Exhibit 99.1
 TE/Tousa, LLC
and Subsidiaries
 Consolidated Financial Statements
Year Ended November 30, 2006 and the
Period from Inception (July 1, 2005) to November 30, 2005




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TE/Tousa, LLC
and Subsidiaries
 Contents
 Independent Auditors Report
    
    
    3Consolidated Balance Sheets
    
    
    4Consolidated Statements of Operations
    
    
    5Consolidated Statements of Members Equity (Deficit)
    
    
    6Consolidated Statements of Cash Flows
    
    
    7Notes to Consolidated Financial Statements
    
    
    8  27




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Independent Auditors Report
 
     /s/ BDO Seidman, LLPCertified Public AccountantsMarch 15, 2007West Palm Beach, FL
 3




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TE/Tousa, LLC
and Subsidiaries
 Consolidated Balance Sheets
(Note 1)
 November 30,
    
    2006
    
    
    2005(in thousands)AssetsCash and Cash Equivalents
    
    $
    16,704
    
    
    $
    18,078Restricted cash
    
    
    34,991
    
    
    
    11,530Inventory(Note 2):Deposits and option contracts
    
    
    102,424
    
    
    
    248,318Homesites and land under development
    
    
    42,238
    
    
    
    119,784Residences completed and under construction
    
    
    251,706
    
    
    
    256,399Inventory not owned
    
    
    12,452
    
    
    
    23,130Total inventory
    
    
    408,820
    
    
    
    647,631Other assets(Note 4)
    
    
    10,497
    
    
    
    26,142Intangible assets net (Note 3)
    
    
    
    
    
    
    123,445Goodwill- net
    
    
    
    
    
    
    72,209Total assets
    
    $
    471,012
    
    
    $
    899,035Liabilities and Members Equity (Deficit)LiabilitiesAccounts payable, accrued expenses and
other liabilities
    
    $
    95,914
    
    
    $
    44,905Customer deposits
    
    
    13,596
    
    
    
    67,059Obligations for inventory not owned (Note 2)
    
    
    12,452
    
    
    
    23,130Due to members (Note 10)
    
    
    32,425
    
    
    
    10,117Bank borrowings (Note 6)
    
    
    625,000
    
    
    
    585,000Member loans (Note 10)
    
    
    31,250
    
    
    
    23,750Total liabilities
    
    
    810,637
    
    
    
    753,961Commitments and Contingencies(Note 7)Members Equity (Deficit)(Note 8)Members capital
    
    
    144,173
    
    
    
    161,250Deficit
    
    
    (483,798
    )
    
    
    (15,824
    )Accumulated other comprehensive loss
    
    
    
    
    
    
    (352
    )Total members equity (deficit)
    
    
    (339,625
    )
    
    
    145,074Total liabilities and members equity (deficit)
    
    $
    471,012
    
    
    $
    899,035
 See accompanying notes to consolidated financial statements.
 4




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TE/Tousa, LLC
and Subsidiaries
 Consolidated Statements of Operations
 For the year ended November 30, 2006 and the period frominception (July 1, 2005) to November 30, 2005
    
    2006
    
    
    2005(in thousands)RevenueHome sales
    
    $
    659,308
    
    
    $
    106,615Land and lot sales
    
    
    72,730
    
    
    
    9,336732,038
    
    
    
    115,951Cost of salesHome sales
    
    
    548,424
    
    
    
    95,639Loss on impairment of inventory (Note 2)
    
    
    261,623
    
    
    
    Intangibles and goodwill impairment (Note 3)
    
    
    176,568
    
    
    
    Write off of
deposits and abandonment costs (Note 2)
    
    
    18,161
    
    
    
    Land and lot sales
    
    
    59,319
    
    
    
    2,8341,064,095
    
    
    
    98,473Gross profit (loss)
    
    
    (332,057
    )
    
    
    17,478Selling, general and administrative expenses
    
    
    82,194
    
    
    
    18,288Depreciation and amortization
    
    
    18,180
    
    
    
    7,733Interest expense
    
    
    42,880
    
    
    
    8,824Other income
    
    
    (7,337
    )
    
    
    (1,543
    )Net loss
    
    $
    (467,974
    )
    
    $
    (15,824
    )
 See accompanying notes to consolidated financial statements.
 5




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TE/Tousa, LLC
and Subsidiaries
 Consolidated Statements of Members Equity (Deficit)
(Dollars in Thousands)
 AccumulatedOtherMembers
    
    
    
    ComprehensiveCapital
    
    Deficit
    
    Loss
    
    TotalBalance at inception (July 1, 2005)
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Contributions of capital
    
    
    165,000
    
    
    
    
    
    
    
    
    
    
    
    165,000Net loss
    
    
    
    
    
    
    (15,824
    )
    
    
    
    
    
    
    (15,824
    )Distributions of capital
    
    
    (3,750
    )
    
    
    
    
    
    
    
    
    
    
    (3,750
    )Change in unrealized loss on interest
rate swap
    
    
    
    
    
    
    
    
    
    
    (352
    )
    
    
    (352
    )Balance, November 30, 2005
    
    $
    161,250
    
    
    $
    (15,824
    )
    
    $
    (352
    )
    
    $
    145,074Net loss
    
    
    
    
    
    
    (467,974
    )
    
    
    
    
    
    
    (467,974
    )Distributions of capital
    
    
    (17,077
    )
    
    
    
    
    
    
    
    
    
    
    (17,077
    )Reclassification adjustment included
in net loss
    
    
    
    
    
    
    
    
    
    
    352
    
    
    
    352Balance, November 30, 2006
    
    $
    144,173
    
    
    $
    (483,798
    )
    
    $
    
    
    
    $
    (339,625
    )
 See accompanying notes to consolidated financial statements.
 6




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TE/Tousa, LLC
and Subsidiaries
Consolidated Statements of Cash Flows
 For the year ended November 30, 2006 and the period frominception (July 1, 2005) to November 30, 2005
    
    2006
    
    
    2005(in thousands)Cash flows from operating activitiesNet loss
    
    $
    (467,974
    )
    
    $
    (15,824
    )Adjustments to reconcile net loss to net cash
used in operating activities:Impairment of inventory, goodwill and intangible assets
    
    
    456,352
    
    
    
    Depreciation and amortization
    
    
    22,308
    
    
    
    7,733Amortization and write-off of deferred loan costs
    
    
    10,444
    
    
    
    1,398Provision for doubtful collection of receivables
    
    
    10,958
    
    
    
    Loss on retirement of property and equipment
    
    
    706
    
    
    
    Reclassification of other comprehensive income
    
    
    352
    
    
    
    Changes in:Restricted cash
    
    
    (23,461
    )
    
    
    5,905Inventory
    
    
    (53,251
    )
    
    
    (118,177
    )Other assets
    
    
    (7,461
    )
    
    
    34,529Accounts payable, accrued expenses and other liabilities
    
    
    51,009
    
    
    
    5,677Customer deposits
    
    
    (53,463
    )
    
    
    5,586Net cash used in operating activities
    
    
    (53,481
    )
    
    
    (73,173
    )Cash flows from investing activitiesAdditions to property and equipment
    
    
    (624
    )
    
    
    (1,199
    )Proceeds from real estate joint venture
    
    
    
    
    
    
    200Net cash used in investing activities
    
    
    (624
    )
    
    
    (999
    )Cash flows from financing activitiesAdvances from members
    
    
    29,808
    
    
    
    34,648Net proceeds from revolving credit facility
    
    
    40,000
    
    
    
    31,209Distribution on capital
    
    
    (17,077
    )
    
    
    (3,750
    )Net cash provided by financing activities
    
    
    52,731
    
    
    
    62,107Net decrease in cash and cash equivalents
    
    
    (1,374
    )
    
    
    (12,065
    )Cash and Cash Equivalents,at beginning of period
    
    
    18,078
    
    
    
    30,143Cash and Cash Equivalents, at end of period
    
    $
    16,704
    
    
    $
    18,078Supplemental disclosure of noncash financial activities-Land included in inventory in accordance with FIN 46R and
SFAS No. 66
    
    $
    12,452
    
    
    $
    23,130Obligations for inventory not owned in accordance with
FIN 46R and SFAS No. 66
    
    
    12,452
    
    
    
    23,130
 See accompanying notes to consolidated financial statements.
 7




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TE/Tousa, LLC
and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in Thousands)
 1. Organization and Summary of Significant Accounting Policies
 Organization and Acquisition
  Inventory
    
    $
    486,756Other assets
    
    
    114,060Identified intangibles
    
    
    134,939Goodwill
    
    
    72,209Liabilities assumed
    
    
    (108,825
    )Purchase price
    
    $
    699,139
  8




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TE/Tousa, LLC
and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in Thousands)
 1. Organization and Summary of Significant Accounting Policies (Continued)
 Principles of Consolidation
   Use of Estimates
  Revenue Recognition
  Cash and Cash Equivalents
  9




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TE/Tousa, LLC
and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in Thousands)
 1. Organization and Summary of Significant Accounting Policies (Continued)
 Restricted Cash
  Inventory
  Accounting for the Impairment of Long-Lived Assets
 Accounting
for the Impairment or Disposal of Long-Lived
Assets
 10




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TE/Tousa, LLC
and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in Thousands)
 1. Organization and Summary of Significant Accounting Policies (Continued)
 Concentration of Credit Risk
  Warranty Costs
  2006
    
    
    2005Balance at beginning of period
    
    $
    773
    
    
    $
    1,204Current period warranty costs
    
    
    2,373
    
    
    
    239Payments made for work performed
    
    
    (1,718
    )
    
    
    (670
    )Balance at end of period
    
    $
    1,428
    
    
    $
    773
 Advertising Costs
  11




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TE/Tousa, LLC
and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in Thousands)
 1. Organization and Summary of Significant Accounting Policies (Continued)
 Fair Value of Financial Instruments
  Intangible Assets and Goodwill
  Goodwill and Other
Intangibles
 Obligations for Inventory Not Owned
 Consolidation of Variable Interest
Entities
  12




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TE/Tousa, LLC
and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in Thousands)
 1. Organization and Summary of Significant Accounting Policies (Continued)
  Derivative Financial Instruments
 Accounting for Derivative Instruments and Hedging
Activities Amendment of Statement 133 on
Derivative Instruments and Hedging Activities
  13




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TE/Tousa, LLC
and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in Thousands)
 1. Organization and Summary of Significant Accounting Policies (Concluded)
   Fair Value Measurements
  2. Inventory
 Accounting for the
Impairment or Disposal of
Long-Lived Assets
 Capitalization of
Interest Cost,
 14




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TE/Tousa, LLC
and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in Thousands)
 2. Inventory (Concluded)
 Accounting for Sales of
Real Estate
 Accounting for Product Financing Arrangements
 Business Combinations,
 15




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TE/Tousa, LLC
and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in Thousands)
 3. Intangible Assets
  2006
    
    
    2005Sales contracts
    
    $
    8,449
    
    
    $
    8,449Trade name
    
    
    
    
    
    
    92,600Covenants not to compete
    
    
    
    
    
    
    14,200Rights of first offer agreement
    
    
    
    
    
    
    7,100Construction plans
    
    
    
    
    
    
    6,300Supplier and subcontractor
relationships
    
    
    
    
    
    
    5,500Training programs
    
    
    
    
    
    
    790Total
    
    
    8,449
    
    
    
    134,939Less accumulated amortization
    
    
    8,449
    
    
    
    11,494$
    
    
    
    $
    123,445
  Goodwill and Other Intangible Assets
  16




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TE/Tousa, LLC
and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in Thousands)
 4. Other Assets
  2006
    
    
    2005Prepaid assets
    
    $
    5,552
    
    
    $
    2,643Property and equipment, net of
accumulated depreciation
    
    
    1,430
    
    
    
    2,950Advanced commissions
    
    
    736
    
    
    
    5,031Receivable-interest rate swap
    
    
    711
    
    
    
    Loan costs, net
    
    
    
    
    
    
    10,444Other
    
    
    2,068
    
    
    
    5,074$
    10,497
    
    
    $
    26,142
 
 (a)
    
    Loan costs had been amortized over the life of the
associated debt as additional interest expense. As discussed
in Note 6, the Companys lenders have declared a default under
its credit facilities. As a result, the maturities of the loans
were reclassified as current and immediately payable. EITF
96-19 Debtors Accounting for a Modification or Exchange of
Debt Instruments considers this event as debt extinguishment.
Accordingly, the remaining unamortized loan cost was written
off in 2006.(b)
    
    Property and equipment consists primarily of office
furniture and computer equipment. Depreciation is computed
using the straight-line method over the estimated useful lives
of the assets, ranging from three to seven years. Accumulated
depreciation at November 30, 2006 and 2005 was $1,841 and
$1,374 respectively. Depreciation expense for the year ended
November 30, 2006 and for the period ended November 30, 2005
was $1,429 and $753 respectively. 17




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TE/Tousa, LLC
and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in Thousands)
 5. Accounts Payable, Accrued and Other Liabilities
  2006
    
    
    2005Accounts payable
    
    $
    19,669
    
    
    $
    26,700Accrued expenses, other
    
    
    7,597
    
    
    
    2,527Accrual for unpaid
invoices on delivered
homes
    
    
    4,728
    
    
    
    1,838Accrued real estate taxes
    
    
    6,351
    
    
    
    2,350Accrued compensation
    
    
    4,621
    
    
    
    2,401Accrued interest
    
    
    16,265
    
    
    
    2,880CDD obligations
    
    
    36,683
    
    
    
    6,209$
    95,914
    
    
    $
    44,905
  18




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TE/Tousa, LLC
and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in Thousands)
 5. Accounts Payable, Accrued and Other Liabilities (Concluded)
  Accounting
for Special Assessments
and Tax Increment
Financing
 6. Bank Borrowings
    19




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TE/Tousa, LLC
and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in Thousands)
 6. Bank Borrowings (Continued)
 Derivative Financial Instruments
  2006
    
    2005Revolving Facility, $115,000 revolving line of credit
    
   $
    65,000
    
    
   $
    25,000Senior Term Loan, interest at
LIBOR plus 275 bps, 7.95% &
7.19% at November 30, 2006
and 2005
    
    
    335,000
    
    
    
    335,000Senior Mezzanine Loan,
interest at LIBOR, plus 525
bps, 10.46% and 9.69% at
November 30, 2006 and 2005
    
    
    137,500
    
    
    
    137,500Junior Mezzanine Loan,
$87,500 line,
interest at LIBOR plus 1039
bps, 15.60% & 14.83% at
November 30, 2006 and 2005
    
    
    87,500
    
    
    
    87,500$
    625,000
    
    
    $
    585,000
 20




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TE/Tousa, LLC
and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in Thousands)
 6. Bank Borrowings (Concluded)
    7. Commitments and Contingencies
  2007
    
    $
    5922008
    
    
    71
 21




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TE/Tousa, LLC
and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in Thousands)
 7. Commitments and Contingencies (Continued)
     22




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TE/Tousa, LLC
and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in Thousands)
 7.
Commitments and Contingencies (Concluded)
  Business Combinations
  8. Limited Liability Agreement
  9. Income Tax Matters
  23




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TE/Tousa, LLC
and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in Thousands)
 10. Related Party Transactions
 Due from Members
  Due to Members
  Management Fee
  Sale of Options
  24




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TE/Tousa, LLC
and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in Thousands)
 10. Related Party Transactions (continued)
 Sales and a Repurchase of Inventory
   
    
    During February, the Company
assigned its right under an option to
acquire lots for $36,500 and recorded
the related cost of sales of $31,940.
    
    During February, the Company
assigned its right under an option to
acquire lots for $19,531 and recorded
the related cost of sales of $13,657.
    
    During February, the Company
assigned its right under an option to
acquire lots and owned lots for $14,952
and recorded the related cost of sales
of $13,689.
    
    During May, the Company
assigned its right under an option to
acquire lots and sold owned lots for a
combined $8,085 and recorded the
related cost of sales of $5,748.
    
    During November, the Company
sold 17 completed homes and lots for
$15,198 and recorded the related cost
of sales of $11,858.
 Member Loan
  25




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TE/Tousa, LLC
and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in Thousands)
 10. Related Party Transactions (concluded)
 Payments to Members
  11. Going-Concern Issues Arising from Default of Loan Covenants
    26




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TE/Tousa, LLC
and Subsidiaries
Notes to Consolidated Financial Statements
(Dollars in Thousands)
 11. Going-Concern Issues Arising from Default of Loan Covenants (Concluded)
     27