Exhibit 99.1

Shea Homes Reports Second Quarter 2012 Results

Walnut, Calif., August 10, 2012

Shea Homes, one of America’s largest private homebuilders, recently reported results for the second quarter ended June 30, 2012.

Three Months Ended 6/30/12 Highlights, Commentary and Comparisons to Three Months Ended 6/30/11

• Total revenues were $132.5 million compared to $114.9 million, a 15% increase.

• Total gross margin was 18.5% compared to 8.8%, a 110% increase. There were no inventory impairments in 2012 compared to $9.7 million, or 8% of revenues, in 2011.

• Home sales were 587 compared to 410, a 43% increase. Active selling communities averaged 63 and 79 in the first quarter of 2012 and 2011, respectively.

• Home sales per community were 9.3 homes or 3.1 per month in 2012 compared to 5.2 homes or 1.7 per month in 2011, a 79% increase.

• Cancellation rate was 14% compared to 18%.

• Homes closed were 307 compared to 273, a 12% increase.

• House revenues were $127.1 million* compared to $111.1 million*, a 14% increase.

• Average selling price of homes closed was $414,000 compared to $407,000, a 2% increase primarily attributable to price increases in several communities in our Northern California and South West segments and a shift to higher-priced homes in our Southern California and Northern California segments.

• House gross margin was 19.5%* compared to 17.5%*, an 11% increase primarily attributable to the aforementioned increase in average selling price of homes closed.

• SG&A expense was $21.8 million compared to $19.4 million and primarily attributable to higher direct selling costs associated with higher house revenues, higher legal expenses associated with our tax court case on our use of the completed contract method and increased incentive compensation costs, offset by a decrease in model home amortization costs. As a percentage of revenue, SG&A expense was 16.4% compared to 16.9% in 2011.

• Other (expense) income, net was $(8.4) million compared to $0.8 million and was primarily attributable to an $8.2 million loss in the current quarter on an actuarial adjustment to our ultimate loss estimate to be paid on completed operations policies that were reinsured in 2009. However, the estimated ultimate loss under these policies at this time does not exceed the policy limits reinsured.

• Net loss attributable to Shea Homes was $12.1 million compared to $101.1 million. The loss in 2011 was primarily attributable to an $88.3 million loss on debt extinguishment in May 2011. In addition, in 2012 we experienced a $14.4 million improvement in gross margin, offset by the $8.2 million loss on the aforementioned actuarial adjustment, $1.5 million increased interest expense (due to fewer assets qualifying for interest capitalization), $2.3 million increased SG&A expense and $1.5 million increased income tax expense.

• Interest incurred was $16.7 million compared to $17.6 million primarily attributable to a lower effective interest rate associated with our $750.0 million senior secured notes issued in May 2011 (8.9%) compared to our previously outstanding indebtedness (10.6%) which was restructured in November 2010 and included higher yield subordinated debt, loan restructuring fees and amortization of loan discounts. Interest expense was $5.9 million compared to $4.4 million, a 35% increase due to fewer assets qualifying for interest capitalization.

• Cash, restricted cash and investments at June 30, 2012 was $283.8 million compared to $314.5 million at December 31, 2011, primarily from direct construction costs and land acquisitions (see Condensed Consolidated Statements of Cash Flows on page 6).

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• Backlog units at June 30, 2012 were 1,002 compared to 745 at June 30, 2011, a 34% increase.

• Backlog sales value was $392.5 million at June 30, 2012 compared to $318.5 million at June 30, 2011, a 23% increase.

• Backlog average selling price was $392,000 at June 30, 2012 compared to $427,000 at June 30, 2011, an 8% decrease.

Bert Selva, President and CEO, stated: “We continued to experience strong results in the second quarter of 2012 compared to 2011, including a 43% increase in new home orders and a 79% increase in new home orders per community. In addition, house closings and revenues were up 12% and 14%, respectively, and house gross margins improved 114 basis points to 18.3% for the quarter. We’ve also experienced a consistent flow of well-qualified new homebuyer traffic in all of our markets, which has resulted in our backlog growing to 1,002 homes, up 34% over last year.”

Six Months Ended 6/30/12 Highlights, Commentary and Comparisons to Six Months Ended 6/30/11

• Total revenues were $238.1 million compared to $189.0 million, a 26% increase.

• Total gross margin was 18.9% compared to 10.9%, a 73% increase. There were no inventory impairments in 2012 compared to $10.3 million, or 5% of revenues, in 2011.

• Home sales were 1,086 compared to 756, a 44% increase. Active selling communities averaged 67 and 77 in 2012 and 2011, respectively.

• Home sales per community were 16.2 homes or 2.7 per month in 2012 compared to 9.8 homes or 1.6 per month in 2011, a 65% increase.

• Cancellation rate was 14% compared to 18%.

• Homes closed were 545 compared to 455, a 20% increase.

• House revenues were $228.0 million* compared to $182.3 million*, a 25% increase.

• Average selling price of homes closed was $418,000 compared to $401,000, a 4% increase primarily attributable to price increases in several communities in our Northern California and South West segments and a shift to higher-priced homes in our Southern California, Mountain West and South West segments.

• House gross margin was 20.1%* compared to 17.7%*, a 14% increase primarily attributable to the aforementioned increase in average selling price of homes closed.

• SG&A expense was $39.4 million compared to $35.9 million and primarily attributable to higher direct selling costs associated with higher house revenues, higher legal expenses associated with our tax court case on our use of the completed contract method and increased incentive compensation costs, offset by a decrease in model home amortization costs. As a percentage of revenue, SG&A expense was 16.5% compared to 19.0% in 2011.

• Other (expense) income, net was $(6.1) million compared to $2.4 million and was primarily attributable to a $7.4 million loss in the current year on an actuarial adjustment related to our ultimate loss estimate to be paid on completed operations policies that were reinsured in 2009. However, the estimated ultimate loss under these policies at this time does not exceed the policy limits reinsured.

• Net loss attributable to Shea Homes was $12.5 million compared to $109.4 million. The loss in 2011 was primarily attributable to an $88.3 million loss on debt extinguishment in May 2011. In addition, in 2012 we experienced a $24.4 million improvement in gross margin, offset by the $7.4 million loss on the aforementioned actuarial adjustment, $3.9 million increased interest expense (due to fewer assets qualifying for interest capitalization), $3.5 million increased SG&A expense and $1.1 million increased income tax expense.

• Interest incurred was $33.3 million compared to $37.2 million and primarily attributable to a lower effective interest rate associated with our $750.0 million senior secured notes issued in May 2011 (8.9%) compared to our previously outstanding indebtedness (10.5%) which was restructured in November 2010 and included higher yield subordinated debt, loan restructuring fees and amortization of loan discounts. Interest expense was $12.2 million compared to $8.3 million, a 46% increase due to fewer assets qualifying for interest capitalization.

* See “Reconciliation of Non-GAAP Financial Measures” beginning on page 9.

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About Shea Homes

Shea Homes is one of the largest private homebuilders in the nation. Since its founding in 1968, Shea Homes has closed in excess of 88,000 homes. Shea Homes builds homes with quality craftsmanship and designs that best fit varied lifestyles and budgets. Over the past several years, Shea Homes has been recognized as a leader in customer satisfaction with a reputation for design, quality and service. For more about Shea Homes and its communities, visit www.sheahomes.com.

The preceding summary of the financial results of Shea Homes Limited Partnership and its subsidiaries does not purport to be complete and is qualified in its entirety by reference to the consolidated financial statements of Shea Homes Limited Partnership and its subsidiaries, available on our website at: http://www.sheahomes.com/investor

This news release contains forward-looking statements and information relating to Shea Homes Limited Partnership and its subsidiaries that are based on the beliefs of, as well as assumptions made by, and information currently available to, our management. When used in this document, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan” and “project” and similar expressions, as they relate to Shea Homes Limited Partnership and its subsidiaries are intended to identify forward-looking statements. These statements reflect our management’s current views with respect to future events, are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Further, certain forward-looking statements are based upon assumptions of future events that may not prove to be accurate. Such statements involve known and unknown risks, uncertainties, assumptions and other factors many of which are out of Shea Homes Limited Partnership’s and its subsidiaries’ control and difficult to forecast that may cause actual results to differ materially from those that may be described or implied. Such factors include but are not limited to: changes in employment levels; changes in the availability of financing for homebuyers; changes in interest rates; changes in consumer confidence; changes in levels of new and existing homes for sale; changes in demographic trends; changes in housing demands; changes in home prices; elimination or reduction of the tax benefits associated with owning a home; litigation risks associated with home warranty and construction defect and other claims; and various other factors, both referenced and not referenced above. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results, performance or achievements may vary materially from those described as anticipated, believed, estimated, expected, intended, planned or projected. Except as required by law, Shea Homes Limited Partnership and its subsidiaries neither intend nor assume any obligation to revise or update these forward-looking statements, which speak only as of their dates. Shea Homes Limited Partnership and its subsidiaries nonetheless reserve the right to make such updates from time to time by press release, periodic report or other method of public disclosure without the need for specific reference to this press release. No such update shall be deemed to indicate that other statements not addressed by such update remain correct or create an obligation to provide any other updates.

Contact: Bruce Varker, CFO @ 909-594-9500 or bruce.varker@sheahomes.com

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KEY OPERATIONAL AND FINANCIAL DATA

(dollars in thousands)

	At or For the Three Months Ended June 30,									At or For the Six Months ended June 30,
	2012			2011			% Change			2012			2011			% Change
	(unaudited)			(unaudited)						(unaudited)			(unaudited)
Operating Data:
Total revenues	$	132,468		$	114,934			15	%	$	238,071		$	188,993			26	%
Total gross margin %		18.5	%		8.8	%		110	%		18.9	%		10.9	%		73	%
Homebuilding revenues (a) *	$	132,218		$	114,666			15	%	$	237,578		$	188,468			26	%
Homebuilding gross margin % (a) *		18.3	%		8.6	%		113	%		18.8	%		10.7	%		75	%
House revenues *	$	127,108		$	111,149			14	%	$	228,016		$	182,317			25	%
House gross margin % *		19.5	%		17.5	%		11	%		20.1	%		17.7	%		14	%
Adjusted house gross margin % excluding interest in cost of sales *		26.6	%		24.6	%		8	%		27.4	%		25.3	%		8	%
Inventory impairment	$	—		$	9,684			-100	%	$	—		$	10,302			-100	%
SG&A expense	$	21,772		$	19,435			12	%	$	39,375		$	35,876			10	%
SG&A % of total revenue		16.4	%		16.9	%		-3	%		16.5	%		19.0	%		-13	%
Net loss attributable to Shea Homes	$	(12,101	)	$	(101,105	)		-88	%	$	(12,512	)	$	(109,394	)		-89	%
Adjusted EBITDA (b) *	$	14,766		$	12,410			19	%	$	29,325		$	15,940			84	%
Interest incurred	$	16,660		$	17,582			-5	%	$	33,320		$	37,244			-11	%
Interest capitalized to inventory	$	10,550		$	12,862			-18	%	$	20,745		$	28,133			-26	%
Interest expense	$	5,909		$	4,375			35	%	$	12,197		$	8,326			46	%
Interest in cost of sales (c)	$	10,074		$	8,342			21	%	$	17,858		$	14,150			26	%
Other Data (d):
Home sales orders (units)		587			410			43	%		1,086			756			44	%
Homes closed (units)		307			273			12	%		545			455			20	%
Average selling price	$	414		$	407			2	%	$	418		$	401			4	%
Average active selling communities		63			79			-20	%		67			77			-13	%
Home sales orders per community		9.3			5.2			79	%		16.2			9.8			65	%
Cancellation rate		14	%		18	%		-22	%		14	%		18	%		-22	%
Backlog at end of period (units)		1,002			745			34	%		1,002			745			34	%
Backlog at end of period (sales value)	$	392,463		$	318,471			23	%	$	392,463		$	318,471			23	%
Lots owned or controlled (units)		17,573			17,661			0	%		17,573			17,661			0	%
Homes under construction (units) (e)		858			774			11	%		858			774			11	%

(a) Homebuilding revenue and gross margin include house, land and other homebuilding activities.

(b) EBITDA is adjusted for non-recurring items of (1) professional fees related to debt issuance costs, modifications and waivers, (2) loss on debt extinguishment, (3) deposit write-offs and impairment losses on real estate assets, investments in joint ventures and non-controlling interest, (4) realized (gains) losses on sales of marketable securities and other than temporary impairments on marketable securities, and (5) restructuring costs, primarily severance. Other companies may calculate Adjusted EBITDA differently. Adjusted EBITDA information, as presented, is useful as a measure of the ability to service debt and obtain financing; however, it is not a U.S. generally accepted accounting principle (“GAAP”) financial measure and should not be considered in isolation or as an alternative to operating performance or other liquidity measures prescribed by GAAP.

(c) As previously capitalized to house and land.

(d) Represents consolidated activity only; excludes unconsolidated joint ventures.

(e) Homes under construction includes completed homes.

* See “Reconciliation of Non-GAAP Financial Measures” beginning on page 9.

	June 30, 2012		December 31, 2011		% Change
	(unaudited)
Balance Sheet Data:
Cash and cash equivalents, restricted cash and investments	$	283,821	$	314,512		-10	%
Inventory and investments in joint ventures		812,793		801,680		1	%
Total assets		1,285,942		1,328,116		-3	%
Notes payable		751,700		752,056		0	%
Total equity		278,069		328,003		-15	%

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CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

	June 30,		December 31,
	2012		2011
	(unaudited)
Assets
Cash and cash equivalents	$	240,937	$	268,366
Restricted cash		13,859		13,718
Investments		29,025		32,428
Accounts and other receivables, net		127,488		120,689
Receivables from related parties, net		33,462		60,223
Inventory		794,761		783,810
Investments in joint ventures		18,032		17,870
Other assets, net		28,378		31,012
Total assets	$	1,285,942	$	1,328,116
Liabilities and equity
Liabilities:
Notes payable	$	751,700	$	752,056
Other liabilities		256,173		248,057
Total liabilities		1,007,873		1,000,113
Total equity		278,069		328,003
Total liabilities and equity	$	1,285,942	$	1,328,116

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2012			2011			2012			2011
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenues	$	132,468		$	114,934		$	238,071		$	188,993
Cost of sales		(107,978	)		(104,856	)		(193,013	)		(168,302	)
Gross margin		24,490			10,078			45,058			20,691
Selling, general and administrative expenses		(21,772	)		(19,435	)		(39,375	)		(35,876	)
Loss on debt extinguishment		—			(88,384	)		—			(88,384	)
Interest and other expense, net		(13,990	)		(3,691	)		(17,905	)		(6,404	)
Loss before income taxes		(11,272	)		(101,432	)		(12,222	)		(109,973	)
Income tax (expense) benefit		(848	)		676			(96	)		1,017
Net loss		(12,120	)		(100,756	)		(12,318	)		(108,956	)
Less: Net (income) loss attributable to non-controlling interests		19			(349	)		(194	)		(438	)
Net loss attributable to Shea Homes	$	(12,101	)	$	(101,105	)	$	(12,512	)	$	(109,394	)

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2012			2011			2012			2011
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Operating activities
Net loss	$	(12,120	)	$	(100,756	)	$	(12,318	)	$	(108,956	)
Adjustments to reconcile net loss to net cash used in operating activities:
Loss on debt extinguishment		—			88,384			—			88,384
Depreciation and amortization expense		1,509			2,942			3,321			4,489
Impairment of inventory		—			9,684			—			10,302
Other operating activities, net		(17	)		128			216			(58	)
Changes in operating assets and liabilities:
Inventory		(24,634	)		(17,648	)		(28,542	)		(48,224	)
Payables and other liabilities		5,366			18,019			8,606			15,987
Other operating assets		(13,494	)		(7,091	)		(4,913	)		(6,432	)
Net cash used in operating activities		(43,390	)		(6,338	)		(33,630	)		(44,508	)
Investing activities
Proceeds from sale of available-for-sale investments		5,009			601			5,212			895
Net proceeds from promissory notes from related parties		1,951			90,414			1,843			101,741
Other investing activities, net		(518	)		(8,111	)		(1,034	)		(8,797	)
Net cash provided by investing activities		6,442			82,904			6,021			93,839
Financing activities
Net decrease in debt		(452	)		(29,996	)		(1,053	)		(51,283	)
Amortization of notes payable discount		—			3,569			—			7,366
Other financing activities, net		(1	)		2,550			1,233			3,828
Net cash (used in) provided by financing activities		(453	)		(23,877	)		180			(40,089	)
Net (decrease) increase in cash and cash equivalents		(37,401	)		52,689			(27,429	)		9,242
Cash and cash equivalents at beginning of period		278,338			123,427			268,366			166,874
Cash and cash equivalents at end of period	$	240,937		$	176,116		$	240,937		$	176,116

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SEGMENT OPERATING DATA

(dollars in thousands)

(unaudited)

	Three Months Ended June 30,								Six Months Ended June 30,
	2012				2011				2012				2011
	Homes Closed		Avg. Selling Price		Homes Closed		Avg. Selling Price		Homes Closed		Avg. Selling Price		Homes Closed		Avg. Selling Price
Homes closed:
Southern California		64	$	470		63	$	410		111	$	481		102	$	447
San Diego		19		533		26		543		46		527		37		536
Northern California		58		521		53		495		115		488		87		483
Mountain West		64		444		46		462		102		451		73		439
South West		95		280		80		282		160		287		147		276
Other		7		226		5		234		11		217		9		251
Total consolidated		307	$	414		273	$	407		545	$	418		455	$	401
Unconsolidated joint ventures		37		298		29		283		57		302		49		306
Total		344	$	402		302	$	395		602	$	407		504	$	391
	Three Months Ended June 30,								Six Months Ended June 30,
	2012				2011				2012				2011
	Home Sales Orders		Avg. Active Selling Communities		Home Sales Orders		Avg. Active Selling Communities		Home Sales Orders		Avg. Active Selling Communities		Home Sales Orders		Avg. Active Selling Communities
Home sales orders:
Southern California		88		7		87		13		158		8		167		12
San Diego		57		9		49		10		110		10		89		10
Northern California		115		15		62		15		236		16		104		13
Mountain West		121		13		80		13		210		13		138		13
South West		194		16		122		25		348		17		242		26
Other		12		3		10		3		24		3		16		3
Total consolidated		587		63		410		79		1,086		67		756		77
Unconsolidated joint ventures		63		10		24		14		106		11		63		13
Total		650		73		434		93		1,192		78		819		90

	At June 30,
	2012				2011
	Backlog Units		Backlog Sales Value		Backlog Units		Backlog Sales Value
Backlog:
Southern California		106	$	58,862		156	$	90,567
San Diego		103		41,266		94		47,891
Northern California		226		104,810		116		57,992
Mountain West		203		89,167		124		54,313
South West		340		92,717		242		64,988
Other		24		5,641		13		2,720
Total consolidated		1,002	$	392,463		745	$	318,471
Unconsolidated joint ventures		83		26,947		36		12,258
Total		1,085	$	419,410		781	$	330,729

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SEGMENT OPERATING DATA (continued)

(unaudited)

	At June 30,
	2012		2011
Lots owned or controlled:
Southern California		1,133		1,288
San Diego		713		908
Northern California		3,963		3,673
Mountain West		9,900		10,083
South West		1,819		1,635
Other		45		74
Total consolidated		17,573		17,661
Unconsolidated joint ventures		1,919		6,107
Total		19,492		23,768
Lots by ownership type:
Lots owned		9,753		10,480
Lots optioned or subject to contract		7,820		7,181
Joint venture lots		1,919		6,107
Total		19,492		23,768

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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(in thousands)

(unaudited)

In this earnings release, we utilize certain financial measures and ratios, including Adjusted EBITDA, that in each case are not recognized under GAAP. These measures are presented as we believe they and similar measures are widely used as a means of evaluating a company’s operating performance and financing structure and, in certain cases, because those measures could be used to determine compliance with contractual covenants. These measures are useful because they eliminate from our operating results the impact of certain non-recurring income and expense items, which may facilitate comparability. They may not be comparable to other similarly titled measures of other companies and are not measurements under GAAP, nor should they be considered a substitute for, or superior to, financial measures prepared in accordance with GAAP.

The following reconciles revenues, cost of sales and gross margins, as reported, to adjusted revenues, cost of sales and gross margins, which excludes impairment charges, interest in cost of sales, land sales and other transactions:

	Three Months Ended June 30, 2012												Three Months Ended June 30, 2011
	Revenue			Cost of Sales			Gross Margin $			Gross Margin %			Revenue			Cost of Sales			Gross Margin $			Gross Margin %
Total	$	132,468		$	(107,978	)	$	24,490			18.5	%	$	114,934		$	(104,856	)	$	10,078			8.8	%
Less: Other		(250	)					(250	)					(268	)					(268	)
Homebuilding		132,218			(107,978	)		24,240			18.3	%		114,666			(104,856	)		9,810			8.6	%
Less: Land		(4,738	)		4,757			19			-0.4	%		(2,157	)		1,598			(559	)		25.9	%
Less: Impairment		—			—			—						—			9,684			9,684
Less: Other homebuilding		(372	)		954			582						(1,360	)		1,855			495
House	$	127,108		$	(102,267	)	$	24,841			19.5	%	$	111,149		$	(91,719	)	$	19,430			17.5	%
Add: Interest in house cost of sales (a)					9,007			9,007									7,960			7,960
Adjusted house excluding interest in cost of sales	$	127,108		$	(93,260	)	$	33,848			26.6	%	$	111,149		$	(83,759	)	$	27,390			24.6	%

	Six Months Ended June 30, 2012												Six Months Ended June 30, 2011
	Revenue			Cost of Sales			Gross Margin $			Gross Margin %			Revenue			Cost of Sales			Gross Margin $			Gross Margin %
Total	$	238,071		$	(193,013	)	$	45,058			18.9	%	$	188,993		$	(168,302	)	$	20,691			10.9	%
Less: Other		(493	)					(493	)					(525	)					(525	)
Homebuilding		237,578			(193,013	)		44,565			18.8	%		188,468			(168,302	)		20,166			10.7	%
Less: Land		(8,701	)		6,506			(2,195	)		25.2	%		(4,030	)		3,150			(880	)		21.8	%
Less: Impairment		—			—			—						—			10,302			10,302
Less: Other homebuilding		(861	)		4,265			3,404						(2,121	)		4,831			2,710
House	$	228,016		$	(182,242	)	$	45,774			20.1	%	$	182,317		$	(150,019	)	$	32,298			17.7	%
Add: Interest in house cost of sales (a)					16,661			16,661									13,767			13,767
Adjusted house excluding interest in cost of sales	$	228,016		$	(165,581	)	$	62,435			27.4	%	$	182,317		$	(136,252	)	$	46,065			25.3	%

(a) Interest incurred is generally capitalized to inventory, then expensed in cost of sales as related units close.

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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued)

(in thousands)

(unaudited)

The following reconciles net loss to adjusted EBITDA:

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Net loss	$	(12,120	)	$	(100,756	)	$	(12,318	)	$	(108,956	)
Adjustments:
Income tax expense (benefit)		848			(676	)		96			(1,017	)
Depreciation and amortization expense		1,509			2,942			3,321			4,489
Interest in cost of sales (a)		10,074			8,342			17,858			14,150
Interest in equity in income (loss) from joint ventures (b)		201			212			378			455
Interest expense (c)		5,909			4,375			12,197			8,326
Debt modification fees (recoveries) (d)		—			(645	)		—			(645	)
Loss on debt extinguishment (e)		—			88,384			—			88,384
Impairment (f)		—			9,684			—			10,302
Project write-offs and abandonments (g)		179			62			431			82
Realized gain on sale of marketable securities (h)		—			(270	)		(22	)		(409	)
Severence		3			45			17			199
Deferred gain recognition from PIC Transaction (i)		8,163			711			7,367			580
Adjusted EBITDA	$	14,766		$	12,410		$	29,325		$	15,940

(a) Interest incurred is generally capitalized to inventory, then expensed in cost of sales as related units close.

(b) Interest incurred is generally capitalized to investment in joint ventures, then expensed in equity in income (loss) from joint ventures as related units close.

(c) Interest is expensed to the extent assets qualifying for interest capitalization was less than debt.

(d) Professional fees related to debt issuance costs, modifications and waivers incurred in connection with modifications and extensions to our previously outstanding indebtedness paid primarily to attorneys, consultants and advisors.

(e) Loss on debt extinguishment in connection with payoff of our previously outstanding indebtedness in May 2011.

(f) Impairment losses on real estate assets held and used in operations and investment in joint ventures.

(g) Includes non-refundable deposits and costs associated with preparatory due diligence for land acquisitions subsequently abandoned.

(h) Includes other than temporary gains on sale of marketable securities.

(i) Amortization of deferred gain resulting from a series of novation and reinsurance transactions ("PIC Transaction") entered into by Partners Insurance Company ("PIC"), a wholly-owned subsidiary.

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