8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): February 2, 2011

STANDARD PACIFIC CORP.

(Exact Name of Registrant as Specified in Charter)

Delaware	1-10959	33-0475989
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

26 Technology Drive Irvine, California	92618
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (949) 789-1600

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

INFORMATION TO BE INCLUDED IN THE REPORT

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On February 2, 2011, Standard Pacific Corp. issued a press release announcing financial results for the quarter and year ended December 31, 2010 (the "Press Release"). Attached hereto as Exhibit 99.1 and incorporated by reference herein is a copy of the Press Release.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits

EXHIBIT NUMBER	DESCRIPTION
99.1	Press Release announcing financial results for the quarter and year ended December 31, 2010.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: February 2, 2011

STANDARD PACIFIC CORP.
By:	/S/ JOHN M. STEPHENS
	John M. Stephens
	Senior Vice President and Chief Financial Officer

EXHIBIT INDEX

EXHIBIT NUMBER	DESCRIPTION
99.1	Press Release announcing financial results for the quarter and year ended December 31, 2010

EX-99.1

Exhibit 99.1

News Release

Standard Pacific Corp. Reports 2010 Fourth Quarter and Full Year Results

IRVINE, CALIFORNIA, February 2, 2011.  Standard Pacific Corp. (NYSE:SPF) today announced operating results for its fourth quarter and year ended December 31, 2010.

2010 Fourth Quarter Highlights and Comparisons to the 2009 Fourth Quarter

·   Net loss of $21.9 million, or $0.08 per share, vs. net income of $82.7 million, or $0.31 per share

o   2010 net income of $4.3 million*, or $0.02* per share, excluding charges of $23.8 million related to the refinance of $575.7 million of pre-2016 debt and $2.3 million of impairments

o   2009 net income included a $94.1 million income tax benefit related to a change in tax law

·   Homebuilding revenues of $212.4 million, down 37% from $339.8 million

·   619 new home deliveries, down 34% from 943 homes

·   Average home price of $340,000, up 7% from $318,000

·   Gross margin from home sales of 22.2% vs. 18.1% (23.1%* vs. 20.3%* excluding impairment charges)

·   SG&A rate from home sales of 18.1% vs. 16.5%

o   SG&A expenses down $11.4 million

·   Net new orders down 22% to 428 homes

·   Backlog value down 34% to $137.4 million from $207.9 million

o   414 homes in backlog, down 31% from 599 homes

·   Cash outflows from operating activities of $52.5 million vs. cash inflows of $109.7 million

o   Cash flows from operating activities before land purchases, land sales and debt restructuring payments was $10.4 million* vs. $110.3 million*

·   $187.5 million in proceeds from exercise in full of warrant for common stock

·   Homebuilding cash balance of $748.8 million vs. $602.2 million

·   Adjusted net homebuilding debt to total adjusted capitalization ratio of 47.9%* vs. 56.0%*

o   Total debt to book capitalization of 68.5% vs. 73.4%

2010 Fiscal Year Highlights and Comparisons to Fiscal Year 2009

·   Net loss of $11.7 million, or $0.05 per share, vs. a net loss of $13.8 million, or $0.06 per share

o   2010 net income of $20.6 million*, or $0.08* per share, excluding $30.0 million of debt refinance charges and $2.3 million of impairments

·   Homebuilding revenues of $912.4 million, down 22% from $1,166.4 million

·   2,646 new home deliveries, down 24% from 3,465 homes

·   Gross margin from home sales of 22.2% vs. 14.5% (22.4%* vs. 18.8%* excluding impairment charges)

·   SG&A rate from home sales of 16.6% vs. 16.3%* (2009 excludes $19.1 million of restructuring charges)

·   Net new orders down 26% to 2,461 homes

·   Cash outflows from operating activities of $81.0 million vs. cash inflows of $419.8 million

o   Cash flows from operating activities before land purchases, land sales and debt restructuring payments was $201.6 million* vs. $389.2 million*

Ken Campbell, the Company’s President and CEO commented, “I am pleased to announce that before debt refinancing charges, the fourth quarter represented our third consecutive quarter of generating an operating profit.  Before land spends and debt refinancing costs, we generated $10 million of cash flows from operations for the quarter and over $200 million for 2010 despite weaker homebuyer demand.”  Mr. Campbell continued, “During the quarter we also successfully completed the refinancing of $576 million of our pre-September 2016 debt, which was reduced from $665 million to less than $90 million.  This refinance, coupled with the proceeds from our recent equity issuance, provides us with a substantial amount of capital and liquidity to continue our land acquisition strategy over the nex t few years.  As a result of our land buying efforts, we expect to open over 55 new communities in 2011, 35 of which are slated for the first half of the year.”

For the 2010 fourth quarter, the Company generated a net loss of $21.9 million, or $0.08 per diluted share, compared to net income of $82.7 million, or $0.31 per diluted share, for the year earlier period.  The 2010 fourth quarter included a $23.8 million charge related to the early extinguishment of debt and $2.3 million of asset impairments.  Excluding charges related to the early extinguishment of debt and impairments, the Company generated net income of $4.3 million* for the 2010 fourth quarter and $20.6 million* for the full year 2010.  The 2009 fourth quarter included an income tax benefit of $94.1 million related to tax legislation enacted during the prior year, $10.9 million of asset impairment charges, a $3.5 million charge related to the early extinguishment of debt and $1.6 million of restructuring charges.

Homebuilding revenues for the 2010 fourth quarter were $212.4 million, down 37% from $339.8 million for the 2009 fourth quarter.  The decrease in homebuilding revenues was driven primarily by a 34% decline in new home deliveries to 619 homes, which was offset in part by a 7% increase in consolidated average home price to $340,000 as compared to $318,000 for the 2009 fourth quarter.  The increase in average home price was largely due to the delivery of more higher priced homes in California and a reduction in deliveries in Florida and Arizona as compared to the 2009 fourth quarter.  Homebuilding revenues for 2010 were $912.4 million compared to $1,166.4 million for the prior year.

Gross margin from home sales for the 2010 fourth quarter was 22.2% versus 18.1% for the year earlier period.  The Company’s 2010 fourth quarter gross margin from home sales included $1.8 million of inventory impairment charges and was offset by a $2.0 million benefit related to a reduction in its warranty accrual, while the Company’s 2009 fourth quarter margin included $6.6 million of inventory impairment charges.  Excluding impairment charges, gross margin from home sales was 23.1%* for the 2010 fourth quarter compared to 20.3%* for the prior year quarter.  The 280 basis point improvement in the 2010 fourth quarter adjusted gross margin from home sales was driven primarily by lower direct construction costs, an increased mix of California deliveries and higher margins in Southern California as co mpared to the 2009 fourth quarter, and the $2.0 million warranty accrual adjustment in 2010.  Excluding impairments and previously capitalized interest costs, gross margin from home sales for the 2010 fourth quarter was 30.2%* versus 26.9%* for the 2009 fourth quarter.

The Company’s 2010 fourth quarter SG&A expenses (including Corporate G&A) were $38.0 million compared to $49.4 million for the 2009 fourth quarter and included noncash stock-based compensation expenses of $3.3 million and $5.6 million, respectively.  The Company’s 2010 fourth quarter SG&A rate from home sales was 18.1% versus 16.5% for the 2009 fourth quarter.  The increase in the Company’s SG&A rate was primarily the result of a 30% decrease in revenues from home sales.

During the 2010 fourth quarter, the Company issued $275 million of 8⅜% senior notes due 2018 and $400 million of 8⅜% senior notes due 2021.  The net proceeds from the issuance of these notes (approximately $666.8 million) were used to repurchase or repay $575.7 million principal amount of indebtedness due between 2012 and 2015 and to extinguish a $24.5 million liability associated with the termination of the Company’s Term Loan B interest rate swap arrangement.  As a result of these transactions, the Company recognized a $23.8 million charge from the early extinguishment of debt, $21.7 million of which was a cash charge related to tender premiums and other related costs and $2.1 million related to the write-off of deferred debt issuance costs.  The $24.5 million cost associated with the early unwind of the Company’s interest rate swap related to

2

the Term Loan B will be amortized over a period of approximately 2.3 years.  As a result of these refinancing transactions, the Company reduced the principal amount of its debt maturing prior to September 2016 from approximately $665 million to $89 million and eliminated substantially all of the restrictive covenants contained in the supplemental indentures governing the 2012, 2014 and 2015 notes.

The Company generated a $9.1 million income tax benefit during the 2010 fourth quarter related to the current quarter loss which was fully offset by a noncash deferred tax asset valuation allowance for the same amount.  In addition, the Company recorded a $1.2 million tax benefit related to a net reduction of its liability for uncertain tax positions during the 2010 fourth quarter due primarily to the expiration of statutes of limitations related to state income taxes.  During the three months and year ended December 31, 2010, the Company recorded a noncash reduction of its deferred tax asset of $8.8 million and $22.9 million, respectively, and a corresponding noncash reduction of its deferred tax asset valuation allowance primarily related to built-in losses realized during these periods that were in excess of the Sec tion 382 annual limitation.  As of December 31, 2010, the Company had a $516.4 million deferred tax asset valuation allowance.

The Company used $52.5 million of cash flows from operating activities for the 2010 fourth quarter versus generating $109.7 million of cash flows from operating activities in the 2009 fourth quarter.  The decline in cash flows from operations as compared to the 2009 fourth quarter was driven primarily by a $127.4 million decrease in homebuilding revenues (including a $37.6 million decrease in land sale revenues), a $24.5 payment made to unwind the Term Loan B interest rate swap and $6.5 million of accelerated interest payments made in connection with the 2010 fourth quarter tender and debt restructure.  Cash outflows from operations for the three months ended December 31, 2010 and 2009 also included $33.6 million and $35.3 million, respectively, of cash land purchases.  Excluding cash land purchases, land sal es, and $31.0 million of accelerated payments related to the debt restructure, cash inflows from operating activities for the 2010 fourth quarter were $10.4 million* versus $110.3 million* in the 2009 fourth quarter.  In addition, during the 2010 fourth quarter, the Company generated $239.5 million of cash flows from financing activities, which included approximately $187.5 million of proceeds related to the issuance of the Company’s common stock in connection with the early exercise of a warrant.

Net new orders (excluding joint ventures) for the 2010 fourth quarter decreased 22% from the 2009 fourth quarter to 428 homes on an 8% increase in the number of average active selling communities from 124 to 134.  The Company’s monthly sales absorption rate for the 2010 fourth quarter was 1.1 per community compared to 1.5 per community for the 2009 fourth quarter.  The Company’s cancellation rate for the 2010 fourth quarter was 23% versus 21% for the 2009 fourth quarter and 19% for the 2010 third quarter.  The total number of sales cancellations for the 2010 fourth quarter was 130, of which 71 cancellations related to homes in the Company’s 2010 fourth quarter beginning backlog and 59 related to orders generated during the quarter.

The dollar value of homes in backlog (excluding joint ventures) decreased 34% to $137.4 million, or 414 homes, compared to $207.9 million, or 599 homes, for the 2009 fourth quarter.  The decrease in backlog value was driven primarily by a 22% decrease in net new orders and a 4% decline in average home price in backlog from $347,000 to $332,000.

During the 2010 fourth quarter, the Company approved (but had not yet consummated) the purchase of $45.0 million of land, comprised of approximately 1,400 lots, 13% of which are finished and 87% are raw.  During the same period, the Company purchased approximately 750 lots valued at $33.6 million.  Approximately 36% of the land purchases related to land located in California and 38% in Texas, with the balance spread throughout the Company’s other operations.  For the year ended December 31, 2010, the Company purchased approximately 5,400 lots valued at $315.4 million ($282.4 million of which were land purchases and $33.0 million were acquired through an investment in a joint venture).

3

Earnings Conference Call

A conference call to discuss the Company’s 2010 fourth quarter and full year results will be held at 12:00 p.m. Eastern time February 3, 2011.  The call will be broadcast live over the Internet and can be accessed through the Company’s website at http://standardpacifichomes.com/ir.  The call will also be accessible via telephone by dialing (888) 747-4655 (domestic) or (913) 312-0696 (international); Passcode: 5430040.  The audio transmission with the slide presentation will be available on our website for repla y within 2 to 3 hours following the live broadcast, and can be accessed by dialing (888) 203-1112 (domestic) or (719) 457-0820 (international); Passcode:5430040.

About Standard Pacific

Standard Pacific, one of the nation’s largest homebuilders, has built more than 112,000 homes during its 45-year history.  The Company constructs homes within a wide range of price and size targeting a broad range of homebuyers.  Standard Pacific operates in many of the largest housing markets in the country with operations in major metropolitan areas in California, Florida, Arizona, the Carolinas, Texas, Colorado and Nevada.  For more information about the Company and its new home developments, please visit our website at: www.standardpacifichomes.com.

This news release contains forward-looking statements.  These statements include but are not limited to statements regarding new home orders, deliveries, backlog, average home price, revenue, strategy, profitability, cash flow, liquidity, gross margins, overhead expenses and other costs; the opening of new communities; the dollar value and timing of anticipated land purchases; the availability of land opportunities and our ability to consummate these opportunities; and the future condition of the housing market.  Forward-looking statements are based on our current expectations or beliefs regarding future events or circumstances, and you should not place undue reliance on these statements.  Such statements involve known and unknown risks, uncertainties, assumptions and other factors many of which are out of the Company’s 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:  local and general economic and market conditions, including consumer confidence, employment rates, interest rates, the cost and availability of mortgage financing, and stock market, home and land valuations; the impact on economic conditions of terrorist attacks or the outbreak or escalation of armed conflict involving the United States; the cost and availability of suitable undeveloped land, building materials and labor; the cost and availability of construction financing and corporate debt and equity capital; our significant amount of debt and the impact of restrictive covenants in our debt agreements; our ability to repay our debt as it comes due; changes in our credit rating or outlook; the demand for and affordability of single-family homes; the supply of housing for sale; cancellations of purchase contracts by homebuyers; the cyclical and competitive nature of the Company’s business; governmental regulation, including the impact of "slow growth" or similar initiatives; delays in the land entitlement process, development, construction, or the opening of new home communities; adverse weather conditions and natural disasters; environmental matters; risks relating to the Company’s mortgage banking operations; future business decisions and the Company’s ability to successfully implement the Company’s operational and other strategies; litigation and warranty claims; and other risks discussed in the Company’s filings with the Securities and Exchange Commission, including in the Company’s Annual Report on Form 10-K for the year ended Dec. 31, 2009 and subsequent Quarterly Reports on Form 10-Q.  The Company assumes no, and hereby disclaims any, obligation to update any of the foregoing or any other forward-looking statements.  T he Company nonetheless reserves 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:

John Stephens, SVP & CFO (949) 789-1641, jstephens@stanpac.com

*Please see “Reconciliation of Non-GAAP Financial Measures” on page 11.

###

(Note: Tables Follow)

4

KEY STATISTICS AND FINANCIAL DATA1

		As of or For the Three Months Ended
		December 31,		December 31,		Percentage	September 30,		Percentage
		2010		2009		or % Change	2010		or % Change
Operating Data		(Dollars in thousands, except average selling price)
Deliveries			619		943	(34%)		599	3%
Average selling price		$	340,000	$	318,000	7%	$	345,000	(1%)
Homebuilding revenues		$	212,424	$	339,779	(37%)	$	207,466	2%
Gross margin %			22.1%		15.3%	6.8%		23.5%	(1.4%)
Gross margin % from home sales (excluding impairments)*			23.1%		20.3%	2.8%		23.6%	(0.5%)
Gross margin % from home sales (excluding impairments and
	interest amortized to cost of home sales)*		30.2%		26.9%	3.3%		29.7%	0.5%
Asset impairments		$	2,289	$	10,907	(79%)	$	-	-
Restructuring charges (excluding debt refinance)		$	-	$	1,637	(100%)	$	-	-
SG&A % from home sales			18.1%		16.5%	1.6%		17.6%	0.5%
SG&A % from home sales (excluding restructuring charges)*			18.1%		16.1%	2.0%		17.6%	0.5%
Net new orders			428		547	(22%)		555	(23%)
Average active selling communities			134		124	8%		131	2%
Monthly sales absorption rate per community			1.1		1.5	(27%)		1.4	(21%)
Cancellation rate			23%		21%	2%		19%	4%
Cancellations from beginning backlog			71		90	(21%)		82	(13%)
Cancellations from current quarter sales			59		56	5%		50	18%
Backlog (homes)			414		599	(31%)		605	(32%)
Backlog (dollar value)		$	137,423	$	207,887	(34%)	$	214,237	(36%)
Cash flows (uses) from operating activities		$	(52,463)	$	109,665	(148%)	$	(67,414)	(22%)
Cash flows (uses) from investing activities		$	4,999	$	(6,432)	(178%)	$	(35,995)	(114%)
Cash flows (uses) from financing activities		$	239,507	$	(37,679)	(736%)	$	(61,447)	(490%)
Land purchases (incl. seller financing and excl. JV investments)		$	33,552	$	35,310	(5%)	$	94,672	(65%)
Land sale proceeds		$	1,757	$	39,273	(96%)	$	940	87%
Adjusted Homebuilding EBITDA*		$	28,892	$	49,471	(42%)	$	29,701	(3%)
Adjusted Homebuilding EBITDA Margin %*			13.6%		14.6%	(1.0%)		14.3%	(0.7%)
Homebuilding interest incurred		$	28,328	$	26,566	7%	$	28,070	1%
Homebuilding interest capitalized to inventories owned		$	19,425	$	13,901	40%	$	17,126	13%
Homebuilding interest capitalized to investments in JVs		$	1,450	$	616	135%	$	687	111%
Interest amortized to cost of sales (incl. cost of land sales)		$	14,898	$	27,255	(45%)	$	12,546	19%

5

KEY STATISTICS AND FINANCIAL DATA (Continued)1

		For the Year Ended
		December 31,		December 31,		Percentage
		2010		2009		or % Change
Operating Data		(Dollars in thousands, except average selling price)
Deliveries			2,646		3,465	(24%)
Average selling price		$	343,000	$	306,000	12%
Homebuilding revenues		$	912,418	$	1,166,397	(22%)
Gross margin %			22.1%		12.2%	9.9%
Gross margin % from home sales (excluding impairments)*			22.4%		18.8%	3.6%
Gross margin % from home sales (excluding impairments and
	interest amortized to cost of home sales)*		29.0%		25.2%	3.8%
Asset impairments		$	2,289	$	68,591	(97%)
Restructuring charges (excluding debt refinance)		$	-	$	22,575	(100%)
SG&A % from home sales			16.6%		18.1%	(1.5%)
SG&A % from home sales (excluding restructuring charges)*			16.6%		16.3%	0.3%
Net new orders			2,461		3,343	(26%)
Average active selling communities			130		140	(7%)
Monthly sales absorption rate per community			1.6		2.0	(20%)
Cancellation rate			18%		18%	0%
Cash flows (uses) from operating activities		$	(80,958)	$	419,830	(119%)
Cash flows (uses) from investing activities		$	(33,455)	$	(27,301)	23%
Cash flows (uses) from financing activities		$	250,225	$	(422,815)	(159%)
Land purchases (incl. seller financing and excl. JV investments)		$	282,361	$	64,913	335%
Land sale proceeds		$	3,596	$	103,770	(97%)
Adjusted Homebuilding EBITDA*		$	131,576	$	116,252	13%
Adjusted Homebuilding EBITDA Margin %*			14.4%		10.0%	4.4%
Homebuilding interest incurred		$	110,358	$	107,976	2%
Homebuilding interest capitalized to inventories owned		$	66,665	$	57,338	16%
Homebuilding interest capitalized to investments in JVs		$	3,519	$	3,180	11%
Interest amortized to cost of sales (incl. cost of land sales)		$	60,565	$	86,835	(30%)

	As of  December 31,
					Percentage
	2010		2009		or % Change
Balance Sheet Data	(Dollars in thousands, except per share amounts)
Homebuilding cash (including restricted cash)	$	748,754	$	602,222	24%
Inventories owned	$	1,181,697	$	986,322	20%
Building sites owned or controlled		23,549		19,191	23%
Homes under construction		568		934	(39%)
Completed specs		512		282	82%
Deferred tax asset valuation allowance	$	516,366	$	534,596	(3%)
Homebuilding debt	$	1,320,254	$	1,156,726	14%
Joint venture recourse debt	$	3,865	$	38,835	(90%)
Stockholders' equity	$	621,862	$	435,798	43%
Stockholders' equity per share (including if-converted preferred stock)*	$	1.83	$	1.75	5%
Total debt to book capitalization*		68.5%		73.4%	(4.9%)
Adjusted net homebuilding debt to total adjusted book capitalization*		47.9%		56.0%	(8.1%)

1All statistical numbers exclude unconsolidated joint ventures and discontinued operations unless noted otherwise.

*Please see “Reconciliation of Non-GAAP Financial Measures” beginning on page 11.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

				Three Months Ended December 31,					Year Ended December 31,
				2010		2009		2010		2009
				(Dollars in thousands, except per share amounts)
				(Unaudited)
Homebuilding:
	Home sale revenues			$	210,424	$	300,190	$	908,562	$	1,060,502
	Land sale revenues				2,000		39,589		3,856		105,895
		Total revenues			212,424		339,779		912,418		1,166,397
	Cost of home sales				(163,606)		(245,847)		(707,006)		(907,058)
	Cost of land sales				(1,940)		(41,939)		(3,568)		(117,517)
		Total cost of sales			(165,546)		(287,786)		(710,574)		(1,024,575)
			Gross margin		46,878		51,993		201,844		141,822
			Gross margin %		22.1%		15.3%		22.1%		12.2%
	Selling, general and administrative expenses				(38,038)		(49,388)		(150,542)		(191,488)
	Income (loss) from unconsolidated joint ventures				25		(268)		1,166		(4,717)
	Interest expense				(7,453)		(12,049)		(40,174)		(47,458)
	Loss on early extinguishment of debt				(23,839)		(3,474)		(30,028)		(6,931)
	Other income (expense)				(544)		(987)		3,733		(2,296)
			Homebuilding pretax income (loss)		(22,971)		(14,173)		(14,001)		(111,068)
Financial Services:
	Revenues				2,745		3,050		12,456		13,145
	Expenses				(2,852)		(2,808)		(10,878)		(11,817)
	Income from unconsolidated joint ventures				-		-		-		119
	Other income				31		31		142		139
			Financial services pretax income (loss)		(76)		273		1,720		1,586
Loss from continuing operations before income taxes					(23,047)		(13,900)		(12,281)		(109,482)
Benefit for income taxes					1,190		96,563		557		96,265
Income (loss) from continuing operations					(21,857)		82,663		(11,724)		(13,217)
Loss from discontinued operations, net of income taxes					-		-		-		(569)
Net income (loss)					(21,857)		82,663		(11,724)		(13,786)
Less: Net (income) loss allocated to preferred shareholder					12,388		(49,060)		6,849		8,371
Net income (loss) available to common stockholders				$	(9,469)	$	33,603	$	(4,875)	$	(5,415)
Basic income (loss) per common share:
	Continuing operations			$	(0.08)	$	0.33	$	(0.05)	$	(0.06)
	Discontinued operations				-		-		-		-
	Basic income (loss) per common share			$	(0.08)	$	0.33	$	(0.05)	$	(0.06)
Diluted income (loss) per common share:
	Continuing operations			$	(0.08)	$	0.31	$	(0.05)	$	(0.06)
	Discontinued operations				-		-		-		-
	Diluted income (loss) per common share			$	(0.08)	$	0.31	$	(0.05)	$	(0.06)
Weighted average common shares outstanding:
	Basic				112,978,508		101,239,928		105,202,857		95,623,851
	Diluted				112,978,508		109,348,514		105,202,857		95,623,851
Weighted average additional common shares outstanding
	if preferred shares converted to common shares				147,812,786		147,812,786		147,812,786		147,812,786
				Three Months Ended December 31,				Year Ended December 31,
				2010		2009		2010		2009
Weighted average common shares outstanding:
Weighted average basic common shares outstanding					112,978,508		101,239,928		105,202,857		95,623,851
Effect of dilutive securities:
	Stock options				-		2,656,409		-		-
	Convertible debt				-		5,452,177		-		-
Weighted average diluted common shares outstanding					112,978,508		109,348,514		105,202,857		95,623,851

7

REGIONAL OPERATING DATA

			Three Months Ended December 31,						Year Ended December 31,
			2010			2009			2010			2009
			Homes	Avg. Selling Price		Homes	Avg. Selling Price		Homes		Avg. Selling Price	Homes	Avg. Selling Price
New homes delivered:
	California		276	$	472,000	396	$	447,000	1,102	$	495,000	1,344	$	434,000
	Arizona		42		195,000	94		211,000	196		202,000	303		211,000
	Texas		82		294,000	91		293,000	368		294,000	419		282,000
	Colorado		22		293,000	34		305,000	115		295,000	147		305,000
	Nevada		7		203,000	2		222,000	22		201,000	15		225,000
	Florida		99		197,000	194		192,000	446		193,000	797		190,000
	Carolinas		91		225,000	132		218,000	397		230,000	440		218,000
		Consolidated total	619		340,000	943		318,000	2,646		343,000	3,465		306,000
	Unconsolidated joint ventures		14		458,000	20		486,000	54		465,000	112		517,000
	Discontinued operations		-		-	-		-	-		-	4		201,000
	Total (including joint ventures)		633	$	343,000	963	$	322,000	2,700	$	346,000	3,581	$	313,000

			Three Months Ended December 31,				Year Ended December 31,
			2010		2009		2010		2009
			Homes	Avg. Selling Communities	Homes	Avg. Selling Communities	Homes	Avg. Selling Communities	Homes	Avg. Selling Communities
Net new orders:
	California		150	46	219	45	974	46	1,358	50
	Arizona		40	9	39	6	185	9	274	8
	Texas		81	19	63	19	358	17	398	19
	Colorado		14	4	28	6	91	5	123	6
	Nevada		4	1	1	1	30	1	11	2
	Florida		79	29	111	24	435	26	728	31
	Carolinas		60	26	86	23	388	26	451	24
		Consolidated total	428	134	547	124	2,461	130	3,343	140
	Unconsolidated joint ventures		12	3	7	4	50	3	174	7
	Discontinued operations		-	-	-	-	-	-	3	-
	Total (including joint ventures)		440	137	554	128	2,511	133	3,520	147

			At December 31,
			2010				2009
Backlog ($ in thousands):			Homes		Value		Homes		Value
	California			119	$	60,440		247	$	117,536
	Arizona			36		7,988		47		9,686
	Texas			99		30,456		109		33,708
	Colorado			30		9,313		54		15,587
	Nevada			8		1,628		-		-
	Florida			67		14,225		78		15,033
	Carolinas			55		13,373		64		16,337
		Consolidated total		414		137,423		599		207,887
	Unconsolidated joint ventures			5		2,109		9		4,601
	Total (including joint ventures)			419	$	139,532		608	$	212,488

			At December 31,
			2010	2009
Building sites owned or controlled:
	California		9,505	7,685
	Arizona		1,940	1,831
	Texas		2,419	1,715
	Colorado		370	255
	Nevada		1,196	1,218
	Florida		5,632	4,678
	Carolinas		2,487	1,809
		Total (including joint ventures)	23,549	19,191
	Building sites owned		17,650	15,827
	Building sites optioned or subject to contract		4,451	2,361
	Joint venture lots		1,448	1,003
		Total (including joint ventures)	23,549	19,191
Building sites owned:
	Raw lots		5,266	4,875
	Lots under development		3,680	2,298
	Finished lots		7,218	7,030
	Under construction or completed homes		1,486	1,624
		Total	17,650	15,827

8

CONDENSED CONSOLIDATED BALANCE SHEETS

					December 31,
					2010		2009
					(Dollars in thousands)
ASSETS					(Unaudited)
Homebuilding:
	Cash and equivalents				$	720,516	$	587,152
	Restricted cash					28,238		15,070
	Trade and other receivables					6,167		12,676
	Inventories:
		Owned				1,181,697		986,322
		Not owned				18,999		11,770
	Investments in unconsolidated joint ventures					73,861		40,415
	Deferred income taxes, net					9,269		9,431
	Other assets					38,175		131,086
						2,076,922		1,793,922
Financial Services:
	Cash and equivalents					10,855		8,407
	Restricted cash					2,870		3,195
	Mortgage loans held for sale, net					30,279		41,048
	Mortgage loans held for investment, net					9,904		10,818
	Other assets					2,293		3,621
						56,201		67,089
				Total Assets	$	2,133,123	$	1,861,011
LIABILITIES AND EQUITY
Homebuilding:
	Accounts payable				$	16,716	$	22,702
	Accrued liabilities					143,127		199,848
	Secured project debt and other notes payable					4,738		59,531
	Senior notes payable					1,272,977		993,018
	Senior subordinated notes payable					42,539		104,177
						1,480,097		1,379,276
Financial Services:
	Accounts payable and other liabilities					820		1,436
	Mortgage credit facilities					30,344		40,995
						31,164		42,431
				Total Liabilities		1,511,261		1,421,707
Equity:
	Stockholders' Equity:
		Preferred stock, $0.01 par value; 10,000,000 shares authorized; 450,829 shares
			issued and outstanding at December 31, 2010 and 2009, respectively			5		5
		Common stock, $0.01 par value; 600,000,000 shares authorized; 196,641,551
			and 105,293,180 shares issued and outstanding at December 31, 2010
			and 2009, respectively			1,966		1,053
		Additional paid-in capital				1,227,292		1,030,664
		Accumulated deficit				(592,352)		(580,628)
		Accumulated other comprehensive loss, net of tax				(15,049)		(15,296)
			Total Stockholders' Equity			621,862		435,798
	Noncontrolling Interests					-		3,506
		Total Equity				621,862		439,304
				Total Liabilities and Equity	$	2,133,123	$	1,861,011

	December 31,
	2010		2009
	(Dollars in thousands)
Inventories Owned:	(Unaudited)
Land and land under development	$	801,681	$	564,516
Homes completed and under construction		281,780		316,323
Model homes		98,236		105,483
Total inventories owned	$	1,181,697	$	986,322
Inventories Owned by Segment:
California	$	727,316	$	618,336
Southwest		222,792		196,279
Southeast		231,589		171,707
Total inventories owned	$	1,181,697	$	986,322

9

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

					Three Months Ended December 31,				Year Ended December 31,
					2010		2009		2010		2009
					(Dollars in thousands)
					(Unaudited)
Cash Flows From Operating Activities:
	Income (loss) from continuing operations				$	(21,857)	$	82,663	$	(11,724)	$	(13,217)
	Income (loss) from discontinued operations, net of income taxes					-		-		-		(569)
	Adjustments to reconcile net income (loss) to net cash
		provided by (used in) operating activities:
			(Gain) loss on early extinguishment of debt			23,839		3,474		30,028		6,931
			Amortization of stock-based compensation			3,250		5,605		11,848		12,864
			Deferred income taxes			(9,824)		(7,775)		9,272		(45,133)
			Deferred tax asset valuation allowance			8,634		(88,787)		(9,829)		(51,429)
			Inventory impairment charges and deposit write-offs			1,918		11,192		1,918		62,940
			Other operating activities			816		5,176		1,772		13,893
			Changes in cash and equivalents due to:
				Trade and other receivables		7,524		4,976		6,541		8,440
				Mortgage loans held for sale		6,319		1,702		12,165		24,718
				Inventories - owned		(28,286)		84,537		(148,706)		326,062
				Inventories - not owned		(3,791)		(1,343)		(27,861)		(2,805)
				Other assets		2,650		1,587		111,496		118,265
				Accounts payable		(16)		(965)		(6,592)		(18,554)
				Accrued liabilities		(43,639)		7,623		(61,286)		(22,576)
		Net cash provided by (used in) operating activities				(52,463)		109,665		(80,958)		419,830
Cash Flows From Investing Activities:
		Net cash provided by (used in) investing activities				4,999		(6,432)		(33,455)		(27,301)
Cash Flows From Financing Activities:
	Change in restricted cash					(11,255)		267,322		(12,843)		(9,748)
	Net proceeds from (payments on) revolving credit facility					-		-		-		(47,500)
	Principal payments on secured project debt and other notes payable					(155)		(37,892)		(83,562)		(125,984)
	Principal payments on senior and senior subordinated notes payable					(596,520)		(261,092)		(792,389)		(466,689)
	Proceeds from the issuance of senior notes payable					677,804		-		977,804		257,592
	Payment of debt issuance costs					(11,709)		(8,764)		(17,215)		(8,764)
	Net proceeds from common stock issuance					186,443		-		186,443		-
	Other financing activities					(5,101)		2,747		(8,013)		(21,722)
		Net cash provided by (used in) financing activities				239,507		(37,679)		250,225		(422,815)
Net increase (decrease) in cash and equivalents						192,043		65,554		135,812		(30,286)
Cash and equivalents at beginning of period						539,328		530,005		595,559		625,845
Cash and equivalents at end of period					$	731,371	$	595,559	$	731,371	$	595,559
Cash and equivalents at end of period					$	731,371	$	595,559	$	731,371	$	595,559
Homebuilding restricted cash at end of period						28,238		15,070		28,238		15,070
Financial services restricted cash at end of period						2,870		3,195		2,870		3,195
Cash and equivalents and restricted cash at end of period					$	762,479	$	613,824	$	762,479	$	613,824

10

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Each of the below measures are non-GAAP financial measures and other companies may calculate such non-GAAP measures differently.  Due to the significance of the GAAP components excluded, such measures should not be considered in isolation or as an alternative to operating performance measures prescribed by GAAP.

The table set forth below reconciles the Company's net loss to net income excluding asset impairment charges (net of a 38% income tax benefit), loss on early extinguishment of debt (net of a 38% income tax benefit), and the deferred tax asset valuation allowance related to these charges.  We believe this measure is useful to management and investors as it provides perspective on the underlying operating performance of the business excluding these charges and provides comparability with the Company’s peer group.  Net income excluding asset impairment charges (net of income tax benefit), loss on early extinguishment of debt (net of income tax benefit), and the deferred tax asset valuation allowance related to these charges for the three months and year ended December 31, 2010 is calculated as follows:

	Three Months Ended		Year Ended
	December 31, 2010		December 31, 2010
	(Dollars in thousands, except per share amounts)
Net loss	$	(21,857)	$	(11,724)
Add: Asset impairment charges, net of income tax benefit		1,419		1,419
Add: Loss on early extinguishment of debt, net of income tax benefit		14,780		18,617
Add:  Net deferred tax asset valuation allowance		9,929		12,281
Net income, as adjusted		4,271		20,593
Less: Adjusted net income allocated to preferred shareholder		(2,421)		(12,031)
Adjusted net income available to common stockholders	$	1,850	$	8,562
Diluted earnings per common share	$	0.02	$	0.08
Weighted average diluted common shares outstanding		116,454,046		108,988,769

The table set forth below reconciles the Company's homebuilding gross margin percentage to the gross margin percentage from home sales, excluding housing inventory impairment charges and interest amortized to cost of home sales.  We believe these measures are useful to management and investors as they provide perspective on the underlying operating performance of the business excluding these charges and provides comparability with the Company’s peer group.

	Three Months Ended
	December 31, 2010		Gross Margin %	December 31, 2009		Gross Margin %	September 30, 2010		Gross Margin %
	(Dollars in thousands)
Homebuilding gross margin	$	46,878	22.1%	$	51,993	15.3%	$	48,835	23.5%
Less: Land sale revenues		(2,000)			(39,589)			(950)
Add: Cost of land sales		1,940			41,939			954
Gross margin from home sales		46,818	22.2%		54,343	18.1%		48,839	23.6%
Add: Housing inventory impairment charges		1,818			6,601			-
Gross margin from home sales, excluding
impairment charges		48,636	23.1%		60,944	20.3%		48,839	23.6%
Add: Capitalized interest included in cost
of home sales		14,898	7.1%		19,769	6.6%		12,546	6.1%
Gross margin from home sales, excluding
impairment charges and interest amortized
to cost of home sales	$	63,534	30.2%	$	80,713	26.9%	$	61,385	29.7%

	Year Ended December 31,
	2010		Gross Margin %	2009		Gross Margin %
	(Dollars in thousands)
Homebuilding gross margin	$	201,844	22.1%	$	141,822	12.2%
Less: Land sale revenues		(3,856)			(105,895)
Add: Cost of land sales		3,568			117,517
Gross margin from home sales		201,556	22.2%		153,444	14.5%
Add: Housing inventory impairment charges		1,818			46,063
Gross margin from home sales, excluding impairment charges		203,374	22.4%		199,507	18.8%
Add: Capitalized interest included in cost of home sales		59,750	6.6%		67,522	6.4%
Gross margin from home sales, excluding impairment charges
and interest amortized to cost of home sales	$	263,124	29.0%	$	267,029	25.2%

11

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Continued)

The table set forth below reconciles the Company’s SG&A expenses to SG&A expenses excluding restructuring charges.  We believe this measure is useful to management and investors as it provides perspective on the underlying operating performance of the business excluding these charges.

	Three Months Ended						Year Ended December 31,
	December 31, 2010		December 31, 2009		September 30, 2010		2010		2009
	(Dollars in thousands)
Selling, general and administrative expenses	$	38,038	$	49,388	$	36,339	$	150,542	$	191,488
Less: Restructuring charges		-		(980)		-		-		(19,125)
Selling, general and administrative expenses,  excluding  restructuring charges	$	38,038	$	48,408	$	36,339	$	150,542	$	172,363
SG&A % from home sales, excluding restructuring charges		18.1%		16.1%		17.6%		16.6%		16.3%

The table set forth below reconciles the Company’s cash flows from operations to cash flows from operations excluding land purchases, proceeds from land sales, payments made to extinguish swap arrangements related to early extinguishment of debt and accelerated interest payments related to debt restructure.  We believe this measure is useful to management and investors to provide perspective on underlying cash flow generation excluding swings related to the timing of land purchases, land sales and debt restructuring activities.

	Three Months Ended						Year Ended December 31,
	December 31, 2010		December 31, 2009		September 30, 2010		2010		2009
	(Dollars in thousands)
Cash flows from (used in) operations	$	(52,463)	$	109,665	$	(67,414)	$	(80,958)	$	419,830
Add: Cash land purchases		33,552		35,256		91,272		255,046		64,804
Less: Land sale proceeds		(1,757)		(39,273)		(940)		(3,596)		(103,770)
Add: Swap unwind payments related to debt restructure		24,545		-		-		24,545		3,733
Add: Accelerated interest payments related to debt restructure		6,541		4,625		-		6,541		4,625
Cash flows from operations (excluding land purchases,
land sales and debt restructuring payments)	$	10,418	$	110,273	$	22,918	$	201,578	$	389,222

The table set forth below reconciles the Company’s total consolidated debt to adjusted net homebuilding debt and provides the Company’s total debt to book capitalization and adjusted net homebuilding debt to total adjusted book capitalization ratios.  We believe that the adjusted net homebuilding debt to total adjusted book capitalization ratio is useful to management and investors as a measure of the Company’s ability to obtain financing.  For purposes of the ratio of adjusted net homebuilding debt to total adjusted book capitalization, total adjusted book capitalization is adjusted net homebuilding debt plus stockholders’ equity.  Adjusted net homebuilding debt excludes indebtedness included in liabilities from inventories not owned, ind ebtedness of the Company’s financial services subsidiary and additionally reflects the offset of cash and equivalents.

		As of December 31,
		2010		2009
		(Dollars in thousands)
Total consolidated debt		$	1,350,598	$	1,199,621
Less:
	Indebtedness included in liabilities from inventories not owned		-		(1,900)
	Financial services indebtedness		(30,344)		(40,995)
	Homebuilding cash		(748,754)		(602,222)
Adjusted net homebuilding debt			571,500		554,504
Stockholders' equity			621,862		435,798
Total adjusted book capitalization		$	1,193,362	$	990,302
Total debt to book capitalization			68.5%		73.4%
Adjusted net homebuilding debt to total adjusted book capitalization ratio			47.9%		56.0%

The table set forth below calculates pro forma stockholders’ equity per common share.  The pro forma common shares outstanding include the if-converted Series B Preferred Stock, and excludes 3.9 million shares issued under a share lending agreement related to the Company’s 6% Convertible Senior Subordinated Notes.  The Company believes that the pro forma stockholders’ equity per common share information is useful to management and investors as a measure to determine the book value per common share after giving effect of the issuance of preferred shares assuming full conversion to common stock and excluding shares outstanding under the share lending agreement.

	As of December 31,
	2010		2009
Actual common shares outstanding		196,641,551		105,293,180
Add: Conversion of preferred shares to common shares		147,812,786		147,812,786
Less: Common shares outstanding under share lending facility		(3,919,904)		(3,919,904)
Pro forma common shares outstanding		340,534,433		249,186,062
Stockholders' equity (actual amounts rounded to nearest thousand)	$	621,862,000	$	435,798,000
Divided by pro forma common shares outstanding	÷	340,534,433	÷	249,186,062
Pro forma stockholders' equity per common share	$	1.83	$	1.75

12

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Continued)

The table set forth below calculates EBITDA and Adjusted Homebuilding EBITDA.  Adjusted Homebuilding EBITDA means net income (loss) (plus cash distributions of income from unconsolidated joint ventures) before (a) income taxes, (b) homebuilding interest expense (c) expensing of previously capitalized interest included in cost of sales, (d) impairment charges and deposit write-offs, (e) (gain) loss on early extinguishment of debt (f) homebuilding depreciation and amortization, (g) amortization of stock-based compensation, (h) income (loss) from unconsolidated joint ventures and (i) income (loss) from financial services subsidiary.  Other companies may calculate Adjusted Homebuilding EBITDA (or similarly titled measures) differently.  We believe Adjusted Homebuilding EBITDA information is useful to management and investors as one measure of the Company’s ability to service debt and obtain financing.  Adjusted Homebuilding EBITDA is a non-GAAP financial measure and due to the significance of the GAAP components excluded, should not be considered in isolation or as an alternative to net income, cash flow from operations or any other operating or liquidity performance measure prescribed by GAAP.

		Three Months Ended						Year Ended December 31,
		December 31, 2010		December 31, 2009		September 30, 2010		2010		2009
		(Dollars in thousands)
Net income (loss)		$	(21,857)	$	82,663	$	4,543	$	(11,724)	$	(13,786)
	Provision (benefit) for income taxes		(1,190)		(96,563)		272		(557)		(96,563)
	Homebuilding interest amortized to cost of sales and interest expense		22,351		39,304		22,803		100,739		134,293
	Homebuilding depreciation and amortization		499		632		479		2,068		2,839
	Amortization of stock-based compensation		3,250		5,605		3,115		11,848		12,864
EBITDA			3,053		31,641		31,212		102,374		39,647
Add:
	Cash distributions of income from unconsolidated joint ventures		-		3,139		-		-		3,465
	Impairment charges and deposit write-offs		1,918		11,192		-		1,918		62,940
	(Gain) loss on early extinguishment of debt		23,839		3,474		999		30,028		6,931
Less:
	Income (loss) from unconsolidated joint ventures		25		(267)		1,801		1,166		(4,597)
	Income (loss) from financial services subsidiary		(107)		242		709		1,578		1,328
Adjusted Homebuilding EBITDA		$	28,892	$	49,471	$	29,701	$	131,576	$	116,252
Homebuilding revenues		$	212,424	$	339,779	$	207,466	$	912,418	$	1,166,397
Adjusted Homebuilding EBITDA Margin %			13.6%		14.6%		14.3%		14.4%		10.0%

 The table set forth below reconciles net cash provided by (used in) operating activities, from continuing and discontinued operations, calculated and presented in accordance with GAAP, to Adjusted Homebuilding EBITDA:

			Three Months Ended						Year Ended December 31,
			December 31, 2010		December 31, 2009		September 30, 2010		2010		2009
			(Dollars in thousands)
Net cash provided by (used in) operating activities			$	(52,463)	$	109,665	$	(67,414)	$	(80,958)	$	419,830
Add:
	Provision (benefit) for income taxes			(1,190)		(96,563)		272		(557)		(96,563)
	Deferred tax asset valuation allowance			(8,634)		88,787		6,908		9,829		51,429
	Homebuilding interest amortized to cost of sales and interest expense			22,351		39,304		22,803		100,739		134,293
	Excess tax benefits from share-based payment arrangements			-		297		-		27		297
Less:
	Income (loss) from financial services subsidiary			(107)		242		709		1,578		1,328
	Depreciation and amortization from financial services subsidiary			344		163		280		934		678
	(Gain) loss on disposal of property and equipment			(2)		1,272		1		(37)		2,611
Net changes in operating assets and liabilities:
		Trade and other receivables		(7,524)		(4,976)		(579)		(6,541)		(8,440)
		Mortgage loans held for sale		(6,319)		(1,702)		(31,621)		(12,165)		(24,718)
		Inventories-owned		28,286		(84,537)		83,309		148,706		(326,062)
		Inventories-not owned		3,791		1,343		6,520		27,861		2,805
		Deferred income taxes		9,824		7,775		(7,180)		(9,272)		45,133
		Other assets		(2,650)		(1,587)		596		(111,496)		(118,265)
		Accounts payable		16		965		9,154		6,592		18,554
		Accrued liabilities		43,639		(7,623)		7,923		61,286		22,576
Adjusted Homebuilding EBITDA			$	28,892	$	49,471	$	29,701	$	131,576	$	116,252

13