WCI Reports Second Quarter 2007 Results




 Second Quarter Financial Highlights:
 * Net loss: $33.2 million
 * Basic and diluted EPS: loss of $0.79
 * Recorded pre-tax impairments and write-offs of $36.0 million
 * Revenues: $241.8 million -- down 54.2%
 * Gross new orders: $155.7 million -- down 50.1%
 * Backlog at June 30, 2007: $635.6 million
 * Generated cash flow from operating activities and investing
   activities of $119.8 million YTD as of June 30, 2007 -- $86.3
   million from operating and $33.5 million from investing activities

BONITA SPRINGS, Fla., Aug. 22, 2007 (PRIME NEWSWIRE) -- WCI Communities, Inc. (NYSE:WCI), a leading builder of traditional and tower residences in highly amenitized lifestyle communities, today reported its results for the second quarter of 2007. For the three months ended June 30, 2007, WCI reported a net loss of $33.2 million, compared with a gain of $22.7 million in the second quarter of 2006. Diluted earnings per share (EPS) was a loss of $0.79 compared to a gain of $0.52 for the same period a year ago. During the quarter, the company completed the sale of a non-golf recreation facility for $47.5 million, which generated an after-tax gain of $11.5 million, or $0.27 per share. Earnings from this recreation facility are characterized as earnings from discontinued operations and the related cash flows are classified in as investing activities. Earnings from continuing operations declined to a loss of $1.07 versus a gain of $0.50 from continuing operations in the same period a year ago. Revenues for the second quarter of 2007 were $241.8 million, compared with $527.7 million for the second quarter of 2006, a 54.2% decrease. Overall company gross margin for the second quarter of 2007 was negative versus 19.0% for the second quarter of 2006.

"WCI continued to focus on reducing costs and generating cash flow in the second quarter," said Jerry Starkey, President and CEO of WCI Communities. "Year-to-date, WCI has generated $119.8 million in cash flow from operating and investing activities and expects to end 2007 having generated a combined $530 million to $730 million ($520 million to $720 million from operating activities and $10 million from investing activities), in large part as a result of closing ten towers, including our two largest towers ever constructed." Starkey continued, "Land sales and recreational amenity conversions are an important part of WCI's business model and we are actively marketing numerous land parcels, including commercial, mixed/use and residential land, as well as recreational assets. We estimate that the aggregate value of these assets range from about $200 million to $300 million. Many of these assets were acquired or developed more than five years ago and are expected to generate significant profits in addition to cash flow. The upper range of our projected cash flow for this year includes approximately $60 million or so from this pool of assets." The Company's expected cash flow from operations assume that about 500 to 600 traditional homes close in the second half of the year. The backlog of almost 700 traditional homes as of June 30, 2007 includes about 500 homes scheduled to close by year end.

For the six month period ended June 30, 2007, the net loss totaled $49.0 million compared with a gain of $62.9 million during the first half of 2006. Diluted EPS from continuing operations declined to a loss of $1.46 versus a gain of $1.38 for the same period a year ago. Revenues decreased 47.2% to $580.5 million from $1.10 billion in the year earlier period. Excluding impairments of $37.1 million, gross margin as a percent of revenue totaled 12.1% versus 21.1% in the year earlier period.

For the three months ended June 30, 2007, the aggregate value of Traditional and Tower Homebuilding net orders fell 96.2% over the same period a year ago to $9.1 million, while the number of unit orders declined 82.6% to 50. Absent Tower defaults and Traditional Homebuilding cancellations, gross new orders for the period versus a year ago declined 46.5% to 216 with a value of $155.7 million, down 50.1%.

Traditional Homebuilding

Second quarter 2007 revenues for Traditional Homebuilding, including lot sales, fell 30.6% to $178.9 million from $257.9 million for the second quarter of 2006. The company closed 217 homes compared with 372 for the same period a year ago. Florida revenues totaled $130.2 million or 72.8% of total Traditional Homebuilding revenues versus $204.7 million or 79.4% for the second quarter of 2006. Revenues from WCI's Northeast Division accounted for 12.0% of Traditional Homebuilding revenues during the second quarter of 2007 vs. 10.2% during the same period a year ago and the company's Mid-Atlantic Division accounted for 15.2% and 10.4% for the second quarters of 2007 and 2006, respectively. Gross margin as a percentage of revenue for Traditional Homebuilding totaled 1.3% for the second quarter of 2007, down from 20.8% in the same period a year ago, due in large part to impairment charges and write-offs of $17.5 million recorded this quarter to reflect lower anticipated selling prices on traditional home inventories and the utilization of significant discounts and incentives to sell finished spec inventory. Excluding impairments, gross margin as a percent of revenues would have been 11.0%.

For the six month period ended June 30, 2007, Traditional Homebuilding revenues decreased 27.9% to $393.2 million. The company closed 523 homes compared with 864 for the same period a year ago. Gross margin as a percentage of revenue declined to 9.6% vs. 21.8% for the first six months of 2006. Excluding impairments, gross margin as a percent of revenue would have been 14.2%.

For the second quarter of 2007, the number of gross and net orders declined 43.4% and 57.4%, respectively. The value of Traditional Homebuilding gross orders declined 42.8% to $143.1 million and the value of net orders dropped 64.9% to $63.6 million. The cancellation rate for the second quarter of 2007 was 47.8%, up from 19.7% in the first quarter of the year. Cancellations during the quarter totaled 98, down from 111 during the same period a year ago. The average price for Traditional Homebuilding gross orders for the second quarter of 2007 rose 1.0% to $698,000 compared with $691,000 for the second quarter of 2006, due to mix changes and despite a higher percentage of discounts during the quarter -- approximately 16.8% compared to approximately 6.5% on orders in the same period a year ago. In total, 120 gross spec homes were sold during the quarter, with an average projected gross margin as a percent of revenues of 7.4%, approximately 620 basis points below the average gross margin percentage of 13.6% projected for the 85 gross to-be-built orders for the quarter.

Tower Homebuilding

For the three months ended June 30, 2007, revenues in the Tower Homebuilding Division decreased 99.0% to $2.1 million from $214.4 million for the same period a year ago, primarily due to the reversal of revenue during the quarter related to reserved tower defaults as well as less progression of building percentage of completion among the towers under construction. There were 7 towers with a total projected sell-out value of $1.3 billion under construction during the quarter compared with 21 towers, with a projected total sellout value of $2.3 billion under construction and recognizing revenue during the second quarter 2006. Tower Homebuilding gross margin dollars for the second quarter of 2007 totaled a negative $16.7 million. Excluding impairment charges related to finished units located at two towers, one in SW Florida and one in Lost Key, that totaled $18.5 million, the division would have reported $1.8 million of gross margin. The normal relationship between Tower Homebuilding revenue and gross margin was not evident this quarter as the reversal of revenue and gross margin related to Tower defaults and the increase in the tower default reserve resulted in variances that obscured typical trends. During each quarter, the company reviews the cost estimates for each tower under construction and makes adjustments to reflect actual increases or decreases in current and expected future costs. For the second quarter of 2007, $13.3 million of unfavorable adjustments (including adding $5.6 million to the default reserve) were made related to towers completed or under construction. In addition to increasing the default reserve, these adjustments included additional construction costs as a result of design revisions, additional estimated interest costs associated with longer tower construction cycles, increases in building insurance costs, and discounts and incentives anticipated in future periods given the current selling environment.

For the first half of 2007, revenues in the Tower Homebuilding Division fell 82.5% to $76.1 million. Gross margin as a percentage of revenue turned negative from 22.8% in the same period last year, due principally to the finished unit impairment charges, the reversal of revenue and gross margin on reserved defaulted units and the cost adjustments referenced above.

Tower Homebuilding orders for the second quarter of 2007 were negative as the 68 defaults recorded during the quarter outnumbered 11 gross new orders. Finished units sold during the quarter totaled six. The average gross order price for Tower Homebuilding units sold in the second quarter of 2007 was $1.1 million compared with $1.5 million in the period a year ago, driven by changes in the mix of units sold. During the quarter, the company completed and delivered two towers, consisting of 134 units, and experienced 16 defaults through August 17 2007. Another 62 sold units have yet to close, and the company currently estimates 31 of those units will ultimately default. For the six months ended June 30, 2007, six towers with 625 units were completed and delivered with a total of 79 defaults. In total, the default rate year-to-date is 17%. Tower Homebuilding backlog at June 30, 2007 totaled $110.2 million, compared with $550.8 million at June 30, 2006. For the balance of the year, four towers, containing 657 units, of which 587 are sold, are expected to close, with three towers expected to begin delivering tower residences in the third quarter and one tower expected to begin closings in the fourth quarter.

Real Estate Services

Revenues for the Real Estate Services Division for the second quarter 2007 were $27.4 million, a 17.5% decrease from the $33.2 million recorded for the same period a year ago. The decline was primarily due to the slowing market for new and resale homes during the quarter. Gross margin as a percentage of revenue for the period was 9.0% compared with 9.1% in the second quarter 2006.

For the six month period, revenues in the Real Estate Services Division totaled $53.0 million, down 16.8% from the $63.7 million recorded for the six months ended June 30, 2006. Gross margin as a percentage of revenue over the period decreased to 8.6% from 9.1% in the same period a year ago primarily due to less operating leverage in the company's real estate brokerage businesses during the first quarter of 2007.

Other Items

Revenues for the Amenities Division for the second quarter 2007 were $19.0 million, almost even with the $19.1 million recorded in the same period a year ago. Gross margin totaled a loss of $732,000 for the second quarter 2007 versus a loss of $878,000 in the second quarter of 2006.

Land sale revenues for the second quarter 2007 totaled $12.6 million compared with $965,000 for the second quarter of 2006. Gross margin as a percentage of land sales revenue equaled 47.1% for the second quarter of 2007.

Other income for the second quarter of 2007 totaled $363,000 versus $701,000 for the second quarter of 2006. The company also recorded a second quarter gain of $3.9 million from insurance recoveries related to damage incurred in 2005 from Hurricane Wilma.

Selling, general, and administrative expenses including real estate taxes (SG&A) as a percentage of revenue for the second quarter 2007 totaled 20.6%, up from 9.9% in the second quarter of the previous year due to lower revenues in 2007. For the six months ended June 30, 2007, SG&A of $96.7 million was 6.9% lower than for the same period last year. During the second quarter, WCI incurred professional fees of approximately $3.5 million related to the company's recently settled proxy contest and preparations for a possible sale of the company. It also incurred charges of approximately $750,000 to cover severance costs associated with workforce reductions during the quarter and a charge of approximately $950,000 for unoccupied lease space. Over the last 16 months, the company has reduced its workforce by over 33% or 1,300 employees, which is expected to produce a savings of over $60 million per year, and continues to evaluate and adjust the size of the workforce.

Cash Flow/Financial Position/Balance Sheet

For the six months ended June 30, 2007, cash flow from operating activities and investing activities totaled $119.8 million -- $86.3 million from operating activities and $33.5 million from investing activities, compared with cash used of $382.0 million in the same period a year ago.

As previously announced, on August 17, 2007, WCI amended its Credit Facility, the Term Loan Agreement and the revolving credit $390 million construction loan (Tower Facility) The amendments are intended to provide for, among other things, greater operational flexibility in the current market environment. The amendments permit certain changes in the composition of WCI's Board of Directors without triggering a change of control, adjust the pricing of the loans under the facilities, provide for certain commitment reductions, provide collateral for the loans, adjust certain financial coverage ratios (effective 6/30/07), and make certain other modifications. The Company's borrowing capacity under the Revolving Credit Facility has been reduced from $850 million to $700 million, with subsequent reductions to $600 million on July 1, 2008, and to $550 million on July 1, 2009. The Term Loan Agreement has been reduced from $300.0 million to $262.5 million, with a subsequent reduction to $225.0 million on July 1, 2008. As of June 30, 2007, the balance on the Revolving Credit Facility was $360.6 million, the balance on the Term Loan Agreement was $300.0 million, and the balance on the Tower Facility was $353.7 million.

Total liquidity, measured as the sum of cash plus available capacity under the revolving facility, totaled approximately $315.0 million at August 17, 2007. In addition, letters of credit of $43.6 million were outstanding as of August 17, 2007.

Recent Developments

As previously announced, WCI entered into a settlement agreement with the Icahn Group. In connection with the settlement agreement, the WCI Board of Directors approved a slate of nominees which will be submitted for shareholder approval on August 30, 2007. As part of this agreement, the Icahn Group agreed to withdraw its slate of nominees for the Board, effectively ending its proxy contest. Pursuant to the agreement, the Company agreed to raise the trigger under its limited duration Shareholder Rights Plan from 15% to 25%. The complete agreement between WCI and the Icahn Group can be viewed under the SEC heading in the Investor Relations section of the Company's website.

Information on Website

In connection with the Icahn Parties' participation in the WCI sale process, WCI provided the Icahn Parties certain non-public information pursuant to a confidentiality agreement. In connection with the settlement discussed above, WCI agreed to post certain information provided to the Icahn Parties that may be deemed material on its website at www.wcicommunities.com under the Other Information tab in the Investor Relations section. That information posted to this website is outdated, has not been updated, and does not reflect management's current intentions or expectations. As a result, the information should not be relied upon.

Conference Call

WCI will conduct a conference call today at 10:00 AM EDT in conjunction with this news release. The call will be broadcast live at http://www.wcicommunities.com in the Investor Relations area or can be accessed by telephone at (303) 205-0055 and asking for the WCI Communities conference call. A replay will be available after the call for a period of 36 hours by dialing (303) 590-3000 and entering conference code 11094554. The replay will also be available on the company's website. A slide presentation will accompany the call and can be accessed on the company's website in the Investor Relations section.

About WCI

WCI Communities, Inc., named America's Best Builder in 2004 by the National Association of Home Builders and Builder Magazine, has been creating amenity-rich, master-planned lifestyle communities since 1946. Florida-based WCI caters to primary, retirement, and second-home buyers in Florida, New York, New Jersey, Connecticut, Maryland and Virginia. The company offers traditional and tower home choices with prices from the high-$100,000s to more than $10 million and features a wide array of recreational amenities in its communities. In addition to homebuilding, WCI generates revenues from its Prudential Florida WCI Realty Division, and title businesses, and its recreational amenities, as well as through land sales and joint ventures. The company currently owns and controls developable land on which the company plans to build over 19,000 traditional and tower homes.

For more information about WCI and its residential communities visit www.wcicommunities.com

The WCI Communities, Inc. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3018

Forward-looking statements:

Certain information included herein and in other company reports, Securities and Exchange Commission filings, statements and presentations is forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements about the company's anticipated operating results, financial resources, ability to acquire land, ability to sell homes and properties, ability to deliver homes from backlog, and ability to secure materials and subcontractors. Such forward-looking information involves important risks and uncertainties that could significantly affect actual results and cause them to differ materially from expectations expressed herein and in other company reports, filings, statements and presentations. These risks and uncertainties include WCI's ability to compete in real estate markets where we conduct business; the availability and cost of land in desirable areas in its geographic markets and our ability to expand successfully into those areas; WCI's ability to obtain necessary permits and approvals for the development of its lands; the availability of capital to WCI and our ability to effect growth strategies successfully; WCI's ability to pay principal and interest on its current and future debts; WCI's ability to amend its bank agreements as needed from time to time to obtain covenant relief during the market downturn; WCI's ability to maintain or increase historical revenues and profit margins; WCI's ability to collect contract receivables from buyers purchasing homes as investments; availability of labor and materials and material increases in insurance, labor and material costs; increases in interest rates and availability of mortgage financing; the ability of prospective residential buyers to obtain mortgage financing due to tightening credit markets, appraisal problems or other factors; increases in construction and homeowner insurance and availability of insurance, the level of consumer confidence; the negative impact of claims for contract rescission or cancellation by contract purchasers due to various factors including the increase in the cost of condominium insurance; adverse legislation or regulations; unanticipated litigation or adverse legal proceedings; ability to retain employees; changes in generally accepted accounting principles; natural disasters; and changes in general economic, real estate and business conditions. If one or more of the assumptions underlying our forward-looking statements proves incorrect, then the company's actual results, performance or achievements could differ materially from those expressed in, or implied by the forward-looking statements contained in this report. Therefore, we caution you not to place undue reliance on our forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This statement is provided as permitted by the Private Securities Litigation Reform Act of 1995.



                           WCI Communities, Inc.
                   Condensed Consolidated Balance Sheets
                          (Dollars in thousands)

                                               June 30,   December 31,
                                                 2007         2006
                                              ----------   ----------
 Assets

 Cash and cash equivalents                    $   22,168   $   41,876
 Contracts receivable                            925,530    1,269,549
 Real estate inventories                       1,980,901    1,955,793
 Property and equipment                          242,120      274,720
 Other assets                                    297,813      289,921
                                              ----------   ----------

 Total assets                                 $3,468,532   $3,831,859
                                              ==========   ==========

 Liabilities and Shareholders' Equity

 Accounts payable, accruals and other
  liabilities                                 $  675,244   $  862,353
                                              ----------   ----------
 Debt obligations:
  Senior revolving credit facility               360,600      503,846
  Senior term note                               300,000      300,000
  Mortgages and notes payable                    371,456      363,261
  Senior subordinated notes                      525,000      525,000
  Junior subordinated notes                      165,000      165,000
  Contingent convertible senior
   subordinated notes                            125,000      125,000
                                              ----------   ----------
   Total debt obligations                      1,847,056    1,982,107
                                              ----------   ----------

 Total shareholders' equity                      946,232      987,399
                                              ----------   ----------

 Total liabilities and shareholders' equity   $3,468,532   $3,831,859
                                              ==========   ==========


 Other Balance Sheet Data

 Debt                                         $1,847,056   $1,982,107
 Shareholders' equity                            946,232      987,399
                                              ----------   ----------
 Capitalization                               $2,793,288   $2,969,506
                                              ==========   ==========
 Ratio of debt to capitalization                    66.1%        66.7%

 Debt, net of cash and cash equivalents       $1,824,888   $1,940,231
 Shareholders' equity                            946,232      987,399
                                              ----------   ----------
 Capitalization, net of cash and cash
  equivalents                                 $2,771,120   $2,927,630
                                              ==========   ==========
 Ratio of net debt to net capitalization            65.9%        66.3%

 Shareholders' equity per share               $    22.50   $    23.57


                      WCI Communities, Inc.
            Selected Revenues and Earnings Information
           (Dollars in thousands, except per share data)

                        For the three months     For the six months
                           ended June 30,          ended June 30,
                       ----------------------  ----------------------
                          2007        2006        2007        2006
                       ----------  ----------  ----------  ----------
 REVENUES

  Homebuilding:
   Homes               $  171,283  $  253,799  $  385,356  $  534,061
   Lots                     7,659       4,139       7,796      11,053
                       ----------  ----------  ----------  ----------
  Total traditional       178,942     257,938     393,152     545,114
   Towers                   2,130     214,434      76,114     433,829
                       ----------  ----------  ----------  ----------
  Total homebuilding      181,072     472,372     469,266     978,943

  Real estate services     27,379      33,233      53,000      63,671
  Amenity membership
   and operations          19,007      19,120      42,156      43,815
  Land sales               12,598         965      12,598       6,117
  Other                     1,705       2,044       3,472       4,091
                       ----------  ----------  ----------  ----------

    Total revenues        241,761     527,734     580,492   1,096,637
                       ----------  ----------  ----------  ----------
 GROSS MARGIN

  Homebuilding:
   Homes                     (224)     52,373      35,313     115,524
   Lots                     2,479       1,237       2,467       3,430
                       ----------  ----------  ----------  ----------
  Total traditional         2,255      53,610      37,780     118,954
   Towers                 (16,723)     44,520     (15,888)     99,028
                       ----------  ----------  ----------  ----------
  Total homebuilding      (14,468)     98,130      21,892     217,982

  Real estate services      2,472       3,035       4,574       5,812
  Amenity membership
   and operations            (732)       (878)        594        (137)
  Land sales                5,937         (54)      5,867       3,451
  Other                        28         (71)         99          44
                       ----------  ----------  ----------  ----------

    Total gross margin     (6,763)    100,162      33,026     227,152
                       ----------  ----------  ----------  ----------

 OTHER INCOME AND
  EXPENSES
  Equity in losses
   (earnings) from
   joint ventures             291        (251)       (495)        (51)
  Other income               (363)       (701)       (852)     (2,156)
  Hurricane recoveries     (3,881)         --      (5,393)         --
  Selling, general and
   administrative,
   including real
   estate taxes, net       49,836      52,108      96,739     103,881
  Depreciation and
   amortization             5,577       6,352      11,232      12,588
  Interest expense,
   net                     18,271       7,206      34,635      10,410
  Expenses related to
   early repayment of
   debt                        --          --          --         455
                       ----------  ----------  ----------  ----------
  (Loss) income from
   continuing
   operations before
   minority interests
   and income taxes       (76,494)     35,448    (102,840)    102,025
  Minority interests        1,415          74         822      (1,266)
  Income tax (benefit)
   expense                (30,215)     13,469     (40,634)     39,075
                       ----------  ----------  ----------  ----------
  (Loss) income from
   continuing
   operations             (44,864)     22,053     (61,384)     61,684
  Income from
   discontinued
   operations, net of
   tax                        157         622         866       1,232
  Gain on sale of
   discontinued
   operations, net of
   tax                     11,490          --      11,490          --
                       ----------  ----------  ----------  ----------
    Net (loss) income  $  (33,217) $   22,675  $  (49,028) $   62,916
                       ==========  ==========  ==========  ==========

 (LOSS) EARNINGS PER
  SHARE:
  Basic:
   From continuing
    operations         $    (1.07) $     0.51  $    (1.46) $     1.42
   From discontinued
    operations               0.28        0.02        0.29        0.03
                       ----------  ----------  ----------  ----------
                       $    (0.79) $     0.53  $    (1.17) $     1.45
                       ==========  ==========  ==========  ==========
  Diluted:
   From continuing
    operations         $    (1.07) $     0.50  $    (1.46) $     1.38
   From discontinued
    operations               0.28        0.02        0.29        0.03
                       ----------  ----------  ----------  ----------
                       $    (0.79) $     0.52  $    (1.17) $     1.41
                       ==========  ==========  ==========  ==========
 WEIGHTED AVERAGE
  NUMBER OF
  SHARES
  Basic                    41,988      42,925      41,954      43,523
  Diluted                  41,988      43,886      41,954      44,534

 OPERATING DATA
  Interest incurred    $   34,544  $   30,321  $   69,933  $   55,750
  Interest included
   in cost of sales    $    8,560  $   17,410  $   22,336  $   33,364


                              WCI Communities, Inc.
                 Condensed Consolidated Statements of Cash Flows
                              (Dollars in thousands)

                                              For the six months ended
                                                      June 30,
                                               ----------------------
                                                  2007         2006
                                               ---------    ---------
 Cash flows from operating activities:
  Net (loss) income                            $ (49,028)   $  62,916
  Asset impairment losses and land acquisition
   termination costs                              37,061        4,586
  Increase in real estate inventories            (52,826)    (230,537)
  Decrease (Increase) in contracts receivable    344,019     (176,150)
  Decrease in customer deposits                 (101,301)     (39,374)
  Decrease in restricted cash                     14,266       68,703
  Decrease in accounts payable and other
   liabilities                                   (75,248)     (66,196)
  All other                                      (30,614)      34,382
                                               ---------    ---------
 Net cash provided by (used in) operating
  activities                                      86,329     (341,670)
                                               ---------    ---------
 Cash flows from investing activities:
  Additions to property and equipment, net       (14,044)     (27,761)
  Proceeds from sale of property and equipment    47,105           --
  Other                                              427      (12,574)
                                               ---------    ---------
 Net cash provided by (used in) investing
  activities                                      33,488      (40,335)
                                               ---------    ---------

 Cash flows from financing activities:
  Net (repayments) borrowings under debt
   obligations                                  (135,681)     405,168
  All other                                       (3,844)     (73,707)
                                               ---------    ---------
 Net cash (used in) provided by financing
  activities                                    (139,525)     331,461

                                               ---------    ---------
 Net decrease in cash and cash equivalents     $ (19,708)   $ (50,544)
                                               =========    =========


                         WCI Communities, Inc.
                     Homebuilding Operational Data
                        (Dollars in thousands)

                           For the three months   For the six months
                              ended June 30,         ended June 30,
                           --------------------  --------------------
                              2007       2006       2007       2006
                           ---------  ---------  ---------  ---------
 Combined Traditional and
  Tower Homebuilding
 ------------------------
  Homes Closed (Units)*          389        627        949      1,228
  Net New Orders (Units)          50        287        287        689
  Net Contract Values of
   New Orders              $   9,057  $ 238,438  $ 165,160  $ 573,203
  Average Selling Price
   Per New Order, Net      $     181  $     831  $     575  $     832

  Average Selling Price
   Per New Order, Gross    $     721  $     772  $     732  $     791
   Traditional
    Homebuilding           $     698  $     691  $     698  $     722
   Tower Homebuilding      $   1,148  $   1,470  $   1,489  $   1,355

 Traditional Homebuilding
 ------------------------
  Homes Closed (Units)
   Florida                       156        304        339        731
   Northeast U.S.                 37         48        147         99
   Mid-Atlantic U.S.              24         20         37         34
                           ---------  ---------  ---------  ---------
    Total                        217        372        523        864
                           ---------  ---------  ---------  ---------
  Revenues, excluding lot
   revenues
   Florida                 $ 122,590  $ 200,606  $ 259,805  $ 432,797
   Northeast U.S.             21,405     26,247     80,673     53,996
   Mid-Atlantic U.S.          27,288     26,946     44,878     47,268
                           ---------  ---------  ---------  ---------
    Total                  $ 171,283  $ 253,799  $ 385,356  $ 534,061
                           ---------  ---------  ---------  ---------
  Average Selling Price
   Per Home Closed
   Florida                 $     786  $     660  $     766  $     592
   Northeast U.S.                579        547        549        545
   Mid-Atlantic U.S.           1,137      1,347      1,213      1,390
                           ---------  ---------  ---------  ---------
    Total                  $     789  $     682  $     737  $     618
                           ---------  ---------  ---------  ---------
  Gross New Orders (Units)
   Florida                       132        228        347        535
   Northeast U.S.                 51        110        111        208
   Mid-Atlantic U.S.              22         24         51         41
                           ---------  ---------  ---------  ---------
    Total                        205        362        509        784
                           ---------  ---------  ---------  ---------
  Cancellations (Units)
   Florida                       (75)       (90)      (123)      (145)
   Northeast U.S.                (16)       (15)       (25)       (24)
   Mid-Atlantic U.S.              (7)        (6)       (10)       (17)
                           ---------  ---------  ---------  ---------
    Total                        (98)      (111)      (158)      (186)
                           ---------  ---------  ---------  ---------
  Net New Orders (Units)
   Florida                        57        138        224        390
   Northeast U.S.                 35         95         86        184
   Mid-Atlantic U.S.              15         18         41         24
                           ---------  ---------  ---------  ---------
    Total                        107        251        351        598
                           ---------  ---------  ---------  ---------

  Gross Contract Values of
   New Orders
   Florida                 $  90,455  $ 161,766  $ 233,522  $ 402,884
   Northeast U.S.             28,686     56,173     64,478    105,731
   Mid-Atlantic U.S.          23,919     32,325     57,426     57,271
                           ---------  ---------  ---------  ---------
    Total                  $ 143,060  $ 250,264  $ 355,426  $ 565,886
                           ---------  ---------  ---------  ---------
  Contract Values of
   Cancellations
   Florida                 $ (64,317) $ (52,195) $(108,181) $ (85,070)
   Northeast U.S.             (8,380)    (7,222)   (13,426)   (11,791)
   Mid-Atlantic U.S.          (6,792)    (9,399)   (11,315)   (22,467)
                           ---------  ---------  ---------  ---------
    Total                  $ (79,489) $ (68,816) $(132,922) $(119,328)
                           ---------  ---------  ---------  ---------
  Net Contract Values of
   New Orders
   Florida                 $  26,138  $ 109,571  $ 125,341  $ 317,814
   Northeast U.S.             20,306     48,951     51,052     93,940
   Mid-Atlantic U.S.          17,127     22,926     46,111     34,804
                           ---------  ---------  ---------  ---------
    Total                  $  63,571  $ 181,448  $ 222,504  $ 446,558
                           ---------  ---------  ---------  ---------
  Gross Average Selling
   Price Per New Order
   Florida                 $     685  $     710  $     673  $     753
   Northeast U.S.                562        511        581        508
   Mid-Atlantic U.S.           1,087      1,347      1,126      1,397
                           ---------  ---------  ---------  ---------
    Total                  $     698  $     691  $     698  $     722
                           ---------  ---------  ---------  ---------

                           For the three months   For the six months
                              ended June 30,         ended June 30,
                           --------------------  --------------------
                              2007       2006       2007       2006
                           ---------  ---------  ---------  ---------
 Tower Homebuilding
 ------------------
  Homes Closed (Units)
   Florida                       172        255        426        364
                           ---------  ---------  ---------  ---------
    Total                        172        255        426        364
                           ---------  ---------  ---------  ---------
  Revenues
   Florida                 $ (17,078) $ 200,586  $  38,355  $ 413,094
   Northeast U.S.             19,208     13,848     37,759     20,735
                           ---------  ---------  ---------  ---------
    Total                  $   2,130  $ 214,434  $  76,114  $ 433,829
                           ---------  ---------  ---------  ---------
  Gross New Orders (Units)
   Florida                         9         41         20         90
   Northeast U.S.                  2          1          3          7
                           ---------  ---------  ---------  ---------
    Total                         11         42         23         97
                           ---------  ---------  ---------  ---------
  Defaults (Units)
   Florida                       (67)        (6)       (84)        (6)
   Northeast U.S.                 (1)        --         (3)        --
                           ---------  ---------  ---------  ---------
    Total                        (68)        (6)       (87)        (6)
                           ---------  ---------  ---------  ---------
  Net New Orders (Units)
   Florida                       (58)        35        (64)        84
   Northeast U.S.                  1          1         --          7
                           ---------  ---------  ---------  ---------
    Total                        (57)        36        (64)        91
                           ---------  ---------  ---------  ---------
  Gross Contract Values of
   New Orders
   Florida                 $  10,356  $  57,852  $  30,866  $ 119,438
   Northeast U.S.              2,272      3,895      3,385     11,964
                           ---------  ---------  ---------  ---------
    Total                  $  12,628  $  61,747  $  34,251  $ 131,402
                           ---------  ---------  ---------  ---------
  Contract Values of
   Defaults
   Florida                 $ (66,261) $  (4,757) $ (89,107) $  (4,757)
   Northeast U.S.               (881)        --     (2,488)        --
                           ---------  ---------  ---------  ---------
    Total                  $ (67,142) $  (4,757) $ (91,595) $  (4,757)
                           ---------  ---------  ---------  ---------
  Net Contract Values of
   New Orders
   Florida                 $ (55,905) $  53,095  $ (58,241) $ 114,681
   Northeast U.S.              1,391      3,895        897     11,964
                           ---------  ---------  ---------  ---------
    Total                  $ (54,514) $  56,990  $ (57,344) $ 126,645
                           ---------  ---------  ---------  ---------
  Gross Average Selling
   Price Per New Order
   Florida                 $   1,151  $   1,411  $   1,543  $   1,327
   Northeast U.S.              1,136      3,895  $   1,128  $   1,709
                           ---------  ---------  ---------  ---------
    Total                  $   1,148  $   1,470  $   1,489  $   1,355
                           ---------  ---------  ---------  ---------
  Towers under
   construction recognizing
   revenue during the
   period                                               11         24

                                  June 30,
                           ----------------------
                              2007        2006
                           ----------  ----------
 Combined Traditional and
  Tower Homebuilding
 ------------------------
  Aggregate Backlog
   Contract Values,
   Traditional and Tower
   Homebuilding            $  635,595  $1,654,696

 Traditional Homebuilding
 ------------------------
  Backlog (Units)                 698       1,431
  Backlog Contract Values  $  525,360  $1,103,944

 Tower Homebuilding
 ------------------
  Cumulative Units in
   Backlog                        807       1,597
  Cumulative Contract
   Values                  $1,053,672  $1,855,924
  Less: Cumulative Revenues
   Recognized                (943,437) (1,305,172)
                           ----------  ----------
  Backlog Contract Values  $  110,235  $  550,752
                           ==========  ==========


 * The Company uses the percentage of completion method to recognize
   revenue on sold tower units. Accordingly, the closing of tower
   homes corresponds with the collection of contracts receivable.


                          WCI Communities, Inc.
                      Reconciliation of Gross Margin
                         (Dollars in thousands)

                        For the three months     For the six months
                           ended June 30,          ended June 30,
                       ----------------------  ----------------------
                          2007        2006        2007        2006
                       ----------  ----------  ----------  ----------

 Company Gross Margin
 --------------------

  Revenue              $  241,761  $  527,734  $  580,492  $1,096,637
                       ----------  ----------  ----------  ----------

  Gross margin             (6,763)    100,162      33,026     227,152
  Add back Homebuilding
   impairment              17,481       4,586      18,126       4,586
  Add back Tower
   impairment              18,498          --      18,948          --
                       ----------  ----------  ----------  ----------
  Gross margin
   excluding
   impairment          $   29,216  $  104,748  $   70,100  $  231,738
                       ----------  ----------  ----------  ----------

  Gross margin % as
   reported                 -2.8%        19.0%        5.7%       20.7%
  Gross margin %
   excluding impairment     12.1%        19.8%       12.1%       21.1%



 Traditional
  Homebuilding
 -------------

  Revenue              $  178,942  $  257,938  $  393,152  $  545,114
                       ----------  ----------  ----------  ----------

  Gross margin              2,255      53,610      37,780     118,954
  Add back impairment      17,481       4,586      18,126       4,586
                       ----------  ----------  ----------  ----------
  Gross margin
   excluding
   impairment          $   19,736  $   58,196  $   55,906  $  123,540
                       ----------  ----------  ----------  ----------

  Gross margin % as
   reported                   1.3%       20.8%        9.6%       21.8%
  Gross margin %
   excluding impairment      11.0%       22.6%       14.2%       22.7%



 Tower Homebuilding
 ------------------

  Revenue              $    2,130  $  214,434  $   76,114  $  433,829
                       ----------  ----------  ----------  ----------

  Gross margin            (16,723)     44,520     (15,888)     99,028
  Add back impairment      18,498          --      18,948          --
                       ----------  ----------  ----------  ----------
   Total Gross Margin
    excluding
    impairment         $    1,775  $   44,520  $    3,060  $   99,028
                       ----------  ----------  ----------  ----------

  Gross margin % as
   reported                    NM        20.8%         NM        22.8%
  Gross margin %
   excluding impairment      83.3%       20.8%        4.0%       22.8%

 ---------------------
 NM = Not meaningful


          2006/2007 Tower Profile (as of 6/30/07) of 6/30/07)

                           # of
                          Units  Projected
                            in   Sell-out    %       %     Average  HUD
                           Bldg   Value    Sold  Complete  Deposit Bldg@
 ----------------------------------------------------------------------
 Closed to Date
 Anchorage at Jupiter
  Yacht Club                  34     $32M   100%    100%    20%     No
 Commodore at Jupiter
  Yacht Club                  22     $21M   100%    100%    20%     No
 San Andres at Lost Key       45     $28M   100%    100%    18%     No
 Serano at Hammock Bay       116     $68M   100%    100%    20%     No
 Navona at The Colony        100     $61M   100%    100%    20%    Yes
 Santo Amaro at Lost Key      45     $27M    96%    100%    18%     No
 LaSalbadora at Lost Key      45     $25M    82%    100%    17%     No
 One Singer Island            15     $47M    80%    100%    20%     No
 Casa at Castella (The
  Colony)                     24     $24M    38%    100%    16%    Yes
 Mansion at Castella (The
  Colony)                     24     $25M    63%    100%    15%    Yes
 Villa at Castella (The
  Colony)                     24     $27M    42%    100%    17%    Yes
 Costa Verano at
  Jacksonville Beach         100     $95M    95%    100%    20%     No
 Tuscany at Hammock Dunes     64     $80M    88%    100%    20%     No
 Mosaic at Miami Beach        91    $124M    97%    100%    20%     No
 Resort at Singer Island
  Condo                       66    $106M    95%    100%    20%    Yes
 Resort at Singer Island
  Condo/Hotel*               229    $151M   100%    100%    20%    Yes
 Lesina at Hammock Bay       116    $125M    56%    100%    19%    Yes
 The Galia at Lost Key
  Marina                      70     $50M    56%    100%    19%     No
 San Anton at Lost Key        54     $38M    72%     97%    19%     No
 Castillo at Westshore        80     $81M    90%     95%    18%    Yes

 ----------------------------------------------------------------------
 Totals                    1,364  $1,244M    79%    100%    19%
 ======================================================================
 Under Construction
 Le Jardin at Hammock
  Dunes                       26     $67M    73%     94%    18%     No
 One Bal Harbour Condo       185    $377M    99%     95%    19%    Yes
 One Bal Harbour Condo/
  Hotel*                     115    $111M   100%     95%    20%    Yes
 The Watermark               206    $233M    86%     83%    20%    Yes
 Florencia at The Colony     116    $123M    79%     96%    19%    Yes
 Oceanside B                 186    $238M    63%     81%    18%    Yes
 ----------------------------------------------------------------------
 Totals                      834  $1,150M    83%     91%    19%
 ======================================================================

                            Initial     Tower     Expected   Expected
                           Contract  Construction   Tower      Tower
                           Conversion   Start      Closing  Completion
                              Date       Date      Date(t)    Date(t)
 ----------------------------------------------------------------------
 Closed to Date
 Anchorage at Jupiter Yacht
  Club                       2Q 2004    2Q 2004     Jan-06    1Q 2006
 Commodore at Jupiter Yacht
  Club                       2Q 2004    2Q 2004     Jan-06    1Q 2006
 San Andres at Lost Key      4Q 2004    4Q 2004     Feb-06    1Q 2006
 Serano at Hammock Bay       4Q 2004    3Q 2004     Apr-06    2Q 2006
 Navona at The Colony        2Q 2004    2Q 2004     May-06    2Q 2006
 Santo Amaro at Lost Key     4Q 2004    4Q 2004     Jun-06    2Q 2006
 LaSalbadora at Lost Key     4Q 2004    4Q 2004     Aug-06    3Q 2006
 One Singer Island           2Q 2004    3Q 2004     Nov-06    4Q 2006
 Casa at Castella (The
  Colony)                    3Q 2004    1Q 2005     Nov-06    4Q 2006
 Mansion at Castella (The
  Colony)                    1Q 2005    1Q 2005     Nov-06    4Q 2006
 Villa at Castella (The
  Colony)                    2Q 2005    1Q 2005     Nov-06    4Q 2006
 Costa Verano at
  Jacksonville Beach         4Q 2004    3Q 2004     Dec-06    4Q 2006
 Tuscany at Hammock Dunes    4Q 2004    2Q 2005     Dec-06    4Q 2006
 Mosaic at Miami Beach       3Q 2004    4Q 2004     Dec-06    4Q 2006
 Resort at Singer Island
  Condo                      3Q 2004    3Q 2004     Mar-07
 Resort at Singer Island
  Condo/Hotel*               3Q 2004    3Q 2004     Mar-07
 Lesina at Hammock Bay       2Q 2005    3Q 2005     Mar-07
 The Galia at Lost Key
  Marina                     4Q 2005    4Q 2005     Mar-07
 San Anton at Lost Key       2Q 2005    3Q 2005     Jun-07
 Castillo at Westshore       3Q 2005    4Q 2005     Jun-07
 ----------------------------------------------------------------------
 Totals  
 ======================================================================
 Under Construction
 Le Jardin at Hammock Dunes  4Q 2005    4Q 2005     Jul-07    2Q 2007
                                                  Sept - Oct
 One Bal Harbour Condo       4Q 2003    2Q 2004       07      1Q 2007
 One Bal Harbour Condo/                           Sept - Oct
  Hotel*                     4Q 2004    2Q 2004       07      1Q 2007
                                                  Oct - Nov
 The Watermark               2Q 2005    3Q 2005       07      3Q 2007
                                                  Sept - Oct
 Florencia at The Colony     3Q 2005    3Q 2005       07      4Q 2007
                                                   Feb - Mar
 Oceanside B                 3Q 2005    4Q 2005       08      1Q 2008
 ----------------------------------------------------------------------
 Totals  
 ======================================================================

 *   Does not count as a separate tower

 @   In the event of a default in a HUD building, the company may
     retain no more than 15% of the total purchase price of the unit.
     Any additional deposit must be returned to the buyer. NJ limits
     deposit retention to 10% of total sales price plus options and
     upgrades costs, not to exceed a total of 15%.

 (t) Expected closing date based on current construction schedule.


                          Summary of Land Controlled
                                June 30, 2007

                              Remaining   Units in    Value in   Spec
                               Planned   Backlog as  Backlog as  Units
         Region                 Units    of 6/30/07  of 6/30/07 in WIP
 Traditional Homebuilding
  (Including Lots)
  Florida
   Miami / Ft. Lauderdale        1,323       230      $ 186.7     63
   Naples / Ft. Myers            4,589       109         67.5     75
   Palm Beach / Indian River       178         6         14.3      4
   Palm Coast / Jacksonville        24        --           --      5
   Perdido Key                      94        --           --     11
   Tampa / Sarasota              4,173       148        118.1     42
  Mid-Atlantic                     381        34         49.0      9
  Northeast                      2,114       171         89.9     21
 ---------------------------------------------------------------------
 Traditional Homebuilding
  Total                         12,876       698        525.4    230

 Tower Homebuilding
  Florida
   Miami / Ft. Lauderdale        1,153       420         53.3     69
   Naples / Ft. Myers            1,205        94          3.7     24
   Palm Beach / Indian River       423        15           --     --
   Palm Coast / Jacksonville       290        32         23.8      7
   Perdido Key                   1,510        20           --     --
   Tampa / Sarasota                846        49          0.0     --
  Mid-Atlantic                     284        --           --     --
  Northeast                        480       177         29.4     29
 ---------------------------------------------------------------------
 Tower Homebuilding Total        6,191       807        110.2    129

 Total Homebuilding
  Florida
   Miami / Ft. Lauderdale        2,476       650        240.0    132
   Naples / Ft. Myers            5,794       203         71.2     99
   Palm Beach / Indian River       601        21         14.3      4
   Palm Coast / Jacksonville       314        32         23.8     12
   Perdido Key                   1,604        20           --     11
   Tampa / Sarasota              5,019       197        118.1     42
  Mid-Atlantic                     665        34         49.0      9
  Northeast                      2,594       348        119.3     50
 ---------------------------------------------------------------------
 Total Homebuilding Total       19,067     1,505        635.6    359
 =====================================================================

                                            Finished
                                            Spec and    Total
                                              Model     Units      %
           Region                             Units   Remaining  Owned
 Traditional Homebuilding (Including Lots)
  Florida
   Miami / Ft. Lauderdale                        94       936     100%
   Naples / Ft. Myers                           114     4,291     100%
   Palm Beach / Indian River                     17       151     100%
   Palm Coast / Jacksonville                     19        --     100%
   Perdido Key                                    1        82     100%
   Tampa / Sarasota                             106     3,877      50%
  Mid-Atlantic                                   19       319      79%
  Northeast                                      11     1,911      76%
 ---------------------------------------------------------------------
 Traditional Homebuilding Total                 381    11,567      79%

 Tower Homebuilding
  Florida
   Miami / Ft. Lauderdale                         3       661      85%
   Naples / Ft. Myers                           113       974     100%
   Palm Beach / Indian River                     28       380      45%
   Palm Coast / Jacksonville                     11       240     100%
   Perdido Key                                   74     1,416     100%
   Tampa / Sarasota                               8       789      81%
  Mid-Atlantic                                   --       284     100%
  Northeast                                      --       274      43%
 ---------------------------------------------------------------------
 Tower Homebuilding Total                       237     5,018      86%

 Total Homebuilding
  Florida
   Miami / Ft. Lauderdale                        97     1,597      93%
   Naples / Ft. Myers                           227     5,265     100%
   Palm Beach / Indian River                     45       531      61%
   Palm Coast / Jacksonville                     30       240     100%
   Perdido Key                                   75     1,498     100%
   Tampa / Sarasota                             114     4,666      55%
  Mid-Atlantic                                   19       603      88%
  Northeast                                      11     2,185      70%
 ---------------------------------------------------------------------
 Total Homebuilding Total                       618    16,585      82%
 =====================================================================

                       Remaining Planned Units
                           June 30, 2007
                                                              Total
                                       Owned     Optioned  Controlled
 Traditional Homebuilding             10,207       2,669       12,876
 Tower Homebuilding                    5,355         836        6,191
 --------------------------------------------------------------------
 Total Homebuilding                   15,562       3,505       19,067
 ====================================================================


            

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