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BNY Mellon Rises After Selling Mortgage Assets, Cutting Risks

Text Size: Oct 20, 2009 @ 11:36 AM, Business, Sree Vidya Bhaktavatsalam And Christopher Condon

BNY Mellon Rises After Selling Mortgage Assets, Cutting Risks 1

Oct. 20 (Bloomberg) -- Bank of New York Mellon Corp., theworld’s biggest custody bank, rose the most in more than fivemonths after selling mortgage securities that hurt earnings overthe past five quarters.

The bank restructured $8.5 billion of mortgage-relatedsecurities and sold $3.6 billion of its lowest-rated debt, BNYMellon said today in a statement. The securities, which areeligible for a government aid program, were bought by assetmanagers and hedge funds, Chief Executive Officer Robert P.Kelly said. The shares rose as much as 8.6 percent to $29.56 inNew York Stock Exchange composite trading.

“This was an overhang for our company and our investorswere indicating that they would like to see this behind us,”Kelly said in an interview.

BNY Mellon, whose shares have trailed rivals such as StateStreet Corp. this year in part because of its investments inmortgage securities, will continue to reduce risks and expectsloss provisions to fall in the fourth quarter, Kelly said. StateStreet, the world’s largest money manager for institutions,today cut its outlook for the full year, saying the second halfis weaker than it had expected.

BNY Mellon rose $1.86, or 6.8 percent, to $29.09 by 1:16p.m. in New York Stock Exchange composite trading, giving theshares a 2.7 percent gain for the year. State Street fell asmuch as 8.8 percent, the most in five months, and dropped $4.19,or 8 percent, to $48.06. It has gained 22 percent this year.

State Street

State Street extended losses after California’s attorneygeneral sued State Street Bank and Trust Co. in an attempt torecover more than $200 million in illegal overcharges andpenalties charged to the state’s two largest pension funds.State Street denied the allegations and said it plans to defenditself.

The Boston-based bank reported an 8.1 percent increase inprofit today to $516 million. While earnings per share of $1.05,excluding some items, beat the average $1 estimate of 20analysts surveyed by Bloomberg, the company lowered its 2009operating earnings forecast to between $4.13 and $4.17 a share.Previously it predicted $4.25 to $4.50.

“We expected our second half of 2009 to be stronger thanit now appears to be,” Chief Executive Officer Ronald Loguesaid in a statement. State Street is the third-largest custodybank after Bank of New York Mellon Corp. and JPMorgan Chase &Co. in New York.

Cutting Losses

State Street shed 1,700 jobs, or about 6 percent of itsstaff, in the first quarter and announced in February it wouldcut bonuses linked to 2008 by half. Its last three dividendpayouts have been 1 cent a share, slashed from 24 cents inJanuary, to shore up capital after mark-to-market losses inproprietary trading.

Unrealized losses in State Street’s investment portfoliodecreased to $2.99 billion, after taxes, from $4.75 billion atthe end of the second quarter. The unrealized loss, net oftaxes, on BNY Mellon’s investments fell to $1 billion from $4.8billion as fixed-income markets improved.

BNY Mellon reported a third-quarter net loss of $2.46billion, or $2.05 a share, compared with a profit of $303million, or 26 cents, a year earlier. Charges to restructuredebt securities cut pretax earnings by $4.8 billion. Excludingthose costs, BNY Mellon posted a profit of 54 cents per share,beating the 46 cent estimate of 19 analysts surveyed byBloomberg.

“They’re getting an issue they have to talk about everyquarter for the most part behind them,” Marty Mosby, an analystwith FTN Equity Capital Markets Corp. in Memphis, Tennessee,said in an interview. “The operating number behind that ispretty much in line with expectations.”

Mosby said he expected BNY Mellon to earn 52 cents a share.

BNY Mellon said the restructuring does not materiallyaffect capital and will lift net interest revenue by as much as$175 million next year, while “significantly” lowering therisk of future writedowns.

To contact the reporter on this story:Sree Vidya Bhaktavatsalam in Boston at sbhaktavatsa@bloomberg.net;Christopher Condon in Boston at ccondon4@bloomberg.net

Source: Bloomberg

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• Standard Pacific Corp. Reports 2009 Third Quarter Results Oct 20, 2009 @ 11:36 AM

  IRVINE, Calif., Oct. 29, 2009 /PRNewswire-FirstCall/ -- Standard Pacific Corp.(NYSE: SPF) today announced operating results for its third quarter endedSeptember 30, 2009. Homebuilding revenues for the 2009 third quarter were$327.4 million (including $57.5 million in land sale revenues), down 18% from$400.3 million last year. The Company generated a net loss of $23.8 million,or $0.10 per diluted share, versus a net loss of $369.9 million, or $2.54 perdiluted share, for the year earlier period. The 2009 third quarter resultsincluded asset impairment charges of $7.8 million, which related primarily tothe sale of a podium building and land, versus $368.4 million in impairmentsin the prior year period. The 2009 third quarter results also included $10.1million in debt and other restructuring charges and a $9.3 million chargerelated to the deferred tax asset generated during the quarter. Excludingasset impairment and restructuring charges, the Company generated a 2009 thirdquarter net loss of approximately $3.6 million*, or $0.01 per diluted share.*During the quarter, the Company generated $112.6 million of cash flows fromoperations, driven primarily from a $104.0 million decrease in inventories(including $56.2 million related to the sale of a podium building and land). The Company ended the quarter with $806.8 million of homebuilding cash(including $283.3 million of restricted cash, $257.6 million of which was heldin escrow related to the issuance of $280 million of 10¾% senior notes due2016). On October 9, 2009, the Company completed a refinancing transactionpursuant to which it utilized the $257.6 million of net proceeds from theissuance of the 10¾% senior notes due 2016 and cash on hand to repurchaseapproximately $133.4 million, $122.0 million and $3.4 million of senior notesdue 2010, 2011 and 2013, respectively. The Company also exchanged $32.8million of its 2012 senior subordinated convertible notes during the quarterfor approximately 7.6 million shares of common stock at an effective price of$4.30 per share. Finally, the Company repaid the remaining $37.1 millionbalance on its Term Loan A credit facility, the $22.9 million balance on itsrevolving credit facility, $51.3 million of other indebtedness and assumed$52.1 million of joint venture recourse debt during the quarter. Inconnection with these financing transactions, the Company recorded an $8.8million non-cash loss on the early extinguishment of debt. As a result of these transactions, the Company reduced the amount of seniornotes, revolving credit facility and Term Loan A indebtedness that wasscheduled to mature before 2013 from $528 million to $180 million ($15 millionin 2010, $49 million in 2011 and $116 million in 2012). Since just prior tothe closing of the MatlinPatterson transaction in June 2008, the Company hasreduced the principal amount of its total homebuilding and joint venturerecourse debt by over $725 million from $2.0 billion to $1.27 billion and hasreduced the amount of homebuilding and joint venture recourse debt maturingprior to 2013 from $1.33 billion to $322 million (including $180 million ofsenior notes, $97 million of project specific debt and $45 million of jointventure recourse debt related to three joint ventures). Ken Campbell, the Company's President and CEO stated, "With over $500 millionof cash in the bank, anticipated near-term positive cash flows from operationsand the significant reduction in the amount of our debt that is scheduled tomature in the next three years, we believe we have ample liquidity to acquireland assets to support our growth when the upturn in the housing marketoccurs."Mr. Campbell continued, "Holding our gross margins at 18% and our SG&A rate at15% during the quarter is not great performance, but gives a good indicationof the margins built into our inventory and positions us reasonably well forsignificant improvements in profitability with only small improvements in thehousing market." Homebuilding OperationsThe Company generated a homebuilding pretax loss for the 2009 third quarter of$24.8 million compared to a pretax loss of $389.4 million in the year earlierperiod. The Company's homebuilding pretax loss for the 2009 third quarterincluded $7.8 million of asset impairment charges, $8.8 million of loss onearly extinguishment of debt and $1.6 million in restructuring charges. Thedecrease in pretax loss was primarily the result of a $360.5 million decreasein impairment charges and a $33.2 million decrease in the Company's SG&Aexpenses. These changes were partially offset by a $9.3 million reduction ingross margin (excluding impairments), an $8.7 million increase innon-capitalized interest expense and a $7.0 million increase in loss on earlyextinguishment of debt. Homebuilding revenues decreased 18% to $327.4 million during the 2009 thirdquarter primarily due to a 25% decrease in new home deliveries to 893 homesand a 9% decline in consolidated average home price to $302,000. Thesedecreases were offset in part by a $52.1 million increase in land salerevenues in the 2009 third quarter. The Company's average home price was flatwith the 2009 second quarter at $302,000 and was slightly positive on a samecommunity basis.The Company's homebuilding gross margin (including land sales) for the 2009third quarter was 13.0% compared to a negative 51.9% in the prior year period. The 2009 third quarter gross margin included $7.7 million in inventoryimpairment charges, which were included in cost of land sales and related tothe sale of a podium building in Southern California and a land sale inFlorida. Excluding land sales and the related inventory impairment charges,the Company's 2009 third quarter gross margin from home sales would have been18.6%* versus 14.1%* for the 2008 third quarter. The 450 basis point increasein the year-over-year adjusted gross margin was driven primarily by highermargins in California and lower direct construction costs as a result of valueengineering and the rebidding of contracts. The Company's 2009 third quarter selling, general and administrative ("SG&A")expenses (including Corporate G&A) decreased $33.2 million, or 43%, from theyear earlier period resulting in an SG&A rate of 13.3% versus 19.2% in theprior year period. The Company's 2009 third quarter results includedapproximately $1.5 million in homebuilding restructuring charges related toseverance and lease terminations, all of which was included in the Company'sSG&A expenses. Excluding land sale revenues and restructuring charges, theCompany's 2009 third quarter SG&A rate was 15.6%* versus 18.7%* for the 2008third quarter despite a 32% decrease in home sale revenues.Net new orders (excluding joint ventures and discontinued operations) for the2009 third quarter decreased 3% from the 2008 third quarter to 893 new homeson a 28% decrease in the number of average active selling communities from theprior year period from 186 to 134. The Company's cancellation rate for thethree months ended September 30, 2009 was 15%, down from 16% for the 2009second quarter and 26% for the 2008 third quarter. The Company's monthlysales absorption rate for the 2009 third quarter was 2.2 per community, upfrom the prior year third quarter rate of 1.7 per community, but down from 2.7per community for the 2009 second quarter. The improvement in the Company'ssales absorption rate during the quarter as compared to the 2008 third quarterwas due to increases in most of its markets on a per community basis withabsorption rates relatively better in California, Arizona and Florida.The dollar value of the Company's backlog (excluding joint ventures) decreased17% to $329.7 million, or 995 homes, as compared to the 2008 third quartervalue, but was up 7% from the 2009 second quarter backlog value. Earnings Conference CallA conference call to discuss the Company's 2009 third quarter will be held at1:00 p.m. Eastern Time Friday, October 30, 2009. The call will be broadcastlive over the Internet and can be accessed through the Company's website athttp://standardpacifichomes.com/ir. The call will also be accessible viatelephone by dialing (888) 213-3752 (domestic) or (913) 981-5510(international); Passcode: 5369884. The entire audio transmission with thesynchronized slide presentation will be available on our website for replaywithin 2 to 3 hours following the live broadcast, and can be accessed bydialing (888) 203-1112 (domestic) or (719) 457-0820 (international); Passcode:5369884.About Standard PacificStandard Pacific, one of the nation's largest homebuilders, has built morethan 108,000 homes during its 43-year history. The Company constructs homeswithin a wide range of price and size targeting a broad range of homebuyers. Standard Pacific operates in many of the largest housing markets in thecountry with operations in major metropolitan areas in California, Florida,Arizona, the Carolinas, Texas, Colorado and Nevada. The Company providesmortgage financing and title services to its homebuyers through StandardPacific Mortgage and SPH Title. For more information about the Company andits new home developments, please visit our website at:www.standardpacifichomes.com.This news release contains forward-looking statements. These statementsinclude but are not limited to statements regarding: trends in new homeorders, deliveries, average home price and backlog; anticipated cash flows andfuture profitability; the sufficiency of our liquidity to support growth; andthe future condition of the housing market. Forward-looking statements arebased on our current expectations or beliefs regarding future events orcircumstances, and you should not place undue reliance on these statements. Such statements involve known and unknown risks, uncertainties, assumptionsand other factors many of which are out of the Company's control and difficultto forecast that may cause actual results to differ materially from those thatmay be described or implied. Such factors include but are not limited to: local and general economic and market conditions, including consumerconfidence, employment rates, interest rates, the cost and availability ofmortgage financing, and stock market, home and land valuations; the impact oneconomic conditions of terrorist attacks or the outbreak or escalation ofarmed conflict involving the United States; the cost and availability ofsuitable undeveloped land, building materials and labor; the cost andavailability of construction financing and corporate debt and equity capital;our significant amount of debt and the impact of restrictive covenants in ourcredit agreements, public notes, and private term loans and our ability tocomply with their covenants and repay such debt as it comes due; a negativechange in our credit rating or outlook; the demand for and affordability ofsingle-family homes; the supply of housing for sale; cancellations of purchasecontracts by homebuyers; the cyclical and competitive nature of the Company'sbusiness; governmental regulation, including the impact of "slow growth" orsimilar initiatives; delays in the land entitlement process, development,construction, or the opening of new home communities; adverse weatherconditions and natural disasters; environmental matters; risks relating to theCompany's mortgage banking operations; future business decisions and theCompany's ability to successfully implement the Company's operational andother strategies; litigation and warranty claims; and other risks discussed inthe Company's filings with the Securities and Exchange Commission, includingin the Company's Annual Report on Form 10-K for the year ended Dec. 31, 2008and subsequent Quarterly Reports on Form 10-Q. The Company assumes no, andhereby disclaims any, obligation to update any of the foregoing or any otherforward-looking statements. The Company nonetheless reserves the right tomake such updates from time to time by press release, periodic report or othermethod of public disclosure without the need for specific reference to thispress release. No such update shall be deemed to indicate that otherstatements not addressed by such update remain correct or create an obligationto provide any other updates. Contact: John Stephens, SVP & CFO (949) 789-1641, jstephens@stanpac.com or Lloyd McKibbin, SVP & Treasurer (949) 789-1603, lmckibbin@stanpac.com.*Please see "Reconciliation of Non-GAAP Financial Measures" on page 8. (Note: Tables follow) KEY STATISTICS AND FINANCIAL DATA** As of or For the Three Months Ended % or % or September 30, September 30, Percentage June 30, Percentage 2009 2008 Change 2009 Change (Dollars in thousands, except average selling price) Operating Data: Deliveries (1) 893 1,188 (25%) 942 (5%) Average selling price (1) $302,000 $332,000 (9%) $302,000 0% Homebuilding revenues $327,411 $400,340 (18%) $289,672 13% Gross margin % 13.0% (51.9%) 64.9% 13.5% (0.5%) Gross margin % from home sales (excluding impairments)* 18.6% 14.1% 4.5% 18.5% 0.1% Impairments and write- offs $7,814 $368,354 (98%) $21,270 (63%) Restructuring charges $1,315 $4,181 (69%) $5,504 (76%) SG&A % 13.3% 19.2% (5.9%) 15.9% (2.6%) SG&A % (excluding restructuring charges and land sales)* 15.6% 18.7% (3.1%) 14.6% 1.0% Net new orders (1) 893 921 (3%) 1,169 (24%) Monthly sales absorption rate per community (1) 2.2 1.7 29% 2.7 (19%) Cancellation rate (1) 15% 26% (11%) 16% (1%) Average active selling communities (1) 134 186 (28%) 144 (7%) Backlog (homes) (1) 995 1,248 (20%) 982 1% Backlog (dollar value) (1) $329,661 $395,657 (17%) $308,540 7% Cash flows (uses) from operating activities $112,572 $31,933 253% $68,595 64% Cash flows (uses) from investing activities $(9,241) $(11,111) (17%) $(10,128) (9%) Cash flows (uses) from financing activities $(147,732) $116,719 (227%) $(32,681) 352% Land purchases $21,595 $9,267 133% $7,857 175% Adjusted Homebuilding EBITDA (2) $31,749 $13,126 142% $32,963 (4%) Homebuilding interest incurred $26,218 $34,428 (24%) $26,797 (2%) Homebuilding interest capitalized to inventories owned $12,836 $28,890 (56%) $14,106 (9%) Homebuilding interest capitalized to investments in unconsolidated joint ventures $749 $1,600 (53%) $956 (22%) As of % or % or September 30, June 30, Percentage December 31, Percentage 2009 2009 Change 2008 Change (Dollars in thousands, except per share amounts) Balance Sheet Data: Homebuilding cash (including restricted cash) $806,766 $573,038 41% $626,379 29% Inventories owned $1,074,153 $1,115,556 (4%)$1,262,521 (15%) Building sites owned or controlled 20,020 22,012 (9%) 24,136 (17%) Homes under construction (1) 1,106 1,041 6% 1,326 (17%) Completed specs (excluding podium projects) (1) 163 258 (37%) 589 (72%) Completed specs - podium projects (1) 193 193 0% - - Deferred tax asset valuation allowance $691,464 $682,186 1% $654,107 6% Homebuilding debt $1,451,336 $1,275,300 14% $1,486,437 (2%) Joint venture recourse debt $45,189 $112,141 (60%) $173,894 (74%) Stockholders' equity $349,591 $346,512 1% $407,941 (14%) Stockholders' equity per share (including as-converted preferred stock) (3) $1.40 $1.44 (3%) $1.70 (18%) Total debt to book capitalization (4) 81.0% 79.3% 1.7% 79.2% 1.8% Adjusted net homebuilding debt to book capitalization (5) 65.0% 67.1% (2.1%) 68.0% (3.0%) *Please see "Reconciliation of Non-GAAP Financial Measures" on page 8. **Please see "Notes to Key Statistics and Financial Data" beginning on page 9. STANDARD PACIFIC CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (2008 as Adjusted(1)) Three Months Ended Nine Months Ended September 30, September 30, 2009 2008 2009 2008 (Dollars in thousands, except per share amounts) Homebuilding: Home sale revenues $269,873 $394,942 $760,312 $1,145,608 Land sale revenues 57,538 5,398 66,306 13,609 Total revenues 327,411 400,340 826,618 1,159,217 Cost of home sales (219,641) (548,622) (661,211)(1,462,654) Cost of land sales (65,147) (59,375) (75,578) (97,704) Total cost of sales (284,788) (607,997) (736,789)(1,560,358) Gross margin 42,623 (207,657) 89,829 (401,141) Gross margin % 13.0% (51.9%) 10.9% (34.6%) Selling, general and administrative expenses (43,695) (76,894) (142,100) (235,473) Loss from unconsolidated joint ventures (1,960) (91,937) (4,449) (130,322) Interest expense (12,633) (3,938) (35,409) (3,938) Loss on early extinguishment of debt (8,824) (1,841) (3,457) (11,339) Other income (expense) (305) (7,100) (1,309) (10,145) Homebuilding pretax loss (24,794) (389,367) (96,895) (792,358) Financial Services: Revenues 3,762 2,492 10,095 10,897 Expenses (2,753) (3,106) (9,009) (11,063) Income from unconsolidated joint ventures - 284 119 659 Other income 19 17 108 128 Financial services pretax income (loss) 1,028 (313) 1,313 621 Loss from continuing operations before income taxes (23,766) (389,680) (95,582) (791,737) (Provision) benefit for income taxes (33) 19,840 (298) (42,030) Loss from continuing operations (23,799) (369,840) (95,880) (833,767) Loss from discontinued operations, net of income taxes (45) (69) (569) (2,005) Net loss (23,844) (369,909) (96,449) (835,772) Less: Net loss allocated to preferred stockholders 14,500 165,213 59,022 188,354 Net loss available to common stockholders $(9,344) $(204,696) $(37,427) $(647,418) Basic loss per share: Continuing operations $(0.10) $(2.54) $(0.40) $(8.59) Discontinued operations - - - (0.02) Basic loss per share $(0.10) $(2.54) $(0.40) $(8.61) Diluted loss per share: Continuing operations $(0.10) $(2.54) $(0.40) $(8.59) Discontinued operations - - - (0.02) Diluted loss per share $(0.10) $(2.54) $(0.40) $(8.61) Weighted average common shares outstanding: Basic 95,250,351 80,681,394 93,731,253 75,155,044 Diluted 243,063,137 145,800,364 241,544,039 97,019,962 (1) Certain 2008 amounts have been retroactively adjusted to reflect the adoption of APB No. 14-1, "Accounting for Convertible Debt Instruments That May be Settled in Cash upon Conversion (Including Partial Cash Settlement)." STANDARD PACIFIC CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share amounts) (2008 as Adjusted(1)) September 30, December 31, 2009 2008 ASSETS (unaudited) Homebuilding: Cash and equivalents $523,474 $622,157 Restricted cash 283,292 4,222 Trade and other receivables 17,677 21,008 Inventories: Owned 1,074,153 1,262,521 Not owned 33,389 42,742 Investments in unconsolidated joint ventures 38,548 50,468 Deferred income taxes 10,383 14,122 Other assets 21,263 145,567 2,002,179 2,162,807 Financial Services: Cash and equivalents 6,524 3,681 Restricted cash 2,295 4,295 Mortgage loans held for sale 42,625 63,960 Mortgage loans held for investment 10,734 11,736 Other assets 4,373 4,792 66,551 88,464 Assets of discontinued operations 159 1,217 Total Assets $2,068,889 $2,252,488 LIABILITIES AND EQUITY Homebuilding: Accounts payable $22,928 $40,225 Accrued liabilities 179,473 216,418 Liabilities from inventories not owned 22,440 24,929 Revolving credit facility - 47,500 Secured project debt and other notes payable 96,816 111,214 Senior notes payable 1,251,193 1,204,501 Senior subordinated notes payable 103,327 123,222 1,676,177 1,768,009 Financial Services: Accounts payable and other liabilities 1,731 3,657 Mortgage credit facilities 38,798 63,655 40,529 67,312 Liabilities of discontinued operations 854 1,331 Total Liabilities 1,717,560 1,836,652 Equity: Stockholders' Equity: Preferred stock, $0.01 par value; 10,000,000 shares authorized; 450,829 shares issued and outstanding at September 30, 2009 and December 31, 2008, respectively 5 5 Common stock, $0.01 par value; 600,000,000 shares authorized; 105,119,880 and 100,624,350 shares issued and outstanding at September 30, 2009 and December 31, 2008, respectively 1,051 1,006 Additional paid-in capital 1,028,624 996,492 Accumulated deficit (663,291) (566,842) Accumulated other comprehensive loss, net of tax (16,798) (22,720) Total Stockholders' Equity 349,591 407,941 Noncontrolling Interests 1,738 7,895 Total Equity 351,329 415,836 Total Liabilities and Equity $2,068,889 $2,252,488 (1) Certain 2008 amounts have been retroactively adjusted to reflect the adoption of APB No. 14-1, "Accounting for Convertible Debt Instruments That May be Settled in Cash upon Conversion (Including Partial Cash Settlement)." REGIONAL OPERATING DATA Three Months Ended September 30, 2009 2008 Avg. Selling Avg. Selling Homes Price Homes Price New homes delivered: California 347 $442,000 435 $482,000 Arizona 75 202,000 132 215,000 Texas (1) 82 269,000 165 291,000 Colorado 37 312,000 62 358,000 Nevada 5 226,000 22 278,000 Florida 235 181,000 220 206,000 Carolinas 112 216,000 152 233,000 Consolidated total 893 302,000 1,188 332,000 Unconsolidated joint ventures 15 548,000 66 578,000 Discontinued operations 1 130,000 14 176,000 Total (including joint ventures) 909 $306,000 1,268 $343,000 Three Months Ended September 30, 2009 2008 % Change Avg. Selling Avg. Selling Same Homes Communities Homes Communities Store Net new orders: California 377 49 340 60 36% Arizona 79 7 100 13 47% Texas (1) 96 19 117 29 25% Colorado 34 6 54 8 (16%) Nevada 2 2 15 2 (87%) Florida 189 28 168 45 81% Carolinas 116 23 127 29 15% Consolidated total 893 134 921 186 35% Unconsolidated joint ventures 28 5 49 11 26% Discontinued operations 1 - 8 - - Total (including joint ventures) 922 139 978 197 34% At September 30, Backlog ($in 2009 2008 thousands): Homes Value Homes Value California 424 $190,185 384 $177,890 Arizona 102 21,815 140 30,413 Texas 137 42,849 219 64,950 Colorado 60 18,022 103 31,609 Nevada 1 213 14 3,408 Florida 161 31,457 261 57,880 Carolinas 110 25,120 127 29,507 Consolidated total 995 329,661 1,248 395,657 Unconsolidated joint ventures 22 10,722 49 35,443 Total (including joint ventures) 1,017 $340,383 1,297 $431,100 (1) Texas excludes the San Antonio division, which is classified as a discontinued operation. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES The table set forth below reconciles the Company's earnings (loss) for the three months ended September 30, 2009 and 2008 to earnings (loss) excluding the after-tax impairment, restructuring, loss on early extinguishment of debt and deferred tax asset valuation charges: Three Months Ended September 30, 2009 2008 (Dollars in thousands, except per share amounts) Net income (loss) $(23,844) $(369,909) Add: Impairment charges, net of income taxes 4,774 225,064 Add: Restructuring charges, net of income taxes 804 2,555 Add: Loss on early extinguishment of debt, net of income taxes 5,391 1,125 Add: Deferred tax asset charge 9,278 134,088 Net income (loss), as adjusted $(3,597) $(7,077) Diluted earnings (loss) per share $(0.01) $(0.05) Diluted shares outstanding 243,063,137 145,800,364 The table set forth below reconciles the Company's homebuilding gross margin percentage and gross margin percentage from home sales for the three months ended September 30, 2009 and 2008, and June 30, 2009, excluding housing inventory impairment charges: Three Months Ended September 30, Gross September 30, Gross June 30, Gross 2009 Margin % 2008 Margin % 2009 Margin % (Dollars in thousands) Homebuilding gross margin $42,623 13.0% $(207,657) (51.9%) $39,108 13.5% Less: Land sale revenues (57,538) (5,398) (5,466) Add: Cost of land sales 65,147 59,375 5,696 Gross margin from home sales 50,232 18.6% (153,680) (38.9%) 39,338 13.8% Add: Housing inventory impairment charges - 209,228 13,129 Gross margin from home sales, as adjusted $50,232 18.6% $55,548 14.1% $52,467 18.5% The table set forth below reconciles the Company's SG&A rate for the three months ended September 30, 2009 and 2008, and June 30, 2009 to the SG&A rate excluding restructuring charges and the SG&A rate excluding land sale revenues and restructuring charges: Three Months Ended SG&A% SG&A% SG&A% (excl. (excl. (excl. September 30, land September 30, land June 30, land 2009 sales) 2008 sales) 2009 sales) (Dollars in thousands) Selling, general and administrative expenses $43,695 16.2% $76,894 19.5% $46,026 16.2% Less: Restructuring charges (1,495) (0.6%) (2,977) (0.8%) (4,650) (1.6%) Selling, general and administrative expenses, excluding restructuring charges $42,200 15.6% $73,917 18.7% $41,376 14.6% We believe that the measures described above, which exclude the effect of impairment, tax valuation and restructuring charges, and loss on early extinguishment of debt, are useful to investors as they provide investors with a perspective on the underlying operating performance of the business by isolating the impact of charges related to impairments, tax valuation and restructuring charges, and loss on early extinguishment of debt. However, it should be noted that such measures are not GAAP financial measures. 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. NOTES TO KEY STATISTICS AND FINANCIAL DATA (1) Excludes unconsolidated joint ventures and discontinued operations. (2) 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 investors as one measure of the Company's ability to service debt and obtain financing. However, it should be noted that Adjusted Homebuilding EBITDA is not a U.S. generally accepted accounting principles ("GAAP") financial measure. Due to the significance of the GAAP components excluded, Adjusted Homebuilding EBITDA 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. For the three and twelve months ended September 30, 2009 and 2008, and three months ended June 30, 2009, EBITDA and Adjusted Homebuilding EBITDA from continuing and discontinued operations was calculated as follows: Three Months Ended LTM Ended September 30, September 30, September 30, June 30, 2009 2008 2009 2009 2008 (Dollars in thousands) Net income (loss) $(23,844) $(369,909) $(23,133) $(494,292) $(1,276,776) Provision (benefit) for income taxes - (19,886) - (47,678) 55,883 Homebuilding interest amortized to cost of sales and interest expense 35,681 25,867 33,590 129,526 115,359 Homebuilding depreciation and amortization 672 1,438 711 3,356 6,931 Amortization of stock- based compensation 1,651 5,174 4,079 8,037 20,671 EBITDA 14,160 (357,316) 15,247 (401,051) (1,077,932) Add: Cash distributions of income from unconsolidated joint ventures - 229 326 1,530 1,402 Impairment charges 7,814 276,105 13,129 472,734 938,986 (Gain) loss on early extinguishment of debt 8,824 1,841 (176) 7,812 9,380 Less: Income (loss) from unconsolidated joint ventures (1,960) (91,653) (5,459) (25,542) (209,703) Income (loss) from financial services subsidiary 1,009 (614) 1,022 1,180 374 Adjusted Homebuilding EBITDA $31,749 $13,126 $32,963 $105,387 $81,165 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, September 30, June 30, 2009 2008 2009 2009 2008 (Dollars in thousands) Net cash provided by (used in) operating activities $112,572 $31,933 $68,595 $375,353 $545,946 Add: Provision (benefit) for income taxes - (19,886) - (47,678) 55,883 Deferred tax valuation allowance (9,278) (134,088) (8,913) (162,280) (529,185) Homebuilding interest amortized to cost of sales and interest expense 35,681 25,867 33,590 133,420 115,359 Less: Income (loss) from financial services subsidiary 1,009 (614) 1,022 1,180 374 Depreciation and amortization from financial services subsidiary 169 188 171 700 837 Loss on disposal of property and equipment 1 901 675 3,230 2,340 Net changes in operating assets and liabilities: Trade and other receivables (2,191) 1,442 (7,666) (15,287) (40,315) Mortgage loans held for sale (16,071) 14,446 8,854 (20,039) (22,969) Inventories- owned (103,969) (58,537) (95,734) (303,581) (330,984) Inventories- not owned 324 6,154 460 (5,715) 5,344 Deferred income taxes 9,277 124,936 8,913 169,218 206,136 Other assets 1,997 18,669 1,599 (94,995) (4,624) Accounts payable (540) 1,264 10,336 42,877 50,535 Accrued liabilities 5,126 1,401 14,797 39,204 33,590 Adjusted Homebuilding EBITDA $31,749 $13,126 $32,963 $105,387 $81,165 (3) The pro forma common shares outstanding include the as-converted Series B Preferred Stock. In addition, this calculation excludes 3.9 million shares as of September 30, 2009, and 7.8 million shares as of June 30, 2009 and December 31, 2008, issued under a share lending agreement related to the Company's 6% Convertible Senior Subordinated Notes issued on September 28, 2007. During the 2009 third quarter, 3.9 million of the shares issued under the share lending agreement were returned to the Company. The Company believes that the pro forma stockholders' equity per common share information is useful to 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. This is a non-GAAP financial measure and due to the significance of items adjusted and excluded from this calculation, such measure should not be considered in isolation or as an alternative to operating performance measures. 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, June 30, December 31, 2009 2009 2008 Actual common shares outstanding 105,119,880 101,110,072 100,624,350 Add: Conversion of Preferred shares to common shares 147,812,786 147,812,786 147,812,786 Less: Common shares outstanding under share lending facility (3,919,904) (7,839,809) (7,839,809) Pro forma common shares outstanding 249,012,762 241,083,049 240,597,327 Stockholders' equity (actual amounts rounded to nearest thousand) $349,591,000 $346,512,000 $407,941,000 Divided by pro forma common shares outstanding / 249,012,762 / 241,083,049 / 240,597,327 Pro forma stockholders' equity per common share $1.40 $1.44 $1.70 (4) Total debt at September 30, 2009, June 30, 2009 and December 31, 2008 includes $38.8 million, $55.6 million and $63.7 million, respectively, of indebtedness of the Company's financial services subsidiary. (5) Adjusted net homebuilding debt excludes indebtedness of the Company's financial services subsidiary and additionally reflects the offset of cash and equivalents in excess of $5 million. We believe that the adjusted net homebuilding debt to total book capitalization ratio is useful to investors as a measure of the Company's ability to obtain financing. This is a non-GAAP ratio and other companies may calculate this ratio differently. For purposes of the ratio of adjusted net homebuilding debt to total book capitalization, total book capitalization is adjusted net homebuilding debt plus stockholders' equity. Adjusted net homebuilding debt is calculated as follows: September 30, June 30, December 31, 2009 2009 2008 (Dollars in thousands) Total consolidated debt $1,490,134 $1,330,940 $1,550,092 Less: Financial services indebtedness (38,798) (55,640) (63,655) Homebuilding cash in excess of $5 million (801,766) (568,038) (621,386) Adjusted net homebuilding debt $649,570 $707,262 $865,051SOURCE Standard Pacific Corp.John Stephens, SVP & CFO, +1-949-789-1641, jstephens@stanpac.com, or LloydMcKibbin, SVP & Treasurer, +1-949-789-1603, lmckibbin@stanpac.com, both ofStandard Pacific Corp.

  
  

• Nikkei hits 3-week closing low below 10000, JAL up Oct 20, 2009 @ 11:36 AM

  By Elaine LiesTOKYO, Oct 29 (Reuters) - Japan's Nikkei average slid below10,000 to a three-week closing low on Thursday as a strong yenhurt exporter shares and weak U.S. data renewed worry aboutglobal economic growth, sparking a broad sell-off on Wall Street. Japan Airlines (9205.T) rose nearly 3 percent on news thatthe transport minister will brief about plans to revive JapanAirlines Corp (9205.T) after the close on Thursday, withinvestors keen to see if the government will announce the use ofpublic funds to bail out the struggling carrier. [ID:nT349661]