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THE PRESLEY COMPANIES REPORTS FOURTH QUARTER AND YEAR-END RESULTS

 NEWPORT BEACH, Calif., Feb. 22 /PRNewswire/ -- The Presley Companies (NYSE: PDC) today reported net income for the fourth quarter ended Dec. 31, 1992 of $921,000, or $0.05 per share on sales of $84,032,000, compared with net income of $3,616,000, or $0.21 per share on a pro forma basis on sales of $87,079,000, for the comparable period a year ago. Home sales for the quarter ended Dec. 31, 1992 were $75,970,000 as compared to $53,400,000 for the quarter ended Dec. 31, 1991. Total sales for the quarter ended Dec. 31, 1992 included $8,062,000 from the sale of lots and land as compared to $33,679,000 for the quarter ended Dec. 31, 1991. The pro forma net income and per share amounts for 1991 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 in the condensed financial statements included herein.
 For the year ended Dec. 31, 1992, the company reported a net loss of ($10,489,000), or ($0.57) per share on sales of $237,858,000, compared with net income for the same period a year ago of $6,126,000, or $0.45 per share on a pro forma basis on sales of $220,418,000. Operations for the year ended Dec. 31, 1992 generated pre-tax income of $8,513,000 compared with pre-tax income from operations of $13,250,000 a year ago. However, the results for the year ended Dec. 31, 1992 include a writedown of $26,000,000 ($15,600,000 after taxes) in certain of the company's real estate assets during the second quarter ended June 30, 1992, as a result of adverse market conditions, compared with a writedown of $3,000,000 ($1,800,000 after taxes) during the year ended Dec. 31, 1991.
 For the company and its unconsolidated joint venture, closings in the fourth quarter of this year were up 44 percent to 419 from 290 in the fourth quarter a year ago. For the year ended Dec. 31, 1992, closings were up 35 percent to 1,144 units from 846 a year ago. Net new home orders for the quarter ended Dec. 31, 1992 rose 69 percent to 235 units from 139 a year ago. For the year ended Dec. 31, 1992, new orders were up 35 percent to 1,173 units from 870 a year ago. For the fourth quarter of 1992, new orders were down 28 percent to 235 units from 325 in the third quarter of 1992. The backlog of homes sold but not closed, as of Dec. 31, 1992, was 238, up 22 percent from 195 units a year earlier and down 44 percent from 422 units at Sept. 30, 1992.
 Management believes that the 35 percent increase in new orders and closings in 1992 compared to 1991 is attributable in large part to reduced sales prices, increased buyer incentives and lower interest rates.
 Effective Dec. 31, 1992, the company's Carmel Mountain Ranch joint venture bought back the interest of the company's joint venture partner in that project. The Carmel Mountain Ranch partnership is now wholly owned by The Presley Companies and its wholly owned subsidiary. As a result, the company has consolidated the financial statements of this partnership in its 1992 consolidated financial statements. The company's investment in the Carmel Mountain Ranch partnership had previously been accounted for using the equity method. In addition, the company's financial statements for 1991 have been restated to present financial information for the new reporting entity for all periods. The restatement had no effect on previously reported net results and related per share amounts.
 The company previously announced that it has signed a forbearance agreement with the majority of its banks on its $360,000,000 revolving line of credit which matured Jan. 31, 1993. The agreement, which runs through March 31, 1993, allows for the company and its banks to continue to negotiate for a restructure and an extension of the current lending agreement. The forbearance agreement includes a modification of Presley's financial covenants regarding minimum net worth and maximum debt to equity ratios. The minimum net worth requirement was changed to $125,000,000 from $140,000,000, while the maximum debt to equity ratio was changed to 3 to 1 from 2.75 to 1. The company believes that agreements can be reached with its lenders, although no assurances can be given in that regard.
 Presley also previously announced that it has signed short-term extension agreements on loans totalling approximately $45,700,000 relating to its two joint venture projects. On Jan. 28, 1993, one of these loans on the Horsethief Canyon Ranch joint venture project with an approximate outstanding balance of $20,000,000, which had matured on Nov. 9, 1992, was extended through March 9, 1993. On Jan. 29, 1993, a loan on the Carmel Mountain Ranch joint venture project with an approximate outstanding balance of $25,700,000, which had matured on Dec. 31, 1992, was extended through March 31, 1993. The company believes that current discussions with those banks will result in longer term agreements for these two loans, although no assurances can be given in that regard.
 The company's borrowing capacity under its revolving line of credit is based on the most recent appraised values of its real estate inventory at any given time. Recent lower appraisals have reduced the company's borrowing capacity. Under the current lending agreement, the borrowing base at Dec. 31, 1992 was approximately $313,900,000, whereas principal outstanding at that time was approximately $317,200,000, an excess of approximately $3,300,000 of borrowings. Under the forbearance agreement, the banks have agreed not to require a repayment of the excess borrowings during the forbearance period. In the near term, the company anticipates that new appraisals required by the company's lenders will result in lower appraised values, which in turn will reduce the available maximum amount available under the line.
 The Presley Companies is one of California's oldest and largest homebuilders. It has operations in California, Arizona and New Mexico, with 39 sales locations, including 28 in its master-planned communities and 11 at its other projects.
 THE PRESLEY COMPANIES
 Condensed Consolidated Statements of Operations
 (In thousands, except per common share amounts and unit data)
 (Unaudited)
 Three months ended Year ended
 Dec. 31, Dec. 31,
 1992 1991(A) 1992 1991(A)
 Sales
 Homes $75,970 $53,400 $217,444 $156,337
 Lots, land and other 8,062 33,679 20,414 64,081
 Total 84,032 87,079 237,858 220,418
 Cost of sales
 Homes 60,441 39,808 168,218 115,371
 Lots, land and other 8,598 27,765 17,185 48,822
 Total 69,039 67,573 185,403 164,193
 Gross profit 14,993 19,506 52,455 56,225
 Reduction of certain
 real estate assets to
 estimated net
 realizable value --- (3,000) (26,000) (3,000)
 Equity in earnings
 of unconsolidated
 joint venture 143 755 685 1,722
 Other expenses (income)
 Sales and marketing 8,811 5,816 26,527 22,968
 General and
 administrative 2,582 2,862 11,393 11,921
 Other (income)
 expense, net 736 (467) (638) (3,503)
 Interest incurred 6,955 9,208 34,870 43,296
 Interest capitalized (6,200) (8,308) (31,127) (35,225)
 Total 12,884 9,111 41,025 39,457
 Income (loss) before
 minority partners'
 interest in consolidated
 net income (loss) 2,252 8,150 (13,885) 15,490
 Minority partners'
 interest in
 consolidated
 net income (loss) (680) (2,353) (3,602) (5,240)
 Income (loss) before
 income taxes 1,572 5,797 (17,487) 10,250
 Credit (provision)
 for income taxes
 including pro
 forma amounts for 1991 (651) (2,181) 6,998 (4,124)
 Net income (loss) $921 $3,616 ($10,489) $6,126
 Net income (loss)
 per common share $0.05 $0.21 ($0.57) $0.45
 Average common shares
 outstanding 18,500 12,410 18,500 12,410
 Unit Data (Including Unconsolidated Joint Venture)
 Net new home orders 235 139 1,173 870
 Homes closed 419 290 1,144 846
 Backlog -- end of period 238 195 238 195
 See accompanying notes.
 (A) Restated (Note 2).
 THE PRESLEY COMPANIES
 Condensed Consolidated Balance Sheets
 (In thousands)
 (Unaudited)
 Dec. 31, Dec. 31,
 1992 1991(A)
 Assets
 Cash and cash equivalents $15,405 $22,098
 Real estate inventories 476,218 494,219
 Investments in and advances to
 unconsolidated joint venture 13,640 13,221
 Other assets 18,489 36,914
 Total $523,752 $566,452
 Liabilities and Stockholders' Equity
 Accounts payable and accrued expenses $20,005 $24,823
 Due to joint venture partner 9,405 ---
 Notes payable 345,743 355,025
 Income taxes payable --- 2,390
 Deferred income taxes 3,041 8,219
 Minority partners' interest --- 20,029
 Stockholders' equity 145,558 155,966
 Total $523,752 $566,452
 See accompanying notes.
 (A) Restated (Note 2).
 THE PRESLEY COMPANIES
 Notes to Financial Summary
 NOTE 1: The Presley Companies filed a registration statement on Form S-1 with the Securities and Exchange Commission for the sale of 7,000,000 shares of common stock at $10 per share, which became effective on Oct. 9, 1991, and was completed on Oct. 18, 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 for income tax purposes. As an S corporation, the company 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 Operations for October 1991. The supplemental pro forma income taxes provided for in the consolidated statements of operations for the three- and 12-month periods ended Dec. 31, 1991, represent the estimated income taxes that would have been reported had the company filed federal and state income tax returns as a regular corporation for these periods.
 NOTE 2: Effective Dec. 31, 1992, the company's Carmel Mountain Ranch joint venture bought back the interest of the company's joint venture partner in that project. The Carmel Mountain Ranch partnership is now wholly owned by The Presley Companies and its wholly owned subsidiary. As a result, the company has consolidated the financial statements of this partnership in its 1992 consolidated financial statements. The company's investment in the Carmel Mountain Ranch partnership had previously been accounted for using the equity method. In addition, the company's financial statements for 1991 have been restated to present financial information for the new reporting entity for all periods. The restatement had no effect on previously reported net results and related per share amounts.
 Effective in the fourth quarter of 1992, the company reclassified selling expenses, which had previously been included in cost of sales, to "Other expenses -- Sales and marketing." In addition, such reclassifications have been made in all periods included in the Consolidated Statements of Operations in order to present comparable financial information for all periods. The reclassifications had no effect on previously reported net results and related per share amounts. These reclassifications were made in order to present financial information on a basis comparable with other homebuilders in the industry.
 -0- 2/22/93
 /CONTACT: Dave Siegel or Craig Manchester of The Presley Companies, 714-640-6400/
 (PDC)


CO: The Presley Companies ST: California IN: CST SU: ERN

JL-LS -- LA008 -- 9077 02/22/93 17:01 EST
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Date:Feb 22, 1993
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