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THE PRESLEY COMPANIES REPORTS FOURTH QUARTER AND YEAR-END RESULTS

 THE PRESLEY COMPANIES REPORTS FOURTH QUARTER AND YEAR-END RESULTS
 NEWPORT BEACH, Calif., Feb. 20 /PRNewswire/ -- The Presley Companies (NYSE: PDC) today announced 1991 year-end and fourth quarter results.
 Pro forma net income for the quarter ended Dec. 31, 1991 was $3,616,000, or $.21 per share, compared to a loss of ($117,000), or ($.01) per share, for the fourth quarter of 1990. Revenues for the 1991 fourth quarter were $67,200,000, an increase from $39,776,000 for the comparable prior year period.
 For the year 1991, pro forma net income was $6,126,000, or $.45 per share, down from $15,713,000, or $1.27 per share, for the year 1990. Revenues for the year 1991 totaled $169,366,000 compared to $272,696,000 for 1990.
 The pro forma net income and per share amounts for the 1991 and 1990 years and fourth quarters are net of adjustments for pro forma income taxes and do not reflect the provision for a deferred income tax liability of $7,700,000 in the fourth quarter of 1991 described below.
 Wade H. Cable, president and chief executive officer of The Presley Companies, said that the company's improved earnings in the fourth quarter of 1991 compared to 1990 was due to a significant increase in land sales and in the number of closings to 290 homes (including unconsolidated joint ventures) from 236 homes. (All unit numbers contained herein include unconsolidated joint ventures.) The decline in revenues and earnings for the year ended Dec. 31, 1991, compared to 1990, is a result of the decline in the number of closings to 846 homes for the current year compared to 1,726 homes for the year 1990. This significant decrease in the number of homes closed was due to weak economic conditions and to the company's efforts to build to its markets and avoid standing inventory, thereby reducing its housing production during the first part of 1991. This strategy resulted in the company having fewer homes available for sale during this period and allowed the company to reduce its overhead expenses in 1991.
 Earnings were also impacted for the 1991 year and fourth quarter by reserves of approximately $3 million relating primarily to sales incentive programs on certain of the company's housing projects.
 Upon consummation of the company's initial public offering in October 1991, the company's status as an S corporation was terminated. Accordingly, the company has been subject to federal and state income taxes since that date and, as described in its prospectus relating to the initial public offering, the company was required to provide for a deferred tax liability of $7,700,000 (attributable to periods prior to the offering) in its statement of income for the fourth quarter of 1991.
 Cable added that while 1991 earnings were lower than comparable 1990 earnings, he was pleased that 1991 results were in line with expectations and that the company's strategy relating to product development and overhead reduction was successful.
 Cable also reported that the company had 139 net new home orders for the fourth quarter of 1991, compared to 151 net new home orders for the fourth quarter of 1990. The company's backlog of homes sold was 195 at Dec. 31, 1991, an increase of 14 percent from the 171 home backlog that existed at Dec. 31, 1990.
 Cable commented that, while net new home orders declined in the fourth quarter of 1991 compared to 1990, he was pleased with the current levels and quality of traffic. Net new home orders increased to 131 homes during the first seven weeks of 1992 compared to 84 homes for the same period during 1991.
 The company's revolving line of credit has been extended to Jan. 31, 1993. As previously disclosed in the Registration Statement for the company's initial public offering, the maximum advances under the line of credit are now limited to the lesser of a percentage of book values or a percentage of appraisal-based values of certain real estate assets.
 As of Feb. 19, 1992, a majority of the required appraisals have been completed. Any remaining appraisals are expected to be completed by the end of the first quarter. The company and its revolving line of credit banks will review the appraisal data and finalize the methodology for calculating the appraisal-driven borrowing capacity by June 1, 1992. Until that date the company's book values will be used.
 The company believes that the appraisals may result in a reduction of the amount available under the line of credit, although at this time the effect on the borrowing capacity of the company cannot be estimated. Presley, one of California's oldest and largest homebuilders, is primarily engaged in the development of large-scale master-planned communities and other homebuilding projects. Presley also has limited operations in Arizona, New Mexico and Illinois.
 THE PRESLEY COMPANIES
 Condensed Consolidated Statement of Income


(In thousands except supplemental pro forma net income per common share
 amounts and average shares outstanding)
 (Unaudited)
 Year ended Three months ended
 Dec. 31, Dec. 31,
 1991 1990 1991 1990
 Sales:
 Homes $136,057 $259,583 $44,602 $38,190
 Lots, land and other 33,309 13,113 22,598 1,586
 Total 169,366 272,696 67,200 39,776
 Cost of sales:
 Homes 119,823 204,202 38,162 33,623
 Lots, land and other 29,586 18,079 23,002 3,245
 Total 149,409 222,281 61,164 36,868
 Gross profit 19,957 50,415 6,036 2,908
 Equity in earnings of
 unconsolidated joint
 ventures 5,347 9,267 2,537 1,742
 Other expenses 15,054 33,369 2,776 4,850
 Income before income
 taxes 10,250 26,313 5,797 (200)
 Income taxes 10,127 860 10,030 (6)
 Net income $123 $25,453 ($4,233) ($194)
 Supplemental pro forma
 information:
 Income before
 income taxes $10,250 $26,313 $5,797 ($200)
 Income taxes 4,124 10,600 2,181 (83)
 Net income $6,126 $15,713 $3,616 ($117)
 Net income per
 common share $0.45 $1.27 $0.21 ($0.01)
 Average shares
 outstanding 13,661,000 12,410,000 17,375,000 12,410,000
 THE PRESLEY COMPANIES
 Condensed Consolidated Balance Sheet
 (In thousands)
 (Unaudited)
 Dec. 31, Dec. 31,
 1991 1990
 Assets:
 Cash and cash equivalents $19,678 $38,183
 Real estate inventories 420,777 414,322
 Investment in unconsolidated
 joint ventures 37,457 25,509
 Other assets 35,276 28,008
 Total $513,188 $506,022
 Liabilities and
 stockholders' equity:
 Accounts payable and
 accrued expenses $24,391 $26,487
 Notes payable 324,612 378,450
 Deferred income taxes 8,219 ---
 Shareholder's equity 155,966 101,085
 Total $513,188 $506,022
 Note to financial summary: The Presley Companies filed a Registration Statement on Form S-1 with the Securities and Exchange Commission (SEC) for the sale of 7 million shares of common stock at $10 per share, which became effective on Oct. 9, 1991. As a result of this offering, the company has 18,500,000 shares of common stock outstanding. The company had historically elected to be taxed as an S corporation and was not subject to federal and certain state income taxes. Upon consummation of this transaction in October, 1991, the company became subject to federal and state income taxes and was required to provide for a deferred income tax liability of approximately $7,700,000 in its statement of income for October, 1991. The supplemental proforma income taxes provided for in the condensed consolidated statements of income represent the estimated income taxes that would have been reported had the company filed federal and state income tax returns as a regular corporation.
 -0- 2/20/92
 /CONTACT: Wade H. Cable, president and CEO of The Presley Companies, 714-640-6400/
 (PDC) CO: The Presley Companies ST: California IN: CST SU: ERN


DM-EH -- LA046 -- 1212 02/20/92 21:37 EST
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Date:Feb 20, 1992
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