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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)
[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (Fee Required)

For the fiscal year ended December 31, 1998

OR

[_]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (No Fee Required)


For the transition period from N/A to
--------------------- ------------------

Commission file number 1-10959

STANDARD PACIFIC CORP.
(Exact name of registrant as specified in its charter)

Delaware 33-0475989
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

1565 W. MacArthur Blvd., 92626
Costa Mesa, California (Zip Code)
(Address of principal executive
offices)

Registrant's telephone number, including area code (714) 668-4300

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Name of each exchange on which
registered

Common Stock, $.01 par value New York Stock Exchange and
(and accompanying Preferred Share Pacific Stock Exchange
Purchase Rights)
10 1/2% Senior Notes Due 2000 New York Stock Exchange
8 1/2% Senior Notes Due 2007 New York Stock Exchange


Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No .

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to the Form 10-K. [_]

As of March 1, 1999, the aggregate market value of voting stock held by
non-affiliates of the registrant was $314,126,811.

Documents incorporated by reference:

Portions of the Company's Proxy Statement to be filed with the Securities
and Exchange Commission in connection with the Company's 1999 Annual Meeting
of Stockholders are incorporated by reference into Part III hereof.

As of March 1, 1999, there were 29,637,480 shares of common stock
outstanding.

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STANDARD PACIFIC CORP.

PART I

ITEM 1. BUSINESS

We operate primarily as a geographically diversified builder of single-
family homes for use as primary residences. We have operations throughout the
major metropolitan markets in California, Texas and Arizona. For the year ended
December 31, 1998, approximately 72%, 20% and 8% of our home deliveries
(including unconsolidated joint ventures) were in California, Texas and
Arizona, respectively.

We also offer mortgage loans to our home buyers and others through a
mortgage banking subsidiary and a joint venture with a leading financial
institution. For business segment financial data, see our consolidated
financial statements included elsewhere in this Annual Report on Form 10-K.

Standard Pacific Corp. was incorporated in the State of Delaware in 1991.
Through our predecessors, we commenced our homebuilding operations in 1966 with
a single tract of land in Orange County, California. Unless the context
otherwise requires, the terms "we," "us" and "our" refer to Standard Pacific
Corp. and its predecessors and subsidiaries.

Strategy

We believe that our long history of building high quality homes and our
conservative operating strategy have enabled us to successfully weather
cyclical downturns and position us to capitalize on future market
opportunities. The main elements of our strategy include:

Focus on Broad Move-Up Market. We concentrate on the construction of single-
family homes for use as primary residences by move-up buyers. We believe that
the market for primary residences is more resistant to economic downturns than
the market for second or vacation homes. The average selling price of our homes
for the year ended December 31, 1998 was approximately $330,000. Currently, we
expect to concentrate our efforts on acquiring land that is suitable for the
construction and sale of homes generally in the price range of $150,000 to
$500,000, which represents a broad market segment in our market areas. We also
construct and sell homes in the $500,000 to $1,000,000 price range in certain
of our California markets.

Reputation for High Quality, Single-Family Homes. We believe that we have an
established reputation for providing high quality homes. We pride ourselves on
our ability to design unique and attractive homes and provide our customer with
a wide selection of options. We believe that our long history of providing high
quality homes has resulted in many repeat buyers and word-of-mouth sales.

Conservative Operating Strategy. We customarily acquire unimproved or
improved land zoned for residential use which appears suitable for the
construction of 50 to 300 homes in increments of 10 to 30 homes. We generally
purchase entitled land only when we project commencement of construction within
a relatively short time period. The number of homes built in the first
increment of a project is based upon internal market studies. The timing and
size of subsequent increments depend to a large extent upon sales rates
experienced in the earlier increments. By developing projects in increments, we
have been able to respond to local market conditions and control the number of
our completed and unsold homes. Additionally, an increasing percentage of our
lots are controlled through joint ventures. We use joint ventures for certain
land development projects that have long lead times or are of significant size
requiring substantial capital investments.

Strong Land Position. We have been operating in California for over 30 years
and have an established reputation with land owners. We believe that our long
standing relationships with land owners and developers give us a competitive
edge in securing quality land positions at competitive prices in California. We
are also continuing to build our reputation and relationships in Texas and
Arizona. In order to ensure an adequate supply of land for future homebuilding
activities, we generally attempt to maintain an inventory of building

1


sites sufficient for construction of homes over a period of approximately three
to four years. We believe that our 13,869 owned or controlled building sites at
December 31, 1998, in addition to any land sites for which we may enter into
negotiations, will be sufficient for our operations over this period.

Geographic Diversification. We have focused our California homebuilding
activities in Orange, Los Angeles, Riverside, San Bernardino, San Diego and
Ventura Counties in southern California, and in the San Francisco Bay area of
northern California. In Texas, we have projects in the Dallas, Houston and
Austin markets. In the third quarter of 1998, we expanded into the Phoenix,
Arizona market with the acquisition of a portion of the homebuilding operations
of an established builder. Our strategy of diversifying among different
geographic areas has enabled us to reduce the impact of adverse local economic
conditions. Additionally, we believe that we have significant opportunities to
expand in our existing markets and enter new geographic markets.

Control of Overhead and Operating Expenses. Throughout our history, we have
sought to minimize overhead expenses in order to be more flexible in responding
to the cyclical nature of our business. We strive to control our overhead costs
by centralizing certain of our administrative functions and by limiting the
number of middle level management positions.

Experienced Management and Decentralized Operations. Our senior corporate
and division operating managers average over 20 years of experience in the
homebuilding business. Each division is run by a local manager. One of the
essential criteria in the selection of a divisional manager is the individual's
in-depth familiarity with the geographic areas within which the division
operates. The decisions regarding selection of parcels of land for purchase and
development are made in conjunction with our corporate officers, and
thereafter, each manager conducts the operations of the division relatively
autonomously.

Operations

We currently build homes in California, Texas and Arizona through a total of
seven geographic divisions, with 152 projects under development or held for
future development at December 31, 1998.

The table below sets forth selected information for each region in which we
operate and for our homebuilding operations as a whole for the periods
indicated.



Year Ended As of
December 31, 1998 December 31, 1998
------------------ --------------------------------------------------
Total Number
Number of Building Homes
Average of Projects Projects Sites Under
Home Held for in Sales Owned or Construc- Presold
Homes Selling Development Stage Controlled tion Homes
Delivered Price (1) (2) (3) (4) (5)
--------- -------- ----------- -------- ---------- --------- -------

Southern California(6).. 1,119 $372,015 47 15 3,406 610 377
Northern California..... 516 402,178 36 14 3,047 358 247
Houston................. 177 157,466 12 6 395 71 31
Dallas/Austin........... 288 251,099 21 11 1,714 105 88
Phoenix................. 188 161,649 26 9 2,984 347 368
----- -------- --- --- ------ ----- -----
Total Consolidated...... 2,288 $329,714 142 55 11,546 1,491 1,111
Unconsolidated Joint
Ventures-- California.. 40 $344,678 10 0 2,323 0 0
----- -------- --- --- ------ ----- -----
Totals for and as of the
year ended December 31,
1998................... 2,328 $329,972 152 55 13,869(7) 1,491 1,111
===== ======== === === ====== ===== =====
Totals for and as of the
year ended December 31,
1997................... 1,946 $309,239 99 50 9,016(7) 708 566
===== ======== === === ====== ===== =====


Footnotes appear on next page

2


- - --------
(1) The total number of projects held for development as of the end of each
period shown includes projects with homes in the sales stage, under
construction and projects in various stages of planning.

(2) The number of projects in the sales stage includes projects where the
sales office has opened and/or we have begun to enter into sales contracts
for the sale of homes.

(3) Includes sites for homes reflected in Homes Under Construction and Presold
Homes.

(4) Includes certain homes reflected in Presold Homes.

(5) For information concerning cancellation rates and contractual arrangements
under which homes are presold, see the section "--Marketing and Sales."

(6) Includes our Orange, San Diego and Ventura County divisions.

(7) Includes as of December 31, 1998, 183 model homes and 136 completed and
unsold homes, and as of December 31, 1997, 102 model homes and 116
completed and unsold homes.
- - --------
Substantially all of our homes are single-family detached dwellings,
although during the past few years up to 10% have been townhouses or
condominiums generally attached in varying configurations of two, three, four
and six dwelling units.

Our homes are designed to suit the particular area of the country in which
they are located and are available in a variety of models, exterior styles and
materials depending upon local preferences. While they typically range in size
from approximately 2,000 to 3,000 square feet and typically include three or
four bedrooms, two or three baths, a living room, kitchen, dining room, family
room and a two or three-car garage, we also have built single-family attached
and detached homes ranging from 1,100 to 5,500 square feet. For the years ended
December 31, 1998, 1997 and 1996, the average selling prices of our homes,
including sales of the unconsolidated joint ventures, were $329,972, $309,239
and $261,681, respectively.

Land Acquisition, Development and Construction

In considering the purchase of land for the development of a project, we
review such factors as:

. proximity to existing developed areas;

. population growth patterns;

. availability of existing community services, such as water, gas,
electricity and sewers;

. school districts;

. employment growth rates;

. the expected absorption rates for new housing;

. environmental condition of the land;

. transportation conditions and availability; and

. the estimated costs of development.

Generally, if all requisite governmental agency approvals are not in place,
we enter into a conditional agreement to purchase a parcel of land, making only
a nominal deposit on the property. Our general policy is to complete a purchase
of land only when we can reasonably project commencement of construction within
a relatively short period of time. Closing of the land purchase is, therefore,
generally made contingent upon satisfaction of conditions relating to the
property and to our being able to obtain all requisite approvals from
governmental agencies within a certain period of time. We customarily acquire
unimproved or improved land zoned for residential use which appears suitable
for the construction of 50 to 300 homes. Construction is then accomplished in
smaller sized increments. The number of homes built in the first increment of a
project is

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based upon our internal market studies. The timing and size of subsequent
increments depends on the sales rates of earlier increments. Our development
work on a project includes obtaining any necessary zoning, environmental and
other regulatory approvals, and constructing, as necessary, roads, sewer and
drainage systems, recreational facilities and other improvements.

We typically use both our equity (internally generated funds) and unsecured
financing in the form of bank debt and other unsecured debt to fund land
acquisitions. To a lesser extent, we also use purchase money trust deeds to
finance the acquisition of land. We also enter into land development joint
ventures from time to time, typically for projects that have long lead times or
require substantial capital investments. Generally, with the exception of joint
ventures, specific project financing is not used.

We essentially function as a general contractor with our supervisory
employees coordinating all work on the project. The services of independent
architectural, design, engineering and other consulting firms are engaged to
assist in project planning, and subcontractors are employed to perform all of
the physical development and construction work on the project. We do not have
long-term contractual commitments with any of our subcontractors, consultants
or suppliers of materials. However, because of our market presence and long-
term relationships, we have generally been able to obtain sufficient materials
and commitments from subcontractors and consultants during times of market
shortages. These types of agreements are generally entered into on an
increment-by-increment or project-by-project basis at a fixed price after
competitive bidding. We believe that the low fixed labor expense resulting from
conducting our operations in this manner has been instrumental in enabling us
to retain the necessary flexibility to react to increases or decreases in
demand for housing.

Although the construction time for our homes varies from project to project
depending on the time of year, local labor situations, certain governmental
approval processes, availability of materials and supplies and other factors,
we can typically complete the construction phase of an increment within one of
our projects in approximately four to six months.

Joint Ventures

We enter into land development and homebuilding joint ventures from time to
time as a means of managing our risk profile and expanding our market
opportunities. Land development joint ventures are typically entered into with
other homebuilders and developers as a method of spreading the financial risks
associated with developing larger projects. Homebuilding joint ventures may
involve partnering with existing landowners as a means of acquiring desirable
properties. For the years ended December 31, 1998, 1997 and 1996, we delivered
40, 67 and 154 homes, respectively, through unconsolidated joint ventures.

In 1996, our Orange County division entered into a joint venture to develop
and deliver approximately 800 homes in Fullerton and Brea, California. During
1998, 1997 and 1996, we delivered 40, 52 and three new homes, respectively,
from this unconsolidated joint venture. As of December 31, 1998, we had made
investments of approximately $8.3 million in this joint venture.

In the first half of 1997, our northern California division entered into a
joint venture to develop approximately 700 lots and a championship golf course
in Gilroy, California. Fifty percent of these lots will be sold to us at cost
for the construction and sale of homes. As of December 31, 1998, we had made
investments of approximately $11.2 million in this joint venture.

During 1997, we entered into a joint venture with affiliates of Catellus
Development Corporation and Starwood Capital Group L.L.C. to acquire and
develop a 3,470-acre masterplanned community located in south Orange County
(the "Talega Joint Venture"). The Talega Joint Venture plans to develop and
deliver in phases finished lots for up to approximately 4,500 attached and
detached homes, develop and operate a championship golf course, and develop
certain community amenities and commercial and industrial components. As a
one-third participant in this long-term project, we may be required to invest
up to $20 million in the project and will receive certain rights of first offer
entitling us to purchase at fair market value up to 1,000 finished lots

4


from the joint venture for construction and sale of homes by us. As of January
31, 1999, we did not have any net investment in this joint venture.
Additionally, in 1998 we purchased 155 lots from the joint venture on which we
will build and sell homes.

In 1998, our San Diego division entered into a joint venture to develop
approximately 700 lots in Riverside County, California. Slightly more than one-
half of these lots will be sold to us at cost for the construction and sale of
homes. As of December 31, 1998, we had made an investment of approximately
$5.8 million in this joint venture.

Marketing and Sales

Our homes are generally sold by our own sales personnel. Furnished and
landscaped model homes are typically maintained at each project site. Home
buyers are afforded the opportunity to select, at additional costs, various
optional amenities such as prewiring options, upgraded flooring, cabinets and
countertops, varied interior and exterior color schemes, additional appliances
and some room configurations. We make extensive use of advertisements in local
newspapers, illustrated brochures, billboards and on-site displays.

Our homes are typically sold during construction using sales contracts which
are usually accompanied by a cash deposit, although some of our homes are sold
after completion of construction. For a limited time, purchasers are typically
permitted to cancel these contracts if they fail to qualify for financing. In
some cases, purchasers are also permitted to cancel these contracts if they are
unable to sell their existing homes or if certain other conditions are not met.

During each of the years ended December 31, 1998, 1997 and 1996, we
experienced cancellation rates of 25%, 22% and 24%, respectively. Although
cancellations can delay our delivery of homes, they have not, during the last
few years, had a material negative impact on sales, operations or liquidity. In
order to minimize the negative impact of cancellations, it is our policy to
closely monitor the progress of prospective buyers in obtaining financing and
to monitor and adjust our start plan to continuously match the level of demand
for our homes. Sales are recorded after construction is completed, required
down payments are received and title passes. At December 31, 1998, 1997 and
1996, we had an inventory of completed and unsold homes of 136, 116 and 206,
respectively.

Financing

In 1998, we began offering primarily conventional, FHA-insured and VA-
guaranteed mortgage loans to some of our southern California homebuyers and
others through our new mortgage banking subsidiary, Family Lending Services,
Inc. Our goal in 1999 is to expand the scope of Family Lending's operations to
serve all of our California operating divisions.

In 1998, we also began offering primarily conventional, FHA-insured and VA-
guaranteed mortgage loans to our Arizona homebuyers through SPH Mortgage, a
joint venture with Norwest Mortgage. During 1999 we are expanding this
operation into our Texas operating divisions.

Family Lending sells the loans it originates in the secondary mortgage
market, generally on a non-recourse basis, and retains some of the servicing
rights. It generally finances its loans held for sale with borrowings under its
line of credit (secured by the loans and certain servicing rights) with a third
party lender. SPH Mortgage generally sells the loans it originates, on a non-
recourse basis and with servicing rights released, to Norwest Mortgage. Both
mortgage banking operations seek to manage interest rate risk with respect to
loan commitments and loans held for sale by pre-selling loans.

The principal sources of revenues for these mortgage banking operations are:

. fees generated from loan originations;

. net gains on the sale of loans;

. revenues from the sale of loan servicing rights; and

. interest income earned on loans during the period they are held prior to
sale.

5


Family Lending also earns loan servicing fees on loans for which it elects
to retain the servicing rights.

Family Lending and SPH Mortgage are each subject to numerous federal, state
and local laws, ordinances, rules and regulations concerning loans to
purchasers of homes as well as eligibility requirements for participation in
federal loan programs.

Certain Factors Affecting our Operations

Set forth below are certain matters that may affect us.

Economic Conditions and Interest Rates Affect Our Industry. The
homebuilding industry is highly cyclical. Changes in world, national and local
economic conditions affect our business and our markets. In particular,
declines in consumer confidence or employment levels in our markets may
adversely affect the demand for homes and could in turn harm our operating
results. The recent downturn and continued instability in various Asian
economies and financial markets could harm the California, Texas and Arizona
economies and consumer demand for homes in those states.

Our customers typically finance their home purchase through lenders
providing mortgage financing. Increases in interest rates or decreases in
availability of mortgage financing could depress the market for new homes
because of the increased monthly mortgage costs, or the decreased availability
of financing, to potential home buyers. Even if some of our potential
customers do not need financing, changes in interest rates and mortgage
availability could make it harder for them to sell their existing homes to
potential buyers who need financing. This could adversely affect our operating
results.

Additional Capital May Not Be Available to Fund Future Growth. Our
operations require significant amounts of cash, and we will be required to
seek additional capital, whether from sales of equity or borrowing more money,
for the future growth and development of our business. We can give no
assurance as to the terms or availability of such additional capital.
Moreover, the indentures for our outstanding debt and our revolving credit
facility contain provisions that may restrict the debt we may incur in the
future. If we are not successful in obtaining sufficient capital, it could
reduce our sales and may adversely affect our future growth and operating
results.

We Depend on the California Market; Risk of California and Arizona Slow
Growth Initiatives. We presently conduct most of our business in California.
Home prices in California, including in some of the markets in which we
operate, have declined from time to time, particularly as a result of slow
economic growth. We cannot be certain that the current economic growth trend
in California will continue. If home prices decline in one or more of the
markets in which we operate, our results of operations may be adversely
affected.

Several California cities and counties, including some in which we have
sold a significant number of homes, have in the past approved, or approved for
inclusion on the ballot, various "slow growth" initiatives and other ballot
measures which could impact the availability of affordable homes and land
within those localities. In addition, in Arizona a state ballot measure was
recently proposed (although it did not qualify for the ballot) which would
have restricted the ability of homebuilders to build outside of designated,
pre-existing urban areas. Introduction and voter approval of such measures
could harm our ability to build and sell homes in the affected markets. This
in turn could adversely affect our operating results.

Possible Shortage of Land for Purchase and Development; Inventory
Risks. Our success in developing, building and selling homes depends in part
upon the continued availability of suitable undeveloped land at acceptable
prices. The availability of undeveloped land for purchase at favorable prices
depends on a number of factors outside of our control, including the risk of
competitive over-bidding of land prices and restrictive governmental
regulation. Should suitable land opportunities become less available, our
operating results could be adversely affected.

6


Land inventory risk can be substantial for homebuilders. The market value of
undeveloped land, buildable lots and housing inventories can fluctuate
significantly as a result of changing economic and market conditions. In the
event of significant changes in economic or market conditions, we may have to
sell homes at a loss or hold land in inventory longer than planned. Inventory
carrying costs can be significant and can result in losses in a poorly
performing project or market.

As a result of the national and California recessions which began in 1990,
in the early 1990's we recorded writedowns of approximately $8.8 million on
several of our California projects. As a result of continued decline in some of
our key markets, particularly San Diego, as well as adoption of a new
accounting rule by the Financial Accounting Standards Board that required us to
change our method of valuing long-lived assets, at December 31, 1995 we
recorded a $46.5 million noncash pretax charge against operations.

Our Industry is Highly Competitive. The homebuilding industry is highly
competitive and fragmented. We compete with numerous other residential
construction firms, including large national and regional firms, for customers,
undeveloped land, financing, raw materials and skilled labor. We compete on the
basis of the location, design, quality and price of, as well as available
mortgage financing for, our homes. Some of these firms have substantially
greater financial resources than us. We also compete with the resale of
existing homes and, in some cases, with rental homes. An oversupply of
attractively priced resale or rental homes in our markets could adversely
affect our ability to sell homes profitably. Our mortgage lending operations
are subject to intense competition from other mortgage lenders, many of which
are substantially larger and may have a lower cost of funds.

Risk of Material and Labor Shortages. The residential construction industry
has from time to time experienced serious material and labor shortages,
including shortages in insulation, drywall, carpentry work, cement and lumber.
These shortages can be more severe during periods of strong demand for housing.
Certain of these materials, including lumber and cement in particular, have
experienced volatile price swings. Similar shortages and price increases in the
future could cause delays in and increase the costs of our home construction
which in turn would adversely affect our operating results.

We Are Subject to Extensive Government Regulation. Our homebuilding
operations are subject to environmental, building, worker health and safety,
zoning and real estate regulations by various federal, state and local
authorities. These regulations, which affect all aspects of the homebuilding
process, including development, design, construction and sales, can
substantially delay or increase the costs of homebuilding activities. In
addition, regulations governing environmental and health matters may prohibit
or severely restrict homebuilding activity in environmentally sensitive
regions.

New housing developments, particularly in California, may be subject to
various assessments for schools, parks, streets, highways and other public
improvements. The costs of these assessments can be substantial and can cause
increases in the prices of our homes, which in turn could adversely affect our
operating results.

During the development process, we must obtain the approval of numerous
governmental authorities which regulate matters such as:

. permitted land uses and levels of density;

. the installation of utility services, such as water and waste disposal;
and

. the dedication of acreage for open space, parks, schools and other
community services.

The approval process can be lengthy and cause significant delays in the
development process. In addition, changes in local circumstances or laws may
require additional approvals or modifications to approvals previously obtained,
which can result in further delays. Such delays in the development process can
cause substantial increases to development costs, which in turn could adversely
affect our operating results.

Our mortgage banking operations are subject to numerous federal, state and
local laws and regulations concerning loan originations and servicing. Many of
these regulatory requirements are designed to protect the

7


interests of consumers. Failure to comply with these requirements can lead to
administrative enforcement actions, the loss of required licenses and claims
for monetary damages.

Risk of Natural Disasters. We are subject to the risks associated with
adverse weather conditions and natural disasters which occur in our key
markets, including:

. unusually heavy or prolonged rain;

. earthquakes;

. fires; and

. floods.

Such conditions can negatively affect our operations in the markets in which
they occur. In addition, California has periodically experienced drought
conditions which result in water conservation measures and sometimes rationing
by municipalities in which we do business. Restrictions by governmental
agencies on construction activity as a result of limited water supplies could
adversely affect our operating results.

Risk Relating to the "Year 2000 Issue." We believe our computer information
systems are Year 2000 compliant in all material respects. We are in the process
of assessing the Year 2000 compliance of our non-information technology
internal office systems. We are also in the process of surveying our
significant vendors, subcontractors, suppliers and financial institutions to
assess the state of their readiness for the Year 2000. We cannot currently
determine to what extent the Year 2000 issue will affect our non-information
technology office systems or these or other third parties, such as governmental
agencies on which we are dependent for zoning, building permits and related
matters, or, consequently, our business. Also, we could be materially impacted
by widespread economic or financial market disruptions as a result of Year 2000
failure in other parties, industries or countries. While at present we do not
believe the Year 2000 issue will have a material adverse effect on our
business, we can give you no assurances in this regard.

Employees

At December 31, 1998, we had approximately 625 employees (excluding
employees of discontinued operations).

During the past five years, we have not directly experienced a work stoppage
in our operations caused by labor disputes. Construction of homes in our
projects has, from time to time, been delayed due to strikes by certain
construction unions against subcontractors retained by us or strikes against
suppliers of materials used in the construction of our homes. Such delays have
not had a significant adverse effect on our operations. We believe that our
relations with our employees and subcontractors are satisfactory.

ITEM 2. PROPERTIES

In addition to real estate held for development and sale, which is either
owned or under option to be purchased by us, we lease approximately 17,000
square feet of office facilities in Costa Mesa, California under leases
expiring in 2002 on which our executive office and the offices of the Orange
County housing division are located. We also lease and sublease to an unrelated
third party an approximately 59,000 square foot manufacturing facility at this
location.

Our other real estate housing divisions occupy leased facilities ranging in
size from approximately 2,000 to 14,000 square feet and aggregating a total of
approximately 56,000 square feet. These leases expire from 2001 through 2006.

Family Lending occupies approximately 9,300 square feet of a facility in
Newport Beach, California under a lease that expires in February 2005.

8


We believe that all of our properties are currently satisfactory for the
purposes for which they are used.

ITEM 3. LEGAL PROCEEDINGS

Various claims and actions, considered normal to our business, have been
asserted and are pending against us. We believe that such claims and actions
should not have a material adverse effect upon our results of operations,
financial position or liquidity.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

EXECUTIVE OFFICERS OF THE COMPANY

Our executive officers' ages, positions, and brief accounts of their
business experience, are set forth below.



Name Age Position
- - ---- --- --------

Arthur E. Svendsen 75 Chairman of the Board and Chief Executive Officer; Director
Stephen J. Scarborough 50 President; Director
Andrew H. Parnes 40 Vice President--Finance, Treasurer and Chief Financial Officer
Clay A. Halvorsen 39 Vice President, General Counsel and Secretary


Arthur E. Svendsen has served as the Chairman of the Board and Chief
Executive Officer since 1961.

Stephen J. Scarborough has served as a Director since May 1996 and as
President since October 1996. Mr. Scarborough served as Executive Vice
President from January 1996 until October 1996. Prior to this and since 1981,
Mr. Scarborough was President of our Orange County, California residential
homebuilding division.

Andrew H. Parnes was appointed to the position of Vice President--Finance
in January 1997. In addition, he has served as our Chief Financial Officer
since July 1996 and as our Treasurer since January 1991. From December 1989
until July 1996, Mr. Parnes served as our Controller.

Clay A. Halvorsen joined us as Vice President, General Counsel and
Secretary in January 1998. Previously, from 1985 through December 1997, Mr.
Halvorsen practiced with the law firm of Gibson, Dunn & Crutcher LLP, where he
became a partner in January 1995.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our shares of common stock are listed on the New York Stock Exchange and
Pacific Stock Exchange. The following table sets forth, for the fiscal
quarters indicated, the reported high and low closing prices of the common
shares as reported on the New York Stock Exchange Composite Tape and the
amount of common dividends paid.



Year Ended December 31,
--------------------------------------------------
1998 1997
------------------------- ------------------------
Quarter Ended High Low Dividend High Low Dividend
------------- ------- -------- -------- ------- ------- --------

March 31.............. $18 7/8 $14 5/8 $.04 $ 8 3/4 $ 5 5/8 $.03
June 30............... 21 14 3/4 .04 10 1/2 6 3/8 .03
September 30.......... 21 11 9/16 .04 13 10 1/8 .04
December 31........... 14 7/8 7 7/8 .05 16 1/4 9 3/4 .04


As of March 1, 1999, the approximate number of record holders of common
stock was 1,468.

9


ITEM 6. SELECTED FINANCIAL DATA



Year Ended December 31,
----------------------------------------------------------
1998 1997 1996 1995(1) 1994
---------- ---------- ---------- ---------- ----------
(Dollars in thousands, except per share amounts)

Revenues.................................... $ 759,612 $ 584,571 $ 399,863 $ 346,263 $ 374,783
========== ========== ========== ========== ==========
Income (loss) from continuing operations
before income taxes and extraordinary
charge..................................... $ 80,894 $ 41,046 $ 12,948 $ (37,247) $ 11,200
(Provision) benefit for income taxes........ (33,490) (17,070) (5,197) 14,890 (4,595)
---------- ---------- ---------- ---------- ----------
Income (loss) from continuing operations
before extraordinary charge................ 47,404 23,976 7,751 (22,357) 6,605
Income (loss) from discontinued operations,
net of income taxes........................ (199) 48 642 (5,006) (718)
Gain on disposal of discontinued operation,
net of income taxes........................ -- 3,302 -- -- --
Extraordinary charge from early
extinguishment of debt, net of income
taxes...................................... (1,328) -- -- -- --
---------- ---------- ---------- ---------- ----------
Net income (loss)........................... $ 45,877 $ 27,326 $ 8,393 $ (27,363) $ 5,887
========== ========== ========== ========== ==========
Basic Net Income (Loss) Per Share:
Income (loss) per share from continuing
operations................................. $ 1.59 $ 0.82 $ 0.26 $ (0.73) $ 0.22
Income (loss) per share from discontinued
operations................................. (0.01) 0.00 0.02 (0.17) (0.03)
Gain on disposal of discontinued operation.. -- 0.11 -- -- --
Extraordinary charge from early
extinguishment of debt..................... (0.04) -- -- -- --
---------- ---------- ---------- ---------- ----------
Net income (loss) per share................. $ 1.54 $ 0.93 $ 0.28 $ (0.90) $ 0.19
========== ========== ========== ========== ==========
Diluted Net Income (Loss) Per Share:
Income (loss) per share from continuing
operations................................. $ 1.58 $ 0.81 $ 0.26 $ (0.73) $ 0.22
Income (loss) per share from discontinued
operations................................. (0.01) 0.00 0.02 (0.17) (0.03)
Gain on disposal of discontinued operation.. -- 0.11 -- -- --
Extraordinary charge from early
extinguishment of debt..................... (0.04) -- -- -- --
---------- ---------- ---------- ---------- ----------
Net income (loss) per share................. $ 1.53 $ 0.92 $ 0.28 $ (0.90) $ 0.19
========== ========== ========== ========== ==========
Stockholders' equity per share.............. $ 10.96 $ 9.58 $ 8.79 $ 8.58 $ 9.56
Cash dividends declared per share........... $ 0.17 $ 0.14 $ 0.12 $ 0.12 $ 0.12
Weighted average common shares outstanding.. 29,714,431 29,504,477 30,000,492 30,488,676 30,616,991
Weighted average common and diluted shares
outstanding................................ 30,050,078 29,807,702 30,011,595 30,488,676 30,674,349
Total assets................................ $ 866,362 $ 547,665 $ 449,114 $ 444,603 $ 531,768
Long-term debt: continuing operations....... $ 404,806 $ 194,305 $ 80,000 $ 129,062 $ 134,360
Stockholders' equity........................ $ 324,679 $ 283,778 $ 260,389 $ 257,926 $ 292,743

- - --------
(1) The 1995 loss from continuing operations before income taxes and
extraordinary charge of $37.2 million reflects the adoption of Financial
Accounting Standards No. 121 ("FAS 121") which resulted in a $46.5 million
noncash pretax charge to operations.

10


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following discussion and analysis should be read in conjunction with the
section "Selected Financial Data" and our consolidated financial statements and
the related notes included elsewhere in this Form 10-K.

Results of Operations
Selected Financial Information



Year Ended December 31,
-------------------------------
1998 1997 1996
--------- --------- ---------
(Dollars in thousands)

Homebuilding:
Revenues.................................... $ 759,612 $ 584,571 $ 399,863
Cost of sales............................... 618,448 490,876 348,066
--------- --------- ---------
Gross margin.............................. 141,164 93,695 51,797
--------- --------- ---------
Gross margin percentage................... 18.6% 16.0% 13.0%
--------- --------- ---------
Selling, general and administrative
expenses................................... 61,691 52,141 37,351
Income from unconsolidated joint ventures... 4,158 3,787 4,708
Interest expense............................ 1,168 4,981 7,142
Amortization of excess of cost over net
assets acquired............................ 1,312 245 --
Other income................................ 168 822 936
--------- --------- ---------
Homebuilding pretax income................ 81,319 40,937 12,948
--------- --------- ---------
Financial Services:
Revenues.................................... 1,403 171 --
Expenses.................................... 1,828 62 --
--------- --------- ---------
Financial services pretax income (loss)... (425) 109 --
--------- --------- ---------
Income from continuing operations before
income taxes and extraordinary charge........ $ 80,894 $ 41,046 $ 12,948
========= ========= =========

Operating Data


Year Ended December 31,
-------------------------------
1998 1997 1996
--------- --------- ---------
(Dollars in thousands, except
average selling prices)

New homes delivered:
Southern California......................... 1,119 849 765
Northern California......................... 516 628 366
--------- --------- ---------
Total California.......................... 1,635 1,477 1,131
--------- --------- ---------
Dallas/Austin............................... 288 234 211
Houston..................................... 177 168 127
--------- --------- ---------
Total Texas............................... 465 402 338
--------- --------- ---------
Arizona..................................... 188 -- --
--------- --------- ---------
Consolidated total.......................... 2,288 1,879 1,469
Unconsolidated joint ventures (California).. 40 67 154
--------- --------- ---------
Total..................................... 2,328 1,946 1,623
========= ========= =========
Average selling price:
California deliveries (excluding joint
ventures).................................. $ 381,534 $337,649 $ 292,007
Texas deliveries............................ $ 215,458 $195,631 $ 185,622
Arizona deliveries.......................... $ 161,649 $ -- $ --
Combined (excluding joint ventures)......... $ 329,714 $307,265 $ 267,529
Combined (including joint ventures)......... $ 329,972 $309,239 $ 261,681


11


Operating Data--continued



Year Ended December 31,
--------------------------
1998 1997 1996
-------- -------- --------

Net new orders:
Southern California............................... 1,226 922 863
Northern California............................... 612 607 474
-------- -------- --------
Total California................................ 1,838 1,529 1,337
-------- -------- --------
Dallas/Austin..................................... 310 238 212
Houston........................................... 156 190 128
-------- -------- --------
Total Texas..................................... 466 428 340
-------- -------- --------
Arizona........................................... 165 -- --
-------- -------- --------
Consolidated total................................ 2,469 1,957 1,677
Unconsolidated joint ventures (California)........ 13 70 121
-------- -------- --------
Total........................................... 2,482 2,027 1,798
======== ======== ========

At December 31,
--------------------------
1998 1997 1996
-------- -------- --------
(Dollars in thousands)

Backlog (in units):
Southern California............................... 377 270 206
Northern California............................... 247 151 172
-------- -------- --------
Total California................................ 624 421 378
-------- -------- --------
Dallas/Austin..................................... 88 66 62
Houston........................................... 31 52 30
-------- -------- --------
Total Texas..................................... 119 118 92
-------- -------- --------
Arizona........................................... 368 -- --
-------- -------- --------
Consolidated total................................ 1,111 539 470
Unconsolidated joint ventures (California)........ -- 27 15
-------- -------- --------
Total........................................... 1,111 566 485
======== ======== ========
Backlog at year end (estimated dollar value)........ $359,959 $191,682 $168,674
======== ======== ========
Active selling communities:
California........................................ 29 28 33
Texas............................................. 17 19 16
Arizona........................................... 9 -- --
Unconsolidated joint ventures (California)........ -- 3 2
-------- -------- --------
Total........................................... 55 50 51
======== ======== ========
Building sites owned or controlled:
California........................................ 8,587 7,246 4,715
Texas............................................. 2,298 1,770 1,812
Arizona........................................... 2,984 -- --
-------- -------- --------
Total........................................... 13,869 9,016 6,527
======== ======== ========



12


Fiscal Year 1998 Compared to Fiscal Year 1997

Income from continuing operations and before an extraordinary charge for the
year ended December 31, 1998 increased 98 percent to $47.4 million, or $1.58
per diluted share, compared with $24.0 million, or $0.81 per diluted share, for
1997. The significant increase in our earnings was fueled by the record number
of new home deliveries, an increase in the average selling price of new homes
delivered and continued improvement in our homebuilding gross margin. This
performance primarily reflects the strong California housing market and our
inventory of well located lots throughout the state.

Net income for the year ended December 31, 1998, including discontinued
operations and an extraordinary charge, increased 68 percent to $45.9 million,
or $1.53 per diluted share, compared to $27.3 million, or $0.92 per diluted
share, for 1997. The discontinued operations in 1997 and 1998 include our
savings and loan subsidiary which is pending disposition pursuant to a
definitive agreement. The discontinued operations in 1997 also includes our
former office furniture subsidiary which was sold in December 1997. Currently,
we do not anticipate a significant gain or loss from the operations or
disposition of the thrift. The extraordinary charge reflects an after tax loss
of $1.3 million, or $0.04 per diluted share, recognized in connection with the
early extinguishment of approximately $39 million of our 10 1/2% Senior Notes
due 2000. (See "--Discontinued Operations" for further discussion of the
discontinued operating segments.)

In the third quarter of 1998, we expanded into the Phoenix, Arizona market
with the acquisition of a portion of the Arizona single-family homebuilding
operations of Shea Homes, Inc., which had been recently acquired from UDC
Homes, Inc. In connection with this acquisition, we purchased, or assumed the
rights to acquire, over 2,000 single-family lots located in 13 communities in
the Phoenix metropolitan area, of which seven were active subdivisions at the
close of the transaction, and acquired a backlog of 400 presold homes. Arizona
is the second fastest growing state in the United States (based on percentage
growth in jobs, gross state product and population) and Phoenix is one of the
nation's largest metropolitan housing markets (based on dollar value of single-
family building permits). As part of the acquisition, the experienced
management team and selected operating personnel joined Standard Pacific. We
paid a total of approximately $59 million for these assets with borrowings
under our revolving credit facility.

Homebuilding

Homebuilding revenues for the year ended December 31, 1998 increased 30
percent to a record $759.6 million, from $584.6 million in 1997. The increase
was fueled by a 20 percent increase in deliveries to a record 2,328 new homes
and a 7 percent increase in the average home price. The increase in the average
price reflects price increases resulting both from the strong housing market
and the delivery of larger, more expensive homes in California where the
average home price was up 13 percent to $381,534. New home deliveries were up
32 percent in southern California due to the addition of new communities and
improved market conditions, while deliveries were off 16 percent in northern
California due to the timing of new project openings and the effects of the
severe weather conditions in early 1998. Texas deliveries were up 16 percent
due to increased deliveries from our Dallas operations resulting from the
addition of new, well-located communities. Additionally, 1998 included 188
deliveries from the recently acquired Arizona operation.

The average cost per new home delivery was up 4 percent over the 1997
average primarily as a result of the delivery of larger, more expensive homes
in California, which was partially offset by lower priced home deliveries in
Arizona.

Our 1998 homebuilding gross margin improved 260 basis points to 18.6 percent
which was primarily the result of rising home prices in the strong California
housing market and the delivery of larger, more expensive homes which typically
generate higher margins.

Selling, general and administrative expenses as a percentage of revenues
decreased from 8.9 percent to 8.1 percent in 1998. This favorable decline was
primarily attributable to the increased volume in revenues

13


relative to the generally fixed nature of certain general and administrative
expenses. Additionally, we experienced a reduction in selling costs as a
percentage of revenues principally due to the healthy California housing market
and a higher sales absorption rate resulting in lower costs per home delivered.

Income from our unconsolidated joint ventures increased 10 percent during
1998 as compared to the prior year despite a 40 percent decline in new home
deliveries from our unconsolidated joint ventures. The reduction in deliveries
was more than offset by the income generated in the fourth quarter from the
initial sale of lots from our Talega land development joint venture in south
Orange County with Catellus and Starwood Capital.

Interest expense for the year ended 1998 declined approximately $3.8 million
from 1997 to $1.2 million. This decrease was primarily the result of
capitalizing more interest to real estate inventories in 1998 compared to 1997.

Amortization of excess of cost over net assets acquired relates to the 1997
acquisition of Duc Development Company, a privately held northern California
homebuilder, and the recently completed acquisition of our Arizona operation on
August 31, 1998. The excess of cost over net assets acquired is being amortized
over 7 and 12 years, respectively.

Our net new orders for the year ended December 31, 1998 increased 22 percent
over the prior year to a record level of 2,482 new homes. Excluding the 165 net
new orders generated from our recently acquired Arizona operation, net new
orders increased 14 percent. Our southern California operations experienced the
strongest gains during 1998 with net new orders increasing 25 percent over 1997
totals, while our northern California division remained in line with the strong
order results achieved in 1997. Texas orders were up 9 percent as a result of
new community openings in our Dallas division. Due to the strength in the order
trends experienced during 1998, we enter 1999 with a backlog of 1,111 presold
homes with an estimated sales value of approximately $360 million, compared to
566 homes with an estimated sales value of approximately $192 million at
December 31, 1997. In addition, to augment our inventory of homes available for
sale, we anticipate opening 60 to 65 new projects during 1999, of which
approximately 38 are scheduled to open in California.

Although we experienced an increase in the delivery of new homes during 1998,
we continue to control a solid position of buildable lots consistent with our
general goal of maintaining a 3 to 4 year supply. At December 31, 1998, our
land holdings totaled approximately 14,000 lots owned or controlled, of which
approximately 8,600 were in California.

Financial Services

In 1998, we began offering mortgage products to some of our southern
California homebuyers through our new mortgage banking operation, Family
Lending Services, Inc. Our goal for 1999 is to expand the scope of this program
to serve all of our California operations. We have established the
infrastructure and management team to grow this business statewide. The results
of operations for 1998 reflect a nominal loss of approximately $425,000 which
was the result of the start-up nature of this business.

Additionally, in connection with the Arizona acquisition, we assumed a joint
venture with a leading national financial institution that offers mortgage
loans to our Arizona homebuyers. We are expanding this operation into Texas
during 1999. For the year ended December 31, 1998, there was no income or loss
recorded from this unconsolidated joint venture. Results from this operation
will be reflected in our 1999 income statement as income from unconsolidated
joint venture.

Fiscal Year 1997 Compared to Fiscal Year 1996

Income from continuing operations for the year ended December 31, 1997
increased 209 percent to $24.0 million, or $0.81 per diluted share, compared to
$7.8 million, or $0.26 per diluted share, in 1996. The

14


strong increase in earnings resulted from an increase in the number of new
homes delivered, an increase in the average selling price of our new homes, and
continued improvement in our gross margins throughout our California
homebuilding operations.

Net income for 1997, including discontinued operations, was $27.3 million, or
$0.92 per diluted share, compared to $8.4 million, or $0.28 per diluted share
in 1996. The discontinued operations reflect our savings and loan subsidiary
and our former office furniture subsidiary, which was sold in December 1997 for
a net gain of approximately $3.3 million, or $0.11 per diluted share.

Homebuilding

Homebuilding revenues totaled $584.6 million in 1997, a 46 percent increase
over 1996. The $184.7 million increase in revenues resulted primarily from an
increase of $109.7 million attributable to a 28 percent increase in new homes
delivered and a $74.7 million increase due to a 15 percent higher average
selling price. Our northern California division delivered 628 new homes, a
72 percent increase over 1996 levels, while the 916 new homes delivered from
our southern California operations during 1997 were in line with the strong
level of deliveries generated in 1996. The increase in the average selling
price in 1997 resulted primarily from a greater distribution of homes delivered
in the $400,000 to $800,000 price range in California.

Our gross margin percentage for 1997 increased 300 basis points to
16.0 percent primarily due to the strengthening California housing market.

Selling, general and administrative expenses decreased as a percentage of
revenues from 9.3 percent in 1996 to 8.9 percent in 1997. This decrease was
attributable to the general fixed nature of certain general and administrative
expenses, as well as a reduction in selling costs as a percent of revenues due
to the improving housing market in California.

Income from unconsolidated joint ventures declined from approximately $4.7
million in 1996 to $3.8 million in 1997. This decline was the result of fewer
unit deliveries in 1997 as compared to 1996. Although joint venture unit
deliveries were down from 1996, both gross margins and average selling prices
for the ventures increased respectively from 1996 levels.

Interest incurred for 1997 was $17.0 million of which $12.0 million was
capitalized to real estate inventories and approximately $5.0 million was
expensed compared to $16.7 million incurred in 1996 of which $9.5 million was
capitalized and $7.1 million expensed. The increase in the amount of interest
capitalized in 1997 was due primarily to more projects under development
throughout 1997 as compared to 1996.

Amortization of excess of cost over net assets acquired related to the
acquisition of Duc Development Company, a privately held northern California
homebuilder, on September 30, 1997. The excess of cost over net assets acquired
is being amortized over a seven-year period.

During 1997 we generated 2,027 net new home orders, a 13 percent increase
over the 1996 total. Our northern California orders increased 28 percent over
1996 to 607 new homes, while the Texas operations combined for a 26 percent
improvement in net new orders over 1996.

Financial Services

Operations for this segment reflect nominal general and administrative costs
associated with forming the financial services subsidiary as well as interest
income from loans that were contributed as part of the initial capitalization
of this entity.

15


Carrying Costs, Real Estate Inventories and Cost of Sales



At December 31,
-------------------------------
1998 1997 1996
--------- --------- ---------
(Dollars in millions)

Capitalized interest in inventory and the
percentage of total real estate
inventories................................. $15.2 2.1% $13.7 3.0% $25.1 6.7%
Average real estate inventory balance........ $583 $412 $370
Cost of sales for the year then ended........ $618 $491 $348
Ratio of cost of sales to average inventory
balance (Inventory turn ratio).............. 1.06x 1.19x .94x


The 1998 inventory turn ratio decreased from 1997 principally due to a 42
percent increase in the average real estate inventory balance while cost of
sales increased only 26 percent. The inventory growth outpaced the increase in
cost of sales as we purchased land in our existing markets in response to the
strong demand for housing, particularly in California, and as a result of the
recent expansion into Arizona.

The improvement in the 1997 inventory turn ratio over 1996 was due to a 41
percent increase in cost of sales while average real estate inventories
increased 11 percent over the 1996 average inventory level. The increase in
cost of sales was primarily due to a 28 percent increase in consolidated unit
deliveries in 1997 over 1996 resulting from an improvement in the California
housing market. Additionally, during 1997 we delivered homes from certain of
our older projects which had been in our inventory balances for several years.
Typically these older projects had higher land and interest costs than our more
recent acquisitions.

Capitalized interest in real estate inventories at December 31, 1998 was up a
modest $1.5 million over 1997 despite a 58 percent increase in ending real
estate inventories. This nominal increase in capitalized interest relative to
the increase in real estate inventories can be attributed to an overall
decrease in our borrowing costs and a strong housing market. Our effective
borrowing costs have declined due to lower long-term financing rates, a
decrease in short-term interest rates and a reduction in pricing in our
unsecured revolving credit facility. The strong housing market resulted in
shorter holding periods of our real estate inventories, which in turn resulted
in lower carrying costs as a percent of ending inventories.

Discontinued Operations

Disposition of Standard Pacific Savings. In May 1997, our Board of Directors
adopted a plan of disposition (the "Plan") for our savings and loan subsidiary
("Savings"). Pursuant to the Plan, we sold substantially all of Savings'
mortgage loan portfolio in June 1997. The proceeds from the sale of the
mortgages were used to pay off substantially all of the outstanding balances of
Federal Home Loan Bank advances with the remaining amount temporarily invested
until the savings deposits are sold along with Savings' remaining assets. The
gain generated from the sale of this mortgage loan portfolio, net of related
expenses, was not material. In August 1998, we entered into a definitive
agreement to sell the remainder of Savings' business, including Savings'
charter. The definitive agreement is subject to a number of conditions
including approval of the transaction by the Office of Thrift Supervision
("OTS"). As a result, Savings has been accounted for as a discontinued
operation and the results of its operations and net assets have been segregated
in the accompanying consolidated financial statements included elsewhere in
this Form 10-K. We currently estimate that both the disposition of Savings
under the Plan and the operating results of Savings for the period through the
disposition will not result in a significant gain or loss. Savings has not
offered mortgage financing to our home buyers since July 1994, and the sale of
Savings is not expected to have any impact on sales of our homes.

Disposition of Panel Concepts. In December 1997, we completed the sale of
Panel Concepts, Inc. ("Panel Concepts") to HON Industries, Inc., a national
furniture manufacturer, for a cash sales price of

16


approximately $9.5 million, after distribution of certain non-operating assets
to us totaling approximately $9 million. Panel Concepts has been accounted for
as a discontinued operation and the results of its operations have also been
segregated in our consolidated financial statements included elsewhere in this
Form 10-K.

Liquidity and Capital Resources

Our homebuilding operations' principal uses of cash have been for operating
expenses, land acquisitions, construction expenditures, market expansion,
principal and interest payments on debt and dividends to our shareholders. Cash
requirements have been provided from internally generated funds and outside
borrowings, including a bank revolving credit facility and public note
offerings. Our mortgage banking subsidiary uses cash from internal funds and a
mortgage warehouse credit facility to fund its mortgage lending operations.
Based on our current business plan and our desire to carefully manage our
leverage, we believe that these sources of cash are sufficient to finance our
current working capital requirements and other needs.

In February 1998, we issued $100 million of 8% Senior Notes due in 2008 (the
"8% Senior Notes"). The 8% Senior Notes were issued at a discount to yield
approximately 8.1 percent. These notes are senior unsecured obligations and
rank equally with our other existing unsecured senior indebtedness. The 8%
Senior Notes contain restrictive covenants similar to those in the 8 1/2%
Senior Notes due 2007 which, among other things, impose certain limitations on
our ability to (1) incur additional indebtedness, (2) create liens, (3) make
restricted payments, as defined, and (4) sell assets. The 8% Senior Notes are
redeemable at our option, in whole or in part, commencing February 15, 2003 at
104.00 percent of par, with the call price reducing ratably to par on February
15, 2006. Net proceeds after offering expenses were approximately
$97.3 million. Approximately $54.3 million of the net proceeds were used to
repay the indebtedness outstanding under the revolving credit facility on the
date of closing (February 10, 1998), with the balance of the net proceeds used
(1) to fund a $20 million sinking fund payment due on March 1, 1998 on our 10
1/2% Senior Notes, (2) to repay an approximately $11.2 million trust deed note
payable in March of 1998 and (3) for general corporate purposes.

In July 1998, we amended our unsecured revolving credit facility with our
bank group to, among other things, increase the commitment to $400 million and
reduce the cost of borrowings and other fees. The revolving credit facility has
a current maturity date of July 31, 2002. This agreement contains covenants,
including certain financial covenants. This agreement also contains provisions
which may, in certain circumstances, limit the amount we may borrow under the
revolving credit facility. At December 31, 1998, we had borrowings of $204.9
million outstanding under this facility.

To fund mortgage loans through our financial services subsidiary, we have in
place a $15 million revolving mortgage warehouse credit facility with a bank.
Loans are held for a short period of time as they are typically sold to
investors within approximately 30 days following funding. Borrowings are
secured by the related mortgage loans held for sale and contain a LIBOR based
pricing. The facility, which has a current maturity date of May 31, 1999,
requires our financial services subsidiary to comply with certain financial
covenants, as defined.

In March 1997 and 1998, we made two separate $20 million sinking fund
payments on our 10 1/2% Senior Notes due 2000. In May 1998, we repurchased, and
simultaneously retired, approximately $7.7 million of our 10 1/2% Senior Notes
through open market purchases. On September 30, 1998, we repurchased and
retired approximately $31.5 million of our 10 1/2% Senior Notes in connection
with our tender offer and consent solicitation. With the successful completion
of the consent solicitation, certain restrictive financial covenants were
modified or eliminated under the indenture. In connection with open market
purchases and the tender offer, we incurred an after tax extraordinary charge
for the early extinguishment of debt of approximately $1.3 million for the year
ended December 31, 1998. At December 31, 1998, approximately $19.6 million of
the 10 1/2% Senior Notes remained outstanding. On March 1, 1999, we repaid the
balance of these notes under the annual sinking fund payment provision of the
indenture.

From time to time, we use purchase money mortgage financing to finance land
acquisitions. At December 31, 1998, we had approximately $21.2 million
outstanding under trust deed notes payable, an increase of $4.0 million from
December 31, 1997.

17


Additionally, as a form of off balance sheet financing and for other
purposes, on selected projects we use joint ventures which obtain separate
secured construction financing. This type of structure minimizes the use of
funds from our revolving credit facility and other financing sources. We plan
to continue using these types of arrangements to finance the development of
properties as opportunities arise.

We paid approximately $5.0 million in dividends to our stockholders during
the year ended December 31, 1998. Common stock dividends are paid at the
discretion of our Board of Directors and are dependent upon various factors,
including our earnings, cash flow, capital requirements and operating and
financial condition. Additionally, certain senior credit and debt agreements
impose restrictions on the amount of dividends we may be able to pay. On
January 26, 1999, our Board of Directors declared a quarterly cash dividend of
$.05 per share of common stock. This dividend was paid on February 26, 1999 to
shareholders of record on February 12, 1999.

During the year ended December 31, 1998, we issued 131,500 shares of common
stock pursuant to the exercise of stock options for aggregate proceeds of
approximately $771,000.

Pursuant to the previously announced stock repurchase program, we repurchased
139,301 shares of our common stock for approximately $1.3 million during 1998.
Since inception of the program and through December 31, 1998, we have
repurchased an aggregate of 1,425,051 shares of our common stock for
approximately $9.6 million, leaving a balance of approximately $10.4 million
available under the repurchase program.

In October 1998, we had declared effective by the Securities and Exchange
Commission a $300 million universal shelf registration statement on Form S-3.
The universal shelf registration statement permits us to issue, from time to
time, up to an aggregate of $300 million of our common stock, preferred stock,
debt securities and warrants as market conditions permit.

We have no material commitments or off balance sheet financing arrangements
that would tend to affect our future liquidity.

Year 2000 Issue

The "Year 2000 issue" is a general term used to describe the problems which
may arise from the inability of systems to properly recognize a year that
begins with "20" instead of the familiar "19." If not corrected, many computer
applications could fail or miscalculate the data being processed.

We utilize a number of computer information systems in conjunction with our
homebuilding and mortgage banking operations. All of our homebuilding
operations are on computer software applications that are year 2000 compliant.
Our mortgage banking subsidiary, Family Lending Services, Inc., utilizes a
service bureau for its application systems. This service bureau has advised us
that its systems are year 2000 compliant. The financial institution partner in
our mortgage banking joint venture has advised us that both its and the joint
venture's computer information systems are year 2000 compliant.

During 1998, we upgraded our hardware, including but not limited to,
procuring a new AS400 mid-range computer, installing a Company-wide computer
area network, and making numerous upgrades to various personal computer
operating systems. As a result, we believe that all of our critical computer
hardware, including personal computer operating systems and peripheral
equipment, is also year 2000 compliant. Any remaining non-critical computer
hardware and peripheral equipment is scheduled to be substantially year 2000
compliant by the middle of 1999.

In addition, we have evaluated, or are in the process of assessing, all other
non-information technology internal office systems. We anticipate that this
assessment will be substantially completed by the middle of 1999.


18


We are also in the process of surveying our significant vendors,
subcontractors, suppliers and financial institutions to assess their state of
readiness for the Year 2000. Third parties significant to our operations
include our bank group, escrow and title companies, subcontractors and
suppliers, and a third-party payroll service. Responses and non-responses will
be reviewed over the next quarter, with this part of our Year 2000 evaluation
anticipated to be substantially completed by the middle of 1999. We cannot
currently determine to what extent the Year 2000 issue will affect these or
other third parties, such as governmental agencies on which we are dependent
for zoning, building permits and related matters or, consequently, our
business. Also, we could be materially impacted by widespread economic or
financial market disruptions as a result of year 2000 failure in other parties,
industries or countries.

We are in the process of formulating our year 2000 contingency plan which is
anticipated to be substantially complete by the middle of 1999.

We completed certain systems conversions and network upgrades as part of our
normal course of business as there was a need to upgrade the existing
information systems irrespective of the Year 2000 issue. Including the cost of
these conversions and upgrades, we estimate that we have expended approximately
$1.2 million on addressing Year 2000 issues to date and estimate that we will
incur approximately an additional $500,000 in such costs.

At present, we do not believe the Year 2000 issue will have a material
adverse effect on our business operations or financial performance. There can
be no assurance, however, that the Year 2000 issue will not adversely affect
us.

Recent Accounting Pronouncement

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" (FAS 133). Under the provisions of FAS 133, companies
are required to recognize all derivatives as either assets or liabilities in
the statements of financial position and measure those instruments at fair
value. We are required to adopt FAS 133 effective January 1, 2000. Currently,
we do not have any instruments that would qualify as derivatives under FAS 133.
Accordingly, we do not believe FAS 133 would have a material impact on our
statement of position, results of operations, or liquidity at the current time.

19


FORWARD-LOOKING STATEMENTS

This Form 10-K contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, which represent our expectations or beliefs concerning
future events, including, but not limited to, statements regarding:

. our potential to capitalize on future market opportunities;

. the expected price range of our future homes;

. our backlog of homes and their estimated sales value;

. the adequacy of our inventory of building sites;

. our opportunities to expand in our existing markets and enter new
geographic markets;

. the availability of building sites for purchase and expected deliveries
from joint ventures;

. the time typically required to complete the construction phase of an
increment of a project;

. our expansion plans for Family Lending and SPH Mortgage;

. the expected impact of outstanding claims and actions on our results of
operations, financial position and liquidity;

. planned new home community openings;

. the sufficiency of our cash provided by internally generated funds and
outside borrowings;

. our planned continued use of joint ventures as a financing structure;

. the gain or loss to be recognized from the planned disposition of
Savings and the operating results of Savings for the period through
disposition;

. our Year 2000 compliance and the expected impact of the Year 2000 issue
on our business operations and financial performance;

. the expected impact of various accounting statements on our
consolidated financial statements; and

. our exposure to market risks, including fluctuations in interest rates.

We caution that these statements are further qualified by important factors
that could cause actual results to differ materially from those in the forward-
looking statements, including, without limitation, the factors set forth under
"Business--Certain Factors Affecting our Operations" and the following:

. changes in local and general economic and market conditions, including
consumer confidence;

. changes in interest rates and the availability of construction and
mortgage financing;

. changes in costs and availability of material, supplies and labor;

. the cyclical and competitive nature of homebuilding;

. the availability of debt and equity capital;

. changes in the availability of suitable undeveloped land at reasonable
prices;

. governmental regulation;

. adverse weather conditions and natural disasters; and

. adverse consequences of the Year 2000 issue.

Results actually achieved thus may differ materially from expected results
included in these and any other forward-looking statements contained herein.

20


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risks related to fluctuations in interest rates on
our mortgage loans receivable and debt. Currently, we do not utilize interest
rate swaps, forward or option contracts on foreign currencies or commodities,
or other types of derivative financial instruments. The purpose of the
following analysis is to provide a framework to understand our sensitivity to
hypothetical changes in interest rates as of December 31, 1998. You should be
aware that many of the statements contained in this section are forward looking
and should be read in conjunction with our disclosures under the heading
"Forward-Looking Statements."

As part of our normal operations, we provide mortgage loans to our home
buyers through our financial services subsidiaries. Family Lending pre-sells
these loans to investors as a means of managing the interest rate risk
associated with mortgage lending. In general, these loans are warehoused by
Family Lending for a short period of time (typically less than 30 days) while
the investor completes its due diligence of the funded loans. Due to the
frequency of these loan sales and commitments from our investors, the market
rate risk associated with these mortgage loans is minimal. There are also
certain loans in Family Lending's mortgage loan portfolio which were
contributed to Family Lending in connection with its initial capitalization.
These mortgage loans are held for sale and include both fixed and variable rate
loans. With respect to our mortgage banking joint venture, there is
substantially no interest rate risk related to this operation as loans to our
home buyers are presold to investors generally the same day we commit the
interest rate lock to our customers. To a much lesser extent, our homebuilding
operation has provided first and second mortgage loans to home buyers and on
occasion trust deed mortgage financing on land sales. These loans are held to
maturity and generally are at fixed interest rates.

We utilize debt financing primarily for the purpose of acquiring and
developing land and constructing and selling homes. Historically, we have made
short-term borrowings under our revolving credit facility to fund these
expenditures and when market conditions were appropriate, based on our
judgment, we would issue stock or fixed rate debt to provide longer-term
financing. In addition, our financial services subsidiary utilizes short-term
borrowings under a mortgage warehouse credit facility to finance mortgage loan
originations for our home buyers. Borrowings under both of these facilities are
at variable rates.

For fixed rate debt, changes in interest rates generally affect the fair
market value of the debt instrument, but not our earnings or cash flows.
Conversely, for variable rate debt, changes in interest rates generally do not
impact fair market value of the debt instrument, but do affect our future
earnings and cash flows. We do not have an obligation to prepay fixed rate debt
prior to maturity, and as a result, interest rate risk and changes in fair
market value should not have a significant impact on the fixed rate debt until
we would be required to refinance such debt. Holding the variable rate debt
balance constant, each one percentage point increase in interest rates would
result in an increase in variable rate interest incurred for the coming year of
approximately $2.2 million.

21


The table below details the principal amount and the average interest rates
for the mortgage notes receivable, mortgage loans held for sale and debt for
each category based upon the expected maturity dates. Certain mortgage notes
receivable and mortgage loans held for sale, require periodic principal
payments prior to the expected maturity date. The fair value estimates for
these mortgage notes receivable and mortgage loans held for sale are based upon
future discounted cash flows of similar type notes or quoted market prices for
similar loans. The carrying value of our variable rate debt approximates fair
value due to the frequency of repricing of this debt. Our fixed rate debt
consists of trust deed notes payable and senior notes payable. The interest
rates on our trust deed notes payable approximate the current rates available
for secured real estate financing with similar terms and maturities, and as a
result, their carrying amounts approximate fair value. Senior notes payable are
publicly traded debt instruments and their fair values are based on their
quoted market prices as of December 31, 1998.



Expected Maturity Date
---------------------------------------------------
Fair
1999 2000 2001 2002 2003 Thereafter Total Value
December 31, ------- ------ ---- -------- ------ ---------- -------- --------
(Dollars in thousands)

Assets:
Mortgage notes
receivable............ $ 135 $ 146 $182 $ 157 $3,021 $ 1,420 $ 5,061 $ 4,827
Average interest
rate................. 8.45% 8.46% 8.66% 8.35% 5.83% 7.29% 6.57%
Mortgage loans held for
sale.................. $12,519 $ 807 $881 $ 425 $ 466 $ 4,243 $ 19,341 $ 20,314
Average interest
rate................. 7.13% 8.85% 8.85% 9.36% 9.36% 9.47% 7.89%

Liabilities:
Fixed rate debt........ $39,663 $1,161 $-- $ -- $ -- $198,745 $239,569 $239,506
Average interest
rate................. 8.90% 8.50% -- -- -- 8.35% 8.44%
Variable rate debt..... $10,826 $ -- $-- $204,900 $ -- $ -- $215,726 $215,726
Average interest
rate................. 5.81% -- -- 7.09% -- -- 7.03%


We do not believe that the future market rate risks related to the above
securities will have a material adverse impact on our financial position,
results of operations or liquidity.

22


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Public Accountants

To the Stockholders and Board of Directors of Standard Pacific Corp.:

We have audited the accompanying consolidated balance sheets of STANDARD
PACIFIC CORP. (a Delaware corporation) and subsidiaries as of December 31, 1998
and 1997, and the related consolidated statements of income, stockholders'
equity and cash flows for each of the three years in the period ended December
31, 1998. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Standard Pacific Corp. and
subsidiaries as of December 31, 1998 and 1997, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1998, in conformity with generally accepted accounting principles.


ARTHUR ANDERSEN LLP

Orange County, California
January 22, 1999

23


STANDARD PACIFIC CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share amounts)



Year Ended December 31,
----------------------------------
1998 1997 1996
---------- ---------- ----------

Homebuilding:
Revenues................................. $ 759,612 $ 584,571 $ 399,863
Cost of sales............................ 618,448 490,876 348,066
---------- ---------- ----------
Gross margin........................... 141,164 93,695 51,797
---------- ---------- ----------
Selling, general and administrative
expenses................................ 61,691 52,141 37,351
Income from unconsolidated joint
ventures................................ 4,158 3,787 4,708
Interest expense......................... 1,168 4,981 7,142
Amortization of excess of cost over net
assets acquired......................... 1,312 245 --
Other income............................. 168 822 936
---------- ---------- ----------
Homebuilding pretax income........... 81,319 40,937 12,948
---------- ---------- ----------

Financial Services:
Revenues................................. 1,403 171 --
Expenses................................. 1,828 62 --
---------- ---------- ----------
Financial services pretax income
(loss).............................. (425) 109 --
---------- ---------- ----------

Income from continuing operations before
income taxes and extraordinary charge..... 80,894 41,046 12,948
Provision for income taxes................. (33,490) (17,070) (5,197)
---------- ---------- ----------
Income from continuing operations before
extraordinary charge...................... 47,404 23,976 7,751
Income (loss) from discontinued operations,
net of income taxes of $111, $(1,034), and
$(408), respectively...................... (199) 48 642
Gain on disposal of discontinued operation,
net of income taxes of $(51) in 1997...... -- 3,302 --
Extraordinary charge from early
extinguishment of debt, net of
income taxes of $904 in 1998.............. (1,328) -- --
---------- ---------- ----------
Net Income................................. $ 45,877 $ 27,326 $ 8,393
========== ========== ==========
Basic Net Income Per Share:
Income per share from continuing
operations.............................. $ 1.59 $ 0.82 $ 0.26
Income (loss) per share from discontinued
operations.............................. (0.01) 0.00 0.02
Gain on disposal of discontinued
operation............................... -- 0.11 --
Extraordinary charge from early
extinguishment of debt.................. (0.04) -- --
---------- ---------- ----------
Net Income Per Share..................... $ 1.54 $ 0.93 $ 0.28
========== ========== ==========
Weighted average common shares
outstanding............................. 29,714,431 29,504,477 30,000,492
========== ========== ==========
Diluted Net Income Per Share:
Income per share from continuing
operations.............................. $ 1.58 $ 0.81 $ 0.26
Income (loss) per share from discontinued
operations.............................. (0.01) 0.00 0.02
Gain on disposal of discontinued
operation............................... -- 0.11 --
Extraordinary charge from early
extinguishment of debt.................. (0.04) -- --
---------- ---------- ----------
Net Income Per Share..................... $ 1.53 $ 0.92 $ 0.28
========== ========== ==========
Weighted average common and diluted
shares outstanding...................... 30,050,078 29,807,702 30,011,595
========== ========== ==========


The accompanying notes are an integral part of these consolidated statements.

24


STANDARD PACIFIC CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)



At December 31,
-----------------
1998 1997
-------- --------

ASSETS
Homebuilding:
Cash and equivalents...................................... $ 13,413 $ 7,033
Other notes and accounts receivable, net.................. 25,279 11,686
Mortgage notes receivable and accrued interest............ 5,061 2,690
Inventories............................................... 713,446 451,848
Investments in and advances to unconsolidated joint
ventures................................................. 38,405 26,217
Property and equipment, net............................... 3,512 2,485
Deferred income taxes..................................... 10,784 12,136
Other assets.............................................. 8,210 6,577
Excess of cost over net assets acquired, net ............. 17,293 6,605
-------- --------
835,403 527,277
-------- --------
Financial Services:
Cash and equivalents...................................... 1,651 1,348
Mortgage loans held for sale.............................. 19,341 9,405
Other assets.............................................. 1,920 908
-------- --------
22,912 11,661
-------- --------
Net assets of discontinued operations..................... 8,047 8,727
-------- --------
Total Assets............................................ $866,362 $547,665
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Homebuilding:
Accounts payable.......................................... $ 22,015 $ 15,219
Accrued liabilities....................................... 63,777 33,965
Revolving credit facility................................. 204,900 19,000
Trust deed notes payable.................................. 21,187 17,174
Senior notes payable...................................... 218,382 178,131
-------- --------
530,261 263,489
-------- --------
Financial Services:
Accounts payable and other liabilities.................... 596 398
Mortgage warehouse line of credit......................... 10,826 --
-------- --------
11,422 398
-------- --------
Stockholders' Equity:
Preferred stock, $.01 par value; 10,000,000 shares
authorized; none issued.................................. -- --
Common stock, $.01 par value; 100,000,000 shares
authorized; 29,629,480 and 29,637,281 shares outstanding
at December 31, 1998 and 1997, respectively.............. 296 296
Paid-in capital........................................... 283,598 283,525
Retained earnings (deficit)............................... 40,785 (43)
-------- --------
Total stockholders' equity................................ 324,679 283,778
-------- --------
Total Liabilities and Stockholders' Equity.............. $866,362 $547,665
======== ========


The accompanying notes are an integral part of these consolidated balance
sheets.

25


STANDARD PACIFIC CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Dollars in thousands, except per share amounts)



Common
Number of Stock Retained
Years Ended December 31, 1996, 1997 and Common Par Paid-In Earnings
1998 Shares Value Capital (Deficit)
- - --------------------------------------- ---------- ------ -------- ---------

Balance, December 31, 1995............. 30,060,281 $301 $285,655 $(28,030)
Repurchase of common shares............ (430,300) (5) (2,324) --
Cash dividends declared ($0.12 per
share)................................ -- -- -- (3,601)
Net income............................. -- -- -- 8,393
---------- ---- -------- --------
Balance, December 31, 1996............. 29,629,981 296 283,331 (23,238)
Exercise of stock options and related
income tax benefit.................... 292,100 3 2,315 --
Repurchase of common shares............ (284,800) (3) (2,121) --
Cash dividends declared ($0.14 per
share) ............................... -- -- -- (4,131)
Net income............................. -- -- -- 27,326
---------- ---- -------- --------
Balance, December 31, 1997............. 29,637,281 296 283,525 (43)
Exercise of stock options and related
income tax benefit.................... 131,500 1 1,383 --
Repurchase of common shares............ (139,301) (1) (1,310) --
Cash dividends declared ($0.17 per
share)................................ -- -- -- (5,049)
Net income............................. -- -- -- 45,877
---------- ---- -------- --------
Balance, December 31, 1998............. 29,629,480 $296 $283,598 $ 40,785
========== ==== ======== ========




The accompanying notes are an integral part of these consolidated statements.

26


STANDARD PACIFIC CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)



Year Ended December 31,
-----------------------------
1998 1997 1996
--------- -------- --------

Cash Flows from Operating Activities:
Net income.................................... $ 45,877 $ 27,326 $ 8,393
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities of continuing operations:
Discontinued operations..................... 199 (3,350) (642)
Extraordinary charge from early
extinguishment of debt..................... 1,328 -- --
Depreciation and amortization............... 918 586 555
Amortization of excess of cost over net
assets acquired............................ 1,312 245 --
Changes in cash and equivalents due to:
Inventories............................... (193,242) (615) (5,376)
Receivables and accrued interest.......... (26,087) (1,804) (992)
Deferred income taxes..................... 1,833 4,345 1,124
Other, net................................ (703) 4,555 299
Accounts payable.......................... 2,883 6,796 7,527
Accrued liabilities....................... 30,624 14,287 (4,730)
--------- -------- --------
Net cash provided by (used in) operating
activities of continuing operations.......... (135,058) 52,371 6,158
--------- -------- --------
Cash Flows from Investing Activities:
Net cash paid for acquisitions................ (59,279) (65,842) --
Investments in and advances to unconsolidated
joint ventures............................... (12,188) (25,332) 3,576
Net additions to property and equipment....... (1,439) (1,264) (242)
Sales (purchases) of investment securities.... -- 5,329 81
Proceeds from the sale of discontinued
operations................................... 1,087 8,379 --
--------- -------- --------
Net cash provided by (used in) investing
activities................................... (71,819) (78,730) 3,415
--------- -------- --------
Cash Flows from Financing Activities:
Net proceeds from (payments on) revolving
credit facility and term loans............... 185,900 (38,300) 8,800
Net proceeds from mortgage warehouse line of
credit....................................... 10,826 -- --
Net proceeds from the issuance of senior notes
payable...................................... 97,571 96,931 --
Principal payments on senior notes and trust
deed notes payable........................... (75,148) (27,707) (11,021)
Dividends..................................... (5,049) (4,131) (3,601)
Repurchase of common shares................... (1,311) (2,124) (2,329)
Proceeds from exercise of stock options....... 771 1,705 --
--------- -------- --------
Net cash provided by (used in) financing
activities................................... 213,560 26,374 (8,151)
--------- -------- --------
Net cash provided by (used in) discontinued
operations................................... (6,826) 37,088 (22,785)
--------- -------- --------
Net increase (decrease) in cash and
equivalents.................................. (143) 37,103 (21,363)
Cash and equivalents at beginning of year..... 53,337 16,234 37,597
--------- -------- --------
Cash and equivalents at end of year........... $ 53,194 $ 53,337 $ 16,234
========= ======== ========


The accompanying notes are an integral part of these consolidated statements.

27


STANDARD PACIFIC CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS--(Continued)

(Dollars in thousands)



Year Ended December 31,
-----------------------
1998 1997 1996
------- ------- -------

Summary of Cash Balances:
Continuing operations ............................... $15,064 $ 8,381 $ 5,252
Discontinued operations.............................. 38,130 44,956 10,982
------- ------- -------
$53,194 $53,337 $16,234
======= ======= =======
Supplemental Disclosures of Cash Flow Information:
Cash paid during the year for:
Interest--continuing operations.................... $24,995 $17,698 $15,751
Income taxes....................................... 19,890 15,500 1,477
Supplemental Disclosures of Noncash Activities:
Land acquisitions financed by purchase money trust
deeds............................................... $18,670 $19,214 $ 635
Expenses capitalized in connection with the issuance
of the 8 1/2% senior notes due 2007................. -- 2,377 --
Expenses capitalized in connection with the issuance
of the 8% senior notes due 2008..................... 1,750 -- --
Income tax benefit credited in connection with shares
of common stock issued pursuant to stock options
exercised........................................... 613 613 --



The accompanying notes are an integral part of these consolidated statements.

28


STANDARD PACIFIC CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Company Organization and Operations

Standard Pacific Corp., a Delaware corporation, operates primarily as a
geographically diversified builder of single-family homes for use as primary
residences with operations throughout the major metropolitan markets in
California, Texas and Arizona. For the year ended December 31, 1998,
approximately 72 percent, 20 percent and 8 percent of home deliveries
(including the unconsolidated joint ventures) were from California, Texas and
Arizona, respectively. Standard Pacific Corp. and its subsidiaries are
hereinafter referred to as the "Company."

In August 1997, the Company formed Family Lending Services, Inc. ("Family
Lending"), which operates as a wholly-owned mortgage banking subsidiary and
offers mortgage financing primarily to the Company's California home buyers.
Additionally, the Company offers mortgage loans to its Arizona home buyers
through SPH Mortgage, a mortgage banking joint venture with Norwest Mortgage.
The Company anticipates expanding SPH Mortgage's operation into its Texas
divisions during 1999.

2. Summary of Significant Accounting Policies

a. Basis of Presentation

The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated. Investments in unconsolidated joint ventures
in which the Company has less than a controlling interest are accounted for
using the equity method.

b. Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

c. Segment Reporting

Effective December 31, 1998, the Company adopted Statement of Financial
Accounting Standards No. 131 "Disclosures about Segments of an Enterprise and
Related Information" (FAS 131). Under the provisions of FAS 131, the Company's
operating segments consist of homebuilding and mortgage banking. These two
segments are segregated in the accompanying consolidated financial statements
under "Homebuilding" and "Financial Services," respectively.

d. Cash and Equivalents

For purposes of the consolidated statements of cash flows, cash and
equivalents include cash on hand, demand deposits, and all highly liquid short-
term investments, including interest bearing securities purchased with a
remaining maturity of three months or less.

29


STANDARD PACIFIC CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)



e. Mortgage Loans Held for Sale

Mortgage loans held for sale are reported at the lower of cost or market on
an aggregate basis. The Company estimates market value of its loans held for
sale based on quoted market prices for similar loans. Loan origination fees,
net of the related direct origination costs, and loan discount points are
deferred as an adjustment to the carrying value of the related mortgage loans
held for sale and are recognized into income upon the sale of mortgage loans.

The Company accounts for loan servicing rights under Statement of Financial
Accounting Standards No. 125, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities" (FAS 125). FAS 125
requires that upon origination of a mortgage loan, the book value of the
mortgage loan be allocated to the mortgage servicing right and to the loan
based on its relative fair value, whether it be originated or purchased by the
Company. In addition, FAS 125 requires that loan servicing assets be amortized
in proportion to, and over the period of, the estimated net servicing income of
the underlying mortgages. FAS 125 also requires that mortgage servicing rights
be evaluated periodically for impairment based on the fair value of these
rights. The Company did not retain any servicing rights for mortgage loans sold
during fiscal 1998, and as a result, FAS 125 did not have a material impact on
its consolidated financial statements for the year then ended. However, as the
Company grows its financial services segment, FAS 125 could have a more
significant impact on its financial position and results of operations.

f. Real Estate Inventories

The Company capitalizes direct carrying costs, including interest, property
taxes and related development costs to real estate under development. Field
construction supervision and related direct overhead are also included in the
capitalized cost of real estate inventories. General and administrative costs
are expensed as incurred.

The Company assesses the recoverability of real estate inventories in
accordance with the provisions of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-lived Assets and for Long-lived Assets
to be Disposed Of" (FAS 121). FAS 121 requires long-lived assets, including
real estate inventories, that are expected to be held and used in operations to
be carried at the lower of cost or, if impaired, the fair value of the asset,
rather than its net realizable value. Long-lived assets to be disposed of
should be reported at the lower of carrying amount or fair value less cost to
sell.

g. Capitalization of Interest

The Company follows the practice of capitalizing interest to real estate
inventories during the period of development in accordance with Financial
Accounting Standards No. 34, "Capitalization of Interest Cost." Interest
capitalized as a cost of real estate under development is included in cost of
sales as related units are sold. The following is a summary of interest
capitalized and expensed from continuing operations for the following periods:



Year Ended December 31,
-----------------------
1998 1997 1996
------- ------- -------
(Dollars in thousands)

Total interest incurred during the year................ $29,010 $17,026 $16,687
Less: Interest capitalized as a cost of real estate
under development..................................... 27,842 12,045 9,545
------- ------- -------
Interest expense....................................... $ 1,168 $ 4,981 $ 7,142
======= ======= =======
Interest previously capitalized as a cost of real
estate under development, included in cost of sales... $26,399 $23,475 $16,920
======= ======= =======
Capitalized interest in ending inventories............. $15,155 $13,712 $25,142
======= ======= =======


30


STANDARD PACIFIC CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)



h. Property and Equipment

Property and equipment is recorded at cost, net of accumulated depreciation
and amortization of $4,204,000 and $3,570,000 as of December 31, 1998 and 1997,
respectively. Depreciation and amortization is recorded using the straight-line
method over the estimated useful lives of the assets.

i. Income Taxes

The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes." This
statement requires a liability approach for measuring deferred taxes based on
temporary differences between the financial statement and tax bases of assets
and liabilities existing at each balance sheet date using enacted tax rates for
years in which taxes are expected to be paid or recovered.

j. Excess of Cost Over Net Assets Acquired

The excess amount paid for business acquisitions over the net fair value of
assets acquired and liabilities assumed has been capitalized in the
accompanying consolidated balance sheets and is being amortized on a straight-
line basis over periods ranging from 7 to 12 years. Accumulated amortization
was $1,557,000 and $245,000 as of December 31, 1998 and 1997, respectively.
(See Note 4)

k. Revenue Recognition

Revenues of residential housing are recorded after construction is
completed, required down payments are received and title passes.

The Company recognizes loan origination fees and expenses, and gains and
losses on loans when the related mortgage loans are sold. The Company's current
policy is to sell all mortgage loans originated. Mortgage loan interest is
accrued only so long as it is deemed collectible.

Mortgage servicing fees are generally based on a percentage of the
outstanding principal serviced by the Company for others.

l. Warranty Costs

Estimated future warranty costs are charged to cost of sales in the period
when the revenues from home closings are recognized.

31


STANDARD PACIFIC CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


m. Net Income Per Share

Effective December 31, 1997 the Company adopted Statement of Financial
Accounting Standards No. 128 "Earnings per Share" (FAS 128). This statement
requires the presentation of both basic and diluted net income per share for
financial statement purposes. Basic net income per share is computed by
dividing income available to common stockholders by the weighted average number
of common shares outstanding. Diluted net income per share includes the effect
of the potential shares outstanding, including dilutive stock options using the
treasury stock method. The table set forth below reconciles the components of
the basic net income per share calculation to diluted net income per share.



Year Ended December 31,
-------------------------------------------------------------------------
1998 1997 1996
------------------------ ------------------------ -----------------------
Income Shares EPS Income Shares EPS Income Shares EPS
------- ---------- ----- ------- ---------- ----- ------ ---------- -----
(Dollars in thousands, except per share amounts)

Basic Net Income Per
Share:
Income available to
common stockholders
before discontinued
operations and
extraordinary charge.. $47,404 29,714,431 $1.59 $23,976 29,504,477 $0.82 $7,751 30,000,492 $0.26
Effect of dilutive stock
options ............... -- 335,647 -- 303,225 -- 11,103
------- ---------- ------- ---------- ------ ----------
Diluted net income per
share from continuing
operations and before
extraordinary charge... $47,404 30,050,078 $1.58 $23,976 29,807,702 $0.81 $7,751 30,011,595 $0.26
======= ========== ===== ======= ========== ===== ====== ========== =====


n. Recent Accounting Pronouncement

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" (FAS 133). Under the provisions of FAS 133, the Company
will be required to recognize all derivatives as either assets or liabilities
in the statements of financial position and measure these instruments at fair
value. The Company is required to adopt FAS 133 effective January 1, 2000.
Currently, the Company does not have any instruments that would qualify as
derivatives under FAS 133. Accordingly, the Company does not believe that FAS
133 would have a material impact on its financial position or results of
operations at this time.

o. Reclassifications

Effective January 1, 1997, the Company changed its presentation of selling
costs in its consolidated statements of income whereby selling costs are now
combined with general and administrative expenses. This presentation is
consistent with industry practice. Previously, the Company included these costs
as a component of cost of sales. The Company reclassified the prior period
amounts to conform with the 1997 presentation.

Additionally, certain other items in prior period financial statements have
been reclassified to conform with current year presentation.

32


STANDARD PACIFIC CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


3. Investments in Unconsolidated Joint Ventures

Summarized financial information related to the Company's joint ventures
accounted for under the equity method are as follows:



At December 31,
-----------------
1998 1997
-------- --------
(Dollars in
thousands)

Assets:
Cash................................................... $ 8,450 $ 5,545
Trust deed notes receivable............................ 37,856 --
Real estate in process of development and completed
model homes........................................... 175,830 112,023
Other assets........................................... 596 1,319
-------- --------
$222,732 $118,887
======== ========
Liabilities and Equity:
Accounts payable and accrued expenses.................. $ 33,007 $ 7,316
Construction loans and trust deed notes payable........ 78,747 17,442
General obligation assessment bonds.................... 31,539 35,120
Equity................................................. 79,439 59,009
-------- --------
$222,732 $118,887
======== ========


The Company's share of equity shown above was approximately $36.9 million
and $23.5 million at December 31, 1998 and 1997, respectively.



Year Ended December 31,
-----------------------
1998 1997 1996
------- ------- -------
(Dollars in thousands)

Revenues............................................ $54,219 $24,427 $32,168
Cost of revenues.................................... 41,588 17,591 23,817
------- ------- -------
Net earnings of joint ventures...................... $12,631 $ 6,836 $ 8,351
======= ======= =======


The Company's share of earnings in the joint ventures detailed above varies,
but in no case is its share of earnings greater than 50 percent.

In addition, there are some joint ventures to which the Company is party
whose sole purpose is to develop finished lots for sale to the joint venture's
partners. The Company and other partners will then purchase the lots from the
joint venture to construct homes thereon. The Company does not anticipate
recording any income or loss from these joint ventures as the related lots will
be sold to the Company and other partners at cost.

4. Acquisitions

On August 31, 1998, the Company acquired a portion of the assets of Shea
Homes' Phoenix, Arizona single-family homebuilding operation (which had
recently been acquired from UDC Homes, Inc.) for approximately $59 million in
cash. The acquisition was financed under the Company's unsecured revolving
credit facility. At closing, the Company purchased or assumed the rights to
acquire over 2,000 single-family lots located in 13 communities in the Phoenix
Metropolitan area, of which seven communities were active subdivisions and
acquired a backlog of 400 presold homes. In addition, the Company retained
UDC's senior management team.

33


STANDARD PACIFIC CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


On September 30, 1997, the Company acquired all of the outstanding common
stock of Duc Development Company ("Duc"), a privately held northern California
homebuilding company, for approximately $16 million. In connection with this
acquisition, the Company acquired certain other real estate assets related to
Duc's operations for approximately $55 million in cash and the assumption of
approximately $8 million of debt.

Both acquisitions have been accounted for as a purchase, and accordingly,
the purchase price has been allocated to the net assets acquired based upon
their estimated fair market values as of the date of acquisition. The excess of
the purchase price over the estimated fair value of net assets acquired totaled
approximately $12 million and $6.85 million for the Arizona and Duc
acquisitions, respectively. The excess purchase price has been recorded as
excess of cost over net assets acquired in the accompanying consolidated
balance sheets and is being amortized on a straight-line basis over periods
ranging from 7 to 12 years.

The pro forma effect on the Company's consolidated operating results of the
acquired businesses have not been presented, as the impact is not material.

5. Revolving Credit Facility and Trust Deed Notes Payable

a. Revolving Credit Facility

In July 1998, the Company and its bank group amended the unsecured Revolving
Credit Facility (the "Facility") to, among other things, increase the
commitment to $400 million and extend the maturity date to July 31, 2002. The
Facility contains covenants which require, among other things, the maintenance
of certain amounts of tangible stockholders' equity, limitations on leverage,
and minimum interest coverage, as defined. The Facility also contains
provisions which may, in certain circumstances, limit the amount the Company
may borrow under the credit facility. At December 31, 1998, the Company had
borrowings of $204.9 million outstanding under this Facility. Interest rates
charged under this Facility include LIBOR and prime rate pricing options. In
addition there are fees charged on the commitment and unused portion of the
Facility, as defined.

As of December 31, 1998, and throughout the year, the Company was in
compliance with the covenants of the Revolving Credit Facility.

b. Trust Deed Notes Payable

At December 31, 1998 and 1997, trust deed notes payable primarily consisted
of trust deeds on land purchases. At December 31, 1998, the weighted average
interest rate on these trust deeds was approximately 7.4 percent.

34


STANDARD PACIFIC CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


c. Borrowings and Maturities

The following summarizes the borrowings outstanding under unsecured notes
payable (excluding senior notes see Note 6) and trust deed notes payable during
the three years ended December 31, 1998:



1998 1997 1996
-------- ------- -------
(Dollars in thousands)

Maximum borrowings outstanding during year at
month end..................................... $244,808 $98,295 $91,299
Average outstanding balance during the year.... $ 97,349 $45,395 $78,552
Weighted average interest rate for the year.... 6.9% 7.3% 6.8%
Weighted average interest rate on borrowings
outstanding at year end....................... 7.0% 7.9% 7.1%


Maturities of the trust deed notes payable and the senior notes (see Note 6
below) are as follows:



Year Ended
December 31,
------------
(Dollars in
thousands)

1999............................................................ $ 39,663
2000............................................................ 1,161
2001............................................................ --
2002............................................................ --
2003............................................................ --
Thereafter...................................................... 198,745
--------
$239,569
========


6. Senior Notes Payable

Senior notes payable consist of the following:



At December 31,
-----------------
1998 1997
-------- --------
(Dollars in
thousands)

10 1/2% Senior Notes due 2000............................. $ 19,637 $ 78,800
8 1/2% Senior Notes due 2007, net......................... 99,379 99,331
8% Senior Notes due 2008, net............................. 99,366 --
-------- --------
$218,382 $178,131
======== ========


In 1993, the Company issued $100 million principal amount of its 10 1/2%
Senior Notes due March 1, 2000 (the "10 1/2% Senior Notes"). Interest is due
and payable on March 1 and September 1 of each year. Under the original terms
of the 10 1/2% Senior Notes, the Company did not have the option to redeem
these notes prior to their scheduled maturities. However, the Company was
required to make annual mandatory sinking fund payments sufficient to retire 20
percent of the original aggregate principal amount of these notes ($20 million
per year) commencing on March 1, 1997, at a redemption price of 100 percent of
the principal amount, with the balance of the notes to be retired on March 1,
2000. The Company made two $20 million sinking fund payments on the 10 1/2%
Senior Notes in March of 1997 and 1998. Also, in May 1998, the Company
repurchased and retired approximately $7.7 million of its 10 1/2% Senior Notes
due 2000 through a series of open market purchases. In addition, on September
30, 1998, the Company completed a tender offer and consent solicitation for a
portion of its 10 1/2% Senior Notes due 2000. In connection with this tender
offer, the Company repurchased and retired approximately $31.5 million of its
10 1/2% Senior Notes. With the successful completion of the consent
solicitation, certain restrictive financial covenants were modified or
eliminated under the

35


STANDARD PACIFIC CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

indenture. In aggregate, the Company incurred an after tax extraordinary charge
for the early extinguishment of debt, including transaction costs, of
approximately $1.3 million for the year ended December 31, 1998. On March 1,
1999, the Company repaid the balance of the 10 1/2% Senior Notes outstanding
($19.6 million) under the annual sinking fund payment provision of the
indenture.

In June 1997, the Company issued $100 million of 8 1/2% Senior Notes due
June 15, 2007 (the "8 1/2% Senior Notes"). The 8 1/2% Senior Notes were issued
at a discount to yield approximately 8.6 percent and have been reflected net of
the unamortized discount in the accompanying consolidated balance sheets.
Interest is due and payable on June 15 and December 15 of each year until
maturity. These notes are redeemable at the option of the Company, in whole or
in part, commencing June 15, 2002 at a price of 104.25 percent of par value,
with the call price reducing ratably to par on June 15, 2005. Net proceeds to
the Company after offering expenses were approximately $96.9 million.

In February 1998, the Company issued $100 million of 8% Senior Notes due
February 15, 2008 (the "8% Senior Notes"). The 8% Senior Notes were issued at a
discount to yield approximately 8.1 percent. Interest is due and payable on
February 15 and August 15 of each year until maturity. These notes are
redeemable at the option of the Company, in whole or in part, commencing
February 15, 2003 at 104.00 percent of par, with the call price reducing
ratably to par on February 15, 2006. Net proceeds to the Company after offering
expenses were approximately $97.3 million.

The 8 1/2% and 8% Senior Notes (the "Notes") are senior unsecured
obligations of the Company and rank pari passu with the Company's other
existing senior unsecured indebtedness. The Company will, under certain
circumstances, be obligated to make an offer to purchase a portion of the Notes
in the event of the Company's failure to maintain a minimum consolidated net
worth, as defined, and under certain other circumstances. In addition, the
Notes contain other restrictive covenants which, among other things, impose
certain limitations on the ability of the Company to (i) incur additional
indebtedness, (ii) create liens, (iii) make restricted payments, as defined,
and (iv) sell assets. As of December 31, 1998, the Company was in compliance
with the covenants under the Notes.

7. Mortgage Warehouse Line of Credit

During 1998, the Company's financial services subsidiary entered into a
revolving mortgage warehouse credit facility (the "Mortgage Warehouse
Facility") with a bank to finance the subsidiary's mortgage loans held for
sale. The total commitment under this facility at December 31, 1998 was $15
million and has a maturity date of May 31, 1999. Borrowings under the Mortgage
Warehouse Facility are secured by the related mortgage loans held for sale and
contain a LIBOR based pricing. Maximum borrowings outstanding under this
facility at month end during fiscal 1998 was $10,826,000. Average borrowings
outstanding during the year ended December 31, 1998 was $1,870,000. In
addition, the Mortgage Warehouse Facility requires the Company's financial
services subsidiary to comply with certain financial covenants, including, but
not limited to, a minimum net worth requirement and a total liabilities to
tangible net worth ratio. As of December 31, 1998, and throughout the year,
Family Lending was in compliance with all covenants of the Mortgage Warehouse
Facility.

8. Disclosures about Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value
of each class of financial instrument for which it is practicable to estimate:

Cash and Equivalents--The carrying amount is a reasonable estimate of
fair value. These assets primarily consist of short term investments and
demand deposits.

36


STANDARD PACIFIC CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Mortgage Notes Receivable--Mortgage notes receivable consist of first
and second mortgages on single-family residences and trust deed notes
receivable originated from land sales. Fair values are determined based
upon discounted cash flows of the applicable instruments.

Mortgage Loans Held for Sale--These consist primarily of first mortgages
on single-family residences. Fair value of these loans is based on quoted
market prices for similar loans.

Revolving Credit Facility and Mortgage Warehouse Line of Credit--The
carrying amounts of these credit obligations approximate market value
because of the frequency of repricing the borrowings (generally every 7 to
180 days).

Trust Deed Notes Payable--These notes are primarily for purchase money
deeds of trust on land acquired. These notes have maturities ranging from 1
month to three years. The rates of interest paid on these notes approximate
the current rates available for secured real estate financing with similar
terms and maturities, therefore, carrying amounts approximate fair value.

10 1/2% Senior Notes due 2000--This issue is publicly traded on the New
York Stock Exchange. Consequently, the fair value of this issue is based on
its quoted market price at year end.

8 1/2% Senior Notes due 2007--This issue is also publicly traded on the
New York Stock Exchange. As a result, the fair value of this issue is based
on its quoted market price at year end.

8% Senior Notes due 2008--These notes are publicly traded over the
counter and the fair value is based upon the value of the last trade at
year end.

The estimated fair values of the Company's financial instruments from
continuing operations are as follows:



At December 31,
-----------------------------------
1998 1997
----------------- -----------------
Carrying Fair Carrying Fair
Amount Value Amount Value
-------- -------- -------- --------
(Dollars in thousands)

Financial assets:
Homebuilding:
Cash and equivalents................ $ 13,413 $ 13,413 $ 7,033 $ 7,033
Mortgage notes receivable........... 5,061 4,827 2,690 2,690
Financial services:
Cash and equivalents................ 1,651 1,651 1,348 1,348
Mortgage loans held for sale........ 19,341 20,314 9,405 10,644
Financial liabilities:
Homebuilding:
Revolving credit facility........... $204,900 $204,900 $19,000 $ 19,000
Trust deed notes payable............ 21,187 21,187 17,174 17,174
10 1/2 Senior Notes due 2000........ 19,637 20,054 78,800 82,669
8 1/2 Senior Notes due 2007......... 99,379 100,375 99,331 102,990
8% Senior Notes due 2007............ 99,366 97,890 -- --
Financial services:
Mortgage warehouse line of credit... 10,826 10,826 -- --


37


STANDARD PACIFIC CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


9. Commitments and Contingencies

The Company leases office facilities under noncancelable operating leases.
Future minimum rental payments on operating leases, net of related subleases,
having an initial term in excess of one year as of December 31, 1998 are as
follows:



Year Ended December 31,
-----------------------
(Dollars in thousands)

1999................................................ $ 1,467
2000................................................ 1,624
2001................................................ 1,531
2002................................................ 906
2003................................................ 703
Thereafter.......................................... 1,285
-------
Subtotal.......................................... 7,516
Less--Sublease income............................... (1,233)
-------
Net rental obligations............................ $ 6,283
=======


Rent expense from continuing operations under noncancelable operating
leases, net of sublease income, for the three years ended December 31, 1998 was
approximately $838,000, $397,000 and $301,000, respectively.

Mortgage loans in process for which interest rates were committed to
borrowers totaled approximately $1.9 million at December 31, 1998 and carried a
weighted average interest rate of approximately 6.62 percent. Interest rate
risks related to these obligations are generally mitigated by Family Lending
preselling the loans to its investors.

The Company and certain of its subsidiaries are parties to claims and
litigation proceedings arising in the normal course of business. Although the
legal responsibility and financial impact with respect to certain claims and
litigation cannot presently be ascertained, the Company does not believe that
these matters will result in a payment by the Company of monetary damages that,
in the aggregate, would have a material impact on its financial position,
results of operations or liquidity. It is possible that the reserves provided
for by the Company with respect to such claims and litigation could change in
the near term.


38


STANDARD PACIFIC CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

10. Income Taxes

The Company's provision for income taxes for continuing operations includes
the following components:



Year Ended December 31,
----------------------
1998 1997 1996
------- ------- ------
(Dollars in thousands)

Current:
Federal........................................... $24,940 $12,909 $ 766
State............................................. 4,160 3,471 209
------- ------- ------
29,100 16,380 975
------- ------- ------
Deferred:
Federal........................................... 3,931 535 3,254
State............................................. 459 155 968
------- ------- ------
4,390 690 4,222
------- ------- ------
Provision for income taxes for continuing operations
and before extraordinary charge.................... $33,490 $17,070 $5,197
======= ======= ======


The components of the Company's deferred income tax asset (liability) from
continuing operations is as follows:



At December 31,
------------------------
1998 1997
----------- -----------
(Dollars in thousands)

Inventory adjustments............................... $ 2,663 $ 10,610
Financial accruals.................................. 8,628 5,885
State income taxes ................................. 2,115 1,160
Nondeductible purchase price........................ (2,747) (4,613)
Amortization of excess of cost over net assets
acquired........................................... 27 --
Other............................................... 98 (906)
----------- -----------
$ 10,784 $ 12,136
=========== ===========


At December 31, 1998, the Company has a consolidated net deferred tax asset
of approximately $10.8 million. A significant portion of this asset's
realization is dependent upon the Company's ability to generate sufficient
taxable income in future years. Although realization is not assured,
management believes it is more likely than not that the net deferred tax asset
will be realized. The amount of the deferred tax asset considered realizable,
however, could be reduced in the near term if estimates of future taxable
income are reduced or if tax rates are lowered.

The effective tax rate differs from the Federal statutory rate of 35
percent for 1998 and 1997 and 34 percent for 1996 due to the following items:



Year Ended December 31,
-------------------------
1998 1997 1996
------- ------- -------
(Dollars in thousands)

Financial income from continuing operations
before income taxes and extraordinary charge.. $80,894 $41,046 $12,948
======= ======= =======
Provision for income taxes at statutory rate... $28,313 $14,366 $ 4,402
Increases (decreases) in tax resulting from:
State income taxes........................... 4,648 2,481 796
Nondeductible amortization of excess of cost
over net assets
acquired ................................... 399 100 --
Other........................................ 130 123 (1)
------- ------- -------
Provision for income taxes for continuing
operations and before extraordinary charge.... $33,490 $17,070 $ 5,197
======= ======= =======
Effective tax rate for continuing operations .. 41.4% 41.6% 40.1%
======= ======= =======


39


STANDARD PACIFIC CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

11. Stock Option Plan

In 1991, the Company adopted the 1991 Employee Stock Incentive Plan (the
"Plan") pursuant to which officers, directors and employees of the Company are
eligible to receive options to purchase common stock of the Company. Under the
Plan the maximum number of shares of Company stock that may be issued is
one million. On May 13, 1997, the shareholders of the Company approved the 1997
Stock Incentive Plan (the "1997 Plan"). Under the 1997 Plan, the maximum number
of shares of Company stock that may be issued is two million.

Options are typically granted to purchase shares at prices equal to the fair
market value of the shares at the date of grant. The options typically vest
over a one to five year period and are generally exercisable at various dates
over one to 10 year periods. When the options are exercised, the proceeds are
credited to equity along with the related income tax benefits, if any.

The following is a summary of the transactions relating to the two
respective Plans for the years ended December 31, 1998, 1997 and 1996:



1998 1997 1996
------------------- ------------------- ------------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Options Price Options Price Options Price
--------- -------- --------- -------- -------- --------

Options outstanding,
beginning of year...... 958,990 $ 7.99 928,590 $ 6.30 721,590 $9.73
Granted................. 1,382,500 13.50 343,000 10.70 365,000 6.35
Exercised............... (131,500) 5.86 (292,100) 5.81 -- --
Canceled................ (21,000) 12.57 (20,500) 7.83 (158,000) 9.48
--------- ------ --------- ------ -------- -----
Options outstanding, end
of year................ 2,188,990 $11.55 958,990 $ 7.99 928,590 $6.30
========= ====== ========= ====== ======== =====
Options exercisable at
end of year............ 450,490 360,990 588,590
========= ========= ========
Options available for
future grant........... 323,775 1,685,275 7,775
========= ========= ========


During the fourth quarter of 1996 the Company repriced 326,100 options which
were previously granted to nonexecutive employees. The new exercise price
represented the fair market value of the shares at the date of repricing. The
weighted average exercise price for all options outstanding as of December 31,
1996 reflects the repriced options at the new exercise price.

The following information is provided pursuant to the requirements of
Statement of Financial Accounting Standards No. 123 "Accounting for Stock-Based
Compensation" (FAS 123).

The fair value of each option granted during the three years in the period
ended December 31, 1998 is estimated using the Black--Scholes option-pricing
model on the date of grant using the following weighted average assumptions:



1998 1997 1996
------- ------- -------

Dividend yield.................................... 1.52% 1.31% 2.0%
Expected volatility............................... 40.99% 43.80% 46.30%
Risk-free interest rate........................... 5.18% 6.17% 6.12%
Expected life..................................... 5 years 5 years 5 years


40


STANDARD PACIFIC CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

The 2,188,990 options outstanding as of December 31, 1998 have exercise
prices between $5.38 and $17.63, with a weighted average exercise price of
$11.55 and a weighted average remaining contractual life of 8.65 years. As of
December 31, 1998, 450,490 of these options are exercisable with a weighted
average exercise price of $7.99. The weighted average fair value of options
granted during the years ended December 31, 1998, 1997 and 1996 was $5.35,
$6.55 and $2.75, respectively.

During the years ended December 31, 1998, 1997 and 1996, no compensation
expense was recognized related to the stock options granted, however, had
compensation expense been determined consistent with FAS 123 for the Company's
1998, 1997 and 1996 grants for its stock-based compensation plan, the Company's
net income and diluted net income per share for the years ended December 31,
1998, 1997 and 1996 would approximate the pro forma amounts below:



Year Ended December 31,
-----------------------------------------------------------------
1998 1997 1996
--------------------- --------------------- ---------------------
As Reported Pro Forma As Reported Pro Forma As Reported Pro Forma
----------- --------- ----------- --------- ----------- ---------
(Dollars in thousands, except per share amounts)

Net income.............. $45,877 $44,210 $27,326 $27,100 $8,393 $7,619
Diluted net income per
common share........... $ 1.53 $ 1.47 $ .92 $ .91 $ .28 $ .25


The effects of applying FAS 123 in this pro forma disclosure are not
indicative of future amounts.

12. Stockholder Rights Plan and Common Stock Repurchase Plan

The Company has a stockholder rights agreement (the "Agreement") in place.
Under the Agreement, one right will be granted for each share of the Company's
outstanding common stock. Each right entitles the holder, in certain takeover
situations, as defined, and after paying the exercise price (currently $40), to
purchase Company common stock having a market value equal to two times the
exercise price. Also, if the Company is merged into another corporation, or if
50 percent or more of the Company's assets are sold, the rightholders may be
entitled, upon payment of the exercise price, to buy common shares of the
acquiring corporation at a 50 percent discount from the then current market
value. In either situation, these rights are not available to the acquiring
party. However, these exercise features will not be activated if the acquiring
party makes an offer to acquire all of the Company's outstanding shares at a
price which is judged by the Board of Directors to be fair to all Company
stockholders. The rights may be redeemed by the Company under certain
circumstances at the rate of $.01 per right. The rights will expire on December
31, 2001, unless earlier redeemed or exchanged.

In July 1995, the Board of Directors of the Company authorized the
repurchase of up to $10 million of the Company's common stock. In January 1997,
the Board increased the repurchase limit to $20 million. For the year ended
December 31, 1998, the Company repurchased 139,301 shares of its common stock
for an aggregate price of approximately $1.3 million. Since July 1995 and
through the year ended December 31, 1998, the Company had repurchased an
aggregate of 1,425,051 shares of its common stock for approximately
$9.6 million, leaving a balance of approximately $10.4 million available under
the repurchase program.

13. Discontinued Operations

In May 1997, the Company's Board of Directors adopted a plan of disposition
(the "Plan") for the Company's savings and loan subsidiary ("Savings").
Pursuant to the Plan, the Company sold substantially all of Savings' mortgage
loan portfolio in June 1997. The proceeds from the sale of the mortgages were
used to pay off substantially all of the outstanding balances of Federal Home
Loan Bank advances with the remaining amount temporarily invested until the
savings deposits are sold along with Savings' remaining assets. The gain

41


STANDARD PACIFIC CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

generated from the sale of this mortgage loan portfolio, net of related
expenses, was not material. In August 1998, the Company entered into a
definitive agreement to sell the remainder of Savings' business, including
Savings' charter. The definitive agreement is subject to a number of conditions
including approval of the transaction by the Office of Thrift Supervision
("OTS"). As a result, Savings has been accounted for as a discontinued
operation and the results of its operations and net assets have been segregated
in the accompanying consolidated financial statements. Management currently
estimates that both the disposition of Savings under the Plan and the operating
results of Savings for the period through the disposition will not result in a
significant gain or loss to the Company.

Interest income from Savings aggregated $3,451,000, $12,395,000 and
$19,607,000 for the years ended December 31, 1998, 1997 and 1996, respectively.

In November 1997, the Company entered into a definitive agreement to sell
all of the outstanding stock of Panel Concepts, Inc. ("Panel") to a third
party. This transaction closed December 1, 1997. A net gain of approximately
$3.3 million has been reflected in the accompanying consolidated results of
operations. Proceeds from the sale of Panel were approximately $9.5 million
before transaction and other related costs. In addition, certain non-operating
assets of Panel totaling approximately $9 million were distributed to the
Company prior to the closing. Panel has also been accounted for as a
discontinued operation and, accordingly, the results of its operations have
been segregated in the accompanying consolidated statements of income. In
addition, since the sale of Panel was completed before the end of 1997, there
are no assets or liabilities included in the accompanying consolidated balance
sheets.

Product sales from Panel totaled $19,689,000 and $19,311,000 for the years
ended December 31, 1997 and 1996, respectively.

The components of net assets of discontinued operations, all of which
relates to Savings, included in the consolidated balance sheets at December 31,
1998 and 1997 are as follows:



At December 31,
---------------
1998 1997
------- -------
(Dollars in
thousands)

Assets:
Cash and equivalents....................................... $38,130 $44,956
Investment securities available for sale................... 15,649 22,559
Accrued interest receivable................................ 244 317
Property and equipment, net ............................... 62 98
Deferred income taxes...................................... 274 1,273
Investment in FHLB stock................................... 8,971 8,465
Other assets............................................... 73 108
------- -------
Total assets--discontinued operations.................... $63,403 $77,776
------- -------
Liabilities:
Savings accounts........................................... $53,878 $50,230
FHLB advances.............................................. -- 18,000
Accounts payable and accrued expenses...................... 1,478 819
------- -------
Total liabilities--discontinued operations............... 55,356 69,049
------- -------
Net assets of discontinued operations........................ $ 8,047 $ 8,727
======= =======


42


STANDARD PACIFIC CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


14. Results of Quarterly Operations (Unaudited)



First Second Third Fourth
Quarter Quarter(1) Quarter Quarter Total(2)
-------- ---------- -------- -------- --------
(Dollars in thousands, except per share
amounts)

1998:
Revenues.................. $ 96,911 $153,141 $194,130 $315,431 $759,612
Income from continuing
operations before income
taxes and extraordinary
charge................... 8,325 17,340 19,649 35,579 80,894
Income (loss) from
discontinued operations,
net of income taxes...... (65) (42) (36) (56) (199)
Extraordinary charge from
the early extinguishment
of debt, net of income
taxes.................... -- (222) (1,106) -- (1,328)
Net income................ $ 4,768 $ 9,915 $ 10,370 $ 20,823 $ 45,877
======== ======== ======== ======== ========
Diluted Net Income Per
Share:
Income per share from
continuing operations.. $ 0.16 $ 0.34 $ 0.38 $ 0.70 $ 1.58
Income (loss) per share
from discontinued
operations............. (0.00) (0.00) (0.00) (0.00) (0.01)
Extraordinary charge
from the early
extinguishment of
debt................... -- (0.01) (0.04) -- (0.04)
-------- -------- -------- -------- --------
Net income per share.... $ 0.16 $ 0.33 $ 0.34 $ 0.70 $ 1.53
======== ======== ======== ======== ========
1997:
Revenues.................. $111,303 $140,578 $177,150 $155,541 $584,571
Income from continuing
operations before income
taxes.................... 5,146 7,955 11,660 16,285 41,046
Income (loss) from
discontinued operations,
net of income taxes...... 484 (24) 367 (779) 48
Gain on disposal of
discontinued operation,
net of income taxes...... -- -- -- 3,302 3,302
Net income................ $ 3,517 $ 4,667 $ 7,241 $ 11,901 $ 27,326
======== ======== ======== ======== ========
Diluted Net Income Per
Share:
Income per share from
continuing operations.. $ 0.10 $ 0.16 $ 0.23 $ 0.32 $ 0.81
Income (loss) per share
from discontinued
operations............. 0.02 0.00 0.01 (0.03) 0.00
Gain on disposal of
discontinued
operation.............. -- -- -- 0.11 0.11
-------- -------- -------- -------- --------
Net income per share.... $ 0.12 $ 0.16 $ 0.24 $ 0.40 $ 0.92
======== ======== ======== ======== ========

- - --------
(1) Reflects certain reclassifications made to conform with 1998 year end
presentation with respect to transactions related to the early
extinguishment of debt (see Note 6).

(2) Some amounts do not add across due to rounding differences in quarterly
amounts.


43


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Not applicable.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Certain of the information required by this Item with respect to executive
officers is set forth under the caption "Executive Officers of the Company" in
Part I. The remaining information required by Items 401 and 405 of Regulation
S-K is set forth in the Company's 1999 Annual Meeting Proxy Statement which
will be filed with the Securities and Exchange Commission not later than
120 days after December 31, 1998. The Company's 1999 Annual Meeting Proxy
Statement, exclusive of the information set forth under the captions "Report of
the Compensation Committee" and "Company Performance," is incorporated herein
by this reference.

ITEM 11. EXECUTIVE COMPENSATION

The information required by Item 402 of Regulation S-K is set forth in the
Company's 1999 Annual Meeting Proxy Statement which will be filed with the
Securities and Exchange Commission not later than 120 days after December 31,
1998. The Company's 1999 Annual Meeting Proxy Statement, exclusive of the
information set forth under the captions "Report of the Compensation Committee"
and "Company Performance," is incorporated herein by this reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by Item 403 of Regulation S-K is set forth in the
Company's 1999 Annual Meeting Proxy Statement which will be filed with the
Securities and Exchange Commission not later than 120 days after December 31,
1998. The Company's 1999 Annual Meeting Proxy Statement, exclusive of the
information set forth under the captions "Report of the Compensation Committee"
and "Company Performance," is incorporated herein by this reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by Item 404 of Regulation S-K is set forth in the
Company's 1999 Annual Meeting Proxy Statement which will be filed with the
Securities and Exchange Commission not later than 120 days after December 31,
1998. The Company's 1999 Annual Meeting Proxy Statement, exclusive of the
information set forth under the captions "Report of the Compensation Committee"
and "Company Performance," is incorporated herein by this reference.

44


PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K



Page
Reference
---------

(a) (1) Financial Statements, included in Part II of this report:
Report of Independent Public Accountants.................................................... 23
Consolidated Statements of Income for each of the three years in the period ended
December 31, 1998......................................................................... 24
Consolidated Balance Sheets at December 31, 1998 and 1997................................... 25
Consolidated Statements of Stockholders' Equity for each of the three years in the period
ended December 31, 1998................................................................... 26
Consolidated Statements of Cash Flows for each of the three years in the period ended
December 31, 1998......................................................................... 27
Notes to Consolidated Financial Statements.................................................. 29

(2) Financial Statement Schedules:
Financial Statement Schedules are omitted since the required information is not present or
is not present in the amounts sufficient to require submission of the schedule, or because
the information required is included in the consolidated financial statements, including the
notes thereto.

(3) Index to Exhibits
See Index to Exhibits on pages 47-48 below.


(b)Reports on Form 8-K. Form 8-K dated October 2, 1998, was filed during the
last quarter of the period covered by this Annual Report on Form 10-K reporting
that the Company had successfully completed its tender offer and consent
solicitation for its outstanding 10 1/2% Senior Notes due 2000.

(c)Index to Exhibits. See Index to Exhibits on pages 47-48 below.

(d)Financial Statements required by Regulation S-X excluded from the annual
report to shareholders by Rule 14(a)-3(b)(1). Not applicable.

45


SIGNATURES

Pursuant to the requirements of section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Costa Mesa, California, on the 22nd day of March 1999.

STANDARD PACIFIC CORP.
(Registrant)

By: /s/ Arthur E. Svendsen
__________________________________
Arthur E. Svendsen
Chairman of the Board and
Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant in the capacities and on the dates indicated.



Signature Title Date
--------- ----- ----


/s/ Arthur E. Svendsen Chairman of the Board, Chief March 22, 1999
____________________________________ Executive Officer and Director
(Arthur E. Svendsen)


/s/ Stephen J. Scarborough President and Director March 22, 1999
____________________________________
(Stephen J. Scarborough)


/s/ Andrew H. Parnes Vice President--Finance, March 22, 1999
____________________________________ Treasurer and Chief Financial
(Andrew H. Parnes) Officer


/s/ Robert J. St. Lawrence Director March 22, 1999
____________________________________
(Robert J. St. Lawrence)


/s/ William H. Langenberg Director March 22, 1999
____________________________________
(William H. Langenberg)


/s/ James L. Doti Director March 22, 1999
____________________________________
(James L. Doti)


/s/ Keith D. Koeller Director March 22, 1999
____________________________________
(Keith D. Koeller)


/s/ Donald H. Spengler Director March 22, 1999
____________________________________
(Donald H. Spengler)


/s/ Ronald R. Foell Director March 22, 1999
____________________________________
(Ronald R. Foell)


/s/ Douglas C. Jacobs Director March 22, 1999
____________________________________
(Douglas C. Jacobs)



46


INDEX TO EXHIBITS


*3.1 Certificate of Incorporation of the Registrant incorporated by reference
to Exhibit 3.1 of the Registrant's Registration Statement on Form S-4
(file no. 33-42293).

*3.2 Certificate of Correction of Certificate of Incorporation of the
Registrant incorporated by reference to Exhibit 3.2 of the Registrant's
Registration Statement on Form 8-B filed with the Securities and
Exchange Commission on December 17, 1991.

*3.3 Form of Certificate of Amendment to Certificate of Incorporation of
the Registrant incorporated by reference to Exhibit 3.3 of the
Registrant's Registration Statement on Form 8-B filed with the
Securities and Exchange Commission on December 17, 1991.

*3.4 Form of Certificate of Merger of the Registrant incorporated by
reference to Exhibit 3.4 of the Registrant's Registration Statement on
Form 8-B filed with the Securities and Exchange Commission on December
17, 1991.

*3.5 Bylaws of the Registrant incorporated by reference to Exhibit 3.2 of
the Registrant's Registration Statement on Form S-4 (file no. 33-
42293).

*4.1 Rights Agreement, dated as of December 31, 1991, between the
Registrant and Manufacturers Hanover Trust Company of California, as
Rights Agent, incorporated by reference to Exhibit 4.1 of the
Registration Statement on Form S-4 (file no. 33-42293).

*4.2 Standard Pacific Corp. Officers' Certificate dated March 5, 1993 with
respect to the Company's 10 1/2% Senior Notes due 2000, incorporated
by reference to Exhibit 4 of the Company's Current Report on Form 8-K
dated March 5, 1993.

*4.3 Standard Pacific Corp. Officers' Certificate dated June 17, 1997 with
respect to the Registrant's 8 1/2% Senior Notes due 2007, incorporated
by reference to Exhibit 4.1 of the Registrant's Current Report on Form
8-K dated June 17, 1997.

*4.4 Standard Pacific Corp. Officers' Certificate dated February 5, 1998
with respect to the Registrant's 8% Senior Notes due 2008.

*4.5 Registration Rights Agreement dated as of February 5, 1998 between the
Registrant and SBC Warburg Dillon Read Inc., BancAmerica Robertson
Stephens and Donaldson Lufkin & Jenrette Securities Corporation.

*4.6 Indenture dated as of April 1, 1992 by and between the Company and
United States Trust Company of New York, Trustee, incorporated by
reference to Exhibit 4 to the Company's Current Report on Form 8-K
dated February 24, 1993.

*10.1 Acquisition Agreement dated March 6, 1987 between the Federal Savings
and Loan Insurance Corporation and Standard Pacific Savings, F.A.
incorporated by reference to Exhibit C of the Company's Current Report
on Form 8-K dated March 6, 1987.

*10.2 Seventh Amended and Restated Revolving Credit Agreement dated as of
July 28, 1998, among the Company, Bank of America National Trust and
Savings Association, The First National Bank of Chicago, Credit
Lyonnais Los Angeles Branch, Fleet National Bank, Sanwa Bank
California, Comerica Bank, PNC Bank, National Association, Bank
United, First American Bank Texas, SSB, Union Bank of California and
Guaranty Federal Bank, F.S.B., incorporated by reference to
Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1998.

*10.3 Standard Pacific Corp. 1991 Employee Stock Incentive Plan,
incorporated by reference to Annex B of the Company's prospectus
dated October 11, 1991, filed with the Securities and Exchange
Commission pursuant to Rule 424(b).


47


*10.4 Form of Stock Option Agreement to be used in connection with the
Standard Pacific Corp. 1991 Employee Stock Incentive Plan,
incorporated by reference to Exhibit 28.2 of the Company's
Registration Statement on Form S-8 filed on January 3, 1992.

*10.5 Standard Pacific Corp. 1997 Stock Incentive Plan, incorporated by
reference to Exhibit 99.1 of the Company's Registration Statement on
Form S-8 filed on August 21, 1997.

*10.6 Form of Non-Qualified Stock Option Agreement to be used in Company's
1997 Stock Incentive Plan, incorporated by reference to Exhibit 99.2
of the Company's Registration Statement on Form S-8 filed on August
21, 1997.

*10.7 Form of Non-Qualified Director's Stock Option Agreement to be used in
connection with the Company's 1997 Stock Incentive Plan, incorporated
by reference to Exhibit 99.3 of the Company's Registration Statement
on Form S-8 filed on August 21, 1997.

*10.8 Form of Incentive Stock Option Agreement to be used in connection
with the Company's 1997 Stock Incentive Plan, incorporated by
reference to Exhibit 99.4 of the Company's Registration Statement on
Form S-8 filed on August 21, 1997.

*10.9 Stock Purchase Agreement, dated as of September 30, 1997, by and
between the Company, Duc Development Company and Daniel A. Duc,
incorporated by reference to Exhibit 10.9 of the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1997.

*10.10 Share Purchase Agreement, dated as of November 7, 1997, by and
between the Company and HON Industries, Inc.

*10.11 Asset Purchase Agreement, dated August 13, 1998, by and among UDC
Homes, Inc., UDC Homes Construction, Inc., Shea Homes Limited
Partnership, Standard Pacific of Arizona, Inc., Standard Pacific
Construction, Inc., and Standard Pacific Corp., incorporated by
reference to Exhibit 2.1 of the Company's Form 8-K dated August 28,
1998.

21.1 Subsidiaries of the Company.

23.1 Consent of Arthur Andersen LLP, Independent Public Accountants.

27.1 Financial Data Schedule.
- - --------
(*) Previously filed.

48