UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~September 30, 2015

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from N/A to

Commission file number 1-10959

~~STANDARD PACIFIC CORP.~~CALATLANTIC GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware	33-0475989
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
15360 Barranca Parkway, Irvine, CA (Address of principal executive offices)	92618-2215 (Zip Code)

(949) 789-1600

(Registrant’s telephone number, including area code)

	~~N/A~~Standard Pacific Corp.
	(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ___.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes X No ___.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x	Accelerated filer ¨
Non-accelerated filer ¨ (Do not check if a smaller reporting company)	Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes ___ No X .

Registrant's shares of common stock outstanding at ~~July 30,~~November 4, 2015: ~~276,312,411~~121,017,696

~~STANDARD PACIFIC CORP.~~CALATLANTIC GROUP, INC.

FORM 10-Q

INDEX

				Page No.

PART I.	Financial Information

		ITEM 1.	Financial Statements

			Unaudited Condensed Consolidated Statements of Operations for the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2015 and 2014	2

			Condensed Consolidated Balance Sheets as of ~~June~~September 30, 2015 (Unaudited) and December 31, 2014	3

			Unaudited Condensed Consolidated Statements of Cash Flows for the ~~Six~~Nine Months Ended ~~June~~September 30, 2015 and 2014	4

			Notes to Unaudited Condensed Consolidated Financial Statements	5

		ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2427

		ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	3740

		ITEM 4.	Controls and Procedures	3740

PART II.	Other Information

		ITEM 1.	Legal Proceedings	4043

		ITEM 1A.	Risk Factors	4043

		ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4143

		ITEM 3.	Defaults Upon Senior Securities	4143

		ITEM 4.	Mine Safety Disclosures	4143

		ITEM 5.	Other Information	4143

		ITEM 6.	Exhibits	4144

SIGNATURES				4348

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

~~STANDARD PACIFIC CORP.~~CALATLANTIC GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014			2015			2014			2015			2014
	(Dollars in thousands, except per share amounts)												(Dollars in thousands, except per share amounts)
	(Unaudited)												(Unaudited)

Homebuilding:
Home sale revenues	$	694,678		$	591,706		$	1,163,057		$	1,038,624		$	626,008		$	603,788		$	1,789,065		$	1,642,412
Land sale revenues		4,954			780			6,853			14,061			26,182			1,061			33,035			15,122
Total revenues		699,632			592,486			1,169,910			1,052,685			652,190			604,849			1,822,100			1,657,534
Cost of home sales		(523,933	)		(434,196	)		(878,750	)		(762,441	)		(467,358	)		(444,898	)		(1,346,108	)		(1,207,339	)
Cost of land sales		(3,758	)		(350	)		(5,114	)		(13,354	)		(25,076	)		(891	)		(30,190	)		(14,245	)
Total cost of sales		(527,691	)		(434,546	)		(883,864	)		(775,795	)		(492,434	)		(445,789	)		(1,376,298	)		(1,221,584	)
Gross margin		171,941			157,940			286,046			276,890			159,756			159,060			445,802			435,950
Selling, general and administrative expenses		(79,910	)		(67,835	)		(145,980	)		(126,425	)		(73,260	)		(70,164	)		(219,240	)		(196,589	)
Income (loss) from unconsolidated joint ventures		(51	)		(462	)		(502	)		(899	)		121			557			(381	)		(342	)
Other income (expense)		(5,276	)		(363	)		(5,572	)		(376	)		(11,170	)		(69	)		(16,742	)		(445	)
Homebuilding pretax income		86,704			89,280			133,992			149,190			75,447			89,384			209,439			238,574
Financial Services:
Revenues		6,716			6,112			11,635			11,096			6,130			6,179			17,765			17,275
Expenses		(4,446	)		(3,760	)		(8,547	)		(7,200	)		(4,079	)		(3,673	)		(12,626	)		(10,873	)
Other income		548			214			938			375			796			231			1,734			606
Financial services pretax income		2,818			2,566			4,026			4,271			2,847			2,737			6,873			7,008

Income before taxes		89,522			91,846			138,018			153,461			78,294			92,121			216,312			245,582
Provision for income taxes		(32,324	)		(35,383	)		(49,215	)		(58,839	)		(31,117	)		(35,522	)		(80,332	)		(94,361	)
Net income		57,198			56,463			88,803			94,622			47,177			56,599			135,980			151,221
Less: Net income allocated to preferred shareholder		(13,798	)		(13,496	)		(21,475	)		(22,650	)		(11,342	)		(13,511	)		(32,818	)		(36,165	)
Less: Net income allocated to unvested restricted stock		(112	)		(77	)		(181	)		(134	)		(93	)		(77	)		(274	)		(211	)
Net income available to common stockholders	$	43,288		$	42,890		$	67,147		$	71,838		$	35,742		$	43,011		$	102,888		$	114,845

Income Per Common Share:
Basic	$	0.16		$	0.15		$	0.24		$	0.26		$	0.65		$	0.77		$	1.87		$	2.06
Diluted	$	0.14		$	0.14		$	0.22		$	0.23		$	0.59		$	0.70		$	1.71		$	1.87

Weighted Average Common Shares Outstanding:
Basic		275,498,449			279,075,416			274,572,173			278,514,992			55,345,443			55,909,542			55,059,683			55,772,603
Diluted		310,553,895			316,727,592			310,407,657			316,451,929			62,292,524			63,423,385			62,152,754			63,338,361

Weighted average additional common shares outstanding
if preferred shares converted to common shares		87,812,786			87,812,786			87,812,786			87,812,786			17,562,557			17,562,557			17,562,557			17,562,557

Total weighted average diluted common shares outstanding
if preferred shares converted to common shares		398,366,681			404,540,378			398,220,443			404,264,715			79,855,081			80,985,942			79,715,311			80,900,918

The accompanying notes are an integral part of these condensed consolidated statements.

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~~STANDARD PACIFIC CORP.~~CALATLANTIC GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30, 2015		December 31, 2014		September 30, 2015		December 31, 2014
	(Dollars in thousands)				(Dollars in thousands)
	(Unaudited)				(Unaudited)
ASSETS
Homebuilding:
Cash and equivalents	$	77,088	$	180,428	$	97,854	$	180,428
Restricted cash		39,714		38,222		37,425		38,222
Inventories:
Owned		3,624,498		3,255,204		3,805,453		3,255,204
Not owned		45,771		85,153		47,333		85,153
Investments in unconsolidated joint ventures		60,835		50,111		121,937		50,111
Deferred income taxes, net of valuation allowance of $1,115 and $2,561 at
June 30, 2015 and December 31, 2014, respectively		266,091		276,402
September 30, 2015 and December 31, 2014, respectively						255,297		276,402
Other assets		54,424		61,597		52,074		61,597
Total Homebuilding Assets		4,168,421		3,947,117		4,417,373		3,947,117
Financial Services:
Cash and equivalents		11,225		31,965		28,868		31,965
Restricted cash		1,045		1,295		1,045		1,295
Mortgage loans held for sale, net		109,239		174,420		86,064		174,420
Mortgage loans held for investment, net		23,366		14,380		22,087		14,380
Other assets		6,596		5,243		5,772		5,243
Total Financial Services Assets		151,471		227,303		143,836		227,303
Total Assets	$	4,319,892	$	4,174,420	$	4,561,209	$	4,174,420

LIABILITIES AND EQUITY
Homebuilding:
Accounts payable	$	79,719	$	45,085	$	82,754	$	45,085
Accrued liabilities		225,622		223,783		209,872		223,783
Revolving credit facility		30,000		―		268,700		―
Secured project debt and other notes payable		5,927		4,689		5,855		4,689
Senior notes payable		2,133,111		2,131,393		2,104,212		2,131,393
Total Homebuilding Liabilities		2,474,379		2,404,950		2,671,393		2,404,950
Financial Services:
Accounts payable and other liabilities		2,629		3,369		3,630		3,369
Mortgage credit facilities		90,341		89,413		78,859		89,413
Total Financial Services Liabilities		92,970		92,782		82,489		92,782
Total Liabilities		2,567,349		2,497,732		2,753,882		2,497,732

Equity:
Stockholders' Equity:
Preferred stock, $0.01 par value; 10,000,000 shares authorized; 267,829 shares
issued and outstanding at June 30, 2015 and December 31, 2014		3		3
Common stock, $0.01 par value; 600,000,000 shares authorized; 276,042,503
and 275,141,189 shares issued and outstanding at June 30, 2015 and
Preferred stock, $0.01 par value; 10,000,000 shares authorized; 53,565 shares
issued and outstanding at September 30, 2015 and December 31, 2014						1		1
Common stock, $0.01 par value; 600,000,000 shares authorized; 55,444,065
and 55,028,238 shares issued and outstanding at September 30, 2015 and
December 31, 2014, respectively		2,760		2,751		554		550
Additional paid-in capital		1,333,745		1,346,702		1,343,560		1,348,905
Accumulated earnings		416,035		327,232		463,212		327,232
Total Equity		1,752,543		1,676,688		1,807,327		1,676,688
Total Liabilities and Equity	$	4,319,892	$	4,174,420	$	4,561,209	$	4,174,420

The accompanying notes are an integral part of these condensed consolidated balance sheets.

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~~STANDARD PACIFIC CORP.~~CALATLANTIC GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended June 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(Dollars in thousands)						(Dollars in thousands)
	(Unaudited)						(Unaudited)
Cash Flows From Operating Activities:
Net income	$	88,803		$	94,622		$	135,980		$	151,221
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
(Income) loss from unconsolidated joint ventures		502			899			381			342
Cash distribution of income from unconsolidated joint ventures		592			1,875			592			1,875
Depreciation and amortization		14,982			12,024			22,369			18,908
Loss on disposal of property and equipment		34			1			41			6
Amortization of stock-based compensation		5,084			5,231			8,620			7,736
Excess tax benefits from share-based payment arrangements		(6,363	)		―			(8,573	)		(960	)
Deferred income tax provision		49,198			59,005			52,132			94,474
Changes in cash and equivalents due to:
Mortgage loans held for sale		65,182			42,574			88,360			53,108
Inventories - owned		(341,894	)		(325,611	)		(521,646	)		(562,812	)
Inventories - not owned		(12,061	)		(14,794	)		(21,612	)		(19,884	)
Other assets		5,877			(13,108	)		8,862			(14,645	)
Accounts payable		34,634			6,149			37,669			14,753
Accrued liabilities		(15,767	)		(12,379	)		(19,005	)		(2,668	)
Net cash provided by (used in) operating activities		(111,197	)		(143,512	)		(215,830	)		(258,546	)

Cash Flows From Investing Activities:
Investments in unconsolidated homebuilding joint ventures		(20,778	)		(5,677	)		(83,288	)		(7,948	)
Distributions of capital from unconsolidated joint ventures		8,760			14,808			10,289			18,010
Net cash paid for acquisitions		―			(33,408	)		―			(33,408	)
Other investing activities		(12,022	)		(1,487	)		(11,716	)		(1,984	)
Net cash provided by (used in) investing activities		(24,040	)		(25,764	)		(84,715	)		(25,330	)

Cash Flows From Financing Activities:
Change in restricted cash		(1,242	)		(9,925	)		1,047			(15,567	)
Borrowings from revolving credit facility		158,900			―			491,400			―
Principal payments on revolving credit facility		(128,900	)		―			(222,700	)		―
Principal payments on secured project debt and other notes payable		(497	)		(1,061	)		(569	)		(1,399	)
Principal payments on senior notes payable		―			(4,971	)		(29,789	)		(4,971	)
Payment of debt issuance costs								―			(2,387	)
Net proceeds from (payments on) mortgage credit facilities		928			(34,288	)		(10,554	)		(36,169	)
Repurchases of common stock		(22,073	)		―			(22,073	)		―
Issuance of common stock under employee stock plans, net of tax withholdings		(2,322	)		3,769			(461	)		5,786
Excess tax benefits from share-based payment arrangements		6,363			―			8,573			960
Net cash provided by (used in) financing activities		11,157			(46,476	)		214,874			(53,747	)

Net increase (decrease) in cash and equivalents		(124,080	)		(215,752	)		(85,671	)		(337,623	)
Cash and equivalents at beginning of period		212,393			363,291			212,393			363,291
Cash and equivalents at end of period	$	88,313		$	147,539		$	126,722		$	25,668

Cash and equivalents at end of period	$	88,313		$	147,539		$	126,722		$	25,668
Homebuilding restricted cash at end of period		39,714			31,385			37,425			37,027
Financial services restricted cash at end of period		1,045			1,295			1,045			1,295
Cash and equivalents and restricted cash at end of period	$	129,072		$	180,219		$	165,192		$	63,990

The accompanying notes are an integral part of these condensed consolidated statements.

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~~STANDARD PACIFIC CORP.~~CALATLANTIC GROUP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~JUNE~~SEPTEMBER 30, 2015

1. Basis of Presentation

On October 1, 2015, pursuant to the terms and conditions of the Amended and Restated Agreement and Plan of Merger, dated as of June 14, 2015 (the "Merger Agreement"), between Standard Pacific Corp. ("Standard Pacific") and The Ryland Group, Inc. ("Ryland"), Ryland merged with and into Standard Pacific (the "Merger"), with Standard Pacific continuing as the surviving corporation. At the same time: (i) Standard Pacific changed its name to "CalAtlantic Group, Inc." ("the Company") and effected a reverse stock split such that each five shares of common stock of Standard Pacific issued and outstanding immediately prior to the closing of the Merger were combined and converted into one issued and outstanding share of common stock of the Company ("Common Stock"), (ii) MP CA Homes, LLC ("MatlinPatterson"), the sole owner of the Company's outstanding Series B Preferred Stock, converted all of its preferred stock to Common Stock, and (iii) each outstanding share of Ryland common stock, stock options and restricted stock units were converted into the right to receive, or the option to acquire, as applicable, 1.0191 shares of Common Stock. Cash was paid in lieu of all fractional shares. Please see Note 2 for additional information regarding the Merger.

The accompanying condensed consolidated financial statements include the accounts of ~~Standard Pacific Corp.~~CalAtlantic Group, Inc. and its wholly owned subsidiaries and have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for Form 10-Q. Because the closing of the Merger occurred on October 1, 2015, Ryland's results of operations are not included in the accompanying condensed financial statements. Certain information normally included in the annual financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") has also been omitted pursuant to applicable rules and regulations. In the opinion of management, the unaudited condensed consolidated financial statements included herein reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly our financial position as of ~~June~~September 30, 2015 and the results of operations and cash flows for the periods presented.

Certain items in the prior period condensed consolidated financial statements have been reclassified to conform with the current period ~~presentation.~~presentation, including per share related information. In accordance with ASC Topic 260, Earnings per Share ("ASC 260"), the Company is required to restate per share information for all periods presented in this Form 10-Q as if the reverse stock split had been implemented for such period. ASC 260, however, does not allow the Company to include the MP CA Homes, LLC conversion of its Series B Preferred Stock, which occurred at the same time as the reverse stock split, into the restated share information.

The unaudited condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10‑K for the year ended December 31, 2014. Unless the context otherwise requires, the terms "we," "us," "our" and "the Company" refer to ~~Standard Pacific Corp.~~CalAtlantic Group, Inc. and its subsidiaries. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year.

2.Subsequent Events

a. Merger Agreement

On October 1, 2015, pursuant to the terms of the Merger Agreement, Ryland merged with and into the Company, with the Company continuing as the surviving corporation. Please see Note 1 for additional information regarding the Merger. Based on the closing price of the Company's Common Stock on September 30, 2015, and the 48.0 million shares of Common Stock that were issued to Ryland stockholders in connection with the Merger, the consideration received by Ryland stockholders had a value of

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approximately $1.9 billion. The calculation of the estimated consideration is subject to change as the Company is in process of completing the final analysis of certain components of the purchase price.

The Merger will be accounted for as a business combination, with the Company deemed to be the accounting acquirer, in accordance with ASC Topic 805, Business Combinations ("ASC 805"). The total estimated consideration that will be allocated to Ryland's net assets and liabilities is subject to the Company's completion of the purchase price accounting. Because the Merger closed on October 1, 2015, the Company has not completed the detailed valuation studies of the fair value of Ryland's assets acquired and the liabilities assumed and the related calculation of the purchase price. As of the date of this filing, the Company estimates that $3.0 billion of fair value will be assigned to homebuilding assets and $1.9 billion of fair value will be assigned to homebuilding liabilities, with the remainder representing approximately $0.8 billion of goodwill. The Company's assessment of fair value and the purchase price accounting is preliminary and subject to completion.

The following unaudited pro forma homebuilding revenues for the three and nine months ended September 30, 2015 and 2014, assumes that the Merger was completed on January 1, 2014. These amounts are not intended to be a projection of future results and do not reflect the actual homebuilding revenues that might have been achieved by the Company if the Merger was completed on January 1, 2014.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
	(Dollars in thousands)

Homebuilding revenues	$	1,344,969	$	1,273,087	$	3,656,924	$	3,373,501

Pro forma net income and pro forma earnings per share have not been presented as the Company is still completing the valuation studies necessary to arrive at these financial measures. The Company expects the valuation, among other things, may impact pro forma cost of home sales, other income (expense) and the income tax provision.

During the three and nine months ended September 30, 2015, the Company incurred acquisition costs of $2.3 million and $7.5 million, respectively, associated with the Merger. In addition, the Company incurred integration and executive compensation costs related to the Merger of $6.7 million during the three and nine months ended September 30, 2015. The acquisition, integration and executive compensation costs related to the Merger were expensed as incurred and are included in other income (expense) in the unaudited condensed consolidated statements of operations.

b. Revolving Credit Facility

On October 5, 2015, the Company entered into a new credit agreement that effectively amended, restated and combined Standard Pacific's previous $450 million senior unsecured revolving credit facility and Ryland's $300 million senior unsecured revolving credit facility. The new credit agreement provides for total lending commitments of $750 million, $350 million of which will be available for letters of credit and has an accordion feature under which the Company may increase the total commitment up to a maximum aggregate amount of $1.2 billion, subject to certain conditions, including the availability of additional bank commitments. Please see Note 12 for additional information regarding the Company's Revolving Credit Facility.

c. Senior Notes Payable

The Company's Senior Notes and Ryland's Senior Notes remain outstanding after the Merger. As required by the applicable note indentures, on October 1, 2015, the Company and certain former Ryland and Company subsidiaries entered into supplemental indentures and guarantees pursuant to which the Company formally assumed Ryland's obligations under the Ryland Senior Notes, former Ryland subsidiaries that guaranteed the Ryland Senior Notes agreed to guarantee the Company's Senior Notes and Company subsidiaries that guaranteed the Company's Senior Notes agreed to guarantee the Ryland Senior

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Notes. The guarantees are unsecured obligations of each subsidiary, ranking equal in right of payment with all such subsidiary's existing and future unsecured and unsubordinated indebtedness. Each of the notes rank equally with all of the Company's other unsecured and unsubordinated indebtedness.

d. Preferred Stock

Prior to the Merger, MatlinPatterson held all of the outstanding shares (267,829 shares) of Company Series B Preferred Stock and 126.4 million shares of Common Stock, which, together, represented approximately 59% of the total number of shares of Company common stock issued and outstanding on an if-converted basis. Immediately following the Merger, after giving effect to the 1-for-5 reverse stock split, MatlinPatterson converted all of their shares of preferred stock into 17.6 million shares of Common Stock. As of October 1, 2015, MatlinPatterson held 42.8 million shares (approximately 35%) of the Company's outstanding Common Stock and no shares of preferred stock.

e. Common Stock

The following table summarizes the components of Common Stock outstanding immediately following the Merger as of October 1, 2015:

	As of	Split/Exchange	As Adjusted
	October 1, 2015	Ratio	October 1, 2015
Common Stock - Standard Pacific	277,220,324	5	55,444,065
Common Stock - Ryland	46,856,558	1.0191	47,751,518
Accelerated Vesting of Ryland Equity Awards	234,751	1.0191	239,235
Preferred Stock - Standard Pacific	87,812,786	5	17,562,557
Fractional Shares Paid Out	―		(661)
Total	412,124,419		120,996,714

3. Recent Accounting Pronouncements

In January 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-04, Receivables - Troubled Debt Restructurings by Creditors ("ASU 2014-04"), which clarifies when an in-substance repossession or foreclosure of residential real estate property collateralizing a consumer mortgage loan has occurred. By doing so, this guidance helps determine when the creditor should derecognize the loan receivable and recognize the real estate property. For public companies, ASU 2014-04 iswas effective prospectively for interim and annual periods beginning after December 15, 2014. Our adoption of ASU 2014-04 on January 1, 2015 did not have an effect on our condensed consolidated financial statements.

In April 2014, the FASB issued ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity ("ASU 2014-08"). The amendments in ASU 2014-08 change the criteria for reporting discontinued operations while enhancing disclosures in this area. The new guidance requires expanded disclosures about discontinued operations, including more information about the assets, liabilities, income, and expenses of discontinued operations. The new guidance also requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. For public companies, the amendments in ASU 2014-08 ~~are~~were effective prospectively for interim and annual periods beginning after December 15, 2014. Our adoption of ASU 2014-08 on January 1, 2015 did not have an effect on our condensed consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), which supersedes existing accounting literature relating to how and when a company recognizes revenue. Under ASU 2014-09, a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. ~~On July 9,~~In August 2015, the FASB ~~approved~~issued ASU No. 2015-14,

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Revenue from Contracts with Customers (Topic 606): Deferral of the ~~deferral of~~Effective Date, which delayed the effective date of ASU 2014-09 by one year. As a result, for public companies, ASU 2014-09 will be effective for interim and annual reporting periods beginning after December 15, 2017, and is to be applied either with a full retrospective or modified retrospective approach, with early application permitted. We are

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currently evaluating the impact the adoption will have on our condensed consolidated financial statements and related disclosures.

In June 2014, the FASB issued ASU No. 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period ("ASU 2014-12"), which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in ASC Topic 718, Compensation — Stock Compensation ("ASC 718"), as it relates to awards with performance conditions that affect vesting to account for such awards. The amendments in ASU 2014-12 are effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. Our adoption of ASU 2014-12 is not expected to have a material effect on our condensed consolidated financial statements and related disclosures.

In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties About an Entity's Ability to Continue as a Going Concern, ("ASU 2014-15"), which requires management to perform interim and annual assessments on whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year of the date the financial statements are issued and to provide related disclosures, if required. The amendments in ASU 2014-15 are effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early adoption is permitted. Our adoption of ASU 2014-15 is not expected to have a material effect on our condensed consolidated financial statements and related disclosures.

In February 2015, the FASB issued ASU No. 2015-02, Amendments to the Consolidation Analysis, ("ASU 2015-02"), which changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The amendments in ASU 2015-02 are effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. Our adoption of ASU 2015-02 is not expected to have a material effect on our condensed consolidated financial statements and related disclosures.

In April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, ("ASU 2015-03"), which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The amendments in ASU 2015-03 are effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. Our adoption of ASU 2015-03 is not expected to have a material effect on our condensed consolidated financial statements.

In August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements — Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting ("ASU 2015-15"), which clarifies the treatment of debt issuance costs from line-of-credit arrangements after the adoption of ASU 2015-03. In particular, ASU 2015-15 clarifies that the SEC staff would not object to an entity deferring and presenting debt issuance costs related to a line-of-credit arrangement as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of such arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. Our adoption of ASU 2015-15 is not expected to have a material effect on our condensed consolidated financial statements.

In September 2015, the FASB issued ASU No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments ("ASU 2015-16"). ASU 2015-16 eliminates the requirement that an acquirer in a business combination account for measurement-period adjustments retrospectively. Instead, an acquirer will recognize a measurement-period adjustment during the period in which it determines the amount of the adjustment, including the effect on earnings of any amounts it would have recorded in

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previous periods if the accounting had been completed at the acquisition date. ASU 2015-16 is effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. Our adoption of ASU 2015-16 is not expected to have a material effect on our condensed consolidated financial statements.

3.4. Segment Reporting

We operate two principal businesses: homebuilding and financial services.

Our homebuilding operations acquire and develop land and construct and sell single-family attached and detached homes. In accordance with the aggregation criteria defined in ASC Topic 280, Segment Reporting, our homebuilding operating segments have been grouped into three reportable segments: ~~California; Southwest, consisting of our operating divisions in Arizona, Texas, Colorado and Nevada; and~~ Southeast, consisting of our operating divisions in Florida and the ~~Carolinas.~~Carolinas; Southwest, consisting of our operating divisions in Texas, Colorado and Nevada; and West, consisting of our operating divisions in California and Arizona. During the 2015 third quarter, in connection with transition planning related to the Merger, the chief operating decision makers began evaluating the business and allocating resources based on aggregating our Arizona operating segment within our California reportable segment. Our Arizona operating segment was previously reported within our Southwest reportable segment, and as such, prior periods presented have been restated to conform to our new presentation.

Our mortgage financing operation ("Standard Pacific Mortgage") provides mortgage financing to many of our homebuyers in substantially all of the markets in which we operate, and sells substantially all of the loans it originates in the secondary mortgage market. Our title services operation provides title examinations for our homebuyers in Texas, Florida and the Carolinas. Our mortgage financing and title services operations are included in our financial services reportable segment, which is separately reported in our condensed consolidated financial statements under "Financial Services."

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Corporate is a non-operating segment that develops and implements strategic initiatives and supports our operating segments by centralizing key administrative functions such as accounting, finance and treasury, information technology, insurance and risk management, litigation, marketing and human resources. Corporate also provides the necessary administrative functions to support us as a publicly traded company. All of the expenses incurred by Corporate are allocated to each of our operating segments based on their respective percentage of revenues.

Segment financial information relating to the Company's homebuilding operations was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
	(Dollars in thousands)
Homebuilding revenues:
Southeast	$	211,759	$	171,091	$	556,330	$	474,601
Southwest		155,595		128,916		461,304		329,930
West		284,836		304,842		804,466		853,003
Total homebuilding revenues	$	652,190	$	604,849	$	1,822,100	$	1,657,534

Homebuilding pretax income:
Southeast	$	19,379	$	16,312	$	44,909	$	45,051
Southwest		16,552		12,407		49,817		32,738
West		39,516		60,665		114,713		160,785
Total homebuilding pretax income	$	75,447	$	89,384	$	209,439	$	238,574

   Three Months Ended June 30, Six Months Ended June 30,
2015 2014 2015 2014
   (Dollars in thousands)
Homebuilding revenues:
California $ 298,972 $ 290,899 $ 484,593 $ 510,378
Southwest 202,538 131,590 340,746 238,797
Southeast 198,122 169,997 344,571 303,510
     Total homebuilding revenues $ 699,632 $ 592,486 $ 1,169,910 $ 1,052,685

Homebuilding pretax income:
California $ 49,377 $ 57,566 $ 74,475 $ 96,119
Southwest 22,190 14,274 33,987 24,332
Southeast 15,137 17,440 25,530 28,739
     Total homebuilding pretax income $ 86,704 $ 89,280 $ 133,992 $ 149,190

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Segment financial information relating to the Company's homebuilding assets was as follows:

	September 30,		December 31,
	2015		2014
	(Dollars in thousands)
Homebuilding assets:
Southeast	$	1,290,874	$	1,060,343
Southwest		666,391		624,765
West		2,073,094		1,744,308
Corporate		387,014		517,701
Total homebuilding assets	$	4,417,373	$	3,947,117

June 30, December 31,
2015 2014
(Dollars in thousands)
Homebuilding assets:
California $ 1,683,306 $ 1,542,584
Southwest 881,554 826,489
Southeast 1,222,505 1,060,343
Corporate 381,056 517,701
Total homebuilding assets $ 4,168,421 $ 3,947,117

4.5. Earnings Per Common Share

We compute earnings per share in accordance with ASC ~~Topic~~ 260,~~Earnings per Share~~ ~~("ASC 260"),~~ which requires earnings per share for each class of stock (common stock and participating preferred stock) to be calculated using the two-class method. The two-class method is an allocation of earnings between the holders of common stock and a company's participating security holders. Under the two-class method, earnings for the reporting period are allocated between common shareholders and other security holders based on their respective participation rights in undistributed earnings. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are participating securities and, therefore, are included in computing earnings per share pursuant to the two-class method.

Basic earnings per common share is computed by dividing income or loss available to common stockholders by the weighted average number of shares of basic common stock outstanding. Our Series B junior participating convertible preferred stock ("Series B Preferred Stock"), which is convertible into shares of our common stock at the holder's option (subject to a limitation based upon voting interest), and our unvested restricted stock, are classified as participating securities in accordance with ASC 260. Net income allocated to the holders of our Series B Preferred Stock and unvested restricted stock is calculated based on the shareholders' proportionate share of weighted average shares of common stock outstanding on an if-converted basis.

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For purposes of determining diluted earnings per common share, basic earnings per common share is further adjusted to include the effect of potential dilutive common shares outstanding, including stock options, stock appreciation rights, performance share awards and unvested restricted stock using the more dilutive of either the two-class method or the treasury stock method, and Series B Preferred Stock and convertible debt using the if-converted method. Under the two-class method of calculating diluted earnings per share, net income is reallocated to common stock, the Series B Preferred stock and all dilutive securities based on the contractual participating rights of the security to share in the current earnings as if all of the earnings for the period had been distributed. In the computation of diluted earnings per share, the two-class method and if-converted method for the Series B Preferred Stock resulted in the same earnings per share amounts as the holder of the Series B Preferred Stock has the same economic rights as the holders of the common stock.

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In connection with the closing of the Merger on October 1, 2015, the Company effected a reverse stock split such that each five shares of common stock of Standard Pacific common stock issued and outstanding immediately prior to the closing of the Merger were combined and converted into one issued and outstanding share of common stock of the Company. As required in accordance with GAAP, all share and earnings per share information noted below have been retroactively adjusted to reflect the reverse stock split. The following table sets forth the components used in the computation of basic and diluted earnings per common share.

		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,						Nine Months Ended September 30,
		2015			2014			2015			2014				2015			2014			2015			2014
		(Dollars in thousands, except per share amounts)													(Dollars in thousands, except per share amounts)

Numerator:
Net income		$	57,198		$	56,463		$	88,803		$	94,622			$	47,177		$	56,599		$	135,980		$	151,221
Less: Net income allocated to preferred shareholder			(13,798	)		(13,496	)		(21,475	)		(22,650	)			(11,342	)		(13,511	)		(32,818	)		(36,165	)
Less: Net income allocated to unvested restricted stock			(112	)		(77	)		(181	)		(134	)			(93	)		(77	)		(274	)		(211	)
Net income available to common stockholders for basic
earnings per common share			43,288			42,890			67,147			71,838				35,742			43,011			102,888			114,845
Effect of dilutive securities:
Net income allocated to preferred shareholder			13,798			13,496			21,475			22,650				11,342			13,511			32,818			36,165
Interest on 1¼% convertible senior notes due 2032,
capitalized and amortized in cost of sales			41			41			204			204				41			41			490			490
Net income available to common and preferred stock for diluted
earnings per share		$	57,127		$	56,427		$	88,826		$	94,692			$	47,125		$	56,563		$	136,196		$	151,500

Denominator:
Weighted average basic common shares outstanding			275,498,449			279,075,416			274,572,173			278,514,992				55,345,443			55,909,542			55,059,683			55,772,603
Weighted average additional common shares outstanding if preferred shares
converted to common shares (if dilutive)			87,812,786			87,812,786			87,812,786			87,812,786				17,562,557			17,562,557			17,562,557			17,562,557
Total weighted average common shares outstanding if preferred shares	Total weighted average common shares outstanding if preferred shares													Total weighted average common shares outstanding if preferred shares
converted to common shares			363,311,235			366,888,202			362,384,959			366,327,778				72,908,000			73,472,099			72,622,240			73,335,160
Effect of dilutive securities:
Share-based awards			3,742,596			6,339,326			4,522,634			6,624,087				684,511			1,251,273			830,501			1,303,188
1¼% convertible senior notes due 2032			31,312,850			31,312,850			31,312,850			31,312,850				6,262,570			6,262,570			6,262,570			6,262,570
Weighted average diluted shares outstanding			398,366,681			404,540,378			398,220,443			404,264,715				79,855,081			80,985,942			79,715,311			80,900,918

Income per common share:
Basic		$	0.16		$	0.15		$	0.24		$	0.26			$	0.65		$	0.77		$	1.87		$	2.06
Diluted		$	0.14		$	0.14		$	0.22		$	0.23			$	0.59		$	0.70		$	1.71		$	1.87

5.6. Stock-Based Compensation

We account for share-based awards in accordance with ASC 718 which requires that the cost resulting from all share-based payment transactions be recognized in the financial statements. ASC 718 requires all entities to apply a fair value-based measurement method in accounting for share-based payment transactions with employees except for equity instruments held by employee share ownership plans.

Total compensation expense recognized related to stock-based compensation was ~~$2.4~~$3.5 million and ~~$2.8~~$2.5 million for the three months ended ~~June~~September 30, 2015 and 2014, respectively. For the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, we recognized stock-based compensation expense of ~~$5.1~~$8.6 million and ~~$5.2~~$7.7 million, respectively. As of ~~June~~September 30, 2015, total unrecognized stock-based compensation expense was ~~$16.2~~$16.4 million, with a weighted average period over which the remaining unrecognized compensation expense is expected to be recorded of approximately 2.1 years.

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6.7. Cash and Equivalents and Restricted Cash

Cash and equivalents include cash on hand, demand deposits and all highly liquid short-term investments, including interest-bearing securities purchased with a maturity of three months or less from the date of purchase. At ~~June~~September 30, 2015, cash and equivalents included ~~$34.6~~$31.6 million of cash from home closings held in escrow for our benefit, typically for less than five days, which are considered deposits in-transit.

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At ~~June~~September 30, 2015, restricted cash consisted of ~~$40.8~~$38.5 million of cash held in cash collateral accounts primarily related to certain letters of credit that have been issued and a portion related to our financial services subsidiary mortgage credit facilities ($~~39.7~~37.4 million of homebuilding restricted cash and $1.1 million of financial services restricted cash).

7.8. Inventories

a. Inventories Owned

Inventories owned consisted of the following at:

	June 30, 2015								September 30, 2015
	California		Southwest		Southeast		Total		Southeast		Southwest		West		Total
	(Dollars in thousands)								(Dollars in thousands)

Land and land under development	$	980,718	$	491,820	$	797,460	$	2,269,998	$	840,926	$	340,918	$	1,079,353	$	2,261,197
Homes completed and under construction		493,539		306,345		329,834		1,129,718		346,696		269,667		683,248		1,299,611
Model homes		107,770		50,574		66,438		224,782		77,201		35,844		131,600		244,645
Total inventories owned	$	1,582,027	$	848,739	$	1,193,732	$	3,624,498	$	1,264,823	$	646,429	$	1,894,201	$	3,805,453

	December 31, 2014								December 31, 2014
	California		Southwest		Southeast		Total		Southeast		Southwest		West		Total
	(Dollars in thousands)								(Dollars in thousands)

Land and land under development	$	1,021,585	$	504,538	$	722,166	$	2,248,289	$	722,166	$	339,625	$	1,186,498	$	2,248,289
Homes completed and under construction		318,982		250,498		258,132		827,612		258,132		223,032		346,448		827,612
Model homes		81,763		44,437		53,103		179,303		53,103		36,199		90,001		179,303
Total inventories owned	$	1,422,330	$	799,473	$	1,033,401	$	3,255,204	$	1,033,401	$	598,856	$	1,622,947	$	3,255,204

In accordance with ASC Topic 360, Property, Plant, and Equipment ("ASC 360"), we record impairment losses on inventories when events and circumstances indicate that they may be impaired, and the future undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts. Inventories that are determined to be impaired are written down to their estimated fair value. We calculate the fair value of a project under a land residual value analysis and in certain cases in conjunction with a discounted cash flow analysis. As of ~~June~~September 30, 2015 and 2014, the total active and future projects that we owned were ~~381~~380 and ~~360,~~373, respectively. During the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, we reviewed all projects for indicators of impairment and based on our review we did not record any inventory impairments during these periods.

b. Inventories Not Owned

Inventories not owned consisted of the following at:

	June 30,		December 31,		September 30,		December 31,
	2015		2014		2015		2014
	(Dollars in thousands)				(Dollars in thousands)

Land purchase and lot option deposits	$	41,238	$	47,472	$	44,241	$	47,472
Other lot option contracts, net of deposits		4,533		37,681		3,092		37,681
Total inventories not owned	$	45,771	$	85,153	$	47,333	$	85,153

Under ASC Topic 810, Consolidation ("ASC 810"), a non-refundable deposit paid to an entity is deemed to be a variable interest that will absorb some or all of the entity's expected losses if they occur.

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Our land purchase and lot option deposits generally represent our maximum exposure to the land seller if we elect not to purchase the optioned property. In some instances, we may also expend funds for due diligence, development and construction activities with respect to optioned land prior to takedown. Such costs are classified as inventories owned, which we would have to absorb should we not exercise the option. Therefore, whenever we enter into a land option or purchase contract with an entity and make a non-refundable deposit, a variable interest entity ("VIE") may have been created. In accordance with ASC 810, we perform ongoing reassessments of whether we are the primary beneficiary of a VIE. As of ~~June~~ September

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30, 2015 and December 31, 2014, we had consolidated ~~$1.4~~$0 million and $7.6 million, respectively, within other lot option contracts (with a corresponding increase in accrued liabilities) related to land option and purchase contracts where we were deemed to be the primary beneficiary of a VIE.

Other lot option contracts also included $3.1 million, as of ~~June~~September 30, 2015 and December 31, 2014, of purchase price allocated in connection with a business acquisition during the 2013 ~~second~~third quarter, and $27.0 million as of December 31, 2014 related to a land purchase contract where we made a significant deposit and as a result we were deemed to be economically compelled to purchase the land.

8.9. Capitalization of Interest

We follow the practice of capitalizing interest to inventories owned during the period of development and to investments in unconsolidated homebuilding and land development joint ventures in accordance with ASC Topic 835, Interest ("ASC 835"). Homebuilding interest capitalized as a cost of inventories owned is included in cost of sales as related units or lots are sold. Interest capitalized to investments in unconsolidated homebuilding and land development joint ventures is included as a reduction of income from unconsolidated joint ventures when the related homes or lots are sold to third parties. Interest capitalized to investments in unconsolidated land development joint ventures is transferred to inventories owned if the underlying lots are purchased by us. To the extent our debt exceeds our qualified assets as defined in ASC 835, we expense a portion of the interest incurred by us. Qualified assets represent projects that are actively selling or under development as well as investments in unconsolidated joint ventures. During the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, our qualified assets exceeded our debt, and as a result, all of our homebuilding interest incurred during the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014 was capitalized in accordance with ASC 835.

The following is a summary of homebuilding interest capitalized to inventories owned and investments in unconsolidated joint ventures, amortized to cost of sales and income (loss) from unconsolidated joint ventures and expensed as interest expense, for the three and ~~six~~nine months ended ~~June~~September 30, 2015 and 2014:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
	(Dollars in thousands)

Total interest incurred	$	42,304		$	37,308		$	125,964		$	113,735
Less: Interest capitalized to inventories owned		(41,611	)		(36,927	)		(124,520	)		(112,368	)
Less: Interest capitalized to investments in unconsolidated joint ventures		(693	)		(381	)		(1,444	)		(1,367	)
Interest expense	$	―		$	―		$	―		$	―

Interest previously capitalized to inventories owned, included in cost of home sales	$	30,275		$	28,872		$	87,721		$	83,052
Interest previously capitalized to inventories owned, included in cost of land sales	$	3,048		$	87		$	4,803		$	706
Interest previously capitalized to investments in unconsolidated joint ventures,
included in income (loss) from unconsolidated joint ventures	$	―		$	―		$	―		$	30
Interest capitalized in ending inventories owned (1)	$	307,603		$	275,367		$	307,603		$	275,367
Interest capitalized as a percentage of inventories owned		8.1	%		8.8	%		8.1	%		8.8	%
Interest capitalized in ending investments in unconsolidated joint ventures (1)	$	2,109		$	299		$	2,109		$	299
Interest capitalized as a percentage of investments in unconsolidated joint ventures		1.7	%		0.6	%		1.7	%		0.6	%

Three Months Ended June 30, Six Months Ended June 30,
2015 2014 2015 2014
(Dollars in thousands)

Total interest incurred $ 41,857 $ 37,641 $ 83,660 $ 76,427
Less: Interest capitalized to inventories owned (41,508 ) (37,228 ) (82,909 ) (75,441 )
Less: Interest capitalized to investments in unconsolidated joint ventures (349 ) (413 ) (751 ) (986 )
Interest expense $ ― $ ― $ ― $ ―

Interest previously capitalized to inventories owned, included in cost of home sales $ 35,051 $ 29,812 $ 57,446 $ 54,180
Interest previously capitalized to inventories owned, included in cost of land sales $ 1,512 $ 4 $ 1,755 $ 619
Interest previously capitalized to investments in unconsolidated joint ventures,
included in income (loss) from unconsolidated joint ventures $ ― $ ― $ ― $ 30
Interest capitalized in ending inventories owned (1) $ 299,315 $ 265,393 $ 299,315 $ 265,393
Interest capitalized as a percentage of inventories owned 8.3 % 9.1 % 8.3 % 9.1 %
Interest capitalized in ending investments in unconsolidated joint ventures (1) $ 1,416 $ 1,924 $ 1,416 $ 1,924
Interest capitalized as a percentage of investments in unconsolidated joint ventures 2.3 % 3.8 % 2.3 % 3.8 %

__________________

(1)	During the ~~six~~three and nine months ended ~~June~~September 30, 2014, in connection with lot purchases from our joint ventures, ~~$4.0~~$2.0 million and $6.0 million, respectively, of capitalized interest was transferred from investments in unconsolidated joint ventures to inventories owned.

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9.10. Investments in Unconsolidated Land Development and Homebuilding Joint Ventures

The table set forth below summarizes the condensed combined statements of operations for our unconsolidated land development and homebuilding joint ventures that we account for under the equity method:

	Six Months Ended June 30,								Nine Months Ended September 30,
	2015				2014				2015			2014
	(Dollars in thousands)								(Dollars in thousands)
	(Unaudited)								(Unaudited)

Revenues		$	18,350			$	31,225		$	22,350		$	31,225
Cost of sales and expenses			(21,556	)			(36,251	)		(25,444	)		(35,943	)
Income (loss) of unconsolidated joint ventures		$	(3,206	)		$	(5,026	)	$	(3,094	)	$	(4,718	)
Income (loss) from unconsolidated joint ventures reflected in the
accompanying condensed consolidated statements of operations		$	(502	)		$	(899	)	$	(381	)	$	(342	)

Income (loss) from unconsolidated joint ventures reflected in the accompanying condensed consolidated statements of operations represents our share of the income (loss) of our unconsolidated land development and homebuilding joint ventures, which is allocated based on the provisions of the underlying joint venture operating agreements less any additional impairments recorded against our investments in joint ventures which we do not deem recoverable. In addition, we defer recognition of our share of income that relates to lots purchased by us from land development joint ventures until we ultimately sell the homes to be constructed to third parties, at which time we account for these earnings as a reduction of the cost basis of the lots purchased from these joint ventures. For the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, income (loss) from unconsolidated joint ventures was primarily attributable to our share of income (loss) related to our California joint ventures, which was allocated based on the provisions of the underlying joint venture operating agreements.

During each of the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, all of our investments in unconsolidated joint ventures were reviewed for impairment. Based on the impairment review, no joint venture projects were determined to be impaired for the ~~six~~nine months ended ~~June~~September 30, 2015 or 2014.

The table set forth below summarizes the condensed combined balance sheets for our unconsolidated land development and homebuilding joint ventures that we accounted for under the equity method:

	June 30,		December 31,		September 30,		December 31,
	2015		2014		2015		2014
	(Dollars in thousands)				(Dollars in thousands)
	(Unaudited)				(Unaudited)
Assets:
Cash	$	24,765	$	29,472	$	28,218	$	29,472
Inventories		200,620		197,727		403,953		197,727
Other assets		38,783		10,372		13,975		10,372
Total assets	$	264,168	$	237,571	$	446,146	$	237,571

Liabilities and Equity:
Accounts payable and accrued liabilities	$	10,732	$	16,173	$	12,502	$	16,173
Non-recourse debt		30,000		30,000		30,000		30,000
Standard Pacific equity		64,576		54,347		124,966		54,347
Other members' equity		158,860		137,051		278,678		137,051
Total liabilities and equity	$	264,168	$	237,571	$	446,146	$	237,571

Investments in unconsolidated joint ventures reflected in
the accompanying condensed consolidated balance sheets	$	60,835	$	50,111	$	121,937	$	50,111

In some cases our net investment in these unconsolidated joint ventures is not equal to our proportionate share of total equity reflected in the table above primarily because of differences between ~~asset~~

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asset impairments that we recorded in prior periods against our joint venture investments and the impairments recorded by the applicable joint venture. As of ~~June~~September 30, 2015 and December 31, 2014, substantially all of our investments in unconsolidated joint ventures were in California. Our investments in unconsolidated joint ventures also included approximately ~~$1.4~~$2.1 million and $0.7 million of homebuilding interest capitalized to investments in unconsolidated joint ventures as of ~~June~~September 30, 2015 and December 31, 2014, respectively, which capitalized interest is not included in the condensed combined balance sheets above.

Our investments in these unconsolidated joint ventures may represent a variable interest in a VIE depending on, among other things, the economic interests of the members of the entity and the contractual terms of the arrangement. We analyze all of our unconsolidated joint ventures under the provisions of ASC 810 to determine whether these entities are deemed to be VIEs, and if so, whether we are the primary beneficiary. As of ~~June~~September 30, 2015, all of our homebuilding and land development joint ventures with unrelated parties were determined under the provisions of ASC 810 to be unconsolidated joint ventures either because they were not deemed to be VIEs and we did not have a controlling interest, or, if they were a VIE, we were not deemed to be the primary beneficiary.

~~10.~~11. Warranty Costs

Estimated future direct warranty costs are accrued and charged to cost of sales in the period when the related homebuilding revenues are recognized. Amounts accrued are based upon historical experience. Indirect warranty overhead salaries and related costs are charged to cost of sales in the period incurred. We assess the adequacy of our warranty accrual on a quarterly basis and adjust the amounts recorded if necessary. Our warranty accrual is included in accrued liabilities in the accompanying condensed consolidated balance sheets.

Changes in our warranty accrual are detailed in the table set forth below:

	Six Months Ended June 30,							Nine Months Ended September 30,
	2015				2014			2015				2014
	(Dollars in thousands)							(Dollars in thousands)

Warranty accrual, beginning of the period		$	13,584		$	13,811			$	13,584		$	13,811
Warranty costs accrued during the period			4,359			2,812				7,403			4,950
Warranty costs paid during the period			(4,397	)		(3,277	)			(7,119	)		(5,615	)
Warranty accrual, end of the period		$	13,546		$	13,346			$	13,868		$	13,146

~~11.~~12. Revolving Credit Facility and Letter of Credit Facilities

As of ~~June~~September 30, 2015, we were party to a $450 million unsecured revolving credit facility ~~(the "Revolving Facility")~~ which ~~matures~~was set to mature in July 2018. Following the closing of the Merger with Ryland, on October 5, 2015, the Company entered into a new $750 million unsecured revolving credit facility. The ~~Revolving Facility~~new facility replaces and combines the Company's $450 million facility and Ryland's $300 million facility, providing for total lending commitments of $750 million, $350 million of which will be available for letters of credit. In addition, the new facility has an accordion feature under which the ~~aggregate~~Company may increase the total commitment ~~may be increased~~up to a maximum aggregate amount of ~~$750 million,~~$1.2 billion, subject to certain conditions, including the availability of additional bank ~~commitments~~commitments. The new facility matures on October 5, 2019.

In addition to customary representations and ~~certain~~warranties, the new facility also contains financial and other ~~conditions.~~ ~~As of June 30, 2015, the Revolving Facility contained financial~~ covenants, including ~~but not limited to, (i)~~ a minimum ~~consolidated~~ tangible net worth ~~covenant; (ii)~~requirement of $1.65 billion (which amount is subject to increase over time based on subsequent earnings and proceeds from equity offerings), a net homebuilding leverage covenant that prohibits the leverage ratio (as defined therein) from exceeding 2.00 to 1.00 and a land covenant which limits land not under development to an amount not to exceed tangible net worth. The Company is also required to maintain either (a) a minimum liquidity level (unrestricted cash in excess of interest incurred for the previous four quarters) or (b) a minimum interest coverage ~~ratio; (iii) a maximum net homebuilding leverage~~ ratio ~~and (iv) a maximum land not under development~~(EBITDA to ~~tangible net worth ratio. This~~interest expense, as defined therein) of at least 1.25 to 1.00. The new facility also ~~contains a limitation on our~~limits,

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among other things, the Company's investments in joint ~~ventures.~~ ventures and the amount of the Company's common stock that the Company can repurchase. Interest rates charged under the ~~Revolving Facility~~new revolving facility include LIBOR and prime rate pricing options. AsOn October 5, 2015, the closing date of ~~June 30, 2015, we satisfied~~ the ~~conditions that would allow us to borrow up to $450 million~~new facility, no borrowings were outstanding and the Company had outstanding letters of credit issued under the new facility totaling $90.8 million, leaving $659.2 million available under the new facility to be drawn. Substantially all of ~~which $30 million in borrowings was outstanding, with $420 million~~our 100% owned active homebuilding subsidiaries are guarantors of ~~remaining availability.~~the new facility.

As of ~~June~~September 30, 2015, we were party to four committed letter of credit facilities totaling $48 million, of which ~~$38.0~~$35.5 million was outstanding. These facilities require cash collateralization and have maturity dates ranging from October ~~2015~~2016 to October 2017. In addition, as of such date, we also had $0.2 million outstanding under an uncommitted letter of credit facility. As of ~~June~~September 30, 2015, these facilities were

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secured by cash collateral deposits of ~~$38.8~~$36.3 million. Upon maturity, we may renew or enter into new letter of credit facilities with the same or other financial institutions.

~~12.~~13. Secured Project Debt and Other Notes Payable

Our secured project debt and other notes payable consist of seller non-recourse financing and community development district and similar assessment district bond financings used to finance land acquisition, development and infrastructure costs for which we are responsible. At ~~June~~September 30, 2015, we had approximately $5.9 million outstanding in secured project debt and other notes payable.

~~13.~~14. Senior Notes Payable

Senior notes payable consisted of the following at:

	June 30,		December 31,		September 30,		December 31,
	2015		2014		2015		2014
	(Dollars in thousands)				(Dollars in thousands)

7% Senior Notes due August 2015	$	29,789	$	29,789	$	―	$	29,789
10¾% Senior Notes due September 2016, net of discount		274,676		272,684		275,707		272,684
8⅜% Senior Notes due May 2018, net of premium		577,850		578,278		577,629		578,278
8⅜% Senior Notes due January 2021, net of discount		397,796		397,642		397,876		397,642
6¼% Senior Notes due December 2021		300,000		300,000		300,000		300,000
5⅞% Senior Notes due November 2024		300,000		300,000		300,000		300,000
1¼% Convertible Senior Notes due August 2032		253,000		253,000		253,000		253,000
	$	2,133,111	$	2,131,393	$	2,104,212	$	2,131,393

The senior notes payable described above are all senior obligations and rank equally with our other existing senior indebtedness and, with the exception of our 1¼% Convertible Senior Notes, are redeemable at our option, in whole or in part, pursuant to a "make whole" formula. These notes contain various restrictive covenants. Our 10¾% Senior Notes due 2016 contain our most restrictive covenants, including a limitation on additional indebtedness and a limitation on restricted payments. Outside of the specified categories of indebtedness that are carved out of the additional indebtedness limitation (including a carve-out for up to $1.1 billion in credit facility indebtedness), the Company must satisfy at least one of two conditions (either a maximum leverage condition or a minimum interest coverage condition) to incur additional indebtedness. The Company must also satisfy at least one of these two conditions to make restricted payments. Restricted payments include dividends, stock repurchases and investments in and advances to our joint ventures and other unrestricted subsidiaries. Our ability to make restricted payments is also subject to a basket limitation (as defined in the indentures). As of ~~June~~September 30, 2015, we were able to incur additional indebtedness and make restricted payments because we satisfied both conditions. Many of our 100% owned direct and indirect subsidiaries (collectively, the "Guarantor Subsidiaries") ~~guaranty~~guarantee our outstanding senior notes. The guarantees are full and unconditional, and joint and several. The indentures further provide that a Guarantor Subsidiary will be released and relieved of any obligations under its note guarantee in the event (i) of a sale or other disposition (whether by merger, stock purchase, asset sale or otherwise) of a Guarantor Subsidiary to an entity which is not ~~Standard Pacific Corp.~~CalAtlantic Group, Inc. or a Guarantor Subsidiary; (ii) the requirements for legal defeasance or covenant defeasance have been satisfied;

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(iii) a Guarantor Subsidiary ceases to be a restricted subsidiary as the result of the Company owning less than 80% of such Guarantor Subsidiary; (iv) a Guarantor Subsidiary ceases to guarantee all other public notes of the Company; or (v) a Guarantor Subsidiary is designated as an Unrestricted Subsidiary under the indentures for covenant purposes. Please see Note 21 for supplemental financial statement information about our guarantor subsidiaries group and non-guarantor subsidiaries group.

The 1¼% Convertible Senior Notes due 2032 (the "Convertible Notes") will mature on August 1, 2032, unless earlier converted, redeemed or repurchased. The holders may at any time convert their Convertible Notes into shares of the Company's common stock, after giving effect to the 1-for-5 reverse stock split, at ~~an initial~~a conversion rate of ~~123.7662~~24.7532 shares of common stock per $1,000 principal amount of Convertible Notes (which is equal to ~~an initial~~a conversion price of approximately ~~$8.08~~$40.40 per share), subject to adjustment. On or after August 5, 2017, the

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Company may redeem for cash all or part of the Convertible Notes at a redemption price equal to 100% of the principal amount of the Convertible Notes being redeemed. On each of August 1, 2017, August 1, 2022 and August 1, 2027, holders of the Convertible Notes may require the Company to purchase all or any portion of their Convertible Notes for cash at a price equal to 100% of the principal amount of the Convertible Notes to be repurchased.

We repaid the remaining $29.8 million principal balance of our 7% Senior Notes upon maturity in August 2015.

All of the Company's senior notes remained outstanding after the October 1, 2015 closing of the Company's Merger with Ryland. In addition, all of Ryland's senior notes, totaling $1.3 billion in aggregate principal amount as of October 1, 2015, remained outstanding following the merger. As required by the applicable note indentures, the Company and certain former Ryland and Company subsidiaries entered into supplemental indentures and guarantees pursuant to which the Company affirmed its assumption of Ryland Group, Inc.'s obligations under the Ryland senior notes, former Ryland subsidiaries that guaranteed the Ryland senior notes agreed to guarantee the Company's senior notes and Company subsidiaries that guaranteed the Company's senior notes agreed to guarantee the Ryland senior notes. The guarantees are unsecured obligations of each subsidiary, ranking equal in right of payment with all such subsidiary's existing and future unsecured and unsubordinated indebtedness. Interest on each series of notes is payable semi-annually. Each of the Company senior notes and Ryland senior notes rank equally with all of the Company's other unsecured and unsubordinated indebtedness.

~~14.~~15. Preferred Stock

Our Series B Preferred Stock is convertible at the holder's option into shares of our common stock provided that no holder, with its affiliates, may beneficially own total voting power of our voting stock in excess of 49%. The number of shares of common stock into which our Series B Preferred Stock is convertible is determined by dividing $1,000 by the applicable conversion price ($~~3.05,~~15.25, subject to customary anti-dilution adjustments) plus cash in lieu of fractional shares. The Series B Preferred Stock also mandatorily converts into our common stock upon its sale, transfer or other disposition by MP CA Homes LLC ("MatlinPatterson") or its affiliates to an unaffiliated third party. The Series B Preferred Stock votes together with our common stock on all matters upon which holders of our common stock are entitled to vote. Each share of Series B Preferred Stock is entitled to such number of votes as the number of shares of our common stock into which such share of Series B Preferred Stock is convertible, provided that the aggregate votes attributable to such shares with respect to any holder of Series B Preferred Stock (including its affiliates), taking into consideration any other voting securities of the Company held by such stockholder, cannot exceed more than 49% of the total voting power of the voting stock of the Company. Shares of Series B Preferred Stock are entitled to receive only those dividends declared and paid on the common stock.

At ~~June~~September 30, 2015, MatlinPatterson owned 267,829 shares of Series B Preferred Stock, which ~~are~~were convertible into 87.8 million shares of our common stock. MatlinPatterson also owned 126.4 million shares of our common stock. As of ~~June~~September 30, 2015, the outstanding shares of Series B Preferred Stock

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on an as converted basis plus the common stock owned by MatlinPatterson represented approximately 59% of the total number of shares of our common stock outstanding on an if-converted basis.

Immediately following the Merger on October 1, 2015, after giving effect to the 1-for-5 reverse stock split, MatlinPatterson converted all of their shares of Series B Preferred Stock into 17.6 million shares of Common Stock. As of October 1, 2015, MatlinPatterson held 42.8 million shares (approximately 35%) of the Company's outstanding Common Stock and no shares of preferred stock.

~~15.~~16. Mortgage Credit Facilities

At ~~June~~September 30, 2015, we had ~~$90.3~~$78.9 million outstanding under our mortgage financing subsidiary's mortgage credit facilities. These mortgage credit facilities consist of a $100 million repurchase facility ($25 million committed and $75 million uncommitted) with one lender, maturing in June 2016, and a $75 million repurchase facility with another lender, maturing in ~~October~~December 2015. These facilities require Standard Pacific Mortgage to maintain cash collateral accounts, which totaled $1.1 million as of ~~June~~September 30, 2015, and also contain financial covenants which require Standard Pacific Mortgage to, among other things, maintain a minimum level of tangible net worth, not to exceed a debt to tangible net worth ratio, maintain a minimum liquidity amount based on a measure of total assets (inclusive of the cash collateral requirement), and satisfy pretax income (loss) requirements. As of ~~June~~September 30, 2015, Standard Pacific Mortgage was in compliance with the financial and other covenants contained in these facilities.

On October 2, 2015, Standard Pacific Mortgage amended its $100 million repurchase facility to increase the facility to $200 million ($25 million committed and $175 million uncommitted).

~~16.~~17. Disclosures about Fair Value

ASC Topic 820, Fair Value Measurements and Disclosures ("ASC 820"), establishes a framework for measuring fair value, expands disclosures regarding fair value measurements and defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Further, ASC 820 requires us to maximize the use of observable market inputs, minimize the use of unobservable market inputs and disclose in the form of an outlined hierarchy the details of such fair value measurements. ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to a fair value measurement are considered to be observable or unobservable in a marketplace. The three levels of the hierarchy are as follows:

• Level 1 – quoted prices for identical assets or liabilities in active markets;

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• Level 2 – quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and

• Level 3 – valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The following table presents the Company's financial instruments measured at fair value on a recurring basis:

Fair Value at

Description

Fair Value Hierarchy

June 30,
2015

December 31,
2014

Description

Fair Value

Hierarchy

September 30,
2015

December 31,
2014

(Dollars in thousands)

Mortgage loans held for sale

Level 2

111,654

176,511

Mortgage loans held for sale

Level 2

88,163

176,511

Mortgage loans held for sale consist of FHA, VA, USDA and agency first mortgages on single-family residences which are eligible for sale to FNMA/FHLMC, GNMA or other investors, as applicable. Fair values of these loans are based on quoted prices from third party investors when preselling loans.

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The following table presents the carrying values and estimated fair values of our other financial instruments for which we have not elected the fair value option in accordance with ASC Topic 825, Financial Instruments:

			June 30, 2015				December 31, 2014						September 30, 2015				December 31, 2014
Description	Description	Fair Value Hierarchy		Carrying Amount		Fair Value		Carrying Amount		Fair Value	Description	Fair Value Hierarchy		Carrying Amount		Fair Value		Carrying Amount		Fair Value
			(Dollars in thousands)										(Dollars in thousands)

Financial services assets:	Financial services assets:										Financial services assets:
	Mortgage loans held for investment, net	Level 2	$	23,366	$	23,366	$	14,380	$	14,380	Mortgage loans held for investment, net	Level 2	$	22,087	$	22,087	$	14,380	$	14,380
Homebuilding liabilities:	Homebuilding liabilities:										Homebuilding liabilities:
	Senior notes payable, net	Level 2	$	2,133,111	$	2,401,780	$	2,131,393	$	2,337,839	Senior notes payable, net	Level 2	$	2,104,212	$	2,328,899	$	2,131,393	$	2,337,839

Mortgage Loans Held for Investment – Fair value of these loans is based on the estimated market value of the underlying collateral based on market data and other factors for similar type properties as further adjusted to reflect the estimated net realizable value of carrying the loans through disposition.

Senior Notes Payable – The senior notes are traded over the counter and their fair values were estimated based upon the values of their last trade at the end of the period.

The fair value of our cash and equivalents, restricted cash, trade and other receivables, accounts payable, revolving credit facility borrowings, secured project debt and other notes payable, mortgage credit facilities and other liabilities approximate their carrying amounts due to the short-term nature of these assets and liabilities.

~~17.~~18. Commitments and Contingencies

a. Land Purchase and Option Agreements

We are subject to obligations associated with entering into contracts for the purchase of land and improved homesites. These purchase contracts typically require us to provide a cash deposit or deliver a letter of credit in favor of the seller, and our purchase of properties under these contracts is generally contingent upon satisfaction of certain requirements by the sellers, including obtaining applicable property and development entitlements. We also utilize option contracts with land sellers as a method of acquiring land in staged takedowns, to help us manage the financial and market risk associated with land holdings, and to reduce the near-term use of funds from our corporate financing sources. Option contracts generally require a non-refundable deposit for the right to acquire lots over a specified period of time at predetermined prices. We generally have the right at our discretion to terminate our obligations under both

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purchase contracts and option contracts by forfeiting our cash deposit or by repaying amounts drawn under our letter of credit with no further financial responsibility to the land seller, although in certain instances, the land seller has the right to compel us to purchase a specified number of lots at predetermined prices.

In some instances, we may also expend funds for due diligence, development and construction activities with respect to our land purchase and option contracts prior to purchase, which we would have to write off should we not purchase the land. At ~~June~~September 30, 2015, we had non-refundable cash deposits outstanding of approximately ~~$39.1~~$43.1 million and capitalized pre-acquisition and other development and construction costs of approximately ~~$6.8~~$9.1 million relating to land purchase and option contracts having a total remaining purchase price of approximately ~~$389.3~~$447.3 million.

Our utilization of option contracts is dependent on, among other things, the availability of land sellers willing to enter into option takedown arrangements, the availability of capital to financial intermediaries, general housing market conditions, and geographic preferences. Options may be more difficult to procure from land sellers in strong housing markets and are more prevalent in certain geographic regions.

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b. Land Development and Homebuilding Joint Ventures

Our joint ventures have historically obtained secured acquisition, development and construction financing designed to reduce the use of funds from corporate financing sources. As of ~~June~~September 30, 2015, we held membership interests in 19 homebuilding and land development joint ventures, of which eight were active and 11 were inactive or winding down. As of such date, only one joint venture had project specific debt outstanding, which totaled $30 million. This joint venture bank debt is non-recourse to us and is scheduled to mature in June 2016. At ~~June~~September 30, 2015, we had no joint venture surety bonds outstanding.

�� c. Surety Bonds

We obtain surety bonds in the normal course of business to ensure completion of the infrastructure of our projects. At ~~June~~September 30, 2015, we had approximately ~~$526.9~~$554.6 million in surety bonds outstanding, with respect to which we had an estimated ~~$297.8~~$320.4 million remaining in cost to complete.

d. Mortgage Loans and Commitments

We commit to making mortgage loans to our homebuyers through our mortgage financing subsidiary, Standard Pacific Mortgage. Standard Pacific Mortgage sells substantially all of the loans it originates in the secondary mortgage market and finances these loans under its mortgage credit facilities for a short period of time (typically for 30 to 45 days), as investors complete their administrative review of applicable loan documents. Mortgage loans in process for which interest rates were committed to borrowers totaled approximately ~~$83.4~~$109.1 million at ~~June~~September 30, 2015 and carried a weighted average interest rate of approximately 3.8%. Interest rate risks related to these obligations are mitigated through the preselling of loans to investors or through its interest rate hedging program. As of ~~June~~September 30, 2015, Standard Pacific Mortgage had approximately ~~$38.5~~$27.1 million in closed mortgage loans held for sale and ~~$19.4~~$26.1 million of mortgage loans that we were committed to sell to investors subject to our funding of the loans and completion of the investors' administrative review of the applicable loan documents. In addition, as of ~~June~~September 30, 2015, Standard Pacific Mortgage had approximately ~~$71.1~~$58.4 million in closed mortgage loans held for sale and ~~$64.0~~$83.0 million of mortgage loans in process that were or are expected to be originated on a non-presold basis, all of which were hedged by forward sale commitments of mortgage-backed securities prior to entering into loan sale transactions with third party investors.

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Substantially all of the loans originated by Standard Pacific Mortgage are sold with servicing rights released on a non-recourse basis. These sales are generally subject to Standard Pacific Mortgage's obligation to repay its gain on sale if the loan is prepaid by the borrower within a certain time period following such sale, or to repurchase the loan if, among other things, the purchaser's underwriting guidelines are not met, or there is fraud in connection with the loan. As of ~~June~~September 30, 2015, we had incurred an aggregate of $10.9 million in losses related to loan repurchases and make-whole payments we had been required to make on the ~~$9.6~~$9.8 billion total dollar value of the loans we originated from the beginning of 2004 through the end of the ~~second~~third quarter of 2015. During the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, Standard Pacific Mortgage recorded loan loss expense related to indemnification and repurchase allowances of $0.1 million and ~~$0.2~~$0.4 million, respectively. As of ~~June~~September 30, 2015, Standard Pacific Mortgage had indemnity and repurchase allowances related to loans sold of approximately $2.2 million. In addition, during the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, Standard Pacific Mortgage made make-whole payments totaling approximately $0.1 million related to three loans and ~~$0.2~~$0.4 million related to ~~four~~nine loans, respectively.

e. Insurance and Litigation Accruals

Insurance and litigation accruals are established with respect to estimated future claims cost. We maintain general liability insurance designed to protect us against a portion of our risk of loss from construction-related claims. We also generally require our subcontractors and design professionals to indemnify us for liabilities arising from their work, subject to various limitations. However, such indemnity

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is significantly limited with respect to certain subcontractors that are added to our general liability insurance policy. We record allowances to cover our estimated costs of self-insured retentions and deductible amounts under these policies and estimated costs for claims that may not be covered by applicable insurance or indemnities. Our total insurance and litigation accruals as of ~~June~~September 30, 2015 and December 31, 2014 were ~~$64.0~~$64.6 million and $62.8 million, respectively, which are included in accrued liabilities in the accompanying condensed consolidated balance sheets. Estimation of these accruals include consideration of our claims history, including current claims, estimates of claims incurred but not yet reported, and potential for recovery of costs from insurance and other sources. We utilize the services of an independent third party actuary to assist us with evaluating the level of our insurance and litigation accruals. Because of the high degree of judgment required in determining these estimated accrual amounts, actual future claim costs could differ from our currently estimated amounts.

~~18.~~19. Income Taxes

We account for income taxes in accordance with ASC Topic 740, Income Taxes ("ASC 740"). ASC 740 requires an asset and liability approach for measuring deferred taxes based on temporary differences between the financial statement and tax bases of assets and liabilities existing at each balance sheet date using enacted tax rates for years in which taxes are expected to be paid or recovered.

Each quarter we assess our deferred tax asset to determine whether all or any portion of the asset is more likely than not unrealizable under ASC 740. We are required to establish a valuation allowance for any portion of the asset we conclude is more likely than not to be unrealizable. Our assessment considers, among other things, the nature, frequency and severity of our prior and cumulative losses, forecasts of our future taxable income, the duration of statutory carryforward periods, our utilization experience with operating loss and tax credit carryforwards, and tax planning alternatives.

Our 2015 ~~second~~third quarter provision for income taxes of ~~$32.3~~$31.1 million primarily related to our ~~$89.5~~$78.3 million of pretax income. As of ~~June~~September 30, 2015, we had a ~~$267.2~~$256.4 million deferred tax asset which was offset by a valuation allowance of $1.1 million related to state net operating loss carryforwards that are limited by shorter carryforward periods. As of such date, ~~$127.7~~$128.8 million of our deferred tax asset related to net operating loss carryforwards ($112.6 million of federal and state net operating loss carryforwards that were subject to the Section 382 gross annual limitation of $15.6 million for both federal and state purposes, and ~~$15.1~~$16.2 million of state net operating loss carryforwards that were not subject to such limitation). The remaining deferred tax asset balance of ~~$139.5~~$127.6 million represented deductible timing differences, primarily

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related to inventory impairments and financial accruals, which have no expiration date. As of ~~June~~September 30, 2015 and December 31, 2014, our liability for unrecognized tax benefits was ~~$3.8~~$4.4 million and $2.5 million, respectively, which is included in accrued liabilities in the accompanying condensed consolidated balance sheets. In addition, as of ~~June~~September 30, 2015, we remained subject to examination by various tax jurisdictions for the tax years ended December 31, 2010 through 2014.

~~19.Subsequent Event~~

~~On July 2, 2015, the Company filed a~~ ~~Registration Statement on Form S-4 in connection with~~ the Agreement and Plan of Merger it entered into on June 14, 2015 (the "Merger Agreement") with The Ryland Group, Inc., a Maryland corporation ("Ryland"). Subject to the terms and conditions of the Merger Agreement, Standard Pacific and Ryland have agreed that Ryland will merge with and into Standard Pacific in a "merger of equals," with Standard Pacific continuing as the surviving corporation (the "Surviving Corporation"), and the separate corporate existence of Ryland will cease (the "Merger"). Subject to the terms and conditions of the Merger Agreement, which was unanimously approved by the boards of directors of Standard Pacific and Ryland, if the Merger is completed, each five shares of common stock issued and outstanding of Standard Pacific will be combined and converted into one issued and outstanding share of common stock of the Surviving Corporation and each share of common stock of Ryland issued and outstanding will be converted and exchangeable for 1.0191 issued and outstanding shares of common stock of the Surviving Corporation. The proposed merger is subject to approval by the shareholders of the Company and Ryland and other customary closing conditions.

20. Supplemental Disclosures to Condensed Consolidated Statements of Cash Flows

The following are supplemental disclosures to the condensed consolidated statements of cash flows:

	Six Months Ended June 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
	(Dollars in thousands)				(Dollars in thousands)
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Income taxes	$	21,990	$	3,712	$	66,310	$	6,766

Supplemental Disclosures of Noncash Activities:
Liabilities assumed in connection with acquisitions	$	―	$	4,170	$	―	$	4,170

~~-18-~~-21-

Table of Contents

21. Supplemental Guarantor Information

Certain of our 100% owned direct and indirect subsidiaries guarantee our outstanding senior notes payable (please see Note 1314 "Senior Notes Payable"). Presented below are the condensed consolidated financial statements for our guarantor subsidiaries and non-guarantor subsidiaries.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

	Three Months Ended June 30, 2015															Three Months Ended September 30, 2015
	Standard Pacific Corp.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Standard Pacific Corp.			CalAtlantic Group, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated CalAtlantic Group, Inc.
	(Dollars in thousands)															(Dollars in thousands)
Homebuilding:
Revenues	$	191,188		$	324,365		$	184,079		$	―		$	699,632		$	172,420		$	296,420		$	183,350		$	―		$	652,190
Cost of sales		(144,796	)		(248,896	)		(133,999	)		―			(527,691	)		(132,775	)		(226,945	)		(132,714	)		―			(492,434	)
Gross margin		46,392			75,469			50,080			―			171,941			39,645			69,475			50,636			―			159,756
Selling, general and administrative expenses		(24,393	)		(40,524	)		(14,993	)		―			(79,910	)		(21,582	)		(37,660	)		(14,018	)		―			(73,260	)
Income (loss) from unconsolidated joint ventures		(4	)		―			(47	)		―			(51	)		14			―			107			―			121
Equity income of subsidiaries		50,169			―			―			(50,169	)		―			48,155			―			―			(48,155	)		―
Interest income (expense), net		3,175			(2,465	)		(710	)		―			―			3,109			(2,160	)		(949	)		―			―
Other income (expense)		(6,440	)		(75	)		1,239			―			(5,276	)		(11,782	)		(212	)		824			―			(11,170	)
Homebuilding pretax income		68,899			32,405			35,569			(50,169	)		86,704			57,559			29,443			36,600			(48,155	)		75,447
Financial Services:
Financial services pretax income		―			―			2,818			―			2,818			―			―			2,847			―			2,847
Income before taxes		68,899			32,405			38,387			(50,169	)		89,522			57,559			29,443			39,447			(48,155	)		78,294
Provision for income taxes		(11,701	)		(13,247	)		(7,376	)		―			(32,324	)		(10,382	)		(13,931	)		(6,804	)		―			(31,117	)
Net income	$	57,198		$	19,158		$	31,011		$	(50,169	)	$	57,198		$	47,177		$	15,512		$	32,643		$	(48,155	)	$	47,177

	Three Months Ended June 30, 2014															Three Months Ended September 30, 2014
	Standard Pacific Corp.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Standard Pacific Corp.			CalAtlantic Group, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated CalAtlantic Group, Inc.
	(Dollars in thousands)															(Dollars in thousands)
Homebuilding:
Revenues	$	210,663		$	250,945		$	130,878		$	―		$	592,486		$	197,617		$	246,839		$	160,393		$	―		$	604,849
Cost of sales		(155,611	)		(187,801	)		(91,134	)		―			(434,546	)		(145,278	)		(188,601	)		(111,910	)		―			(445,789	)
Gross margin		55,052			63,144			39,744			―			157,940			52,339			58,238			48,483			―			159,060
Selling, general and administrative expenses		(25,637	)		(32,286	)		(9,912	)		―			(67,835	)		(24,974	)		(32,465	)		(12,725	)		―			(70,164	)
Income (loss) from unconsolidated joint ventures		4			(5	)		(461	)		―			(462	)		64			142			351			―			557
Equity income of subsidiaries		41,577			―			―			(41,577	)		―			41,821			―			―			(41,821	)		―
Interest income (expense), net		3,270			(2,848	)		(422	)		―			―			3,204			(2,875	)		(329	)		―			―
Other income (expense)		(910	)		(223	)		770			―			(363	)		(1,128	)		(45	)		1,104			―			(69	)
Homebuilding pretax income		73,356			27,782			29,719			(41,577	)		89,280			71,326			22,995			36,884			(41,821	)		89,384
Financial Services:
Financial services pretax income		―			―			2,566			―			2,566			―			―			2,737			―			2,737
Income before taxes		73,356			27,782			32,285			(41,577	)		91,846			71,326			22,995			39,621			(41,821	)		92,121
Provision for income taxes		(16,893	)		(10,289	)		(8,201	)		―			(35,383	)		(14,727	)		(10,169	)		(10,626	)		―			(35,522	)
Net income	$	56,463		$	17,493		$	24,084		$	(41,577	)	$	56,463		$	56,599		$	12,826		$	28,995		$	(41,821	)	$	56,599

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Table of Contents

21. Supplemental Guarantor Information (continued)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

	Six Months Ended June 30, 2015															Nine Months Ended September 30, 2015
	Standard Pacific Corp.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Standard Pacific Corp.			CalAtlantic Group, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated CalAtlantic Group, Inc.
	(Dollars in thousands)															(Dollars in thousands)
Homebuilding:
Revenues	$	328,080		$	544,093		$	297,737		$	―		$	1,169,910		$	500,500		$	840,513		$	481,087		$	―		$	1,822,100
Cost of sales		(248,154	)		(419,853	)		(215,857	)		―			(883,864	)		(380,929	)		(646,798	)		(348,571	)		―			(1,376,298	)
Gross margin		79,926			124,240			81,880			―			286,046			119,571			193,715			132,516			―			445,802
Selling, general and administrative expenses		(47,539	)		(73,274	)		(25,167	)		―			(145,980	)		(69,121	)		(110,934	)		(39,185	)		―			(219,240	)
Income (loss) from unconsolidated joint ventures		22			―			(524	)		―			(502	)		36			―			(417	)		―			(381	)
Equity income of subsidiaries		73,536			―			―			(73,536	)		―			121,691			―			―			(121,691	)		―
Interest income (expense), net		6,398			(5,209	)		(1,189	)		―			―			9,507			(7,369	)		(2,138	)		―			―
Other income (expense)		(7,441	)		(223	)		2,092			―			(5,572	)		(19,223	)		(435	)		2,916			―			(16,742	)
Homebuilding pretax income		104,902			45,534			57,092			(73,536	)		133,992			162,461			74,977			93,692			(121,691	)		209,439
Financial Services:
Financial services pretax income		―			―			4,026			―			4,026			―			―			6,873			―			6,873
Income before taxes		104,902			45,534			61,118			(73,536	)		138,018			162,461			74,977			100,565			(121,691	)		216,312
Provision for income taxes		(16,099	)		(20,571	)		(12,545	)		―			(49,215	)		(26,481	)		(34,502	)		(19,349	)		―			(80,332	)
Net income	$	88,803		$	24,963		$	48,573		$	(73,536	)	$	88,803		$	135,980		$	40,475		$	81,216		$	(121,691	)	$	135,980

	Six Months Ended June 30, 2014															Nine Months Ended September 30, 2014
	Standard Pacific Corp.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Standard Pacific Corp.			CalAtlantic Group, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated CalAtlantic Group, Inc.
	(Dollars in thousands)															(Dollars in thousands)
Homebuilding:
Revenues	$	379,003		$	456,029		$	217,653		$	―		$	1,052,685		$	576,620		$	702,868		$	378,046		$	―		$	1,657,534
Cost of sales		(277,121	)		(342,623	)		(156,051	)		―			(775,795	)		(422,399	)		(531,224	)		(267,961	)		―			(1,221,584	)
Gross margin		101,882			113,406			61,602			―			276,890			154,221			171,644			110,085			―			435,950
Selling, general and administrative expenses		(49,442	)		(60,134	)		(16,849	)		―			(126,425	)		(74,416	)		(92,599	)		(29,574	)		―			(196,589	)
Income (loss) from unconsolidated joint ventures		(113	)		28			(814	)		―			(899	)		(49	)		170			(463	)		―			(342	)
Equity income of subsidiaries		66,073			―			―			(66,073	)		―			107,894			―			―			(107,894	)		―
Interest income (expense), net		6,959			(5,654	)		(1,305	)		―			―			10,163			(8,529	)		(1,634	)		―			―
Other income (expense)		(1,052	)		(253	)		929			―			(376	)		(2,180	)		(298	)		2,033			―			(445	)
Homebuilding pretax income		124,307			47,393			43,563			(66,073	)		149,190			195,633			70,388			80,447			(107,894	)		238,574
Financial Services:
Financial services pretax income		―			―			4,271			―			4,271			―			―			7,008			―			7,008
Income before taxes		124,307			47,393			47,834			(66,073	)		153,461			195,633			70,388			87,455			(107,894	)		245,582
Provision for income taxes		(29,685	)		(17,544	)		(11,610	)		―			(58,839	)		(44,412	)		(27,713	)		(22,236	)		―			(94,361	)
Net income	$	94,622		$	29,849		$	36,224		$	(66,073	)	$	94,622		$	151,221		$	42,675		$	65,219		$	(107,894	)	$	151,221

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21. Supplemental Guarantor Information (continued)

CONDENSED CONSOLIDATING BALANCE SHEET

	June 30, 2015													September 30, 2015
	Standard Pacific Corp.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Adjustments			Consolidated Standard Pacific Corp.		CalAtlantic Group, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Adjustments			Consolidated CalAtlantic Group, Inc.
	(Dollars in thousands)													(Dollars in thousands)
ASSETS
Homebuilding:
Cash and equivalents	$	28,782		$	20,626		$	27,680	$	―		$	77,088	$	61,416		$	9,803		$	26,635	$	―		$	97,854
Restricted cash		―			―			39,714		―			39,714		―			―			37,425		―			37,425
Intercompany receivables		1,795,110			―			181,691		(1,976,801	)		―		1,830,064			―			105,856		(1,935,920	)		―
Inventories:
Owned		1,156,145			1,294,269			1,174,084		―			3,624,498		1,228,171			1,319,062			1,258,220		―			3,805,453
Not owned		16,691			20,478			8,602		―			45,771		14,879			16,382			16,072		―			47,333
Investments in unconsolidated joint ventures		(1,632	)		(69	)		62,536		―			60,835		(1,618	)		(69	)		123,624		―			121,937
Investments in subsidiaries		1,023,496			―			―		(1,023,496	)		―		1,065,251			―			―		(1,065,251	)		―
Deferred income taxes, net		274,642			―			―		(8,551	)		266,091		264,667			―			―		(9,370	)		255,297
Other assets		39,550			10,649			4,225		―			54,424		36,824			11,103			4,147		―			52,074
Total Homebuilding Assets		4,332,784			1,345,953			1,498,532		(3,008,848	)		4,168,421		4,499,654			1,356,281			1,571,979		(3,010,541	)		4,417,373
Financial Services:
Cash and equivalents		―			―			11,225		―			11,225		―			―			28,868		―			28,868
Restricted cash		―			―			1,045		―			1,045		―			―			1,045		―			1,045
Mortgage loans held for sale, net		―			―			109,239		―			109,239		―			―			86,064		―			86,064
Mortgage loans held for investment, net		―			―			23,366		―			23,366		―			―			22,087		―			22,087
Other assets		―			―			8,246		(1,650	)		6,596		―			―			7,448		(1,676	)		5,772
Total Financial Services Assets		―			―			153,121		(1,650	)		151,471		―			―			145,512		(1,676	)		143,836
Total Assets	$	4,332,784		$	1,345,953		$	1,651,653	$	(3,010,498	)	$	4,319,892	$	4,499,654		$	1,356,281		$	1,717,491	$	(3,012,217	)	$	4,561,209

LIABILITIES AND EQUITY
Homebuilding:
Accounts payable	$	24,049		$	25,141		$	30,529	$	―		$	79,719	$	22,040		$	33,958		$	26,756	$	―		$	82,754
Accrued liabilities and intercompany payables		213,627			917,572			887,502		(1,793,079	)		225,622		193,756			923,146			921,004		(1,828,034	)		209,872
Revolving credit facility		30,000			―			―		―			30,000		268,700			―			―		―			268,700
Secured project debt, other notes payable and
intercompany loans		179,454			―			4,203		(177,730	)		5,927		103,619			―			4,131		(101,895	)		5,855
Senior notes payable		2,133,111			―			―		―			2,133,111		2,104,212			―			―		―			2,104,212
Total Homebuilding Liabilities		2,580,241			942,713			922,234		(1,970,809	)		2,474,379		2,692,327			957,104			951,891		(1,929,929	)		2,671,393
Financial Services:
Accounts payable and other liabilities		―			―			18,822		(16,193	)		2,629		―			―			20,667		(17,037	)		3,630
Mortgage credit facilities		―			―			90,341		―			90,341		―			―			78,859		―			78,859
Total Financial Services Liabilities		―			―			109,163		(16,193	)		92,970		―			―			99,526		(17,037	)		82,489
Total Liabilities		2,580,241			942,713			1,031,397		(1,987,002	)		2,567,349		2,692,327			957,104			1,051,417		(1,946,966	)		2,753,882

Equity:
Total Stockholders' Equity		1,752,543			403,240			620,256		(1,023,496	)		1,752,543
Total Equity															1,807,327			399,177			666,074		(1,065,251	)		1,807,327
Total Liabilities and Equity	$	4,332,784		$	1,345,953		$	1,651,653	$	(3,010,498	)	$	4,319,892	$	4,499,654		$	1,356,281		$	1,717,491	$	(3,012,217	)	$	4,561,209

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21. Supplemental Guarantor Information (continued)

CONDENSED CONSOLIDATING BALANCE SHEET

	December 31, 2014												December 31, 2014
	Standard Pacific Corp.			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Consolidated Standard Pacific Corp.		CalAtlantic Group, Inc.			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Consolidated CalAtlantic Group, Inc.
	(Dollars in thousands)												(Dollars in thousands)
ASSETS
Homebuilding:
Cash and equivalents	$	133,304		$	1,061	$	46,063	$	―		$	180,428	$	133,304		$	1,061	$	46,063	$	―		$	180,428
Restricted cash		―			―		38,222		―			38,222		―			―		38,222		―			38,222
Intercompany receivables		1,637,226			―		184,772		(1,821,998	)		―		1,637,226			―		184,772		(1,821,998	)		―
Inventories:
Owned		1,059,197			1,234,233		961,774		―			3,255,204		1,059,197			1,234,233		961,774		―			3,255,204
Not owned		17,360			28,520		39,273		―			85,153		17,360			28,520		39,273		―			85,153
Investments in unconsolidated joint ventures		(1,653	)		497		51,267		―			50,111		(1,653	)		497		51,267		―			50,111
Investments in subsidiaries		957,933			―		―		(957,933	)		―		957,933			―		―		(957,933	)		―
Deferred income taxes, net		283,890			―		―		(7,488	)		276,402		283,890			―		―		(7,488	)		276,402
Other assets		42,224			11,234		8,139		―			61,597		42,224			11,234		8,139		―			61,597
Total Homebuilding Assets		4,129,481			1,275,545		1,329,510		(2,787,419	)		3,947,117		4,129,481			1,275,545		1,329,510		(2,787,419	)		3,947,117
Financial Services:
Cash and equivalents		―			―		31,965		―			31,965		―			―		31,965		―			31,965
Restricted cash		―			―		1,295		―			1,295		―			―		1,295		―			1,295
Mortgage loans held for sale, net		―			―		174,420		―			174,420		―			―		174,420		―			174,420
Mortgage loans held for investment, net		―			―		14,380		―			14,380		―			―		14,380		―			14,380
Other assets		―			―		6,980		(1,737	)		5,243		―			―		6,980		(1,737	)		5,243
Total Financial Services Assets		―			―		229,040		(1,737	)		227,303		―			―		229,040		(1,737	)		227,303
Total Assets	$	4,129,481		$	1,275,545	$	1,558,550	$	(2,789,156	)	$	4,174,420	$	4,129,481		$	1,275,545	$	1,558,550	$	(2,789,156	)	$	4,174,420

LIABILITIES AND EQUITY
Homebuilding:
Accounts payable	$	13,856		$	16,202	$	15,027	$	―		$	45,085	$	13,856		$	16,202	$	15,027	$	―		$	45,085
Accrued liabilities and intercompany payables		206,731			868,922		783,324		(1,635,194	)		223,783		206,731			868,922		783,324		(1,635,194	)		223,783
Secured project debt, other notes payable and
intercompany loans		100,813			―		4,689		(100,813	)		4,689		100,813			―		4,689		(100,813	)		4,689
Senior notes payable		2,131,393			―		―		―			2,131,393		2,131,393			―		―		―			2,131,393
Total Homebuilding Liabilities		2,452,793			885,124		803,040		(1,736,007	)		2,404,950		2,452,793			885,124		803,040		(1,736,007	)		2,404,950
Financial Services:
Accounts payable and other liabilities		―			―		18,585		(15,216	)		3,369		―			―		18,585		(15,216	)		3,369
Mortgage credit facilities		―			―		169,413		(80,000	)		89,413		―			―		169,413		(80,000	)		89,413
Total Financial Services Liabilities		―			―		187,998		(95,216	)		92,782		―			―		187,998		(95,216	)		92,782
Total Liabilities		2,452,793			885,124		991,038		(1,831,223	)		2,497,732		2,452,793			885,124		991,038		(1,831,223	)		2,497,732

Equity:
Total Stockholders' Equity		1,676,688			390,421		567,512		(957,933	)		1,676,688
Total Equity														1,676,688			390,421		567,512		(957,933	)		1,676,688
Total Liabilities and Equity	$	4,129,481		$	1,275,545	$	1,558,550	$	(2,789,156	)	$	4,174,420	$	4,129,481		$	1,275,545	$	1,558,550	$	(2,789,156	)	$	4,174,420

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Table of Contents

21. Supplemental Guarantor Information (continued)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

	Six Months Ended June 30, 2015															Nine Months Ended September 30, 2015
	Standard Pacific Corp.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Standard Pacific Corp.			CalAtlantic Group, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated CalAtlantic Group, Inc.
	(Dollars in thousands)															(Dollars in thousands)
Cash Flows From Operating Activities:
Net cash provided by (used in) operating activities	$	(39,876	)	$	(21,756	)	$	(49,565	)	$	―		$	(111,197	)	$	(116,827	)	$	(14,645	)	$	(84,358	)	$	―		$	(215,830	)

Cash Flows From Investing Activities:
Investments in unconsolidated homebuilding joint ventures		―			―			(20,778	)		―			(20,778	)		―			―			(83,288	)		―			(83,288	)
Distributions of capital from unconsolidated homebuilding joint ventures		―			―			8,760			―			8,760			―			―			10,289			―			10,289
Loan to parent and subsidiaries		―			―			5,000			(5,000	)		―
Loan to subsidiaries																	―			―			80,000			(80,000	)		―
Other investing activities		(1,670	)		(1,278	)		(9,074	)		―			(12,022	)		(2,308	)		(1,605	)		(7,803	)		―			(11,716	)
Net cash provided by (used in) investing activities		(1,670	)		(1,278	)		(16,092	)		(5,000	)		(24,040	)		(2,308	)		(1,605	)		(802	)		(80,000	)		(84,715	)

Cash Flows From Financing Activities:
Change in restricted cash		―			―			(1,242	)		―			(1,242	)		―			―			1,047			―			1,047
Borrowings from revolving credit facility		158,900			―			―			―			158,900			491,400			―			―			―			491,400
Principal payments on revolving credit facility		(128,900	)		―			―			―			(128,900	)		(222,700	)		―			―			―			(222,700	)
Principal payments on secured project debt and other notes payable		―			―			(497	)		―			(497	)		―			―			(569	)		―			(569	)
Loan from subsidiary		75,000			―			―			(75,000	)		―
Principal payments on senior notes payable																	(29,789	)		―			―			―			(29,789	)
Net proceeds from (payments on) mortgage credit facilities		―			―			(79,072	)		80,000			928			―			―			(90,554	)		80,000			(10,554	)
(Contributions to) distributions from Corporate and subsidiaries		7,973			(12,144	)		4,171			―			―			14,373			(31,719	)		17,346			―			―
Repurchase of common stock		(22,073	)		―			―			―			(22,073	)		(22,073	)		―			―			―			(22,073	)
Issuance of common stock under employee stock plans, net of tax withholdings		(2,322	)		―			―			―			(2,322	)		(461	)		―			―			―			(461	)
Excess tax benefits from share-based payment arrangements		6,363			―			―			―			6,363			8,573			―			―			―			8,573
Intercompany advances, net		(157,917	)		54,743			103,174			―			―			(192,076	)		56,711			135,365			―			―
Net cash provided by (used in) financing activities		(62,976	)		42,599			26,534			5,000			11,157			47,247			24,992			62,635			80,000			214,874

Net increase (decrease) in cash and equivalents		(104,522	)		19,565			(39,123	)		―			(124,080	)		(71,888	)		8,742			(22,525	)		―			(85,671	)
Cash and equivalents at beginning of period		133,304			1,061			78,028			―			212,393			133,304			1,061			78,028			―			212,393
Cash and equivalents at end of period	$	28,782		$	20,626		$	38,905		$	―		$	88,313		$	61,416		$	9,803		$	55,503		$	―		$	126,722

	Six Months Ended June 30, 2014															Nine Months Ended September 30, 2014
	Standard Pacific Corp.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Standard Pacific Corp.			CalAtlantic Group, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated CalAtlantic Group, Inc.
	(Dollars in thousands)															(Dollars in thousands)
Cash Flows From Operating Activities:
Net cash provided by (used in) operating activities	$	40,140		$	(136,481	)	$	(47,171	)	$	―		$	(143,512	)	$	14,398		$	(174,601	)	$	(83,784	)	$	(14,559	)	$	(258,546	)

Cash Flows From Investing Activities:
Investments in unconsolidated homebuilding joint ventures		144			2			(5,823	)		―			(5,677	)		144			2			(8,094	)		―			(7,948	)
Distributions of capital from unconsolidated homebuilding joint ventures		120			229			14,459			―			14,808			227			229			17,554			―			18,010
Net cash paid for acquisitions		(35,685	)		―			2,277			―			(33,408	)		(35,685	)		―			2,277			―			(33,408	)
Loan to parent		―			―			(85,000	)		85,000			―			―			―			(190,000	)		190,000			―
Other investing activities		(618	)		(855	)		(14	)		―			(1,487	)		(1,367	)		(1,108	)		491			―			(1,984	)
Net cash provided by (used in) investing activities		(36,039	)		(624	)		(74,101	)		85,000			(25,764	)		(36,681	)		(877	)		(177,772	)		190,000			(25,330	)

Cash Flows From Financing Activities:
Change in restricted cash		―			―			(9,925	)		―			(9,925	)		―			―			(15,567	)		―			(15,567	)
Principal payments on secured project debt and other notes payable		―			―			(1,061	)		―			(1,061	)		―			―			(1,399	)		―			(1,399	)
Principal payments on senior notes payable		(4,971	)		―			―			―			(4,971	)		(4,971	)		―			―			―			(4,971	)
Payment of debt issuance costs																	(2,387	)		―			―			―			(2,387	)
Loan from subsidiary		85,000			―			―			(85,000	)		―			190,000			―			―			(190,000	)		―
Net proceeds from (payments on) mortgage credit facilities		―			―			(34,288	)		―			(34,288	)		―			―			(36,169	)		―			(36,169	)
(Contributions to) distributions from Corporate and subsidiaries		4,600			―			(4,600	)		―			―			3,650			―			(3,650	)		―			―
Issuance of common stock under employee stock plans, net of tax withholdings		3,769			―			―			―			3,769			5,786			―			―			―			5,786
Excess tax benefits from share-based payment arrangements																	960			―			―			―			960
Intercompany advances, net		(241,539	)		137,403			104,136			―			―			(345,307	)		175,834			169,473			―			―
Net cash provided by (used in) financing activities		(153,141	)		137,403			54,262			(85,000	)		(46,476	)		(152,269	)		175,834			112,688			(190,000	)		(53,747	)

Net increase (decrease) in cash and equivalents		(149,040	)		298			(67,010	)		―			(215,752	)		(174,552	)		356			(148,868	)		(14,559	)		(337,623	)
Cash and equivalents at beginning of period		175,289			494			187,508			―			363,291			175,289			494			187,508			―			363,291
Cash and equivalents at end of period	$	26,249		$	792		$	120,498		$	―		$	147,539		$	737		$	850		$	38,640		$	(14,559	)	$	25,668

~~-23-~~-26-

Table of Contents

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Recent Developments

~~On June 14,~~October 1, 2015 ~~Standard Pacific entered into an Agreement and Plan~~Closing of Merger ~~(the "Merger Agreement")~~Transaction with ~~The~~ Ryland Group, Inc.~~, a Maryland corporation ("Ryland"). Subject~~

On October 1, 2015, pursuant to the terms and conditions of the Amended and Restated Agreement and Plan of Merger, ~~Agreement, Standard Pacific~~dated as of June 14, 2015 (the "Merger Agreement"), between the Company and The Ryland ~~have agreed that~~Group, Inc. ("Ryland"), Ryland ~~will merge~~merged with and into ~~Standard Pacific in a "merger of equals,"~~the Company (the "Merger"), with ~~Standard Pacific~~the Company continuing as the surviving ~~corporation (the "Surviving Corporation"),~~corporation. At the same time: (i) the Company changed its name to "CalAtlantic Group, Inc." and the separate corporate existence of Ryland will cease (the "Merger"). Subject to the terms and conditions of the Merger Agreement, which was unanimously approved by the boards of directors of Standard Pacific and Ryland, if the Merger is completed,effected a reverse stock split such that each five shares of common stock of the Company ("Common Stock") issued and outstanding immediately prior to the closing of ~~Standard Pacific will be~~the Merger were combined and converted into one issued and outstanding share of Common Stock, (ii) MP CA Homes, LLC, the sole owner of the Company's outstanding Series B Preferred Stock, converted all of its preferred stock to Common Stock, and (iii) each outstanding share of Ryland common stock, stock options and restricted stock units were converted into the right to receive, or the option to acquire, as applicable, 1.0191 shares of Common Stock. Cash was paid in lieu of all fractional shares.

Because the closing of the ~~Surviving Corporation and each share of common stock of Ryland issued and outstanding will be converted and exchangeable for 1.0191 issued and outstanding shares of common stock~~Merger occurred on the first day of the ~~Surviving Corporation. The proposed merger is subject to approval by~~Company's fourth quarter, Ryland's results of operations are not included in this Report on Form 10-Q. However, even though the ~~shareholders~~reverse stock split also occurred on the first day of the Company's fourth quarter, applicable accounting rules provide that the Company ~~and Ryland and other customary closing conditions.~~ is required to restate per share information for all periods presented in this Form 10-Q as if the reverse stock split had been implemented for such period. Those same accounting rules, however, do not allow the Company to include the MP CA Homes, LLC conversion of its Series B Preferred Stock, which occurred at the same time as the reverse stock split, into the restated share information.

The ~~Company currently expects~~foregoing description does not purport to be complete. Additional information regarding the ~~transaction to close~~Merger may be found in ~~early fall 2015.~~the Company's current report on Form 8-K, filed with the SEC on October 5, 2015, which is incorporated herein by reference.

~~-24-~~-27-

Table of Contents

Results of Operations

Selected Financial Information

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014			2015			2014			2015			2014
	(Dollars in thousands, except per share amounts)												(Dollars in thousands, except per share amounts)
Homebuilding:
Home sale revenues	$	694,678		$	591,706		$	1,163,057		$	1,038,624		$	626,008		$	603,788		$	1,789,065		$	1,642,412
Land sale revenues		4,954			780			6,853			14,061			26,182			1,061			33,035			15,122
Total revenues		699,632			592,486			1,169,910			1,052,685			652,190			604,849			1,822,100			1,657,534
Cost of home sales		(523,933	)		(434,196	)		(878,750	)		(762,441	)		(467,358	)		(444,898	)		(1,346,108	)		(1,207,339	)
Cost of land sales		(3,758	)		(350	)		(5,114	)		(13,354	)		(25,076	)		(891	)		(30,190	)		(14,245	)
Total cost of sales		(527,691	)		(434,546	)		(883,864	)		(775,795	)		(492,434	)		(445,789	)		(1,376,298	)		(1,221,584	)
Gross margin		171,941			157,940			286,046			276,890			159,756			159,060			445,802			435,950
Gross margin percentage		24.6	%		26.7	%		24.5	%		26.3	%		24.5	%		26.3	%		24.5	%		26.3	%
Selling, general and administrative expenses		(79,910	)		(67,835	)		(145,980	)		(126,425	)		(73,260	)		(70,164	)		(219,240	)		(196,589	)
Income (loss) from unconsolidated joint ventures		(51	)		(462	)		(502	)		(899	)		121			557			(381	)		(342	)
Other income (expense)		(5,276	)		(363	)		(5,572	)		(376	)		(11,170	)		(69	)		(16,742	)		(445	)
Homebuilding pretax income		86,704			89,280			133,992			149,190			75,447			89,384			209,439			238,574

Financial Services:
Revenues		6,716			6,112			11,635			11,096			6,130			6,179			17,765			17,275
Expenses		(4,446	)		(3,760	)		(8,547	)		(7,200	)		(4,079	)		(3,673	)		(12,626	)		(10,873	)
Other income		548			214			938			375			796			231			1,734			606
Financial services pretax income		2,818			2,566			4,026			4,271			2,847			2,737			6,873			7,008

Income before taxes		89,522			91,846			138,018			153,461			78,294			92,121			216,312			245,582
Provision for income taxes		(32,324	)		(35,383	)		(49,215	)		(58,839	)		(31,117	)		(35,522	)		(80,332	)		(94,361	)
Net income		57,198			56,463			88,803			94,622			47,177			56,599			135,980			151,221
Less: Net income allocated to preferred shareholder		(13,798	)		(13,496	)		(21,475	)		(22,650	)		(11,342	)		(13,511	)		(32,818	)		(36,165	)
Less: Net income allocated to unvested restricted stock		(112	)		(77	)		(181	)		(134	)		(93	)		(77	)		(274	)		(211	)
Net income available to common stockholders	$	43,288		$	42,890		$	67,147		$	71,838		$	35,742		$	43,011		$	102,888		$	114,845

Income Per Common Share:
Basic	$	0.16		$	0.15		$	0.24		$	0.26		$	0.65		$	0.77		$	1.87		$	2.06
Diluted	$	0.14		$	0.14		$	0.22		$	0.23		$	0.59		$	0.70		$	1.71		$	1.87

Weighted Average Common Shares Outstanding:
Basic		275,498,449			279,075,416			274,572,173			278,514,992			55,345,443			55,909,542			55,059,683			55,772,603
Diluted		310,553,895			316,727,592			310,407,657			316,451,929			62,292,524			63,423,385			62,152,754			63,338,361

Weighted average additional common shares outstanding
if preferred shares converted to common shares		87,812,786			87,812,786			87,812,786			87,812,786			17,562,557			17,562,557			17,562,557			17,562,557

Total weighted average diluted common shares outstanding
if preferred shares converted to common shares		398,366,681			404,540,378			398,220,443			404,264,715			79,855,081			80,985,942			79,715,311			80,900,918

Net cash provided by (used in) operating activities	$	(17,126	)	$	(25,949	)	$	(111,197	)	$	(143,512	)	$	(104,633	)	$	(115,034	)	$	(215,830	)	$	(258,546	)
Net cash provided by (used in) investing activities	$	(16,156	)	$	(36,050	)	$	(24,040	)	$	(25,764	)	$	(60,675	)	$	434		$	(84,715	)	$	(25,330	)
Net cash provided by (used in) financing activities	$	17,997		$	4,426		$	11,157		$	(46,476	)	$	203,717		$	(7,271	)	$	214,874		$	(53,747	)

Adjusted Homebuilding EBITDA (1)	$	135,263		$	131,294		$	214,291		$	224,326		$	119,553		$	127,371		$	333,844		$	351,697

__________________

(1)

Adjusted Homebuilding EBITDA means net income (plus cash distributions of income from unconsolidated joint ventures) before (a) income taxes, (b) homebuilding interest expense, (c) expensing of previously capitalized interest included in cost of sales, (d) impairment charges and deposit write-offs, (e) gain (loss) on early extinguishment of debt, (f) homebuilding depreciation and amortization, including amortization of capitalized model costs, (g) amortization of stock-based compensation, (h) income (loss) from unconsolidated joint ventures and (i) income (loss) from financial services subsidiaries. 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 our 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 cash flows from operations or any other liquidity performance measure prescribed by GAAP.

~~-25-~~-28-

Table of Contents

(1) continued

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

	Three Months Ended June 30,						Six Months Ended June 30,						LTM Ended June 30,						Three Months Ended September 30,						Nine Months Ended September 30,						LTM Ended September 30,
	2015			2014			2015			2014			2015			2014			2015			2014			2015			2014			2015			2014
	(Dollars in thousands)																		(Dollars in thousands)

Net cash provided by (used in) operating activities	$	(17,126	)	$	(25,949	)	$	(111,197	)	$	(143,512	)	$	(330,082	)	$	(148,524	)	$	(104,633	)	$	(115,034	)	$	(215,830	)	$	(258,546	)	$	(319,681	)	$	(286,366	)
Add:
Provision (benefit) for income taxes, net of
deferred component		―			―			17			(166	)		35,284			(15,791	)		28,183			53			28,200			(113	)		63,414			367
Homebuilding interest amortized to cost of
sales and interest expense		36,563			29,816			59,201			54,799			127,514			118,030			33,323			28,959			92,524			83,758			131,878			116,667
Excess tax benefits from share-based
payment arrangements		2,994			―			6,363			―			19,767			―			2,210			960			8,573			960			21,017			960
Less:
Income from financial services subsidiaries		2,818			2,352			4,026			3,896			9,004			8,363			2,847			2,506			6,873			6,402			9,345			8,620
Depreciation and amortization from financial
services subsidiaries		25			34			62			67			133			132			19			35			81			102			117			134
Loss on disposal of property and equipment		15			―			34			1			44			2			7			5			41			6			46			7
Net changes in operating assets and liabilities:
Mortgage loans held for sale		10,542			9,364			(65,182	)		(42,574	)		30,230			(28,073	)		(23,178	)		(10,534	)		(88,360	)		(53,108	)		17,586			(6,386	)
Inventories-owned		137,351			132,828			341,894			325,611			680,710			521,371			179,752			237,201			521,646			562,812			623,261			669,505
Inventories-not owned		6,183			6,629			12,061			14,794			30,294			48,403			9,551			5,090			21,612			19,884			34,755			31,503
Other assets		(12,809	)		(5,274	)		(5,877	)		13,108			(23,514	)		(5,515	)		(2,985	)		1,537			(8,862	)		14,645			(28,036	)		8,863
Accounts payable		(21,155	)		(4,773	)		(34,634	)		(6,149	)		(37,799	)		(19,854	)		(3,035	)		(8,604	)		(37,669	)		(14,753	)		(32,230	)		(21,223	)
Accrued liabilities		(4,422	)		(8,961	)		15,767			12,379			(30,835	)		10,669			3,238			(9,711	)		19,005			2,668			(17,886	)		(12,207	)
Adjusted Homebuilding EBITDA	$	135,263		$	131,294		$	214,291		$	224,326		$	492,388		$	472,219		$	119,553		$	127,371		$	333,844		$	351,697		$	484,570		$	492,922

Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2015 Compared to Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2014

Please note the following discussion does not include the results of operations of Ryland. Because the closing of the Company's merger with Ryland occurred on the first day of the Company's fourth quarter, Ryland's results of operations are not required to be included in this Report on Form 10-Q.

Overview

The Company's 2015 ~~second~~third quarter results reflect a continuation of the housing market recovery and our focus on the execution of our strategy. ~~We delivered 1,305~~Despite the inevitable distraction to our business caused by the planning associated with our merger with Ryland, we were able to deliver 1,165 homes during the quarter, generating home sale revenues of ~~$694.7~~$626.0 million, up ~~17%~~4% from the prior year period, on an average selling price of ~~$532~~$537 thousand, up 11% from the ~~second~~third quarter of 2014. Net income for the 2015 ~~second~~third quarter was ~~$57.2~~$47.2 million, or ~~$0.14~~$0.59 per diluted share, as compared to ~~$56.5~~$56.6 million, or ~~$0.14~~$0.70 per diluted share, for the 2014 ~~second~~third quarter, and pretax income was ~~$89.5~~$78.3 million, compared to ~~$91.8~~$92.1 million. The year over year ~~decrease~~decreases in net income and pretax income ~~was~~were primarily the result of incurring approximately $9.0 million of merger transaction costs during the 2015 third quarter and a decrease in our gross margin percentage from home sales which, consistent with the Company's expectations, decreased ~~200~~100 basis points from ~~26.6%~~26.3% for the 2014 ~~second~~third quarter to ~~24.6%~~25.3% for the 2015 ~~second~~third quarter. The decrease in our gross margin percentage was driven primarily by an increase in direct construction costs. For the ~~six~~nine months ended ~~June~~September 30, 2015, we reported net income of ~~$88.8~~$136.0 million, or ~~$0.22~~$1.71 per diluted share, as compared to ~~$94.6~~$151.2 million, or ~~$0.23~~$1.87 per diluted share, in the prior year period. Pretax income for the ~~six~~nine months ended ~~June~~September 30, 2015 was ~~$138.0~~$216.3 million, compared to ~~$153.5~~$245.6 million in the prior year ~~period. In addition, the~~period, and was impacted by approximately $14.2 million of merger transaction costs and a decrease in our gross margin percentage from home sales which decreased 170 basis points from 26.5% for 2014 to 24.8% for 2015. The dollar value of homes in backlog ~~was $1.5~~as of the end of the quarter $1.7 billion, a ~~30%~~47% increase from the prior year period.

During the first ~~half~~nine months of 2015, we spent ~~$348.4~~$610.6 million on land acquisition and development, acquiring ~~2,254~~4,085 homesites. We remain focused on acquiring and developing strategically located and appropriately priced land and on designing and building highly desirable, amenity-rich communities and homes that appeal to the move-up and luxury home buying segments we target. We believe the strength of our land and product portfolio leaves us well positioned to take advantage of the housing recovery.

~~-26-~~-29-

Table of Contents

Homebuilding

			Three Months Ended June 30,					Six Months Ended June 30,							Three Months Ended September 30,					Nine Months Ended September 30,
			2015		2014		% Change	2015		2014		% Change			2015		2014		% Change	2015		2014		% Change
			(Dollars in thousands)												(Dollars in thousands)
Homebuilding revenues:	Homebuilding revenues:												Homebuilding revenues:
	California		$	298,972	$	290,899	3%	$	484,593	$	510,378	(5%)	Southeast		$	211,759	$	171,091	24%	$	556,330	$	474,601	17%
	Southwest			202,538		131,590	54%		340,746		238,797	43%	Southwest			155,595		128,916	21%		461,304		329,930	40%
	Southeast			198,122		169,997	17%		344,571		303,510	14%	West			284,836		304,842	(7%)		804,466		853,003	(6%)
		Total homebuilding revenues	$	699,632	$	592,486	18%	$	1,169,910	$	1,052,685	11%		Total homebuilding revenues	$	652,190	$	604,849	8%	$	1,822,100	$	1,657,534	10%

Homebuilding pretax income:	Homebuilding pretax income:												Homebuilding pretax income:
	California		$	49,377	$	57,566	(14%)	$	74,475	$	96,119	(23%)	Southeast		$	19,379	$	16,312	19%	$	44,909	$	45,051	(0%)
	Southwest			22,190		14,274	55%		33,987		24,332	40%	Southwest			16,552		12,407	33%		49,817		32,738	52%
	Southeast			15,137		17,440	(13%)		25,530		28,739	(11%)	West			39,516		60,665	(35%)		114,713		160,785	(29%)
		Total homebuilding pretax income	$	86,704	$	89,280	(3%)	$	133,992	$	149,190	(10%)		Total homebuilding pretax income	$	75,447	$	89,384	(16%)	$	209,439	$	238,574	(12%)

Homebuilding pretax income as a percentage	Homebuilding pretax income as a percentage												Homebuilding pretax income as a percentage
of homebuilding revenues:	of homebuilding revenues:												of homebuilding revenues:
	California			16.5%		19.8%	(3.3%)		15.4%		18.8%	(3.4%)	Southeast			9.1%		9.5%	(0.4%)		8.1%		9.5%	(1.4%)
	Southwest			11.0%		10.8%	0.2%		10.0%		10.2%	(0.2%)	Southwest			10.6%		9.6%	1.0%		10.8%		9.9%	0.9%
	Southeast			7.6%		10.3%	(2.7%)		7.4%		9.5%	(2.1%)	West			13.9%		19.9%	(6.0%)		14.3%		18.9%	(4.6%)
		Total homebuilding pretax income percentage		12.4%		15.1%	(2.7%)		11.5%		14.2%	(2.7%)		Total homebuilding pretax income percentage		11.6%		14.8%	(3.2%)		11.5%		14.4%	(2.9%)

Homebuilding pretax income for the 2015 ~~second~~third quarter was ~~$86.7~~$75.4 million compared to ~~$89.3~~$89.4 million in the year earlier period. This decrease was primarily attributable to the $9.0 million of merger transaction costs we incurred during the ~~result of~~ 2015 third quarter and a ~~200~~100 basis point decrease in gross margin from home sales, partially offset by a ~~17%~~4% increase in home sale revenues which was mainly driven by the increase in average selling price within all our reportable ~~segments and a 32% increase in deliveries in our Southwest reportable segment compared to the prior year period.~~

segments.

			At June 30,
			2015	2014	% Change
Homesites owned and controlled:
	California		10,975	9,603	14%
	Arizona		1,970	2,242	(12%)
	Texas		4,430	5,204	(15%)
	Colorado		974	1,196	(19%)
	Nevada		920	1,124	(18%)
		Total Southwest	8,294	9,766	(15%)
	Florida		12,366	12,138	2%
	Carolinas		4,399	4,441	(1%)
		Total Southeast	16,765	16,579	1%
		Total (including joint ventures)	36,034	35,948	0%

	Homesites owned		28,866	28,774	0%
	Homesites optioned or subject to contract		6,123	6,909	(11%)
	Joint venture homesites (1)		1,045	265	294%
		Total (including joint ventures)	36,034	35,948	0%


Homesites owned:
	Raw lots		7,116	6,747	5%
	Homesites under development		8,361	9,373	(11%)
	Finished homesites		7,397	6,605	12%
	Under construction or completed homes		4,010	3,548	13%
	Held for sale		1,982	2,501	(21%)
		Total	28,866	28,774	0%

			At September 30,
			2015	2014	% Change
Homesites owned and controlled:
	Southeast		16,098	16,961	(5%)
	Southwest		6,537	7,292	(10%)
	West		12,880	12,054	7%
		Total (including joint ventures)	35,515	36,307	(2%)

	Homesites owned		28,343	28,937	(2%)
	Homesites optioned or subject to contract		5,792	7,172	(19%)
	Joint venture homesites (1)		1,380	198	597%
		Total (including joint ventures)	35,515	36,307	(2%)

Homesites owned:
	Raw lots		6,916	6,745	3%
	Homesites under development		7,717	9,379	(18%)
	Finished homesites		7,674	6,448	19%
	Under construction or completed homes		4,323	3,594	20%
	Held for sale		1,713	2,771	(38%)
		Total	28,343	28,937	(2%)

			At June 30,					At September 30,
			2015	2014	% Change			2015	2014	% Change
Homes under construction:	Homes under construction:					Homes under construction:
	Homes under construction (excluding specs)		1,776	1,568	13%	Homes under construction (excluding specs)		1,914	1,520	26%
	Speculative homes under construction		1,215	1,034	18%	Speculative homes under construction		1,338	1,030	30%
		Total homes under construction	2,991	2,602	15%		Total homes under construction	3,252	2,550	28%

Completed homes:	Completed homes:					Completed homes:
	Completed and unsold homes (excluding models)		359	347	3%	Completed and unsold homes (excluding models)		377	406	(7%)
	Completed and under contract (excluding models)		265	297	(11%)	Completed and under contract (excluding models)		287	315	(9%)
	Model homes		395	302	31%	Model homes		407	323	26%
		Total completed homes	1,019	946	8%		Total completed homes	1,071	1,044	3%

			Three Months Ended June 30,		Six Months Ended June 30,				Three Months Ended September 30,		Nine Months Ended September 30,
			2015	2014	2015	2014			2015	2014	2015	2014
			(Dollars in thousands)						(Dollars in thousands)
Total Originations:	Total Originations:						Total Originations:
	Loans		808	703	1,411	1,290	Loans		691	726	2,102	2,016
	Principal		$300,341	$232,993	$515,163	$417,954	Principal		$251,163	$245,114	$766,326	$663,068
	Capture Rate		74%	74%	75%	75%	Capture Rate		72%	77%	74%	76%

Loans Sold to Third Parties:	Loans Sold to Third Parties:						Loans Sold to Third Parties:
	Loans		794	685	1,625	1,431	Loans		729	755	2,354	2,186
	Principal		$284,536	$223,809	$567,225	$46,038	Principal		$275,417	$253,678	$842,642	$713,716

Mortgage Loan Origination Product Mix:	Mortgage Loan Origination Product Mix:						Mortgage Loan Origination Product Mix:
	FHA loans		8%	9%	8%	9%	FHA loans		8%	9%	8%	9%
	Other government loans (VA & USDA)		7%	9%	7%	10%	Other government loans (VA & USDA)		9%	11%	8%	10%
		Total government loans	15%	18%	15%	19%		Total government loans	17%	20%	16%	19%
	Conforming loans		73%	75%	72%	75%	Conforming loans		72%	71%	72%	74%
	Jumbo loans		12%	7%	13%	6%	Jumbo loans		11%	9%	12%	7%
			100%	100%	100%	100%			100%	100%	100%	100%
Loan Type:	Loan Type:						Loan Type:
	Fixed		92%	90%	92%	92%	Fixed		89%	92%	91%	92%
	ARM		8%	10%	8%	8%	ARM		11%	8%	9%	8%
Credit Quality:	Credit Quality:						Credit Quality:
	Avg. FICO score		752	753	752	752	Avg. FICO score		753	751	752	752
Other Data:	Other Data:						Other Data:
	Avg. combined LTV ratio		79%	81%	79%	81%	Avg. combined LTV ratio		79%	80%	79%	81%
	Full documentation loans		100%	100%	100%	100%	Full documentation loans		100%	100%	100%	100%

	~~June~~September 30, 2015
	(Dollars in thousands)

~~7% Senior Notes due August 2015~~	$	~~29,789~~
10¾% Senior Notes due September 2016	$	280,000
8⅜% Senior Notes due May 2018		575,000
8⅜% Senior Notes due January 2021		400,000
6¼% Senior Notes due December 2021		300,000
5⅞% Senior Notes due November 2024		300,000
1¼% Convertible Senior Notes due August 2032		253,000
	$	~~2,137,789~~2,108,000

	October 1, 2015
	(Dollars in thousands)

8.4% Senior Notes due May 2017	$	230,000
1.625% Convertible Senior Notes due May 2018		225,000
0.25% Convertible Senior Notes due June 2019		267,500
6.625% Convertible Senior Notes due May 2020		300,000
5.375% Convertible Senior Notes due October 2022		250,000
	$	1,272,500

Dated: ~~July 31,~~November 5, 2015	By:	/s/ ~~Scott D. Stowell~~Larry T. Nicholson
		~~Scott D. Stowell~~Larry T. Nicholson President and Chief Executive Officer (Principal Executive Officer)


Dated: ~~July 31,~~November 5, 2015	By:	/s/ Jeff J. McCall
		Jeff J. McCall Executive Vice President and Chief Financial Officer (Principal Financial Officer)