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): April 28, 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 April 28, 2011, Standard Pacific Corp. issued a press release announcing financial results for the quarter ended March 31, 2011.  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 ended March 31, 2011.

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: April 28, 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 ended March 31, 2011.

EX-99.1

Exhibit 99.1

News Release

Standard Pacific Corp. Reports 2011 First Quarter Results

IRVINE, CALIFORNIA, April 28, 2011.  Standard Pacific Corp. (NYSE:SPF) today announced operating results for its first quarter.

2011 First Quarter Highlights and Comparisons to the 2010 First Quarter

·   Net loss of $14.8 million, or $0.04 per share, vs. net loss of $5.1 million, or $0.02 per share

·   Revenues from home sales of $143.7 million, down 18% from $174.9 million

·   439 new home deliveries, down 18% from 537 homes

·   Average home price of $327,000 vs. $326,000

·   Gross margin from home sales of 20.5% vs. 22.7%

·   SG&A rate from home sales of 22.5% (22.1%* excluding restructuring charges) vs. 18.7%

·   Net new orders down 14% to 652 homes

·   Backlog value down 24% to $211.8 million from $278.3 million

o   627 homes in backlog, down 24% from 821 homes

·   Cash outflows from operating activities of $110.2 million vs. cash inflows of $33.6 million (2010 included $108 million tax refund)

o   Cash outflows from operating activities before land purchases and land sales was $23.1 million* vs. cash inflows of $84.0 million*

·   Homebuilding cash balance of $619.8 million vs. $591.7 million

·   Adjusted net homebuilding debt to total adjusted capitalization ratio of 53.4%* vs. 55.1%*

o   Total debt to book capitalization of 68.6% vs. 72.7%

Ken Campbell, the Company’s CEO commented, “Despite challenging housing market conditions, we continued to make progress with our strategy of opening new communities.  We opened 18 new communities during the quarter and expect to open another 22 communities by the middle of the year, representing a 20% increase in community count compared to last year and bringing our total community count to north of 155.”  Mr. Campbell added, “While home pricing has been under pressure over the last few quarters, our gross margin has remained above 20% for the sixth consecutive quarter.  In addition, we increased the dollar value of our backlog by 54% over the 2010 fourth quarter while holding the line on our margins in backlog.”

Mr. Campbell continued, “Consistent with our land strategy, we approved the purchase of 2,000 lots totaling $122 million and purchased 1,100 lots for $87 million during the quarter.  With $620 million of cash on hand and the additional liquidity provided by our new senior unsecured revolving credit facility, we believe we have ample liquidity to navigate through the market downturn.”

For the 2011 first quarter, the Company generated a net loss of $14.8million, or $0.04per diluted share, compared to net loss of $5.1 million, or $0.02 per diluted share, for the year earlier period.  The increase in the quarterly loss was driven primarily by an 18% decrease in home sale revenues from $174.9 million for the 2010 first quarter to $143.7 million for the 2011 first quarter and a 220 basis point decline in the Company’s gross margin to 20.5%.  The decrease in revenues was primarily the result of an 18% decline in new home deliveries to 439 homes.  The 2011 first quarter also included $0.6 million of restructuring charges related to employee

severance.  The Company’s consolidated average home price for the 2011 first quarter was $327,000, up slightly from $326,000 for the year earlier period largely due to a mix shift, which was partially offset by slightly lower pricing and fewer California deliveries.

Gross margin from home sales for the 2011 first quarter was 20.5% versus 22.7% for the year earlier period.  The 220 basis point decline in the 2011 first quarter gross margin from home sales was driven by lower margins in substantially all of the Company’s markets due to competitive pricing pressure, a mix shift to more deliveries from lower margin projects and, to a lesser extent, a reduction in the percentage of California deliveries as compared to the 2010 first quarter.  Excluding previously capitalized interest costs, gross margin from home sales for the 2011 first quarter was 28.1%* versus 29.2%* for the 2010 first quarter.

The Company’s 2011 first quarter SG&A expenses (including Corporate G&A) were $32.3 million compared to $32.8 million for the 2010 first quarter and included noncash stock-based compensation expenses of $1.9 million and $2.0 million, respectively.  The Company’s 2011 first quarter SG&A expenses included approximately $0.6 million in restructuring charges related to employee severance costs incurred in connection with further adjusting the Company’s workforce to align with lower sales volumes.  The Company’s 2011 first quarter SG&A rate from home sales was 22.5% versus 18.7% for the 2010 first quarter.  Excluding restructuring charges, the Company’s 2011 first quarter SG&A rate was 22.1%*.  The increase in the Company’s SG&A rate was primarily the result of an 18% decrease in revenues from home sales and higher sales and marketing costs associated with new community openings.

Net new orders (excluding joint ventures) for the 2011 first quarter decreased 14% from the 2010 first quarter to 652 homes on a 10% increase in the number of average active selling communities from 126 to 138.  The Company’s monthly sales absorption rate for the 2011 first quarter was 1.6 per community compared to 2.0 per community for the 2010 first quarter.  The Company’s cancellation rate for the 2011 first quarter was 14% versus 15% for the 2010 first quarter and 23% for the 2010 fourth quarter.  The total number of sales cancellations for the 2011 first quarter was 106, of which 59 cancellations related to homes in the Company’s 2011 first quarter beginning backlog and 47 related to orders generated during the quarter.

The dollar value of homes in backlog (excluding joint ventures) decreased 24% to $211.8 million, or 627 homes, compared to $278.3 million, or 821 homes, for the 2010 first quarter.  The decrease in backlog value was driven primarily by a 14% decrease in net new orders.

The Company used $110.2 million of cash flows from operating activities for the 2011 first quarter versus generating $33.6 million of cash flows from operating activities in the 2010 first quarter.  The decline in cash flows from operations as compared to the 2010 first quarter was driven primarily by a $31.7 million decrease in homebuilding revenues, a $36.3 million increase in land purchases and a $108 million decrease attributable to the federal tax refund that was received in the 2010 first quarter.  Cash outflows from operations for the three months ended March 31, 2011 and 2010 included $87.1 million and $50.8 million, respectively, of cash land purchases.  Excluding cash land purchases and land sales, cash outflows from operating activities for the 2011 first quarter were $23.1 million* versus cash inflows of $84.0 million* in the 2010 first quarter.

Earnings Conference Call

A conference call to discuss the Company’s 2011 first quarter results will be held at 12:00 p.m. Eastern time April 29, 2011.  The call will be broadcast live over the Internet and can be accessed through the Company’s website at http://ir.standardpacifichomes.com.  The call will also be accessible via telephone by dialing (888) 801-6497 (domestic) or (913) 312-0652 (international); Passcode: 3913688. The audio transmission with the slide presentation will be available on our website for replay 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: 3913688.

2

About Standard Pacific

Standard Pacific, one of the nation’s largest homebuilders, has built more than 113,000 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, 2010 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.  The 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 9.

###

(Note: Tables Follow)

3

KEY STATISTICS AND FINANCIAL DATA1

		As of or For the Three Months Ended
		March 31,		March 31,		Percentage	December 31,		Percentage
		2011		2010		or % Change	2010		or % Change
Operating Data		(Dollars in thousands, except average selling price)
Deliveries			439		537	(18%)		619	(29%)
Average selling price		$	327,000	$	326,000	0%	$	340,000	(4%)
Home sale revenues		$	143,699	$	174,913	(18%)	$	210,424	(32%)
Gross margin %			20.5%		22.7%	(2.2%)		22.1%	(1.6%)
Gross margin % from home sales (excluding impairments)*			20.5%		22.7%	(2.2%)		23.1%	(2.6%)
Gross margin % from home sales (excluding impairments and
	interest amortized to cost of home sales)*		28.1%		29.2%	(1.1%)		30.2%	(2.1%)
Asset impairments		$	—	$	—	—	$	2,289	(100%)
Restructuring charges (excluding debt refinance)		$	561	$	—	—	$	—	—
SG&A expenses		$	32,261	$	32,752	(1%)	$	38,038	(15%)
SG&A % from home sales			22.5%		18.7%	3.8%		18.1%	4.4%
SG&A % from home sales (excluding restructuring charges)*			22.1%		18.7%	3.4%		18.1%	4.0%
Net new orders			652		759	(14%)		428	52%
Average active selling communities			138		126	10%		134	3%
Monthly sales absorption rate per community			1.6		2.0	(20%)		1.1	45%
Cancellation rate			14%		15%	(1%)		23%	(9%)
Gross cancellations			106		133	(20%)		130	(18%)
Cancellations from current quarter sales			47		73	(36%)		59	(20%)
Backlog (homes)			627		821	(24%)		414	51%
Backlog (dollar value)		$	211,813	$	278,269	(24%)	$	137,423	54%
Cash flows (uses) from operating activities		$	(110,150)	$	33,570	(428%)	$	(52,463)	110%
Cash flows (uses) from investing activities		$	(4,049)	$	(1,008)	302%	$	4,999	(181%)
Cash flows (uses) from financing activities		$	(18,997)	$	(41,863)	(55%)	$	239,507	(108%)
Land purchases (incl. seller financing and excl. JV investments)		$	87,110	$	50,849	71%	$	33,552	160%
Land sale proceeds		$	—	$	452	(100%)	$	1,757	(100%)
Adjusted Homebuilding EBITDA*		$	11,018	$	21,879	(50%)	$	28,892	(62%)
Adjusted Homebuilding EBITDA Margin %*			7.7%		12.5%	(4.8%)		13.6%	(5.9%)
Homebuilding interest incurred		$	34,854	$	26,230	33%	$	28,328	23%
Homebuilding interest capitalized to inventories owned		$	22,710	$	13,599	67%	$	19,425	17%
Homebuilding interest capitalized to investments in JVs		$	1,629	$	646	152%	$	1,450	12%
Interest amortized to cost of sales (incl. cost of land sales)		$	10,980	$	11,796	(7%)	$	14,898	(26%)

	As of
	March 31,		December 31,		Percentage
	2011		2010		or % Change
Balance Sheet Data	(Dollars in thousands, except per share amounts)
Homebuilding cash (including restricted cash)	$	619,807	$	748,754	(17%)
Inventories owned	$	1,292,365	$	1,181,697	9%
Lots owned and controlled		25,505		23,549	8%
Homes under construction		801		568	41%
Completed specs		409		512	(20%)
Deferred tax asset valuation allowance	$	522,025	$	516,366	1%
Homebuilding debt	$	1,321,212	$	1,320,254	0%
Joint venture recourse debt	$	995	$	3,865	(74%)
Stockholders' equity	$	613,252	$	621,862	(1%)
Stockholders' equity per share (including if-converted preferred stock)*	$	1.80	$	1.83	(2%)
Total debt to book capitalization*		68.6%		68.5%	0.1%
Adjusted net homebuilding debt to total adjusted book capitalization*		53.4%		47.9%	5.5%

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

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

4

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

				Three Months Ended March 31,
				2011		2010
				(Dollars in thousands, except per share amounts)
				(Unaudited)
Homebuilding:
	Home sale revenues			$	143,699	$	174,913
	Land sale revenues				—		456
		Total revenues			143,699		175,369
	Cost of home sales				(114,312)		(135,253)
	Cost of land sales				—		(253)
		Total cost of sales			(114,312)		(135,506)
			Gross margin		29,387		39,863
			Gross margin %		20.5%		22.7%
	Selling, general and administrative expenses				(32,261)		(32,752)
	Loss from unconsolidated joint ventures				(257)		(434)
	Interest expense				(10,515)		(11,985)
	Other income (expense)				292		424
			Homebuilding pretax loss		(13,354)		(4,884)
Financial Services:
	Revenues				1,060		2,298
	Expenses				(2,418)		(2,429)
	Other income				15		33
			Financial services pretax loss		(1,343)		(98)
Loss before income taxes					(14,697)		(4,982)
Provision for income taxes					(100)		(89)
Net loss					(14,797)		(5,071)
Less: Net loss allocated to preferred shareholder					6,415		3,002
Net loss available to common stockholders				$	(8,382)	$	(2,069)
Loss per common share:
	Basic			$	(0.04)	$	(0.02)
	Diluted			$	(0.04)	$	(0.02)
Weighted average common shares outstanding:
	Basic				193,158,727		101,836,408
	Diluted				193,158,727		101,836,408
Weighted average additional common shares outstanding
	if preferred shares converted to common shares				147,812,786		147,812,786

5

CONDENSED CONSOLIDATED BALANCE SHEETS

					March 31,		December 31,
					2011		2010
					(Dollars in thousands)
ASSETS					(Unaudited)
Homebuilding:
	Cash and equivalents				$	587,394	$	720,516
	Restricted cash					32,413		28,238
	Trade and other receivables					7,330		6,167
	Inventories:
		Owned				1,292,365		1,181,697
		Not owned				20,013		18,999
	Investments in unconsolidated joint ventures					77,091		73,861
	Deferred income taxes, net					8,297		9,269
	Other assets					40,035		38,175
						2,064,938		2,076,922
Financial Services:
	Cash and equivalents					10,781		10,855
	Restricted cash					2,870		2,870
	Mortgage loans held for sale, net					20,016		30,279
	Mortgage loans held for investment, net					9,938		9,904
	Other assets					1,524		2,293
						45,129		56,201
				Total Assets	$	2,110,067	$	2,133,123
LIABILITIES AND EQUITY
Homebuilding:
	Accounts payable				$	15,785	$	16,716
	Accrued liabilities					138,342		143,127
	Secured project debt and other notes payable					4,333		4,738
	Senior notes payable					1,273,475		1,272,977
	Senior subordinated notes payable					43,404		42,539
						1,475,339		1,480,097
Financial Services:
	Accounts payable and other liabilities					781		820
	Mortgage credit facilities					20,695		30,344
						21,476		31,164
				Total Liabilities		1,496,815		1,511,261
Equity:
	Stockholders' Equity:
		Preferred stock, $0.01 par value; 10,000,000 shares authorized; 450,829 shares
			issued and outstanding at March 31, 2011 and December 31, 2010, respectively			5		5
		Common stock, $0.01 par value; 600,000,000 shares authorized; 197,422,268
			and 196,641,551 shares issued and outstanding at March 31, 2011
			and December 31, 2010, respectively			1,974		1,966
		Additional paid-in capital				1,231,892		1,227,292
		Accumulated deficit				(607,149)		(592,352)
		Accumulated other comprehensive loss, net of tax				(13,470)		(15,049)
			Total Equity			613,252		621,862
				Total Liabilities and Equity	$	2,110,067	$	2,133,123

INVENTORIES

	March 31,		December 31,
	2011		2010
	(Dollars in thousands)
Inventories Owned:	(Unaudited)
Land and land under development	$	876,853	$	801,681
Homes completed and under construction		312,189		281,780
Model homes		103,323		98,236
Total inventories owned	$	1,292,365	$	1,181,697
Inventories Owned by Segment:
California	$	798,447	$	727,317
Southwest		239,025		222,791
Southeast		254,893		231,589
Total inventories owned	$	1,292,365	$	1,181,697

6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

					Three Months Ended March 31,
					2011		2010
					(Dollars in thousands)
					(Unaudited)
Cash Flows From Operating Activities:
	Net income (loss)				$	(14,797)	$	(5,071)
	Adjustments to reconcile net income (loss) to net cash
		provided by (used in) operating activities:
			Amortization of stock-based compensation			1,922		1,964
			Other operating activities			1,285		1,079
			Changes in cash and equivalents due to:
				Trade and other receivables		(1,163)		(8,080)
				Mortgage loans held for sale		10,294		8,544
				Inventories - owned		(105,146)		(40,826)
				Inventories - not owned		(2,810)		(11,062)
				Other assets		3,140		108,412
				Accounts payable and accrued liabilities		(2,875)		(21,390)
		Net cash provided by (used in) operating activities				(110,150)		33,570
Cash Flows From Investing Activities:
	Investments in unconsolidated homebuilding joint ventures					(3,369)		(845)
	Other investing activities					(680)		(163)
		Net cash provided by (used in) investing activities				(4,049)		(1,008)
Cash Flows From Financing Activities:
	Change in restricted cash					(4,175)		942
	Principal payments on secured project debt and other notes payable					(405)		(34,758)
	Net proceeds from (payments on) mortgage credit facilities					(9,649)		(8,561)
	Other financing activities					(4,768)		514
		Net cash provided by (used in) financing activities				(18,997)		(41,863)
Net increase (decrease) in cash and equivalents						(133,196)		(9,301)
Cash and equivalents at beginning of period						731,371		595,559
Cash and equivalents at end of period					$	598,175	$	586,258
Cash and equivalents at end of period					$	598,175	$	586,258
Homebuilding restricted cash at end of period						32,413		14,128
Financial services restricted cash at end of period						2,870		3,195
Cash and equivalents and restricted cash at end of period					$	633,458	$	603,581

7

REGIONAL OPERATING DATA

			Three Months Ended March 31,
			2011			2010
			Homes	Avg. Selling Price		Homes	Avg. Selling Price
New homes delivered:
	California		170	$	464,000	218	$	454,000
	Arizona		35		205,000	47		198,000
	Texas		76		294,000	90		299,000
	Colorado		17		311,000	25		298,000
	Nevada		5		192,000	—		—
	Florida		62		203,000	86		188,000
	Carolinas		74		222,000	71		227,000
		Consolidated total	439		327,000	537		326,000
	Unconsolidated joint ventures		8		391,000	13		492,000
	Total (including joint ventures)		447	$	328,000	550	$	330,000

			Three Months Ended March 31,
			2011		2010
			Homes	Avg. Selling Communities	Homes	Avg. Selling Communities
Net new orders:
	California		232	45	290	44
	Arizona		46	9	60	8
	Texas		120	21	106	18
	Colorado		26	5	29	6
	Nevada		1	1	3	1
	Florida		115	33	141	24
	Carolinas		112	24	130	25
		Consolidated total	652	138	759	126
	Unconsolidated joint ventures		8	3	15	3
	Total (including joint ventures)		660	141	774	129

			At March 31,
			2011				2010
Backlog ($ in thousands):			Homes		Value		Homes		Value
	California			181	$	97,424		319	$	154,630
	Arizona			47		10,331		60		12,518
	Texas			143		43,335		125		37,415
	Colorado			39		12,302		58		16,847
	Nevada			4		859		3		591
	Florida			120		24,632		133		25,709
	Carolinas			93		22,930		123		30,559
		Consolidated total		627		211,813		821		278,269
	Unconsolidated joint ventures			5		2,361		11		5,072
	Total (including joint ventures)			632	$	214,174		832	$	283,341

			At March 31,
			2011	2010
Lots owned and controlled:
	California		9,577	8,174
	Arizona		1,926	1,974
	Texas		3,478	1,681
	Colorado		768	271
	Nevada		1,143	1,218
	Florida		5,916	4,881
	Carolinas		2,697	2,306
		Total (including joint ventures)	25,505	20,505
	Lots owned		18,221	16,220
	Lots optioned or subject to contract		5,844	3,295
	Joint venture lots		1,440	990
		Total (including joint ventures)	25,505	20,505
Lots owned:
	Raw lots		4,933	5,110
	Lots under development		4,439	2,389
	Finished lots		7,169	6,893
	Under construction or completed homes		1,680	1,828
		Total	18,221	16,220

8

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 gross margin percentage from home sales 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 provide comparability with the Company’s peer group.

	Three Months Ended
	March 31, 2011		Gross Margin %	March 31, 2010		Gross Margin %	December 31, 2010		Gross Margin %
	(Dollars in thousands)
Home sale revenues	$	143,699		$	174,913		$	210,424
Less: Cost of home sales		(114,312)			(135,253)			(163,606)
Gross margin from home sales		29,387	20.5%		39,660	22.7%		46,818	22.2%
Add: Housing inventory impairment charges		—			—			1,818
Gross margin from home sales, excluding
impairment charges		29,387	20.5%		39,660	22.7%		48,636	23.1%
Add: Capitalized interest included in cost
of home sales		10,980	7.6%		11,363	6.5%		14,898	7.1%
Gross margin from home sales, excluding
impairment charges and interest amortized
to cost of home sales	$	40,367	28.1%	$	51,023	29.2%	$	63,534	30.2%

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
	March 31, 2011		March 31, 2010		December 31, 2010
	(Dollars in thousands)
Selling, general and administrative expenses	$	32,261	$	32,752	$	38,038
Less: Restructuring charges		(561)		—		—
Selling, general and administrative expenses,  excluding  restructuring charges	$	31,700	$	32,752	$	38,038
SG&A % from home sales, excluding restructuring charges		22.1%		18.7%		18.1%

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
	March 31, 2011		March 31, 2010		December 31, 2010
	(Dollars in thousands)
Cash flows from (used in) operations	$	(110,150)	$	33,570	$	(52,463)
Add: Cash land purchases		87,055		50,849		33,552
Less: Land sale proceeds		—		(452)		(1,757)
Add: Swap unwind payments related to debt restructure		—		—		24,545
Add: Accelerated interest payments related to debt restructure		—		—		6,541
Cash flows from operations (excluding land purchases,
land sales and debt restructuring payments)	$	(23,095)	$	83,967	$	10,418

9

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						LTM Ended March 31,
		March 31, 2011		March 31, 2010		December 31, 2010		2011		2010
		(Dollars in thousands)
Net income (loss)		$	(14,797)	$	(5,071)	$	(21,857)	$	(21,450)	$	30,615
	Provision (benefit) for income taxes		100		89		(1,190)		(546)		(96,474)
	Homebuilding interest amortized to cost of sales and interest expense		21,495		23,781		22,351		98,453		132,356
	Homebuilding depreciation and amortization		663		551		499		2,180		2,566
	Amortization of stock-based compensation		1,922		1,964		3,250		11,806		13,299
EBITDA			9,383		21,314		3,053		90,443		82,362
Add:
	Cash distributions of income from unconsolidated joint ventures		20		—		—		20		3,465
	Impairment charges and deposit write-offs		—		—		1,918		1,918		32,135
	(Gain) loss on early extinguishment of debt		—		—		23,839		30,028		12,122
Less:
	Income (loss) from unconsolidated joint ventures		(257)		(434)		25		1,343		(8,120)
	Income (loss) from financial services subsidiary		(1,358)		(131)		(107)		351		2,142
Adjusted Homebuilding EBITDA		$	11,018	$	21,879	$	28,892	$	120,715	$	136,062
Homebuilding revenues		$	143,699	$	175,369	$	212,424	$	880,748	$	1,132,231
Adjusted Homebuilding EBITDA Margin %			7.7%		12.5%		13.6%		13.7%		12.0%

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

			Three Months Ended						LTM Ended March 31,
			March 31, 2011		March 31, 2010		December 31, 2010			2011		2010
			(Dollars in thousands)
Net cash provided by (used in) operating activities			$	(110,150)	$	33,570	$	(52,463)	$	(224,678)	$	324,402
Add:
	Provision (benefit) for income taxes			100		89		(1,190)		(546)		(96,474)
	Homebuilding interest amortized to cost of sales and interest expense			21,495		23,781		22,351		98,453		132,356
	Excess tax benefits from share-based payment arrangements			—		27		—		—		324
Less:
	Income (loss) from financial services subsidiary			(1,358)		(131)		(107)		351		2,142
	Depreciation and amortization from financial services subsidiary			343		157		344		1,120		660
	(Gain) loss on disposal of property and equipment			2		(36)		(2)		1		1,912
Net changes in operating assets and liabilities:
		Trade and other receivables		1,163		8,080		(7,524)		(13,458)		(6,753)
		Mortgage loans held for sale		(10,294)		(8,544)		(6,319)		(13,915)		(17,463)
		Inventories-owned		105,146		40,826		28,286		213,026		(243,414)
		Inventories-not owned		2,810		11,062		3,791		19,609		13,189
		Deferred income taxes, net of valuation allowance		—		—		—		—		96,562
		Other assets		(3,140)		(108,412)		(2,650)		(6,224)		(106,403)
		Accounts payable		931		929		16		6,594		11,690
		Accrued liabilities		1,944		20,461		44,829		43,326		32,760
Adjusted Homebuilding EBITDA			$	11,018	$	21,879	$	28,892	$	120,715	$	136,062

10

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Continued)

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, indebtedness of the Company’s financial services subsidiary and additionally reflects the offset of cash and equivalents.

		March 31, 2011		December 31, 2010		March 31, 2010
		(Dollars in thousands)
Total consolidated debt		$	1,341,907	$	1,350,598	$	1,156,700
Less:
	Financial services indebtedness		(20,695)		(30,344)		(32,434)
	Homebuilding cash		(619,807)		(748,754)		(591,663)
Adjusted net homebuilding debt			701,405		571,500		532,603
Stockholders' equity			613,252		621,862		434,568
Total adjusted book capitalization		$	1,314,657	$	1,193,362	$	967,171
Total debt to book capitalization			68.6%		68.5%		72.7%
Adjusted net homebuilding debt to total adjusted book capitalization ratio			53.4%		47.9%		55.1%

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.

	March 31,		December 31,
	2011		2010
Actual common shares outstanding		197,422,268		196,641,551
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		341,315,150		340,534,433
Stockholders' equity (actual amounts rounded to nearest thousand)	$	613,252,000	$	621,862,000
Divided by pro forma common shares outstanding	÷	341,315,150	÷	340,534,433
Pro forma stockholders' equity per common share	$	1.80	$	1.83

11