Third Quarter Financial Highlights:
-----------------------------------
-- Net income: $10.7 million - down 73.0%
-- Diluted EPS: $0.25 - down 70.6%
-- Revenues: $427.2 million - down 31.3%
-- New orders: $120.1 million - down 82.0%
-- Backlog at September 30, 2006: $1.41 billion
-- Reduced projected 2006 diluted EPS to $2.50 to $3.00 from $2.75 to
$3.25
-- Projected 2007 diluted EPS of $1.00 to $2.00
BONITA SPRINGS, Fla., Nov. 7, 2006 (PRIMEZONE) -- WCI Communities, Inc. (NYSE:WCI), a leading builder of traditional and tower residences in highly amenitized lifestyle communities, today reported its results for the third quarter of 2006. For the three months ended September 30, 2006, net income fell 73.0% to $10.7 million, compared with $39.7 million in the third quarter of 2005, while diluted earnings per share (EPS) fell 70.6% to $0.25 from $0.85. Revenues for the third quarter of 2006 were $427.2 million, compared with $621.9 million for the third quarter of 2005, a 31.3% decrease. The aggregate value of Traditional and Tower Homebuilding orders for the quarter fell 82.0% over the same period a year ago to $120.1 million, while the number of unit orders declined 81.5% to 140.
"Our results this quarter continue to reflect the impact of dramatically lower demand for our Florida traditional and tower homes," said Jerry Starkey, WCI's President and CEO. "Traditional home cancellations were about twice our historical rate during the quarter and we also experienced a higher rate of defaults in our Tower Division. The low order levels and defaults each had an impact on our earnings this quarter, as did our decision to abandon land option contracts, which resulted in a charge of $14.0 million or $0.25 EPS. Given the lack of visibility on demand, we have taken steps to operate the company through a protracted period of lower demand. We are making significant reductions to overhead, including reductions in our workforce that are expected to reduce our payroll, incentive and benefit costs about $60.0 million annually. We are also severely limiting our land spending and are pursuing the disposition of certain recreational amenity assets. The lower land spending is not expected to adversely impact our growth beyond 2007 as WCI already has considerable land holdings, which have a remaining projected build-out of approximately 18,500 units and were purchased an average of five years ago. Another 2,675 units are currently under option. We continue to focus on direct cost reductions in home construction and land development. For the next several quarters, WCI will focus on generating cash flow and reducing debt. Eight towers are expected to close in the fourth quarter of 2006, with another six expected to close in the first half of 2007. We are carefully monitoring the tower closings, as collecting these tower receivables is a key driver of our cash flow and debt reduction during this slower demand period. Attached to this release is a schedule of our towers under construction, which illustrates the percent sold, expected closing date, and average deposit collected per tower. Also attached is an updated land table. We hope our investors find this expanded information useful."
For the nine month period ended September 30, 2006, net income totaled $73.6 million compared with $131.6 million earned during the year-to-date 2005 while EPS declined 40.0% to $1.68 from $2.80 for the same period a year ago. Revenues decreased 13.1% to $1.53 billion from $1.76 billion in the year earlier period. For the nine month period ended September 30, 2006, the aggregate value of Traditional and Tower Homebuilding orders declined 64.1% over the same period a year ago to $693.3 million while the number of unit orders decreased 65.8% to 829. The company's backlog fell to $1.41 billion, down 43.8% from $2.51 billion reported a year earlier.
Traditional Homebuilding
Third quarter 2006 revenues for Traditional Homebuilding, including lot sales, fell 31.9% to $211.9 million from $311.2 million for the third quarter of 2005. The company closed 279 homes compared with 582 for the same period a year ago. Florida revenues totaled $159.9 million or 75.5% of total Traditional Homebuilding revenues versus $220.9 million or 71.0% for the third quarter of 2005. Revenues from WCI's Northeast Division accounted for 4.7% of Traditional Homebuilding revenues during the third quarter of 2006 versus 15.9% during the same period a year ago while the company's Mid-Atlantic Division accounted for 19.8% and 13.1% for the third quarters of 2006 and 2005, respectively. Gross margin as a percentage of revenue for Traditional Homebuilding increased 290 b.p. to 22.6% for the third quarter of 2006, in part due to deposits retained on defaulted closings adding 80 b.p. and cost savings related to recently completed subdivision land development projects adding 104 b.p., partially offset by a 110 b.p. reduction due to asset impairments.
For the third quarter of 2006, the value of Traditional Homebuilding orders declined 57.5% to $118.8 million. Gross demand was down 51.2%, however rising cancellations, at a rate of 34.2% versus 5.8% in the same period a year ago and a 30.7% cancellation rate in the second quarter of 2006, pushed net new orders down 66.0%. Two active adult communities in Florida accounted for over a third of the cancellations this quarter. The average price for Traditional Homebuilding orders for the third quarter of 2006 rose 25.0% to $825,000 compared with $660,000 for the third quarter of 2005, due entirely to mix changes, as the current quarter's orders contained a smaller percentage of active adult homes, which carry a lower price. Incentives and discounts on new orders for the quarter averaged 9.5% vs. 4.8% for the homes closed in the quarter. Traditional Homebuilding backlog at September 30, 2006 was $1.02 billion, down 29.7% over the third quarter 2005's $1.45 billion.
For the nine month period ended September 30, 2006, Traditional Homebuilding revenues decreased 1.7% to $757.0 million. The company closed 1,143 homes compared with 1,487 for the same period a year ago. Gross margin as a percentage of revenue rose to 22.0% versus 17.3% for the nine months ended September 30, 2006, primarily because gross margins were depressed during 2005 due to the impact of 2004 hurricanes on the timing of deliveries and resulting construction cost of homes in backlog. The company currently expects its gross margin as a percentage of Traditional Homebuilding revenue to range from 19% to 20% for the fourth quarter of 2006, and from 18% to 20% for 2007.
Tower Homebuilding
For the three months ended September 30, 2006, revenues in the Tower Homebuilding Division decreased 32.2% to $172.3 million from $254.0 million for the same period a year ago. Fewer sales in buildings under construction and less progression of percentage of completion among the 18 towers under construction and recognizing revenue during the third quarter of 2006, which have a total projected sell-out value of over $2.1 billion, contributed to the decline in revenues. In comparison, there were 20 towers, with a total sellout value of $2.2 billion, under construction and recognizing revenue during the third quarter 2005. No new towers began recognizing revenue during the third quarter of 2006 while four began revenue recognition in the third quarter of 2005. Tower Homebuilding gross margin as a percentage of revenue declined 707 b.p. to 18.0% for the quarter from 24.7% for the three months ended September 30, 2005. During each quarter, the company reviews the cost estimates for each tower under construction and makes adjustments to reflect actual increases or decreases in current and expected future costs. For the third quarter of 2006, $13.3 million (780 b.p.) of unfavorable adjustments to estimates were made related to towers under construction. These adjustments included additional direct construction costs ($4.9 million,) additional estimated interest costs anticipated associated with longer tower construction cycles ($3.9 million,) an increase in the tower default reserve ($2.2 million,) and increases in building insurance costs ($2.3 million.)
Tower Homebuilding orders for the third quarter 2006 totaled negative four (comprised of nine new contracts less 13 defaults) versus 333 in the third quarter of 2005. No new towers converted to contract during the third quarter this year. Tower Homebuilding backlog at September 30, 2006 totaled $384.3 million, a 63.7% decrease over the $1.06 billion backlog at September 30, 2005. For the balance of the year, eight towers, consisting of 637 units and with a projected sell-out value of approximately $680.0 million, are expected to close. Those towers are over 94% sold.
During the quarter, the company completed and delivered one tower, consisting of 45 units, and experienced nine defaults in that tower plus another four defaults in other towers recently closed or under construction. For the nine months ended September 30, 2006, seven towers with 407 units were completed with a total of 19 defaults, producing a default rate of approximately 4.7%.
Year-to-date 2006, revenues in the Tower Homebuilding Division fell 13.0% to $606.2 million. Gross margin as a percentage of revenue declined to 21.5% from 25.5% the same period last year, due principally to cost adjustments in the second and third quarters of the year. Gross margin as a percentage of revenue for the Tower Homebuilding Division for the fourth quarter is expected to range from 24% to 25% and range from 20% to 23% for 2007.
Real Estate Services
Revenues for the Real Estate Services Division for the third quarter 2006 were $23.4 million, a 42.8% decrease from the $40.9 million recorded for the same period a year ago. The decline was primarily due to the continued slow market for new and resale homes during the quarter. Transactions for Prudential Florida WCI Realty declined 41.3% over the same period a year ago. Gross margin as a percentage of revenue for the period was 0.5% compared with 16.2% in the third quarter 2005.
For the nine month period, revenues in the Real Estate Services Division totaled $87.1 million, down 32.2% from the $128.5 million recorded for the nine months ended September 30, 2005. Gross margin as a percentage of revenue over the period decreased to 6.8% from 17.3% in the same period a year ago on weaker results from the company's real estate brokerage and mortgage banking businesses.
Other Items
Revenues for the Amenities Division for the third quarter 2006 were $16.2 million, a 24.6% increase from $13.0 million for the same period a year ago. Gross margin totaled a loss of $3.3 million for the third quarter 2006 versus a loss of $1.5 million in the third quarter of 2005.
Land sale revenues for the third quarter 2006 totaled $1.4 million compared with $899,000 for the third quarter of 2005. Other revenue totaled $2.0 million. Gross margin on other revenue totaled a loss of $13.4 million, due primarily to the write-down of option deposits and other costs on three land parcels, that were terminated during the quarter. Approximately $12.3 million was related to a large Southwest Florida community where entitlements were delayed.
Other income, including hurricane costs and recoveries, for the three months ended September 30, 2006 totaled $9.5 million compared with $1.5 million in the third quarter of 2005. The September 30, 2006 figure includes $5.9 million of hurricane recoveries related to Hurricane Ivan, which impacted the company in September 2004. The company also recognized a $2.6 million gain on the sale of a 50.1% interest in a newly formed joint venture with an affiliate of Wells Fargo Home Mortgage. This mortgage company joint venture will replace the company's mortgage banking operation.
Selling, general, and administrative expenses including real estate taxes (SG&A) as a percentage of revenue for the third quarter 2006 totaled 10.5%, up from 7.4% in the third quarter of the previous year due to lower revenues. The effective income tax rate for the quarter of 24.9% benefited from a one-time tax benefit of $2.9 million. The company expects its tax rate going forward to approximate its recent historical rate of 38.0% to 39.0%.
Cash Flow/Financial Position/Balance Sheet
For the nine months ended September 30, 2006, net cash used in operating activities, including the purchase and development of real estate inventories, totaled $605.0 million compared with cash used of $115.2 million in the same period a year ago. The company expects a large inflow of cash in the next three to nine months related to the closing of 14 towers. In total, the closing of over 1,100 tower units over the period is expected to result in a net cash inflow of approximately $1.1 billion.
On September 7th, 2006, the company's Board of Directors increased WCI's common stock share repurchase authorization by three million shares to a total of five million shares, to be made within predetermined parameters set by the company's Board of Directors. On September 15th, 2006, WCI filed a form 8-K in which it stated that it had entered into an agreement pursuant to which the company could enter into call option transactions with respect to up to five million shares of its common stock. In mid-September through October, the company did purchase a series of capped call options, allowing it to repurchase up to five million shares of its common stock one year from the date of each option contract. The option payment that WCI paid an investment bank approximated $25.7 million, with approximately $20.3 million paid and recorded during the fourth quarter.
Total liquidity, measured as the sum of cash plus available capacity under the unsecured revolving facility, totaled approximately $379.9 million at September 30, 2006. In addition, letters of credit of $31.6 million were outstanding as of September 30, 2006. The maximum amount available to borrow under the company's senior unsecured revolving credit facility is $930 million. The facility matures in June of 2010. The ratio of net debt to net capitalization increased to 65.4% compared with 58.4% at September 30, 2005 and 62.1% at June 30, 2006. The company continues to expect its net debt to net capitalization rate to fall significantly by the end of the year due to its seasonal pattern of deliveries, which historically is highest in the fourth quarter of the year. In addition, if the expectation of a high percentage of tower contracts closing as scheduled is realized, the company expects leverage to continue to fall during 2007.
Guidance
For 2006, the company currently projects the following:
-- EPS of $2.50 to $3.00, depending on traditional and tower
homebuilding closings and certain land or recreational amenity
sales
-- Revenues of $2.1 billion to $2.3 billion
-- Debt to Capital ratio of 59% - 62%
For 2007, the company currently projects the following:
-- EPS of $1.00 to $2.00, depending on traditional and tower
homebuilding orders and land sales
-- Revenues of $1.3 billion to $1.7 billion
-- Traditional Homebuilding Division gross margins between 18% and 20%
-- Tower Homebuilding Division gross margins between 20% and 23%
-- Year-end Debt to Capital ratio of 49% - 52%
Conference Call
WCI will conduct a conference call today at 10:00 AM EST in conjunction with this release. The call will be broadcast live at http://www.wcicommunities.com in the Investor Relations area or can be accessed by telephone at (480) 629-9040 and asking for the WCI Communities conference call, reference code 11074608. A replay will be available after the call for a period of 36 hours by dialing (303) 590-3000 and entering conference code 11074608. The replay will also be available on the company's website. A slide presentation will accompany the call and can be accessed on the company's website in the Investor Relations section.
About WCI
WCI Communities, Inc., named America's Best Builder in 2004 by the National Association of Home Builders and Builder Magazine, has been creating amenity-rich, master-planned lifestyle communities since 1946. Florida-based WCI caters to primary, retirement, and second-home buyers in Florida, New York, New Jersey, Connecticut, Maryland and Virginia. The company offers traditional and tower home choices with prices from the low-$200,000s to more than $10 million and features a wide array of recreational amenities in its communities. In addition to homebuilding, WCI generates revenues from its Prudential Florida WCI Realty Division, and title businesses, and its recreational amenities, as well as through land sales and joint ventures. The company currently owns and controls developable land on which the company plans to build over 21,000 traditional and tower homes.
The WCI Communities, Inc. logo is available at http://www.primezone.com/newsroom/prs/?pkgid=3018
For more information about WCI and its residential communities visit www.wcicommunities.com
Click here to join our email list: http://www.b2i.us/irpass.asp?BzID=631&to=ea&s=0
Certain information included herein and in other company reports, Securities and Exchange Commission filings, statements and presentations is forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements about the company's anticipated operating results, financial resources, ability to acquire land, ability to sell homes and properties, ability to deliver homes from backlog, and ability to secure materials and subcontractors. Such forward-looking information involves important risks and uncertainties that could significantly affect actual results and cause them to differ materially from expectations expressed herein and in other company reports, filings, statements and presentations. These risks and uncertainties include WCI's ability to compete in real estate markets where we conduct business; the availability and cost of land in desirable areas in its geographic markets and our ability to expand successfully into those areas; WCI's ability to obtain necessary permits and approvals for the development of its lands; the availability of capital to WCI and our ability to effect growth strategies successfully; WCI's ability to pay principal and interest on its current and future debts; WCI's ability to maintain or increase historical revenues and profit margins; WCI's ability to collect contract receivables from buyers purchasing homes as investments; availability of labor and materials and material increases in insurance, labor and material costs; increases in interest rates and availability of mortgage financing; increases in construction and homeowner insurance and availability of insurance, the level of consumer confidence; the negative impact of claims for contract rescission or cancellation by contract purchasers due to various factors including the increase in the cost of condominium insurance; adverse legislation or regulations; unanticipated litigation or adverse legal proceedings; changes in generally accepted accounting principles; natural disasters; and changes in general economic, real estate and business conditions. If one or more of the assumptions underlying our forward-looking statements proves incorrect, then the company's actual results, performance or achievements could differ materially from those expressed in, or implied by the forward-looking statements contained in this report. Therefore, we caution you not to place undue reliance on our forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This statement is provided as permitted by the Private Securities Litigation Reform Act of 1995.
WCI Communities, Inc.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
September 30, December 31,
2006 2005
------------ ------------
Assets
Cash and cash equivalents $ 21,454 $ 52,584
Contracts receivable 1,443,103 1,123,509
Real estate inventories 2,129,127 1,687,852
Property and equipment 281,979 208,205
Other assets 294,199 409,256
---------- ----------
Total assets $4,169,862 $3,481,406
========== ==========
Liabilities and Shareholders' Equity
Accounts payable, accruals and other
liabilities $1,047,814 $1,070,047
---------- ----------
Debt obligations:
Senior unsecured credit facility 571,556 94,050
Senior unsecured term note 300,000 300,000
Mortgages and notes payable 363,161 203,214
Senior subordinated notes 525,000 530,473
Junior subordinated notes 165,000 100,000
Contingent convertible senior
subordinated notes 125,000 125,000
---------- ----------
Total debt obligations 2,049,717 1,352,737
---------- ----------
Total shareholders' equity 1,072,331 1,058,622
---------- ----------
Total liabilities and shareholders'
equity $4,169,862 $3,481,406
========== ==========
Other Balance Sheet Data
Debt $2,049,717 $1,352,737
Shareholders' equity 1,072,331 1,058,622
---------- ----------
Capitalization $3,122,048 $2,411,359
========== ==========
Ratio of debt to capitalization 65.7% 56.1%
Debt, net of cash and cash equivalents $2,028,263 $1,300,153
Shareholders' equity 1,072,331 1,058,622
---------- ----------
Capitalization, net of cash and cash
equivalents $3,100,594 $2,358,775
========== ==========
Ratio of net debt to net capitalization 65.4% 55.1%
Shareholders' equity per share $ 25.64 $ 23.86
WCI Communities, Inc.
Selected Revenues and Earnings Information
(Dollars in thousands, except per share data)
For the For the
three months ended nine months ended
September 30, September 30,
--------------------- ---------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
REVENUES
Homebuilding:
Homes $ 203,477 $ 300,439 $ 737,538 $ 740,726
Lots 8,420 10,763 19,473 29,695
---------- ---------- ---------- ----------
Total traditional 211,897 311,202 757,011 770,421
Towers 172,324 254,023 606,153 696,436
---------- ---------- ---------- ----------
Total homebuilding 384,221 565,225 1,363,164 1,466,857
Real estate
services 23,412 40,905 87,083 128,513
Amenity membership
and operations 16,172 13,038 63,534 56,814
Land sales 1,401 899 7,517 100,899
Other 2,035 1,820 6,126 5,323
---------- ---------- ---------- ----------
Total revenues 427,241 621,887 1,527,424 1,758,406
---------- ---------- ---------- ----------
GROSS MARGIN
Homebuilding:
Homes 46,184 58,214 161,708 124,738
Lots 1,704 3,237 5,132 8,165
---------- ---------- ---------- ----------
Total traditional 47,888 61,451 166,840 132,903
Towers 31,077 62,672 130,105 177,305
---------- ---------- ---------- ----------
Total homebuilding 78,965 124,123 296,945 310,208
Real estate
services 114 6,648 5,926 22,180
Amenity membership
and operations (3,324) (1,545) (1,466) (3,822)
Land sales 1,278 635 4,728 77,221
Other (13,380) 185 (13,336) 139
---------- ---------- ---------- ----------
Total gross
margin 63,653 130,046 292,797 405,926
---------- ---------- ---------- ----------
OTHER INCOME AND EXPENSES
Equity in losses
from joint
ventures 865 1,923 814 827
Other income (3,090) (964) (5,248) (4,917)
Hurricane
recoveries, net (6,437) (503) (6,435) (2,364)
Selling, general
and administrative,
including real
estate taxes, net 44,832 46,234 148,711 155,125
Depreciation and
amortization 6,122 4,110 18,710 11,683
Interest expense,
net 8,693 9,255 19,103 25,016
Expenses related to
early repayment
of debt -- 2,776 455 4,295
---------- ---------- ---------- ----------
Income before
minority interests
and income taxes 12,668 67,215 116,687 216,261
Minority interests (1,525) 2,101 (259) 1,974
Income tax expense 3,534 25,404 43,370 82,697
---------- ---------- ---------- ----------
Net income $ 10,659 $ 39,710 $ 73,576 $ 131,590
========== ========== ========== ==========
EARNINGS PER SHARE
Basic $ 0.26 $ 0.89 $ 1.71 $ 2.93
Diluted $ 0.25 $ 0.85 $ 1.68 $ 2.80
WEIGHTED AVERAGE
NUMBER OF SHARES
Basic 41,730 44,841 42,919 44,965
Diluted 42,335 46,766 43,795 46,946
OPERATING DATA
Interest incurred,
excluding warehouse
credit facility $ 34,594 $ 26,644 $ 90,343 $ 76,403
Interest included
in cost of sales $ 17,099 $ 16,118 $ 50,464 $ 46,223
WCI Communities, Inc.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
For the nine months ended
September 30,
-------------------------
2006 2005
--------- ---------
Cash flows from operating activities:
Net income $ 73,576 $ 131,590
Increase in real estate inventories (383,158) (145,409)
Increase in contracts receivable (319,594) (333,366)
(Decrease) increase in customer deposits (52,365) 140,278
Decrease in restricted cash 72,518 20,356
(Decrease) increase in accounts payable
and other liabilities (67,024) 7,284
All other 71,053 64,053
-----------------------
Net cash used in operating activities (604,994) (115,214)
--------- ---------
Cash flows from investing activities:
Net cash paid for acquisition -- (136,558)
Other (45,088) (37,107)
--------- ---------
Net cash used in investing activities (45,088) (173,665)
--------- ---------
Cash flows from financing activities:
Net borrowings under debt obligations 698,502 308,815
All other (79,550) (41,002)
--------- ---------
Net cash provided by financing activities 618,952 267,813
--------- ---------
Net decrease in cash and cash equivalents $ (31,130) $ (21,066)
========= =========
SUPPLEMENTAL INFORMATION
Reconciliation of cash flows from
operating activities to EBITDA (1)
Net cash used in operating activities $(604,994) $(115,214)
Interest expense, net 19,103 25,016
Interest included in cost of sales 50,464 46,223
Expenses related to early repayment
of debt 455 4,295
Income tax expense 43,370 82,697
Depreciation and amortization 18,710 11,683
Increase in real estate inventories 383,158 145,409
Increase in contracts receivable 319,594 333,366
Decrease (increase) in customer
deposits 52,365 (140,278)
Decrease in restricted cash (72,518) (20,356)
Decrease (increase) in accounts
payable and other liabilities 67,024 (7,284)
All other (71,053) (64,053)
--------- ---------
Total EBITDA $ 205,678 $ 301,504
========= =========
(1) Earnings before interest, taxes, depreciation and amortization
(EBITDA) is not a generally accepted accounting principle (GAAP)
financial statement measurement. EBITDA should not be considered
an alternative to cash flows from operations determined in
accordance with GAAP as a measure of liquidity. The Company's
management believes that EBITDA is an indication of the Company's
ability to generate funds from operations that are available to
pay principal and interest on debt obligations and to meet other
cash needs. A reconciliation of cash from operating activities to
EBITDA, the most directly comparable GAAP measure, is provided
above.
WCI Communities, Inc.
Homebuilding Operational Data
(Dollars in thousands)
For the For the
three months ended nine months ended
September 30, September 30,
---------------------- ----------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
Combined Traditional
and Tower
Homebuilding
--------------------
Homes Closed
(Units)(a) 319 827 1,547 1,883
Net New Orders
(Units) 140 756 829 2,427
Contract Values
of New Orders $ 120,046 $ 666,999 $ 693,249 $1,928,671
Average Selling
Price Per New
Order $ 857 $ 882 $ 836 $ 795
Traditional
Homebuilding
-------------
Homes Closed
(Units)
Florida 219 460 950 1,221
Northeast U.S. 20 85 119 190
Mid-Atlantic U.S. 40 37 74 76
---------- ---------- ---------- ----------
Total 279 582 1,143 1,487
---------- ---------- ---------- ----------
Revenues,
excluding lot
revenues
Florida $ 151,470 $ 210,168 $ 584,268 $ 548,513
Northeast U.S. 9,993 49,514 63,988 111,425
Mid-Atlantic U.S. 42,014 40,757 89,282 80,788
---------- ---------- ---------- ----------
Total $ 203,477 $ 300,439 $ 737,538 $ 740,726
---------- ---------- ---------- ----------
Average Selling
Price Per Home
Closed
Florida $ 692 $ 457 $ 615 $ 449
Northeast U.S. 500 583 538 586
Mid-Atlantic U.S. 1,050 1,102 1,207 1,063
---------- ---------- ---------- ----------
Total $ 729 $ 516 $ 645 $ 498
---------- ---------- ---------- ----------
Net New Orders
(Units)
Florida 100 370 490 1,373
Northeast U.S. 37 39 221 130
Mid-Atlantic U.S. 7 14 31 80
---------- ---------- ---------- ----------
Total 144 423 742 1,583
---------- ---------- ---------- ----------
Contract Values
of New Orders
Florida $ 90,722 $ 238,225 $ 408,537 $ 847,354
Northeast U.S. 21,900 26,291 115,839 80,916
Mid-Atlantic U.S. 6,146 14,858 40,950 102,645
---------- ---------- ---------- ----------
Total $ 118,768 $ 279,374 $ 565,326 $1,030,915
---------- ---------- ---------- ----------
Average Selling
Price Per New
Order
Florida $ 907 $ 644 $ 834 $ 617
Northeast U.S. 592 674 524 622
Mid-Atlantic U.S. 878 1,061 1,321 1,283
---------- ---------- ---------- ----------
Total $ 825 $ 660 $ 762 $ 651
---------- ---------- ---------- ----------
Tower Homebuilding
------------------
Homes Closed
(Units)
Florida 40 245 404 396
---------- ---------- ---------- ----------
Total 40 245 404 396
---------- ---------- ---------- ----------
Revenues
Florida $ 159,223 $ 254,023 $ 572,317 $ 696,436
Northeast U.S. 13,101 -- 33,836 --
---------- ---------- ---------- ----------
Total $ 172,324 $ 254,023 $ 606,153 $ 696,436
---------- ---------- ---------- ----------
Net New Orders
(Units)
Florida (4) 220 80 685
Northeast U.S. -- 113 7 159
---------- ---------- ---------- ----------
Total (4) 333 87 844
---------- ---------- ---------- ----------
Contract Values
of New Orders
Florida $ 1,249 $ 282,482 $ 115,929 $ 749,157
Northeast U.S. 29 105,143 11,994 148,599
---------- ---------- ---------- ----------
Total $ 1,278 $ 387,625 $ 127,923 $ 897,756
---------- ---------- ---------- ----------
Average Selling
Price Per New
Order
Florida NM $ 1,284 $ 1,449 $ 1,094
Northeast U.S. -- 930 1,713 935
---------- ---------- ---------- ----------
Total NM $ 1,164 $ 1,470 $ 1,064
Towers under
construction
recognizing
revenue during
the period 18 20 24 22
September 30,
-------------------------
2006 2005
----------- -----------
Combined Traditional
and Tower
Homebuilding
--------------------
Aggregate Backlog Contract Values,
Traditional and Tower Homebuilding $ 1,407,092 $ 2,508,130
Traditional Homebuilding
------------------------
Backlog (Units) 1,296 2,344
Backlog Contract Values $ 1,022,829 $ 1,451,746
Tower Homebuilding
------------------
Cumulative Units in Backlog 1,558 1,915
Cumulative Contract Values $ 1,834,572 $ 2,153,769
Less: Cumulative Revenues Recognized (1,450,309) (1,097,385)
----------- -----------
Backlog Contract Values $ 384,263 $ 1,056,384
=========== ===========
(a) The Company uses the percentage of completion method to
recognize revenue on sold tower units. Accordingly, the closing
of tower homes corresponds with the collection of contracts
receivable.
NM: Data not meaningful
2006 Tower Profile (as of 9/30/06)
No. of
Units Projected
in Sell-out % % Average HUD
Bldg Value Sold Complete Deposit Bldg(b)
--------------------------------------------------------------------
Closed to Date
Anchorage at
Jupiter
Yacht Club 34 $32M 100% 100% 20% No
Commodore at
Jupiter
Yacht Club 22 $21M 100% 100% 20% No
San Andres
at Lost Key 45 $28M 100% 100% 18% No
Serano at
Hammock Bay 116 $68M 100% 100% 20% No
Navona at
The Colony 100 $61M 99% 100% 20% Yes
Santo Amaro
at Lost Key 45 $27M 93% 100% 18% No
LaSalbadora
at Lost Key 45 $26M 80% 100% 17% No
--------------------------------------------------------------------
Totals 407 $262M 99% 100% 19%
====================================================================
Under
Construction
One Singer
Island 15 $48M 93% 95% 20% No
Mosaic at
Miami Beach 91 $124M 100% 95% 20% No
Casa at
Castella
(The Colony) 24 $24M 75% 96% 16% Yes
Mansion at
Castella
(The Colony) 24 $25M 67% 96% 15% Yes
Villa at
Castella
(The Colony) 24 $27M 63% 96% 17% Yes
Costa Verano
at
Jacksonville
Beach 100 $94M 95% 97% 20% No
Resort at
Singer
Island Condo 66 $106M 100% 93% 20% Yes
Resort at
Singer
Island
Condo/Hotel(a) 229 $152M 100% 93% 20% Yes
Tuscany at
Hammock Dunes 64 $82M 89% 88% 20% No
Lesina at
Hammock Bay 116 $130M 64% 85% 19% Yes
The Galia at
Lost Key
Marina 70 $51M 56% 83% 19% No
One Bal
Harbour
Condo 185 $377M 100% 90% 19% Yes
One Bal
Harbour
Condo/Hotel(a) 115 $111M 100% 85% 20% Yes
Le Jardin at
Hammock
Dunes 26 $67M 69% 65% 18% No
Castillo at
Westshore 80 $81M 90% 69% 18% Yes
San Anton at
Lost Key 54 $39M 80% 77% 19% No
The Water-
mark(c) 206 $233M 86% 48% 10% Yes
Florencia at
The Colony 116 $123M 78% 60% 19% Yes
Oceanside B 186 $237M 63% 48% 18% Yes
--------------------------------------------------------------------
Totals 1,791 $2,131M 86% 79% 18%
====================================================================
Initial Tower Expected
Contract Construction Tower
Conversion Start Closing
Date Date Date(d)
-----------------------------------------------------------
Closed to Date
Anchorage at
Jupiter
Yacht Club 2Q 2004 2Q 2004 Jan-06
Commodore at
Jupiter
Yacht Club 2Q 2004 2Q 2004 Jan-06
San Andres
at Lost Key 4Q 2004 4Q 2004 Feb-06
Serano at
Hammock Bay 4Q 2004 3Q 2004 Apr-06
Navona at
The Colony 2Q 2004 2Q 2004 May-06
Santo Amaro
at Lost Key 4Q 2004 4Q 2004 Jun-06
LaSalbadora
at Lost Key 4Q 2004 4Q 2004 Aug-06
-----------------------------------------------------------
Totals
===========================================================
Under
Construction
One Singer
Island 2Q 2004 3Q 2004 Nov-06
Mosaic at
Miami Beach 3Q 2004 4Q 2004 Nov - Dec 06
Casa at
Castella
(The Colony) 3Q 2004 1Q 2005 Nov - Dec 06
Mansion at
Castella
(The Colony) 1Q 2005 1Q 2005 Nov - Dec 06
Villa at
Castella
(The Colony) 2Q 2005 1Q 2005 Nov - Dec 06
Costa Verano
at
Jacksonville
Beach 4Q 2004 3Q 2004 Dec 06 - Jan 07
Resort at
Singer
Island Condo 3Q 2004 3Q 2004 Dec 06 - Jan 07
Resort at
Singer
Island
Condo/Hotel(a) 3Q 2004 3Q 2004 Dec 06 - Jan 07
Tuscany at
Hammock Dunes 4Q 2004 2Q 2005 Dec 06 - Jan 07
Lesina at
Hammock Bay 2Q 2005 3Q 2005 Mar - Apr 07
The Galia at
Lost Key
Marina 4Q 2005 4Q 2005 Mar - Apr 07
One Bal
Harbour
Condo 4Q 2003 2Q 2004 Mar - Apr 07
One Bal
Harbour
Condo/Hotel(a) 4Q 2004 2Q 2004 Mar - Apr 07
Le Jardin at
Hammock
Dunes 4Q 2005 4Q 2005 May - Jun 07
Castillo at
Westshore 3Q 2005 4Q 2005 Jun - Jul 07
San Anton at
Lost Key 2Q 2005 3Q 2005 Jun - Jul 07
The Water-
mark(c) 2Q 2005 3Q 2005 Sept - Oct 07
Florencia at
The Colony 3Q 2005 3Q 2005 Oct - Nov 07
Oceanside B 3Q 2005 4Q 2005 Feb - Mar 08
-----------------------------------------------------------
(a) Does not count as a separate tower
(b) In the event of a default in a HUD building, the company may
retain no more than 15% of the total purchase price of the unit.
Any additional deposit must be returned to the buyer.
(c) An additional 10% is due when the tower is topped off.
(d) Expected closing date based on current construction schedule.
Summary of Land Controlled
September 30, 2006
Finished
Remaining Units in Value in Spec Spec and
Planned Backlog as Backlog as Units Model
Region Units of 9/30/06 of 9/30/06 in WIP Units
-------------------------------------------------------------------
Traditional
Homebuilding
(Including Lots)
Florida
Miami /
Ft. Lauderdale 2,075 432 $ 432.2 75 10
Naples /
Ft. Myers 4,275 163 111.9 143 83
Palm Beach /
Indian River 1,075 47 34.4 5 19
Palm Coast /
Jacksonville 25 1 1.1 18 6
Perdido Key 125 -- -- 12 1
Tampa /
Sarasota 4,725 352 233.5 116 43
Mid-Atlantic 450 59 83.5 27 26
Northeast 2,150 242 126.2 25 21
-------------------------------------------------------------------
Traditional
Homebuilding
Total 14,900 1,296 1,022.8 421 209
Tower Homebuilding
Florida
Miami /
Ft. Lauderdale 1,275 513 136.8 69 --
Naples /
Ft. Myers 1,050 215 56.1 98 --
Palm Beach /
Indian River 600 309 18.6 1 --
Palm Coast /
Jacksonville 400 181 45.9 20 --
Perdido Key 1,550 90 12.5 54 --
Tampa /
Sarasota 650 72 22.5 8 --
Mid-Atlantic 275 -- -- -- --
Northeast 475 178 91.8 28 --
-------------------------------------------------------------------
Tower Homebuilding
Total 6,275 1,558 384.3 278 --
Total Homebuilding
Florida
Miami /
Ft. Lauderdale 3,350 945 569.0 144 10
Naples /
Ft. Myers 5,325 378 167.9 241 83
Palm Beach /
Indian River 1,675 356 53.0 6 19
Palm Coast /
Jacksonville 425 182 47.1 39 6
Perdido Key 1,675 90 12.5 66 1
Tampa /
Sarasota 5,375 424 256.1 124 43
Mid-Atlantic 725 59 83.5 27 26
Northeast 2,625 420 218.1 53 21
-------------------------------------------------------------------
Total Homebuilding
Total 21,175 2,854 $1,407.1 700 209
===================================================================
Total
Units %
Region Remaining Owned
-----------------------------------------------------------
Traditional
Homebuilding
(Including Lots)
Florida
Miami /
Ft. Lauderdale 1,558 100%
Naples /
Ft. Myers 3,886 100%
Palm Beach /
Indian River 1,004 54%
Palm Coast /
Jacksonville -- 100%
Perdido Key 112 100%
Tampa /
Sarasota 4,214 83%
Mid-Atlantic 338 78%
Northeast 1,862 77%
-----------------------------------------------------------
Traditional
Homebuilding
Total 12,974 87%
Tower Homebuilding
Florida
Miami /
Ft. Lauderdale 693 87%
Naples /
Ft. Myers 737 100%
Palm Beach /
Indian River 290 62%
Palm Coast /
Jacksonville 199 100%
Perdido Key 1,406 100%
Tampa /
Sarasota 570 75%
Mid-Atlantic 275 100%
Northeast 269 43%
-----------------------------------------------------------
Tower Homebuilding
Total 4,439 87%
Total Homebuilding
Florida
Miami /
Ft. Lauderdale 2,251 95%
Naples /
Ft. Myers 4,623 100%
Palm Beach /
Indian River 1,294 57%
Palm Coast /
Jacksonville 198 100%
Perdido Key 1,518 100%
Tampa /
Sarasota 4,784 82%
Mid-Atlantic 613 87%
Northeast 2,131 71%
-----------------------------------------------------------
Total Homebuilding
Total 17,412 87%
===========================================================
