Welcome to the Beazer Homes fourth quarter fiscal 2008 earnings conference call. Today’s call is being recorded and will be hosted by Ian McCarthy the company’s Chief Executive Officer. Joining him on the call will be Allan Merrill, the company’s Chief Financial Officer and Bob Salomon, the company’s Chief Accounting Officer. Before he begins Leslie Kratcoski, Vice President of Investor Relations will give instructions on accessing the company’s slide presentation over the Internet and will make comments regarding forward-looking statements.

Welcome to the Beazer Homes conference call on our results for the quarter and year ended September 30, 2008. During this call we will webcast a synchronized slide presentation. To access the slide presentation, go to the investor home page of Beazer.com and click on the webcast link in the center of the screen. Before we begin you should be aware that during this call we will be making forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. Such risks, uncertainties and other factors are described in our SEC filings. Any forward-looking statement speaks only as of the date on which such statement is made and except as required by law we do not undertake any obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. New factors emerge from time-to-time and it is not possible for management to predict all such factors. Ian McCarthy our President and Chief Executive Officer and Allan Merrill, our Executive Vice President and Chief Financial Officer will give a brief presentation after which they will address questions you may have for the duration of this one hour conference call. We are also joined by Bob Salomon, our Chief Accounting Officer. In the interest of time and allowing everyone a chance to ask questions, we do kindly request that you limit yourself to one questions and then one follow up. I’ll now turn the call over to Ian McCarthy.

Before we begin our discussion of the results we released this morning and the current business environment, I would like to make a few brief comments on the company specific issues that we continue to work through. As previously disclosed, Beazer Homes and our subsidiary Beazer Mortgage Corporation are under investigation by the US Attorney’s office in the Western District of North Carolina and by other federal and state agencies concerning matters that were the subject of our audit committee’s previous independent investigation. From the outset we have been fully cooperating with the ongoing external investigations. In September we reached a settlement with the SEC and intend to attempt a negotiate a settlement with other government authorities with respect to these matters. We also continue to defend the company’s interest in the related civil litigation. To date, three cases have been concluded following dismissal by the courts. At this point I would like to confirm that with respect to ongoing investigations, litigation and possible future settlements of public filings to date speak for themselves and until definitive resolutions have been reached we cannot provide any further comment beyond the details included in those filings. We remain absolutely committed to our enhanced compliance program and our code of business conduct and ethics. Furthermore, during the fourth quarter we continue to actively work on remediation efforts to address the material weaknesses previously identified in our ICFR or internal control over financial reporting. I am pleased to report that as of September 30, 2008 there were no remaining material weaknesses under our ICFR. Turning to the current business environment, conditions in both the overall economy and housing market were under greater pressure during our fourth quarter and have continued to deteriorate since that time. Homebuyer demand for new homes continues to be adversely…

First, I’d like to spend a few moments on the inventory, option abandonment and joint venture impairment charges incurred during the fourth quarter. As with our previous filings, you will find expanded disclosure as it relates to impairment charges in our 10K which we expect to file later today. Inventory impairments totaled $46 million in the September quarter. Of that amount, $39 million related to properties held for development and $7 million related to land held for sale. Impairments recorded on our held for development inventory resulted from the continued decline in the housing market that negatively impacted both sales prices and absorption rates. Impairments on held for development inventory were fairly evenly distributed across the west, east and southeast segments. The September quarter impairments represented 1,903 lots in 30 communities. For all of fiscal 2008, we impaired approximately 11,000 lots and 221 communities. The $7 million in impairments related to properties held for sale were primarily related to markets we were exiting. During the September quarter we also incurred lot option abandonment charges totaling $13 million. Finally, we also further reduced the carrying value in our interest in joint ventures by $6 million. Our continuing investment in joint ventures stands at $33.1 million. Our land position as of September 30, 2008 totaled 39,627 lots, 73% of which were owned and 27% of which were controlled under options. This represents a reduction of approximately 14% and 36% from levels as of June 30, 2008 and September 30, 2007 respectively. We achieved these reductions through the abandonment of lot options, asset sales which totaled $156 million for the fiscal year and of course, our own home closings. This has led to a significant shift over the year in the waiting of our land holdings toward owned land. Excluding property held for…

In closing, fiscal 2008 was a very challenging year for both our company and the home building industry. At this time with further deterioration in the overall economy since our yearend, we have very low visibility in to fiscal 2009. Taking the current trends in to account along with our reduced backlog, we should realistically expect that both closings and average sales prices will be lower in fiscal 2009 and that we will again likely incur a loss for the year. In times like this, it is essential to maintain strong liquidity and I am pleased with our progress in that regard. Going forward we will maintain that keen focus on liquidity through continued reductions in both overhead and direct costs as well as in our investment in land and unsold home inventory. I’d like to express my appreciation to our many stakeholders who continue to work with us to weather the current downturn. In particular, I would like to thank all of our Beazer ambassadors for their tireless efforts in achieving our strong cash position in fiscal 2008 and who will be instrumental in maintaining our liquidity in 2009 and positioning us for a return to profitability upon a market recovery. Allan and I would now be pleased to answer your questions and I’ll ask the operator to give the instructions.

(Operator Instructions) Our first question comes from David Goldberg – UBS.

First question, and I know it’s still not a lot of visibility in to next year but I’m just trying to get an idea given where the backlog is now and given where the sales pace is, I think the obvious question is can you be free cash flow neutral, maybe slightly negative, slightly positive as you look forward to next year at the current sales pace?

David, what I would say is we have had a singular focus on generating liquidity and increasing our cash position. We have pulled all of the levers necessary to do that. You prefaced your question with the fact that it is a very difficult time to make forecasts and so I will have to just relate back to what we said about reducing land and land development expenditures likely and our continued focus on cash generation and stop short of making any specific forecast. But, I have to say that I think our track record is very good in terms of generating and maintaining liquidity and we intend to continue to pursue that strategy.

I guess a follow up question, and I’m wondering if we can get some more details and Allan thanks for the exact specifications on the $17 million per annum but I guess I’m trying to figure out is with the 382 can you just give us an idea of how much of the FAS 109 allowance that applies to and help us put some boundaries on it? I’m not sure I understood exactly all the specifications, can you just maybe go through those again and give us a way to quantify how much of the deferred tax assets that you’ve written off subject to 382 and potentially how long that’s going to take to work through those potential assets over time?

There’s a lot there. A couple of things, first of all we will file our K later today and I think that will be helpful but let me introduce Bob Salomon. Bob, I think can address that question in whole or in part.

It’s important to note that the 382 limitation and the deferred tax asset allowance are actually separate occurrences. The DTA allowance is primarily due to the impairments that have been taken in some other fixed asset type losses and JV impairment losses. As it relates to the limitation, all of our operating losses going forward after the 382 change which as of 12/31/07, any losses incurred after that are not limited. Any built in losses which are these impairments that have not turned, any fixed asset type items that haven’t turned that were taken prior to the 382 change which was prior to 12/31/07 could be limited going forward as they turned in to losses within the first five years after the 382 change. So, as an example, if $100 million or $150 million worth of losses that were in effect from a book basis prior to 12/31/07 were realized for tax purposes during the first five years, they would be subject to the $17 million annual limitation.

It sounds like any deferred tax assets that were created before 12/31/07 that turn in to NOLs in the next five years subsequently would be subject to the limitation. Would that be correct?

That’s correct.

Our next question comes from Ivy Zelman – Zelman & Associates. Ivy Zelman – Zelman & Associates: I wanted to just see if Ian you can tell us a little bit why and what success you’ve been able to derive with orders being better than the industry? You guys had a relatively good quarter with orders up 10%, are you doing anything that might help explain that out performance? Is there any mortgage rate buy downs that you may have offered for example or anything that’s been significant in promotions that might attribute the success? Then, any changes as it relates to your relationship with your preferred lender as a result of the required use rule that HUD passed on November 14th and the implication that it might have for your business?

On the first point Ivy I would say that in these times that any slight gain we will take certainly with pleasure. It’s very good to see an uptick in our orders in the fourth quarter but in relative terms I would say they’re still quite weak. We were helped a lot by the cancellation rate being a lot better in this period than it was in the prior year. I would say there’s nothing special there. If you break it out between our ongoing markets and our exit markets you can clearly see there’s a difference in that so that our ongoing markets where we put the focus on now have definitely performed better. In this period we actually performed slightly better in the west coast, in California, Las Vegas and Phoenix. Those markets are seeing affordability come to certain levels now and I think people are taking some of those opportunities. So, I think we were pleased with that but I wouldn’t say that there was anything that I would attribute to in terms of any special promotions. Obviously, we’ve seen the market in this quarter be very tough as well. I would say that we have to recognize that everyone has experienced with the meltdown in the financial environment I think people are very much in the sidelines right now. So, I think orders for the December quarter are going to be a tough comparison for everyone. On the second point I would say that we’re still in discussions with our preferred lender there and in terms of our arrangement with Countrywide BOA and I really don’t think I can make any comments on that at this time. Ivy Zelman – Zelman & Associates: The mortgage rate buy downs, those programs, you’re not offering anything right now?

Nothing out of the ordinary, nothing that we wouldn’t normally do, no. Ivy Zelman – Zelman & Associates: And normally what type of things are you doing just to give us examples?

We don’t have any buy downs at this point. Certainly, we have to be competitive in the markets. Firstly we try and ensure the homebuyer of the differentiation of our product, that’s our whole concept around smart design and the e initiatives that we have in there. Then, we have to be competitive with the markets so I would say all that we’re doing is trying to make sure that the buyer understands what they are getting from us, the benefits they’re getting with some of the green initiatives we’ve put in there but then secondly we have to be competitive in the market and I think we have to do that just with regular incentives in terms of sales prices and the like. So, I wouldn’t say that there’s anything beyond that at this time.

Our next question comes from Joel Locker - FTN Securities.

I wanted to ask you about your gross margins actually, I saw they came down about 340 basis points excluding any impairments sequentially and I was just wondering it seemed like they had kind of came up in the June quarter from the March quarter and now they seem like they’ve ticked back down and I was just wondering if there was any one-time charges in those or anything like that?

There really aren’t any. There are clearly going to be mix issues which will affect quarter-to-quarter comparability at the gross margin line. I would say in the quarter there was a reasonable weighting of our exit markets or the other home building segment. I think you’ll see in the K some information that will allow you sort of to work through the gross margins by segment and what you’ll see there is almost 500 basis points lower gross margins in that other segment or the so-called exit markets and that clearly had an effect. There’s no question that our desire to generate liquidity probably had some impact as well but there are really no one-time or special charges to make note of.

As modeling is that a good base rate to use, 7%, where it was in the fourth quarter or would you expect it to be higher just because you’re exiting some of the others?

Well certainly the drag effect of the exit markets will be greatly reduced in subsequent quarters so I think you should look at the segment information. The difficulty of course is segment comparisons Q3 versus Q4 aren’t necessarily meaningful because you can have mix changes within segments but for sure you should adjust for the weight of those exit markets.

Then just a follow up on the SG&A, do you have a number for the litigation fees that were involved in the fourth quarter SG&A?

I think it was about $6 million.

About $6 million?

Yes.

Our next question comes from Larry Taylor – Credit Suisse. Larry Taylor – Credit Suisse: You had talked about reducing unsold home inventory to [inaudible] during this coming year. You’ve already brought it down below 1,000 units, how much more do you think is a possible goal there?

Larry, I think you have to look at the number of communities that we have open at any one time. Certainly we can only bring it down so far per community but there may be some communities that we have to restrict selling in but not build and only build to order in those communities. I think most of the unsold inventory have come through cancellations right now so I think we will just monitor that very closely right now. It’s certainly one area that we’ve got to keep a close eye on in terms of our liquidity and the amount we spend out there and how much we can pull back from that. But, it’s certainly alright that we’ve pulled it down a lot over this fiscal 2008 but our ability to do that going in to 2009 I would say also depends on the number of communities open with active selling in them. Larry Taylor – Credit Suisse: So you don’t have a target or a specific level that you’d try and get to?

No, what we’ve tried to do is keep it in context of the business, where selling patterns and absorption rates are. I think you’ve seen the reduction really is fairly parallel with the reduction in backlog. I think that’s not entirely by accident. I’d also say it’s not entirely by design. But, that’s probably a reasonable barometer to think about that number. Larry Taylor – Credit Suisse: Then just very quickly, was there any impact from the down payment assistance program ending in the quarter? Did that pull any demand or any comments in that area?

Well, I think there may have been some positive effect in the September quarter in terms of people trying to close their homes and use the benefit of down payment assistance. I think it’s difficult to assess the impact in this quarter because so many other external factors have impacted the buying environment. I think I would believe that it certainly has had a negative impact but I think the external shock to the market has been more of an influence than the loss of down payment assistance. Larry Taylor – Credit Suisse: Do you have the percentage in the September quarter of [inaudible]?

We don’t have that number.

Our next question comes from [Alex Bering - Agency Trading Group]. [Alex Bering - Agency Trading Group]: I wanted to ask you as it pertains to your impairments I’m wondering what percentage of your communities that you guys have right now have been impaired at least once?

Well, during 2008 we impaired about 60% of our communities. [Alex Bering - Agency Trading Group]: My other question has to do with your covenants and I was just wondering given the impact of the deferred tax assets on your equity I was wondering if you could update us on what your current covenants say and which ones I guess are you guys closest to having less cushion on?

There will be I think a very detailed discussion of this probably longer than the one we have time for on this call in the 10K but I would generally say that the revolver was structured such that there was the opportunity to reduce the facility if the net worth came below $350 on a tangible basis, and it did. The covenant level is at $100 million and our tangible net worth under the covenant definition was a little over $300 million. Other than $120 million liquidity covenant that’s really the only maintenance covenants that we have. [Alex Bering - Agency Trading Group]: So what would happen if you did fall below $350 then?

Well, we are below $350 and so the facility size was reduced or will be effective with the filing of our 10K today from $400 million to $250 million. That was built in to the agreement so it’s not a covenant breach it is a ratchet that we had established that the facility size was tied to the tangible net worth level.

Our next question comes from [Chris Cook – Inaudible]. [Chris Cook – Inaudible]: With respect to your cash position now close to $600 million and your debt trading where it is, could you give us a quick update on how you intend to address the balance sheet?

Well, I made a general comment that we are actively studying options but, I also said and it’s very important that it is our continuing and current intent to attempt to resolve matters with the Department of Justice and other governmental agencies prior to engaging in any transactions to address the capital structure and that continues to be our belief as of today. We are not immune to or unaware of both the optics of what the balance sheet looks like nor are we ignorant of what’s happening in the market with other issuers but at this time we don’t have intent to take action on that until we’re able to resolve matters with the regulatory authorities.

Your last question comes from Joel Locker - FTN Securities.

Just two follow-ups, on the land held for sale do you have any open contracts that will close in say the first quarter or second quarter of fiscal ’09?

I don’t have that at my fingertips. We would have letters of intent on a good portion of it but whether or not they’re definitive agreements as of today I don’t know. We’ve been fairly successful in moving through that land held for sale and I expect we can be during fiscal 2009 but I’m not comfortable giving a quarterly forecast on the receipt of those proceeds.

Is it a substantial amount of the $85 million?

We are having active substantive discussions on essentially every single asset in there. Again, whether it’s a LOI or a definitive agreement, I don’t know off the top of my head but all of the assets that are in that category are being actively marketed and are under active negotiation today.

The income tax receivable, I guess $173 million differs a little than the $150 million expected tax refund. Can you just walk me through that an explain what the difference is there?

The difference between the $150 that we’ve been talking about and the $173 relates to receivables unrelated to our carry back for the FY08 tax return. There are some items prior to ’07 that we’re still working with the IRS and there’s a couple of state receivables that we haven’t received yet that we have not projected to be early in ’09.

So if those get resolved you could get those maybe later in ’09?

That’s correct.

Just the last thing, I guess the impairments I would expect to be a little larger just based on the gross margins. I was just wondering how come they weren’t a little larger than the $45 million or so?

I know that we’ve talked before about the process that we go through and it’s an aggregate cash flows above or below book value. At this point we would have cycled through a significant majority of our communities being impaired one time over the last two years and so you end up in a situation where as home prices recede the margins that you thought you might get after impairments you’re not getting any more but they’re not so bad as to warrant further impairment. That’s really the thing that makes it very difficult to estimate just on the basis of gross margins what impairments should be.

There are no further questions. I’d like to turn the call back over to Mr. McCarthy.

I’d just like to take this opportunity to thank all of you for joining us today. The recording of this conference call with the slide presentation will be available this afternoon in the investor relations section of our website at Beazer.com. Thanks very much.