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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
  Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2007oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number:
    001-32322
  TOUSA, Inc.
 (Exact Name of Registrant as
    Specified in Its Charter)
  Delaware

76-0460831(State or Other Jurisdiction
    of
    Incorporation or Organization)

(I.R.S. Employer
    Identification No.)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:
 None
  Securities registered pursuant to Section 12(g) of the
    Act:
  Title of Each
    Class
  Common Stock, $.01 par value
 9% Senior Notes due 2010 (CUSIP No. 872962 AA3)
 9% Senior Notes due 2010 (CUSIP No. 872962 AB1)
 103/8% Senior
    Subordinated Notes due 2012 (CUSIP No. 872962 AD7)
 71/2% Senior
    Subordinated Notes due 2011 (CUSIP No. 872962 AC9)
 71/2% Senior
    Subordinated Notes due 2015 (CUSIP No. 872962 AE5)
  o þ
  o þ
  o þ
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large accelerated filer o

Accelerated filer þ

Non-accelerated filer o
    (Do not check if a smaller reporting company)

Smaller reporting company o   Rule 12b-2 o þ
      DOCUMENTS INCORPORATED BY REFERENCE




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##### 





TABLE OF
    CONTENTS
   
 PART IITEM 1.


Business


2ITEM 1A.


Risk Factors


18ITEM 1B.


Unresolved Staff Comments


33ITEM 2.


Properties


33ITEM 3.


Legal Proceedings


33ITEM 4.


Submission of Matters to a Vote of Security
    Holders


38PART IIITEM 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


38ITEM 6.


Selected Financial Data


40ITEM 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


41ITEM 7A.


Quantitative and Qualitative Disclosures about
    Market Risk


79ITEM 8.


Financial Statements and Supplementary Data


80ITEM 9.


Changes In and Disagreements with Accountants on
    Accounting and Financial Disclosure


80ITEM 9A.


Controls and Procedures


80ITEM 9B.


Other Information


80PART IIIITEM 10.


Directors and Executive Officers and Corporate
    Governance


80ITEM 11.


Executive Compensation


86ITEM 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


95ITEM 13.


Certain Relationships and Related Transactions
    and Director Independence


97ITEM 14.


Principal Accounting Fees and Services


99PART IVITEM 15.


Exhibits and Financial Statement Schedules


100SIGNATURES


107    EX-10.56
    
    EMPLOYMENT AGREEMENT, DATED JANUARY 1, 2008, BY AND BETWEEN
    TOUSA, INC. AND GEORGE YEONASEX-10.57
    
    AMENDMENT TO EMPLOYMENT AGREEMENT, DATED JANUARY 18, 2008, BY
    AND BETWEEN TOUSA, INC. AND TOMMY MCADENEX-21.0
    
    SUBSIDIARIES OF THE REGISTRANTEX-23.1
    
    CONSENT OF ERNST & YOUNG LLP INDEPENDENT REGISTERED PUBLIC
    ACCOUNTING FIRM

EX-23.2
    
    CONSENT OF ERNST & YOUNG LLP  INDEPENDENT CERTIFIED PUBLIC
    ACCOUNTANTSEX-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
    SUBSIDIARIES FOR THE YEARS ENDED NOVEMBER 30, 2006 AND THE
    PERIOD FROM INCEPTION (JULY 1, 2005) TO NOVEMBER 30,
    2005EX-99.2
    
    UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF TE/TOUSA, LLC AND
    SUBSIDIARIES FOR THE EIGHT MONTHS ENDED JULY 30, 2007EX-99.3
    
    FINANCIAL STATEMENTS OF ENGLE/SUNBELT HOLDINGS, LLC




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PART I ITEM 1.  Business  Explanatory
    Note
  Form 10-Q Form 10-Q
  Introduction
      No. 08-10928-JKO.
   2




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Form 10-K
  Form 10-K, Dallas/Fort Worth
  move-up
         3




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Business
    Strategy
   4




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
    limiting new arrangements to acquire land (by submitting
    proposals to increased review);
    engaging in bulk sales of land and unsold homes;
    reducing the number of unsold homes under construction and
    limiting
    and/or
    curtailing development activities in any development where we do
    not expect to deliver homes in the near future;
    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 (see Item 7, Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Recent Developments regarding the
    June 2007 sale of our Dallas/Fort Worth division and the
    September 2007 bulk sale of homesites in our Mid-Atlantic
    region);
    reducing our speculative inventory levels; and
    pursuing other initiatives designed to monetize our assets.  Homebuilding
    Operations
  Operations
    Operating
    Division Responsibilities
    
    site selection, which involves  
    a feasibility study;
    an intensive evaluation of competition;
    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 certain aspects of the homesite option or similar
    contracts;
    obtaining necessary land development and home construction
    approvals;
    overseeing land development; 5




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
    selecting building plans and architectural schemes;
    selecting and managing construction subcontractors and suppliers
    within an integrated national supply chain network;
    planning and managing homebuilding schedules; and
    developing and implementing sales and marketing plans.  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 homesite acquisitions and
    dispositions;
    accounting, financial and management reporting;
    review and approval of division plans and budgets;
    internal audit;
    information technology systems;
    administration of human resource compliance, 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

Nashville

Houston

Las VegasSoutheast Florida

Northern Virginia

San Antonio

PhoenixSouthwest Florida
    Tampa/St. Petersburg  6




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Florida. Tampa/St.
  Mid-Atlantic.
  Texas.
  West.
  Product
    Mix
    Home Delivery Price Ranges

2007


2006Below $200,000


28
%


23
%$200,000 to $300,000


26



27$300,001 to $400,000


23



26Over $400,000


23



24100
%


100
%     Land and
    Homesites
   7




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Types
    of Land and Homesites
    on-site
    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;
    desirability of location, including proximity to metropolitan
    area, local traffic corridors and amenities;
    market competition, including the prices and number 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 and absorption 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.  on-site
 8




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Land
    Supply and Asset Management Actions
    and/or
  Option
    Contracts
       9




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Joint
    Ventures
  and/or and/or
    The Equity
    Method of Accounting for Investments in Common Stock
    Transeastern
    JV
     10




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
    the Transeastern JV became a wholly-owned subsidiary of ours by
    merger into one of our subsidiaries, which became a guarantor on
    our credit facilities and note indentures (the acquisition was
    accounted for using the purchase method of accounting and
    results of operations have been included in our consolidated
    results beginning on July 31, 2007);
    the senior secured lenders of the Transeastern JV were repaid in
    full, including accrued interest (approximately
    $400.0 million in cash);
    the senior mezzanine lenders to the Transeastern JV received
    $20.0 million in aggregate principal amount of
    14.75% Senior Subordinated PIK Election Notes due 2015 and
    $117.5 million in initial aggregate liquidation preference
    of 8% Series A Convertible Preferred PIK Preferred Stock;
    the junior mezzanine lenders to the Transeastern JV received
    warrants to purchase shares of our common stock which had an
    estimated fair value of $8.2 million at issuance (based on
    the Black-Scholes option pricing model and before issuance
    costs);
    we entered into settlement and mutual release agreements with
    the senior mezzanine lenders and the junior mezzanine lenders to
    the Transeastern JV which released us from our potential
    obligations to them; and
    we entered into a settlement and mutual release agreement with
    Falcone/Ritchie LLC and certain of its affiliates (the
    Falcone Entities) concerning the Transeastern JV,
    one of which owned 50% of the equity interests in the
    Transeastern JV and, among other things, released the Falcone
    Entities from claims under the 2005 asset purchase agreement
    pursuant to which we acquired our interest in the Transeastern
    JV. Pursuant to the settlement agreement, we remain obligated on
    certain indemnification obligations, including, without
    limitation, related to certain land bank arrangements.    
    an amendment to our $800.0 million revolving loan facility,
    dated January 30, 2007;
    a new $200.0 million aggregate principal amount first lien
    term loan facility; and
    a new $300.0 million aggregate principal amount second lien
    term loan facility.        
    $50.2 million in cash to purchase land under existing land
    bank arrangements with the former Transeastern JV
    partner; and
    $33.5 million in interest and expenses.  Supply
    Management
   11




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Design
    Design
    Centers
    Construction
   12




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Marketing
    and Sales
            Customer
    Service and Quality Control
   13




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Warranty
    Program
          Financial
    Services
   14




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e-commerce e-mail
      Governmental
    Regulation
   15




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and/or and/or
      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;
    our reputation for service and quality; and
    our ability to retain key employees.       16




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Seasonality
    Backlog
    Employees
     17




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Availability
    of Reports and Other Information
  Form 10-K, Form 10-Q, Form 8-K,
    ITEM 1A.
    Risk
    Factors  Risks
    Relating to the Chapter 11 Cases
  We are
    subject to the risks and uncertainties associated with our
    Chapter 11 cases.
  debtors-in-possession
  
    our ability to obtain and maintain normal terms with existing
    and potential homebuyers, vendors and service providers and
    maintain contracts and leases that are critical to our
    operations;
    limitations on our ability to implement and execute our business
    plans and strategy;
    limitations on our ability to obtain Bankruptcy Court approval
    with respect to motions in the Chapter 11 cases that we may
    seek from time to time or potentially adverse decisions by the
    Bankruptcy Court with respect to such motions, including as a
    result of the actions of our creditors and other third parties,
    who may oppose our plans or who may seek to require us to take
    actions that we oppose;
    limitations on our ability to reject contracts or leases that
    are burdensome or uneconomical;
    limitations on our ability to raise capital, including through
    sales of assets;
    our ability to attract, motivate and retain key and essential
    personnel is impacted by the Bankruptcy Code which limits our
    ability to implement a retention program or take other measures
    intended to motivate employees to remain with us; and
    our ability to obtain needed approval from the Bankruptcy Court
    for transactions outside of the ordinary course of business,
    which may limit our ability to respond on a timely basis to
    certain events or take advantage of certain opportunities.   18




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
    our ability to generate and maintain adequate cash;
    the cost, duration and outcome of the restructuring process;
    our ability to comply with the terms of our cash collateral
    order and, if necessary, seek further extensions of our ability
    to use cash collateral;
    our ability to achieve profitability following a restructuring
    given housing market challenges; and
    our ability to retain key employees.      A long
    period of operating under Chapter 11 may harm our
    business.
      Operating
    under the Bankruptcy Code may restrict our ability to pursue our
    business strategies.
    
    incur additional indebtedness; 19




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
    pay dividends, repurchase our capital stock or make certain
    other restricted payments or investments;
    make investments;
    sell assets;
    consolidate, merge, sell or otherwise dispose of all or
    substantially all of our assets;
    grant liens;
    plan for or react to market conditions or meet capital needs or
    otherwise restrict our activities or business plans; and
    finance our operations, strategic acquisitions, investments or
    joint ventures or other capital needs or to engage in other
    business activities that would be in our interest.    Our
    cash collateral order includes operating budgets and financial
    covenants that limit our operating flexibility.
    
    incur indebtedness;
    incur liens and enter sale/leaseback transactions except for
    model homes subject to certain limitations;
    make or own investments;
    enter into transactions with affiliates;
    engage in new lines of business;
    consolidate, merge, sell all or substantially all of our assets;
    issue guarantees of debt;
    agree to amendment or modification to our organizational
    documents;
    incur or create claims; and
    make additional payments on prepetition indebtedness.  Limitations
    in the cash collateral order on making capital expenditures and
    incurring additional debt may prevent us from pursing new
    business initiatives, which may place us at a competitive
    disadvantage.
    We
    require a significant amount of cash, which may not be available
    to us.
   20




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We may
    not be able to confirm or consummate a plan of
    reorganization.
        Transfers
    of our equity, or issuances of equity in connection with our
    restructuring, may impair our ability to utilize our federal
    income tax net operating loss carryforwards in the
    future.
    The
    Bankruptcy Code may limit our secured creditors ability to
    realize value from their collateral.
   21




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
    how long payments under our secured debt could be delayed as a
    result of our Chapter 11 cases;
    whether or when secured creditors (or their applicable agents)
    could repossess or dispose of collateral; or
    the value of the collateral.      Our
    successful reorganization will depend on our ability to retain
    and motivate key employees.
    Our
    financial results may be volatile and may not reflect historical
    trends.
   22




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Risks
    Related to Capital Resources; Liquidity
  We
    have substantial liquidity needs and face liquidity
    pressure.
      Our
    substantial indebtedness could adversely impact our financial
    health and limit our operations.
    
    limiting our ability to borrow additional amounts for working
    capital, capital expenditures, debt service requirements,
    execution of our strategy or other purposes;
    limiting our ability to use operating cash flow in other areas
    of our business because we must dedicate a substantial portion
    of these funds to service the debt;
    increasing our vulnerability to general adverse economic and
    industry conditions;
    limiting our ability to capitalize on business opportunities and
    to react to competitive pressures and adverse changes in
    government regulation; and
    limiting our ability or increasing the costs to refinance
    indebtedness.  We may
    be unable to obtain additional financing in the
    future.
    
    general economic and capital market conditions;
    credit availability from banks or other lenders for us and our
    industry peers, as well as the economy in general; 23




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
    investor confidence in the industry and in us; and
    provisions of tax and securities laws that are conducive to
    raising capital.  Our
    cash collateral order imposes significant operating and
    financial restrictions on us; any failure to comply with these
    restrictions could have a material adverse effect on our
    liquidity and our operations.
    
    incur additional indebtedness and issue stock;
    make additional prepayments on or purchase indebtedness in whole
    or in part;
    pay dividends and other distributions with respect to our
    capital stock or repurchase our capital stock or make other
    restricted payments;
    make certain investments;
    incur liens and enter sale/leaseback transactions except for
    model homes subject to certain limitations;
    consolidate or merge with another entity, or allow one of our
    subsidiaries to do so;
    lease, transfer or sell assets and use proceeds of permitted
    asset leases, transfers or sales;
    incur dividend or other payment restrictions affecting certain
    subsidiaries;
    engage in certain business activities; and
    acquire other businesses.    We may
    incur significant damages and expenses due to the purported
    class action complaints filed against us and certain of our
    officers.
  No. 06-61844-CIV.
     24




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and/or
        You
    may find it difficult to sell our common stock and debt
    securities.
  and/or
  Rule 15g-9
 25




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and/or
  Risks
    Related to Our Business
  The
    homebuilding industry is experiencing a severe downturn that may
    continue for an indefinite period which may further adversely
    affect our business and results of operations compared to prior
    periods.
      Our
    strategies in responding to the adverse conditions in the
    homebuilding industry have had limited success and the continued
    implementation of these and other strategies may not be
    successful.
   26




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Continued
    high cancellation rates may negatively impact our
    business.
    Our
    revenues and profitability may be adversely affected by natural
    disasters or weather conditions.
  and/or
  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.
  project-by-project
 27




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Reduced
    home sales may impair our ability to recoup development costs or
    force us to absorb additional costs.
    Market
    conditions in the mortgage lending and mortgage finance
    industries deteriorated significantly in 2007, adversely
    impacting us by increasing the supply of inventory housing,
    negatively impacting pricing conditions, as well as decreasing
    the demand for our homes, which adversely affected our revenues
    and profitability. Recent changes in mortgage lending
    requirements or further reduced mortgage liquidity could
    adversely affect the availability of credit for some purchasers
    of our homes and thereby reduce our sales.
        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.
   28




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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, associated with the rapid
    rise in the cost of oil, energy, and other factors.    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, including selling and marketing expenses,
    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.     29




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Future
    limitations on our ability to obtain bonds may adversely affect
    our homebuilding operations.
    We are
    subject to product liability and warranty claims arising in the
    ordinary course of business that could adversely affect our
    results of operations.
    Our
    business is subject to governmental regulations that may delay,
    increase the cost of, prohibit or severely restrict our
    development and homebuilding projects.
     30




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Forward-Looking
    Statements
  Form 10-K
  
    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 successful implementation of our
    asset management strategy and its impact on our business;
    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 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 option contracts, investments in
    land development joint ventures;
    our expectations regarding the housing market in 2008 and beyond;
    our expectations regarding our use of cash in
    operations; and
    our expectations of receiving federal and state income tax
    refunds.     31




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
    the risks and uncertainties associated with our Chapter 11
    cases, including our ability to successfully reorganize and
    emerge from Chapter 11;
    a long period of operating under Chapter 11 may harm our
    business;
    we may not be able to obtain confirmation of our Chapter 11
    plan;
    operating under the Bankruptcy Code may restrict our ability to
    pursue our business strategies;
    our debt instruments include restrictive and financial covenants
    that limit our operating flexibility;
    our ability to attract, motivate and retain key and essential
    personnel is impacted by the Bankruptcy Code which limits our
    ability to implement a retention program or take other measures
    intended to motivate employees to remain with us;
    we require a significant amount of cash, which may not be
    available to us;
    our ability to confirm or consummate a plan of reorganization;
    financial results that may be volatile and may reflect
    historical trends;
    our belief that our ability to continue as a going concern will
    depend upon our ability to restructure our capital structure;
    our belief that failure to restructure our capital structure
    would result in depleting our available funds and not being able
    to pay our obligations when they become due;
    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 enter successfully into, utilize, and recognize
    the anticipated benefits of, joint ventures and option contracts;
    a further decline in the value of our land and home inventories;
    an increase in the cost of, or shortages in the availability of,
    qualified labor and materials;
    our ability to dispose successfully 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; 32




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
    the impact of any or all of the above risks on the operations or
    financial results of our unconsolidated joint ventures; and
    a change in ownership of our stock, as defined in
    Section 382 of the Internal Revenue Code, which would limit
    our ability to receive anticipated income tax refunds.  ITEM 1B.
    Unresolved
    Staff Comments  Form 10-K Form 10-Q Form 10-K
  In the Matter of TOUSA, Inc. SEC Inquiry No. FL-3310.
  ITEM 2.
    Properties    ITEM 3.
    Legal
    Proceedings  Chapter 11
  Chapter 11
    Cases
  No. 08-10928-JKO.
  debtors-in-possession
 33




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
    our ability to generate and maintain adequate cash;
    the cost, duration and outcome of the restructuring process;
    our ability to comply with the terms of our cash collateral
    order and, if necessary, seek further extensions of our ability
    to use cash collateral;
    our ability to achieve profitability following a restructuring
    given housing market challenges; and
    our ability to retain key employees.     34




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
    limiting new arrangements to acquire land (by submitting
    proposals to increased review);
    engaging in bulk sales of land and unsold homes;
    reducing the number of unsold homes under construction and
    limiting
    and/or
    curtailing development activities in any development where we do
    not expect to deliver homes in the near future;
    renegotiating 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 (see Note 15 regarding the June 2007 sale
    of our Dallas/Fort Worth division and Note 14
    regarding the September 2007 bulk sale of homesites in our
    Mid-Atlantic region);
    reducing our speculative home levels; and
    pursuing other initiatives designed to monetize our assets.      Class Action
    Lawsuit
  No. 06-61844-CIV.
     35




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and/or
        Proceeding
    by Official Committee of Unsecured Creditors
  In re TOUSA, Inc. No. 08-10928-JKO; No. 08-1435-JKO.
 36




---



##### Table of Contents



Proofs of
    Claims
    Vista
    Lakes
  re-opened
    Other
    Litigation
   37




---



##### Table of Contents



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  and/or 1 2 1 2 3 8
    High


LowFiscal Year Ended December 31, 2007First Quarter

$
10.87


$
3.66Second Quarter

$
4.85


$
3.32Third Quarter

$
4.20


$
1.61Fourth Quarter

$
2.08


$
0.07   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        38




---



##### Table of Contents



PERFORMANCE
    GRAPH
    Comparison
    of Cumulative Five Year Total Return
  
  Base Period



Cumulative Total Return Years Ending December 31,December 31,Company/Index


2002



2003



2004



2005



2006



2007TOUSA, INC.



100.00




185.01




257.52




268.13




129.92




1.60S&P 500 INDEX



100.00




128.68




142.69




149.70




173.34




182.86S&P 600 HOMEBUILDING



100.00




178.19




265.64




265.20




218.07




97.15  39




---



##### Table of Contents



ITEM 6.
    Selected
    Financial Data    Year Ended December 31,2007


2006


2005


2004


2003(Dollars in millions, except per share data)Statement of Income
    Data(1):Total revenues

$
2,195.3


$
2,504.6


$
2,408.0


$
2,060.6


$
1,608.1Homebuilding revenues

$
2,158.8


$
2,441.3


$
2,360.5


$
2,026.1


$
1,570.0Homebuilding gross profit (loss)

$
(507.4
)

$
417.9


$
591.0


$
422.2


$
314.6Homebuilding pretax income
    (loss)(2)

$
(1,349.3
)

$
(265.1
)

$
336.1


$
187.6


$
117.3Financial services pretax income

$
(3.7
)

$
21.5


$
8.5


$
8.3


$
15.6Income (loss) from continuing operations before income
    taxes(2)

$
(1,353.0
)

$
(243.6
)

$
344.6


$
195.9


$
132.9Income (loss) from continuing operations, net of
    taxes(2)

$
(1,319.7
)

$
(200.8
)

$
218.1


$
123.4


$
84.4Share
    Data(3):Income (loss) from continuing operations per common
    share 
    basic(2)(4)

$
(22.22
)

$
(3.37
)

$
3.82


$
2.20


$
1.60Income (loss) from continuing operations per common
    share 
    diluted(2)(4)

$
(22.22
)

$
(3.37
)

$
3.68


$
2.15


$
1.59Common stock cash dividends per share

$



$
0.060


$
0.057


$
0.036


$
Statement of Financial Condition Data:Inventory

$
1,271.8


$
2,078.5


$
1,630.2


$
1,209.4


$
1,099.1Total assets

$
1,762.0


$
2,842.2


$
2,422.7


$
1,920.6


$
1,536.2Homebuilding notes payable and bank
    borrowings(5)

$
1,753.8


$
1,060.7


$
876.6


$
811.4


$
497.9Total
    borrowings(5)(6)

$
1,761.6


$
1,096.1


$
911.7


$
860.4


$
561.1Redeemable preferred
    stock(7)

$
3.9


$



$



$



$
Stockholders equity (deficit)

$
(475.5
)

$
774.9


$
971.3


$
662.7


$
537.6     (1)
    
    See Note 9 to the consolidated financial statements for
    discussion of discontinued operations and the effect on
    comparability.(2)
    
    Results for 2007 and 2006 include charges totaling
    $1.3 billion and $586.7 million, respectively, related
    to inventory impairments, abandonment costs, joint venture
    impairments, goodwill impairments and the provision for
    settlement of loss contingency.(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)
    
    Net of preferred stock dividends and accretion of discount,
    initially accrued for in the third quarter of 2007.(5)
    
    Homebuilding notes payable and bank borrowings and total
    borrowings do not include obligations for inventory not owned of
    $26.0 million, $300.6 million, $92.9 million,
    $126.9 million and $246.2 million as of
    December 31, 2007, 2006, 2005, 2004 and 2003 respectively.(6)
    
    Total borrowings include Homebuilding borrowings and Financial
    Services borrowings.(7)
    
    Issued in connection with the Transeastern JV acquisition. 40




---



##### Table of Contents



ITEM 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations    Form 10-K, Dallas/Fort Worth
    Executive
    Summary
    Florida

Mid-Atlantic

Texas

WestCentral Florida

Baltimore/Southern Pennsylvania

Austin

ColoradoJacksonville

Nashville

Houston

Las VegasSoutheast Florida

Northern Virginia

San Antonio

PhoenixSouthwest FloridaTampa/St. Petersburg        41




---



##### Table of Contents



Recent
    Developments
  Chapter 11
    Cases
  No. 08-10928-JKO.
  debtors-in-possession
   42




---



##### Table of Contents




    our ability to generate and maintain adequate cash;
    the cost, duration and outcome of the restructuring process;
    our ability to comply with the terms of our cash collateral
    order and, if necessary, seek further extensions of our ability
    to use cash collateral;
    our ability to achieve profitability following a restructuring
    given housing market challenges; and
    our ability to retain key employees.      
    limiting new arrangements to acquire land (by submitting
    proposals to increased review);
    engaging in bulk sales of land and unsold homes;
    reducing the number of unsold homes under construction and
    limiting
    and/or
    curtailing development activities in any development where we do
    not expect to deliver homes in the near future; 43




---



##### Table of Contents




    renegotiating 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 (see Note 15 regarding the June 2007 sale
    of our Dallas/Fort Worth division and Note 14
    regarding the September 2007 bulk sale of homesites in our
    Mid-Atlantic region);
    reducing our speculative home levels; and
    pursuing other initiatives designed to monetize our assets.    Mortgage
    Joint Venture
    Transeastern
    JV Settlement
    
    the Transeastern JV became a wholly-owned subsidiary of ours by
    merger into one of our subsidiaries, which became a guarantor on
    our credit facilities and note indentures (the acquisition was
    accounted for using the purchase method of accounting and
    results of operations have been included in our consolidated
    results beginning on July 31, 2007);
    the senior secured lenders of the Transeastern JV were repaid in
    full, including accrued interest (approximately
    $400.0 million in cash);
    the senior mezzanine lenders to the Transeastern JV received
    $20.0 million in aggregate principal amount of
    14.75% Senior Subordinated PIK Election Notes due 2015 and
    $117.5 million in initial aggregate liquidation preference
    of 8% Series A Convertible Preferred PIK Preferred Stock; 44




---



##### Table of Contents




    the junior mezzanine lenders to the Transeastern JV received
    warrants to purchase shares of our common stock which had an
    estimated fair value of $8.2 million at issuance (based on
    the Black-Scholes option pricing model and before issuance
    costs);
    we entered into settlement and mutual release agreements with
    the senior mezzanine lenders and the junior mezzanine lenders to
    the Transeastern JV which released us from our potential
    obligations to them; and
    we entered into a settlement and mutual release agreement with
    Falcone/Ritchie LLC and certain of its affiliates (the
    Falcone Entities) concerning the Transeastern JV,
    one of which owned 50% of the equity interests in the
    Transeastern JV and, among other things, released the Falcone
    Entities from claims under the 2005 asset purchase agreement
    pursuant to which we acquired our interest in the Transeastern
    JV. Pursuant to the settlement agreement, we remain obligated on
    certain indemnification obligations, including, without
    limitation, related to certain land bank arrangements.    
    an amendment to our $800.0 million revolving loan facility,
    dated January 30, 2007;
    a new $200.0 million aggregate principal amount first lien
    term loan facility; and
    a new $300.0 million aggregate principal amount second lien
    term loan facility.        
    $50.2 million in cash to purchase land under existing land
    bank arrangements with the former Transeastern JV
    partner; and
    $33.5 million in interest and expenses.  NYSE
    Delisting
  and/or 1 2 1 2 3 8
  Sale
    of Dallas/Fort Worth Operations
   45




---



##### Table of Contents



Bulk
    Sale of Homesites in the Mid-Atlantic (excluding Nashville) and
    Virginia Divisions
    SEC
    Inquiry
  In the Matter of TOUSA, Inc. SEC Inquiry No. FL-3310.
  Total
    Controlled Homesites by our Homebuilding Operations (Including
    Joint Ventures)
    December 31, 2007


December 31, 2006Total








TotalOwned


Optioned


Controlled


Owned


Optioned


ControlledRegion:Florida(1)


8,600



600



9,200



6,900



11,000



17,900Mid-Atlantic


400



800



1,200



800



2,700



3,500Texas(2)


2,500



4,000



6,500



2,700



7,800



10,500West(3)


9,900



5,400



15,300



10,800



17,900



28,700Continuing operations


21,400



10,800



32,200



21,200



39,400



60,600Discontinued
    operations(2)


100



100



200



1,000



3,100



4,100Total consolidated homesites


21,500



10,900



32,400



22,200



42,500



64,700Unconsolidated joint ventures


2,500



1,100



3,600



2,900



2,100



5,000Transeastern
    JV(1)














2,200



13,500



15,700Combined total


24,000



12,000



36,000



27,300



58,100



85,400     (1)
    
    At December 31, 2007, Florida includes 3,700 owned and 200
    optioned homesites acquired as part of the TE Acquisition that
    met the consolidation criteria at December 31, 2007. The
    homesites for these joint ventures were included in
    unconsolidated joint ventures at December 31, 2006.(2)
    
    The Texas region excludes the Dallas/Fort Worth division,
    which is classified as a discontinued operation.(3)
    
    The West region includes 100 owned homesites from joint ventures
    that met the consolidation criteria at December 31, 2007.
    The homesites for these joint ventures were included in
    unconsolidated joint ventures at December 31, 2006. 46




---



##### Table of Contents



Residences Completed


Homesites Finished


Raw Land Held for


Total Consolidatedor Under Construction


or Under Construction


Future Development


Homesites12/31/07


12/31/06


12/31/07


12/31/06


12/31/07


12/31/06


12/31/07


12/31/06Region:Florida(1)


1,400



1,700



6,600



3,500



600



1,700



8,600



6,900Mid-Atlantic


100



300



300



500











400



800Texas(2)


700



1,000



1,400



1,100



400



600



2,500



2,700West(3)


700



800



2,500



2,200



6,700



7,800



9,900



10,800Continuing operations


2,900



3,800



10,800



7,300



7,700



10,100



21,400



21,200Discontinued
    operations(2)






200







300



100



500



100



1,000Total


2,900



4,000



10,800



7,600



7,800



10,600



21,500



22,200     (1)
    
    For December 31, 2007, the Florida region includes 3,700
    owned homesites acquired as part of the TE Acquisition.(2)
    
    The Texas region excludes the Dallas/Fort Worth division,
    which is now classified as a discontinued operation.(3)
    
    The West region includes 100 homesites from joint ventures that
    met the consolidation criteria at December 31, 2007. The
    homesites for these joint ventures were included in
    unconsolidated joint ventures at December 31, 2006.         47




---



##### Table of Contents



Homebuilding
    Operations
         48




---



##### Table of Contents



on-site
  Financial
    Services Operations
        Critical
    Accounting Policies
   49




---



##### Table of Contents



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
  Investments
    in Unconsolidated Joint Ventures
  The
    Equity Method of Accounting for Investments in Common Stock 78-9, Accounting for Investments in Real Estate Ventures Accounting by Creditors for Impairment of a Loan
 50




---



##### Table of Contents



Accounting for
    Contingencies
  Goodwill
  Goodwill and Other Intangible
    Assets
  Homesite
    Option Contracts and Consolidation of Variable Interest
    Entities
     51




---



##### Table of Contents



and/or
      Product Financing Arrangements
  Stock-Based
    Compensation
  Share-Based Payment,
   52




---



##### Table of Contents



Warranty
    Reserves
    Insurance
    and Litigation Reserves
    Income
    Taxes
      Results
    of Operations  Consolidated
  Fiscal
    Year 2007 compared to Fiscal Year 2006
     53




---



##### Table of Contents



Homebuilding
         54




---



##### Table of Contents



Net Sales
    Orders and Homes in Backlog (Consolidated)
        Net Sales
    Orders and Homes in Backlog (Unconsolidated Joint
    Ventures)
     55




---



##### Table of Contents



Financial
    Services
      Discontinued
    Operations
      Fiscal
    Year 2006 Compared to Fiscal Year 2005
     56




---



##### Table of Contents



Homebuilding
           57




---



##### Table of Contents



Net Sales
    Orders and Homes in Backlog (Consolidated)
    Mid-Atlantic
    Net Sales
    Orders and Homes in Backlog (Unconsolidated Joint
    Ventures)
        Financial
    Services
   58




---



##### Table of Contents



Discontinued
    Operations
      Reportable
    Segments
  Disclosures About Segments of an Enterprise and
    Related Information
  Homebuilding
    Operations
    Florida:
  Mid-Atlantic:
  Texas:
  West:
 59




---



##### Table of Contents



Selected
    Homebuilding Operations and Financial Data
    Year Ended December 31,2007


2006


2005Homebuilding revenues:Florida:Sales of homes

$
849.1


$
999.2


$
829.4Sales of land


42.8



18.8



29.8Total Florida


891.9



1,018.0



859.2Mid-Atlantic:Sales of homes


228.2



258.8



290.3Sales of land


36.8



47.2



0.6Total Mid-Atlantic


265.0



306.0



290.9Texas(1):Sales of
    homes(1)


625.4



592.0



408.4Sales of
    land(1)


9.6



10.3



7.0Total
    Texas(1)


635.0



602.3



415.4West:Sales of homes


346.7



459.4



646.3Sales of land


20.2



55.6



148.7Total West


366.9



515.0



795.0Total homebuilding revenues

$
2,158.8


$
2,441.3


$
2,360.5     (1)
    
    The Texas region excludes the Dallas division, which is now
    classified as a discontinued operation.  Year Ended December 31,2007


2006


2005Results of Operations:Homebuilding:Florida

$
(543.6
)

$
11.8


$
138.1Mid-Atlantic


(119.0
)


(20.9
)


38.1Texas(1)


52.4



59.4



33.6West


(473.1
)


26.4



186.4Total Homebuilding


(1,083.3
)


76.7



396.2Financial Services


(0.8
)


21.5



8.5Corporate and unallocated


(268.9
)


(341.8
)


(60.1
)Total income (loss) from continuing operations before income
    taxes

$
(1,353.0
)

$
(243.6
)

$
344.6     (1)
    
    The Texas region excludes the Dallas division, which is now
    classified as a discontinued operation.  60




---



##### Table of Contents



Year Ended December 31,2007


2006


2005Impairment charges on active communities:Florida

$
95.8


$
13.2


$
1.8Mid-Atlantic


16.0



26.2



0.8Texas(1)


1.0



0.6



West


68.0



41.9



3.9180.8



81.9



6.5Write-offs of deposits and abandonment costs:Florida


370.1



8.3



Mid-Atlantic


63.3



11.8



Texas(1)


5.3



0.2



0.2West


233.2



51.0



671.9



71.3



0.2Inventory impairments and abandonment costs

$
852.7


$
153.2


$
6.7     (1)
    
    The Texas region excludes the Dallas division, which is now
    classified as a discontinued operation.  Year Ended December 31,2007


2006


2005Homes


$


Homes


$


Homes


$Deliveries:Consolidated:Florida


2,471


$
849.1



2,742


$
999.2



2,785


$
829.4Mid-Atlantic


649



228.2



683



258.8



697



290.3Texas(1)


2,421



625.4



2,382



592.0



1,610



408.4West


1,039



346.7



1,453



459.4



2,228



646.3Continuing operations


6,580



2,049.4



7,260



2,309.4



7,320



2,174.4Discontinued
    operations(1)


190



44.9



564



129.7



449



92.2Total


6,770



2,094.3



7,824



2,439.1



7,769



2,266.6Unconsolidated joint ventures:Florida (excluding Transeastern)


40



11.3















Transeastern


739



174.8



2,173



659.3



347



106.6Mid-Atlantic


16



4.0



108



31.2



185



55.5West


871



255.9



1,670



590.7



1,134



382.0Total unconsolidated joint ventures


1,666



446.0



3,951



1,281.2



1,666



544.1Combined total


8,436


$
2,540.3



11,775


$
3,720.3



9,435


$
2,810.7     (1)
    
    The Texas region excludes the Dallas division, which is now
    classified as a discontinued operation.  61




---



##### Table of Contents



Year Ended December 31,2007


2006


2005Homes


$


Homes


$


Homes


$Net Sales
    Orders(1):Consolidated:Florida


1,349


$
381.9



2,028


$
809.2



2,794


$
959.2Mid-Atlantic


517



174.6



588



227.8



597



243.1Texas(2)


1,996



506.6



2,406



611.3



2,182



558.2West


974



269.8



1,063



345.6



2,469



817.6Continuing operations


4,836



1,332.9



6,085



1,993.9



8,042



2,578.1Discontinued
    operations(2)


60



15.6



498



119.8



572



124.4Total


4,896



1,348.5



6,583



2,113.7



8,614



2,702.5Unconsolidated joint ventures:Florida (excluding Transeastern)


12



1.7



10



4.7



4



1.7Transeastern


248



27.1



(208
)


(32.6
)


387



118.4Mid-Atlantic


19



3.8



74



18.0



141



47.3West


536



129.5



580



161.0



1,477



548.0Total unconsolidated joint ventures


815



162.1



456



151.1



2,009



715.4Combined total


5,711


$
1,510.6



7,039


$
2,264.8



10,623


$
3,417.9     (1)
    
    Net of cancellations.(2)
    
    The Texas region excludes the Dallas division, which is now
    classified as a discontinued operation.  December 31,2007


2006


2005Avg.








Avg.








Avg.Homes


$


Price


Homes


$


Price


Homes


$


PriceSales Backlog:Consolidated:Florida(1)


1,330


$
435.7


$
328



2,228


$
851.9


$
382



2,937


$
1,036.7


$
353Mid-Atlantic


80



28.1


$
351



206



80.5


$
391



246



94.7


$
385Texas(2)


549



154.8


$
282



974



273.6


$
281



950



254.3


$
268West


420



117.7


$
280



461



189.9


$
412



851



303.8


$
357Continuing operations


2,379



736.3


$
310



3,869



1,395.9


$
361



4,984



1,689.5


$
339Discontinued
    operations(2)


3



0.8


$
253



222



55.1


$
248



288



65.0


$
226Consolidated total


2,382



737.1


$
309



4,091



1,451.0


$
355



5,272



1,754.5


$
333Unconsolidated joint ventures:Florida (excluding Transeastern)














46



14.2


$
308



36



9.5


$
261Transeastern














697



194.3


$
279



3,078



886.2


$
288Mid-Atlantic














3



1.3


$
434



92



31.3


$
341West


94



24.7


$
263



453



155.8


$
344



1,543



585.5


$
379Total unconsolidated joint ventures


94



24.7


$
263



1,199



365.6


$
305



4,749



1,512.5


$
318Combined total


2,476


$
761.8


$
308



5,290


$
1,816.6


$
343



10,021


$
3,267.0


$
326     (1)
    
    Contracts with a third-party that marketed homes in the United
    Kingdom included in backlog at December 31, 2007 were
    cancelled in 2008. These contracts were for 511 homes
    representing $115.6 million in revenue.(2)
    
    The Texas region excludes the Dallas division, which is now
    classified as a discontinued operation. 62




---



##### Table of Contents



Year Ended December 31,2007


2006


2005Deliveries


Sales Orders


Deliveries


Sales Orders


Deliveries


Sales OrdersAverage Price:Consolidated:Florida

$
344


$
283


$
364


$
399


$
298


$
343Mid-Atlantic

$
352


$
338


$
379


$
387


$
417


$
407Texas(1)

$
258


$
254


$
249


$
254


$
254


$
256West

$
334


$
277


$
316


$
325


$
290


$
331Continuing operations

$
311


$
276


$
318


$
328


$
297


$
321Discontinued
    operations(1)

$
236


$
259


$
230


$
241


$
205


$
218Total

$
309


$
275


$
312


$
321


$
292


$
314Unconsolidated joint ventures:Florida (excluding Transeastern)

$
282


$
142


$



$
476


$



$
410Transeastern

$
237


$
109


$
303


$
157


$
307


$
306Mid-Atlantic

$
249


$
202


$
289


$
243


$
300


$
336West

$
294


$
242


$
354


$
278


$
337


$
371Total unconsolidated joint ventures

$
268


$
199


$
324


$
332


$
327


$
356Combined total

$
301


$
265


$
316


$
322


$
298


$
322     (1)
    
    The Texas region excludes the Dallas division, which is now
    classified as a discontinued operation.  Fiscal
    Year 2007 Compared to Fiscal Year 2006
  Florida:
        Mid-Atlantic:
 63




---



##### Table of Contents



Texas:
      West:
   64




---



##### Table of Contents



Fiscal
    Year 2006 Compared to Fiscal Year 2005
  Florida:
        Mid-Atlantic:
   65




---



##### Table of Contents



Texas:
      West:
       66




---



##### Table of Contents



Financial
    Services Operations
    Year Ended December 31,2007


2006


2005Revenues

$
36.5


$
63.3


$
47.5Expenses


36.3



41.8



39.0Goodwill Impairment


3.9







Financial services pretax income

$
(3.7
)

$
21.5


$
8.5   FINANCIAL
    CONDITION, LIQUIDITY AND CAPITAL RESOURCES
  Sources
    and Uses of Cash
        debtors-in-possession
  
    our ability to operate subject to the terms of the
    debtors-in-possession
    financing;
    our ability to obtain final approval of the debtor in possession
    financing or some other financing alternative;
    limitations on our ability to implement and execute our business
    plans and strategy;
    our ability to obtain and maintain normal terms with existing
    and potential homebuyers, vendors and service providers and
    maintain contracts and leases that are critical to our
    operations;
    our ability to obtain needed approval from the Bankruptcy Court
    for transactions outside of the ordinary course of business,
    which may limit our ability to respond on a timely basis to
    certain events or take advantage of certain opportunities;
    limitations on our ability to obtain Bankruptcy Court approval
    with respect to motions in the Chapter 11 cases that we may
    seek from time to time or potentially adverse decisions by the
    Bankruptcy Court with respect to such motions, including as a
    result of the actions of our creditors and other third parties,
    who may oppose our plans or who may seek to require us to take
    actions that we oppose;
    limitations on our ability to reject contracts or leases that
    are burdensome or uneconomical;
    limitations on our ability to raise capital, including through
    sales of assets; and
    our ability to attract, motivate and retain key and essential
    personnel is impacted by the Bankruptcy Code which limits our
    ability to implement a retention program or take other measures
    intended to motivate employees to remain with us. 67




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##### Table of Contents




    our ability to generate and maintain adequate cash;
    the cost, duration and outcome of the restructuring process;
    our ability to comply with the terms of our cash collateral
    order and, if necessary, seek further extensions of our ability
    to use cash collateral;
    our ability to achieve profitability following a restructuring
    given housing market challenges; and
    our ability to retain key employees.         68




---



##### Table of Contents



Refunds
    of Federal & State Income Taxes
    Financing
    Activities
        Revolving
    Loan Facility and First and Second Lien Term Loan
    Facilities
   69




---



##### Table of Contents



Form 10-Q
    Senior
    Notes and Senior Subordinated Notes
  1 4 1 4 90-day
 70




---



##### Table of Contents



90-day
  pari passu pari
    passu
  Senior
    Subordinated PIK Notes
       71




---



##### Table of Contents



Financial
    Services Borrowings
  30-day
    Liquidity
    Needs
    Contractual
    Obligations and Commitments
   72




---



##### Table of Contents



Payment Due by PeriodBetween


BetweenLess Than


1 and 3


3 and 5


More ThanTotal


1 Year


Years


Years


5 YearsContractual
    Obligations(1):Debt Obligations (Note 8)

$
1,773.7


$
1,773.7


$



$



$
Interest Payments
    (Note 8)(2)


909.2



179.6



363.9



265.2



100.5Capital Lease Obligations


















Operating Lease Obligations (Note 10)


30.0



9.3



9.7



5.2



5.8Purchase Obligations


















FIN 48 Unrecognized Tax Benefits, net (Note 9)


7.5



0.9



3.8



2.8



Other Long-Term Liabilities Reflected on the Registrants
    Statement of Financial Condition under GAAP


















Total

$
2,720.4


$
1,963.5


$
377.4


$
273.2


$
106.3     (1)
    
    Does not include obligations for inventory not owned
    of $32.0 million at December 31, 2007. 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)
    
    Although the Company is currently in default on its debt, for
    purposes of calculating interest payment obligations in the
    table above, it is assumed that the interest payments would be
    made at the regularly scheduled dates through maturity.
    Represents scheduled interest payments on fixed rate debt
    obligations. Estimates of future interest payments for variable
    rate debt are based on interest rates as of December 31,
    2007.  Off-Balance
    Sheet Arrangements
  Land and
    Homesite Option Contracts
  and/or
   73




---



##### Table of Contents



Investments
    in Unconsolidated Joint Ventures
  and/or
   74




---



##### Table of Contents



Engle/Sunbelt
    Joint Venture
               75




---



##### Table of Contents



Engle/Sunbelt,
  TOUSA/Kolter
    Joint Venture
  TOUSA/Kolter
       76




---



##### Table of Contents



Centex/TOUSA
    at Wellington, LLC
  loan-to-value
    Layton
    Lakes Joint Venture
         77




---



##### Table of Contents



Transeastern
    JV
  Form 10-K.
  Other
    Accounting Changes and Error Corrections, a replacement of
    Opinion No. 20 and FASB Statement No. 3,
      Recent
    Accounting Pronouncements
    Seasonality
    of Operations
   78




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##### Table of Contents



ITEM 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk          Expected Maturity DateFairLiabilities

2008


2009


2010


2011


2012


Thereafter


ValueDebtFixed rate
    (71/2)%

$
325.0






















$
13.0Fixed rate
    (81/4)%


250.0























107.3Fixed rate (9)%


300.0























124.3Fixed rate
    (103/8)%


185.0























10.6Fixed rate, Senior Subordinated PIK Notes
    (143/4%)


21.3























0.2Variable rate, First Lien Term Loan Facility (9.8% at
    December 31, 2007)


199.0























199.0Variable rate, Second Lien Term Loan Facility (12.8% at
    December 31, 2007)


317.1























317.1Variable rate, credit facility (11.25% at December 31, 2007)


168.5























168.5Variable rate, warehouse lines of credit (6.6% at
    December 31, 2007)


7.8























7.8      79




---



##### 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
  Rules 13a-15(e) 15d-15(e),
  Managements
    Report on Internal Control Over Financial Reporting
  page F-2 Form 10-K. page F-3 Form 10-K.
  ITEM 9B.
    Other
    Information   PART III  ITEM 10.
    Directors
    and Executive Officers of the Registrant  Form 10-K
 80




---



##### Table of Contents



Directors

Age

Principal OccupationKonstantinos Stengos


71


Chairman of the Board, TOUSA, Inc. and President and Managing
    Director, Technical Olympic S.A.Antonio B. Mon


62


Chief Executive Officer and Vice Chairman of TOUSA, Inc.Andreas Stengos


45


Executive Vice President and General Manager, Technical Olympic
    S.A.George Stengos


41


Managing Director, Mochlos S.A.Marianna Stengou


30


Vice President, Porto Carras Campus Hospitality Studies S.A.Larry D. Horner


74


Retired, Chairman and Chief Executive Officer of KPMG LLPWilliam A. Hasler


66


Private InvestorTommy L. McAden


45


Executive Vice President and Chief Financial Officer, TOUSA, Inc.Michael J. Poulos


77


Private InvestorSusan B. Parks


51


Chief Executive Officer, Walkstyles, Inc.J. Bryan Whitworth


69


Of Counsel, Wachtell, Lipton, Rosen & Katz   Officers

Age

Principal OccupationJohn Boken


45


Chief Restructuring Officer, TOUSA, Inc.George Yeonas


53


Executive Vice President and Chief Operating Officer TOUSA, Inc.Paul Berkowitz


59


Executive Vice President and Chief of Staff, TOUSA, Inc.Michael Glass


49


President, Financial Services, TOUSA, Inc.Angela Valdes


38


Vice President and Chief Accounting Officer, TOUSA, Inc.   Directors
  Konstantinos Stengos
  Antonio B. Mon
 81




---



##### Table of Contents



Andreas Stengos
  George Stengos
  Marianna Stengou
  Larry D. Horner
  William A. Hasler
  Tommy L. McAden
 82




---



##### Table of Contents



Michael J. Poulos
  Susan B. Parks
  J. Bryan Whitworth
  Officers
  John R. Boken
  George Yeonas
  Paul Berkowitz
 83




---



##### Table of Contents



Michael Glass
  Angela Valdes
  Certain
    Legal Proceedings
  and/or
  Section 16(a)
    Beneficial Ownership Reporting Compliance
    Stockholder
    Nominees to Board of Directors
    Code of
    Business Conduct and Ethics
   84




---



##### Table of Contents



Ethics
    Hotline
    Audit
    Committee and Designated Audit Committee Financial
    Experts
      
    appointing, overseeing, and determining the compensation of our
    independent registered public accounting firm;
    reviewing the plan and scope of the accountants audit;
    reviewing our audit and internal control functions;
    approving all permitted non-audit services provided by our
    independent registered public accounting firm; and
    reporting to our full Board of Directors regarding all of the
    foregoing.  Form 10-Q Form 10-K. www.tousa.com
 85




---



##### Table of Contents



ITEM 11.
    Executive
    Compensation  COMPENSATION
    COMMITTEE REPORT
  Form 10-K Form 10-K.
        COMPENSATION
    DISCUSSION AND ANALYSIS
    Compensation
    Philosophy
  Guiding Principles.
    
    compensation should be adequate to attract and retain qualified
    associates;
    compensation paid to such associates should be based on their
    individual duties and responsibilities and their relative
    contribution to overall results; and
    compensation should reflect remuneration levels for comparable
    positions inside and outside the organization. The Committee
    reviews the Companys compensation policies at least
    annually with its overall review of executive compensation.    th
 86




---



##### Table of Contents



th
  Determination of Compensation.
  Tax Deductibility of Pay.
  Recoupment of Annual Incentives.
  Components
    of Our Compensation Program
  Base Pay.
 87




---



##### Table of Contents



Cash Incentive Bonus. and/or and/or
  Executive Savings Plan. and/or
  Health and Insurance Plans.
 88




---



##### Table of Contents



Summary
    Compensation Table
    2007
    EXECUTIVE COMPENSATION
  Change inPensionNon-Equity


Value andStock


Option


Incentive Plan


NQDC


All OtherSalary


Bonus


Awards


Awards


Compensation


Earnings


Compensation


TotalName and Principal Position

Year


($)


($)


($)


($)


($)


($)


($)


($)Antonio B. Mon


2007



1,288,408
(1)


898,061
(2)


















654,864
(3)


2,841,333Chief Executive Officer


2006



1,200,562



1,000,000



















264,795
(4)


2,465,357Stephen M. Wagman


2007



441,663



325,000



















12,000
(5)


778,663Executive Vice President &


2006



























Chief Financial OfficerGeorge C. Yeonas


2007



100,000



1,125,000



















700,724
(6)


1,925,724Exec Vice President 


2006



100,000























700,000
(6)


800,000TOUSA HomesMark Upton


2007
(7)


450,973



2,156,495



















7,200
(5)


2,614,668Exec Vice President 


2006



420,000



1,229,900











770,100
(8)






97,294
(9)


2,517,294TOUSA HomesJohn Kraynick


2007
(7)


544,891



1,530,000











1,343,727
(10)






6,833
(11)


3,425,451Vice President


2006



500,000



640,000











1,760,000
(10)










2,900,000Harry Engelstein


2007
(7)


566,919



3,339,240



















30,540
(12)


3,936,699Chairman  TOUSA


2006



500,000



1,550,000



















104,940
(13)


2,154,940Homes     (1)
    
    Mr. Mon waived his contractual right to annual 10% salary
    increases effective October 1, 2007.(2)
    
    Effective October 1, 2007, Mr. Mon waived his
    contractual right to an annual bonus of $1 million.(3)
    
    This amount includes $60,000 paid for life insurance policies,
    $51,636 paid in tax
    gross-up
    payments on such premiums, $36,286 for personal use of a
    corporate automobile, $38,065 for personal rental of a corporate
    condominium, $422,500 representing the excess of the fair market
    value over the purchase price paid by Mr. Mon for the
    condominium pursuant to the terms of his amended and restated
    employment agreement dated January 27, 2004, $40,437 tax
    gross-up on
    the automobile and condominium, and the balance represents the
    taxable portion of premiums paid by the Company on group term
    life insurance and tax
    gross-up
    payments on them.(4)
    
    This amount includes $60,000 paid for life insurance policies,
    $51,636 paid in tax
    gross-up
    payments on such premiums, $36,286 for personal use of a
    corporate automobile, $54,000 for personal use of a corporate
    apartment, $29,287 tax
    gross-up on
    the automobile and apartment, $25,646 for personal use of a
    corporate aircraft, and the balance represents the taxable
    portion of premiums paid by the Company on group term life
    insurance and tax
    gross-up
    payments on them.(5)
    
    This amount is the annual auto allowance received in 2007.(6)
    
    The $700,000 in 2006 and 2007 represent earnings from consultant
    services provided to the Company. The $724 is the taxable
    portion of premiums paid by the Company for group term life
    insurance in 2007.(7)
    
    Employment with the Company terminated December 31, 2007.(8)
    
    The annual bonus was based on the factors described in the
    Compensation and Discussion Analysis.(9)
    
    This amount represents the taxable proceeds from exercise of
    Company options and sale of shares.(10)
    
    The annual bonus was based on the factors described in the
    discussion of Mr. Kraynicks employment agreement
    below. 89




---



##### Table of Contents



(11)
    
    This amount represents $2,763 for personal use of Company
    automobile, $2,000 for TOUSA executive physical reimbursement
    and $2,070 the taxable portion of premiums paid by the Company
    on group term life Insurance.(12)
    
    This amount represents the auto allowance, $12,000 and the
    taxable portion of premiums paid by the Company on group term
    life insurance, $18,540.(13)
    
    This amount represents the taxable proceeds from exercise of
    Company options and sale of shares, $74,400, auto allowance,
    $12,000 and the taxable portion of premiums paid by the Company
    on group term life insurance, $18,540.  Outstanding
    Equity Awards at Fiscal Year-End
    Option Awards

Stock AwardsNumber of

Number ofSecurities

Securities





Number of

Market ValueUnderlying

Underlying





Shares or Units

of Shares orUnexercised

Unexercised

Option



of Stock Held

Units of StockOptions

Options

Exercise

Option

That Have

That HaveExercisable

Unexercisable

Price

Expiration

Not Vested

Not Vested(#)

(#)

($)

Date

(#)

($)Antonio B. Mon


246,001
(1)(2)


643,160
(1)(2)


9.16



12/31/2012







428,097
(1)(3)






9.16



12/31/2012







658,636
(1)(4)






10.08



12/31/2012







658,636
(1)(5)






11.09



12/31/2012







658,639
(1)(6)






12.20



12/31/2012







661,970







23.62



12/31/2017











661,970
(7)


23.62



12/31/2018







Stephen Wagman






16,666
(8)


10.05



02/16/2017











16,666
(8)


10.05



02/16/2018











16,667
(8)


10.05



02/16/2019







George Yeonas










n/a



n/a







Mark Upton


9,375







10.08



03/03/2013







18,750







10.61



03/03/2013







18,750







11.14



03/03/2013







18,750







11.67



03/03/2013











18,750
(9)


12.20



03/03/2013







John Kraynick


9,375







17.25



03/03/2014







9,375







18.98



03/03/2014







9,375







20.88



03/03/2014











9,375
(9)


22.96



03/03/2014











9,375
(9)


25.25



03/03/2014







Harry Engelstein


7,500







10.61



03/03/2013







7,500







11.14



03/03/2013







7,500







11.67



03/03/2013











7,500
(9)


12.20



03/03/2013







11,250







17.25



03/03/2014







11,250







18.98



03/03/2014







11,250







20.88



03/03/2014











11,250
(9)


22.96



03/03/2014











11,250
(9)


25.25



03/03/2014







     (1)
    
    As a result of various gifts and transfers for estate planning
    purposes, Mr. Mon has transferred stock options to various
    family-controlled entities. The total set forth above includes
    (i) 622,749 shares issuable upon exercise of stock
    options that have already vested that are beneficially owned by
    Maywood Investment Company, LLC (MIC),
    (ii) 967,307 shares issuable upon exercise of stock
    options that have 90




---



##### Table of Contents



already vested that are beneficially owned by a trust for the
    benefit of Mr. Mons adult children (the
    Trust), and (iii) 1,059,953 shares
    issuable upon exercise of stock options that have already vested
    that are beneficially owned by Maywood Capital, LLC
    (MC). Mr. Mon is not the managing member of
    MIC, nor does he own or control majority of the membership
    interests in MIC, and, accordingly, he disclaims beneficial
    ownership of the stock options owned by MIC. Mr. Mon
    disclaims beneficial ownership of the stock options held by the
    Trust, and, although he has a pecuniary interest in MC, he also
    disclaims beneficial ownership of the stock options held by MC.(2)
    
    These options fully vest on December 31, 2009. However,
    these options are subject to accelerated vesting, in accordance
    with the following schedule, depending on whether and to what
    extent the Companys common stock price exceeds the average
    common stock price of a specified peer group at the end of each
    performance period: 246,000 of 296,387 vested on
    December 31, 2004, none of 296,387 vested on
    December 31, 2005, and none of 296,387 vested on
    December 31, 2006.(3)
    
    These non-qualified options were immediately available on the
    grant date of December 31, 2002.(4)
    
    These non-qualified options vested on January 1, 2003.(5)
    
    These non-qualified options vested on January 1, 2004.(6)
    
    These non-qualified options vested on January 1, 2005.(7)
    
    These non-qualified stock options vest on December 31, 2008.(8)
    
    Mr. Wagmans employment was voluntarily terminated on
    January 18, 2008. None of Mr. Wagmans shares had
    vested as of the date of termination.(9)
    
    Mr. Upton, Mr. Kraynick and Mr. Engelstein
    voluntarily terminated their employment on December 31,
    2007. Pursuant to the Amended and Restated Annual Long-Term
    Incentive Plan, the terminated optionees have three months from
    the date of termination to exercise their vested options. Any
    unvested options are cancelled effective the date of termination.  Employment
    Agreements
  Antonio
    B. Mon
   91




---



##### Table of Contents



Form 10-K,
  George
    Yeonas
   92




---



##### Table of Contents



Stephen
    Wagman
    John
    Kraynick
      Mark
    Upton
    Harry
    Engelstein
    Provisions
    in the Employment Agreements Generally
    Potential
    Payments upon Termination or Change in Control
   93




---



##### Table of Contents



Equity
    Compensation Plan Information
    Number of SecuritiesRemaining Available forNumber of Securities





Future Issuance Underto be Issued Upon


Weighted-Average


Equity CompensationExercise of


Exercise Price of


Plans, ExcludingOutstanding Options,


Outstanding Options,


Securities ReflectedPlan Category

Warrants and Rights


Warrants and Rights


in Column (a)(a)


(b)


(c)Equity compensation plans approved by security holders


7,620,019


$
12.89



271,609Equity compensation plans not approved by security holders










Total


7,620,019


$
12.89



271,609   Director
    Compensation
      Fees Earned or


Stock


OptionPaid in
    Cash(1)


Awards(2)


Awards(3)


TotalWilliam Hasler

$
80,000






$
60,000


$
140,000Larry D. Horner

$
120,000






$
120,000


$
240,000Susan B. Parks

$
60,000


$
59,992






$
119,992Michael Poulos

$
70,000


$
59,992






$
129,992J. Bryan Whitworth

$
60,000






$
60,000


$
120,000  94




---



##### Table of Contents



(1)
    
    With respect to Mr. Horner, includes $60,000 paid for
    services as Senior Outside Director of the Board. With respect
    to Messrs. Hasler and Poulos, includes $20,000 and $10,000,
    respectively, paid to each for service as a committee
    chairperson.(2)
    
    Each of Susan B. Parks and Michael Poulos received
    6,825 shares of restricted stock in 2007. Calculation was
    based on the $8.79 closing price of our Common Stock on
    March 2, 2007, the date of grant.(3)
    
    Fair value of the stock option grants are estimated using the
    Black-Scholes option-pricing model. Mr. Horner received
    44,776 options and each of J. Bryan Whitworth and William Hasler
    received 22,388 options based on a Black-Scholes value of $2.68
    with an exercise price equal to the $8.79 closing price of our
    Common Stock on March 2, 2007, the date of grant. Each
    stock option grant vests ratably over a 12 month period
    beginning on the date of grant.    Vested


UnvestedOptions


OptionsWilliam Hasler


46,020



5,597Larry D. Horner


33,582



11,194Susan B. Parks






Michael Poulos






J. Bryan Whitworth


32,862



5,597   Compensation
    Committee Interlocks and Insider Participation
    ITEM 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    
    each person (or group of affiliated persons) who we know to
    beneficially own more than 5% of the outstanding shares of our
    common stock;
    each of our current directors and our Named Executive Officers
    (as defined below); and
    all of our current executive officers and directors as a group.   95




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##### Table of Contents



Amount andNature ofBeneficial


PercentName and Address of Beneficial
    Owner:

Ownership(1)


Owned(1)Common Stock:Technical Olympic
    S.A.(2)


39,899,975



66.94
%Konstantinos Stengos


338,124
(3)


*Antonio B. Mon


3,316,979
(4)


5.27
%Andreas Stengos


291,249
(3)


*George Stengos


285,249
(3)


*Marianna Stengou


301,999
(3)


*Larry D. Horner


70,342
(5)


*William A. Hasler


54,167
(6)


*Michael J. Poulos


19,606



*Susan B. Parks


13,148



*J. Bryan Whitworth


40,709
(7)


*Tommy L. McAden


675,224
(8)


1.12
%John Kraynick


37,500
(9)


*Mark Upton


37,500
(9)


*Harry Engelstein


75,000
(9)


*Stephen Wagman






*All directors and executive officers as a group (19 persons)


5,579,088



8.12
%     
    
    Except as otherwise indicated, the address of each person named
    in this table is
    c/o TOUSA,
    Inc., 4000 Hollywood Boulevard, Suite 500 N,
    Hollywood, Florida 33021.*
    
    Less than one percent.(1)
    
    The amounts and percentage of common stock beneficially owned
    are reported on the basis of regulations of the Commission.
    Under the rules of the Commission, a person is deemed to be a
    beneficial owner of a security if that person has or shares
    voting power, which includes the power to vote or
    direct the voting of the security, or investment
    power, which includes the power to dispose of or direct
    the disposition of the security. Except as indicated by
    footnote, and subject to community property laws where
    applicable, the persons named in the table above have sole
    voting and investment power with respect to all shares of common
    stock shown as beneficially owned by them. In addition, in
    determining the number and percentage of shares beneficially
    owned by each person, shares issuable pursuant to options
    exercisable within 60 days after April 9, 2007, are
    deemed outstanding for purposes of determining the total number
    outstanding for such person and are not deemed outstanding for
    such purpose for all other stockholders. Under these rules, more
    than one person may be deemed a beneficial owner of the same
    securities and a person may be deemed a beneficial owner of
    securities as to which he has no economic interest.(2)
    
    The principal business address of Technical Olympic S.A. is 20
    Solomou Street, Alimos, Athens, Greece, 17456.
    Mr. Konstantinos Stengos owns more than 5% of the
    outstanding stock of Technical Olympic S.A.(3)
    
    Includes 281,249 shares issuable upon exercise of stock
    options that have already vested.(4)
    
    As a result of various gifts and transfers for estate planning
    purposes, Mr. Mon has transferred stock options to various
    family-controlled entities. The total set forth above includes
    (i) 622,749 shares issuable upon exercise of stock
    options that have already vested that are beneficially owned by
    Maywood Investment Company, LLC (MIC),
    (ii) 967,307 shares issuable upon exercise of stock
    options that have already vested that are beneficially owned by
    a trust for the benefit of Mr. Mons adult children
    (the 96




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##### Table of Contents



Trust), (iii) 1,059,953 shares issuable
    upon exercise of stock options that have already vested that are
    beneficially owned by Maywood Capital, LLC (MC), and
    (iv) 661,970 shares issuable upon exercise of stock
    options that have already vested that are beneficially owned by
    Mr. Mon. Mr. Mon is not the managing member of MIC,
    nor does he own or control majority of the membership interests
    in MIC, and, accordingly, he disclaims beneficial ownership of
    the stock options owned by MIC. Mr. Mon disclaims
    beneficial ownership of the stock options held by the Trust,
    and, although he has a pecuniary interest in MC, he also
    disclaims beneficial ownership of the stock options held by MC.(5)
    
    Includes 44,776 shares issuable upon exercise of stock
    options that have already vested.(6)
    
    Includes 51,617 shares issuable upon exercise of stock
    options that have already vested.(7)
    
    Includes 38,459 shares issuable upon exercise of stock
    options that have already vested.(8)
    
    Includes 675,099 shares issuable upon exercise of stock
    options that have already vested.(9)
    
    All shares issuable upon exercise of stock options that have
    already vested.  Security
    Ownership of Principal Stockholders
    Percent ofNumber of Shares and Nature of

OutstandingName and Address

Beneficial Ownership

SharesTechnical Olympic S.A. 
    20 Solomou Street
    Athens, Greece 17456

39,899,975 shares of Common Stock


66.94
%8% Series A Convertible
    Pay-In-Kind
    Preferred Stock:Deutsche Bank Trust Companies of America

77,200(1)


44.58
%     (1)
    
    Represents 77,200 shares of 8% Series A Convertible
    Pay-In-Kind
    Preferred Stock which are convertible into, and have voting
    rights equivalent to 47,950,311 shares of our common stock.  ITEM 13.
    Certain
    Relationships and Related Transactions  Management
    Services Agreement
   97




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Purchasing
    Agreements
    Certain
    Land Bank Transactions
    Other
    Transactions
        Code of
    Business Conduct and Ethics
   98




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##### Table of Contents



Independence
    Family
    Relationships
    ITEM 14.
    Principal
    Accounting Fees and Services  Independent
    Registered Public Accounting Firm Fees
    Audit Fees: (Form 10-K), (Forms 10-Q),
  Audit Related Fees:
  Tax Fees:
  All Other Fees:
   99




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##### Table of Contents



Pre-Approval
    Policies and Procedures for Audit and Permitted Non-Audit
    Services
       PART IV  ITEM 15.
    Exhibits
    and Financial Statement Schedules    Financial Statements
  Form 10-K.
  Financial Statement Schedules
    Exhibits
  Number

Exhibit Description3
.1

Certificate of Incorporation of Newark 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,
    dated April 28, 2004 (incorporated by reference to the Form 10-Q
    for the quarter ended March 31, 2004, previously filed by the
    Registrant).3
.5

Certificate of Amendment to the Certificate of Incorporation,
    dated July 30, 2007 (incorporated by reference to the Form 10-Q
    for the quarter ended June 30, 2007, previously filed by the
    Registrant).3
.6

Certificate of Designation, Powers, Preferences and Rights of 8%
    Series A Convertible
    Pay-In-Kind
    Preferred Stock, dated as of July 31, 2007 (incorporated by
    reference to the Form 10-Q for the quarter ended June 30,
    2007, previously filed by the Registrant).3
.7

Amendment No. 1 to the Bylaws of TOUSA, Inc. (incorporated by
    reference to the Form 10-Q, for the quarter ended September 30,
    2007, previously filed by the Registrant). 100




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##### Table of Contents



Number

Exhibit Description4
.1

Indenture, dated as of June 25, 2002, by and among TOUSA, 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).4
.2

Indenture, dated as of June 25, 2002, by and among TOUSA, Inc.,
    the subsidiaries name therein and Wells Fargo Bank Minnesota,
    National Association, as Trustee covering up to $150,000,000
    103/8% 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 TOUSA, 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 TOUSA, Inc.
    103/8% 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 TOUSA, 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 TOUSA, 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 TOUSA, 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

TOUSA, Inc.
    103/8% 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
    71/2% Senior
    Subordinated Notes due 2011, dated as of March 17, 2004, among
    TOUSA, 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 TOUSA, Inc.
    71/2% 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
    71/2% Senior
    Subordinated Notes due 2015, dated as of December 21, 2004,
    among TOUSA, 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 TOUSA, Inc.
    71/2% 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)).4
.14

Indenture for the 14.75% Senior Subordinated PIK Election
    Notes due 2015, dated as of July 31, 2007, among TOUSA, Inc.,
    the subsidiaries named therein and Wells Fargo Bank, N.A., as
    Trustee (included in Exhibit A to Exhibit 4.14) (incorporated by
    reference to the Form 10-Q for the quarter ended June 30, 2007,
    previously filed by the Registrant).4
.15

Form of TOUSA, Inc. Senior Subordinated PIK Election Notes due
    2015 (incorporated by reference to the Form 10-Q for the quarter
    ended June 30, 2007, previously filed by the Registrant).4
.16

Stock Purchase Warrant dated July 31, 2007 (incorporated by
    reference to the Form 10-Q for the quarter ended June 30, 2007,
    previously filed by the Registrant).4
.17

Registration Rights Agreement dated July 31, 2007 (8% Series A
    Convertible Pay-In-Kind Preferred Stock) (incorporated by
    reference to the Form 10-Q for the quarter ended June 30, 2007,
    previously filed by the Registrant). 101




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Number

Exhibit Description4
.18

Registration Rights Agreement dated July 31, 2007
    (14.75% Senior Subordinated PIK Election Notes due 2015)
    (incorporated by reference to the Form 10-Q for the quarter
    ended June 30, 2007, previously filed by the Registrant).4
.19

Registration Rights Agreement dated July 31, 2007 (Stock
    Purchase Warrant) (incorporated by reference to the Form 10-Q
    for the quarter ended June 30, 2007, previously filed by the
    Registrant).10
.1(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).10
.2(1)

Amended and Restated Employment Agreement between TOUSA, 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(1)

Employment Agreement between TOUSA, 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(1)

TOUSA, 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
    TOUSA, 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 TOUSA, 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 TOUSA, 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(1)

Employment Agreement, dated as of May 1, 2004, between David J.
    Keller and TOUSA, 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 December 31, 2004,
    previously filed by the Registrant).10
.13(1)

TOUSA, 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(1)

Addendum to TOUSA, 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).10
.15(1)

Term Sheet for the Performance Unit Program under the TOUSA,
    Inc. Annual and Long-Term Incentive Plan, as amended and
    restated (incorporated by reference to Exhibit 10.21 to the
    Form 10-K, dated March 11, 2005, previously filed by
    the Registrant). 102




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Number

Exhibit Description10
.16(1)

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(1)

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(1)

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(1)

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(1)

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(1)

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(1)

Policy for Compensation of Outside Directors of TOUSA, 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(1)

Amendment to the Amended and Restated Employment Agreement,
    dated January 13, 2006, by and between TOUSA, 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(1)

Employment Agreement, dated as of January 13, 2006, by and
    between TOUSA, 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).10
.29(1)

Employment Agreement, dated as of January 13, 2006, by and
    between TOUSA, 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 December 31, 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 December 31, 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 December 31, 2006,
    previously filed by the Registrant). 103




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##### Table of Contents



Number

Exhibit Description10
.35

Completion Guaranty dated as of August 1, 2005, by and Tousa
    Homes, L.P. and TOUSA, 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 December 31, 2006,
    previously filed by the Registrant).10
.36

Carve-out Guaranty dated as of August 1, 2005, made by Tousa
    Homes, L.P. and TOUSA, 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 December 31, 2006, previously
    filed by the Registrant).10
.37(1)

Employment Agreement, dated January 3, 2007, by and between
    TOUSA, 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 TOUSA, 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 TOUSA, 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).10
.40

Amendment No. 1 to Security Agreement dated January 30, 2007
    among TOUSA, 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 TOUSA, 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 TOUSA, Inc., certain of its subsidiaries and the
    lenders parties thereto, dated as of March 13, 2007
    (incorporated by reference to Exhibit 10.42 of the Annual
    Report on Form 10-K dated March 20, 2007, previously
    filed by the Registrant).10
.43

Settlement and Release Agreement dated as of May 30, 2007, by
    and among: (i) TOUSA, Inc., f/k/a Technical Olympic USA, Inc.;
    (ii) TOUSA LLC; (iii) TOUSA Homes, L.P.; (iv) TOI, LLC; (v)
    TE/TOUSA, LLC; (vi) TE/TOUSA Mezzanine Two, LLC; (vii) TE/TOUSA
    Mezzanine, LLC; (viii) TE/TOUSA Senior, LLC; (ix)
    EH/Transeastern, LLC; (x) Falcone/TEP Holdings, LLC, f/k/a
    Falcone/Ritchie LLC; (xi) TEP Holdings, Inc., f/k/a Transeastern
    Properties, Inc.; (xii) Arthur J. Falcone; (xiii) Edward W.
    Falcone; and (xiv) those certain entities identified and listed
    on Schedule 1 thereto (incorporated by reference to the Form
    10-Q for the quarter ended June 30, 2007, previously filed by
    the Registrant).10
.44

Mutual Release and Consent Agreement dated as of July 31, 2007,
    by and among EH/Transeastern, LLC, TE/TOUSA Senior, LLC, TOUSA,
    Inc. (f/k/a Technical Olympic USA, Inc.), TOUSA Homes, LP,
    TE/TOUSA LLC, TE/TOUSA Mezzanine Two, LLC, TE/TOUSA Mezzanine,
    LLC, the lenders party to that certain $450,000,000 Senior
    Credit Agreement dated as of August 1, 2005, by and among
    EH/Transeastern, LLC, and TE/TOUSA Senior, LLC, as Borrowers,
    CIT Group/Business Credit, Inc., as successor Administrative
    Agent, and the lenders a party thereto (incorporated by
    reference to the Form 10-Q for the quarter ended June 30, 2007,
    previously filed by the Registrant). 104




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##### Table of Contents



Number

Exhibit Description10
.45

Settlement and Release Agreement dated as of June 29, 2007, by
    and among: (i) Technical Olympic S.A.; (ii) TOUSA, Inc. f/k/a
    Technical Olympic USA, Inc.; (iii) TOUSA, LLC; (iv) TOI, LLC.;
    (v) TOUSA Homes, L.P.; (vi) TE/TOUSA, LLC; (vii) TE/TOUSA
    Mezzanine Two, LLC; (viii) TE/TOUSA Mezzanine, LLC; (ix)
    TE/TOUSA Senior, LLC; (x) EH/Transeastern, LLC; and (xi) the
    lenders party to that certain $137,500,000 Senior Mezzanine
    Credit Agreement dated as of August 1, 2005, by and among
    TE/TOUSA Mezz, as Borrower, Deutsche Bank Trust Company
    Americas, as Administrative Agent, the lenders now or hereafter
    a party thereto, and Deutsche Bank Securities Inc., as Sole Lead
    Arranger and Sole Book Running Manager (incorporated by
    reference to the Form 10-Q for the quarter ended June 30, 2007,
    previously filed by the Registrant).10
.46

Settlement and Release Agreement dated as of June 29, 2007, by
    and among: (i) Technical Olympic S.A.; (ii) TOUSA, Inc. f/k/a
    Technical Olympic USA, Inc.; (iii) TOUSA, LLC; (iv) TOI, LLC;
    (v) TOUSA Homes, L.P.; (vi) TE/TOUSA, LLC; (vii) TE/TOUSA
    Mezzanine Two, LLC; (viii) TE/TOUSA Mezzanine, LLC; (ix)
    TE/TOUSA Senior, LLC; (x) EH/Transeastern, LLC; and (xi) the
    lenders party to that certain $87,500,000 Junior Mezzanine
    Credit Agreement dated as of August 1, 2005, by and among
    TE/TOUSA Mezz Two, as Borrower, Deutsche Bank Trust Company
    Americas as Administrative Agent, the lenders party thereto, and
    Deutsche Bank Securities Inc., as Sole Lead Arranger and Sole
    Book Running Manager (incorporated by reference to the Form 10-Q
    for the quarter ended June 30, 2007, previously filed by the
    Registrant).10
.47

Intercreditor agreement among Citicorp North America, Inc. and
    itself in its capacity as agents for the lenders, dated July 31,
    2007 (incorporated by reference to Exhibit 99.2 to the Current
    Report on Form 8-K dated November 14, 2007, previously filed by
    the Registrant).10
.48

Instrument of Resignation, Appointment and Acceptance, dated
    November 15, 2007, among TOUSA, Inc., Wells Fargo Bank, National
    Association, and Wilmington Trust Company (incorporated by
    reference to Exhibit 10.1 to the Current Report on Form 8-K
    dated November 15, 2007, previously filed by the
    Registrant).10
.49

Instrument of Resignation, Appointment and Acceptance, dated
    November 20, 2007, among TOUSA, Inc., Wells Fargo Bank, National
    Association, and HSBC Bank USA, National Association
    (incorporated by reference to Exhibit 10.2 to the Current Report
    on Form 8-K dated November 21, 2007, previously filed by the
    Registrant).10
.50(1)

Amendment to Employment Agreement, dated December 10th, 2007,
    between TOUSA, Inc. and Stephen Wagman (incorporated by
    reference to Exhibit 10.1 to the Current Report on Form 8-K
    dated December 10, 2007, previously filed by the Registrant).10
.51

Amendment No. 2 to the First Lien Term Loan Credit Agreement
    (incorporated by reference to Exhibit 99.1 to the Current Report
    on Form 8-K dated December 11, 2007, previously filed by the
    Registrant).10
.52

Amendment No. 2 to the Second Amended and Restated Revolving
    Credit Agreement (incorporated by reference to Exhibit 99.2 to
    the Current Report on Form 8-K dated December 14, 2007,
    previously filed by the Registrant).10
.53

Senior Secured Super-Priority Debtor In Possession Credit and
    Security Agreement, dated as of January 29, 2008, by and among
    TOUSA, Inc., and certain of its subsidiaries party thereto, and
    the Lenders and Issuers party thereto, Citicorp North America,
    Inc., as Administrative Agent and Citigroup Global Markets Inc.
    as Sole Lead Arranger and Bookrunner (incorporated by reference
    to Exhibit 10.1 to the Current Report on Form 8-K dated February
    5, 2008, previously filed by the Registrant).10
.54

Consent to Termination of Restructuring Support Agreement
    (incorporated by reference to Exhibit 10.1 to the Current Report
    on Form 8-K dated February 13, 2008, previously filed by the
    Registrant).10
.55

Amendment No. 1 to Senior Secured Super-Priority Debtor In
    Possession Credit and Security Agreement (incorporated by
    reference to Exhibit 10.1 to the Current Report on Form 8-K
    dated March 21, 2008, previously filed by the Registrant).10
.56(1)(2)

Employment Agreement, dated January 1, 2008, by and between
    TOUSA, Inc. and George Yeonas. 105




---



##### Table of Contents



Number

Exhibit Description10
.57(1)(2)

Amendment to Employment Agreement, dated January 18, 2008, by
    and between TOUSA, Inc. and Tommy McAden.10
.58

Letter Agreement between TOUSA, Inc., as Administrative
    Borrower, and Citicorp North America, Inc., dated April 22, 2008
    (incorporated by reference to Exhibit 10.1 to the Current Report
    on Form 8-K dated April 23, 2008, previously filed by the
    Registrant).10
.59

Amendment No. 1 to Senior Secured Super-Priority Debtor In
    Possession Credit and Security Agreement (incorporated by
    reference to Exhibit 10.1 to the Current Report on Form 8-K
    dated May 5, 2008, previously filed by the Registrant).10
.60(1)

Executive Vice-Chairman Agreement, dated May 23, 2008, between
    TOUSA, Inc. and Antonio B. Mon (incorporated by reference
    to Exhibit 99.1 to the Current Report on Form 8-K dated May 27,
    2008, previously filed by the Registrant).10
.61

Order Further Extending Interim Termination Date Under the
    Senior Secured Super-Priority Debtor-In-Possession Credit and
    Security Agreement (incorporated by reference to Exhibit 99.1 to
    the Current Report on Form 8-K dated May 28, 2008, previously
    filed by the Registrant).10
.62

Second Order Further Extending Interim Termination Date Under
    the Senior Secured
    Super-Priority
    Debtor-In-Possession Credit and Security Agreement (incorporated
    by reference to Exhibit 99.1 to the Current Report on Form 8-K
    dated June 12, 2008, previously filed by the Registrant).10
.63

Third Order Further Extending Interim Termination Date Under the
    Senior Secured
    Super-Priority
    Debtor-In-Possession Credit and Security Agreement (incorporated
    by reference to Exhibit 99.1 to the Current Report on Form 8-K
    dated June 17, 2008, previously filed by the Registrant).10
.64

Stipulated Final Order (I) Authorizing Limited Use of Cash
    Collateral Pursuant to Sections 105, 361 and 363 of the
    Bankruptcy Code, and (II) Granting Replacement Liens, Adequate
    Protection and Super Priority Administrative Expense priority to
    Secured Lenders (incorporated by reference to Exhibit 10.1 to
    the Current Report on Form 8-K dated June 24, 2008, previously
    filed by the Registrant).21
.0(2)

Subsidiaries of the Registrant.23
.1(2)

Consent of Ernst & Young LLP Independent Registered Public
    Accounting Firm.23
.2(2)

Consent of Ernst & Young LLP Independent Certified Public
    Accountants.31
.1(2)

Certification of Chief Executive Officer pursuant to Section 302
    of the Sarbanes-Oxley Act of 2002.31
.2(2)

Certification of Chief Financial Officer pursuant to Section 302
    of the Sarbanes-Oxley Act of 2002.32
.1(2)

Certification of Chief Executive Officer pursuant to Section 906
    of the Sarbanes-Oxley Act of 2002.32
.2(2)

Certification of Chief Financial Officer pursuant to Section 906
    of the Sarbanes-Oxley Act of 2002.99
.1(2)

Consolidated financial statements of TE/TOUSA, LLC and
    Subsidiaries for the years ended November 30, 2006 and the
    period from inception (July 1, 2005) to November 30,
    2005.99
.2(2)

Unaudited consolidated financial statements for TE/TOUSA, LLC
    and subsidiaries for the eight months ended July 30, 2007.99
.3(2)

Financial statements of Engle/Sunbelt Holdings, LLC for the
    years ended December 31, 2007 and 2006.     (1)
    
    Management contract or compensatory plan or arrangement.(2)
    
    Filed herewith. 106




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##### Table of Contents



SIGNATURES      By:
    /s/  Antonio
    B. Mon         Signature

Title

Date/s/  Antonio
    B. MonAntonio
    B. Mon

Executive Vice Chairman, President,
    Chief Executive Officer
    (Principal Executive Officer) and Director

August 12, 2008/s/  Tommy
    L. McAdenTommy
    L. McAden

Executive Vice President and Director,
    Chief Financial Officer
    (Principal Financial Officer)

August 12, 2008/s/  Angela
    F. ValdesAngela
    F. Valdes

Vice President & Chief
    Accounting Officer
    (Principal Accounting Officer)

August 12, 2008/s/  Konstantinos
    StengosKonstantinos
    Stengos

Chairman of the Board and Director

August 12, 2008/s/  Andreas
    StengosAndreas
    Stengos

Executive Vice President and Director

August 12, 2008/s/  George
    StengosGeorge
    Stengos

Executive Vice President and Director

August 12, 2008/s/  Marianna
    StengouMarianna
    Stengou

Director

August 12, 2008/s/  Larry
    D. HornerLarry
    D. Horner

Director

August 12, 2008/s/  William
    A. HaslerWilliam
    A. Hasler

Director

August 12, 2008 107




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##### Table of Contents



Signature

Title

Date/s/  Michael
    J. PoulosMichael
    J. Poulos

Director

August 12, 2008/s/  Susan
    B. ParksSusan
    B. Parks

Director

August 12, 2008/s/  J.
    Bryan WhitworthJ.
    Bryan Whitworth

Director

August 12, 2008  108




---



##### 



TOUSA,
    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, 2007 and 2006


F-5Consolidated Statements of Operations for the
    years ended December 31, 2007, 2006 and 2005


F-6Consolidated Statements of Stockholders
    Equity (Deficit) for the years ended December 31, 2007,
    2006 and 2005


F-7Consolidated Statements of Cash Flows for the
    years ended December 31, 2007, 2006 and 2005


F-8Notes to Consolidated Financial Statements


F-9   F-1




---



##### Table of Contents



MANAGEMENTS
    REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING  Rules 13a-15(f)
   F-2




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm  The Board of Directors and Stockholders of TOUSA, Inc.
        TE/Tousa,
  Share-Based Payment Accounting for Uncertainty in Income Taxes an
    interpretation of FASB Statement No. 109
    
     F-3




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
  The Board of Directors and Stockholders of TOUSA, Inc.
              
     F-4




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF FINANCIAL CONDITION
  December 31,


December 31,2007


2006(Dollars in millions,except par value)ASSETSHOMEBUILDING:Cash and cash equivalents:Unrestricted

$
67.2


$
47.4Restricted


5.1



3.8Inventory:Deposits


56.9



216.6Homesites and land under development


633.0



725.6Residences completed and under construction


555.9



835.7Inventory not owned


26.0



300.61,271.8



2,078.5Property and equipment, net


24.6



28.5Investments in unconsolidated joint ventures


9.0



129.0Receivables from unconsolidated joint ventures, net of allowance
    of $0 and $54.8 million at December 31, 2007 and 2006,
    respectively


0.3



27.2Other assets


330.0



236.6Goodwill


11.2



100.9Assets held for sale


6.1



124.81,725.3



2,776.7FINANCIAL SERVICES:Cash and cash equivalents:Unrestricted


9.3



6.8Restricted


5.6



4.2Mortgage loans held for sale


15.0



41.9Other assets


6.8



12.636.7



65.5Total assets

$
1,762.0


$
2,842.2LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)HOMEBUILDING:Accounts payable and other liabilities

$
401.8


$
554.2Customer deposits


33.9



62.6Obligations for inventory not owned


32.0



300.6Notes payable


1,585.3



1,060.7Bank borrowings


168.5



Liabilities associated with assets held for sale


0.9



47.82,222.4



2,025.9FINANCIAL SERVICES:Accounts payable and other liabilities


7.3



6.0Bank borrowings


7.8



35.415.1



41.4Total liabilities


2,237.5



2,067.3Commitments and contingenciesStockholders equity (deficit):Preferred stock  $0.01 par value;
    3,000,000 shares authorized; 117,500 and none issued and
    outstanding at December 31, 2007 and 2006, respectively


3.9



Common stock  $0.01 par value; 975,000,000 and
    97,000,000 shares authorized and 59,604,169 and
    59,590,519 shares issued and outstanding at
    December 31, 2007 and 2006, respectively


0.6



0.6Additional paid-in capital


570.7



481.2Retained earnings (accumulated deficit)


(1,050.7
)


293.1Total stockholders equity (deficit)


(475.5
)


774.9Total liabilities and stockholders equity (deficit)

$
1,762.0


$
2,842.2    F-5




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Year Ended December 31,2007


2006


2005(Dollars in millions, exceptper share amounts)HOMEBUILDING:Revenues:Home sales

$
2,049.4


$
2,309.4


$
2,174.4Land sales


109.4



131.9



186.12,158.8



2,441.3



2,360.5Cost of sales:Home sales


1,681.8



1,745.1



1,622.4Land sales


137.4



135.1



143.1Inventory impairments and abandonment costs


852.7



153.2



6.7Other


(5.7
)


(10.0
)


(2.7
)2,666.2



2,023.4



1,769.5Gross profit (loss)


(507.4
)


417.9



591.0Selling, general and administrative expenses


362.7



358.3



309.1(Income) loss from unconsolidated joint ventures, net


14.9



(104.7
)


(45.7
)Impairments of investments in and receivables from
    unconsolidated joint ventures and related accrued obligations


194.1



152.8



Provision for settlement of loss contingency


151.6



275.0



Goodwill impairments


89.7



5.7



Interest expense


31.6



0.6



0.4Other income, net


(2.7
)


(4.7
)


(8.9
)Homebuilding pretax income (loss)


(1,349.3
)


(265.1
)


336.1FINANCIAL SERVICES:Revenues


36.5



63.3



47.5Expenses


36.3



41.8



39.0Goodwill impairment


3.9







Financial Services pretax income (loss)


(3.7
)


21.5



8.5Income (loss) from continuing operations before income taxes


(1,353.0
)


(243.6
)


344.6Provision (benefit) for income taxes


(33.3
)


(42.8
)


126.5Income (loss) from continuing operations, net of taxes


(1,319.7
)


(200.8
)


218.1Discontinued operations:Income (loss) from discontinued operations


(17.0
)


(0.6
)


0.3Loss from disposal of discontinued operations


(13.6
)






Provision (benefit) for income taxes


(7.8
)


(0.2
)


0.1Income (loss) from discontinued operations, net of taxes


(22.8
)


(0.4
)


0.2Net income (loss)


(1,342.5
)


(201.2
)


218.3Dividends and accretion of discount on preferred stock


4.7







Net income (loss) available to common stockholders

$
(1,347.2
)

$
(201.2
)

$
218.3EARNINGS (LOSS) PER COMMON SHARE, BASIC:Earnings (loss) from continuing operations (net of preferred
    stock dividends and accretion of discount)

$
(22.22
)

$
(3.37
)

$
3.82Loss from discontinued operations


(0.38
)


(0.01
)


Basic earnings (loss) per common share

$
(22.60
)

$
(3.38
)

$
3.82EARNINGS (LOSS) PER COMMON SHARE, DILUTED:Earnings (loss) from continuing operations (net of preferred
    stock dividends and accretion of discount)

$
(22.22
)

$
(3.37
)

$
3.68Loss from discontinued operations


(0.38
)


(0.01
)


Diluted earnings (loss) per common share

$
(22.60
)

$
(3.38
)

$
3.68WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:Basic


59,601,887



59,582,697



57,120,031Diluted


59,601,887



59,582,697



59,359,355CASH DIVIDENDS PER COMMON SHARE

$



$
0.060


$
0.057    F-6




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT)
  Retained


TotalAdditional





Earnings


StockholdersPreferred Stock


Common Stock


Paid-in


Unearned


(Accumulated


EquityShares


Amount


Shares


Amount


Capital


Compensation


Deficit)


(Deficit)(Dollars in millions)Balance at January 1, 2005





$




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 of 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



774.9Adoption of FIN 48


























(1.3
)


(1.3
)Common stock issued to directors










13,650







0.1











0.1Stock option compensation expense


















4.0











4.0Transeastern settlement, net of costs associated with issuance
    of equity instruments of $2.9 million


117,500



81.7











7.6











89.3Recognition of beneficial conversion feature of preferred stock






(82.5
)










82.5











Preferred stock dividends






3.9











(3.9
)










Accretion of discount on preferred stock






0.8











(0.8
)










Net loss


























(1,342.5
)


(1,342.5
)Balance at December 31, 2007


117,500


$
3.9



59,604,169


$
0.6


$
570.7


$



$
(1,050.7
)

$
(475.5
)    F-7




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Year Ended December 31,2007


2006


2005(Dollars in millions)Cash flows from operating activities:Net income (loss)

$
(1,342.5
)

$
(201.2
)

$
218.3(Income) loss from discontinued operations


22.8



0.4



(0.2
)Income (loss) from continuing operations


(1,319.7
)


(200.8
)


218.1Adjustments to reconcile income (loss) from continuing
    operations to net cash used in operating activities, net of
    effects of acquisitions and dispositions:Depreciation and amortization


14.8



13.8



12.7Non-cash compensation expense


4.1



8.7



3.7Non-cash interest expense


19.7







Loss on early termination of debt


2.0







Provision for settlement of loss contingency


151.6



275.0



Inventory impairments and abandonment costs


852.7



153.2



6.7Goodwill impairments


93.6



5.7



Deferred income taxes


(160.6
)


(155.6
)


2.0Equity in (earnings) losses from unconsolidated joint ventures


14.9



(59.8
)


(18.5
)Distributions of earnings from unconsolidated joint ventures


0.9



73.9



0.4Impairment of investments in/receivables from unconsolidated
    joint ventures and related accrued obligations


194.1



152.8



Changes in operating assets and liabilities, net of effects of
    acquisitions and dispositions:Restricted cash


25.6



(1.8
)


4.0Inventory


(10.6
)


(387.0
)


(454.0
)Receivables from unconsolidated joint ventures


5.2



(10.2
)


(37.1
)Other assets


99.0



52.1



(67.7
)Mortgage loans held for sale


26.9



2.0



31.9Accounts payable and other liabilities


(63.0
)


(53.1
)


128.2Customer deposits


(30.6
)


(15.8
)


9.9Net cash used in operating activities


(79.4
)


(146.9
)


(159.7
)Cash flows from investing activities:Acquisitions, net of cash acquired


(7.6
)






Earn-out consideration paid for acquisitions






(0.9
)


Net additions to property and equipment


(8.9
)


(16.4
)


(13.0
)Loans to unconsolidated joint ventures






(11.3
)


(20.0
)Investments in unconsolidated joint ventures


(31.8
)


(32.1
)


(176.1
)Capital distributions from unconsolidated joint ventures


14.3



52.9



9.9Net cash used in investing activities


(34.0
)


(7.8
)


(199.2
)Cash flows from financing activities:Net borrowings from revolving credit facilities


168.5



(65.0
)


65.0Principal payments on notes payable


(1.0
)






Net proceeds from notes offering






248.8



Net proceeds from (repayments of) Financial Services bank
    borrowings


(27.6
)


0.3



(13.9
)Payments for deferred financing costs


(42.6
)


(5.5
)


(0.3
)Net proceeds from sale of common stock










89.2Payments for issuance costs associated with convertible
    preferred stock and stock warrants


(2.9
)






Excess income tax benefit from exercise of stock options






0.1



Proceeds from stock option exercises






0.2



1.8Dividends paid






(3.6
)


(3.2
)Net cash provided by financing activities


94.4



175.3



138.6Net cash provided by (used in) continuing operations


(19.0
)


20.6



(220.3
)Cash flows from discontinued operations:Net cash provided by (used in) operating activities


(15.2
)


2.1



(14.7
)Net cash provided by (used in) financing activities


56.5



(0.8
)


(1.2
)Net cash provided by (used in) discontinued operations


41.3



1.3



(15.9
)Increase (decrease) in cash and cash equivalents


22.3



21.9



(236.2
)Cash and cash equivalents at beginning of year


54.2



32.3



268.5Cash and cash equivalents at end of year

$
76.5


$
54.2


$
32.3Supplemental disclosure of non-cash financing activities:Increase (decrease) in inventory not owned

$
(274.6
)

$
207.7


$
(34.0
)Increase (decrease) in obligations for inventory not owned

$
(268.6
)

$
207.7


$
(34.0
)Supplemental disclosure of cash flow information:Cash paid for income taxes

$
20.2


$
200.4


$
61.4Supplemental disclosure of non-cash activities:Refer to Note 3 for the consolidation of other variable
    interest entities in accordance with FIN 46RRefer to Note 4 for the settlement of the Transeastern JV
    and related acquisition of assets    F-8




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 December 31,
    2007
  1.
    Business
    and Organization  Business
    Organization
    Chapter 11
    Cases
  No. 08-10928-JKO.
  debtors-in-possession
   F-9




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        
    our ability to generate and maintain adequate cash;
    the cost, duration and outcome of the restructuring process;
    our ability to comply with the terms of our cash collateral
    order and, if necessary, seek further extensions of our ability
    to use cash collateral;
    our ability to achieve profitability following a restructuring
    given housing market challenges; and
    our ability to retain key employees.      
    limiting new arrangements to acquire land (by submitting
    proposals to increased review);
    engaging in bulk sales of land and unsold homes; F-10




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   
    reducing the number of unsold homes under construction and
    limiting
    and/or
    curtailing development activities in any development where we do
    not expect to deliver homes in the near future;
    renegotiating 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 (see Note 15 regarding the June 2007 sale
    of our Dallas/Fort Worth division and Note 14
    regarding the September 2007 bulk sale of homesites in our
    Mid-Atlantic (excluding Nashville) region);
    reducing our speculative home levels; and
    pursuing other initiatives designed to monetize our assets.    Mortgage
    Joint Venture
    2.
    Summary
    of Significant Accounting Policies    Principles
    of Consolidation and Basis of Presentation
   F-11




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        
    impairment assessments of investments in unconsolidated joint
    ventures, long-lived assets, including our inventory, and
    goodwill;
    loss exposures associated with the abandonment of our rights
    under option contracts, the relinquishment of our rights under
    certain joint ventures and obligations under joint venture debt
    agreements and under performance bonds;
    realization of amounts due from unconsolidated joint ventures;
    insurance and litigation related contingencies;
    realization of deferred income tax assets and liability for
    unrecognized tax benefits; and
    estimated costs associated with construction and development
    activities in connection with our homebuilding operations.        Homebuilding
  Inventory
   F-12




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Inventory
    Not Owned and Obligations for Inventory Not Owned
  Consolidation of Variable Interest Entities
    Product Financing Arrangements
  Investments
    in Joint Ventures
  No. 04-5, 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 (EITF 04-5). EITF 04-5 EITF 04-5 EITF 04-5
   F-13




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  EITF 04-5.
  The
    Equity Method of Accounting for Investments in Common Stock 78-9, Accounting for Investments in Real Estate Ventures Accounting by Creditors for Impairment of a Loan
  Accounting for
    Contingencies
  Revenue
    Recognition
    Accounting for the Sales of
    Real Estate loan-to-value
  Warranty
    Costs
   F-14




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Advertising
    Costs
    Financial
    Services
  Title Company
    Escrow Deposits
    Mortgage
    Loans Held for Sale
    Interest
    Rate Lock Commitments
  Accounting for Derivative Instruments
    and Hedging Activities Accounting for Certain Derivative
    Instruments and Certain Hedging Activities Amendment of Statement 133 on
    Derivative Instruments and Hedging Activities
  marked-to-market
 F-15




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    lower-of-cost-or-market Accounting for Certain Mortgage
    Banking Activities.
  Application of Accounting
    Principles to Loan Commitments
  agreed-upon
  Early
    Payment Default Reserve
    Revenue
    Recognition
      General
  Cash and
    Supplemental Cash Flow Information
   F-16




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    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
      Deferred
    Finance Costs
    Goodwill
    Goodwill and Other
    Intangible Assets
 F-17




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Year Ended December 31,2007


2006Balance at January 1

$
100.9


$
105.7Earn-out consideration paid on acquisitions






0.9Impairments:Florida


(45.9
)


Mid-Atlantic


(27.6
)


Texas(1)


(0.8
)


West


(15.4
)


(5.7
)Total impairments


(89.7
)


(5.7
)Balance at December
    31(2)

$
11.2


$
100.9     (1)
    
    The Texas Region excludes the Dallas division, which is now
    classified as a discontinued operation.(2)
    
    The balance at December 31, 2007 consists of
    $1.6 million related to the Mid-Atlantic region and
    $9.6 million related to the Texas region.    Insurance
    and Litigation Reserves
    Income
    Taxes
  Accounting for Income Taxes Accounting for Uncertainty in
    Income Taxes
 F-18




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Earnings
    (Loss) Per Share
      Year Ended December 31,2007


2006


2005Basic weighted average shares outstanding


59,601,887



59,582,697



57,120,031Net effect of common stock equivalents assumed to be exercised










2,239,324Diluted weighted average shares outstanding


59,601,887



59,582,697



59,359,355   five-for-four
      Stock-Based
    Compensation
  Accounting for Stock
    Issued to Employees Accounting
    for Stock-Based Compensation
 F-19




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Share-Based Payment
        Year EndedDecember 31,2005Net income as reported

$
218.3Add: Stock-based employee compensation included in reported net
    income, net of tax


2.2Deduct: Stock-based employee compensation expense determined
    under the fair value method, net of tax


(2.7
)Pro forma net income

$
217.8Reported basic earnings per share

$
3.82Pro forma basic earnings per share

$
3.81Reported diluted earnings per share

$
3.68Pro forma diluted earnings per share

$
3.67  F-20




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Expected volatility

0.33 to 0.42Expected dividend yield

0.00%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
  Recent
    Accounting Pronouncements
  ,
    Accounting for Servicing of Financial Assets Accounting for
    Transfers and Servicing of Financial Assets and Extinguishments
    of Liabilities
    Fair Value Measurements Accounting for
    Leases
 F-21




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  No. 06-8, Applicability of the Assessment of a Buyers Continuing
    Investment under FASB Statement No. 66, Accounting for
    Sales of Real Estate, for Sales of Condominiums (EITF 06-8). EITF 06-8 percentage-of-completion EITF 06-8 EITF 06-8
  The
    Fair Value Option for Financial Assets and Financial
    Liabilities
  Determining the Nature of a Host Contract
    Related to a Hybrid Financial Instrument Issued in the Form of a
    Share under FASB Statement No. 133
  Business Combinations
  Noncontrolling Interests in Consolidated Financial
    Statements  an amendment of Accounting Research
    Bulletin No. 51
  SFAS No. 140-3 ,
    Accounting for Transfers of Financial Assets and Repurchase
    Financing Transactions Accounting
    for Transfers and Servicing of Financial Assets and
    Extinguishments of Liabilities )
 F-22




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Disclosures about Derivative Instruments and Hedging
    Activities
  3.
    Inventory    Year Ended December 31,2007


2006


2005Interest capitalized, beginning of period

$
68.7


$
44.2


$
32.6Interest
    incurred(1)


154.8



98.5



79.3Less interest included in:Cost of sales


112.8



72.6



63.0Interest expense


31.6



0.6



0.4Other
    adjustments(2)


1.3



0.8



4.3Interest capitalized, end of period

$
77.8


$
68.7


$
44.2     (1)
    
    Included in interest incurred is the amortization of deferred
    finance costs which totaled $11.0 million,
    $3.7 million and $3.3 million for the years ended
    December 31, 2007, 2006 and 2005, respectively.(2)
    
    Included in other adjustments above for the year ended
    December 31, 2005 is interest which was capitalized to
    inventory that was subsequently contributed to an unconsolidated
    joint venture.  and/or and/or
 F-23




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Consolidation of Variable Interest Entities
    and/or
 F-24




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         F-25




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31,2007


2006


2005Impairment charges on active communities:Florida

$
95.8


$
13.2


$
1.8Mid-Atlantic


16.0



26.2



0.8Texas(1)


1.0



0.6



West


68.0



41.9



3.9180.8



81.9



6.5Write-offs of deposits and abandonment costs:Florida


370.1



8.3



Mid-Atlantic


63.3



11.8



Texas(1)


5.3



0.2



0.2West


233.2



51.0



671.9



71.3



0.2Inventory impairments and abandonment costs

$
852.7


$
153.2


$
6.7     (1)
    
    The Texas region excludes the Dallas division, which is now
    classified as a discontinued operation.  4.
    Transeastern
    Joint Venture Settlement and Acquisition       F-26




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  The Equity Method of Accounting for
    Investments in Common Stock
      
    the Transeastern JV became a wholly-owned subsidiary of ours by
    merger into one of our subsidiaries, which became a guarantor on
    our credit facilities and note indentures (the acquisition was
    accounted for using the purchase method of accounting and
    results of operations have been included in our consolidated
    results beginning on July 31, 2007);
    the senior secured lenders of the Transeastern JV were repaid in
    full, including accrued interest (approximately
    $400.0 million in cash);
    the senior mezzanine lenders to the Transeastern JV received
    $20.0 million in aggregate principal amount of
    14.75% Senior Subordinated PIK Election Notes due 2015 and
    $117.5 million in initial aggregate liquidation preference
    of 8% Series A Convertible Preferred PIK Preferred Stock;
    the junior mezzanine lenders to the Transeastern JV received
    warrants to purchase shares of our common stock which had an
    estimated fair value of $8.2 million at issuance (based on
    the Black-Scholes option pricing model and before issuance
    costs);
    we entered into settlement and release agreements with the
    senior mezzanine lenders and the junior mezzanine lenders to the
    Transeastern JV which released us from our potential obligations
    to them; and
    we entered into a settlement and mutual release agreement with
    Falcone/Ritchie LLC and certain of its affiliates (the
    Falcone Entities) concerning the Transeastern JV,
    one of which owned 50% of the equity interests in the
    Transeastern JV and, among other things, released the Falcone
    Entities from claims under the 2005 asset purchase agreement
    pursuant to which we acquired our interest in the Transeastern
    JV. Pursuant to the settlement agreement, we remain obligated on
    certain indemnification obligations, including, without
    limitation, related to certain land bank arrangements.    
    an amendment to our $800.0 million revolving loan facility,
    dated January 30, 2007;
    a new $200.0 million aggregate principal amount first lien
    term loan facility; and
    a new $300.0 million aggregate principal amount second lien
    term loan facility.   F-27




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      
    $50.2 million in cash to purchase land under existing land
    bank arrangements with the former Transeastern JV
    partner; and
    $33.5 million in interest and expenses.          Purchase price:Cash consideration paid to Senior Lenders of the Transeastern JV

$
400.0Fair value of convertible preferred stock issued


84.0Fair value of senior subordinated notes issued


10.9Fair value of common stock warrants issued


8.2Payment to purchase land under existing land bank arrangements


50.2Transaction costs including accrued interest paid to the Senior
    Lenders


33.5Total estimated purchase price

$
586.8Allocation of purchase consideration:Cash and cash equivalents

$
10.3Restricted cash


28.4Inventory(1)


149.8Property and equipment


1.0Accounts payable and other liabilities


(27.4
)Customer deposits


(1.9
)Previously accrued loss
    contingency(2)


385.9Additional loss on TE
    Acquisition(3)


40.7$
586.8  F-28




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (1)
    
    The fair value of the inventory was determined by estimating
    future cash flows expected to result from the use of the asset
    and its eventual disposition, discounted at a market rate of
    interest.(2)
    
    In accordance with SFAS 5 and other authoritative guidance,
    as of June 30, 2007, the Company accrued
    $385.9 million for settlement of a loss contingency
    (determined by computing the difference between the estimated
    fair market value of the consideration paid in connection with
    the global settlement less the estimated fair market value of
    the business acquired).(3)
    
    There were no identifiable intangible assets or goodwill
    associated with the TE Acquisition.    Year Ended December 31,2007


2006Homebuilding revenues

$
2,333.6


$
3,088.6Loss from continuing operations


(1,379.6
)


(638.8
)Net loss available to common stockholders


(1,390.0
)


(648.4
)EARNINGS (LOSS) PER COMMON SHARE, DILUTED:Earnings (loss) from continuing operations, net of preferred
    stock dividends and accretion of discount


(23.32
)


(10.88
)Earnings (loss) from discontinued operations


(0.38
)


(0.01
)Diluted earnings (loss) per common share

$
(23.70
)

$
(10.89
)     5.
    Investments
    in Unconsolidated Joint Ventures  and/or
   F-29




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Engle/Sunbelt
    Joint Venture
           F-30




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        December 31,2007


2006Assets:Cash and cash equivalents

$
3.5


$
22.5Inventories


193.2



246.6Other assets


2.3



2.8Total assets

$
199.0


$
271.9Liabilities and equity:Accounts payable and other liabilities

$
70.2


$
44.8Notes payable


85.4



161.3Equity of:TOUSA, Inc.


37.6



56.6Others


5.8



9.2Total equity


43.4



65.8Total liabilities and equity

$
199.0


$
271.9   Year Ended December 31,2007


2006Revenues

$
230.1


$
511.1Costs and expenses


252.4



449.2Net income (loss)

$
(22.3
)

$
61.9   TOUSA/Kolter
    Joint Venture
  TOUSA/Kolter
 F-31




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Centex/TOUSA
    at Wellington, LLC
     F-32




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Layton
    Lakes Joint Venture
        Other
     F-33




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Accounting
    Changes and Error Corrections, a replacement of Opinion
    No. 20 and FASB Statement No. 3,
        December 31,2007


2006Assets:Cash and cash equivalents

$
3.2


$
0.9Inventories


39.0



46.4Other assets


0.9



0.3Total assets

$
43.1


$
47.6Liabilities and equity:Accounts payable and other liabilities

$
5.1


$
2.1Notes payable


20.6



24.3Equity of:TOUSA, Inc.


7.9



10.7Others


9.5



10.5Total equity


17.4



21.2Total liabilities and equity

$
43.1


$
47.6   Year Ended December 31,2007


2006Revenues

$
29.0


$
19.3Costs and expenses


27.7



17.4Net income

$
1.3


$
1.9Our share of net income

$
1.1


$
  F-34




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  6.
    Other
    Assets    December 31,2007


2006Homebuilding:Deferred income taxes, net

$



$
160.6Income taxes receivable


218.4



12.9Accounts receivable


34.7



37.0Deferred finance costs, net


55.8



16.1Prepaid expenses


20.3



7.4Other assets


0.8



2.6Total other assets

$
330.0


$
236.6   7.
    Accounts
    Payable and Other Liabilities    December 31,2007


2006Homebuilding:Accrual for settlement of loss contingency (Note 4)

$



$
275.0Accounts payable


41.8



70.2Interest


48.4



39.4Compensation


14.8



27.8Taxes, including income and real estate


22.6



10.4Accrual for unpaid invoices on delivered homes


27.9



23.6Accrued expenses


90.7



42.4Community development district bond obligations


29.6



7.3Obligations related to unconsolidated joint ventures


74.6



Accrued letters of credit expected to be drawn


43.6



Warranty costs


5.0



7.4Deferred revenue


2.8



50.7Total accounts payable and other liabilities

$
401.8


$
554.2   on-site EITF 91-10, Accounting for Special Assessments and Tax Increment
    Financing
 F-35




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      8.
    Homebuilding
    and Financial Services Borrowings  Homebuilding
    Borrowings
    December 31,2007


2006Revolving Loan Facility (11.25% at December 31, 2007)

$
168.5


$
First Lien Term Loan Facility due 2012 (9.81% at December 31,
    2007)


199.0



Discount on First Lien Term Loan Facility


(1.8
)


Second Lien Term Loan Facility due 2013 (12.81% at December 31,
    2007)


317.1



Discount on Second Lien Term Loan Facility


(2.8
)


Senior notes due 2010, at 9%


300.0



300.0Senior notes due 2011, at
    81/4%


250.0



250.0Discount on senior notes


(2.5
)


(3.5
)Senior subordinated notes due 2012, at
    103/8%


185.0



185.0Senior subordinated notes due 2011, at
    71/2%


125.0



125.0Senior subordinated notes due 2015, at
    71/2%


200.0



200.0Premium on senior subordinated notes


3.7



4.2Senior Subordinated PIK Notes due 2015, at
    143/4%


21.3



Discount on Senior Subordinated PIK Notes


(8.7
)


$
1,753.8


$
1,060.7      F-36




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Revolving
    Loan Facility and First and Second Lien Term Loan
    Facilities
        Form 10-Q 3 8
   F-37




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Senior
    Notes and Senior Subordinated Notes
  pari passu pari
    passu
  Special
    Interest
  1 4 1 4 90-day 90-day
  Senior
    Subordinated PIK Notes
     F-38




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Financial
    Services Borrowings
  30-day
   F-39




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    9.
    Income
    Taxes    Year Ended December 31,2007


2006


2005Current:Federal

$
(195.1
)

$
106.5


$
119.9State


1.2



6.3



4.6(193.9
)


112.8



124.5Deferred:Federal


159.2



(150.6
)


2.0State


1.4



(5.0
)


160.6



(155.6
)


2.0Total income tax expense (benefit)

$
(33.3
)

$
(42.8
)

$
126.5     Year Ended December 31,2007


2006


2005Computed income tax expense (benefit) at statutory rate

$
(473.5
)

$
(85.3
)

$
120.0State income taxes


(31.1
)


1.2



5.8Change in valuation allowance


463.5



42.1



Liability for unrecognized tax benefits (FIN 48)


2.4







Non-deductible items


6.6







Other, net


(1.2
)


(0.8
)


0.7Total income tax expense (benefit)

$
(33.3
)

$
(42.8
)

$
126.5      F-40




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,2007


2006Deferred tax assets:Property and equipment

$
4.4


$
Warranty, legal and insurance reserves


6.6



6.7Inventory


384.9



48.6Goodwill write-off


15.2



Accrued compensation


12.0



7.9Investments in unconsolidated entities


13.5



150.6Federal and state net operating loss carryforwards


57.1



2.7Alternative minimum tax carryforwards


12.5



Other


3.9



3.6Total deferred tax assets


510.1



220.1Deferred tax liabilities:Property and equipment






(1.8
)Amortizable intangibles






(13.1
)Prepaid expenses


(3.8
)


(0.1
)Prepaid commissions and differences in reporting selling and
    marketing


(0.7
)


(2.4
)Investment in unconsolidated entities






Total deferred tax liabilities


(4.5
)


(17.4
)Valuation allowance


(505.6
)


(42.1
)Net deferred tax asset

$



$
160.6      F-41




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          2007Balance at January 1

$
4.7Additions based on tax positions related to the current year


2.7Additions for tax positions of prior years


2.5Reductions for tax positions of prior years


(1.2
)Settlements


(1.7
)Lapse of statute of limitations


(0.4
)Balance at December 31

$
6.6      F-42




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      10.
    Commitments
    and Contingencies    Warranty
      Year EndedDecember 31,2007


2006Accrued warranty costs at January 1

$
7.4


$
6.6Liability recorded for warranties issued during the period


4.8



6.9Warranty work performed


(9.5
)


(8.4
)Transeastern warranty obligation acquired


2.0



Adjustments


0.3



2.3Accrued warranty costs at December 31

$
5.0


$
7.4   Letters
    of Credit and Performance Bonds
   F-43




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Exposure
    on Abandoned Homesite Option Contracts
      Chapter 11
    Cases
  No. 08-10928-JKO.
    Class Action
    Lawsuit
  No. 06-61844-CIV.
 F-44




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      and/or
       F-45




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Proceeding
    by Official Committee of Unsecured Creditors
  In re TOUSA, Inc. No. 08-10928-JKO; No. 08-1435-JKO.
    Proofs of
    Claims
   F-46




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Vista
    Lakes
        Other
    Litigation
    Unresolved
    Staff Comments
  In the Matter of TOUSA, Inc. SEC Inquiry No. FL-3310.
  One-Time
    Termination Benefits
    PHMC
    Settlement
   F-47




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Operating
    Leases
  and/or
  2008

$
9.32009


5.72010


4.02011


3.02012


2.2Thereafter


5.8$
30.0   11.
    Related
    Party Transactions         F-48




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
              12.
    Stockholders
    Equity (Deficit)        Convertible
    PIK Preferred Stock
   F-49




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Accounting for Certain Financial Instruments with
    Characteristics of both Liabilities and Equity Classification and Measurement
    of Redeemable Securities EITF 00-19, Accounting for Derivative Financial Instruments Indexed to,
    and Potentially Settled in, a Companys Own Stock,
    EITF 00-19-2, Accounting for Registration Payment Arrangements
  EITF 98-5, paid-in-capital EITF 00-27, Application of Issue
    No. 98-5
    to Certain Convertible Instruments
 F-50




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Earnings per Share EITF 03-6, Participating Securities and the Two-Class Method under
    FASB Statement No. 128
  Warrants
    The
    Charter Amendment
    NYSE
    Delisting
  and/or 1 2 1 2 3 8
 F-51




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  13.
    Stock-Based
    Compensation      Year Ended December 31,2007


2006


2005Weighted





Weighted





WeightedAverage





Average





AverageExercise





Exercise





ExerciseOptions


Price


Options


Price


Options


PriceOptions outstanding at beginning of year


7,712,574


$
13.04



6,606,611


$
11.06



6,827,755


$
11.12Granted


189,552


$
9.45



1,339,708


$
23.58



16,374


$
24.19Exercised










(23,750
)

$
10.84



(115,625
)

$
10.43Expired






















Forfeited


(147,250
)

$
17.30



(209,995
)

$
18.37



(121,893
)

$
16.47Options outstanding at end of year


7,754,876


$
12.87



7,712,574


$
13.04



6,606,611


$
11.06Options exercisable at end of year


6,428,847


$
13.51



4,964,676


$
10.83



4,881,757


$
10.76Options available for grant at end of year


271,609







327,561







719,061Weighted average fair market value per share of options granted
    during the year under SFAS No. 123(R)

$
3.40






$
7.90






$
7.33       Options Outstanding


Options ExercisableWeightedAverage


Weighted





WeightedRemaining


Average





AverageContractual


Exercise





ExerciseRange of Exercise Prices

Options


Life (Years)


Price


Options


Price$8.33 - $10.08


3,710,203



5.21


$
9.47



2,454,298


$
9.59$10.61 - $12.20


2,519,842



5.01


$
11.61



2,490,967


$
11.61$17.25 - $19.35


84,375



6.17


$
18.13



84,375


$
18.13$20.35 - $21.29


58,893



6.50


$
20.74



58,893


$
20.74$22.96 - $25.25


1,381,563



2.22


$
23.64



1,340,314


$
23.63  F-52




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    WeightedAverageGranted-DateFair ValueShares


(Per Share)Nonvested at January 1, 2007


2,747,898


$
5.92Granted


189,552


$
9.45Vested


(1,497,046
)

$
7.51Forfeited


(114,375
)

$
5.72Nonvested at December 31, 2007


1,326,029


$
3.78       Expected volatility

0.33 - 0.42Expected dividend yield

0.00%Risk-free interest rate

1.47% - 4.85%Expected life

3 - 10 years       14.
    Operating
    and Reportable Segments  Disclosures About
    Segments of an Enterprise and Related Information
    Florida
 F-53




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Mid-Atlantic:
  Texas:
  West:
     F-54




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Year Ended December 31,2007


2006


2005Revenues:Homebuilding:Florida

$
891.9


$
1,018.0


$
859.2Mid-Atlantic


265.0



306.0



290.9Texas(1)


635.0



602.3



415.4West


366.9



515.0



795.0Total Homebuilding


2,158.8



2,441.3



2,360.5Financial Services


36.5



63.3



47.5Total revenues

$
2,195.3


$
2,504.6


$
2,408.0     (1)
    
    The Texas region excludes the Dallas division, which is now
    classified as a discontinued operation.  (Income) loss from unconsolidated joint ventures:Florida

$
2.1


$
(9.7
)

$
7.2Mid-Atlantic


(2.2
)


(7.4
)


(5.8
)Texas


(0.5
)


(1.2
)


(0.4
)West


15.5



(86.4
)


(46.7
)$
14.9


$
(104.7
)

$
(45.7
)Impairments on unconsolidated joint ventures and related
    accrued obligations:Florida

$
90.6


$
152.8


$
Mid-Atlantic


1.6







Texas


2.0







West


99.9







$
194.1


$
152.8


$
(Income) Loss from unconsolidated joint ventures after
    impairments and related accrued obligations

$
209.0


$
48.1


$
(45.7
)Results of Operations:Homebuilding:Florida

$
(543.6
)

$
11.8


$
138.1Mid-Atlantic


(119.0
)


(20.9
)


38.1Texas(1)


52.4



59.4



33.6West


(473.1
)


26.4



186.4Total Homebuilding


(1,083.3
)


76.7



396.2Financial Services


(0.8
)


21.5



8.5Corporate and unallocated


(268.9
)


(341.8
)


(60.1
)Total income (loss) from continuing operations before income
    taxes

$
(1,353.0
)

$
(243.6
)

$
344.6     (1)
    
    The Texas region excludes the Dallas division, which is now
    classified as a discontinued operation. F-55




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   December 31,2007


2006Assets:Homebuilding:Florida

$
631.3


$
892.9Mid-Atlantic


73.0



230.4Texas(1)


220.0



210.6West


381.3



721.4Assets held for
    sale(1)


6.1



124.8Financial Services


36.7



65.5Corporate and unallocated


413.6



596.6Total assets

$
1,762.0


$
2,842.2Investments in Unconsolidated Joint Ventures:Florida

$



$
29.4Mid-Atlantic


0.1



5.3Texas


8.6



6.8West


0.3



87.5Total Investments in Unconsolidated Joint Ventures

$
9.0


$
129.0     (1)
    
    The Texas region excludes the Dallas division, which is now
    classified as a discontinued operation.    15.
    Discontinued
    Operations    Dallas/Fort Worth
   F-56




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      16.
    Employee
    Benefit Plans      17.
    Quarterly
    Results (Unaudited)   F-57




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    First


Second


Third


Fourth2007:Total revenue

$
572.7


$
576.7


$
501.2


$
544.7Inventory impairments and abandonment
    costs(1)

$
(39.1
)

$
(84.8
)

$
(504.5
)

$
(224.3
)Homebuilding gross margin (loss)

$
79.9


$
17.8


$
(437.4
)

$
(167.7
)Provision for settlement of loss contingency related to
    Transeastern JV

$
(78.9
)

$
(32.0
)

$
(40.7
)

$
Net loss

$
(66.0
)

$
(132.0
)

$
(619.7
)

$
(524.8
)Net loss available to common
    stockholders(2)

$
(66.0
)

$
(132.0
)

$
(621.9
)

$
(527.3
)Basic loss per common share from continuing operations

$
(1.05
)

$
(2.04
)

$
(10.36
)

$
(8.76
)Diluted loss per common share from continuing operations

$
(1.05
)

$
(2.04
)

$
(10.36
)

$
(8.76
)2006:Total revenue

$
598.6


$
638.8


$
592.6


$
674.6Inventory impairments and abandonment
    costs(1)

$
(5.8
)

$
(1.8
)

$
(49.8
)

$
(95.8
)Homebuilding gross margin

$
145.8


$
159.2


$
79.7


$
33.2Provision for settlement of loss contingency related to
    Transeastern JV

$



$



$



$
(275.0
)Net income (loss)

$
55.0


$
67.6


$
(80.0
)

$
(243.8
)Basic earnings (loss) per common share from continuing operations

$
0.91


$
1.12


$
(1.34
)

$
(4.07
)Diluted earnings (loss) per common share from continuing
    operations

$
0.89


$
1.09


$
(1.35
)

$
(4.06
)     (1)
    
    Inventory impairments and abandonment costs are a component of
    cost of sales.(2)
    
    Net of preferred stock dividends starting in the third quarter
    of 2007.      18.
    Summarized
    Financial Information   F-58




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidated
    Statement of Financial Condition
    December 31, 2007
  Non-TOUSA,


Guarantor


Guarantor


IntercompanyInc.


Subsidiaries


Subsidiaries


Eliminations


Total(Dollars in millions)ASSETSHOMEBUILDING:Cash and cash equivalents

$
81.3


$
(9.0
)

$



$



$
72.3Inventory






1,271.8











1,271.8Property and equipment, net


3.3



21.3











24.6Investments in unconsolidated joint ventures






9.0











9.0Receivables from unconsolidated joint ventures, net






0.3











0.3Investments in/advances to consolidated subsidiaries


989.7



(372.5
)


(5.5
)


(611.7
)


Other assets


287.7



42.3











330.0Goodwill






11.2











11.2Assets held for sale






6.1











6.11,362.0



980.5



(5.5
)


(611.7
)


1,725.3FINANCIAL SERVICES:Cash and cash equivalents










14.9







14.9Mortgage loans held for sale










15.0







15.0Other assets










6.8







6.8







36.7







36.7Total assets

$
1,362.0


$
980.5


$
31.2


$
(611.7
)

$
1,762.0LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)HOMEBUILDING:Accounts payable and other liabilities

$
83.7


$
318.1


$



$



$
401.8Customer deposits






33.9











33.9Obligations for inventory not owned






32.0











32.0Notes payable


1,585.3















1,585.3Bank borrowings


168.5















168.5Liabilities associated with assets held for sale






0.9











0.91,837.5



384.9











2,222.4FINANCIAL SERVICES:Accounts payable and other liabilities










8.0



(0.7
)


7.3Bank borrowings










7.8







7.8







15.8



(0.7
)


15.1Total liabilities


1,837.5



384.9



15.8



(0.7
)


2,237.5Total stockholders equity (deficit)


(475.5
)


595.6



15.4



(611.0
)


(475.5
)Total liabilities and stockholders equity (deficit)

$
1,362.0


$
980.5


$
31.2


$
(611.7
)

$
1,762.0  F-59




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidated
    Statement of Financial Condition
    December 31, 2006
  Non-TOUSA,


Guarantor


Guarantor


IntercompanyInc.


Subsidiaries


Subsidiaries


Eliminations


Total(Dollars in millions)ASSETSHOMEBUILDING:Cash and cash equivalents

$
53.6


$
(2.4
)

$



$



$
51.2Inventory






2,078.5











2,078.5Property and equipment, net


6.5



22.0











28.5Investments in unconsolidated joint ventures






129.0











129.0Receivables from unconsolidated joint ventures, net






27.2











27.2Investments in/advances to consolidated subsidiaries


1,933.4



(188.9
)


8.2



(1,752.7
)


Other assets


190.1



46.5











236.6Goodwill






100.9











100.9Assets held for sale






124.8











124.82,183.6



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


$
206.2


$



$



$
554.2Customer deposits






62.6











62.6Obligations for inventory not owned






300.6











300.6Notes payable


1,060.7















1,060.7Bank borrowings


















Liabilities associated with assets held for sale






47.8











47.81,408.7



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 (deficit)

$
2,183.6


$
2,337.6


$
73.7


$
(1,752.7
)

$
2,842.2  F-60




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidated
    Statement of Operations
    Year Ended December 31, 2007
  Non-TOUSA,


Guarantor


Guarantor


IntercompanyInc.


Subsidiaries


Subsidiaries


Eliminations


Total(Dollars in millions)HOMEBUILDING:Revenues

$



$
2,158.8


$



$



$
2,158.8Cost of sales






2,666.2











2,666.2Gross profit (loss)






(507.4
)










(507.4
)Selling, general and administrative expenses


91.2



286.6







(15.1
)


362.7Loss from unconsolidated joint ventures, net






14.9











14.9Impairments of investments in and receivables from
    unconsolidated joint ventures and related accrued obligations






194.1











194.1Provision for settlement of loss contingency


151.6















151.6Goodwill impairments






89.7











89.7Interest expense


31.1



0.5











31.6Other (income) expenses, net


1,078.5



55.6







(1,136.8
)


(2.7
)Homebuilding pretax income (loss)


(1,352.4
)


(1,148.8
)






1,151.9



(1,349.3
)FINANCIAL SERVICES:Revenues










51.6



(15.1
)


36.5Expenses










41.2



(4.9
)


36.3Goodwill Impairment










3.9







3.9Financial Services pretax income (loss)










6.5



(10.2
)


(3.7
)Income (loss) from continuing operations before income taxes


(1,352.4
)


(1,148.8
)


6.5



1,141.7



(1,353.0
)Provision (benefit) for income taxes


(9.9
)


(29.8
)


6.4







(33.3
)Income (loss ) from continuing operations, net of taxes


(1,342.5
)


(1,119.0
)


0.1



1,141.7



(1,319.7
)Discontinued operations:Income (loss) from discontinued operations






(17.0
)










(17.0
)Loss from disposal of discontinued operations






(13.6
)










(13.6
)Provision (benefit) for income taxes






(7.8
)










(7.8
)Income (loss) from discontinued operations, net of taxes






(22.8
)










(22.8
)Net income (loss)


(1,342.5
)


(1,141.8
)


0.1



1,141.7



(1,342.5
)Dividends and accretion of discount on preferred stock


4.7















4.7Net income (loss) available to common stockholders

$
(1,347.2
)

$
(1,141.8
)

$
0.1


$
1,141.7


$
(1,347.2
)  F-61




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidated
    Statement of Operations
    Year Ended December 31, 2006
  Non-TOUSA,


Guarantor


Guarantor


IntercompanyInc.


Subsidiaries


Subsidiaries


Eliminations


Total(Dollars in millions)HOMEBUILDING:Revenues

$



$
2,441.3


$



$



$
2,441.3Cost of sales






2,023.4











2,023.4Gross profit






417.9











417.9Selling, general and administrative expenses


71.2



291.9







(4.8
)


358.3Income from unconsolidated joint ventures, net






(104.7
)










(104.7
)Impairments of investments in and receivables from
    unconsolidated joint ventures and related accrued obligations






152.8











152.8Provision for settlement of loss contingency


275.0















275.0Goodwill impairments






5.7











5.7Interest expense


0.3



0.3











0.6Other (income) expenses, net


(79.3
)


28.2







46.4



(4.7
)Homebuilding pretax income (loss)


(267.2
)


43.7







(41.6
)


(265.1
)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) from continuing operations before income taxes


(267.2
)


43.7



17.2



(37.3
)


(243.6
)Provision (benefit) for income taxes


(66.0
)


15.1



8.1







(42.8
)Income (loss) from continuing operations, net of taxes


(201.2
)


28.6



9.1



(37.3
)


(200.8
)Discontinued operations:Loss from discontinued operations






(0.6
)










(0.6
)Benefit for income taxes






(0.2
)










(0.2
)Loss from discontinued operations, net of taxes






(0.4
)










(0.4
)Net income (loss)


(201.2
)


28.2



9.1



(37.3
)


(201.2
)Dividends and accretion of discount on preferred stock


















Net income (loss) available to common stockholders

$
(201.2
)

$
28.2


$
9.1


$
(37.3
)

$
(201.2
)  F-62




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidated
    Statement of Operations
    Year Ended December 31, 2005
  Non-TOUSA,


Guarantor


Guarantor


IntercompanyInc.


Subsidiaries


Subsidiaries


Eliminations


Total(Dollars in millions)HOMEBUILDING:Revenues

$



$
2,360.5


$



$



$
2,360.5Cost of sales






1,769.5











1,769.5Gross profit






591.0











591.0Selling, general and administrative expenses


75.3



243.6







(9.8
)


309.1Income from unconsolidated joint ventures, net






(45.7
)










(45.7
)Interest (income) expense


(0.1
)


0.5











0.4Other (income) expenses, net


(281.7
)


29.9







242.9



(8.9
)Homebuilding pretax income


206.5



362.7







(233.1
)


336.1FINANCIAL SERVICES:Revenues










57.3



(9.8
)


47.5Expenses










44.8



(5.8
)


39.0Financial Services pretax income










12.5



(4.0
)


8.5Income from continuing operations before income taxes


206.5



362.7



12.5



(237.1
)


344.6Provision (benefit) for income taxes


(11.8
)


133.4



4.9







126.5Income from continuing operations, net of taxes


218.3



229.3



7.6



(237.1
)


218.1Discontinued operations:Income from discontinued operations






0.3











0.3Provision for income taxes






0.1











0.1Income from discontinued operations, net of taxes






0.2











0.2Net income


218.3



229.5



7.6



(237.1
)


218.3Dividends and accretion of discount on preferred stock


















Net income (loss) available to common stockholders

$
218.3


$
229.5


$
7.6


$
(237.1
)

$
218.3  F-63




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidated
    Statement of Cash Flows
    Year Ended December 31, 2007
  Non-TOUSA,


Guarantor


Guarantor


IntercompanyInc.


Subsidiaries


Subsidiaries


Eliminations


Total(Dollars in millions)Net cash provided by (used in) operating activities

$
(1,037.3
)

$
(200.5
)

$
17.4


$
1,141.0


$
(79.4
)Cash flows from investing activities:Acquisitions, net of cash acquired






(7.6
)










(7.6
)Earn-out consideration paid for acquisitions


















Net additions to property and equipment


0.1



(8.0
)


(1.0
)






(8.9
)Loans to unconsolidated joint ventures


















Investments in unconsolidated joint ventures






(31.8
)










(31.8
)Capital distributions from unconsolidated joint ventures






14.3











14.3Net cash provided by (used in) investing activities


0.1



(33.1
)


(1.0
)






(34.0
)Cash flows from financing activities:Net borrowings from revolving credit facilities


168.5















168.5Principal payments on notes payable


(1.0
)














(1.0
)Net proceeds from notes offering


















Net repayments of Financial Services bank borrowings










(27.6
)






(27.6
)Payments for deferred financing costs


(42.6
)














(42.6
)Payments for issuance of convertible preferred stock and warrants


(2.9
)














(2.9
)Proceeds from stock option exercises


















Dividends paid


















Increase (decrease) in intercompany transactions


943.7



183.6



13.7



(1,141.0
)


Net cash provided by (used in) financing activities


1,065.7



183.6



(13.9
)


(1,141.0
)


94.4Net cash provided by (used in) continuing operations


28.5



(50.0
)


2.5







(19.0
)Net cash provided by (used in) discontinued operations






(41.3
)










(41.3
)Increase (decrease) in cash and cash equivalents


28.5



(8.7
)


2.5







22.3Cash and cash equivalents at beginning of year


50.6



(3.2
)


6.8







54.2Cash and cash equivalents at end of year

$
79.1


$
(11.9
)

$
9.3


$



$
76.5  F-64




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidated
    Statement of Cash Flows
    Year Ended December 31, 2006
  Non-TOUSA,


Guarantor


Guarantor


IntercompanyInc.


Subsidiaries


Subsidiaries


Eliminations


Total(Dollars in millions)Net cash provided by (used in) operating activities

$
(155.4
)

$
34.2


$
11.6


$
(37.3
)

$
(146.9
)Cash flows from investing activities:Earn-out consideration paid for acquisitions






(0.9
)










(0.9
)Net additions to property and equipment


(2.6
)


(12.0
)


(1.8
)






(16.4
)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 provided by (used in) investing activities


(2.6
)


(3.4
)


(1.8
)






(7.8
)Cash flows from financing activities:Net borrowings from revolving credit facilities


(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 provided by (used in) financing activities


188.4



(38.7
)


(11.7
)


37.3



175.3Net cash provided by (used in) continuing operations


30.4



(7.9
)


(1.9
)






20.6Net cash provided by discontinued operations






1.3











1.3Increase (decrease) in cash and cash equivalents


30.4



(6.6
)


(1.9
)






21.9Cash and cash equivalents at beginning of year


20.2



3.4



8.7







32.3Cash and cash equivalents at end of year

$
50.6


$
(3.2
)

$
6.8


$



$
54.2  F-65




---



##### Table of Contents



TOUSA,
    INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Consolidated
    Statement of Cash Flows
    Year Ended December 31, 2005
  Non-TOUSA,


Guarantor


Guarantor


IntercompanyInc.


Subsidiaries


Subsidiaries


Eliminations


Total(Dollars in millions)Net cash provided by (used in) operating activities

$
309.7


$
(272.9
)

$
40.6


$
(237.1
)

$
(159.7
)Cash flows from investing activities:Net additions to property and equipment


(4.4
)


(6.7
)


(1.9
)






(13.0
)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
)


(192.9
)


(1.9
)






(199.2
)Cash flows from financing activities:Net borrowings from revolving credit facilities


65.0















65.0Net repayments of 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 provided by (used in) financing activities


(444.4
)


426.8



(80.9
)


237.1



138.6Net cash used in continuing operations


(139.1
)


(39.0
)


(42.2
)






(220.3
)Net cash used in discontinued operations






(15.9
)










(15.9
)Decrease in cash and cash equivalents


(139.1
)


(54.9
)


(42.2
)






(236.2
)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


$
3.4


$
8.7


$



$
32.3  F-66