Good morning, and welcome to the Beazer Homes Earnings Conference Call for quarter ended March 31, 2014. Today's call is being recorded and a replay will be available on the company's website later today. In addition, PowerPoint slides, intended to accompany this call, are available on the Investor Relations section of the company's website at www.beazer.com. At this point, I will turn the call over to Carey Phelps, Director of Investor Relations.

Thank you. Good morning, and welcome to the Beazer Homes conference call discussing our results for the second quarter of fiscal 2014. 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, which are described in our SEC filings, including our Form 10-K, which may cause actual results to differ materially. 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 statement, 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. Joining me today are Allan Merrill, our President and Chief Executive Officer; and Bob Salomon, our Executive Vice President and Chief Financial Officer. Following their prepared remarks, we will take questions in the time remaining. I will now turn the call over to Allan.

Thank you, Carey, and thank you, all, for joining us. As one of the last home builders to report this spring, we know that there had been mixed reports about the strength and durability of the housing recovery. While it is clear the industry is not enjoying a so-called V-shaped recovery, affordability remains healthy, rental rates keeps rising, new and used home supply is limited, and crucially lenders seem to be tiptoeing back into the purchase money mortgage origination business. And after a long period of dormancy, we are seeing encouraging signs in the first-time buyer segment. Overall, our sense is that, as long as mortgage rates don't spike again like they did last May, new-home sales should continue on a slow but deliberate improvement path, with home prices inching up in most markets. At Beazer, with our operational turnaround in full swing, we have a number of achievements to be pleased about this quarter. Our sales absorption rates were ahead of our expectations, home pricing was a bit better than expected and gross margins were stronger than we anticipated. Specifically for the second quarter, we increased adjusted EBITDA at $18.5 million, up from $15.2 million last year. We sold 3.3 homes per community per month, higher than we have recorded for any of the previous 3 quarters. We expanded gross margins by 340 basis points to 22.5%. We grew ASPs by 7.5%. We ended the quarter with $300 million in unrestricted cash and we spent $129 million on land and land development compared to only $63 million last year. We also activated one of our largest land held for future development assets located in California, creating more opportunity for unit and profitability growth next year. In addition, just after the end of the quarter, we successfully completed a bond…

Thanks, Allan. Back to the community count, with challenges covered, I'm going to take you through both our quarterly results and more importantly, the LTM results on each driver of our 2B10 plan. Starting with revenues. For the quarter, our total revenue was lower than expected at $270 million. On a trailing 12-month basis, total revenues are in excess of $1.3 billion, up 13% versus a year ago. We sold 3.3 homes per community per month during the quarter without sacrificing margin dollars. This compares with a number well below resales per community per month reported by most of our peers. On a trailing 12-month basis, our sales per community per month held steady at 2.9, and compares favorably to 2.7 a year ago. Our ASP was $272,000 for the quarter, up 7.5% versus last year. On a trailing 12-month basis, our ASP was $266,000, 13% higher than a year ago. Usually it doesn't make much sense to look at sequential trends in ASP. However, because there was a sequential decline, we wanted to illustrate that mix between segments and within segments was the reason. We could see that on these segments and its higher ASPs comprised the much lower portion, call it 6% less, of our closings this quarter than last, some of which was due to weather. You can also see that our West segment where prices have risen steadily, was impacted by a different mix this quarter. Our Texas business and 1 very affordable townhome community in Las Vegas, played a much larger role in our closings this quarter than California, which contributed a decline in ASPs within that segment. On a year-over-year basis, the trend in higher prices is intact. In fact, our ASP in backlog is the highest it's been in recent memory, the $295,000,…

Thank you, Bob. With the exception of the modest reduction in community counts, which I discussed earlier, our other full year expectations are all unchanged or improved. We still expect to report positive net income, obviously, a major milestone for the company and in fact we are again raising our expectations for full year adjusted EBITDA. We now expect EBITDA growth of $45 million over last year, a more than 50% year-over-year improvement. That's a $5 million increase since our last call. We are also increasing the expected range of our ASPs to $280,000 to $290,000, and focusing our expectations for gross margins at the high end of our prior range, likely between 21.5% and 22%. We continue to expect 3 to 3.1 sales per community per month with a significant contribution from our soon-to-open communities. And SG&A as a percentage of revenue between 12.5% and 13% despite the higher ratio this quarter. All in all, things are progressing well for us. I'd like to take just a minute to acknowledge our teams' efforts. They're the ones who have put this company on their backs and carried us to a better place. They have been consistently generating better results with no excuses for legacy assets or the legacy debt load. They have demonstrated that we can outperform on absorption rates, while improving gross margins, reducing SG&A ratios and investing for the future. This is led to 3 straight years of large-scale increases in EBITDA, which will soon translate into GAAP profitability for our shareholders. So to my Beazer colleagues, thank you for your focus, your intensity and your accountability. For those of you on the call, thank you for joining us today, and thank you for your patience as we execute our improvement plans. We look forward to sharing our continuing progress in the quarters ahead. At this point, I'll turn the call over to the operator to take us into Q&A.

[Operator Instructions] Our first question comes from the line of Mr. Michael Rehaut from JPMC. Michael Jason Rehaut - JP Morgan Chase & Co, Research Division: The first question I had was on sales pace and you continue to make good progress, I think, given the challenges in the weather and in comparison to your -- many of your peers that several of them have had sales pace down 10%, 15% or so, and just wanted to focus on that for a moment. I mean, certainly, I think part of it is -- if I can put words in here, improvement off of levels that you weren't satisfied with and that you saw a lot of improvement opportunity over the last couple of years, but as you go forward, I mean, is that something that you would expect to improve a little bit further? I mean, certainly it's kind of in the range of your goals, but would you want that to be more in a 3 to 4% -- 3 to 4 sales per month or how do you see that changing from here on in?

Well, Mike, you've hit a couple of different points there. I mean, if we just start with the 2B10 plan, which isn't the be all and end all, it's our current focal point for financial outcomes. We have used 3.2 as kind of a target there. On a trailing 12-month basis, we're at 2.9. So I do think that there is an opportunity for us to make incremental improvements over the next year or 2. I think longer term, it depends on the environment we're in. There are clearly -- there have been in the past environments where 3.2 would be an immodest objective. I think in the current environment, it's a very healthy, if not industry-leading objective. And so I'd like to reserve the right to adjust that based on broader market conditions, but I think for where we are right now, the modest pace of the recovery, I think being in that low 3 range is a pretty good place to be. Michael Jason Rehaut - JP Morgan Chase & Co, Research Division: Okay. Also, the -- looking at the gross margins by region, the East, I guess it was a 200 bp decline year-over-year, and part of that, I guess, is due to a warranty charge, but was it -- the other part, either just due to higher operational costs in the quarter related to weather or if you can go into that a little bit more?

There was a warranty charge in the East, about $1 million in the quarter. And we are really in the midst of a significant repositioning of our divisions in the East segment. We've got a few closeout communities. We had costs associated with startups. So I think we are in the midst of a significant transition in the East. There is no reason structurally longer term why the East margins will be an order of magnitude less than in the rest of the company. We wouldn't be making the investments there that we are making if we thought that was the case. So I would say there is a little bit of translational noise. I can't really say that there is a ton of weather noise in there, but clearly some closeout and startup costs. Michael Jason Rehaut - JP Morgan Chase & Co, Research Division: Okay. Just one other quick one if I could. Interest not qualified for capitalization ran about $16 million in the quarter, it was $16 million last year, does that run rate change at all with the debt issuance and refinancing?

Yes, Mike, I think it will change a bit, but then also, if you remember, it's highly dependent upon how many new assets we bring on the balance sheet as we continue to invest. I think over the next several quarters that should trend downwards. Helped by the refinancing as well.

Next question comes from Ivy Zelman from Zelman & Associates. Alan Ratner - Zelman & Associates, LLC: It's actually Alan on for Ivy. Allan you gave us obviously a great detail as far as how the weather impacted the development side of the business, just curious if you can give us some commentary about how the sales, and also pricing environment progressed through the quarter? We have heard from some other builders that they have seen a pretty significant snap back in activity in March once the weather had been subsided a bit, doesn't look like you faced as much of the headwind as some of your peers giving a commentary on absorptions being stronger than you were expecting, but curious to see how that progressed through the quarter, and also kind of where you see the incentive environment today both from a company standpoint, as well as what you're seeing in the industry?

Okay. So that was a two-fer. We've got absorption rates and incentives. And I'll try and deal with both of those. So on the progression during the quarter, there is no question, January was not a huge number, it was fairly similar to where we were last year in January. February was a good step-up. Now, we always admit that in February, we expect and kind of create a step-up, because we were on one of our big national promos during that period of time. I think we've got very disciplined on not using that as an opportunity or an excuse to lower prices. But it rallies enthusiasm and it's kind of our kickoff to the sales season. It's disappointing that we've been copied and more and more folks are kind of pulling those spring selling events forward, but the fact is it still has effect on our results. And we did see broader-based less promotionally-driven traffic activity and sales activity in March. I think one thing I'm a little cautious about, and it's not a big negative, but it is the case that Easter was in March last year, and it was in April this year. And as I have sort of had a chance to look at partial April data, which let me just anticipate the question, I would tell you, I think March was a lot better than last year, and I think April is a little softer than last year, as I look at traffic level, I don't know what the April sales are yet, but I do think part of that March pickup that you're hearing about was a little bit of a year-over-year difference in the holiday calendar. I can't speak for others have I sensed a bit of that. I don't see that…

So that's an easier question. And I would say that we look across the footprint. I do think that prices are inching, and I use that word advisedly, inching upward across our footprint. I would tell you that there are certain product types and lot width where we have seen a substantial change in the number of competing communities. And just as a specific example, if you were to look at community counts in Phoenix, which I'm sure most of the folks on this call have done, they're up over 100 communities year-over-year on a base of about 300. You have 100 more communities in Phoenix. What's interesting is, if you break it down to what are the home sizes that are being sold and the lot width that are available, there has clearly been a dramatic bunching up in certain lot width and certain home sizes, and you can too many new communities too quickly attacking exactly the same buyer profile. I think those can create the dynamics that you are describing. Speaking for us, broadly and specifically about Phoenix, we have not seen an environment of net price reductions, but I can -- I just described for you the circumstances that I think might be culpable for what you've heard.

Next question comes from David Goldberg from UBS.

I wanted to start by asking a question I think you guys did an excellent job talking about some of the delays in terms of entitlements from the weather and even on the development side, but I was thinking about build cycles, and kind of where build cycles are now, kind of laying foundations to actually closing homes, and how that was affected by weather, and how long that really takes to normalize, and what that kind of does to return assumptions if it gets extended 10 or 15 days in a 100-day build cycle?

So there is -- that's a really rich question in terms of build cycles, because I think it's broader than just the context of weather. I would tell you that if the only thing going on in any of our markets were adverse weather, the good news is that you can "catch up" relatively quickly. And it's not -- it doesn't become a lingering problem. Land development is different. There is a linearity to the progression of land development where x has to come before y, which has to come before z. In the home construction process, you can multitask and you can be doing multiple things at the same time to cut -- try and catch up some of those days. So we did lose some closings because we weren't able to complete the homes during the period. I couldn't give you an exact metric on what that did to cycle time, but clearly it elongated as we just want to be able to be on the job sites safely or get our contractors on the job sites safely. I don't think that that issue, weather specifically as we think about cycle times as kind of a go-forward issue -- although I can tell you I was talking to my guys in Maryland yesterday and 6 inches of rain made for a decidedly tough day in the market. But I think the bigger question is cycle times more broadly, and I think there are a couple of markets for us, Houston and Dallas just jump off the page, where we're struggling a little bit to sustain our cycle times because of labor availability issues. And we have seen 5-day, 8-day, 10-day expansions in our cycle times in those markets. It's particularly acute on the framing side of the business right now, and it is the spring selling season. And so we've got different builders particularly in Houston, with different specs strategies. It's definitely created a bottleneck. And we tried to -- we've tried to deal with it by doing a better job at setting expectations with buyers upfront. Because it’s one thing to be 10 days late, it's another thing to be a lot more than 10 days late and not have communicated that to the buyer. So I'm worried about it from a customer experience and perspective not just the return criteria. I haven't calculated it. It's -- I'm sure it's just a simple algorithm to add 10 days to cycle time in a handful of markets. At this point, that doesn't feel to us like it's not changing our margin progression in either of those markets. There are some cost side pressures there. I'm happy to say that the pricing environment has been sufficiently strong that we have been able to absorb that. I will be worried if our cycle times across the country expand like that, but it really has been for us at least pretty isolated to those 2 markets.

That's great color. I just want to follow-up on the comment you made about starting to see some first-time buyers come back in the market, and clearly, I think, mortgage market liquidity loosening, we're starting to hear signs of that too, but I'm wondering if you think there is any aspects of first time -- the limited amount of first-time buyers in the market coming from a lack of supply. It feels like a lot of builders -- and you talked about Phoenix and you can buy a 3,500 square foot home on a number of different lots in Phoenix today that you maybe you had a lot less choice last year at this time. But I'm wondering how much of the issue, if any, do you think from the lack of first-time buyers is coming from a lack of supply and that the builders just haven't built the products, but demand might be there, not sort of like the levels that we saw in last cycle but better than what -- better than completely absent as some builders seem to indicate?

I think the death of the first-time buyers has been greatly exaggerated to paraphrase Mark Twain. And I do think part of the responsibility is ours as an industry. I think a larger portion relates to the legacy of the mortgage crisis and the housing crisis but what we're observing is that this first-time buyer population, perspective first-time buyer population is older and more affluent than prior first-time buyer cohorts. And they are bifurcating in some interesting ways. There is a larger portion of single-only buyers and there are larger portion of, what I would call, purely location buyers. And that's putting some pressure on us as an industry to understand and execute infill. So I think that we have some responsibility for that. But I think that the good thing is we haven't tried to solve the problem by building dozens of tracts of moderately priced and smaller affordable units in the desert, on a "build it and they will come" basis. Because I do think these buyers are a little different. I think the amenity feature, I think in the house, I think the access to transportation. I do think that the locations have to change. So I would say that, I think, if the focus was purely on price, that would be a mistake. And frankly, we have seen some successful examples of folks using either remote locations or dramatically reduced optionality to drive that price, and they can have it. Our view is, let’s be in the places where people want to be, these first-time buyers, but accepting the burdens those are harder to find and the product, the product is not a cookie cutter. We have got to be right for each market in those locations. So I'm -- because of that being my view, I don't think we, Beazer, can solve by problem by putting sticks in the air. There is a portion of the market that others can probably address by putting sticks in the air. We want to be very selective. I mean, we want to be on great real estate no matter what, not just have units for units sake. So I think your question is nuanced and interesting. I think what our reaction is a little different from what you've heard from some others about how to attack the first-time buyer opportunity.

Next question comes from Dan Oppenheim from Crédit Suisse. Daniel Mark Oppenheim - Crédit Suisse AG, Research Division: Wondering if you can talk a little bit more about SG&A. I think you were talking about increasing costs on the list of community openings costs there and so we'll see seasonal incentives, but it describes the season here as a modest recovery, and then also, in terms of plans for potentially using incentives strategically, do you think as we look at SG&A over the coming quarters we should be expecting a bit more from the incentives coming in there, understanding that it may be for some strategic reason there be it the modest recovery here?

Our incentives are in cost of goods sold. So they'd be up above, not there. I think the simple answer Dan is, you should look for our SG&A in dollar terms to be higher in the third and fourth quarter than it was in the second quarter, but keep an eye on full year between 12.5% and 13%.

Next question comes from Eli Hackel from Goldman Sachs.

Allan, just want to go back to some of the comments you made about credit loosening, clearly it has been slow so far this recovery. I wonder if you can just go on a little bit more detail about what you're seeing. Is it more from the nonbank originators than the bank originators? Is it on the FICO or is there some debt level reduction that they'd be able to -- that they're taking a little bit more detail that would be appreciative?

Yes, I think it's that interesting. It's the big money center banks that have seen their share start to erode, and I think it's because there are still these legacy issues. I can't imagine that dozens if not hundreds or thousands of lawyers and folks they have working on legacy problems, and so the folks that are I think a little bit more nimble working within the QM rules and not writing crazy loans are aggressive, they're hungry. I called it last quarter the animal spirits. And I see it every day with our mortgage choice lenders. They want to lend. One of the things that is going on now, and it's frustrating to me, I wish had a perfect answer for it, I don't. But I genuinely believe this. I think a lot of buyers, particularly first-time buyers and first move-up buyers, who were first-time buyers more than 5 years ago, have a very different view of what is required and what is actually required. I think people believe they've got to have 20% down. I mean, I'd love to have $1 for every news article about 20% down, somebody spouting off about how that's what's going to make America great again. I think it's gotten in people's heads. It doesn't take 20% down. You and I know that. And so, it is an ongoing challenge for us for -- to communicate to buyers that you have a great opportunity to qualify. You are well employed, you don't have a recent bankruptcy or a significant default. And even if you have those things, but they have seasoned and you have repaired your credit, you have an opportunity to qualify. And I do think that banks have to be better salespeople, I think builders have to be better hand holders…

And then just one quick one, just on the land held for future development, it sounds like you won't develop over the next couple of years, is there an opportunity, understanding maybe sell it sooner versus later to a third-party to reinvest that capital elsewhere within the company, or you really want to hold onto for next couple of years and develop it yourself?

There are different answers for different parcels. I think the Sacramento stuff, we like that market. I have been there a lot lately. We have activated a big asset. We've got other assets up there that are levy constrained. I like our position very much. I talked a little bit about it before, but if you look at an aerial photo of Sacramento, you'd find a across in the middle of the city where I-5 and I-80 intersect. We own essentially the northeast quadrant, the southwest quadrant of the busiest interchange in northern California. I like that land a lot. Now, we need the levies repaired, so we can go back to building in those locations, but those are -- I think those are excellent sites. We have other sites around the company where the right answer may be to sell them. I think our issue is what's the good stewards of our investor capital. And we'll make that decision asset by asset, but I don't think there is a stubbornness on our part or an unwillingness to monetize them where it makes sense. And without making a specific prediction that is not a thought process far removed from ours in real time.

Next question comes from Jay McCanless from Sterne Agee. James McCanless - Sterne Agee & Leach Inc., Research Division: First question I had, the guidance for positive net income for the year, does that exclude the onetime charge for the debt refinancing or doesn't included it?

We believe we will be positive GAAP net income including net charge. James McCanless - Sterne Agee & Leach Inc., Research Division: Okay. And then if you could repeat the gross margin detail for the back half of the year, I missed that?

I think what Bob said about that is that because we did have the benefit, a little mix shift and the warranty recovery in that 22.5%, we think that the back half will be below that, and we believe that the full year will be between 21.5% and 22%. James McCanless - Sterne Agee & Leach Inc., Research Division: And then just one other quick one, it sounds like M&A at least public to private is starting to pick up again, can you talk about the deal fall you're seeing there and where it compares to this time last year?

Yes, the deal flow is certainly up. I think, we've seen a lot of different deals. We continue to be very focused on our existing footprint and opportunities to drive more value from that footprint. Obviously, we haven't bought anything. You'd know about it if we had. I think we look at it like I guess other builders would, and in some cases it's an opportunity to replenish or add to our land supply. In others it may represent something more strategic as to a buyer profile or a product expertise. But I would say that there are several opportunities a month that we become aware of, maybe it's even higher than that. There's a lot of drama and a lot of complexity associated with M&A and so we try and only spend time thinking about those where we think it we're really the likely you are a right buyer for it. There are lot of shiny objects that go floating by and we wish others well, but we don't feel compelled to chase them all.

Next question comes from Adam Rudiger from Wells Fargo.

On your prepared remarks, Allan, you talked about, I think, an opportunity to grow gross margins a bit more in contrast as in peers who have talked more stable ones, and I was wondering what you think the biggest leverage were for that continued expansion?

Yes. I admit, it's not really natural for us to sort of beat our chest, but I think that one of the things that's missing, is we've got pounded and appropriately so if our margins have been below our peers, but a lot of them had the great luxury and the foresight, they're all geniuses but they have loaded up on land in '10, '11 and '12, and I wish we had. I'd love to have the problem that my margins are too high. But we don't. So we suffered by that comparison over the last couple of years, but there is a regression to mean problem that they have gotten that we have different sides of. We are out competing with them in the market every day and have been for the last 18 months or so. And so the deals that we're putting on for '15 and '16 are the same deals that they are looking at for '15 and '16. From where we sit, we see opportunity. I think if we had been burning off of legacy positions, which were extraordinary purchases, it would be able a little harder to sustain. So it's -- I'd love to tell you it's a lot more complicated than that in the thousand things that we're doing to raise gross margins, and that's all true. But the bigger picture and simpler answer is, we just don't have the benefit of some of those well-timed legacy purchases.

Okay. And does that suggest that the deals you're putting under -- for purchase agreements now have higher margins than current margins?

We are buying deals that are supportive of our ambition to grow gross margins.

Okay and then secondly on margins, I look at your 2B10 plan, you talk about 22% growth, 12% SG&A, so that gets you to 10% margin although, and that's normally what people talk about as maybe a normal margin for the builders, but usually that's an operating margin, not an EBITDA one. So I was wondering if you threw the interest in there that reduces that goal a bit and I was wondering if that was what you think is the appropriate normal for Beazer, or is that just more of an interim goal?

I think when you're hiking across the desert, you identify a point on the horizon and you sort of set your sights on that. It doesn't mean that's the end goal. And that's kind of what 2B10 for us was. $2 billion people can kind of relate to that and 10% is a round number. I wouldn't interpret it a lot more deeply than that. Our ambition extends beyond both of those numbers. But I think at least it became specific and actionable stretch but not insane on both the revenue and on the margin side, so it sort of served that purpose. But I think our opportunities and our ambitions will exceed beyond both -- it will exceed both those numbers during the cycle.

Okay, makes sense. And thanks for all the metaphors, makes it a lot easier to understand the -- walking the desert.

The team here is not as enthusiastic about all of my metaphors and analogies, some of them work better than others. But thank you.

Next question comes from Joel Locker from FBN Securities.

Just I was curious about your cost per square foot, in the second quarter. What was it and maybe if you have it for a year ago also?

Joe, we don't break that out because I always wonder about what's included and what's not included. But I think if you use direct cost of around $40 a foot, you are in the right range. It's up a little bit in the last year, primarily in framing and materials and labor. But that is not a metric that we have tried to sort of wrap our hands around and communicate externally, because if our mix changes and all of a sudden my cost per square foot changes, and I can't tell you whether it was labor or materials or whether it's because we're building attached products instead of detached or 2-storys instead of 1-story. But $40 is still a pretty good number.

All right. And on your underwriting you have, do you include any appreciation on the home price or the cost side?

We don't. And that's a stubbornness on my part. My view is I'd rather know what return I'm bargaining for. If everything stays the same, rather than at this point in the cycle trying to be smart enough to guestimate what might happen to prices at this location at specific dates in the future and what might happen with labor, materials, cost, by trade at this location in the future, it does end up being opportunities to make lots and lots of assumptions and I think adding up more and more assumptions doesn't make the analysis more accurate.

All right and but what about hurdle rates, do you have a minimum IRR just -- I mean...

We do Joel and I -- others are probably going to hang up now because they're tired of me talking about it but we use what we call modified internal rate of returns, it's actually an Excel thing, we didn't invent it, but we forced the reinvestment rate in our cash flows to 15%, which is kind of a rough proxy for a unlevered cost to capital, and that therefore compresses a lot of IRRs with a 15% investment rate are really dramatically reduced in the MIRR math, but we target 20% -- we targeted 20% MIRR.

All right. And you still find a deal at those range?

We are and we've done deals above that, and we've done a few deals below that. And my view is, is 19% okay? It might be in a particular location with a specific risk profile. But I'd rather consciously make that bet than convince myself it was a 20%, because we were smart enough to guess by how much prices we're going to increase in March of 2016.

Next question comes from Alex Barrón from Housing Research Center. Alex Barrón - Housing Research Center, LLC: I guess I was just saying that I'm trying to get my arms around the SG&A this quarter and how it relates to the remainder of the year. I was just trying to figure out if there is anything that's onetime in nature, I know you mentioned you're opening new communities, but I guess that's -- I'm assuming that's going to continue to happen every quarter?

Yes with that I think -- let me help you with that, Alex. SG&A in dollar terms will be higher in third and fourth quarter than it was this quarter. But lower in percentage of revenue terms and focus on 12.5% to 13% for the full year.

Our last question comes from Michael Rehaut from JPMorgan. Michael Jason Rehaut - JP Morgan Chase & Co, Research Division: Just circling back to a couple of things, I just wanted to make sure I understood. A little clarifications if you will. First, Allan, if risk is going back on the incentives question, and I appreciate all the additional detail and thoughts around that, but I was hoping also to get a sense, I mean, you mentioned that pricing was kind of inching upwards across the footprint. Incentives down 1% year-over-year and again, understanding incentives aren't the end on deal, but just directionally, what did you see in incentives as well on a sequential basis this past quarter versus the previous quarter?

Boy, when you go from October, the first day of the previous quarter to March, the last day of the most recent quarter. Obviously, you're covering from tip to tip, really different environments, seasonal patterns and otherwise. So I have to tell you, I think that the sequential change for the quarters was pretty modest. Certainly less than a point in terms of improvement. I think it was modest improvement, but I just don’t spend a lot of time thinking about that and I'm sorry I don't have a metric for you. It didn't feel like we did things very differently. And so, when we end up looking at numbers at the end of the quarter, the weighted average moves a little bit but there wasn't any -- there was no enduring or searing message that sort of comes through there. I'm sorry I don't have anything better for you. Michael Jason Rehaut - JP Morgan Chase & Co, Research Division: No that's fine. So then basically, you are saying is the -- you think it's essentially stable, more or less?

Yes. I think it's essentially stable. Michael Jason Rehaut - JP Morgan Chase & Co, Research Division: Okay. And then also, again just a clarification, Bob, on that interest question, in terms of the savings from the actions you did on the debt side, given where your inventory levels are, all else equal, in other words, not assuming any changes going forward, that wouldn't have any type of at least immediate impact on that, let's say the $16 million that you did in the first quarter that was not qualified, that's more of -- it's still kind of relates more to the direction of the inventory balance?

Well, I think it's absolutely true Michael that our interest expense going forward will be less. So therefore, all things being equal, we will drop a bit less into the income statement because of that. As inventory improves and continues to grow, that will ratably also decease the interest expense below the line as we move forward.

But I think the simpler way to think about it, is if you kept inventory exactly flat, that savings would dollar for dollar show up in the disqualified interest, that's the only place it would go. What Bob was trying to give you Michael, is a little more nuanced view that we expect the inventory balance is going to grow. So there are going to be a couple of things reducing the interest below the line in subsequent quarters. Michael Jason Rehaut - JP Morgan Chase & Co, Research Division: Right, right. Well that's what I was getting at in that. You already had that first driver of -- as inventory balance grows, but aside from that, with this action you did $60 million last year, you had a -- you're going to expect roughly $8 million in savings, so inventory balance aside, you're starting from a $8 million lower base.

Yes, figure about $2 million a quarter.

That concludes today's conference. Thank you all for participating. You may now disconnect.