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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K
  þ
    
    annual report pursuant to section 13 or 15(d) of
the securities exchange act of 1934
 For the fiscal year ended December 31, 2006
 or
 o
    
    transition report pursuant to section 13 or 15(d) of
the securities exchange act of 1934
 For
the transition period from      to
 Commission file number: 001-32322
 Technical Olympic USA, Inc.
 (Exact Name of Registrant as Specified in Its Charter)
 Delaware
    
    76-0460831(State or Other Jurisdiction of
    
    (I.R.S. Employer Identification No.)Incorporation or Organization)4000 Hollywood Boulevard, Suite 500 North
    
    33021Hollywood, Florida
    
    (Zip Code)(Address of Principal Executive Offices)
 Registrants telephone number, including area code: (954) 364-4000
 Securities registered pursuant to Section 12(b) of the Act:
 Name of Each ExchangeTitle of Each Class
    
    On Which RegisteredCommon Stock, $.01 par value
    
    New York Stock Exchange9% Senior Notes due 2010 (CUSIP No. 878483 AC0)
    
    New York Stock Exchange9% Senior Notes due 2010 (CUSIP No. 878483 AG1)
    
    New York Stock Exchange10 3/8 % Senior Subordinated Notes due 2012 (CUSIP No. 878483 AD8)
    
    New York Stock Exchange7 1/2% Senior Subordinated Notes due 2011 (CUSIP No. 878483 AJ5)
    
    New York Stock Exchange7 1/2% Senior Subordinated Notes due 2015 (CUSIP No. 878483 AL0)
    
    New York Stock Exchange
 Securities registered pursuant to Section 12(g) of the Act:
None
 o þ
 o þ
 þ o
 o
  o þ o
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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TABLE OF CONTENTS  PART IItem 1. BusinessItem 1A. Risk FactorsItem 1B. Unresolved Staff CommentsItem 2. PropertiesItem 3. Legal ProceedingsItem 4. Submission of Matters to a Vote of Security HoldersPART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesITEM 6. Selected Financial DataITEM 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsITEM 7A. Quantitative and Qualitative Disclosures about Market RiskITEM 8. Financial Statements and Supplementary DataITEM 9. Changes In and Disagreements with Accountants on Accounting and Financial DisclosureITEM 9A. Controls and ProceduresITEM 9B. Other InformationPART IIIITEM 10. Directors and Executive Officers of the RegistrantITEM 11. Executive CompensationITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersITEM 13 Certain Relationships and Related TransactionsITEM 14. Principal Accounting Fees and ServicesPART IVITEM 15. Exhibits and Financial Statement SchedulesSIGNATURESEX-10.42 AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT AGREEMENTEX-21.0 SUBSIDIARIES OF THE REGISTRANTEX-23.1 CONSENT OF ERNST & YOUNG LLP INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMEX-23.2 CONSENT OF ERNST & YOUNG LLP CERTIFIED PUBLIC ACCOUNTANTSEX-23.3 CONSENT OF BDO SEIDMAN, LLP INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMEX-31.1 SECTION 302 CERTIFICATION OF THE CEOEX-31.2 SECTION 302 CERTIFICATION OF THE CFOEX-32.1 SECTION 906 CERTIFICATION OF THE CEOEX-32.2 SECTION 906 CERTIFICATION OF THE CFOEX-99.1 CONSOLIDATED FINANCIAL STATEMENTS OF TE/TOUSA, LLC AND SUBSIDIARIESEX-99.2 FINANCIAL STATEMENTS OF ENGLE/SUNBELT HOLDINGS, LLC    Table of Contents  
 PART I
 
 Item 1. Business
        2




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Business Strategies
 Manage our Assets to Strengthen our Balance Sheet
  
    
    limiting new arrangements to acquire land;
    
    engaging in bulk sales of land and unsold homes;
    
    reducing the number of homes under construction;
    
    re-negotiating terms or abandoning our rights under option contracts;
    
    considering other asset dispositions including the possible sale of
underperforming assets, communities, divisions or joint venture interests;
    
    further reducing inventory target levels; and
    
    other initiatives designed to monetize our assets.
  Effectively Use Option Contracts and Land Development Joint Ventures to Maximize our Return on
Equity and Manage Risk
  3




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Grow Our Financial Services Business
  
    
    further increasing the percentage of our homebuyers who use our financial services;
and
    
    marketing, on a selected basis, our financial services to qualified buyers of homes
built by other homebuilders, including smaller homebuilders that do not provide their
own financial services.
 Homebuilding Operations
 Decentralized Operations
  Operating Division Responsibilities
  
    
    Site selection, which involves
 
    
    A feasibility study;
    
    Soil and environmental reviews;
    
    Review of existing zoning and other governmental requirements; and
    
    Review of the need for and extent of offsite work required to meet local building codes;
 
    
    Negotiating homesite option or similar contracts;
    
    Obtaining all necessary land development and home construction approvals;
    
    Overseeing land development;
    
    Selecting building plans and architectural schemes;
    
    Selecting and managing construction subcontractors and suppliers;
    
    Planning and managing homebuilding schedules; and
    
    Developing and implementing sales and marketing plans.
 4




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Centralized Controls
  
    
    Financing;
    
    Treasury and cash management;
    
    Risk and litigation management;
    
    Allocation of capital;
    
    Issuance and monitoring of inventory investment guidelines;
    
    Review and approval of all land and homesite acquisition contracts;
    
    Oversight of land and construction inventory levels;
    
    Environmental assessments of land and homesite acquisitions and dispositions;
    
    Approval and funding of land and lot acquisitions;
    
    Accounting and management reporting;
    
    Review and approval of division plans and budgets;
    
    Internal audit;
    
    Information technology systems;
    
    Administration of payroll and employee benefits;
    
    Negotiation of national purchasing contracts; and
    
    Management of major national or regional supply chain initiatives.
 Markets
  Florida
    
    Mid-Atlantic
    
    Texas
    
    WestCentral Florida
    
    Baltimore/Southern Pennsylvania
    
    Austin
    
    ColoradoJacksonville
    
    Delaware
    
    Dallas/Ft. Worth
    
    Las VegasSoutheast Florida
    
    Nashville
    
    Houston
    
    PhoenixSouthwest Florida
    
    Northern Virginia
    
    San AntonioTampa/St. Petersburg
 Florida.
 Mid-Atlantic.
 Texas.
 5




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West.
 Product Mix
   Land and Homesites
  Types of Land and Homesites.
      6




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Land Acquisition Policies.
  
    
    historical and projected population employment, and income growth rates for the surrounding area;
    
    demographic information such as age, education and economic status of the homebuyers in the area;
    
    suitability for development within two to four years of acquisition;
    
    desirability of location, including proximity to metropolitan area, local traffic corridors and amenities;
    
    market competition, including the prices of comparable new and resale homes in the areas; and
    
    the amount of capital currently invested in that market.
  
    
    estimated costs of completed homesite development;
    
    current and anticipated competition in the area, including the type and anticipated
sales prices of homes offered by our competitors;
    
    opportunity to acquire additional homesites in the future, if desired; and
    
    results of financial analyses, such as projected profit margins and return on invested capital.
   Land Supply and Asset Management Actions.
  7




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Option Contracts
 Joint Ventures.
   Transeastern JV.
  8




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9




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The Equity Method of
Accounting for Investments in Common Stock
  Supply Management
   Design
  10




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Design Centers
  Construction
    Marketing and Sales
     11




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Customer Service and Quality Control
   Warranty Program
    12




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Financial Services
       Governmental Regulation
   13




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Competition and Market Forces
  
    
    our experience within our geographic markets;
    
    the ability of our local managers to identify and quickly respond to local market conditions; and
    
    our reputation for service and quality.
   Seasonality
  14




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Backlog
  Employees
  15




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Item 1A. Risk Factors
 Risks Related to Our Business
 We expect our potential obligations under the guarantees rendered in connection with the
Transeastern Joint Venture or any settlement thereof will have a material adverse effect on our
consolidated financial position and results of operations and could cause defaults under our
financing documents.
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We may incur significant damages and expenses due to the purported class action complaints that
were filed against us and certain of our officers.
  
    
    certain guaranties entered into by us in connection with the
Transeastern JV and related potential liability;
    
    declining conditions in the housing market in Florida; and,
    
    that as a consequence of market declines, we could lose value in our investment in the joint venture.
  The homebuilding industry is experiencing deteriorating conditions that may continue for an
indefinite period and may further adversely affect our business and results of operations compared
to prior periods.
   Changes in economic or other business conditions could cause our current and proposed levels of
debt to adversely affect our financial condition and prevent us from fulfilling our debt service
obligations.
  17




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Our debt instruments impose significant operating and financial restrictions, which may limit our
ability to finance future operations or capital needs and pursue business opportunities, thereby
limiting our growth.
  
    
    incur additional debt;
    
    pay dividends or make other restricted payments;
    
    create or permit certain liens, other than customary and ordinary liens;
    
    sell assets other than in the ordinary course of our business;
    
    invest in joint ventures above the amounts established in such instruments;
    
    create or permit restrictions on the ability of our restricted subsidiaries to pay
dividends or make other distributions to us;
    
    engage in transactions with affiliates; and
    
    consolidate or merge with or into other companies or sell all or substantially all of our assets.
  We are dependent on the continued availability and satisfactory performance of our subcontractors,
which, if unavailable, could have a material adverse effect on our business.
  18




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Changes in accounting rules relating to the consolidation of assets associated with option
contracts and joint ventures, or a change in the interpretation or application of such rules, could
adversely affect our financial condition and limit our use of such arrangements, which could impact
our future growth.
  In the event that tax liabilities arise in connection with the October 2003 restructuring, there
can be no assurance that we will not be liable for such amounts.
  Our revenues and profitability may be adversely affected by natural disasters or weather
conditions.
  Technical Olympic S.A., our majority stockholder, can cause us to take, or prevent us from taking,
actions without the approval of the other stockholders and may have interests that could conflict
with the interests of our other stockholders.
  Control of our company by Technical Olympic S.A. and/or our issuance of preferred stock could make
it difficult for a third party to acquire us.
  19




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Our common stock price has been and could continue to be volatile.
  
    
    our failure to resolve, or the terms of a resolution of , the claims against us related to the Transeastern JV;
    
    our failure to obtain adequate financing for a Transeastern JV resolution;
    
    the limited amount of our common stock held by non-affiliates;
    
    quarterly variations in our operating results;
    
    general conditions in the homebuilding industry;
    
    changes in the markets expectations about our earnings;
    
    changes in financial estimates, recommendations and ratings by securities analysts and
credit agencies concerning our company or the homebuilding industry in general;
    
    operating and stock price performance of other companies that investors deem comparable to us;
    
    material announcements by us or our competitors;
    
    news reports relating to trends in our markets;
    
    changes in laws and regulations affecting our business;
    
    sales of substantial amounts of common stock by our directors, executive officers or
majority stockholder, Technical Olympic, S.A., or the perception that such sales could
occur; and
    
    general economic and political conditions such as recessions and acts of war or
terrorism.
  Risks Related to Our Industry
 We are subject to substantial risks with respect to the land and home inventories we maintain, and
fluctuations in market conditions may affect our ability to sell our land and home inventories at
expected prices, if at all, which would reduce our profit margins.
  Changes in the mortgage market could adversely impact us by increasing the supply of inventory
housing, negatively impacting pricing conditions, as well as decreasing the demand for our homes,
which would adversely affect our revenues and profitability.
  20




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Supply risks and shortages relating to labor and materials can harm our business by delaying
construction and increasing costs.
  
    
    shortages of qualified trades people and other labor;
    
    inadequately capitalized local subcontractors;
    
    shortages of materials; and
    
    volatile increases in the cost of certain materials, including lumber, framing,
roofing, and cement, which are significant components of home construction costs.
  The competitive conditions in the homebuilding industry could increase our costs, reduce our
revenues, and otherwise adversely affect our results of operations.
  
    
    increase our costs and reduce our revenues and/or profit margins;
    
    make it difficult for us to acquire suitable land or homesites at acceptable prices;
    
    require us to increase selling commissions and other incentives;
    
    result in delays in construction if we experience a delay in procuring materials or hiring laborers; and
    
    result in lower sales volumes.
   21




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We are subject to product liability and warranty claims arising in the ordinary course of business
that could adversely affect our results of operations.
  States, cities, and counties in which we operate have, or may adopt, slow or no growth initiatives
that would reduce our ability to build in these areas and could adversely affect our future
revenues.
  Our business is subject to governmental regulations that may delay, increase the cost of, prohibit
or severely restrict our development and homebuilding projects.
     22




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Special Note Regarding Forward Looking Statements
  
    
    our expectations regarding population growth and median income growth trends and
their impact on future housing demand in our markets;
    
    our expectation regarding the impact of geographic and customer diversification;
    
    our expectations regarding our successful implementation of our asset management
strategy and its impact on our business;
    
    our belief that homes in premier locations will continue to attract homebuyers in
both strong and weak economic conditions;
    
    our expectations regarding future land sales;
    
    our belief regarding growth opportunities within our financial services business;
    
    our estimate that we have adequate financial resources to meet our current and
anticipated working capital, including our annual debt service payments, and land
acquisition and development needs;
    
    the impact of inflation on our future results of operations;
    
    our expectations regarding our ability to pass through to our customers any increases in our costs;
    
    our expectations regarding our continued use of option contracts, investments in
land development joint ventures;
    
    our expectations regarding the housing market in 2007; and
    
    our expectations regarding our use of cash in operations.
   
    
    our significant level of debt and the impact of the restrictions imposed on us by the terms of this debt;
    
    our ability to borrow or otherwise finance our business in the future;
    
    our ability to identify and acquire, at anticipated prices, additional homebuilding
opportunities and/or to effect our growth strategies in our homebuilding operations and
financial services business;
    
    our relationship with Technical Olympic S.A. and its control over our business
activities;
    
    economic or other business conditions that affect the desire or ability of our
customers to purchase new homes in markets in which we conduct our business, such as
increases in interest rates, inflation, or unemployment rates or declines in median
income growth, consumer confidence or the demand for, or the price of, housing;
    
    events which would impede our ability to open new communities and/or deliver homes
within anticipated time frames and/or within anticipated budgets;
    
    our ability to successfully enter into, utilize, and recognize the anticipated
benefits of, joint ventures and option contracts;
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
    
    a decline in the value of the land and home inventories we maintain;
    
    an increase in the cost of, or shortages in the availability of, qualified labor and materials;
    
    our ability to successfully dispose of developed properties or undeveloped land or
homesites at expected prices and within anticipated time frames;
    
    our ability to compete in our existing and future markets;
    
    the impact of hurricanes, tornadoes or other natural disasters or weather conditions
on our business, including the potential for shortages and increased costs of materials
and qualified labor and the potential for delays in construction and obtaining
government approvals;
    
    an increase or change in government regulations, or in the interpretation and/or
enforcement of existing government regulations; and
  Availability of Reports and Other Information
 www.tousa.com
 
 Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
  
 Item 3. Legal Proceedings
 Litigation
Related to Transeastern JV
 Technical Olympic USA, Inc. and TOUSA Homes L.P. v. Deutsche Bank Trust Co. Americas Deutsche Bank Trust Co. Americas v. Technical Olympic USA, Inc. and TOUSA Homes L.P
 24




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Securities Litigation
 Durgin v. Technical Olympic USA, Inc., et al
 Other Litigation
  25




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Item 4. Submission of Matters to a Vote of Security Holders
  
 PART II
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
  High
    
    LowFiscal Year Ended December 31, 2006First Quarter
    
    $
    23.97
    
    
    $
    18.31Second Quarter
    
    $
    23.00
    
    
    $
    13.26Third Quarter
    
    $
    14.63
    
    
    $
    9.66Fourth Quarter
    
    $
    11.37
    
    
    $
    6.55
 High
    
    LowFiscal Year Ended December 31, 2005First Quarter
    
    $
    25.56
    
    
    $
    18.48Second Quarter
    
    $
    25.69
    
    
    $
    20.70Third Quarter
    
    $
    30.43
    
    
    $
    23.15Fourth Quarter
    
    $
    26.46
    
    
    $
    19.03
      26




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EQUITY COMPENSATION PLAN INFORMATION
 Number of SecuritiesRemaining AvailableNumber of
    
    
    
    
    
    for Future IssuanceSecurities to be
    
    
    
    
    
    Under EquityIssued Upon
    
    Weighted-Average
    
    Compensation PlansExercise of
    
    Exercise Price of
    
    (ExcludingOutstanding
    
    Outstanding
    
    SecuritiesOptions, Warrants
    
    Options, Warrants
    
    Reflected in ColumnPlan Category
    
    and Rights
    
    and Rights
    
    (a))(a)
    
    (b)
    
    (c)Equity compensation
plans approved by
security holders
    
    
    4,964,676
    
    
    $
    13.04
    
    
    
    327,561Equity compensation
plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    4,964,676
    
    
    $
    13.04
    
    
    
    327,561
 
 ITEM 6. Selected Financial Data
 Year Ended December 31,2006
    
    2005
    
    2004
    
    2003
    
    2002(1)(2)(Dollars in millions, except per share data)Statement of Income Data:Total revenues
    
    $
    2,637.3
    
    
    $
    2,509.0
    
    
    $
    2,135.3
    
    
    $
    1,680.7
    
    
    $
    1,408.4Homebuilding revenues
    
    $
    2,574.0
    
    
    $
    2,461.5
    
    
    $
    2,100.8
    
    
    $
    1,642.6
    
    
    $
    1,377.7Homebuilding gross profit
    
    $
    435.2
    
    
    $
    604.9
    
    
    $
    428.4
    
    
    $
    323.2
    
    
    $
    276.1Homebuilding pretax income (loss)
    
    $
    (265.7
    )
    
    $
    336.4
    
    
    $
    181.7
    
    
    $
    114.7
    
    
    $
    91.2Financial services pretax income
    
    $
    21.5
    
    
    $
    8.5
    
    
    $
    8.3
    
    
    $
    15.6
    
    
    $
    15.7Income (loss) from continuing
operations before income taxes
    
    $
    (244.2
    )
    
    $
    344.9
    
    
    $
    190.0
    
    
    $
    130.3
    
    
    $
    106.9Income (loss) from continuing
operations
    
    $
    (201.2
    )
    
    $
    218.3
    
    
    $
    119.6
    
    
    $
    82.7
    
    
    $
    67.0Share Data(3):Income (loss) from continuing
operations per share  basic
    
    $
    (3.38
    )
    
    $
    3.82
    
    
    $
    2.13
    
    
    $
    1.57
    
    
    $
    1.28Income (loss) from continuing
operations per share  diluted
    
    $
    (3.38
    )
    
    $
    3.68
    
    
    $
    2.08
    
    
    $
    1.56
    
    
    $
    1.28Cash dividends per share
    
    $
    0.060
    
    
    $
    0.057
    
    
    $
    0.036
    
    
    $
    
    
    
    $
    Statement of Financial Condition
Data:Inventory
    
    $
    2,196.2
    
    
    $
    1,740.8
    
    
    $
    1,281.2
    
    
    $
    1,177.9
    
    
    $
    753.9Total assets
    
    $
    2,842.2
    
    
    $
    2,422.7
    
    
    $
    1,920.6
    
    
    $
    1,536.2
    
    
    $
    1,012.6Homebuilding notes payable and
bank borrowings (4)
    
    $
    1,060.7
    
    
    $
    876.6
    
    
    $
    811.4
    
    
    $
    497.9
    
    
    $
    413.1Total borrowings (4)(5)
    
    $
    1,096.1
    
    
    $
    911.7
    
    
    $
    860.4
    
    
    $
    561.1
    
    
    $
    461.4Stockholders equity
    
    $
    774.9
    
    
    $
    971.3
    
    
    $
    662.7
    
    
    $
    537.6
    
    
    $
    405.1
 27




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(1)
    
    On June 25, 2002, we completed the merger with Engle Holdings Corp. As both
entities were under the common control of Technical Olympic, Inc., our parent company at
the time, the merger was accounted for as a reorganization of entities under common
control. In accordance with Statement of Financial Accounting Standards (SFAS) No.
141, Business Combinations, we recognized the acquired assets and liabilities of Engle
Holdings Corp. at their historical carrying amounts. As both entities came under common
control of Technical Olympic on November 22, 2000, our financial statements and other
operating data have been restated to include the operations of Engle Holdings Corp. from
November 22, 2000.(2)
    
    On April 15, 2002, we completed the sale of Westbrooke, formerly one of our
Florida homebuilding subsidiaries. In accordance with SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, the results of Westbrookes operations have
been classified as discontinued operations.(3)
    
    The shares issued and outstanding, the earnings per share and the cash dividends
per share amounts have been adjusted to reflect a three-for-two stock split effected in
the form of a 50% stock dividend paid on June 1, 2004 and a five-for-four stock split
effected in the form of a 25% stock dividend paid on March 31, 2005.(4)
    
    Homebuilding notes payable and bank borrowings and total borrowings do not
include obligations for inventory not owned of $338.5 million, $124.6 million, $136.2
million, $246.2 million, and $16.3 million as of December 31, 2006, 2005, 2004, 2003, and
2002 respectively.(5)
    
    Total borrowings include Homebuilding borrowings and Financial Services
borrowings. 28




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ITEM 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
   Executive Summary
  Florida
    
    Mid-Atlantic
    
    Texas
    
    WestCentral Florida
    
    Delaware
    
    Dallas/Ft. Worth
    
    Las VegasJacksonville
    
    Baltimore/Southern Pennsylvania
    
    Austin
    
    ColoradoSoutheast Florida
    
    Nashville
    
    Houston
    
    PhoenixSouthwest Florida
    
    Northern Virginia
    
    San AntonioTampa /St. Petersburg
    Total Controlled Homesites by our Homebuilding Operations (Excluding the Transeastern JV)
  29




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December 31, 2006
    
    December 31, 2005Total
    
    
    
    
    
    
    
    
    
    TotalOwned
    
    Optioned
    
    Controlled
    
    Owned
    
    Optioned
    
    ControlledConsolidated
    
    
    22,200
    
    
    
    42,500
    
    
    
    64,700
    
    
    
    22,000
    
    
    
    46,900
    
    
    
    68,900Unconsolidated joint ventures
    
    
    2,900
    
    
    
    2,100
    
    
    
    5,000
    
    
    
    2,900
    
    
    
    2,300
    
    
    
    5,200Combined total
    
    
    25,100
    
    
    
    44,600
    
    
    
    69,700
    
    
    
    24,900
    
    
    
    49,200
    
    
    
    74,100
 Owned and Optioned Land Summary for our Consolidated Operations
  December 31, 2006
    
    December 31, 2005Total
    
    
    
    
    
    
    
    
    
    TotalRegion
    
    Owned
    
    Optioned
    
    Controlled
    
    Owned
    
    Optioned
    
    ControlledFlorida
    
    
    6,800
    
    
    
    11,000
    
    
    
    17,800
    
    
    
    5,300
    
    
    
    14,800
    
    
    
    20,100Mid-Atlantic
    
    
    800
    
    
    
    2,700
    
    
    
    3,500
    
    
    
    600
    
    
    
    6,700
    
    
    
    7,300Texas
    
    
    3,800
    
    
    
    10,900
    
    
    
    14,700
    
    
    
    5,600
    
    
    
    6,800
    
    
    
    12,400West
    
    
    10,800
    
    
    
    17,900
    
    
    
    28,700
    
    
    
    10,500
    
    
    
    18,600
    
    
    
    29,100Total
    
    
    22,200
    
    
    
    42,500
    
    
    
    64,700
    
    
    
    22,000
    
    
    
    46,900
    
    
    
    68,900
  Residences Completed or
    
    Homesites Finished or
    
    Raw Land Held forUnder Construction
    
    Under Development
    
    Future Development
    
    TotalRegion
    
    12/31/06
    
    12/31/05
    
    12/31/06
    
    12/31/05
    
    12/31/06
    
    12/31/05
    
    12/31/06
    
    12/31/05Florida
    
    
    1,700
    
    
    
    2,000
    
    
    
    3,500
    
    
    
    3,100
    
    
    
    1,700
    
    
    
    200
    
    
    
    6,900
    
    
    
    5,300Mid-Atlantic
    
    
    300
    
    
    
    300
    
    
    
    500
    
    
    
    300
    
    
    
    
    
    
    
    
    
    
    
    800
    
    
    
    600Texas
    
    
    1,200
    
    
    
    1,200
    
    
    
    1,400
    
    
    
    2,900
    
    
    
    1,100
    
    
    
    1,500
    
    
    
    3,700
    
    
    
    5,600West
    
    
    800
    
    
    
    900
    
    
    
    2,200
    
    
    
    2,100
    
    
    
    7,800
    
    
    
    7,500
    
    
    
    10,800
    
    
    
    10,500Total
    
    
    4,000
    
    
    
    4,400
    
    
    
    7,600
    
    
    
    8,400
    
    
    
    10,600
    
    
    
    9,200
    
    
    
    22,200
    
    
    
    22,000
 Homebuilding Operations.
   30




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##### Table of Contents



Outlook.
  
    
    limiting new arrangements to acquire land;
    
    engaging in bulk sales of land and unsold homes;
    
    reducing the number of homes under construction;
    
    re-negotiating terms or abandoning our rights under option contracts;
    
    considering other asset dispositions including the possible sale of underperforming
assets, communities, divisions and joint venture interests;
    
    further reducing inventory target levels; and
    
    other initiatives designed to monetize our assets.
  Financial Services Operations
 31




---



##### Table of Contents



Critical Accounting Policies
  Homebuilding Revenues and Cost of Sales
  Financial Services Revenues and Expenses
  Impairment of Long-Lived Assets
 Accounting
for the Impairment or Disposal of Long-Lived Assets
 Goodwill
 Goodwill and
Other Intangible Assets
 32




---



##### Table of Contents



Homesite Option Contracts and Consolidation of Variable Interest Entities
   Consolidation of Variable Interest Entities
  Stock-Based Compensation
 33




---



##### Table of Contents



Accounting for Stock Issued to Employees Accounting for Stock-Based Compensation Share-Based Payment
 Warranty Reserves
  Insurance and Litigation Reserves
  Income Taxes
  Recent Developments
  34




---



##### Table of Contents



Results of Operations  Consolidated
 Fiscal Year 2006 compared to Fiscal Year 2005
     Results of Operations  Consolidated
 Homebuilding
    35




---



##### Table of Contents



Net Sales Orders and Homes in Backlog (consolidated)
    Net Sales Orders and Homes in Backlog (unconsolidated joint ventures excluding the
Transeastern JV)
  36




---



##### Table of Contents



Financial Services
   Results of Operations  Consolidated
 Fiscal Year 2005 Compared to Fiscal Year 2004
     37




---



##### Table of Contents



Results of Operations  Consolidated
 Homebuilding
       38




---



##### Table of Contents



Net Sales Orders and Homes in Backlog (consolidated)
    Net Sales Orders and Homes in Backlog (unconsolidated joint ventures excluding the
Transeastern JV)
    Financial Services
   39




---



##### Table of Contents



Reportable Segments
 Disclosures About Segments of an Enterprise and Related
Information
 Homebuilding Operations
  Florida:
 Mid-Atlantic:
 Texas:
 West:
 Selected Homebuilding Operations and Financial Data
  Year Ended December 31,2006
    
    
    2005
    
    
    2004Revenues:Homebuilding Florida:Sales of homes
    
    $
    999.2
    
    
    $
    829.4
    
    
    $
    632.8Sales of land
    
    
    18.8
    
    
    
    29.8
    
    
    
    63.2Total Homebuilding Florida
    
    $
    1,018.0
    
    
    $
    859.2
    
    
    $
    696.0Homebuilding Mid-Atlantic:Sales of homes
    
    $
    258.8
    
    
    $
    290.3
    
    
    $
    235.3Sales of land
    
    
    47.2
    
    
    
    0.6
    
    
    
    7.3Total Homebuilding Mid-Atlantic
    
    $
    306.0
    
    
    $
    290.9
    
    
    $
    242.6Homebuilding Texas:Sales of homes
    
    $
    721.7
    
    
    $
    500.6
    
    
    $
    459.9Sales of land
    
    
    13.3
    
    
    
    15.8
    
    
    
    12.3Total Homebuilding Texas
    
    $
    735.0
    
    
    $
    516.4
    
    
    $
    472.2Homebuilding West:Sales of homes
    
    $
    459.4
    
    
    $
    646.3
    
    
    $
    657.0Sales of land
    
    
    55.6
    
    
    
    148.7
    
    
    
    33.0Total Homebuilding West
    
    $
    515.0
    
    
    $
    795.0
    
    
    $
    690.0Total Homebuilding Revenues
    
    $
    2,574.0
    
    
    $
    2,461.5
    
    
    $
    2,100.8
 40




---



##### Table of Contents



Year Ended December 31,2006
    
    
    2005
    
    
    2004Results of Operations:Homebuilding:Florida (1)
    
    $
    11.8
    
    
    $
    138.1
    
    
    $
    109.0Mid-Atlantic
    
    
    (20.9
    )
    
    
    38.1
    
    
    
    36.5Texas
    
    
    58.8
    
    
    
    33.9
    
    
    
    18.9West (2)
    
    
    26.4
    
    
    
    186.4
    
    
    
    60.6Financial Services
    
    
    21.5
    
    
    
    8.5
    
    
    
    8.3Corporate and unallocated
    
    
    (341.8
    )
    
    
    (60.1
    )
    
    
    (43.3
    )Income (loss) before
provision (benefit) for
income taxes
    
    $
    (244.2
    )
    
    $
    344.9
    
    
    $
    190.0
 
 (1)
    
    Includes impairment on Transeastern joint venture of
$145.1 million for the year ended December 31, 2006 and an impairment charge of
$7.7 million related to our investment in joint ventures in Southwest Florida.(2)
    
    Includes in the year ended December 31, 2006, a
charge of $5.7 million related to the impairment of goodwill at our Colorado
division. Year Ended December 31,2006
    
    
    2005
    
    
    2004Impairment charges on active communities:Homebuilding:Florida
    
    $
    13.2
    
    
    $
    1.8
    
    
    $
    Mid-Atlantic
    
    
    26.2
    
    
    
    0.8
    
    
    
    Texas
    
    
    0.7
    
    
    
    
    
    
    
    West
    
    
    41.9
    
    
    
    3.9
    
    
    
    0.3Total impairment charges on active
communities
    
    $
    82.0
    
    
    $
    6.5
    
    
    $
    0.3
 Year Ended December 31,2006
    
    
    2005
    
    
    2004Write-offs of deposits and abandonment costs:Homebuilding:Florida
    
    $
    8.3
    
    
    $
    
    
    
    $
    0.1Mid-Atlantic
    
    
    11.8
    
    
    
    
    
    
    
    0.1Texas
    
    
    2.4
    
    
    
    0.6
    
    
    
    2.0West
    
    
    51.0
    
    
    
    
    
    
    
    2.3Total write-offs of deposits and abandonment
costs:
    
    $
    73.5
    
    
    $
    0.6
    
    
    $
    4.5
 41




---



##### Table of Contents



Year Ended December 31,2006
    
    
    2005
    
    
    2004Homes
    
    
    $
    
    
    Homes
    
    
    $
    
    
    Homes
    
    
    $Deliveries:Consolidated:Florida
    
    
    2,742
    
    
    $
    999.2
    
    
    
    2,785
    
    
    $
    829.4
    
    
    
    2,361
    
    
    $
    632.8Mid-Atlantic
    
    
    683
    
    
    
    258.8
    
    
    
    697
    
    
    
    290.3
    
    
    
    562
    
    
    
    235.3Texas
    
    
    2,946
    
    
    
    721.7
    
    
    
    2,059
    
    
    
    500.6
    
    
    
    1,827
    
    
    
    459.9West
    
    
    1,453
    
    
    
    459.4
    
    
    
    2,228
    
    
    
    646.3
    
    
    
    2,471
    
    
    
    657.0Consolidated total
    
    
    7,824
    
    
    
    2,439.1
    
    
    
    7,769
    
    
    
    2,266.6
    
    
    
    7,221
    
    
    
    1,985.0Unconsolidated joint ventures:Florida*
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mid-Atlantic
    
    
    108
    
    
    
    31.2
    
    
    
    185
    
    
    
    55.5
    
    
    
    61
    
    
    
    16.0West
    
    
    1,670
    
    
    
    590.7
    
    
    
    1,134
    
    
    
    382.0
    
    
    
    55
    
    
    
    18.7Total unconsolidated joint ventures
    
    
    1,778
    
    
    
    621.9
    
    
    
    1,319
    
    
    
    437.5
    
    
    
    116
    
    
    
    34.7Combined total
    
    
    9,602
    
    
    $
    3,061.0
    
    
    
    9,088
    
    
    $
    2,704.1
    
    
    
    7,337
    
    
    $
    2,019.7
 
 *
    
    Excludes Transeastern JV deliveries of 2,173 and 347, including revenues of $659.3 million and
$106.6 million for our years ended December 31, 2006 and
2005, respectively. Year Ended December 31,2006
    
    
    2005
    
    
    2004Homes
    
    
    $
    
    
    Homes
    
    
    $
    
    
    Homes
    
    
    $Net Sales Orders (1) :Consolidated:Florida
    
    
    2,028
    
    
    $
    809.2
    
    
    
    2,794
    
    
    $
    959.2
    
    
    
    3,711
    
    
    $
    1,107.8Mid-Atlantic
    
    
    588
    
    
    
    227.8
    
    
    
    597
    
    
    
    243.1
    
    
    
    682
    
    
    
    289.0Texas
    
    
    2,904
    
    
    
    731.1
    
    
    
    2,754
    
    
    
    682.6
    
    
    
    1,876
    
    
    
    473.9West
    
    
    1,063
    
    
    
    345.6
    
    
    
    2,469
    
    
    
    817.6
    
    
    
    3,274
    
    
    
    942.0Consolidated total
    
    
    6,583
    
    
    
    2,113.7
    
    
    
    8,614
    
    
    
    2,702.5
    
    
    
    9,543
    
    
    
    2,812.7Unconsolidated joint ventures:Florida*
    
    
    10
    
    
    
    4.7
    
    
    
    4
    
    
    
    1.7
    
    
    
    32
    
    
    
    7.8Mid-Atlantic
    
    
    74
    
    
    
    18.0
    
    
    
    141
    
    
    
    47.3
    
    
    
    160
    
    
    
    44.8West
    
    
    580
    
    
    
    161.0
    
    
    
    1,477
    
    
    
    548.0
    
    
    
    198
    
    
    
    65.0Total unconsolidated joint ventures
    
    
    664
    
    
    
    183.7
    
    
    
    1,622
    
    
    
    597.0
    
    
    
    390
    
    
    
    117.6Combined total
    
    
    7,247
    
    
    $
    2,297.4
    
    
    
    10,236
    
    
    $
    3,299.5
    
    
    
    9,933
    
    
    $
    2,930.3
 
 (1)
    
    Net of cancellations*
    
    Excludes Transeastern JV net sales orders of (208) and 387
with a sales value of ($46.3) million and $118.4 million,
respectively, including cancellations of 1,049 and 108 for our years
ended December 31, 2006 and 2005, respectively. 42




---



##### Table of Contents



Year Ended December 31,2006
    
    
    2005
    
    
    2004Avg
    
    
    
    
    
    
    
    
    
    
    Avg
    
    
    
    
    
    
    
    
    
    
    AvgHomes
    
    
    $
    
    
    Price
    
    
    Homes
    
    
    $
    
    
    Price
    
    
    Homes
    
    
    $
    
    
    PriceSales Backlog:Consolidated:Florida
    
    
    2,228
    
    
    $
    851.9
    
    
    $
    382
    
    
    
    2,937
    
    
    $
    1,036.7
    
    
    $
    353
    
    
    
    2,896
    
    
    $
    898.9
    
    
    $
    310Mid-Atlantic
    
    
    206
    
    
    
    80.5
    
    
    $
    391
    
    
    
    246
    
    
    
    94.7
    
    
    $
    385
    
    
    
    346
    
    
    
    141.9
    
    
    $
    410Texas
    
    
    1,196
    
    
    
    328.7
    
    
    $
    275
    
    
    
    1,238
    
    
    
    319.3
    
    
    $
    258
    
    
    
    543
    
    
    
    137.3
    
    
    $
    253West
    
    
    461
    
    
    
    189.9
    
    
    $
    412
    
    
    
    851
    
    
    
    303.8
    
    
    $
    357
    
    
    
    1,309
    
    
    
    388.9
    
    
    $
    297Consolidated total (1)
    
    
    4,091
    
    
    
    1,451.0
    
    
    $
    355
    
    
    
    5,272
    
    
    
    1,754.5
    
    
    $
    333
    
    
    
    5,094
    
    
    
    1,567.0
    
    
    $
    308Unconsolidated joint ventures:Florida*
    
    
    46
    
    
    
    14.2
    
    
    $
    308
    
    
    
    36
    
    
    
    9.5
    
    
    $
    261
    
    
    
    32
    
    
    
    7.8
    
    
    $
    242Mid-Atlantic
    
    
    3
    
    
    
    1.3
    
    
    $
    434
    
    
    
    92
    
    
    
    31.3
    
    
    $
    341
    
    
    
    136
    
    
    
    39.5
    
    
    $
    291West
    
    
    453
    
    
    
    155.8
    
    
    $
    344
    
    
    
    1,543
    
    
    
    585.5
    
    
    $
    379
    
    
    
    501
    
    
    
    163.1
    
    
    $
    326Total unconsolidated joint ventures(1)
    
    
    502
    
    
    
    171.3
    
    
    $
    341
    
    
    
    1,671
    
    
    
    626.3
    
    
    $
    375
    
    
    
    669
    
    
    
    210.4
    
    
    $
    314Combined total (1)
    
    
    4,593
    
    
    $
    1,622.3
    
    
    $
    353
    
    
    
    6,943
    
    
    $
    2,380.8
    
    
    $
    343
    
    
    
    5,763
    
    
    $
    1,777.4
    
    
    $
    308
 
 (1)
    
    Includes acquired backlog.*
    
    Excludes for our years ended December 31, 2006 and 2005, homes in backlog of 697 and 3,078 with a sales value of $194.3 million and $886.2
million, respectively for the Transeastern JV. Year Ended December 31,2006
    
    2005
    
    2004Sales
    
    
    
    
    
    Sales
    
    
    
    
    
    SalesDeliveries
    
    Orders
    
    Deliveries
    
    Orders
    
    Deliveries
    
    OrdersAverage Price:Consolidated:Florida
    
    $
    364
    
    
    $
    399
    
    
    $
    298
    
    
    $
    343
    
    
    $
    268
    
    
    $
    299Mid-Atlantic
    
    $
    379
    
    
    $
    387
    
    
    $
    417
    
    
    $
    407
    
    
    $
    419
    
    
    $
    424Texas
    
    $
    245
    
    
    $
    252
    
    
    $
    243
    
    
    $
    248
    
    
    $
    252
    
    
    $
    253West
    
    $
    316
    
    
    $
    325
    
    
    $
    290
    
    
    $
    331
    
    
    $
    266
    
    
    $
    288Consolidated total
    
    $
    312
    
    
    $
    321
    
    
    $
    292
    
    
    $
    314
    
    
    $
    275
    
    
    $
    295Unconsolidated joint ventures:Florida
    
    $
    
    
    
    $
    476
    
    
    $
    
    
    
    $
    410
    
    
    $
    
    
    
    $
    242Mid-Atlantic
    
    $
    289
    
    
    $
    243
    
    
    $
    300
    
    
    $
    336
    
    
    $
    263
    
    
    $
    280West
    
    $
    354
    
    
    $
    278
    
    
    $
    337
    
    
    $
    371
    
    
    $
    339
    
    
    $
    329Total unconsolidated joint ventures
    
    $
    350
    
    
    $
    277
    
    
    $
    332
    
    
    $
    368
    
    
    $
    299
    
    
    $
    301Combined total
    
    $
    319
    
    
    $
    317
    
    
    $
    298
    
    
    $
    322
    
    
    $
    275
    
    
    $
    295
 Fiscal Year 2006 Compared to Fiscal Year 2005
 Florida
   43




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##### Table of Contents



Mid-Atlantic
  Texas:
  West:
   Fiscal Year 2005 Compared to Fiscal Year 2004
 Florida:
  Mid-Atlantic:
 44




---



##### Table of Contents



Texas:
  West:
  Financial Services Operations
  Year Ended December 31,2006
    
    2005
    
    2004Revenues
    
    
    63.3
    
    
    
    47.5
    
    
    
    34.5Expenses
    
    
    41.8
    
    
    
    39.0
    
    
    
    26.2Financial Services pretax income
    
    
    21.5
    
    
    
    8.5
    
    
    
    8.3
 Financial Condition, Liquidity and Capital Resources
 Sources and Uses of Cash
    45




---



##### Table of Contents



Financing Activities
 1 4 3 8 1 2 1 2
     46




---



##### Table of Contents



1 4 pari passu
 1 4
 47




---



##### Table of Contents



pari passu pari passu
   Homebuilding net debt to capitalDecember 31,
    
    
    December 31,2006
    
    
    2005(Dollars in millions)Notes payable
    
    $
    1,060.7
    
    
    $
    811.6Bank borrowings
    
    
    
    
    
    
    65.0Homebuilding borrowings(1)
    
    $
    1,060.7
    
    
    $
    876.6Less: unrestricted cash
    
    
    49.4
    
    
    
    26.2Homebuilding net debt
    
    $
    1,011.3
    
    
    $
    850.4Stockholders equity
    
    
    774.9
    
    
    
    971.3Total capital(2)
    
    $
    1,786.2
    
    
    $
    1,821.7Ratio
    
    
    56.6
    %
    
    
    46.7
    %
 
 (1)
    
    Does not include obligations for inventory not owned of $338.5 million
at December 31, 2006 and $124.6 million at December 31, 2005, all of
which are non-recourse to us.(2)
    
    Does not include Financial Services bank borrowings of $35.4 million
at December 31, 2006 and $35.1 million at December 31, 2005.   48




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##### Table of Contents



Payment due by periodLess than
    
    
    1-3
    
    
    3-5
    
    
    More thanContractual Obligations (1)
    
    Total
    
    
    1 year
    
    
    Years
    
    
    years
    
    
    5 yearsLong-Term Debt Obligations
    
    $
    1,095.4
    
    
    $
    35.4
    (2)
    
    
    
    
    
    $
    675.0
    (3)
    
    $
    385.0
    (3)Capital Lease Obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating Lease Obligations
    
    $
    41.3
    
    
    $
    12.1
    
    
    $
    14.4
    
    
    $
    7.1
    
    
    $
    7.7Purchase Obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other Long-Term
Liabilities Reflected on
the Registrants Statement
of Financial Condition
under GAAP
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    1,136.7
    
    
    $
    47.5
    
    
    $
    14.4
    
    
    $
    682.1
    
    
    $
    392.7
 
 (1)
    
    Does not include obligations for inventory not owned of $338.5 million at December
31, 2006. See notes 2 and 3 to the consolidated financial statements included elsewhere in
this Form 10-K for more information on obligations for inventory not owned.(2)
    
    Represents borrowings under the Financial Services warehouse lines of credit
outstanding at December 31, 2006.(3)
    
    Includes $1.1 billion in aggregate principal amount of outstanding senior and senior
subordinated notes. Does not include aggregate annual interest of $91.2 million on such
senior and senior subordinated notes. See note 7 to the 49




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##### Table of Contents



consolidated financial statements
included elsewhere in this Form 10-K for more information on the senior and senior
subordinated notes. Off Balance Sheet Arrangements
 Land and Homesite Option Contracts
   Investments in Unconsolidated Joint Ventures
   Transeastern
JV Update
     50




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##### Table of Contents



The Equity Method of
Accounting for Investments in Common Stock
  Dividends
  Recent Accounting Pronouncements
 Accounting for Servicing of Financial Assets
 Accounting for Uncertainty in Income
Taxes-an interpretation of SFAS 109,
 Fair Value Measurements
 Applicability of
the Assessment of a Buyers Continuing Investment under FASB Statement No. 66, Accounting for Sales
of Real Estate, for Sales of Condominiums,
 51




---



##### Table of Contents



Seasonality of Operations
  
 ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk
   Expected Maturity Date(in millions)2007
    
    2008
    
    2009
    
    2010
    
    2011
    
    Thereafter
    
    Fair ValueLiabilitiesLong-term debtFixed rate (71/2%)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    125.0
    
    
    $
    200.0
    
    
    $
    260.4Fixed rate (81/4%)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    250.0
    
    
    
    
    
    
    
    240.9Fixed rate (9.0%)
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    300.0
    
    
    
    
    
    
    
    
    
    
    
    295.9Fixed rate
(103/8%)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    185.0
    
    
    $
    169.5Variable rate,
credit facility
(8.4% at December
31, 2006)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Variable rate,
warehouse line of
credit (6.4% at
December 31,
2006)
    
    $
    35.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    35.4
   52




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##### Table of Contents



ITEM 8 . Financial Statements and Supplementary Data
  
 ITEM 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
  
 ITEM 9A. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Managements Report on Internal Control Over Financial Reporting
  
 ITEM 9B. Other Information
  
 PART III
 
 ITEM 10. Directors and Executive Officers of the Registrant
    53




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##### Table of Contents



ITEM 11. Executive Compensation
  
 ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
  
 ITEM 13 Certain Relationships and Related Transactions
  
 ITEM 14. Principal Accounting Fees and Services
  
 PART IV
 
 ITEM 15. Exhibits and Financial Statement Schedules
       Number
    
    Exhibit Description3.1
    
    Certificate of Incorporation of Newmark Homes Corp (Incorporated by
reference to the Form 8-K, dated March 23, 2001, previously filed by the
Registrant).3.2
    
    Certificate of Amendment to the Certificate of Incorporation (Incorporated
by reference to the Registration Statement on Form S-4 previously filed by
the Registrant (Registration Statement No. 333-100013)).3.3
    
    Amended and Restated Bylaws. (Incorporated by reference to the
Registration Statement on Form S-4 previously filed by the Registrant
(Registration Statement No. 333-100013)).3.4
    
    Certificate of Amendment to the Certificate of Incorporation, filed on
April 28, 2004 (Incorporated by reference to the Form 10-Q for the quarter
ended March 31, 2004, previously filed by the Registrant).4.1
    
    Indenture, dated as of June 25, 2002, by and among Technical Olympic USA,
Inc. and the subsidiaries named therein and Wells Fargo Bank Minnesota,
National Association, as Trustee covering up to $200,000,000 9% Senior
Notes due 2010 (Incorporated by reference to the Form 8-K, dated July 9,
2002, previously filed by the Registrant).
 54




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##### Table of Contents



Number
    
    Exhibit Description4.2
    
    Indenture, dated as of June 25, 2002, by and among Technical Olympic USA,
Inc., the subsidiaries name therein and Wells Fargo Bank Minnesota,
National Association, as Trustee covering up to $150,000,000 10 3/8%
Senior Subordinated Notes due 2012 (Incorporated by reference to the Form
8-K, dated July 9, 2002, previously filed by the Registrant).4.3
    
    Form of Technical Olympic USA, Inc. 9% Senior Note due 2010 (included in
Exhibit A to Exhibit 4.1) (Incorporated by reference to the Form 8-K,
dated July 9, 2002, previously filed by the Registrant).4.4
    
    Form of Technical Olympic USA, Inc. 10 3/8% Senior Subordinated Note due
2012 (included in Exhibit A of Exhibit 4.2) (Incorporated by reference to
the Form 8-K, dated July 9, 2002, previously filed by the Registrant).4.6
    
    Specimen of Stock Certificate of Technical Olympic USA, Inc. (Incorporated
by reference to Exhibit 4.1 to the Registration Statement on Form S-8
previously filed by the Registrant (Registration No. 333-99307)).4.7
    
    Indenture for the 9% Senior Notes due 2010, dated as of February 3, 2003,
among Technical Olympic USA, Inc., the subsidiaries named therein, Salomon
Smith Barney Inc., Deutsche Bank Securities Inc., Fleet Securities, Inc.
and Credit Lyonnais Securities (USA) Inc. (Incorporated by reference to
Exhibit 4.13 to the Form 10-K for the year ended December 31, 2002,
previously filed by the Registrant).4.8
    
    Form of Technical Olympic USA, Inc. 9% Senior Note due 2010 (included in
Exhibit A to Exhibit 4.7) (Incorporated by reference to Exhibit 4.13 to
the Form 10-K for the year ended December 31, 2002, previously filed by
the Registrant).4.9
    
    Technical Olympic USA, Inc. 10 3/8% Senior Subordinated Note due 2012,
dated as of April 22, 2003, in the amount of $35,000,000. (Incorporated by
reference to Exhibit 4.19 to the Registration Statement on Form S-1
previously filed by the Registrant (Registration Statement No.
333-106537)).4.10
    
    Indenture for the 7 1/2% Senior Subordinated Notes due 2011, dated as of
March 17, 2004, among Technical Olympic USA, Inc., the subsidiaries named
therein and Wells Fargo Bank, N.A., as Trustee (Incorporated by reference
to Exhibit 4.24 to the Registration Statement on Form S-4 previously filed
by the Registrant (Registration Statement No. 333-114587)).4.11
    
    Form of Technical Olympic USA, Inc. 7 1/2% Senior Subordinated Note due 2011
(included in Exhibit A to Exhibit 4.10) (Incorporated by reference to
Exhibit 4.24 to the Registration Statement on Form S-4 previously filed by
the Registrant (Registration Statement No. 333-114587)).4.12
    
    Indenture for the 7 1/2% Senior Subordinated Notes due 2015, dated as of
December 21, 2004, among Technical Olympic USA, Inc., the subsidiaries
named therein and Wells Fargo Bank, N.A., as Trustee (Incorporated by
reference to the Registration Statement on Form S-4 previously filed by
the Registrant (Registration Statement No. 333-122450)).4.13
    
    Form of Technical Olympic USA, Inc. 7 1/2% Senior Subordinated Note due 2015
(included in Exhibit A to Exhibit 4.12) (Incorporated by reference to the
Registration Statement on Form S-4 previously filed by the Registrant
(Registration Statement No. 333-122450)).10.1+
    
    Form of Indemnification Agreement (Incorporated by reference to the Form
10-K for the year ended December 31, 2003, previously filed by the
Registrant).
 55




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##### Table of Contents



Number
    
    Exhibit Description10.2+
    
    Amended and Restated Employment Agreement between Technical Olympic USA,
Inc. and Antonio B. Mon dated January 27, 2004, effective as of July 26,
2003 (Incorporated by reference to Exhibit 10.9 to the Form 10-K for the
year ended December 31, 2003, previously filed by the Registrant).10.3+
    
    Employment Agreement between Technical Olympic USA, Inc. and Tommy L.
McAden dated July 12, 2002, effective June 25, 2002 (Incorporated by
reference to Exhibit 10.10 to the Form 10-Q for the quarter ended June 30,
2002, previously filed by the Registrant).10.4+
    
    Technical Olympic USA, Inc. Annual and Long-Term Incentive Plan, as
amended and restated. (Incorporated by reference to Exhibit 10.5 to the
Form 10-K for the fiscal year ended December 31, 2004, previously filed by
the Registrant).10.5
    
    Contractor Agreement, effective as of November 6, 2000, between Technical
Olympic USA, Inc. (f/k/a Newmark Homes Corp.) and Technical Olympic S.A.
(Incorporated by reference to Exhibit 10.26 to the Registration Statement
on Form S-1 previously filed by the Registrant (Registration No.
333-106537)).10.6
    
    Supplemental Contractor Agreement, effective as of January 4, 2001,
between Technical Olympic USA, Inc. (f/k/a Newmark Homes Corp.) and
Technical Olympic S.A. (Incorporated by reference to Exhibit 10.27 to the
Registration Statement on Form S-1 previously filed by the Registrant
(Registration Statement No. 333-106537)).10.7
    
    Contractor Agreement, effective as of November 22, 2000, between TOUSA
Homes, Inc. (f/k/a Engle Homes, Inc.) and Technical Olympic S.A.
(Incorporated by reference to Exhibit 10.28 to the Registration Statement
on Form S-1 previously filed by the Registrant (Registration Statement No.
333-106537)).10.8
    
    Supplemental Contractor Agreement, effective as of January 3, 2001,
between TOUSA Homes, Inc. (f/k/a Engle Homes Inc.) and Technical Olympic
S.A. (Incorporated by reference to Exhibit 10.29 to the Registration
Statement on Form S-1 previously filed by the Registrant (Registration
Statement No. 333-106537)).10.9
    
    Amended and Restated Management Services Agreement, dated as of June 13,
2003, between Technical Olympic USA, Inc. and Technical Olympic, Inc.
(Incorporated by reference to Exhibit 10.33 to the Registration Statement
on Form S-1 previously filed by the Registrant (Registration Statement No.
333-106537)).10.10+
    
    Employment Agreement, dated as of May 1, 2004, between David J. Keller and
Technical Olympic USA, Inc. (Incorporated by reference to Exhibit 10.44 to
the Form 10-Q for the quarter ended June 30, 2004, previously filed by the
Registrant).10.12
    
    Revolving Credit and Security Agreement, dated as of October 22, 2004,
among Preferred Home Mortgage Company and Countrywide Warehouse Lending
(Incorporated by reference to Exhibit 10.46 to the Form 10-Q for the
quarter ended September 30, 2004, previously filed by the Registrant).10.13+
    
    Technical Olympic USA, Inc. Executive Savings Plan, effective as of
December 1, 2004, comprised of the Basic Plan Document and the Adoption
Agreement. (Incorporated by reference to Exhibit 99.1 to the Form 8-K,
dated November 30, 2004, previously filed by the Registrant).10.14+
    
    Addendum to Technical Olympic USA, Inc. Executive Savings Plan, effective
as of December 1, 2004 (Incorporated by reference to Exhibit 99.2 to the
Form 8-K, dated November 30, 2004, previously filed by the Registrant).
 56




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##### Table of Contents



Number
    
    Exhibit Description10.15+
    
    Term Sheet for the Performance Unit Program under the Technical Olympic
USA, Inc. Annual and Long-Term Incentive Plan, as amended and restated.10.16+
    
    Employment Agreement, dated as of February 16, 2005, by and between TOUSA
Associates Services Company and Harry Engelstein. (Incorporated by
reference to Exhibit 10.22 to the Form 8-K, dated February 16, 2005,
previously filed by the Registrant).10.17+
    
    Employment Agreement, dated as of February 16, 2005, by and between TOUSA
Associates Services Company and Mark Upton. (Incorporated by reference to
Exhibit 10.23 to the Form 8-K, dated February 16, 2005, previously filed
by the Registrant).10.19+
    
    Employment Agreement, dated as of January 1, 2004, between TOUSA
Associates Services Company and John Kraynick. (Incorporated by reference
to Exhibit 10.25 to the Form 10-K for the fiscal year ended December 31,
2004, previously filed by the Registrant).10.20+
    
    Form of Director Non-Qualified Stock Option Agreement. (Incorporated by
reference to Exhibit 10.26 to the Form 8-K, dated March 3, 2005,
previously filed by the Registrant).10.21+
    
    Form of Director Restricted Stock Grant Agreement. (Incorporated by
reference to Exhibit 10.27 to the Form 10-K for the fiscal year ended
December 31, 2004, previously filed by the Registrant).10.22+
    
    Form of Associate Non-Qualified Stock Option Agreement. (Incorporated by
reference to Exhibit 10.28 to the Form 10-K for the fiscal year ended
December 31, 2004, previously filed by the Registrant).10.23+
    
    Policy for Compensation of Outside Directors of Technical Olympic USA,
Inc. (Incorporated by reference to Exhibit 10.30 to the Form 10-Q for the
quarter ended March 31, 2005, previously filed by the Registrant).10.24
    
    Asset Purchase Agreement, dated as of June 6, 2005, among EH/Transeastern,
LLC, Transeastern Properties, Inc. and the other sellers identified
therein, Arthur J. Falcone and Edward W. Falcone. (Incorporated by
reference to Exhibit 10.31 to the Form 10-Q for the quarter ended June 30,
2005, previously filed by the Registrant).10.26
    
    Commitment Letter for Revolving Credit and Security Agreement, dated
December 9, 2005, by and between Preferred Home Mortgage Company and
Countrywide Warehousing Lending, amending that certain Revolving Credit
and Security Agreement, dated as of October 22, 2004, by and between
Preferred Home Mortgage Company and Countrywide Warehousing Lending.
(Portions of this exhibit have been omitted pursuant to a request for
confidential treatment).10.27+
    
    Amendment to the Amended and Restated Employment Agreement, dated January
13, 2006, by and between Technical Olympic USA, Inc. and Antonio B. Mon.
(Incorporated by reference to Exhibit 10.27 to the Form 10-K for the
fiscal year ended December 31, 2005, previously filed by the Registrant).10.28+
    
    Employment Agreement, dated as of January 13, 2006, by and between
Technical Olympic USA, Inc. and Tommy L. McAden. (Incorporated by
reference to Exhibit 10.28 to the Form 10-K for the fiscal year ended
December 31, 2005, previously filed by the Registrant).
 57




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##### Table of Contents



Number
    
    Exhibit Description10.29+
    
    Employment Agreement, dated as of January 13, 2006, by and between
Technical Olympic USA, Inc. and John Kraynick. (Incorporated by reference
to Exhibit 10.29 to the Form 10-Q for the fiscal year ended December 31,
2005, previously filed by the Registrant).10.32
    
    $450,000,000 Credit Agreement dated as of August 1, 2005, by and among
EH/Transeastern, LLC and TE/TOUSA Senior, LLC, as the Borrowers, Deutsche
Bank Trust Company Americas and the Institutions from time to time party
thereto, as Lenders, Deutsche Bank Trust Company Americas, as
Administrative Agent and Deutsche Bank Securities, Inc., as sole Lead
Arranger and Sole Book Running Manager. (Incorporated by reference to
Exhibit 10.2 to the Form 10-Q for the quarter ended September 30, 2006,
previously filed by the Registrant).10.33
    
    $137,500,000 Senior Mezzanine Credit Agreement dated as of August 1, 2005,
by and among EH/TOUSA Mezzanine, LLC, as the Borrowers, Deutsche Bank
Trust Company Americas and the Institutions from time to time party
thereto, as Lenders, Deutsche Bank Trust Company Americas, as
Administrative Agent and Deutsche Bank Securities, Inc., as sole Lead
Arranger and Sole Book Running Manager. (Incorporated by reference to
Exhibit 10.3 to the Form 10-Q for the quarter ended September 30, 2006,
previously filed by the Registrant).10.34
    
    $87,500,000 Junior Mezzanine Credit Agreement dated as of August 1, 2005,
by and among EH/TOUSA Mezzanine two, LLC, as the Borrowers, Deutsche Bank
Trust Company Americas and the Institutions from time to time party
thereto, as Lenders, Deutsche Bank Trust Company Americas, as
Administrative Agent and Deutsche Bank Securities, Inc., as sole Lead
Arranger and Sole Book Running Manager. (Incorporated by reference to
Exhibit 10.4 to the Form 10-Q for the quarter ended September 30, 2006,
previously filed by the Registrant).10.35
    
    Completion Guaranty dated as of August 1, 2005, by and Tousa Homes, L.P.
and Technical Olympic USA, Inc. in favor of Deutsche Bank Trust Company
Americas, as Administrative Agent. (Additional guaranties of the same
obligations in substantially identical forms were executed in connection
with the $137,500,000 Senior Mezzanine Credit Agreement and the
$87,500,000 Junior Mezzanine Credit Agreement). (Incorporated by reference
to Exhibit 10.5 to the Form 10-Q for the quarter ended September 30,
2006, previously filed by the Registrant).10.36
    
    Carve-out Guaranty dated as of August 1, 2005, made by Tousa Homes, L.P.
and Technical Olympic USA, Inc. in favor of Deutsche Bank Trust Company
Americas as Administrative Agent. (Additional guaranties of the same
obligations in substantially identical forms were executed in connection
with the $137,500,000 Senior Mezzanine Credit Agreement and the
$87,500,000 Junior Mezzanine Credit Agreement). (Incorporated by
reference to Exhibit 10.6 to the Form 10-Q for the quarter ended
September 30, 2006, previously filed by the Registrant).10.37
    
    Employment Agreement, dated January 3, 2007, by and between Technical
Olympic USA, Inc. and Stephen M. Wagman. (Incorporated by reference to
Exhibit 10.1 to the Form 8-K dated as of January 4, 2007, previously filed
by the Registrant).10.38
    
    Amended and Restated Credit Agreement dated as of January 30, 2007 among
Technical Olympic USA, Inc., its subsidiaries parties thereto, the Lenders
party thereto and Citicorp North America as Administrative Agent.
(Incorporated by reference to Exhibit 10.1 to the Current Report on Form
8-K dated February 1, 2007, previously filed by the Registrant).10.39
    
    Security Agreement dated October 23, 2006 among Technical Olympic USA,
Inc., its subsidiaries parties thereto and Citicorp North America as
Administrative Agent (Incorporated by reference to Exhibit 10.2 to the Current Report on
Form 8-K dated February 1, 2007, previously filed by the Registrant).
 58




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##### Table of Contents



Number
    
    Exhibit Description10.40
    
    Amendment No. 1 to Security Agreement dated January 30, 2007 among
Technical Olympic USA, Inc., its subsidiaries parties thereto and Citicorp
North America as Administrative Agent. (Incorporated by reference to
Exhibit 10.3
to the Current Report on Form 8-K dated February 1, 2007, previously filed by the
Registrant).10.41
    
    Pledge and Security Agreement dated as of February 6, 2007 between
Technical Olympic USA, Inc. and Citicorp North America, Inc. (Incorporated
by reference to Exhibit 10.1 of the Current Report on Form 8-K dated
February 6, 2007, previously filed by the Registrant).10.42*
    
    Amendment No. 1 to Amended and Restated Credit Agreement entered into
among Technical Olympic USA, Inc., certain of its subsidiaries and the
lenders parties thereto, dated as of March 13, 2007.21.0*
    
    Subsidiaries of the Registrant.23.1*
    
    Consent of Ernst & Young LLP independent registered public accounting firm.23.2*
    
    Consent of Ernst & Young LLP independent certified public accountants.23.3*
    
    Consent of BDO Seidman, LLP independent registered public accounting firm.31.1*
    
    Certification of Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2*
    
    Certification of Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1*
    
    Certification of Chief Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.32.2*
    
    Certification of Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.99.1*
    
    Consolidated financial statements of TE/TOUSA, LLC and Subsidiaries for the year ended November 30, 2006 and the period from inception (July 1, 2005) to November 30, 2005.99.2*
    
    Financial statements of Engle/Sunbelt Holdings, LLC for the years ended December 31, 2006 and 2005.
 
 *
    
    Filed herewith.+
    
    Management contract or compensatory plan or arrangement. 59




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##### Table of Contents



SIGNATURES
   By:
    
    /s/ Antonio B. Mon
Antonio B. MonPresident and Chief Executive OfficerDate: March 19, 2007
  Signature
    
    Title
    
    Date/s/ Antonio B. Mon
Antonio B. Mon
    
    Executive Vice Chairman, President,
Chief Executive Officer (Principal
Executive Officer) and Director
    
    March 19, 2007/s/ Stephen M. Wagman
Stephen M. Wagman
    
    Executive Vice President, Chief
Financial Officer (Principal
Financial Officer)
    
    March 19, 2007/s/ Randy L. Kotler
Randy L. Kotler
    
    Senior Vice President  Chief
Accounting Officer (Principal
Accounting Officer)
    
    March 19, 2007/s/ Konstantinos Stengos
Konstantinos Stengos
    
    Chairman of the Board and Director
    
    March 19, 2007/s/ Andreas Stengos
Andreas Stengos
    
    Executive Vice President and Director
    
    March 19, 2007/s/ George Stengos
George Stengos
    
    Executive Vice President and Director
    
    March 19, 2007/s/ Marianna Stengou
Marianna Stengou
    
    Director
    
    March 19, 2007/s/ Larry D. Horner
Larry D. Horner
    
    Director
    
    March 19, 2007/s/ William A. Hasler
William A. Hasler
    
    Director
    
    March 19, 2007
 60




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##### Table of Contents



Signature
    
    Title
    
    Date/s/
Michael J. Poulos
Michael J. Poulos
    
    Director
    
    March 19, 2007/s/
Susan B. Parks
Susan B. Parks
    
    Director
    
    March 19, 2007/s/
J. Bryan Whitworth
J. Bryan Whitworth
    
    Director
    
    March 19, 2007/s/
Tommy L. McAden
Tommy L. McAden
    
    Executive Vice President and Director
    
    March 19, 2007
 61




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##### Table of Contents



TECHNICAL OLYMPIC USA, INC. AND SUBSIDIARIES
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageManagements Report on Internal Control over Financial Reporting
    
    F-2Reports of Independent Registered Public Accounting Firm
    
    F-3Consolidated Statements of Financial Condition as of
December 31, 2006 and 2005
    
    F-5Consolidated Statements of Operations for the years ended
December 31, 2006, 2005 and 2004
    
    F-6Consolidated Statements of Stockholders Equity for the
years ended December 31, 2006, 2005 and 2004
    
    F-7Consolidated Statements of Cash Flows for the
years ended December 31, 2006, 2005 and 2004
    
    F-8Notes to Consolidated Financial Statements
    
    F-10




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##### Table of Contents



MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
 Internal Control  Integrated
Framework Internal Control  Integrated Framework,
  F-2




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
 The Board of Directors and Stockholders of Technical Olympic USA, Inc.
     .
  
 
 F-3




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 The Board of Directors and Stockholders of Technical Olympic USA, Inc.
     March 16,
 
 
 F-4




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##### Table of Contents



TECHNICAL OLYMPIC USA, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 (Dollars in millions, except par value)
 December 31, 2006
    
    
    December 31, 2005ASSETSHOMEBUILDING:Cash and cash equivalents:Unrestricted
    
    $
    49.4
    
    
    $
    26.2Restricted
    
    
    3.8
    
    
    
    3.1Inventory:Deposits
    
    
    229.6
    
    
    
    218.5Homesites and land under development
    
    
    751.7
    
    
    
    652.5Residences completed and under construction
    
    
    876.4
    
    
    
    745.2Inventory not owned
    
    
    338.5
    
    
    
    124.62,196.2
    
    
    
    1,740.8Property and equipment, net
    
    
    30.0
    
    
    
    27.1Investments in unconsolidated joint ventures
    
    
    129.0
    
    
    
    254.5Receivables from unconsolidated joint ventures, net
of allowance of $54.8 million and $0 at December 31, 2006 and
2005, respectively
    
    
    27.2
    
    
    
    60.5Other assets
    
    
    237.1
    
    
    
    133.2Goodwill
    
    
    104.0
    
    
    
    108.82,776.7
    
    
    
    2,354.2FINANCIAL SERVICES:Cash and cash equivalents:Unrestricted
    
    
    6.8
    
    
    
    8.7Restricted
    
    
    4.2
    
    
    
    3.1Mortgage loans held for sale
    
    
    41.9
    
    
    
    43.9Other assets
    
    
    12.6
    
    
    
    12.865.5
    
    
    
    68.5Total assets
    
    $
    2,842.2
    
    
    $
    2,422.7LIABILITIES AND STOCKHOLDERS EQUITYHOMEBUILDING:Accounts payable and other liabilities
    
    $
    563.5
    
    
    $
    329.4Customer deposits
    
    
    63.2
    
    
    
    79.3Obligations for inventory not owned
    
    
    338.5
    
    
    
    124.6Notes payable
    
    
    1,060.7
    
    
    
    811.6Bank borrowings
    
    
    
    
    
    
    65.02,025.9
    
    
    
    1,409.9FINANCIAL SERVICES:Accounts payable and other liabilities
    
    
    6.0
    
    
    
    6.4Bank borrowings
    
    
    35.4
    
    
    
    35.141.4
    
    
    
    41.5Total liabilities
    
    
    2,067.3
    
    
    
    1,451.4Commitments and contingenciesStockholders equity:Preferred stock  $0.01 par value; 3,000,000 shares
authorized; none issued or outstanding
    
    
    
    
    
    
    Common stock  $0.01 par value; 97,000,000
shares authorized and 59,590,519 and 59,554,977
shares issued and outstanding at
December 31, 2006, and December 31, 2005, respectively
    
    
    0.6
    
    
    
    0.6Additional paid-in capital
    
    
    481.2
    
    
    
    480.5Unearned compensation
    
    
    
    
    
    
    (7.7
    )Retained earnings
    
    
    293.1
    
    
    
    497.9Total stockholders equity
    
    
    774.9
    
    
    
    971.3Total liabilities and stockholders equity
    
    $
    2,842.2
    
    
    $
    2,422.7
  F-5




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##### Table of Contents



TECHNICAL OLYMPIC USA, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (Dollars in millions, except per share amounts)
 Year Ended December 31,2006
    
    
    2005
    
    
    2004HOMEBUILDING:Revenues:Home sales
    
    $
    2,439.1
    
    
    $
    2,266.6
    
    
    $
    1,985.0Land sales
    
    
    134.9
    
    
    
    194.9
    
    
    
    115.82,574.0
    
    
    
    2,461.5
    
    
    
    2,100.8Cost of sales:Home sales
    
    
    1,854.7
    
    
    
    1,700.2
    
    
    
    1,591.7Land sales
    
    
    128.6
    
    
    
    149.3
    
    
    
    75.9Inventory impairments and abandonment costs
    
    
    155.5
    
    
    
    7.1
    
    
    
    4.82,138.8
    
    
    
    1,856.6
    
    
    
    1,672.4Gross profit
    
    
    435.2
    
    
    
    604.9
    
    
    
    428.4Selling, general and administrative expenses
    
    
    376.2
    
    
    
    322.9
    
    
    
    251.7(Income)
loss from unconsolidated joint ventures, net
    
    
    48.1
    
    
    
    (45.7
    )
    
    
    (3.2
    )Provision
for settlement of loss contingency
    
    
    275.0
    
    
    
    
    
    
    
    Goodwill impairment
    
    
    5.7
    
    
    
    
    
    
    
    Other (income) expense, net
    
    
    (4.1
    )
    
    
    (8.7
    )
    
    
    (1.8
    )Homebuilding pretax income (loss)
    
    
    (265.7
    )
    
    
    336.4
    
    
    
    181.7FINANCIAL SERVICES:Revenues
    
    
    63.3
    
    
    
    47.5
    
    
    
    34.5Expenses
    
    
    41.8
    
    
    
    39.0
    
    
    
    26.2Financial Services pretax income
    
    
    21.5
    
    
    
    8.5
    
    
    
    8.3Income (loss) before provision (benefit) for
income taxes
    
    
    (244.2
    )
    
    
    344.9
    
    
    
    190.0Provision (benefit) for income taxes
    
    
    (43.0
    )
    
    
    126.6
    
    
    
    70.4Net income (loss)
    
    $
    (201.2
    )
    
    $
    218.3
    
    
    $
    119.6EARNINGS (LOSS) PER COMMON SHARE:Basic
    
    $
    (3.38
    )
    
    $
    3.82
    
    
    $
    2.13Diluted
    
    $
    (3.38
    )
    
    $
    3.68
    
    
    $
    2.08WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING:Basic
    
    
    59,582,697
    
    
    
    57,120,031
    
    
    
    56,060,371Diluted
    
    
    59,582,697
    
    
    
    59,359,355
    
    
    
    57,410,700CASH DIVIDENDS PER SHARE
    
    $
    0.060
    
    
    $
    0.057
    
    
    $
    0.036
  F-6




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##### Table of Contents



TECHNICAL OLYMPIC USA, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
 (Dollars in millions)
 AdditionalCommon Stock
    
    
    Paid-In
    
    
    Unearned
    
    
    Retained
    
    
    TotalShares
    
    
    Amount
    
    
    Capital
    
    
    Compensation
    
    
    Earnings
    
    
    EquityBalance at January 1, 2004
    
    
    56,041,943
    
    
    $
    0.6
    
    
    $
    379.1
    
    
    $
    (7.3
    )
    
    $
    165.2
    
    
    $
    537.6Common stock issued to directors
    
    
    13,646
    
    
    
    
    
    
    
    0.2
    
    
    
    
    
    
    
    
    
    
    
    0.2Stock option exercises
    
    
    14,921
    
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    0.1Dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2.0
    )
    
    
    (2.0
    )Unearned compensation
    
    
    
    
    
    
    
    
    
    
    8.9
    
    
    
    (1.7
    )
    
    
    
    
    
    
    7.2Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    119.6
    
    
    
    119.6Balance at December 31, 2004
    
    
    56,070,510
    
    
    
    0.6
    
    
    
    388.3
    
    
    
    (9.0
    )
    
    
    282.8
    
    
    
    662.7Common stock issued to directors
    
    
    10,842
    
    
    
    
    
    
    
    0.3
    
    
    
    
    
    
    
    
    
    
    
    0.3Stock option exercises
    
    
    115,625
    
    
    
    
    
    
    
    1.9
    
    
    
    
    
    
    
    
    
    
    
    1.9Dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3.2
    )
    
    
    (3.2
    )Sale of common stock
    
    
    3,358,000
    
    
    
    
    
    
    
    89.2
    
    
    
    
    
    
    
    
    
    
    
    89.2Unearned compensation
    
    
    
    
    
    
    
    
    
    
    0.8
    
    
    
    1.3
    
    
    
    
    
    
    
    2.1Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    218.3
    
    
    
    218.3Balance at December 31, 2005
    
    
    59,554,977
    
    
    
    0.6
    
    
    
    480.5
    
    
    
    (7.7
    )
    
    
    497.9
    
    
    
    971.3Common stock issued to directors
    
    
    11,792
    
    
    
    
    
    
    
    0.2
    
    
    
    
    
    
    
    
    
    
    
    0.2Stock option exercises
    
    
    23,750
    
    
    
    
    
    
    
    0.2
    
    
    
    
    
    
    
    
    
    
    
    0.2Excess income tax benefit from
exercise of stock options
    
    
    
    
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    0.1Transfer unearned compensation
upon adoption of SFAS 123(R)
    
    
    
    
    
    
    
    
    
    
    (7.7
    )
    
    
    7.7
    
    
    
    
    
    
    
    Modification of stock rights
    
    
    
    
    
    
    
    
    
    
    4.1
    
    
    
    
    
    
    
    
    
    
    
    4.1Stock option
compensation expense
    
    
    
    
    
    
    
    
    
    
    3.8
    
    
    
    
    
    
    
    
    
    
    
    3.8Dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3.6
    )
    
    
    (3.6
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (201.2
    )
    
    
    (201.2
    )Balance at December 31, 2006
    
    
    59,590,519
    
    
    $
    0.6
    
    
    $
    481.2
    
    
    $
    
    
    
    $
    293.1
    
    
    $
    774.9
  F-7




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##### Table of Contents



TECHNICAL OLYMPIC USA, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Dollars in millions)
 Year ended December 31,2006
    
    
    2005
    
    
    2004Cash flows from operating activities:Net income (loss)
    
    $
    (201.2
    )
    
    $
    218.3
    
    
    $
    119.6Adjustments to reconcile net income (loss) to net cash
used in operating activities:Depreciation and amortization
    
    
    14.5
    
    
    
    13.3
    
    
    
    12.6Non-cash compensation
    
    
    8.7
    
    
    
    3.7
    
    
    
    8.8Provision
for settlement of loss contingency
    
    
    275.0
    
    
    
    
    
    
    
    Loss on impairment of inventory and abandonment costs
    
    
    155.5
    
    
    
    6.2
    
    
    
    4.8Impairment of investments in/receivables from
unconsolidated joint ventures
    
    
    152.8
    
    
    
    
    
    
    
    Impairment of goodwill
    
    
    5.7
    
    
    
    
    
    
    
    Deferred income taxes
    
    
    (155.6
    )
    
    
    2.0
    
    
    
    (0.7
    )Equity in earnings from unconsolidated joint ventures
    
    
    (59.8
    )
    
    
    (18.5
    )
    
    
    (0.5
    )Distributions of earnings from unconsolidated joint ventures
    
    
    73.9
    
    
    
    0.4
    
    
    
    Changes in operating assets and liabilities:Restricted cash
    
    
    (1.8
    )
    
    
    4.0
    
    
    
    15.6Inventory
    
    
    (390.2
    )
    
    
    (470.1
    )
    
    
    (216.6
    )Receivables from unconsolidated joint ventures
    
    
    (10.2
    )
    
    
    (37.1
    )
    
    
    (3.4
    )Other assets
    
    
    52.2
    
    
    
    (67.5
    )
    
    
    (19.3
    )Mortgage loans held for sale
    
    
    2.0
    
    
    
    31.9
    
    
    
    (0.6
    )Accounts payable and other liabilities
    
    
    (50.9
    )
    
    
    131.4
    
    
    
    31.1Customer deposits
    
    
    (16.1
    )
    
    
    10.1
    
    
    
    33.6Net cash used in operating activities
    
    
    (145.5
    )
    
    
    (171.9
    )
    
    
    (15.0
    )Cash flows from investing activities:Earn out consideration paid for acquisitions
    
    
    (0.9
    )
    
    
    
    
    
    
    (6.6
    )Net additions to property and equipment
    
    
    (17.1
    )
    
    
    (14.1
    )
    
    
    (15.6
    )Loans to unconsolidated joint ventures
    
    
    (11.3
    )
    
    
    (20.0
    )
    
    
    Investments in unconsolidated joint ventures
    
    
    (32.1
    )
    
    
    (176.1
    )
    
    
    (61.1
    )Capital distributions from unconsolidated joint ventures
    
    
    52.9
    
    
    
    9.9
    
    
    
    Net cash used in investing activities
    
    
    (8.5
    )
    
    
    (200.3
    )
    
    
    (83.3
    )Cash flows from financing activities:Net borrowings from (repayments on) revolving credit facility
    
    
    (65.0
    )
    
    
    65.0
    
    
    
    (10.0
    )Net proceeds from notes offerings
    
    
    248.8
    
    
    
    
    
    
    
    330.0Principal payments on unsecured borrowings and senior notes
    
    
    
    
    
    
    
    
    
    
    (7.9
    )Net
(repayments of) proceeds from Financial
Services bank borrowings
    
    
    0.3
    
    
    
    (13.9
    )
    
    
    (14.3
    )Payments for deferred financing costs
    
    
    (5.5
    )
    
    
    (0.3
    )
    
    
    (5.9
    )Excess income tax benefit from exercise of stock options
    
    
    0.1
    
    
    
    
    
    
    
    Net proceeds from sale of common stock
    
    
    
    
    
    
    89.2
    
    
    
    Proceeds from stock option exercises
    
    
    0.2
    
    
    
    1.8
    
    
    
    0.1Dividends paid
    
    
    (3.6
    )
    
    
    (3.2
    )
    
    
    (2.0
    )Net cash provided by financing activities
    
    
    175.3
    
    
    
    138.6
    
    
    
    290.0Increase (decrease)  in cash and cash equivalents
    
    
    21.3
    
    
    
    (233.6
    )
    
    
    191.7Cash and
cash equivalents at beginning of year
    
    
    34.9
    
    
    
    268.5
    
    
    
    76.8Cash and
cash equivalents at end of year
    
    $
    56.2
    
    
    $
    34.9
    
    
    $
    268.5
  F-8




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##### Table of Contents



Year Ended December 31,2006
    
    
    2005
    
    
    2004Increase (decrease)  in
obligations for inventory not
owned and corresponding increase (decrease)
 in inventory not owned
    
    $
    213.9
    
    
    $
    (11.6
    )
    
    $
    (110.0
    )
  Year Ended December 31,2006
    
    
    2005
    
    
    2004Cash paid for income taxes
    
    $
    200.4
    
    
    $
    61.4
    
    
    $
    60.4
 F-9




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##### Table of Contents



TECHNICAL OLYMPIC USA, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 December 31, 2006
 1. Business and Organization
 Business
  Organization
  2. Summary of Significant Accounting Policies
  Principles of Consolidation and Basis of Presentation
    
    
    Impairment assessments of investments in unconsolidated joint ventures,
long-lived assets, including our inventory, and
goodwill;
    
    Insurance and litigation related contingencies, including our
accrual for settlement of loss
contingency related to the Transeastern JV;
    
    Realization of deferred income tax assets;
    
    Warranty reserves; and
    
    Estimated costs associated with construction and development activities in connection
with our homebuilding operations
   Homebuilding
 Inventory
  F-10




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##### Table of Contents



Obligations for Inventory Not Owned
 Consolidation of Variable Interest Entities
  Investments in Joint Ventures
 Determining Whether a General Partner, or General
Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners
Have Certain Rights
  Revenue Recognition
  Accounting for the Sales of Real
Estate,
 Warranty Costs
  F-11




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##### Table of Contents



Advertising Costs
  Financial Services
 Title Company Escrow Deposits
  Mortgage Loan Held for Sale
  Interest Rate Lock Commitments
 Application of Accounting Principles to Loan Commitments Accounting for Derivative Instruments and Hedging
Activities
 Revenue Recognition
   F-12




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##### Table of Contents



General
 Cash and Supplemental Cash Flow Information
   Accounting for the Impairment of Long-Lived Assets
 Accounting for the Impairment or Disposal of Long-Lived
Assets
 Concentration of Credit Risk
  Property and Equipment
   Goodwill
  Goodwill and Other Intangible Assets
 F-13




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##### Table of Contents



Year Ended December 31,2006
    
    
    2005Balance at January 1
    
    $
    108.8
    
    
    $
    110.7Earn out
consideration paid or accrued for acquisitions
    
    
    0.9
    
    
    
    Impairment
    
    
    (5.7
    )
    
    
    Other adjustments
    
    
    
    
    
    
    (1.9
    )Balance at December 31
    
    $
    104.0
    
    
    $
    108.8
 Insurance and Litigation Reserves
  Income Taxes
 Accounting for Income Taxes
 Earnings (Loss) Per Share
   Year Ended December 31,2006
    
    2005
    
    2004Basic weighted average shares outstanding
    
    
    59,582,697
    
    
    
    57,120,031
    
    
    
    56,060,371Net effect of common stock equivalents
assumed to be exercised
    
    
    
    
    
    
    2,239,324
    
    
    
    1,350,329Diluted weighted average shares outstanding
    
    
    59,582,697
    
    
    
    59,359,355
    
    
    
    57,410,700
   F-14




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##### Table of Contents



Stock-Based Compensation
 Accounting for Stock Issued to Employees
     Year Ended December 31,2005
    
    
    2004Net income as reported
    
    $
    218.3
    
    
    $
    119.6Add: Stock-based employee compensation included
in reported net income, net of tax
    
    
    2.2
    
    
    
    5.4Deduct: Stock-based employee compensation
expense determined under the fair value method,
net of tax
    
    
    (2.7
    )
    
    
    (4.1
    )Pro forma net income
    
    $
    217.8
    
    
    $
    120.9Reported basic earnings per share
    
    $
    3.82
    
    
    $
    2.13Pro forma basic earnings per share
    
    $
    3.81
    
    
    $
    2.16Reported diluted earnings per share
    
    $
    3.68
    
    
    $
    2.08Pro forma diluted earnings per share
    
    $
    3.67
    
    
    $
    2.11
 F-15




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##### Table of Contents



Expected volatility
    
    0.33% - 0.42%Expected dividend yield
    
    0.0%Risk-free interest rate
    
    1.47% - 4.85%Expected life
    
    3 -10 years
 Fair Value of Financial Instruments
 Disclosures about Fair Value of Financial Instruments
 Reclassifications
  Recent Accounting Pronouncements
 Accounting for
Servicing of Financial Assets
 Accounting for Uncertainty in Income
Taxes-an interpretation of SFAS 109,
 F-16




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##### Table of Contents



Fair Value Measurements
 Applicability of
the Assessment of a Buyers Continuing Investment under FASB Statement No. 66, Accounting for Sales
of Real Estate, for Sales of Condominiums,
 3. Inventory
  Year Ended December 31,2006
    
    
    2005
    
    
    2004Interest capitalized, beginning of period
    
    $
    47.7
    
    
    $
    36.8
    
    
    $
    29.7Interest incurred
    
    
    101.3
    
    
    
    81.5
    
    
    
    66.1Less interest included in:Cost of sales
    
    
    76.4
    
    
    
    66.3
    
    
    
    50.5Other*
    
    
    0.8
    
    
    
    4.3
    
    
    
    8.5Interest capitalized, end of period
    
    $
    71.8
    
    
    $
    47.7
    
    
    $
    36.8
 
 *
    
    Included in Other above for the years ended December 31, 2005 and
2004 is interest which was capitalized to inventory that was
subsequently contributed to an unconsolidated joint venture. For the
years ended December 31, 2006, 2005, and 2004, all interest incurred
has been capitalized.    F-17




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##### Table of Contents



Year Ended December 31,2006
    
    
    2005
    
    
    2004Impairment charges on active communities:Homebuilding:Florida
    
    $
    13.2
    
    
    $
    1.8
    
    
    $
    Mid-Atlantic
    
    
    26.2
    
    
    
    0.8
    
    
    
    Texas
    
    
    0.7
    
    
    
    
    
    
    
    West
    
    
    41.9
    
    
    
    3.9
    
    
    
    0.3Total impairment charges on active
communities
    
    $
    82.0
    
    
    $
    6.5
    
    
    $
    0.3
 Year Ended December 31,2006
    
    
    2005
    
    
    2004Write-offs of deposits and abandonment costs:Homebuilding:Florida
    
    $
    8.3
    
    
    $
    
    
    
    $
    0.1Mid-Atlantic
    
    
    11.8
    
    
    
    
    
    
    
    0.1Texas
    
    
    2.4
    
    
    
    0.6
    
    
    
    2.0West
    
    
    51.0
    
    
    
    
    
    
    
    2.3Total write-offs of deposits and abandonment
costs
    
    $
    73.5
    
    
    $
    0.6
    
    
    $
    4.5
 F-18




---



##### Table of Contents



4. Transeastern Joint Venture
       F-19




---



##### Table of Contents



The Equity Method of
Accounting for Investments in Common Stock
  F-20




---



##### Table of Contents



5. Investments in Unconsolidated Joint Ventures (Excluding the Transeastern JV)
  December 31, 2006Land
    
    
    HomeDevelopment
    
    
    Construction
    
    
    TotalAssets:Cash
    
    $
    5.6
    
    
    $
    30.4
    
    
    $
    36.0Inventories
    
    
    382.9
    
    
    
    314.5
    
    
    
    697.4Other assets
    
    
    7.1
    
    
    
    5.3
    
    
    
    12.4Total assets
    
    $
    395.6
    
    
    $
    350.2
    
    
    $
    745.8Liabilities and equity:Accounts payable and other
liabilities
    
    $
    77.7
    
    
    $
    56.5
    
    
    $
    134.2Notes payable
    
    
    195.7
    
    
    
    161.3
    
    
    
    357.0Equity of:Technical Olympic USA, Inc.
    
    
    55.1
    
    
    
    83.3
    
    
    
    138.4Others
    
    
    67.1
    
    
    
    49.1
    
    
    
    116.2Total equity
    
    
    122.2
    
    
    
    132.4
    
    
    
    254.6Total liabilities and equity
    
    $
    395.6
    
    
    $
    350.2
    
    
    $
    745.8
 December 31, 2005Land
    
    
    Home
    
    
    TotalDevelopment
    
    
    ConstructionAssets:Cash
    
    $
    13.4
    
    
    $
    30.9
    
    
    $
    44.3Inventories
    
    
    306.1
    
    
    
    375.9
    
    
    
    682.0Other assets
    
    
    3.3
    
    
    
    7.1
    
    
    
    10.4Total assets
    
    $
    322.8
    
    
    $
    413.9
    
    
    $
    736.7Liabilities and equity:Accounts payable and other
liabilities
    
    $
    6.6
    
    
    $
    43.6
    
    
    $
    50.2Notes payable
    
    
    142.0
    
    
    
    196.5
    
    
    
    338.5Equity of:Technical Olympic USA, Inc.
    
    
    86.1
    
    
    
    85.2
    
    
    
    171.3Others
    
    
    88.1
    
    
    
    88.6
    
    
    
    176.7Total equity
    
    
    174.2
    
    
    
    173.8
    
    
    
    348.0Total liabilities and equity
    
    $
    322.8
    
    
    $
    413.9
    
    
    $
    736.7
 F-21




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##### Table of Contents



Year Ended December 31, 2006
    
    
    Year Ended December 31, 2005Land
    
    
    Home
    
    
    
    
    
    
    Land
    
    
    HomeDevelopment
    
    
    Construction
    
    
    Total
    
    
    Development
    
    
    Construction
    
    
    TotalRevenues
    
    $
    24.5
    
    
    $
    621.9
    
    
    $
    646.4
    
    
    $
    34.6
    
    
    $
    437.5
    
    
    $
    472.1Cost and expenses
    
    
    25.3
    
    
    
    545.1
    
    
    
    570.4
    
    
    
    35.3
    
    
    
    380.9
    
    
    
    416.2Net earnings
(losses) of
unconsolidated
joint ventures
    
    $
    (0.8
    )
    
    $
    76.8
    
    
    $
    76.0
    
    
    $
    (0.7
    )
    
    $
    56.6
    
    
    $
    55.9Our share of net
earnings (losses)
    
    $
    (0.2
    )
    
    $
    60.0
    
    
    $
    59.8
    
    
    $
    (0.8
    )
    
    $
    30.5
    
    
    $
    29.7Management fees
earned
    
    
    3.1
    
    
    
    29.0
    
    
    
    32.1
    
    
    
    3.1
    
    
    
    22.2
    
    
    
    25.3Income from unconsolidated joint
ventures
    
    $
    2.9
    
    
    $
    89.0
    
    
    $
    91.9
    
    
    $
    2.3
    
    
    $
    52.7
    
    
    $
    55.0
       F-22




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##### Table of Contents



Accounting
Changes and Error Corrections, a replacement of Opinion No. 20 and FASB Statement No. 3
   6. Accounts Payable and Other Liabilities
  December 31,2006
    
    
    2005Homebuilding:Accrual for settlement of loss contingency
    
    $
    275.0
    
    
    $
    Accounts payable
    
    
    75.6
    
    
    
    66.5Interest
    
    
    37.8
    
    
    
    32.7Compensation
    
    
    28.1
    
    
    
    42.3Taxes, including income and real estate
    
    
    12.1
    
    
    
    80.5Accrual for unpaid invoices on delivered homes
    
    
    24.6
    
    
    
    24.9Accrued expenses
    
    
    51.5
    
    
    
    33.5Warranty costs
    
    
    8.1
    
    
    
    7.0Deferred revenue
    
    
    50.7
    
    
    
    42.0Total accounts payable and other liabilities
    
    $
    563.5
    
    
    $
    329.4
 F-23




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##### Table of Contents



7. Homebuilding and Financial Services Borrowings
 Homebuilding Borrowings
  December 31,2006
    
    
    2005Senior notes due 2010, at 9% (a)
    
    $
    300.0
    
    
    $
    300.0Senior notes due 2011, at 8 1/4% (a)
    
    
    250.0
    
    
    
    Discount on senior notes
    
    
    (3.5
    )
    
    
    (3.1
    )Senior subordinated notes due 2012, at 10 3/8% (a)
    
    
    185.0
    
    
    
    185.0Senior subordinated notes due 2011, at 7 1/2% (a)
    
    
    125.0
    
    
    
    125.0Senior subordinated notes due 2015, at 7 1/2% (a)
    
    
    200.0
    
    
    
    200.0Premium on senior subordinated notes
    
    
    4.2
    
    
    
    4.7Revolving credit facility (b)
    
    
    
    
    
    
    65.0$
    1,060.7
    
    
    $
    876.6
 
 (a)
    
    Interest on the senior notes due 2010 and senior subordinated notes
due 2012 is payable semi-annually on January 1 and July 1 of each
year. Interest on the senior subordinated notes due 2011 and 2015 is
payable semi-annually on March 15 and September 15 of each year, and
January 15 and July 15 of each year, respectively. Interest on the
senior notes due 2010 is payable semi-annually on April 1 and October
1 of each year. Our outstanding senior notes are guaranteed, on a
joint and several basis, by the Guarantor Subsidiaries, which are all
of our material direct and indirect subsidiaries (Guarantor
Subsidiaries), other than our mortgage and title operations
subsidiaries ( Non-guarantor Subsidiaries). Our outstanding senior
subordinated notes are guaranteed on a senior subordinated basis by
all of the Guarantor Subsidiaries. The indentures governing the senior
notes and senior subordinated notes require us to maintain a minimum
net worth and place certain restrictions on our ability, among other
things, to incur additional debt (other than under our revolving
credit facility), pay or make dividends or other distributions, sell
assets, enter into transactions with affiliates, invest in joint
ventures above specified amounts, and merge or consolidate with other
entities.Our outstanding senior notes and senior subordinated notes have call
features that allow redemption of the notes prior to maturity, upon
payment of a make-whole premium or, in certain cases, a stated
premium as provided in the relevant indenture.(b)
    
    At December 31, 2005, our revolving credit facility permitted us to
borrow up to the lesser of (i) $600.0 million or (ii) our borrowing
base (calculated in accordance with the revolving credit facility
agreement) minus our outstanding senior debt. The revolving credit
facility also has a letter of credit subfacility of $300.0 million. In
addition, we had the right to increase the size of the facility to
provide up to an additional $150.0 million of revolving loans,
provided we give 10 business days notice of our intention to increase
the size of the facility and we meet the following conditions: (i) at
the time of and after giving effect to the increase, we are in pro
forma compliance with our financial covenants; (ii) no default or
event of default has occurred and is continuing or would result from
the increase, and (iii) the conditions precedent to a borrowing are
satisfied as of such date. The revolving credit facility was to expire
on October 26, 2008. Loans outstanding under the facility may be base
rate loans or Eurodollar loans, at our election. Base rate loans
accrued interest at a rate per annum equal to (i) an applicable margin
plus (ii) the higher of (A) Citicorps base rate or (B) 0.5% plus the
Federal Funds Rate. Eurodollar loans accrue interest at a rate per
annum equal to (i) an applicable margin plus (ii) the reserve-adjusted
Eurodollar base rate for the interest period. Applicable margins were
adjusted based on the ratio of our liabilities (net of unrestricted
cash in excess of $10 million) to our adjusted tangible net worth or
our senior debt rating. The revolving credit facility required us to
maintain specified financial ratios regarding leverage, interest
coverage, adjusted tangible net worth and certain operational
measurements. The revolving credit facility also places certain
restrictions on, among other things, our ability to pay or declare
dividends or other special payments, create or permit certain liens,
make investments in joint ventures, enter into transactions with
affiliates and merge or consolidate with other entities. Our
obligations under the revolving credit facility are guaranteed by our
Guarantor Subsidiaries. As of December 31, 2005, we had $65.0 million
in borrowings under the revolving credit facility and had issued
letters of credit totaling $218.9 million. F-24




---



##### Table of Contents



On March 9, 2006, we entered into a new $800.0 million unsecured
revolving credit facility replacing our previous $600.0 million
revolving credit facility. The new revolving credit facility
is substantially similar to our prior revolving credit facility and
permits us to borrow to the lesser of (i) $800.0 million or (ii) our
borrowing base (calculated in accordance with the revolving credit
facility agreement) minus our outstanding senior debt. The new
unsecured revolving credit facility also has a letter credit
subfacility of $400.0 million. Loans outstanding under the new
revolving credit facility may be base rate loans or Eurodollar loans,
at our election. Our obligations under the new revolving credit
facility are guaranteed by our Guarantor Subsidiaries. The
new revolving credit facility requires us to maintain specified
financial ratios regarding leverage, interest coverage, adjusted
tangible net worth and certain operational measurements. The new
revolving credit facility also places certain restrictions on, among
other things, our ability to pay or declare dividends or other special
payments, create or permit certain liens, make investments in joint
ventures, enter into transactions with affiliates and merge or
consolidate with other entities. The new revolving credit facility
expires on March 9, 2010. In addition, we have the right to increase
the size of the facility to provide up to an additional $150.0 million
of revolving loans, provided we satisfy certain conditions.On October 23, 2006, we amended our new $800.0 million revolving
credit facility. This amendment changes our existing unsecured
revolving credit facility to a secured revolving credit facility,
which permits us to borrow up to the lesser of (i) $800.0 million or
(ii) our borrowing base calculated in accordance with the amendment.
The amendment changes certain definitions in the new revolving credit
facility, provides for mortgage requirements on the borrowing base
assets, provides interim borrowing limits until the borrowing base
assets have been securitized, and provides limitations on future
investments in or advances to the Transeastern JV.On December 20, 2006, we amended our $800.0 million revolving credit
facility to extend the timing of delivery relative to mortgage
requirements on borrowing base assets and our financial projections.On January 30, 2007, we amended and restated in its entirety the
Credit Agreement among the Company, the Lenders and the Administrative
Agent dated as of March 9, 2006, as amended on October 23, 2006 and
December 20, 2006 (the Amended Credit Agreement). Among other
things, the Amended Credit Agreement extended the dates by which the
Company and its Subsidiaries are to deliver mortgages on certain
assets of the Company and such assets are included in the Borrowing
Base, as such term is defined in the Amended Credit Agreement. In
addition, certain subsidiaries of the Company which had previously
been guarantors of the Companys obligations under the previous credit
agreement are now co-borrowers under the Amended Credit Agreement with
the Company (and continue to guarantee the obligations of the
Company). The Amended Credit Agreement is otherwise substantially
similar to the previous credit agreement in that it continues to
permit us to borrow up to the lesser of (i) $800.0 million or (ii) our
borrowing base (calculated in accordance with the revolving credit
facility agreement). The facility has a letter of credit subfacility
of $400.0 million. In addition, we continue to have the right to
increase the size of the facility to provide up to an additional
$150.0 million of revolving loans, provided we give 10 business days
notice of our intention to increase the size of the facility, there
are lenders (existing or new) who are willing to commit to such an
increase and we meet the following conditions: (i) at the time of and
after giving effect to the increase, we are in pro forma compliance
with our financial covenants; (ii) no default or event of default has
occurred and is continuing or would result from the increase; and
(iii) the conditions precedent to a borrowing are satisfied as of such
date. The revolving credit facility expires on March 9, 2010, at which
time we will be required to repay all outstanding principal. Loans
outstanding under the facility may be base rate loans or Eurodollar
loans, at our election. Base rate loans accrue interest at a rate per
annum equal to (i) an applicable margin plus (ii) the higher of (A)
Citicorps base rate or (B) 0.5% plus the Federal Funds Rate.
Eurodollar loans accrue interest at a rate per annum equal to (i) an
applicable margin plus (ii) the reserve-adjusted Eurodollar base rate
for the interest period. Applicable margins will be adjusted based on
the ratio of our liabilities (net of our unrestricted cash in excess
of $10 million) to our adjusted tangible net worth or our senior debt
rating. The Amended Credit Agreement continues to require us to
maintain specified financial ratios regarding leverage, interest
coverage, adjusted tangible net worth and certain operational
measurements and continues to contain certain restrictions on, among
other things, our ability to pay or make dividends or other
distributions, create or permit certain liens, make investments in
joint ventures, enter into transactions with affiliates and merge or
consolidate with other entities. Our obligations under the Amended
Credit Agreement continues to be guaranteed by our material domestic
subsidiaries, other than our mortgage and title subsidiaries
(unrestricted subsidiaries).On March 13, 2007, we amended the Amended and Restated Credit Agreement. The amendment to the
Amended and Restated Credit Agreement reduced the interest coverage ratio for the third and fourth
quarters of 2007 from 2.00 to 1 to a new ratio of 1:35 to 1. In addition, we agreed to increase the
applicable margin on Eurodollar rate loans and base rate loans to us by .25%. In connection with
this amendment, we are required to pay a fee of up to $2.0 million in expenses.As of December 31, 2006, we had no borrowings under the new revolving
credit facility, as amended, had F-25




---



##### Table of Contents



issued letters of credit totaling
$294.9 million and had $275.2 million in availability, all of which we
could have borrowed without violating any of our debt covenants. Our
availability under the Amended Credit Agreement would have been $478.8
million on December 31, 2006, had all mortgage requirements been
satisfied. We are currently in the process of satisfying the mortgage
requirements and anticipate substantially completing this process by April 2007. (c)
    
    On April 12, 2006, we issued $250.0 million of the 81/4% Senior Notes
due 2011. The net proceeds of $248.8 million were used to repay
amounts outstanding under our previous revolving credit facility.
These notes are guaranteed, on a joint and several basis, by the
Guarantor Subsidiaries. The senior notes rank pari passuin right of
payment with all of our existing and future unsecured senior debt and
senior in right of payment to our senior subordinated notes and any
future subordinated debt. The indenture governing the senior notes
requires us to maintain a minimum consolidated net worth and places
certain restrictions on our ability, among other things, to incur
additional debt, pay or declare dividends or other restricted
payments, sell assets, enter into transactions with affiliates, and
merge or consolidate with other entities. Interest on these notes is
payable semi-annually.
  Financial Services Borrowings
     F-26




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##### Table of Contents



Borrowing Capacity
  8. Commitments and Contingencies
 Liquidity
 Warranty
   Year Ended December 31,2006
    
    
    2005Accrued warranty costs at January 1
    
    $
    7.0
    
    
    $
    6.5Liability recorded for warranties issued during the period
    
    
    7.6
    
    
    
    12.0Warranty work performed
    
    
    (9.2
    )
    
    
    (9.1
    )Liability recorded for pre-existing warranties
    
    
    2.7
    
    
    
    (2.4
    )Accrued warranty costs at December 31
    
    $
    8.1
    
    
    $
    7.0
 Letters of Credit
  Mortgage Insurance
  One-Time Termination Benefits
  F-27




---



##### Table of Contents



Liquidity
     Operating Leases
  2007
    
    $
    12.12008
    
    
    8.32009
    
    
    6.12010
    
    
    4.42011
    
    
    2.7Thereafter
    
    
    7.7$
    41.3
 9. Related Party Transactions
 F-28




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##### Table of Contents



10. Income Taxes
  Year Ended December 31,2006
    
    
    2005
    
    
    2004Current:Federal
    
    $
    106.3
    
    
    $
    120.0
    
    
    $
    65.5State
    
    
    6.3
    
    
    
    4.6
    
    
    
    5.6112.6
    
    
    
    124.6
    
    
    
    71.1Deferred:Federal
    
    
    (150.6
    )
    
    
    2.0
    
    
    
    (0.6
    )State
    
    
    (5.0
    )
    
    
    
    
    
    
    (0.1
    )(155.6
    )
    
    
    2.0
    
    
    
    (0.7
    )$
    (43.0
    )
    
    $
    126.6
    
    
    $
    70.4
 F-29




---



##### Table of Contents



Year Ended December 31,2006
    
    
    2005
    
    
    2004Computed income tax expense (benefit) at statutory rate
    
    $
    (85.5
    )
    
    $
    120.1
    
    
    $
    66.5State income taxes
    
    
    1.2
    
    
    
    5.8
    
    
    
    2.7Change in valuation allowance
    
    
    42.1
    
    
    
    
    
    
    
    Other, net
    
    
    (0.8
    )
    
    
    0.7
    
    
    
    1.2Income taxes
    
    $
    (43.0
    )
    
    $
    126.6
    
    
    $
    70.4
  December 31,2006
    
    
    2005Deferred tax assets:Warranty, legal and insurance reserves
    
    $
    6.7
    
    
    $
    5.7Inventory
    
    
    48.6
    
    
    
    9.0Accrued compensation
    
    
    7.9
    
    
    
    6.5Investments in unconsolidated entities
    
    
    150.6
    
    
    
    1.7State net operating loss carryforwards
    
    
    2.7
    
    
    
    0.6Other
    
    
    3.6
    
    
    
    2.8Total deferred tax assets
    
    
    220.1
    
    
    
    26.3Deferred tax liabilities:Property and equipment
    
    
    (1.8
    )
    
    
    (1.1
    )Amortizable intangibles
    
    
    (13.1
    )
    
    
    (12.1
    )Prepaid expenses
    
    
    (0.1
    )
    
    
    (2.4
    )Prepaid commissions and differences in reporting
selling and marketing
    
    
    (2.4
    )
    
    
    (4.5
    )Other
    
    
    
    
    
    
    (1.2
    )Total deferred tax liabilities
    
    
    (17.4
    )
    
    
    (21.3
    )Valuation allowance
    
    
    (42.1
    )
    
    
    Net deferred tax asset
    
    $
    160.6
    
    
    $
    5.0
   11. Stockholders Equity
   F-30




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##### Table of Contents



12. Stock Option Plan
    2006
    
    
    2005
    
    
    2004Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    WeightedExercise
    
    
    
    
    
    
    Exercise
    
    
    
    
    
    
    AverageOptions
    
    
    Price
    
    
    Options
    
    
    Price
    
    
    Options
    
    
    Exercise PriceOptions outstanding at
beginning of year
    
    
    6,606,611
    
    
    $
    11.06
    
    
    
    6,827,755
    
    
    $
    11.12
    
    
    
    6,420,880
    
    
    $
    10.44Granted
    
    
    1,339,708
    
    
    $
    23.58
    
    
    
    16,374
    
    
    $
    24.19
    
    
    
    450,000
    
    
    $
    21.60Exercised
    
    
    (23,750
    )
    
    $
    10.84
    
    
    
    (115,625
    )
    
    $
    10.43
    
    
    
    (15,000
    )
    
    $
    10.08Forfeited
    
    
    (209,995
    )
    
    $
    18.37
    
    
    
    (121,893
    )
    
    $
    16.47
    
    
    
    (28,125
    )
    
    $
    17.76Options outstanding at end
of year
    
    
    7,712,574
    
    
    $
    13.04
    
    
    
    6,606,611
    
    
    $
    11.06
    
    
    
    6,827,755
    
    
    $
    11.12Options exercisable at end
of year
    
    
    4,964,676
    
    
    $
    10.83
    
    
    
    4,881,757
    
    
    $
    10.76
    
    
    
    3,628,558
    
    
    $
    10.10Options available for
grant at end of year
    
    
    327,561
    
    
    
    
    
    
    
    719,061
    
    
    
    
    
    
    
    657,245Weighted average fair
market value per share of
options granted during
the year under SFAS No.
123(R)
    
    $
    7.90
    
    
    
    
    
    
    $
    7.33
    
    
    
    
    
    
    $
    7.68
 F-31




---



##### Table of Contents



Options Outstanding
    
    Options ExercisableWeightedAverage
    
    Weighted
    
    
    
    
    
    WeightedRemaining
    
    Average
    
    
    
    
    
    AverageContractual
    
    Exercise
    
    
    
    
    
    ExerciseRange of Exercise Price
    
    Options
    
    Life (years)
    
    Price
    
    Options
    
    Price$  8.33-$10.08
    
    
    3,520,651
    
    
    
    6.00
    
    
    $
    9.47
    
    
    
    2,387,134
    
    
    $
    9.61$10.61-$12.20
    
    
    2,593,967
    
    
    
    6.02
    
    
    $
    11.62
    
    
    
    2,453,717
    
    
    $
    11.60$17.25-$19.35
    
    
    95,625
    
    
    
    7.17
    
    
    $
    18.13
    
    
    
    95,625
    
    
    $
    18.13$20.35-$21.29
    
    
    64,518
    
    
    
    7.48
    
    
    $
    20.75
    
    
    
    11,826
    
    
    $
    20.35$22.96-$25.25
    
    
    1,437,813
    
    
    
    3.38
    
    
    $
    23.66
    
    
    
    16,374
    
    
    $
    24.19
   13. Operating and Reporting Segments
   Florida  Mid-Atlantic:  Texas:  West:
   F-32




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##### Table of Contents



Year Ended December 31,2006
    
    
    2005
    
    
    2004Revenues:Homebuilding:Florida
    
    $
    1,018.0
    
    
    $
    859.2
    
    
    $
    696.0Mid-Atlantic
    
    
    306.0
    
    
    
    290.9
    
    
    
    242.6Texas
    
    
    735.0
    
    
    
    516.4
    
    
    
    472.2West
    
    
    515.0
    
    
    
    795.0
    
    
    
    690.0Total Homebuilding
    
    
    2,574.0
    
    
    
    2,461.5
    
    
    
    2,100.8Financial Services
    
    
    63.3
    
    
    
    47.5
    
    
    
    34.5Total revenues
    
    $
    2,637.3
    
    
    $
    2,509.0
    
    
    $
    2,135.3(Income) loss from unconsolidated joint ventures:Florida
    
    $
    143.1
    
    
    $
    7.2
    
    
    $
    Mid-Atlantic
    
    
    (7.4
    )
    
    
    (5.8
    )
    
    
    (2.0
    )Texas
    
    
    (1.2
    )
    
    
    (0.4
    )
    
    
    West
    
    
    (86.4
    )
    
    
    (46.7
    )
    
    
    (1.2
    )Total (income) loss from unconsolidated joint ventures
    
    $
    48.1
    
    
    $
    (45.7
    )
    
    $
    (3.2
    )Results of Operations:Homebuilding:Florida
    
    $
    11.8
    
    
    $
    138.1
    
    
    $
    109.0Mid-Atlantic
    
    
    (20.9
    )
    
    
    38.1
    
    
    
    36.5Texas
    
    
    58.8
    
    
    
    33.9
    
    
    
    18.9West
    
    
    26.4
    
    
    
    186.4
    
    
    
    60.6Financial Services
    
    
    21.5
    
    
    
    8.5
    
    
    
    8.3Corporate and unallocated
    
    
    (341.8
    )
    
    
    (60.1
    )
    
    
    (43.3
    )Income (loss) before provision (benefit) for income taxes
    
    $
    (244.2
    )
    
    $
    344.9
    
    
    $
    190.0
 December 31,
    
    
    December 31,2006
    
    
    2005Assets:Homebuilding:Florida
    
    $
    892.9
    
    
    $
    858.7Mid-Atlantic
    
    
    230.4
    
    
    
    252.4Texas
    
    
    335.4
    
    
    
    325.9West
    
    
    721.4
    
    
    
    659.7Financial Services
    
    
    65.5
    
    
    
    68.5Corporate and unallocated
    
    
    596.6
    
    
    
    257.5Total assets
    
    $
    2,842.2
    
    
    $
    2,422.7Investments in Unconsolidated Joint Ventures:Florida
    
    $
    29.4
    
    
    $
    131.5Mid-Atlantic
    
    
    5.3
    
    
    
    16.4Texas
    
    
    6.8
    
    
    
    13.5West
    
    
    87.5
    
    
    
    93.1Total Investments in Unconsolidated Joint Ventures
    
    $
    129.0
    
    
    $
    254.5
 14. Employee Benefit Plans
  F-33




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##### Table of Contents



15. Quarterly Results (Unaudited)
  First
    
    Second
    
    Third
    
    Fourth2006:Total revenue
    
    $
    629.5
    
    
    $
    677.0
    
    
    $
    627.5
    
    
    $
    703.3Homebuilding gross margin
    
    $
    150.4
    
    
    $
    164.6
    
    
    $
    84.6
    
    
    $
    35.6Net income (loss)
    
    $
    55.0
    
    
    $
    67.6
    
    
    $
    (80.0
    )
    
    $
    (243.8
    )Basic earnings (loss) per share
    
    $
    0.92
    
    
    $
    1.13
    
    
    $
    (1.34
    )
    
    $
    (4.09
    )Diluted earnings (loss) per share
    
    $
    0.89
    
    
    $
    1.10
    
    
    $
    (1.34
    )
    
    $
    (4.09
    )2005:Total revenue
    
    $
    543.6
    
    
    $
    627.2
    
    
    $
    676.0
    
    
    $
    662.2Homebuilding gross margin
    
    $
    115.8
    
    
    $
    137.7
    
    
    $
    185.2
    
    
    $
    166.2Net income
    
    $
    26.4
    
    
    $
    45.7
    
    
    $
    70.3
    
    
    $
    75.9Basic earnings per share
    
    $
    0.47
    
    
    $
    0.82
    
    
    $
    1.24
    
    
    $
    1.27Diluted earnings per share
    
    $
    0.45
    
    
    $
    0.79
    
    
    $
    1.18
    
    
    $
    1.23
   
    
    $275.0 million provision for settlement of
loss contingency in connection with our investment in the Transeastern JV;
    
    $97.8 million in impairment and deposit write-offs and abandonment charges;
    
    $42.1 million valuation allowance for deferred tax assets that we do
not believe are more likely than not that we will realize
the benefit.
  F-34




---



##### Table of Contents



16. Summarized Financial Information
  
 TechnicalOlympic
    
    
    Guarantor
    
    
    Non-guarantor
    
    
    IntercompanyUSA, Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Total(Dollars in millions)ASSETSHOMEBUILDING:Cash and cash equivalents
    
    $
    53.6
    
    
    $
    (0.4
    )
    
    $
    
    
    
    $
    
    
    
    $
    53.2Inventory
    
    
    
    
    
    
    2,196.2
    
    
    
    
    
    
    
    
    
    
    
    2,196.2Property and equipment, net
    
    
    6.5
    
    
    
    23.5
    
    
    
    
    
    
    
    
    
    
    
    30.0Investments in unconsolidated joint ventures
    
    
    
    
    
    
    129.0
    
    
    
    
    
    
    
    
    
    
    
    129.0Receivables from unconsolidated joint ventures
    
    
    
    
    
    
    27.2
    
    
    
    
    
    
    
    
    
    
    
    27.2Investments in/ advances to consolidated
subsidiaries
    
    
    1,933.4
    
    
    
    (188.9
    )
    
    
    8.2
    
    
    
    (1,752.7
    )
    
    
    Other assets
    
    
    190.1
    
    
    
    47.0
    
    
    
    
    
    
    
    
    
    
    
    237.1Goodwill
    
    
    
    
    
    
    104.0
    
    
    
    
    
    
    
    
    
    
    
    104.02,183.6
    
    
    
    2,337.6
    
    
    
    8.2
    
    
    
    (1,752.7
    )
    
    
    2,776.7FINANCIAL SERVICES:Cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    11.0
    
    
    
    
    
    
    
    11.0Mortgage loans held for sale
    
    
    
    
    
    
    
    
    
    
    41.9
    
    
    
    
    
    
    
    41.9Other assets
    
    
    
    
    
    
    
    
    
    
    12.6
    
    
    
    
    
    
    
    12.6
    
    
    
    
    
    
    
    65.5
    
    
    
    
    
    
    
    65.5Total assets
    
    $
    2,183.6
    
    
    $
    2,337.6
    
    
    $
    73.7
    
    
    $
    (1,752.7
    )
    
    $
    2,842.2LIABILITIES AND STOCKHOLDERS EQUITYHOMEBUILDING:Accounts payable and other liabilities
    
    $
    348.0
    
    
    $
    215.5
    
    
    $
    
    
    
    $
    
    
    
    $
    563.5Customer deposits
    
    
    
    
    
    
    63.2
    
    
    
    
    
    
    
    
    
    
    
    63.2Obligations for inventory not owned
    
    
    
    
    
    
    338.5
    
    
    
    
    
    
    
    
    
    
    
    338.5Notes payable
    
    
    1,060.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,060.7Bank borrowings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,408.7
    
    
    
    617.2
    
    
    
    
    
    
    
    
    
    
    
    2,025.9FINANCIAL SERVICES:Accounts payable and other liabilities
    
    
    
    
    
    
    
    
    
    
    6.0
    
    
    
    
    
    
    
    6.0Bank borrowings
    
    
    
    
    
    
    
    
    
    
    35.4
    
    
    
    
    
    
    
    35.4
    
    
    
    
    
    
    
    41.4
    
    
    
    
    
    
    
    41.4Total liabilities
    
    
    1,408.7
    
    
    
    617.2
    
    
    
    41.4
    
    
    
    
    
    
    
    2,067.3Total stockholders equity
    
    
    774.9
    
    
    
    1,720.4
    
    
    
    32.3
    
    
    
    (1,752.7
    )
    
    
    774.9Total liabilities and stockholders equity
    
    $
    2,183.6
    
    
    $
    2,337.6
    
    
    $
    73.7
    
    
    $
    (1,752.7
    )
    
    $
    2,842.2
 F-35




---



##### Table of Contents



TechnicalOlympic
    
    
    Guarantor
    
    
    Non-guarantor
    
    
    IntercompanyUSA, Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Total(Dollars in millions)ASSETSHOMEBUILDING:Cash and cash equivalents
    
    $
    21.9
    
    
    $
    7.4
    
    
    $
    
    
    
    $
    
    
    
    $
    29.3Inventory
    
    
    
    
    
    
    1,740.8
    
    
    
    
    
    
    
    
    
    
    
    1,740.8Property and equipment, net
    
    
    7.3
    
    
    
    19.8
    
    
    
    
    
    
    
    
    
    
    
    27.1Investments in unconsolidated joint ventures
    
    
    
    
    
    
    254.5
    
    
    
    
    
    
    
    
    
    
    
    254.5Receivables from unconsolidated joint ventures
    
    
    
    
    
    
    60.5
    
    
    
    
    
    
    
    
    
    
    
    60.5Investments in/ advances to consolidated
subsidiaries
    
    
    1,946.8
    
    
    
    (427.7
    )
    
    
    (3.7
    )
    
    
    (1,515.4
    )
    
    
    Other assets
    
    
    26.3
    
    
    
    106.9
    
    
    
    
    
    
    
    
    
    
    
    133.2Goodwill
    
    
    
    
    
    
    108.8
    
    
    
    
    
    
    
    
    
    
    
    108.82,002.3
    
    
    
    1,871.0
    
    
    
    (3.7
    )
    
    
    (1,515.4
    )
    
    
    2,354.2FINANCIAL SERVICES:Cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    11.8
    
    
    
    
    
    
    
    11.8Mortgage loans held for sale
    
    
    
    
    
    
    
    
    
    
    43.9
    
    
    
    
    
    
    
    43.9Other assets
    
    
    
    
    
    
    
    
    
    
    12.8
    
    
    
    
    
    
    
    12.8
    
    
    
    
    
    
    
    68.5
    
    
    
    
    
    
    
    68.5Total assets
    
    $
    2,002.3
    
    
    $
    1,871.0
    
    
    $
    64.8
    
    
    $
    (1,515.4
    )
    
    $
    2,422.7LIABILITIES AND STOCKHOLDERS EQUITYHOMEBUILDING:Accounts payable and other liabilities
    
    $
    154.4
    
    
    $
    175.0
    
    
    $
    
    
    
    $
    
    
    
    $
    329.4Customer deposits
    
    
    
    
    
    
    79.3
    
    
    
    
    
    
    
    
    
    
    
    79.3Obligations for inventory not owned
    
    
    
    
    
    
    124.6
    
    
    
    
    
    
    
    
    
    
    
    124.6Notes payable
    
    
    811.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    811.6Bank borrowings
    
    
    65.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    65.01,031.0
    
    
    
    378.9
    
    
    
    
    
    
    
    
    
    
    
    1,409.9FINANCIAL SERVICES:Accounts payable and other liabilities
    
    
    
    
    
    
    
    
    
    
    6.4
    
    
    
    
    
    
    
    6.4Bank borrowings
    
    
    
    
    
    
    
    
    
    
    35.1
    
    
    
    
    
    
    
    35.1
    
    
    
    
    
    
    
    41.5
    
    
    
    
    
    
    
    41.5Total liabilities
    
    
    1,031.0
    
    
    
    378.9
    
    
    
    41.5
    
    
    
    
    
    
    
    1,451.4Total stockholders equity
    
    
    971.3
    
    
    
    1,492.1
    
    
    
    23.3
    
    
    
    (1,515.4
    )
    
    
    971.3Total liabilities and stockholders equity
    
    $
    2,002.3
    
    
    $
    1,871.0
    
    
    $
    64.8
    
    
    $
    (1,515.4
    )
    
    $
    2,422.7
 F-36




---



##### Table of Contents



Technical
    
    
    
    
    
    
    Non-Olympic
    
    
    Guarantor
    
    
    guarantor
    
    
    IntercompanyUSA, Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Total(Dollars in millions)HOMEBUILDING:Revenues
    
    $
    
    
    
    $
    2,574.0
    
    
    $
    
    
    
    $
    
    
    
    $
    2,574.0Cost of sales
    
    
    
    
    
    
    2,138.8
    
    
    
    
    
    
    
    
    
    
    
    2,138.8Gross profit
    
    
    
    
    
    
    435.2
    
    
    
    
    
    
    
    
    
    
    
    435.2Selling, general and administrative expenses
    
    
    71.2
    
    
    
    309.8
    
    
    
    
    
    
    
    (4.8
    )
    
    
    376.2(Income)
loss from unconsolidated joint ventures, net
    
    
    
    
    
    
    48.1
    
    
    
    
    
    
    
    
    
    
    
    48.1Provision for settlement of loss contingency
    
    
    275.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    275.0Other (income) expenses, net
    
    
    (79.0
    )
    
    
    28.5
    
    
    
    
    
    
    
    46.4
    
    
    
    (4.1
    )Goodwill impairment
    
    
    
    
    
    
    5.7
    
    
    
    
    
    
    
    
    
    
    
    5.7Homebuilding pretax income (loss)
    
    
    (267.2
    )
    
    
    43.1
    
    
    
    
    
    
    
    (41.6
    )
    
    
    (265.7
    )FINANCIAL SERVICES:Revenues
    
    
    
    
    
    
    
    
    
    
    68.1
    
    
    
    (4.8
    )
    
    
    63.3Expenses
    
    
    
    
    
    
    
    
    
    
    50.9
    
    
    
    (9.1
    )
    
    
    41.8Financial Services pretax income
    
    
    
    
    
    
    
    
    
    
    17.2
    
    
    
    4.3
    
    
    
    21.5Income (loss) before provision (benefit)
for income taxes
    
    
    (267.2
    )
    
    
    43.1
    
    
    
    17.2
    
    
    
    (37.3
    )
    
    
    (244.2
    )Provision (benefit) for income taxes
    
    
    (66.0
    )
    
    
    14.9
    
    
    
    8.1
    
    
    
    
    
    
    
    (43.0
    )Net income (loss)
    
    $
    (201.2
    )
    
    $
    28.2
    
    
    $
    9.1
    
    
    $
    (37.3
    )
    
    $
    (201.2
    )
 
 Technical
    
    
    
    
    
    
    Non-Olympic
    
    
    Guarantor
    
    
    guarantor
    
    
    IntercompanyUSA, Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Total(Dollars in millions)HOMEBUILDING:Revenues
    
    $
    
    
    
    $
    2,461.5
    
    
    $
    
    
    
    $
    
    
    
    $
    2,461.5Cost of sales
    
    
    
    
    
    
    1,856.6
    
    
    
    
    
    
    
    
    
    
    
    1,856.6Gross profit
    
    
    
    
    
    
    604.9
    
    
    
    
    
    
    
    
    
    
    
    604.9Selling, general and administrative expenses
    
    
    75.3
    
    
    
    257.4
    
    
    
    
    
    
    
    (9.8
    )
    
    
    322.9(Income) from unconsolidated joint ventures, net
    
    
    
    
    
    
    (45.7
    )
    
    
    
    
    
    
    
    
    
    
    (45.7
    )Other (income) expense, net
    
    
    (281.8
    )
    
    
    30.2
    
    
    
    
    
    
    
    242.9
    
    
    
    (8.7
    )Homebuilding pretax income
    
    
    206.5
    
    
    
    363.0
    
    
    
    
    
    
    
    (233.1
    )
    
    
    336.4FINANCIAL SERVICES:Revenues
    
    
    
    
    
    
    
    
    
    
    57.3
    
    
    
    (9.8
    )
    
    
    47.5Expenses
    
    
    
    
    
    
    
    
    
    
    44.8
    
    
    
    (5.8
    )
    
    
    39.0Financial Services pretax income
    
    
    
    
    
    
    
    
    
    
    12.5
    
    
    
    (4.0
    )
    
    
    8.5Income before provision (benefit) for
income taxes
    
    
    206.5
    
    
    
    363.0
    
    
    
    12.5
    
    
    
    (237.1
    )
    
    
    344.9Provision (benefit) for income taxes
    
    
    (11.8
    )
    
    
    133.5
    
    
    
    4.9
    
    
    
    
    
    
    
    126.6Net income
    
    $
    218.3
    
    
    $
    229.5
    
    
    $
    7.6
    
    
    $
    (237.1
    )
    
    $
    218.3
 F-37




---



##### Table of Contents



Technical
    
    
    
    
    
    
    Non-Olympic
    
    
    Guarantor
    
    
    guarantor
    
    
    IntercompanyUSA, Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Total(Dollars in millions)HOMEBUILDING:Revenues
    
    $
    
    
    
    $
    2,100.8
    
    
    $
    
    
    
    $
    
    
    
    $
    2,100.8Cost of sales
    
    
    (0.1
    )
    
    
    1,672.5
    
    
    
    
    
    
    
    
    
    
    
    1,672.4Gross profit
    
    
    0.1
    
    
    
    428.3
    
    
    
    
    
    
    
    
    
    
    
    428.4Selling, general and administrative expenses
    
    
    50.2
    
    
    
    208.8
    
    
    
    
    
    
    
    (7.3
    )
    
    
    251.7(Income) from unconsolidated joint ventures, net
    
    
    
    
    
    
    (3.2
    )
    
    
    
    
    
    
    
    
    
    
    (3.2
    )Other (income) expense, net
    
    
    (153.7
    )
    
    
    2.1
    
    
    
    
    
    
    
    149.8
    
    
    
    (1.8
    )Homebuilding pretax income
    
    
    103.6
    
    
    
    220.6
    
    
    
    
    
    
    
    (142.5
    )
    
    
    181.7FINANCIAL SERVICES:Revenues
    
    
    
    
    
    
    
    
    
    
    41.8
    
    
    
    (7.3
    )
    
    
    34.5Expenses
    
    
    
    
    
    
    
    
    
    
    31.6
    
    
    
    (5.4
    )
    
    
    26.2Financial Services pretax income
    
    
    
    
    
    
    
    
    
    
    10.2
    
    
    
    (1.9
    )
    
    
    8.3Income before provision (benefit) for
income taxes
    
    
    103.6
    
    
    
    220.6
    
    
    
    10.2
    
    
    
    (144.4
    )
    
    
    190.0Provision (benefit) for income taxes
    
    
    (16.0
    )
    
    
    81.7
    
    
    
    4.7
    
    
    
    
    
    
    
    70.4Net income
    
    $
    119.6
    
    
    $
    138.9
    
    
    $
    5.5
    
    
    $
    (144.4
    )
    
    $
    119.6
 F-38




---



##### Table of Contents



Technical
    
    
    
    
    
    
    Non-Olympic
    
    
    Guarantor
    
    
    guarantor
    
    
    IntercompanyUSA, Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Total(Dollars in millions)Cash flows from operating activities:Net income (loss)
    
    $
    (201.2
    )
    
    $
    28.3
    
    
    $
    9.0
    
    
    $
    (37.3
    )
    
    $
    (201.2
    )Adjustments to reconcile net income (loss) to net cash
(used in) provided by operating activities:Depreciation and amortization
    
    
    3.4
    
    
    
    9.6
    
    
    
    1.5
    
    
    
    
    
    
    
    14.5Non-cash compensation
    
    
    8.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8.7Settlement of Transeastern litigation
    
    
    275.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    275.0Loss on impairment and abandonment costs
    
    
    
    
    
    
    155.5
    
    
    
    
    
    
    
    
    
    
    
    155.5Impairment of investments in receivables from unconsolidated
joint ventures
    
    
    
    
    
    
    152.8
    
    
    
    
    
    
    
    
    
    
    
    152.8Impairment of goodwill
    
    
    
    
    
    
    5.7
    
    
    
    
    
    
    
    
    
    
    
    5.7Deferred income taxes
    
    
    (155.6
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (155.6
    )Equity in earnings from unconsolidated joint
ventures
    
    
    
    
    
    
    (59.8
    )
    
    
    
    
    
    
    
    
    
    
    (59.8
    )Distributions of earnings from unconsolidated
joint ventures
    
    
    
    
    
    
    73.9
    
    
    
    
    
    
    
    
    
    
    
    73.9Changes in operating assets and liabilities:Restricted cash
    
    
    (1.3
    )
    
    
    0.6
    
    
    
    (1.1
    )
    
    
    
    
    
    
    (1.8
    )Inventory
    
    
    0.4
    
    
    
    (390.6
    )
    
    
    
    
    
    
    
    
    
    
    (390.2
    )Receivables from unconsolidated joint
ventures
    
    
    
    
    
    
    (10.2
    )
    
    
    
    
    
    
    
    
    
    
    (10.2
    )Other assets
    
    
    (2.7
    )
    
    
    54.4
    
    
    
    0.5
    
    
    
    
    
    
    
    52.2Mortgage loans held for sale
    
    
    
    
    
    
    
    
    
    
    2.0
    
    
    
    
    
    
    
    2.0Accounts payable and other liabilities
    
    
    (82.1
    )
    
    
    31.5
    
    
    
    (0.3
    )
    
    
    
    
    
    
    (50.9
    )Customer deposits
    
    
    
    
    
    
    (16.1
    )
    
    
    
    
    
    
    
    
    
    
    (16.1
    )Net cash used in operating activities
    
    
    (155.4
    )
    
    
    35.6
    
    
    
    11.6
    
    
    
    (37.3
    )
    
    
    (145.5
    )Cash flows from investing activities:Earn-out consideration paid for acquisitions
    
    
    
    
    
    
    (0.9
    )
    
    
    
    
    
    
    
    
    
    
    (0.9
    )Net additions to property and equipment
    
    
    (2.6
    )
    
    
    (12.7
    )
    
    
    (1.8
    )
    
    
    
    
    
    
    (17.1
    )Loans to unconsolidated joint ventures
    
    
    
    
    
    
    (11.3
    )
    
    
    
    
    
    
    
    
    
    
    (11.3
    )Investments in unconsolidated joint ventures
    
    
    
    
    
    
    (32.1
    )
    
    
    
    
    
    
    
    
    
    
    (32.1
    )Capital distributions from unconsolidated joint
ventures
    
    
    
    
    
    
    52.9
    
    
    
    
    
    
    
    
    
    
    
    52.9Net cash used in investing activities
    
    
    (2.6
    )
    
    
    (4.1
    )
    
    
    (1.8
    )
    
    
    
    
    
    
    (8.5
    )Cash flows from financing activities:Net borrowings from revolving credit facility
    
    
    (65.0
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (65.0
    )Net proceeds from notes offering
    
    
    248.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    248.8Net proceeds from Financial Services bank
borrowings
    
    
    
    
    
    
    
    
    
    
    0.3
    
    
    
    
    
    
    
    0.3Payments for deferred financing costs
    
    
    (5.5
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5.5
    )Excess income tax benefit from exercise of stock
options
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.1Proceeds from stock option exercises
    
    
    0.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.2Dividends paid
    
    
    (3.6
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3.6
    )Increase (decrease) in intercompany transactions
    
    
    13.4
    
    
    
    (38.7
    )
    
    
    (12.0
    )
    
    
    37.3
    
    
    
    Net cash (used in) provided by financing activities
    
    
    188.4
    
    
    
    (38.7
    )
    
    
    (11.7
    )
    
    
    37.3
    
    
    
    175.3Increase (decrease) in cash and cash equivalents
    
    
    30.4
    
    
    
    (7.2
    )
    
    
    (1.9
    )
    
    
    
    
    
    
    21.3Cash and cash equivalents at beginning of year
    
    
    20.2
    
    
    
    6.0
    
    
    
    8.7
    
    
    
    
    
    
    
    34.9Cash and cash equivalents at end of year
    
    $
    50.6
    
    
    $
    (1.2
    )
    
    $
    6.8
    
    
    $
    
    
    
    $
    56.2
 F-39




---



##### Table of Contents



Technical
    
    
    
    
    
    
    Non-Olympic
    
    
    Guarantor
    
    
    guarantor
    
    
    IntercompanyUSA, Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Total(Dollars in millions)Cash flows from operating activities:Net income
    
    $
    218.3
    
    
    $
    229.5
    
    
    $
    7.6
    
    
    $
    (237.1
    )
    
    $
    218.3Adjustments to reconcile net income to net cash
(used in) provided by operating activities:Depreciation and amortization
    
    
    3.9
    
    
    
    8.2
    
    
    
    1.2
    
    
    
    
    
    
    
    13.3Non-cash compensation expense
    
    
    3.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.7Loss on impairment of inventory and
abandonment costs
    
    
    
    
    
    
    6.2
    
    
    
    
    
    
    
    
    
    
    
    6.2Deferred income taxes
    
    
    
    
    
    
    2.0
    
    
    
    
    
    
    
    
    
    
    
    2.0Equity in earnings from unconsolidated joint
ventures
    
    
    
    
    
    
    (18.5
    )
    
    
    
    
    
    
    
    
    
    
    (18.5
    )Distributions of earnings from unconsolidated
joint ventures
    
    
    
    
    
    
    0.4
    
    
    
    
    
    
    
    
    
    
    
    0.4Changes in operating assets and liabilities:Restricted cash
    
    
    (1.7
    )
    
    
    6.6
    
    
    
    (0.9
    )
    
    
    
    
    
    
    4.0Inventory
    
    
    0.2
    
    
    
    (470.3
    )
    
    
    
    
    
    
    
    
    
    
    (470.1
    )Receivables from unconsolidated joint
ventures
    
    
    
    
    
    
    (37.1
    )
    
    
    
    
    
    
    
    
    
    
    (37.1
    )Other assets
    
    
    (3.4
    )
    
    
    (61.7
    )
    
    
    (2.4
    )
    
    
    
    
    
    
    (67.5
    )Mortgage loans held for sale
    
    
    
    
    
    
    
    
    
    
    31.9
    
    
    
    
    
    
    
    31.9Accounts payable and other liabilities
    
    
    88.7
    
    
    
    39.5
    
    
    
    3.2
    
    
    
    
    
    
    
    131.4Customer deposits
    
    
    
    
    
    
    10.1
    
    
    
    
    
    
    
    
    
    
    
    10.1Net cash provided by (used in) operating
activities
    
    
    309.7
    
    
    
    (285.1
    )
    
    
    40.6
    
    
    
    (237.1
    )
    
    
    (171.9
    )Cash flows from investing activities:Net additions to property and equipment
    
    
    (4.4
    )
    
    
    (7.8
    )
    
    
    (1.9
    )
    
    
    
    
    
    
    (14.1
    )Loans to unconsolidated joint ventures
    
    
    
    
    
    
    (20.0
    )
    
    
    
    
    
    
    
    
    
    
    (20.0
    )Investments in unconsolidated joint ventures
    
    
    
    
    
    
    (176.1
    )
    
    
    
    
    
    
    
    
    
    
    (176.1
    )Capital distributions from unconsolidated joint
ventures
    
    
    
    
    
    
    9.9
    
    
    
    
    
    
    
    
    
    
    
    9.9Net cash used in investing activities
    
    
    (4.4
    )
    
    
    (194.0
    )
    
    
    (1.9
    )
    
    
    
    
    
    
    (200.3
    )Cash flows from financing activities:Net borrowings from revolving credit facility
    
    
    65.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    65.0Net repayments on Financial Services bank
borrowings
    
    
    
    
    
    
    
    
    
    
    (13.9
    )
    
    
    
    
    
    
    (13.9
    )Payments for deferred financing costs
    
    
    (0.3
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.3
    )Net proceeds from sale of common stock
    
    
    89.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    89.2Proceeds from stock option exercises
    
    
    1.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.8Dividends paid
    
    
    (3.2
    )
    
    
    
    
    
    
    (8.0
    )
    
    
    8.0
    
    
    
    (3.2
    )Increase (decrease) in intercompany transactions
    
    
    (596.9
    )
    
    
    426.8
    
    
    
    (59.0
    )
    
    
    229.1
    
    
    
    Net cash (used in) provided by financing
activities
    
    
    (444.4
    )
    
    
    426.8
    
    
    
    (80.9
    )
    
    
    237.1
    
    
    
    138.6Decrease in cash and cash equivalents
    
    
    (139.1
    )
    
    
    (52.3
    )
    
    
    (42.2
    )
    
    
    
    
    
    
    (233.6
    )Cash and cash equivalents at beginning of year
    
    
    159.3
    
    
    
    58.3
    
    
    
    50.9
    
    
    
    
    
    
    
    268.5Cash and cash equivalents at end of year
    
    $
    20.2
    
    
    $
    6.0
    
    
    $
    8.7
    
    
    $
    
    
    
    $
    34.9
 F-40




---



##### Table of Contents



Technical
    
    
    
    
    
    
    Non-Olympic
    
    
    Guarantor
    
    
    guarantor
    
    
    IntercompanyUSA, Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Total(Dollars in millions)Cash flows from operating activities:Net income
    
    $
    119.6
    
    
    $
    138.9
    
    
    $
    5.5
    
    
    $
    (144.4
    )
    
    $
    119.6Adjustments to reconcile net income to net cash
(used in) provided by operating activities:Depreciation and amortization
    
    
    2.9
    
    
    
    9.7
    
    
    
    
    
    
    
    
    
    
    
    12.6Non-cash compensation expense
    
    
    8.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8.8Loss on impairment of inventory
    
    
    
    
    
    
    4.8
    
    
    
    
    
    
    
    
    
    
    
    4.8Deferred income taxes
    
    
    (0.7
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.7
    )Undistributed equity in earnings from
unconsolidated entities
    
    
    
    
    
    
    (0.5
    )
    
    
    
    
    
    
    
    
    
    
    (0.5
    )Changes in operating assets and liabilities:Restricted cash
    
    
    1.5
    
    
    
    11.7
    
    
    
    2.4
    
    
    
    
    
    
    
    15.6Inventory
    
    
    1.4
    
    
    
    (218.0
    )
    
    
    
    
    
    
    
    
    
    
    (216.6
    )Other assets
    
    
    52.5
    
    
    
    (16.8
    )
    
    
    (2.4
    )
    
    
    (52.6
    )
    
    
    (19.3
    )Receivables from unconsolidated joint
ventures
    
    
    
    
    
    
    (3.4
    )
    
    
    
    
    
    
    
    
    
    
    (3.4
    )Accounts payable and other liabilities
    
    
    20.9
    
    
    
    (39.2
    )
    
    
    (3.2
    )
    
    
    52.6
    
    
    
    31.1Customer deposits
    
    
    
    
    
    
    33.6
    
    
    
    
    
    
    
    
    
    
    
    33.6Mortgage loans held for sale
    
    
    
    
    
    
    
    
    
    
    (0.6
    )
    
    
    
    
    
    
    (0.6
    )Net cash provided by (used in) operating
activities
    
    
    206.9
    
    
    
    (79.2
    )
    
    
    1.7
    
    
    
    (144.4
    )
    
    
    (15.0
    )Cash flows from investing activities:Net additions to property and equipment
    
    
    (1.9
    )
    
    
    (13.7
    )
    
    
    
    
    
    
    
    
    
    
    (15.6
    )Investments in unconsolidated joint ventures
    
    
    
    
    
    
    (61.1
    )
    
    
    
    
    
    
    
    
    
    
    (61.1
    )Earn out consideration paid for acquisitions
    
    
    
    
    
    
    (6.6
    )
    
    
    
    
    
    
    
    
    
    
    (6.6
    )Net cash used in investing activities
    
    
    (1.9
    )
    
    
    (81.4
    )
    
    
    
    
    
    
    
    
    
    
    (83.3
    )Cash flows from financing activities:Net repayments on revolving credit facilities
    
    
    (10.0
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10.0
    )Proceeds from notes offering
    
    
    330.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    330.0Principal payments on unsecured borrowings and
senior notes
    
    
    
    
    
    
    (7.9
    )
    
    
    
    
    
    
    
    
    
    
    (7.9
    )Net repayments on Financial Services bank
borrowings
    
    
    
    
    
    
    
    
    
    
    (14.3
    )
    
    
    
    
    
    
    (14.3
    )Payments for deferred financing costs
    
    
    (5.9
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5.9
    )Proceeds from stock option exercises
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.1Dividends paid
    
    
    (2.0
    )
    
    
    
    
    
    
    (24.7
    )
    
    
    24.7
    
    
    
    (2.0
    )Increase (decrease) in intercompany transactions
    
    
    (403.9
    )
    
    
    199.1
    
    
    
    85.1
    
    
    
    119.7
    
    
    
    Net cash (used in) provided by financing
activities
    
    
    (91.7
    )
    
    
    191.2
    
    
    
    46.1
    
    
    
    144.4
    
    
    
    290.0Increase in cash and cash equivalents
    
    
    113.3
    
    
    
    30.6
    
    
    
    47.8
    
    
    
    
    
    
    
    191.7Cash and cash equivalents at beginning of year
    
    
    46.0
    
    
    
    27.7
    
    
    
    3.1
    
    
    
    
    
    
    
    76.8Cash and cash equivalents at end of year
    
    $
    159.3
    
    
    $
    58.3
    
    
    $
    50.9
    
    
    $
    
    
    
    $
    268.5
 F-41