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Press release from PR Newswire

Standard Pacific Corp. Reports 2010 Second Quarter Results

Thursday, July 29, 2010

Standard Pacific Corp. Reports 2010 Second Quarter Results16:15 EDT Thursday, July 29, 2010IRVINE, Calif., July 29, 2010 /PRNewswire-FirstCall/ -- Standard Pacific Corp. (NYSE: SPF) today announced operating results for its second quarter ended June 30, 2010.  2010 Second Quarter Highlights and Comparisons to the 2009 Second QuarterNet income of $10.7 million vs. a net loss of $23.1 million2010 net income of $15.9 million*, excluding $5.2 million charge related to debt repurchasesEarnings per share of $0.04 vs. a loss per share of $0.10 Homebuilding revenues of $317.2 million, up 9% from $289.7 million891 new home deliveries (excluding joint ventures), down 5% from 942 homes (up from 537 homes in the 2010 first quarter)Average home price of $355,000, up 18% from $302,000Gross margin from home sales of 20.9% vs. 18.5%* (2009 second quarter gross margin excludes $13.1 million of inventory impairment charges) Homebuilding SG&A rate from home sales of 13.7% vs. 14.6%* (2010 second quarter includes $6.4 million in incentive-based compensation vs. $0.4 million last year; 2009 second quarter also excludes $4.6 million of restructuring charges)Net new orders (excluding joint ventures) down 38% to 719 homes on a 12% decline in average community count (down 5% from 759 homes in the 2010 first quarter)Backlog value (excluding joint ventures) down 23% to $237.7 million vs. $308.5 million649 homes in backlog, down 34% from 982 homesCash flow from operating activities of $5.3 million vs. $68.6 million$79.4 million of cash land purchases in 2010 vs. $4.2 million in 2009Homebuilding cash balance of $710.4 million vs. $573.0 millionAdjusted net homebuilding debt to total capitalization ratio of 54.2%* vs. 67.0%*The Company generated net income of $10.7 million, or $0.04 per diluted share, for the 2010 second quarter compared to a net loss of $23.1 million, or $0.10 per diluted share, for the year earlier period.  The primary drivers of the improved operating performance for the 2010 second quarter were higher revenues, higher gross margins, higher average sales prices and lower asset impairments and overhead costs. The 2009 second quarter results included $21.3 million of asset impairment charges and $5.5 million of restructuring charges.  The 2010 second quarter included a $5.2 million charge related to the early extinguishment of debt and did not include any asset impairments.  Excluding the loss on the early extinguishment of debt, the Company generated net income of $15.9 million*, or $0.05* per diluted share, for the 2010 second quarter.Homebuilding revenues for the 2010 second quarter were $317.2 million, up 9% from $289.7 million for the 2009 second quarter.  The increase in homebuilding revenues was driven primarily by an 18% increase in consolidated average home price to $355,000, largely due to the delivery of more higher priced California homes during the quarter as compared to the 2009 second quarter.  The increase in average home price was offset in part by a 5% decline in new home deliveries to 891 homes (exclusive of joint ventures).  Gross margin from home sales for the 2010 second quarter was 20.9% versus an adjusted gross margin from home sales for the year earlier period of 18.5%* (2009 second quarter excludes $13.1 million of inventory impairments).  The 240 basis point improvement in the 2010 second quarter gross margin from home sales was driven primarily by lower direct construction costs and price increases in California.  Excluding impairments (of which there were none in the 2010 second quarter) and previously capitalized interest costs, gross margin from home sales for the 2010 second quarter was 27.5%* versus 25.3%* for the 2009 second quarter.    The Company's 2010 second quarter SG&A expenses (including Corporate G&A) were $43.4 million compared to $46.0 million for the 2009 second quarter.  The Company's 2010 second quarter SG&A rate from home sales was 13.7% versus an adjusted rate of 14.6%* (2009 second quarter excludes $4.6 million in restructuring charges).  The reduction in the Company's SG&A rate was primarily the result of lower personnel, model and stock option costs, and an 11% increase in revenues from home sales.  These cost reductions were offset by a $6.0 million increase in the accrual for incentive-based compensation (which is primarily linked to the Company's EBITDA), from $0.4 million for the 2009 second quarter to $6.4 million for the 2010 second quarter ($2.0 million of which related to stock-based compensation).  During the 2010 second quarter, the Company further improved its liquidity and its debt maturity schedule by issuing $300 million of 8 3/8% senior unsecured notes due May 2018.  The net proceeds from the offering were used to, among other things, redeem $185.3 million of the Company's outstanding senior notes due 2010, 2011 and 2013 and to refinance $103.0 million in other indebtedness that was previously repaid by the Company.  As a result of these redemptions, the Company incurred a $5.2 million charge during the 2010 second quarter, which was included in gain (loss) on early extinguishment of debt.The Company generated $5.3 million of cash flow from operating activities for the 2010 second quarter versus $68.6 million for the year earlier period.  The decline in cash flows as compared to the 2009 second quarter was driven primarily by a $75.2 million increase in cash land purchases in the 2010 second quarter, which was partially offset by an increase in homebuilding revenues.  Cash flow from operations for the three months ended June 30, 2010 and 2009 included $79.4 million and $4.2 million, respectively, of cash land purchases.  Excluding cash land purchases and lot sales, cash flow from operating activities for the 2010 second quarter was $84.3 million* versus $65.2 million* in the year earlier period.  Net new orders (excluding joint ventures) for the 2010 second quarter decreased 38% from the 2009 second quarter to 719 homes on a 12% decline in the number of average active selling communities from 144 to 127.  The Company's monthly sales absorption rate for the 2010 second quarter was 1.9 per community compared to 2.7 per community for the 2009 second quarter.  The Company's cancellation rate for the 2010 second quarter was 15% versus 16% for the 2009 second quarter and 15% for the 2010 first quarter.  The total number of sales cancellations for the 2010 second quarter was 130, of which 76 cancellations related to homes in the Company's 2010 second quarter beginning backlog and 54 related to orders generated during the quarter.  The dollar value of the Company's backlog (excluding joint ventures) decreased 23% to $237.7 million, or 649 homes, compared to $308.5 million, or 982 homes, for the 2009 second quarter.  The decrease in backlog value was driven primarily by a 38% decrease in net new orders, which was offset in part by a 17% increase in average home price in backlog from $314,000 to $366,000.  During the 2010 second quarter, the Company approved (but has not yet consummated) the purchase of $198 million of land, comprised of approximately 2,900 lots, 22% of which are finished, 14% partially developed and 64% raw.  Approximately 61% of the approved lot purchases are transactions with developers and 11% with banks.  During the same period, the Company purchased approximately 1,875 lots valued at $103 million ($79.4 million of which were cash purchases).  Approximately 78% of the $103 million in land purchases related to land located in California, with the balance spread throughout the Company's other operations.  As of June 30, 2010, the Company had outstanding approximately $270 million of approved land purchases and option contracts, of which $126 million is expected to be purchased in 2010 and $144 million expected to be purchased in 2011 and beyond.Ken Campbell, the Company's President and CEO commented, "I am pleased that our strategy appears to be working well.  Our average sales price is moving up.  The gross margins in our backlog are steady.  The average gross margin we are earning on new communities, although still a small percentage of the total, is above our older communities."  Mr. Campbell continued, "Achieving this level of profitability at these sales rates bodes particularly well for our financial performance when the market begins to recover.  I am looking forward to that recovery.... anxiously."Earnings Conference CallA conference call to discuss the Company's 2010 second quarter will be held at 11:00 a.m. Eastern time July 30, 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) 211-7449 (domestic) or (913) 312-0857 (international); Passcode: 6415332.  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: 6415332.About Standard PacificStandard 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" at the end of this release.(Note: Tables follow)KEY STATISTICS AND FINANCIAL DATA(1) As of or For the Three Months EndedJune 30,June 30,PercentageMarch 31,Percentage20102009or % Change2010or % ChangeOperating Data(Dollars in thousands, except average selling price)Deliveries891942(5%)53766%Average selling price$355,000$302,00018%$326,0009%Homebuilding revenues$317,159$289,6729%$175,36981%Gross margin %20.9%13.5%7.4%22.7%(1.8%)Gross margin % from home sales (excluding impairments)*20.9%18.5%2.4%22.7%(1.8%)Gross margin % from home sales (excluding impairments and interest amortized to cost of home sales)*27.5%25.3%2.2%29.2%(1.7%)Impairments and write-offs$-$21,270(100%)$--Restructuring charges (excluding debt refinance)$-$5,504(100%)$--SG&A %13.7%15.9%(2.2%)18.7%(5.0%)SG&A % (excluding restructuring charges and land sales)*13.7%14.6%(0.9%)18.7%(5.0%)Net new orders7191,169(38%)759(5%)Average active selling communities127144(12%)1261%Monthly sales absorption rate per community1.92.7(30%)2.0(5%)Cancellation rate15%16%(1%)15%0%Cancellations from beginning backlog7694(19%)6027%Cancellations from current quarter sales54122(56%)73(26%)Backlog (homes)649982(34%)821(21%)Backlog (dollar value)$237,708$308,540(23%)$278,269(15%)Cash flows (uses) from operating activities$5,349$68,595(92%)$33,570(84%)Cash flows (uses) from investing activities$(1,451)$(10,128)(86%)$(1,008)44%Cash flows (uses) from financing activities$114,028$(32,681)(449%)$(41,863)(372%)Land purchases (including seller financing)$103,278$4,2232,346%$50,779103%Land sale proceeds$447$7,626(94%)$452(1%)Adjusted Homebuilding EBITDA*$51,104$32,96355%$21,879134%Adjusted Homebuilding EBITDA Margin %*16.1%11.4%4.7%12.5%3.6%Homebuilding interest incurred$27,730$26,7973%$26,2306%Homebuilding interest capitalized to inventories owned$16,515$14,10617%$13,59921%Homebuilding interest capitalized to investments in JVs$736$956(23%)$64614%Interest amortized to cost of sales (incl. cost of land sales)$21,325$21,855(2%)$11,79681%As of June 30,March 31,PercentageDecember 31,Percentage2010 2010or % Change 2009or % ChangeBalance Sheet Data(Dollars in thousands, except per share amounts)Homebuilding cash (including restricted cash)$710,385$591,66320%$602,22218%Inventories owned$1,057,238$1,030,1583%$986,3227%Building sites owned or controlled21,85320,5057%19,19114%Homes under construction1,0031,104(9%)9347%Completed specs29325415%2824%Deferred tax asset valuation allowance$523,041$536,645(3%)$534,596(2%)Homebuilding debt$1,239,623$1,124,26610%$1,156,7267%Joint venture recourse debt$34,636$37,470(8%)$38,835(11%)Stockholders' equity$447,710$434,5683%$435,7983%Stockholders' equity per share (including if-converted preferred stock)*$1.78$1.742%$1.752%Total debt to book capitalization*74.5%72.7%1.8%73.4%1.1%Adjusted net homebuilding debt to total adjusted book capitalization*54.2%55.1%(0.9%)56.0%(1.8%)(1) All statistical numbers exclude unconsolidated joint ventures and discontinued operations unless noted otherwise. *Please see "Reconciliation of Non-GAAP Financial Measures" at the end of this release.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSThree Months Ended June 30,Six Months Ended June 30,2010200920102009(Dollars in thousands, except per share amounts)(Unaudited)Homebuilding:Home sale revenues$316,709$284,206$491,622$490,439Land sale revenues4505,4669068,768Total revenues317,159289,672492,528499,207Cost of home sales(250,470)(244,868)(385,723)(441,570)Cost of land sales(421)(5,696)(674)(10,431)Total cost of sales(250,891)(250,564)(386,397)(452,001)Gross margin66,26839,108106,13147,206Gross margin %20.9%13.5%21.5%9.5%Selling, general and administrative expenses(43,413)(46,026)(76,165)(98,405)Loss from unconsolidated joint ventures (226)(5,578)(660)(2,489)Interest expense(10,479)(11,735)(22,464)(22,776)Gain (loss) on early extinguishment of debt(5,190)176(5,190)5,367Other income (expense)2,818(237)3,242(1,004)Homebuilding pretax income (loss)9,778(24,292)4,894(72,101)Financial Services:Revenues3,9834,2836,2816,333Expenses(2,876)(3,261)(5,305)(6,256)Other income4816781208Financial services pretax income1,1551,1891,057285Income (loss) from continuing operations before income taxes10,933(23,103)5,951(71,816)Provision for income taxes(272)(10)(361)(265)Income (loss) from continuing operations  10,661(23,113)5,590(72,081)Loss from discontinued operations, net of income taxes-(20)-(524)Net income (loss)10,661(23,133)5,590(72,605)Less: Net (income) loss allocated to preferred stockholder(6,288)14,191(3,303)44,573Net income (loss) available to common stockholders$4,373$(8,942)$2,287$(28,032)Basic earnings (loss) per common share:Continuing operations$0.04$(0.10)$0.02$(0.30)Discontinued operations----Basic earnings (loss) per common share$0.04$(0.10)$0.02$(0.30)Diluted earnings (loss) per common share:Continuing operations$0.04$(0.10)$0.02$(0.30)Discontinued operations----Diluted earnings (loss) per common share$0.04$(0.10)$0.02$(0.30)Weighted average common shares outstanding:Basic102,796,19593,134,612102,318,95392,959,116Diluted123,940,85393,134,612116,854,48992,959,116Weighted average additional common shares outstanding if preferred shares converted to common shares147,812,786147,812,786147,812,786147,812,786REGIONAL OPERATING DATAThree Months Ended June 30,Six Months Ended June 30,2010200920102009HomesAvg. Selling PriceHomesAvg. Selling PriceHomes Avg. Selling PriceHomesAvg. Selling PriceNew homes delivered:California374$526,000383$403,000592$499,000601$421,000Arizona62200,00062203,000109199,000134215,000Texas101293,000118293,000191296,000246283,000Colorado40290,00046303,00065293,00076301,000Nevada9195,0006222,0009195,0008225,000Florida158192,000208195,000244191,000368194,000Carolinas147233,000119224,000218231,000196219,000Consolidated total891355,000942302,0001,428344,0001,629301,000Unconsolidated joint ventures15453,00058513,00028471,00077519,000Discontinued operations------3224,000Total (including joint ventures)906$357,0001,000$314,0001,456$347,0001,709$311,000Three Months Ended June 30,Six Months Ended June 30,2010200920102009HomesAvg. Selling CommunitiesHomesAvg. Selling CommunitiesHomesAvg. Selling CommunitiesHomesAvg. Selling CommunitiesNet new orders:California31147499536014676253Arizona4691169106815610Texas9516131182011723919Colorado224326515617Nevada1218215182Florida11725249322582442835Carolinas11625134242462524925Consolidated total7191271,1691441,4781261,903151Unconsolidated joint ventures1338982831399Discontinued operations------2-Total (including joint ventures)7321301,2581521,5061292,044160At June 30,20102009Backlog ($ in thousands):HomesValueHomes ValueCalifornia256$137,493381$164,807Arizona449,7879821,144Texas11936,63812337,618Colorado4011,5826319,432Nevada61,2284917Florida9218,44820739,843Carolinas9222,53210624,779Consolidated total649237,708982308,540Unconsolidated joint ventures93,9202217,706Total (including joint ventures)658$241,6281,004$326,246At June 30,20102009Building sites owned or controlled:California9,0137,826Arizona2,0272,052Texas2,4271,730Colorado231298Nevada1,2091,911Florida4,7776,427Carolinas2,1691,768Total (including joint ventures)21,85322,012Building sites owned16,94417,510Building sites optioned or subject to contract3,9342,413Joint venture lots9752,089Total (including joint ventures)21,85322,012CONDENSED CONSOLIDATED BALANCE SHEETSJune 30,2010December 31, 2009(Dollars in thousands)ASSETS(Unaudited)Homebuilding:Cash and equivalents$696,593$587,152Restricted cash13,79215,070Trade and other receivables14,25212,676Inventories:Owned1,057,238986,322Not owned17,11011,770Investments in unconsolidated joint ventures41,83040,415Deferred income taxes, net10,4129,431Other assets29,792131,0861,881,0191,793,922Financial Services:Cash and equivalents7,5918,407Restricted cash4,0953,195Mortgage loans held for sale, net67,44541,048Mortgage loans held for investment, net9,95510,818Other assets3,2673,62192,35367,089Total Assets$1,973,372$1,861,011LIABILITIES AND EQUITYHomebuilding:Accounts payable and accrued liabilities$219,202$222,550Secured project debt and other notes payable24,38359,531Senior notes payable1,109,285993,018Senior subordinated notes payable105,955104,1771,458,8251,379,276Financial Services:Accounts payable and other liabilities1,7111,436Mortgage credit facilities65,12640,99566,83742,431Total Liabilities1,525,6621,421,707Equity:Stockholders' Equity:Preferred stock, $0.01 par value; 10,000,000 sharesauthorized; 450,829 shares issued and outstandingat June 30, 2010 and December 31, 2009, respectively55Common stock, $0.01 par value; 600,000,000 sharesauthorized; 106,957,421 and 105,293,180 sharesissued and outstanding at June 30, 2010 andDecember 31, 2009, respectively1,0691,053Additional paid-in capital1,038,4921,030,664Accumulated deficit(575,038)(580,628)Accumulated other comprehensive loss, net of tax(16,818)(15,296)Total Stockholders' Equity447,710435,798Noncontrolling Interests-3,506Total Equity447,710439,304Total Liabilities and Equity$1,973,372$1,861,011June 30,2010December 31,2009(Dollars in thousands)Inventories Owned:(Unaudited)Land and land under development$649,057$564,516Homes completed and under construction314,225316,323Model homes93,956105,483   Total inventories owned$1,057,238$986,322RECONCILIATION OF NON-GAAP FINANCIAL MEASURESEach 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 June 30, 2010 is calculated as follows (dollars in thousands):Net income$10,661Add: Loss on early extinguishment of debt5,190Net income, as adjusted15,851   Less: Adjusted net income allocated to preferred stockholder(9,349)Adjusted net income available to common stockholders$6,502Diluted earnings per common share$0.05Weighted average diluted common shares outstanding123,940,853The 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 EndedJune 30, 2010GrossMargin %June 30,2009GrossMargin %March 31,2010GrossMargin %(Dollars in thousands)Homebuilding gross margin$66,26820.9%$39,10813.5%$39,86322.7%Less: Land sale revenues(450)(5,466)(456)Add: Cost of land sales4215,696253Gross margin from home sales66,23920.9%39,33813.8%39,66022.7%Add: Housing inventory impairment charges-13,129-Gross margin from home sales, excluding  impairment charges66,23920.9%52,46718.5%39,66022.7%Add: Capitalized interest included in cost   of home sales20,9436.6%19,4126.8%11,3636.5%Gross margin from home sales, excluding   impairment charges and interest amortized   to cost of home sales$87,18227.5%$71,87925.3%$51,02329.2%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 EndedJune 30,2010June 30,2009March 31,2010(Dollars in thousands)Selling, general and administrative expenses$43,413$46,026$32,752Less: Restructuring charges-(4,650)-Selling, general and administrative expenses,  excluding  restructuring charges$43,413$41,376$32,752SG&A % from home sales, excluding restructuring charges13.7%14.6%18.7%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 EndedJune 30,2010June 30,2009March 31,2010(Dollars in thousands)Cash flows from operations$5,349$68,595$33,570Add: Cash land purchases79,3644,22350,779Less: Land sale proceeds(447)(7,626)(452)Cash flows from operations (excluding land purchases and land sales)$84,266$65,192$83,897The 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.  June 30, March 31, December 31,June 30,2010201020092009(Dollars in thousands)Total consolidated debt$1,304,749$1,156,700$1,199,621$1,330,940Less:Indebtedness included in liabilities from inventories not owned--(1,900)-Financial services indebtedness(65,126)(32,434)(40,995)(55,640)Homebuilding cash(710,385)(591,663)(602,222)(573,038)Adjusted net homebuilding debt529,238532,603554,504702,262Stockholders' equity447,710434,568435,798346,512Total adjusted book capitalization$976,948$967,171$990,302$1,048,774Total debt to book capitalization74.5%72.7%73.4%79.3%Adjusted net homebuilding debt to total adjusted book capitalization ratio54.2%55.1%56.0%67.0%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.  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:June 30,2010March 31,2010December 31,2009Actual common shares outstanding106,957,421106,165,483105,293,180Add: Conversion of preferred shares to common shares147,812,786147,812,786147,812,786Less: Common shares outstanding under share lending facility(3,919,904)(3,919,904)(3,919,904)Pro forma common shares outstanding250,850,303250,058,365249,186,062Stockholders' equity (actual amounts rounded to nearest thousand)$447,710,000$434,568,000$435,798,000Divided by pro forma common shares outstanding/250,850,303/250,058,365/249,186,062Pro forma stockholders' equity per common share$1.78$1.74$1.75The 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 EndedLTM Ended June 30,June 30,2010June 30,2009March 31,201020102009(Dollars in thousands)Net income (loss)$10,661$(23,133)$(5,071)$64,409$(840,357)Provision (benefit) for income taxes272-89(96,202)(67,564)Homebuilding interest amortized to cost of sales and interest expense31,80433,59023,781130,570119,712Homebuilding depreciation and amortization5397115512,3944,122Amortization of stock-based compensation3,5194,0791,96412,73911,560EBITDA46,79515,24721,314113,910(772,527)Add:Cash distributions of income from unconsolidated joint ventures-326-3,1391,759Impairment charges-13,129-19,006741,025(Gain) loss on early extinguishment of debt5,190(176)-17,488830Less:Income (loss) from unconsolidated joint ventures(226)(5,459)(434)(2,887)(115,235)Income (loss) from financial services subsidiary1,1071,022(131)2,227(443)Adjusted Homebuilding EBITDA$51,104$32,963$21,879$154,203$86,765Homebuilding revenues$317,159$289,672$175,369$1,159,718$1,275,946Adjusted Homebuilding EBITDA Margin %16.1%11.4%12.5%13.3%6.8%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 EndedLTM Ended June 30,June 30,2010June 30,2009March 31,201020102009(Dollars in thousands)Net cash provided by (used in) operating activities$5,349$68,595$33,570$261,156$294,714Add:Provision (benefit) for income taxes272-89(96,202)(67,564)Deferred tax valuation allowance13,603(8,913)(2,048)91,064(287,090)Homebuilding interest amortized to cost of sales and interest expense31,80433,59023,781130,570119,712Excess tax benefits from share-based payment arrangements--27324-Less:Income (loss) from financial services subsidiary1,1071,022(131)2,227(443)Depreciation and amortization from financial services subsidiary153171157642719(Gain) loss on disposal of property and equipment-675(36)1,2374,130Net changes in operating assets and liabilities:Trade and other receivables(6,518)(7,666)8,080(5,605)(11,654)Mortgage loans held for sale34,3198,854(8,544)8,00210,478Inventories-owned(3,715)(95,734)40,826(151,395)(258,149)Inventories-not owned6,48846011,06219,217115Deferred income taxes(13,875)8,9131,9595,137284,877Other assets(1,030)1,599(108,412)(109,032)(74,428)Accounts payable and accrued liabilities(14,333)25,13321,4795,07380,160Adjusted Homebuilding EBITDA$51,104$32,963$21,879$154,203$86,765SOURCE Standard Pacific Corp.For further information: John Stephens, SVP & CFO of Standard Pacific Corp., +1-949-789-1641, jstephens@stanpac.com