, (i.e. after August 17,
2014), or at any time after Fleetwood Homes has earned net income of at least $10.0 million in each
of its two most recently completed consecutive fiscal years, Third Avenue has the right (“Put
Right”) to require Cavco to purchase all of Third Avenue’s shares of Fleetwood Homes common stock
for an amount based upon a calculation that is designed to approximate fair value. Likewise, Cavco
has the right (“Call Right”) to require Third Avenue to sell all of its shares of Fleetwood Homes
common stock based on the same timing and calculation as described above for the Put Right. The
conditions for the Put Right or Call Right to become exercisable have not been met as of September
30, 2011.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The purchase price to be payable by Cavco for the purchase of Third Avenue’s shares pursuant
to the exercise of the Put Right or the Call Right may be settled in cash or shares of common stock
of Cavco. However, the circumstances under which net share settlement would be allowed are not
solely within the control of Cavco. The availability of net share settlement is dependent upon a
number of factors. For example, at the time of such purchase, Cavco’s common stock must be listed
on either the NASDAQ or the New York Stock Exchange. In the case of Third Avenue’s exercise of its
Put Right, Cavco may elect to pay all or a portion of such purchase price in the form of shares of
common stock of Cavco. In the case of Cavco’s exercise of its Call Right, Third Avenue may elect to
receive all or a portion of such purchase price in the form of shares of common stock of Cavco. In
addition, net share settlement would not be available if it were to lead to a change of control of
Cavco. If either Cavco or Third Avenue makes such election, the shares of Cavco common stock to be
issued to Third Avenue would be valued based on the average closing price of Cavco’s common stock
for the sixty most recent trading days. There is no explicit cap on the maximum number of common
shares that could be potentially issuable upon redemption; therefore, Third Avenue’s noncontrolling
interest in Fleetwood Homes is classified as a temporary equity mezzanine item between liabilities
and stockholders’ equity.
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The carrying amount is subject to adjustment, after attribution of net income or loss of
Fleetwood Homes, if there are changes in the redemption value at the end of the reporting period.
For the period since the Fleetwood Acquisition Date through September 30, 2011, the Company
determined that the potential redemption value of the redeemable noncontrolling interest did not
exceed its carrying value and no adjustment was needed.
</div>
<!-- Folio -->
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</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
</div>
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<!-- Begin Block Tagged Note 23 - cvco:ConvertibleNotePayableTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt"><b>23. Convertible Note Payable</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">On December 1, 2010, the Company and Third Avenue entered into separate convertible note
payable agreements with their subsidiary, Fleetwood Homes, for $14.0 million each, convertible to
200 shares of
Fleetwood Homes, Inc. common stock at the successful close of the contemplated Palm Harbor
transaction. The convertible notes were subsequently increased by $22.0 million each, convertible
to an additional 314.28 shares, for a total of $36.0 million per note in the fourth quarter of
2011, convertible to 514.28 shares. The convertible notes bore interest of 2.5% per annum.
Concurrent with the successful completion of the acquisition of Palm Harbor Florida, all
outstanding convertible notes were converted to shares of Fleetwood Homes, Inc. on April 23, 2011
and redeemable noncontrolling interest increased by $36.0 million. Any right to interest income was
forfeited by the note holders upon conversion in accordance with the terms of the agreements.
</div>
</div>
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<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt"><b>24. Related Party Transactions</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">At September 30, 2011, Third Avenue Management LLC beneficially owned approximately 12.1% of
Cavco Industries, Inc. outstanding common shares and thus meets the definition of a principal owner
under FASB ASC 850, <i>Related Party Disclosures </i>(“ASC 850”). Third Avenue Management LLC and Third
Avenue are either directly or indirectly under common control. Third Avenue’s participation in
ownership of Fleetwood Homes, the Fleetwood Homes transaction, convertible note payable, and the
subsequent Palm Harbor acquisition are therefore considered related party transactions in
accordance with ASC 850.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
</div>
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<!-- Begin Block Tagged Note 25 - us-gaap:SegmentReportingDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">
<div align="left" style="font-size: 10pt; margin-top: 10pt"><b>25. Business Segment Information</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Company operates principally in two segments: (1) factory-built housing, which includes
manufactured housing, modular housing and retail operations and (2) financial services, which
includes finance and insurance. The following table details net sales and (loss) income from
operations by segment for the three and six months ended September 30, 2011 and 2010 (in
thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="44%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Three Months Ended</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6">Six Months Ended</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">September 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">September 30,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2010</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Net sales:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Factory-built housing
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">119,686</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">45,888</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">212,526</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">93,393</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Financial services
</div></td>
<td> </td>
<td> </td>
<td align="right">10,322</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,463</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">130,008</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">45,888</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">228,989</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">93,393</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Income before income
taxes:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Factory-built housing
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">4,726</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,239</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,578</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,465</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Financial services
</div></td>
<td> </td>
<td> </td>
<td align="right">2,518</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,640</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">General corporate
charges
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,265</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,283</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,170</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,124</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Gain on bargain
purchase
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,009</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">4,979</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,956</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">25,057</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,341</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="72%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="9%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">As of</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">September 30,</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">March 31,</td>
<td> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total assets:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Factory-built housing
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">241,167</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">192,866</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Financial services
</div></td>
<td> </td>
<td> </td>
<td align="right">156,461</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Corporate
</div></td>
<td> </td>
<td> </td>
<td align="right">35,260</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">76,576</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:30px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">432,888</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">269,442</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>