WCI Reports First Quarter 2006 Earnings Up 142%.

BONITA SPRINGS, Fla. -- WCI Communities, Inc. (NYSE: WCI):

Financial Highlights:

--First quarter net income: $40.2 million - up 142.2%

--First quarter diluted EPS: $0.89 - up 154.3%

--First quarter revenues: $570.7 million - up 22.5%

--First quarter

--Backlog at March 31, 2006: $1.88 billion

--Reduced projected 2006 diluted EPS to $4.50 to $5.00, up 12% to 25% over 2005

--Reduced new order guidance to flat to slightly up over 2005

WCI Communities, Inc. (NYSE: WCI), a leading builder of traditional and tower residences in highly amenitized lifestyle communities, today reported its results for the first quarter of 2006. For the three months ended March 31, 2006, net income rose 142.2% to $40.2 million, compared with $16.6 million in the first quarter of 2005, while diluted earnings per share (EPS) rose 154.3% to $0.89 from $0.35. Revenues for the first quarter of 2006 were $570.7 million, compared with $465.9 million for the first quarter of 2005, a 22.5% increase. Overall company gross margin for the first quarter of 2006 was 23.0% versus 19.9% for the first quarter 2005.

For the three months ended March 31, 2006, the aggregate value of Traditional and Tower Homebuilding orders declined 46.7% over the same period a year ago to $334.8 million, while the number of unit orders declined 55.7% to 402. For the first three months of 2006, the average price of Traditional and Tower Homebuilding orders combined increased 20.2% to $833,000, reflecting price increases that were achieved in the first three quarters of 2005 and a shift in mix of homes sold.

"Earnings for the quarter were up considerably, as expected, with our company benefiting from our beginning backlog that reflected strong demand and pricing power throughout most of 2005," said Jerry Starkey, President and CEO of WCI Communities. "During the quarter, we did not see the seasonal lift in demand for homes in most of our Florida communities that we expected and demand for homes in the Mid-Atlantic region dropped from prior periods. New orders in the Northeast region were better than expected. Our exit surveys indicate that many of the active adult visitors to our West Coast Florida sales centers are intending to purchase in the future, but are extending their timeframe for the purchase. We expect comparatively lower demand in same store communities this year, partly offset by added new orders from the opening of 10 to 12 new communities. So far this year, we have opened three new communities, which have enjoyed strong initial demand."

Starkey continued, "During the first quarter of 2006, we used incentives and discounts on a selective and fairly limited basis. As we move through the balance of the year, we expect to moderately increase the use of targeted incentives and discounts, particularly in our active adult and second home products. On balance, we expect Traditional Homebuilding gross margins to range from 22% to 23% for full year 2006, compared with the 19.1% gross margin achieved in 2005. We expect our cost saving initiatives will mitigate part of the relative increase in targeted incentives and discounts. With traffic levels off approximately 50% in Florida, we also have delayed the release of several towers from the first and second quarters to later in the year, and have reduced the number of towers that we expect to introduce to the market this year to 11 to 13 compared with our initial expectations of 15 to 17. While in some instances in the past we enjoyed tower unit presales of as much as 70% to 90%, in the current environment, we expect a lower level of presales prior to construction commencement, generally in the 50% to 60% area, which is more consistent with our longer-term, historical pre-construction absorption."

"Because we are experiencing lower overall demand for our Florida active adult communities, tower residences and our higher-priced Mid-Atlantic homes, we are lowering our EPS guidance for the year to $4.50 to $5.00, which represents a 12% to 25% increase over 2005 reported EPS. Upside to this estimate may be possible if demand improves or incremental land sales are closed."

Traditional Homebuilding

For the three months ended March 31, 2006, Traditional Homebuilding revenues, including lot sales, rose 53.6% to $287.2 million from $187.0 million for the first quarter 2005. The company closed 492 homes compared with 381 for the same period a year ago. Florida revenues totaled $239.1 million or 83.3% of total Traditional Homebuilding revenues versus $149.5 million or 79.9% for the first quarter of 2005. Revenues from WCI's Northeast Division accounted for 9.7% of Traditional Homebuilding revenues during the first quarter of 2006 vs. 13.9% during the same period a year ago while the company's Mid-Atlantic Division accounted for 7.1% and 6.2%, for the first quarter of 2006 and 2005 respectively. Gross margin as a percentage of revenue for Traditional Homebuilding increased to 23.4% vs. 15.9% for the same period a year ago, as increased home prices on units in backlog and the absence of factors which reduced the margin in the prior period (i.e., cost increases due to construction delays stemming from the 2004 hurricanes and permitting delays) benefited results. The company currently expects its gross margin as a percentage of Traditional Homebuilding revenue to range from 22% to 23% in 2006, compared with the previous estimate of 23% to 24%.

For the first quarter of 2006, the value of Traditional Homebuilding orders declined 40.6% to $265.1 million and the number of orders declined 51.5% versus a record first quarter 2005, when orders rose 77.5% over the first quarter of 2004. The average sales price for Traditional Homebuilding orders for first quarter of 2006 rose to $764,000 compared with $624,000 in for the first quarter 2005. Traditional Homebuilding backlog at March 31, 2006 was $1.18 billion, down 17.5% over the first quarter 2005's $1.43 billion.

Tower Homebuilding

For the three months ended March 31, 2006, revenues in the Tower Homebuilding Division increased 2.8% to $219.4 million from $213.5 million for the same period a year ago, as 24 towers with a total sell out value of $2.41 billion were under construction and recognizing revenue during the first quarter 2006 versus 17 with a total sellout value of $1.88 billion during the first quarter 2005. No towers began revenue recognition during the quarter. Tower Homebuilding gross margin as a percentage of revenue declined to 25.5% from 26.8% for the three months ended March 31, 2006, in part due to $2.9 million in adjustments related to towers that recently closed or are currently under construction, which reduced gross margin as a percentage of revenue for the first quarter of 2006 by approximately 130 basis points. Gross margin as a percent of revenue for the Tower Homebuilding Division is still expected to range from 25% to 28% for 2006.

Tower Homebuilding unit orders for the first quarter 2006, decreased 61.7% in value to $69.7 million and 71.2% in units to 55. As expected, no new towers were converted to contract during the quarter, versus one tower that converted to contract with 15 units valued at $16.0 million in the prior year period. Conversions of reservations to contract are expected to occur mainly in the third and fourth quarters this year. The average order price for Tower Homebuilding units sold in the first quarter of 2006 was $1.3 million compared with $951,000 in the period a year ago. Tower Homebuilding backlog totaled $708.2 million, a 13.7% decrease over the $820.7 million backlog at March 31, 2005. During the quarter, the company completed and delivered 101 units, valued at $80.7 million, in three tower buildings and did not experience any defaults.

Real Estate Services

Revenues for the Real Estate Services Division for the first quarter 2006 were $30.4 million, a 19.8% decrease from the $37.9 million recorded for the same period a year ago, due to the slowing market for new and resale homes during the quarter. Gross margin as a percentage of revenue over the period decreased to 9.1% from 16.1% in the same period a year ago due to higher overheads spread over a lower number of transactions. For the full year, the Real Estate Services Division gross margin as a percentage of revenue is expected to be in the mid-teens.

Other Items

Revenues for the Amenities Division for the first quarter 2006 were $26.5 million, a 3.4% increase from $25.7 million for the same period a year ago. Gross margin totaled $1.7 million for the first quarter 2006 vs. a loss of $230,000 in the first quarter of 2005. Due to the implementation of Emerging Issues Task Force ("EITF") Consensus Opinion 04-5, the company consolidated two existing golf course operating properties into the Amenities Division revenue and gross margin. This was the principal cause of the favorable variances in the Amenities Division.

Land sale revenues for the first quarter 2006 totaled $5.2 million compared with no land sale revenues for the first quarter of 2005. Gross margin as a percent of revenue for the land sales in the first quarter of 2006 totaled 68.0%. Other income for the three months ended March 31, 2006 totaled $1.5 million compared with $2.9 million in the first quarter of 2005.

Interest expense for the three months ended March 31, 2006 was $3.2 million compared with $14.2 million in the first quarter 2005. The decline was a result of increased interest capitalization resulting from the revisions to the company's capitalized interest calculations, which occurred in the second quarter of 2005 and resulted in more interest being included in cost of goods sold.

Selling, general, and administrative expenses including real estate taxes (SG&A) as a percentage of revenue for the first quarter 2006 totaled 9.7%, down from 11.5% in the first quarter of the previous year.

Cash Flow/Financial Position/Balance Sheet

For the three months ended March 31, 2006, net cash used in operating activities, including the purchase and development of real estate inventories, totaled $144.1 million compared with cash used of $160.6 million in the same period a year ago. Excluding land purchases of approximately $30.8 million, operating activities used net cash flow of approximately $113.3 million.

During the quarter, WCI repurchased one million shares of the company's common stock at an average price of $25.48 per share. In October 2005, the company's Board of Directors approved the repurchase of an additional five million shares of WCI's common stock, from time to time, based on certain parameters. After this quarter's purchases, WCI is authorized to repurchase an additional four million shares based on the current Board approval.

Total liquidity, measured as the sum of cash plus available capacity under the unsecured revolving facility, totaled approximately $753.1 million at March 31, 2006 based upon the maximum amount available to borrow under the company's senior unsecured revolving credit facility of $875 million. The ratio of net debt to net capitalization declined to 58.0% compared with 59.8% at March 31, 2005.

Current Guidance

For 2006, the company currently projects the following:

--Total revenues of $2.8 to $3.0 billion

--EPS of $4.50 to $5.00, which includes approximately $0.15 of impact from the expensing of stock-based compensation

--EPS for the second quarter of 2006 to range between $0.75 to $0.85

--EPS for the third quarter of 2006 to range between $0.85 to $0.95

--Traditional Homebuilding Division gross margins between 22% and 23%

--Tower Homebuilding Division gross margins between 25% and 28%

--New orders approximately equal to 2005

Conference Call

WCI will conduct a conference call today at 10:00 AM EST in conjunction with this release. The call will be broadcast live at http://www.wcicommunities.com in the Investor Relations area or can be accessed by telephone at (706) 679-5866 and asking for the WCI Communities conference call. A replay will be available after the call for a period of 36 hours by dialing (706) 645-9291 and entering conference code 8738637. The replay will also be available on the company's website. A slide presentation will accompany the call and can be accessed on the company's website in the Investor Relations section.

About WCI

WCI Communities, Inc., named America's Best Builder in 2004 by the National Association of Home Builders and Builder Magazine, has been creating amenity-rich, master-planned lifestyle communities since 1946. Florida-based WCI caters to primary, retirement, and second-home buyers in Florida, New York, New Jersey, Connecticut, Maryland and Virginia. The company offers traditional and tower home choices with prices from the low-$200,000s to more than $10 million and features a wide array of recreational amenities in its communities. In addition to homebuilding, WCI generates revenues from its Prudential Florida WCI Realty Division, its mortgage and title businesses, and its recreational amenities, as well as through land sales and joint ventures. The company currently owns and controls developable land on which the company plans to build over 25,000 traditional and tower homes.

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

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

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

                                               March 31,  December 31,
                                                  2006         2005
                                             ------------ ------------
Assets

Cash and cash equivalents                        $40,357      $52,584
Contracts receivable                           1,244,375    1,123,509
Real estate inventories                        1,768,361    1,687,852
Property and equipment                           287,690      208,205
Other assets                                     352,808      409,256
                                             ------------ ------------

Total assets                                  $3,693,591   $3,481,406
                                             ============ ============

Liabilities and Shareholders' Equity

Accounts payable, accruals and other
 liabilities                                  $1,071,317   $1,070,047
                                             ------------ ------------
Debt obligations:
Senior unsecured credit facility                 162,331       94,050
Senior unsecured term note                       300,000      300,000
Mortgages and notes payable                      261,202      203,214
Senior subordinated notes                        525,000      530,473
Junior subordinated notes                        165,000      100,000
Contingent convertible senior
 subordinated notes                              125,000      125,000
                                             ------------ ------------
Total debt obligations                         1,538,533    1,352,737
                                             ------------ ------------

Total shareholders' equity                     1,083,741    1,058,622
                                             ------------ ------------

Total liabilities and shareholders' equity    $3,693,591   $3,481,406
                                             ============ ============

Other Balance Sheet Data
Debt                                          $1,538,533   $1,352,737
Shareholders' equity                           1,083,741    1,058,622
                                             ------------ ------------
Capitalization                                $2,622,274   $2,411,359
                                             ============ ============
Ratio of debt to capitalization                     58.7%        56.1%

Debt, net of cash and cash equivalents        $1,498,176   $1,300,153
Shareholders' equity                           1,083,741    1,058,622
                                             ------------ ------------
Capitalization, net of cash and cash
 equivalents                                  $2,581,917   $2,358,775
                                             ============ ============
Ratio of net debt to net capitalization             58.0%        55.1%

Shareholders' equity per share                    $24.81       $23.86







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

                                        For the three months ended
                                                 March 31,
                                       -----------------------------
                                              2006           2005
                                       --------------  -------------
REVENUES

  Homebuilding:
    Homes                                   $280,262       $180,764
    Lots                                       6,914          6,258
                                       --------------  -------------
  Total traditional                          287,176        187,022
    Towers                                   219,395        213,524
                                       --------------  -------------
  Total homebuilding                         506,571        400,546

  Real estate services                        30,437         37,920
  Amenity membership and operations           26,539         25,673
  Land sales                                   5,152              -
  Other                                        2,047          1,725
                                       --------------  -------------

   Total revenues                            570,746        465,864
                                       --------------  -------------


GROSS MARGIN

  Homebuilding:
    Homes                                     65,024         27,615
    Lots                                       2,193          2,188
                                       --------------  -------------
  Total traditional                           67,217         29,803
    Towers                                    55,990         57,231
                                       --------------  -------------
  Total homebuilding                         123,207         87,034

  Real estate services                         2,776          6,087
  Amenity membership and operations            1,730           (230)
  Land sales                                   3,505            (31)
  Other                                          114             21
                                       --------------  -------------

   Total gross margin                        131,332         92,881
                                       --------------  -------------


OTHER INCOME AND EXPENSES
  Equity in losses (earnings) from
   joint ventures                                200         (1,134)
  Other income                                (1,455)        (2,922)
  Hurricane recoveries, net                        -           (806)
  Selling, general and administrative,
   including real estate taxes, net           55,125         53,591
  Depreciation and amortization                6,235          3,677
  Interest expense, net                        3,205         14,153
  Expenses related to early repayment
   of debt                                       455              -
                                       --------------  -------------
  Income before minority interests and
   income taxes                               67,567         26,322
  Minority interests                           1,341           (780)
  Income tax expense                          25,984         10,523
                                       --------------  -------------

   Net income                                $40,242        $16,579
                                       ==============  =============


EARNINGS PER SHARE
  Basic                                        $0.91          $0.37
  Diluted                                      $0.89          $0.35

WEIGHTED AVERAGE NUMBER OF SHARES
  Basic                                       44,129         44,853
  Diluted                                     45,165         47,121

OPERATING DATA
  Interest incurred, excluding
   warehouse credit facility                 $25,430        $23,014
  Interest included in cost of sales         $15,954         $7,967








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


                                                 For the three months
                                                    ended March 31,
                                                 ---------------------
                                                     2006       2005
                                                 ---------- ----------
Cash flows from operating activities:
 Net income                                        $40,242    $16,579
 Increase in real estate inventories               (84,576)   (65,096)
 Increase in contracts receivable                 (120,866)  (196,355)
 (Decrease) increase in customer deposits           (8,861)    60,548
 Decrease in restricted cash                        40,852     37,222
 Decrease in accounts payable and other
  liabilities                                      (25,515)   (41,451)
 All other                                          14,673     27,956
                                                 ---------- ----------
Net cash used in operating activities             (144,051)  (160,597)
                                                 ---------- ----------

Cash flows from investing activities:
 Net cash paid for acquisition                           -   (134,400)
 Other                                             (29,609)    (7,852)
                                                 ---------- ----------
Net cash used in investing activities              (29,609)  (142,252)
                                                 ---------- ----------

Cash flows from financing activities:
 Net borrowings under debt obligations             187,351    267,264
 All other                                         (25,918)       (28)
                                                 ---------- ----------
Net cash provided by financing activities          161,433    267,236

                                                 ---------- ----------
Net decrease in cash and cash equivalents         $(12,227)  $(35,613)
                                                 ========== ==========


SUPPLEMENTAL INFORMATION
Reconciliation of cash flows from operating
 activities to EBITDA (1)
    Net cash used in operating activities        $(144,051) $(160,597)
    Interest expense, net                            3,205     14,153
    Interest included in cost of sales              15,954      7,967
    Expenses related to early repayment of debt        455          -
    Income tax expense                              25,984     10,523
    Depreciation and amortization                    6,235      3,677
    Increase in real estate inventories             84,576     65,096
    Increase in contracts receivable               120,866    196,355
    Decrease (increase) in customer deposits         8,861    (60,548)
    Decrease in restricted cash                    (40,852)   (37,222)
    Decrease in accounts payable and other
     liabilities                                    25,515     41,451
    All other                                      (14,673)   (27,956)
                                                 ---------- ----------
    Total EBITDA                                   $92,075    $52,899
                                                 ========== ==========


(1) Earnings before interest, taxes, depreciation and amortization
(EBITDA) is not a generally accepted accounting principle (GAAP)
financial statement measurement. EBITDA should not be considered an
alternative to cash flows from operations determined in accordance
with GAAP as a measure of liquidity. The Company's management believes
that EBITDA is an indication of the Company's ability to generate
funds from operations that are available to pay principal and interest
on debt obligations and to meet other cash needs. A reconciliation of
cash from operating activities to EBITDA, the most directly comparable
GAAP measure, is provided above.








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

                                          For the three months ended
                                                  March 31,
                                         ----------------------------
                                              2006             2005
                                         -----------    -------------

Combined Traditional and
 Tower Homebuilding
--------------------
  Homes Closed (Units)(1)                       601              400
  Net New Orders (Units)                        402              907
  Contract Values of New Orders            $334,764         $628,152
  Average Selling Price Per New
   Order                                       $833             $693

Traditional Homebuilding
------------------------
Homes Closed (Units)
  Florida                                       427              320
  Northeast U.S.                                 51               49
  Mid-Atlantic U.S.                              14               12
                                         ----------- ----------------
    Total                                       492              381
                                         ----------- ----------------

Revenues
  Florida                                  $232,190         $143,256
  Northeast U.S.                             27,749           25,938
  Mid-Atlantic U.S.                          20,323           11,570
                                         ----------- ----------------
    Total                                  $280,262         $180,764
                                         ----------- ----------------

Average Selling Price Per Home Closed
  Florida                                      $544             $448
  Northeast U.S.                                544              529
  Mid-Atlantic U.S.                           1,452              964
                                         ----------- ----------------
    Total                                      $570             $474
                                         ----------- ----------------

Net New Orders (Units)
  Florida                                       252              618
  Northeast U.S.                                 89               69
  Mid-Atlantic U.S.                               6               29
                                         ----------- ----------------
    Total                                       347              716
                                         ----------- ----------------

Contract Values of New Orders
  Florida                                  $208,243         $373,947
  Northeast U.S.                             44,989           39,849
  Mid-Atlantic U.S.                          11,878           32,727
                                         ----------- ----------------
    Total                                  $265,110         $446,523
                                         ----------- ----------------

Average Selling Price Per New Order
  Florida                                      $826             $605
  Northeast U.S.                                505              578
  Mid-Atlantic U.S.                           1,980            1,129
                                         ----------- ----------------
    Total                                      $764             $624
                                         ----------- ----------------

Tower Homebuilding
------------------
  Homes Closed (Units)
  Florida                                       109               19
                                         ----------- ----------------
    Total                                       109               19
                                         ----------- ----------------

Revenues
  Florida                                  $212,508         $213,524
  Northeast U.S.                              6,887                -
                                         ----------- ----------------
    Total                                  $219,395         $213,524
                                         ----------- ----------------

Net New Orders (Units)
  Florida                                        49              191
  Northeast U.S.                                  6                -
                                         ----------- ----------------
    Total                                        55              191
                                         ----------- ----------------

Contract Values of New Orders
  Florida                                   $61,585         $181,629
  Northeast U.S.                              8,069                -
                                         ----------- ----------------
    Total                                   $69,654         $181,629
                                         ----------- ----------------

Average Selling Price Per New Order
  Florida                                    $1,257             $951
  Northeast U.S.                              1,345                -
                                         ----------- ----------------
    Total                                    $1,266             $951
                                         ----------- ----------------



                                                 March 31,
                                         ----------------------------
                                              2006             2005
                                         -----------    -------------
Combined Traditional and
 Tower Homebuilding
--------------------
  Aggregate Backlog Contract
   Values, Traditional and
   Tower Homebuilding                    $1,884,300       $2,247,997

Traditional Homebuilding
------------------------
  Backlog (Units)                             1,552            2,583
  Backlog Contract Values                $1,176,104       $1,427,328

Tower Homebuilding
------------------
  Cumulative Units in Backlog                 1,816            1,639
  Cumulative Contract Values             $1,958,414       $1,781,458
  Less: Cumulative Revenues Recognized   (1,250,218)        (960,789)
                                         ----------- ----------------
  Backlog Contract Values                  $708,196         $820,669
                                         =========== ================


  Towers under construction during the
  period recognizing revenue                     24               17


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