Exhibit 99.1

News Release

Standard Pacific Corp. Reports 2010 Third Quarter Results

IRVINE, CALIFORNIA, October 26, 2010. Standard Pacific Corp. (NYSE:SPF) today announced operating results for its third quarter ended September 30, 2010.

2010 Third Quarter Highlights and Comparisons to the 2009 Third Quarter

• Net income of $4.5 million vs. a net loss of $23.8 million

• 2010 net income of $5.5 million*, excluding $1.0 million charge related to debt repurchase

• Earnings per share of $0.02 vs. a loss per share of $0.10

• Homebuilding revenues of $207.5 million, down 37% from $327.4 million

• 599 new home deliveries (excluding joint ventures), down 33% from 893 homes

• Average home price of $345,000, up 14% from $302,000

• Gross margin from home sales of 23.6% vs. 18.6%

• Homebuilding SG&A rate from home sales of 17.6% vs. 15.6%* (2009 third quarter excludes $1.5 million of restructuring charges)

• SG&A expenses down $7.4 million from 2009 third quarter

• Net new orders (excluding joint ventures) down 38% to 555 homes on a 2% decline in average community count (down 23% from 719 homes in the 2010 second quarter)

• Backlog value (excluding joint ventures) down 35% to $214.2 million vs. $329.7 million

• 605 homes in backlog, down 39% from 995 homes

• Cash outflows from operating activities of $67 million vs. cash inflows of $113 million

• $91.3 million of cash land purchases in 2010 vs. $21.6 million in 2009

• Homebuilding cash balance of $546 million vs. $807 million

Ken Campbell, the Company’s President and CEO commented, “I am pleased to announce our second consecutive quarter of profitability in an extremely challenging housing market. Our ability to generate a profit at a delivery rate of 1.5 homes per community per month bodes well for us when the housing market returns to any level of normalcy. Consistent with our strategy, our gross margins have also held steady and our average sales price is up meaningfully over the prior year period.” Mr. Campbell continued, “Unfortunately it appears that the nation’s economic recovery may take longer than many anticipated. We will continue to manage through this downturn with a focus on rebuilding our land portfolio, while keeping an eye on maintaining the proper balance between new investment and liquidity.”

The Company generated net income of $4.5 million, or $0.02 per diluted share, for the 2010 third quarter compared to a net loss of $23.8 million, or $0.10 per diluted share, for the year earlier period. The primary drivers of the improved operating performance for the 2010 third quarter were higher gross margins, higher average sales prices, lower asset impairments and lower overhead costs. The 2009 third quarter results included $7.7 million of inventory impairment charges related to land sales, an $8.8 million charge related to the early extinguishment of debt and $1.3 million of restructuring charges. The 2010 third quarter included a $1.0 million charge related to the early extinguishment of debt and did not include any inventory impairments. Excluding the loss on the early extinguishment of debt, the Company generated net income of $5.5 million*, or $0.02* per diluted share, for the 2010 third quarter.

Homebuilding revenues for the 2010 third quarter were $207.5 million, down 37% from $327.4 million for the 2009 third quarter. The decrease in homebuilding revenues was driven primarily by a 33% decline in new home deliveries, offset in part by a 14% increase in consolidated average home price to $345,000 as compared to the 2009 third quarter. The increase in average home price was largely due to the delivery of more higher priced homes in Southern California and a reduction in deliveries in Florida as compared to the 2009 third quarter.

Gross margin from home sales for the 2010 third quarter was 23.6% versus 18.6% for the year earlier period. The 500 basis point improvement in the 2010 third quarter gross margin from home sales was driven primarily by lower direct construction costs and higher margins in substantially all of our markets, and price increases in Southern California. Excluding previously capitalized interest costs, gross margin from home sales for the 2010 third quarter was 29.7%* versus 24.3%* for the 2009 third quarter.

The Company’s 2010 third quarter SG&A expenses (including Corporate G&A) were $36.3 million compared to $43.7 million for the 2009 third quarter, which included noncash stock-based compensation charges of $3.1 million and $1.7 million, respectively. The Company’s 2010 third quarter SG&A rate from home sales was 17.6% versus an adjusted rate of 15.6%* for the 2009 third quarter (2009 third quarter excludes $1.5 million in restructuring charges). The increase in the Company’s SG&A rate was primarily the result of a 23% decrease in revenues from home sales.

The Company’s 2010 third quarter income tax provision was $2.1 million, which was fully offset by a noncash reversal of its deferred tax asset valuation allowance for the same amount. In addition, during the three and nine months ended September 30, 2010, the Company recorded a noncash reduction of its deferred tax asset of $4.8 million and $14.1 million, respectively, and a corresponding noncash reduction of its deferred tax asset valuation allowance related to built-in losses realized during these periods that were in excess of the Section 382 annual limitation. As of September 30, 2010, the Company had a $516.1 million deferred tax asset valuation allowance.

The Company used $67.4 million of cash flows from operating activities for the 2010 third quarter versus generating $112.6 million of cash flows from operating activities in the year earlier period. The decline in cash flows from operations as compared to the 2009 third quarter was driven primarily by a $69.7 million increase in cash land purchases in the 2010 third quarter and a $119.9 million decrease in homebuilding revenues (including a $56.6 million decrease in land sale revenues). Cash flow from operations for the three months ended September 30, 2010 and 2009 included $91.3 million and $21.6 million, respectively, of cash land purchases. Excluding cash land purchases and land sales, cash flow from operating activities for the 2010 third quarter was $22.9 million* versus $77.9 million* in the year earlier period.

Net new orders (excluding joint ventures) for the 2010 third quarter decreased 38% from the 2009 third quarter to 555 homes on a 2% decline in the number of average active selling communities from 134 to 131. The Company’s monthly sales absorption rate for the 2010 third quarter was 1.4 per community compared to 2.2 per community for the 2009 third quarter. The Company’s cancellation rate for the 2010 third quarter was 19% versus 15% for both the 2009 third quarter and the 2010 second quarter. The total number of sales cancellations for the 2010 third quarter was 132, of which 82 cancellations related to homes in the Company’s 2010 third quarter beginning backlog and 50 related to orders generated during the quarter.

The dollar value of the Company’s backlog (excluding joint ventures) decreased 35% to $214.2 million, or 605 homes, compared to $329.7 million, or 995 homes, for the 2009 third quarter. The decrease in backlog value was driven primarily by a 38% decrease in net new orders, which was offset in part by a 7% increase in average home price in backlog from $331,000 to $354,000.

During the 2010 third quarter, the Company approved (but has not yet consummated) the purchase of $93 million of land, comprised of approximately 2,000 lots, 32% of which are finished, 43% partially developed and 25% raw. During the same period, the Company purchased approximately 1,800 lots valued at

2

$127 million ($91 million of which were cash purchases and $32 million were acquired through an investment in a joint venture). Approximately 73% of the $127 million in land purchases related to land located in California, with the balance spread throughout the Company’s other operations. For the nine months ended September 30, 2010, the Company purchased approximately 4,600 lots valued at $281 million.

Earnings Conference Call

A conference call to discuss the Company’s 2010 third quarter will be held at 12:00 p.m. Eastern time October 27, 2010. 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) 747-4660 (domestic) or (913) 312-1500 (international); Passcode: 3684458 The entire audio transmission with the synchronized 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: 3684458.

About Standard Pacific

Standard Pacific, one of the nation’s largest homebuilders, has built more than 110,000 homes during its 44-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 dollar value and timing of anticipated land purchases; the availability of land opportunities that meet our return threshold, 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. 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 8.

###

(Note: Tables Follow)

3

KEY STATISTICS AND FINANCIAL DATA¹

	As of or For the Three Months Ended
	September 30, 2010			September 30, 2009			Percentage or %  Change			June 30, 2010			Percentage or %  Change
	(Dollars in thousands, except average selling price)
Operating Data
Deliveries		599			893			(33	%)		891			(33	%)
Average selling price	$	345,000		$	302,000			14	%	$	355,000			(3	%)
Homebuilding revenues	$	207,466		$	327,411			(37	%)	$	317,159			(35	%)
Gross margin %		23.5	%		13.0	%		10.5	%		20.9	%		2.6	%
Gross margin % from home sales (excluding impairments)*		23.6	%		18.6	%		5.0	%		20.9	%		2.7	%
Gross margin % from home sales (excluding impairments and interest amortized to cost of home sales)*		29.7	%		24.3	%		5.4	%		27.5	%		2.2	%
Impairments and write-offs	$	—		$	7,814			(100	%)	$	—			—
Restructuring charges (excluding debt refinance)	$	—		$	1,315			(100	%)	$	—			—
SG&A %		17.5	%		13.3	%		4.2	%		13.7	%		3.8	%
SG&A % (excluding restructuring charges and land sales)*		17.6	%		15.6	%		2.0	%		13.7	%		3.9	%
Net new orders		555			893			(38	%)		719			(23	%)
Average active selling communities		131			134			(2	%)		127			3	%
Monthly sales absorption rate per community		1.4			2.2			(36	%)		1.9			(26	%)
Cancellation rate		19	%		15	%		4	%		15	%		4	%
Cancellations from beginning backlog		82			92			(11	%)		76			8	%
Cancellations from current quarter sales		50			71			(30	%)		54			(7	%)
Backlog (homes)		605			995			(39	%)		649			(7	%)
Backlog (dollar value)	$	214,237		$	329,661			(35	%)	$	237,708			(10	%)
Cash flows (uses) from operating activities	$	(67,414	)	$	112,572			(160	%)	$	5,349			(1360	%)
Cash flows (uses) from investing activities	$	(35,995	)	$	(9,241	)		290	%	$	(1,451	)		2381	%
Cash flows (uses) from financing activities	$	(61,447	)	$	(147,732	)		(58	%)	$	114,028			(154	%)
Land purchases (incl. seller financing and excl. JV investments)	$	94,672		$	21,595			338	%	$	103,278			(8	%)
Land sale proceeds	$	940		$	56,273			(98	%)	$	447			110	%
Adjusted Homebuilding EBITDA*	$	29,701		$	31,749			(6	%)	$	51,104			(42	%)
Adjusted Homebuilding EBITDA Margin %*		14.3	%		9.7	%		4.6	%		16.1	%		(1.8	%)
Homebuilding interest incurred	$	28,070		$	26,218			7	%	$	27,730			1	%
Homebuilding interest capitalized to inventories owned	$	17,126		$	12,836			33	%	$	16,515			4	%
Homebuilding interest capitalized to investments in JVs	$	687		$	749			(8	%)	$	736			(7	%)
Interest amortized to cost of sales (incl. cost of land sales)	$	12,546		$	23,048			(46	%)	$	21,325			(41	%)

	As of
	September 30, 2010			June 30, 2010			Percentage or %  Change			December 31, 2009			Percentage or %  Change
	(Dollars in thousands, except per share amounts)
Balance Sheet Data
Homebuilding cash (including restricted cash)	$	546,096		$	710,385			(23	%)	$	602,222			(9	%)
Inventories owned	$	1,151,599		$	1,057,238			9	%	$	986,322			17	%
Building sites owned or controlled		23,250			21,853			6	%		19,191			21	%
Homes under construction		886			1,003			(12	%)		934			(5	%)
Completed specs		391			293			33	%		282			39	%
Deferred tax asset valuation allowance	$	516,133		$	523,041			(1	%)	$	534,596			(3	%)
Homebuilding debt	$	1,216,786		$	1,239,623			(2	%)	$	1,156,726			5	%
Joint venture recourse debt	$	7,819		$	34,636			(77	%)	$	38,835			(80	%)
Stockholders’ equity	$	453,475		$	447,710			1	%	$	435,798			4	%
Stockholders’ equity per share (including if-converted preferred stock)*	$	1.81		$	1.78			2	%	$	1.75			3	%
Total debt to book capitalization*		73.4	%		74.5	%		(1.1	%)		73.4	%		0.0	%
Adjusted net homebuilding debt to total adjusted book capitalization*		59.7	%		54.2	%		5.5	%		56.0	%		3.7	%

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

* Please see “Reconciliation of Non-GAAP Financial Measures” beginning on page 8.

4

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended September 30,						Nine Months Ended September 30,
	2010			2009			2010			2009
	(Dollars in thousands, except per share amounts)
	(Unaudited)
Homebuilding:
Home sale revenues	$	206,516		$	269,873		$	698,138		$	760,312
Land sale revenues		950			57,538			1,856			66,306
Total revenues		207,466			327,411			699,994			826,618
Cost of home sales		(157,677	)		(219,641	)		(543,400	)		(661,211	)
Cost of land sales		(954	)		(65,147	)		(1,628	)		(75,578	)
Total cost of sales		(158,631	)		(284,788	)		(545,028	)		(736,789	)
Gross margin		48,835			42,623			154,966			89,829
Gross margin %		23.5	%		13.0	%		22.1	%		10.9	%
Selling, general and administrative expenses		(36,339	)		(43,695	)		(112,504	)		(142,100	)
Income (loss) from unconsolidated joint ventures		1,801			(1,960	)		1,141			(4,449	)
Interest expense		(10,257	)		(12,633	)		(32,721	)		(35,409	)
Loss on early extinguishment of debt		(999	)		(8,824	)		(6,189	)		(3,457	)
Other income (expense)		1,035			(305	)		4,277			(1,309	)
Homebuilding pretax income (loss)		4,076			(24,794	)		8,970			(96,895	)
Financial Services:
Revenues		3,430			3,762			9,711			10,095
Expenses		(2,721	)		(2,753	)		(8,026	)		(9,009	)
Income from unconsolidated joint ventures		—			—			—			119
Other income		30			19			111			108
Financial services pretax income		739			1,028			1,796			1,313
Income (loss) from continuing operations before income taxes		4,815			(23,766	)		10,766			(95,582	)
Provision for income taxes		(272	)		(33	)		(633	)		(298	)
Income (loss) from continuing operations		4,543			(23,799	)		10,133			(95,880	)
Loss from discontinued operations, net of income taxes		—			(45	)		—			(569	)
Net income (loss)		4,543			(23,844	)		10,133			(96,449	)
Less: Net (income) loss allocated to preferred stockholder		(2,676	)		14,500			(5,982	)		59,022
Net income (loss) available to common stockholders	$	1,867		$	(9,344	)	$	4,151		$	(37,427	)
Basic income (loss) per common share:
Continuing operations	$	0.02		$	(0.10	)	$	0.04		$	(0.40	)
Discontinued operations		—			—			—			—
Basic income (loss) per common share	$	0.02		$	(0.10	)	$	0.04		$	(0.40	)
Diluted income (loss) per common share:
Continuing operations	$	0.02		$	(0.10	)	$	0.04		$	(0.40	)
Discontinued operations		—			—			—			—
Diluted income (loss) per common share	$	0.02		$	(0.10	)	$	0.04		$	(0.40	)
Weighted average common shares outstanding:
Basic		103,100,974			95,250,351			102,582,491			93,731,253
Diluted		106,137,371			95,250,351			111,005,597			93,731,253
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

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REGIONAL OPERATING DATA

	Three Months Ended September 30,								Nine Months Ended September 30,
	2010				2009				2010				2009
	Homes		Avg. Selling Price		Homes		Avg. Selling Price		Homes		Avg. Selling Price		Homes		Avg. Selling Price
New homes delivered:
California		234	$	508,000		347	$	442,000		826	$	502,000		948	$	429,000
Arizona		45		214,000		75		202,000		154		204,000		209		210,000
Texas		95		291,000		82		269,000		286		294,000		328		279,000
Colorado		28		302,000		37		312,000		93		296,000		113		305,000
Nevada		6		208,000		5		226,000		15		201,000		13		226,000
Florida		103		196,000		235		181,000		347		192,000		603		189,000
Carolinas		88		230,000		112		216,000		306		231,000		308		218,000
Consolidated total		599		345,000		893		302,000		2,027		344,000		2,522		301,000
Unconsolidated joint ventures		12		456,000		15		548,000		40		467,000		92		524,000
Discontinued operations		—		—		1		130,000		—		—		4		201,000
Total (including joint ventures)		611	$	347,000		909	$	306,000		2,067	$	347,000		2,618	$	309,000

	Three Months Ended September 30,								Nine Months Ended September 30,
	2010				2009				2010				2009
	Homes		Avg. Selling Communities		Homes		Avg. Selling Communities		Homes		Avg. Selling Communities		Homes		Avg. Selling Communities
Net new orders:
California		223		46		377		49		824		45		1,139		52
Arizona		39		10		79		7		145		9		235		9
Texas		76		16		96		19		277		17		335		19
Colorado		26		4		34		6		77		5		95		6
Nevada		11		1		2		2		26		1		10		2
Florida		98		28		189		28		356		26		617		33
Carolinas		82		26		116		23		328		25		365		24
Consolidated total		555		131		893		134		2,033		128		2,796		145
Unconsolidated joint ventures		10		3		28		5		38		3		167		8
Discontinued operations		—		—		1		—		—		—		3		—
Total (including joint ventures)		565		134		922		139		2,071		131		2,966		153

	At September 30,
	2010				2009
Backlog ($ in thousands):	Homes		Value		Homes		Value
California		245	$	123,083		424	$	190,185
Arizona		38		8,184		102		21,815
Texas		100		30,907		137		42,849
Colorado		38		11,412		60		18,022
Nevada		11		2,220		1		213
Florida		87		18,291		161		31,457
Carolinas		86		20,140		110		25,120
Consolidated total		605		214,237		995		329,661
Unconsolidated joint ventures		7		3,148		22		10,722
Total (including joint ventures)		612	$	217,385		1,017	$	340,383

	At September 30,
	2010		2009
Building sites owned or controlled:
California		9,646		7,740
Arizona		1,982		1,925
Texas		2,448		1,676
Colorado		392		261
Nevada		1,203		1,906
Florida		5,001		4,856
Carolinas		2,578		1,656
Total (including joint ventures)		23,250		20,020
Building sites owned		17,468		15,516
Building sites optioned or subject to contract		4,320		2,543
Joint venture lots		1,462		1,961
Total (including joint ventures)		23,250		20,020

Building sites owned:
Raw lots	5,080	3,792
Lots under development	3,469	2,537
Finished lots	7,189	7,142
Under construction or completed homes	1,730	2,045
Total	17,468	15,516

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CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30, 2010			December 31, 2009
	(Dollars in thousands)
	(Unaudited)
ASSETS
Homebuilding:
Cash and equivalents	$	529,113		$	587,152
Restricted cash		16,983			15,070
Trade and other receivables		13,673			12,676
Inventories:
Owned		1,151,599			986,322
Not owned		17,278			11,770
Investments in unconsolidated joint ventures		79,481			40,415
Deferred income taxes, net		10,791			9,431
Other assets		29,537			131,086
		1,848,455			1,793,922
Financial Services:
Cash and equivalents		10,215			8,407
Restricted cash		2,870			3,195
Mortgage loans held for sale, net		36,134			41,048
Mortgage loans held for investment, net		10,378			10,818
Other assets		3,528			3,621
		63,125			67,089
Total Assets	$	1,911,580		$	1,861,011
LIABILITIES AND EQUITY
Homebuilding:
Accounts payable and accrued liabilities	$	204,375		$	222,550
Secured project debt and other notes payable		4,857			59,531
Senior notes payable		1,109,848			993,018
Senior subordinated notes payable		102,081			104,177
		1,421,161			1,379,276
Financial Services:
Accounts payable and other liabilities		1,342			1,436
Mortgage credit facilities		35,602			40,995
		36,944			42,431
Total Liabilities		1,458,105			1,421,707
Equity:
Stockholders’ Equity:
Preferred stock, $0.01 par value; 10,000,000 shares authorized; 450,829 shares issued and outstanding at September 30, 2010 and December 31, 2009, respectively		5			5
Common stock, $0.01 par value; 600,000,000 shares authorized; 107,147,906 and 105,293,180 shares issued and outstanding at September 30, 2010 and December 31, 2009, respectively		1,071			1,053
Additional paid-in capital		1,040,270			1,030,664
Accumulated deficit		(570,495	)		(580,628	)
Accumulated other comprehensive loss, net of tax		(17,376	)		(15,296	)
Total Stockholders’ Equity		453,475			435,798
Noncontrolling Interests		—			3,506
Total Equity		453,475			439,304
Total Liabilities and Equity	$	1,911,580		$	1,861,011

	September 30, 2010		December 31, 2009
	(Dollars in thousands)
	(Unaudited)
Inventories Owned:
Land and land under development	$	741,607	$	564,516
Homes completed and under construction		312,971		316,323
Model homes		97,021		105,483
Total inventories owned	$	1,151,599	$	986,322
Inventories Owned by Segment:
California	$	720,696	$	618,336
Southwest		209,576		196,279
Southeast		221,327		171,707
Total inventories owned	$	1,151,599	$	986,322

7

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Each of the below measures are not 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 income to net income excluding the loss on early extinguishment of debt. We believe this measure is useful to management and investors as it provides perspective on the underlying operating performance of the business excluding this charge and provides comparability with the Company’s peer group. Net income excluding the loss on early extinguishment of debt for the three months ended September 30, 2010 is calculated as follows (dollars in thousands):

Net income	$	4,543
Add: Loss on early extinguishment of debt		999
Net income, as adjusted		5,542
Less: Adjusted net income allocated to preferred stockholder		(3,265	)
Adjusted net income available to common stockholders	$	2,277
Diluted earnings per common share	$	0.02
Weighted average diluted common shares outstanding		106,137,371

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 provide comparability with the Company’s peer group.

	Three Months Ended
	September 30, 2010			Gross Margin %			September 30, 2009			Gross Margin %			June 30, 2010			Gross Margin %
	(Dollars in thousands)
Homebuilding gross margin	$	48,835			23.5	%	$	42,623			13.0	%	$	66,268			20.9	%
Less: Land sale revenues		(950	)					(57,538	)					(450	)
Add: Cost of land sales		954						65,147						421
Gross margin from home sales		48,839			23.6	%		50,232			18.6	%		66,239			20.9	%
Add: Housing inventory impairment charges		—						—						—
Gross margin from home sales, excluding impairment charges		48,839			23.6	%		50,232			18.6	%		66,239			20.9	%
Add: Capitalized interest included in cost of home sales		12,546			6.1	%		15,383			5.7	%		20,943			6.6	%
Gross margin from home sales, excluding impairment charges and interest amortized to cost of home sales	$	61,385			29.7	%	$	65,615			24.3	%	$	87,182			27.5	%

The table set forth below reconciles the Company’s SG&A expenses to SG&A expenses excluding restructuring charges. 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.

	Three Months Ended
	September 30, 2010			September 30, 2009			June 30, 2010
	(Dollars in thousands)
Selling, general and administrative expenses	$	36,339		$	43,695		$	43,413
Less: Restructuring charges		—			(1,495	)		—
Selling, general and administrative expenses, excluding restructuring charges	$	36,339		$	42,200		$	43,413
SG&A % from home sales, excluding restructuring charges		17.6	%		15.6	%		13.7	%

8

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Continued)

The table set forth below reconciles the Company’s cash flows from operations to cash flows from operations excluding land purchases and proceeds from land sales. 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 and land sales.

	Three Months Ended
	September 30, 2010			September 30, 2009			June 30, 2010
	(Dollars in thousands)
Cash flows from (used in) operations	$	(67,414	)	$	112,572		$	5,349
Add: Cash land purchases		91,272			21,595			79,364
Less: Land sale proceeds		(940	)		(56,273	)		(447	)
Cash flows from operations (excluding land purchases and land sales)	$	22,918		$	77,894		$	84,266

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.

	September 30, 2010			June 30, 2010			December 31, 2009			September 30, 2009
	(Dollars in thousands)
Total consolidated debt	$	1,252,388		$	1,304,749		$	1,199,621		$	1,490,134
Less:
Indebtedness included in liabilities from inventories not owned		—			—			(1,900	)		—
Financial services indebtedness		(35,602	)		(65,126	)		(40,995	)		(38,798	)
Homebuilding cash		(546,096	)		(710,385	)		(602,222	)		(806,766	)
Adjusted net homebuilding debt		670,690			529,238			554,504			644,570
Stockholders’ equity		453,475			447,710			435,798			349,591
Total adjusted book capitalization	$	1,124,165		$	976,948		$	990,302		$	994,161
Total debt to book capitalization		73.4	%		74.5	%		73.4	%		81.0	%
Adjusted net homebuilding debt to total adjusted book capitalization ratio		59.7	%		54.2	%		56.0	%		64.8	%

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. In addition, this calculation excludes 3.9 million shares issued under a share lending agreement related to the Company’s 6% Convertible Senior Subordinated Notes issued on September 28, 2007. 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. The following table reconciles actual common shares outstanding to pro forma common shares outstanding used to calculate pro forma stockholders’ equity per share:

	September 30, 2010			June 30, 2010			March 31, 2010			December 31, 2009
Actual common shares outstanding		107,147,906			106,957,421			106,165,483			105,293,180
Add: Conversion of preferred shares to common shares		147,812,786			147,812,786			147,812,786			147,812,786
Less: Common shares outstanding under share lending facility		(3,919,904	)		(3,919,904	)		(3,919,904	)		(3,919,904	)
Pro forma common shares outstanding		251,040,788			250,850,303			250,058,365			249,186,062
Stockholders’ equity (actual amounts rounded to nearest thousand)	$	453,475,000		$	447,710,000		$	434,568,000		$	435,798,000
Divided by pro forma common shares outstanding	÷	251,040,788		÷	250,850,303		÷	250,058,365		÷	249,186,062
Pro forma stockholders’ equity per common share	$	1.81		$	1.78		$	1.74		$	1.75

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, (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 September 30,
	September 30, 2010			September 30, 2009			June 30, 2010			2010			2009
	(Dollars in thousands)
Net income (loss)	$	4,543		$	(23,844	)	$	10,661		$	92,796		$	(494,292	)
Provision (benefit) for income taxes		272			—			272			(95,930	)		(47,678	)
Homebuilding interest amortized to cost of sales and interest expense		22,803			35,681			31,804			117,692			129,526
Homebuilding depreciation and amortization		479			672			539			2,201			3,356
Amortization of stock-based compensation		3,115			1,651			3,519			14,203			8,037
EBITDA		31,212			14,160			46,795			130,962			(401,051	)
Add:
Cash distributions of income from unconsolidated joint ventures		—			—			—			3,139			1,530
Impairment charges		—			7,814			—			11,192			472,734
(Gain) loss on early extinguishment of debt		999			8,824			5,190			9,663			7,813
Less:
Income (loss) from unconsolidated joint ventures		1,801			(1,960	)		(226	)		874			(25,542	)
Income (loss) from financial services subsidiary		709			1,009			1,107			1,927			1,180
Adjusted Homebuilding EBITDA	$	29,701		$	31,749		$	51,104		$	152,155		$	105,388
Homebuilding revenues	$	207,466		$	327,411		$	317,159		$	1,039,773		$	1,203,017
Adjusted Homebuilding EBITDA Margin %		14.3	%		9.7	%		16.1	%		14.6	%		8.8	%

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									LTM Ended September 30,
	September 30, 2010			September 30, 2009			June 30, 2010			2010			2009
	(Dollars in thousands)
Net cash provided by (used in) operating activities	$	(67,414	)	$	112,572		$	5,349		$	81,170		$	375,353
Add:
Provision (benefit) for income taxes		272			—			272			(95,930	)		(47,678	)
Deferred tax valuation allowance		6,908			(9,278	)		13,603			107,250			(162,280	)
Homebuilding interest amortized to cost of sales and interest expense		22,803			35,681			31,804			117,692			129,526
Excess tax benefits from share-based payment arrangements		—			—			—			324			—
Less:
Income (loss) from financial services subsidiary		709			1,009			1,107			1,927			1,180
Depreciation and amortization from financial services subsidiary		280			169			153			753			700
(Gain) loss on disposal of property and equipment		1			1			—			1,237			3,230
Net changes in operating assets and liabilities:
Trade and other receivables		(579	)		(2,191	)		(6,518	)		(3,993	)		(15,287	)
Mortgage loans held for sale		(31,621	)		(16,071	)		34,319			(7,548	)		(20,039	)
Inventories-owned		83,309			(103,969	)		(3,715	)		35,883			(303,581	)
Inventories-not owned		6,520			324			6,488			25,413			(5,715	)
Deferred income taxes		(7,180	)		9,277			(13,875	)		(11,320	)		169,218
Other assets		596			1,997			(1,030	)		(110,433	)		(91,100	)
Accounts payable and accrued liabilities		17,077			4,586			(14,333	)		17,564			82,081
Adjusted Homebuilding EBITDA	$	29,701		$	31,749		$	51,104		$	152,155		$	105,388

10