Good day ladies and gentlemen, and welcome to the first quarter 2008 Pulte Homes Inc. earnings conference call. My name is Katie and I will be your coordinator for today. At this time all participants will be in a listen-only mode. We will be facilitating a question and answer sessions toward the end of this conference. If at any time during the call you require assistance, please key Star followed by a 0 and the operator will be happy to assist you. I would like to now turn the call over to your host for today, Mr. Calvin Boyd.

Thank you, Katie. Good morning and thank you for joining us this morning to discuss Pulte Homes financial results for the three months ending March 31st, 2008. I am Calvin Boyd, Vice President of Investor and Corporate Communications. You have all had a chance to review the press release we issued last night detailing the Pulte’s first quarter 2008 operating and financial performance. On the call to discuss these results are Richard Dugas, President and Chief Executive Officer, Steve Petruska, Executive Vice President and Chief Operating Officer, Roger Cregg, Executive Vice President and CFO, and Vincent Frees, Vice President and Controller. For those of you who have access through the internet a slide presentation at www. Pulte.com will accompany this discussion. The presentation will be archived on the site for the next thirty days for those who want to review it at a later time. As will prior conference calls I want to alert everyone listening on the call and via the internet that certain statements made during the course of this call must be considered forward-looking statements as defined by the Securities Litigation Reform Act of 1995. Pulte Homes believes such statements are based on reasonable assumptions but there are no assurances that actual outcomes will not be materially different from those discussed today. All forward-looking statements are made based on information available to the company on the date of this call and the company does not undertake any obligation to publicly update or advice any forward-looking statements as a result of new information in the future. Participants in today’s call should refer to Pulte’s annual report on Form 10K for the year ending December 31st, 2007 for a detailed list of the risks and uncertainties associated with the business. As always at the end of our prepared comments we will have time for Q&A. We will wait until then to open the queue for questions. I will now turn over the call to Richard Dugas for opening comments. Richard?

Thank you Calvin, and good morning everyone. As you saw in our earnings release last night the first quarter 2008 can best be described for Pulte as making the best of a very unpleasant situation. Clearly the home-building environment has continued to erode during the first three months of 2008, as extremely high levels of inventory, primarily existing home inventory, combined with very weak demand for new housing, has left the industry in a difficult spot. High supply and weak demand do not make for a very pretty picture in any industry and home building is no exception. Despite the significant headwinds the entire industry is encountering, Pulte made progress in many key areas in the first quarter. While we are disappointed at the sizable land charges reported, they are a product of the overall environment we are facing and only tell a part of the story for the first quarter. Our operational performance was very respectable in the first quarter, and we are very proud of our achievements in many respects. At some point our industry, and those that follow it, will move from these large land impairments and other charges and begin to focus again on earnings and other true operational metrics such as sales, closings, overhead leverage, inventory turns and the like. Pulte intends to be near the head of the class when that occurs. Let me spend a minute detailing our accomplishments in the first quarter. We ended the first quarter 2008 with approximately $1.1 Billion of cash on hand and no debt outstanding under our revolving credit facility. This level of cash was higher than our internal projections largely due to relatively strong sales and closings bringing cash in, plus the receipt of a $212 Million tax refund I the first quarter. We ended the…

Thank you Richard and good morning everyone. The first quarter homebuilding net new owner rate decreased approximately 36% from the first quarter last year, and approximately 10% less communities versus the same quarter last year. Revenues from home settlements for the home building operations decreased approximately 22% from the prior year quarter to approximately $1.4 Billion. Lower revenues reflected lower unit closings that were below prior year by approximately 13%. The average sales price decreased approximately 11% versus the prior year quarter to an average of $295,000 per home. In the first quarter land sales generated approximately $2 Million total revenues which is a decrease of the previous years quarter which was approximately $39 Million. Home building gross profits from home settlements, including home building interest expense for the quarter decreased versus the prior year quarter by approximately 330% to a loss of approximately $449 Million. First quarter home building gross margins from home settlements, as a percentage of revenues, was a -32.1% compared with 10.9% in the first quarter of 2007. The decreased margin conversion versus the prior year quarter is attributed to the lower closing volumes, land and community valuation adjustments, in addition to increased selling incentives. Adjusting the last quarter for land and community valuation charges of approximately $599 Million and a favorable House Warranty reserve adjustment of $5 Million the gross margins for home settlements as a percentage of revenues was at a run rate of approximately 10.4% for the quarter. The current quarter benefited from the impact of prior quarters’ land and community valuation adjustments by approximately 486 basis points for approximately $68 Million. Additionally, home building interest expense increased during the quarter to approximately $58 Million versus $48 Million in the prior year. Included in the interest expense of $58 Million is an additional…

Thanks Roger, and good morning everyone. Richard and Roger have already touched on the difficulties we faced in the first quarter of 2008, which in many ways are consistent with the factors that hampered our 2007 performance including high inventory for new and existing homes, tighter mortgage liquidity and weak consumer demand. We believe that our near-term strategy focused on cash generation, maximizing sales, and reducing our cost structure continues to be the right way to go. I will dive further into our progress against this strategy. One of our objectives is to keep new investment and land development and acquisition low. Reducing the supply of lots under control to sales and closings and generating cash in each community. At the end of the first quarter 2008, Pulte controlled approximately 140,000 lots down 7% sequentially from the fourth quarter 2007 and down 33% from the same period last year. For the remainder of 2008 we will continue our focus on reducing land inventory, limiting future land investments to current projects and take downs on finished lots were absorption paced and margins are acceptable. Additionally we will continue to sell lots and land on a local basis as we typically find that these types of transactions net us better pricing relative to bulk sales. We continue to make progress in managing our speculative home inventory. We entered the quarter with 3400 specs down 19% sequentially from the fourth quarter 2007 and 22% lower than last years first quarter. We have approximately 1100 finished spec homes or less than 2 finished spec homes per community. Our finished spec levels are flat versus a year ago and down slightly from the fourth quarter of 2007. Hats off to our field operators who managed to keep this spec inventory relatively low in the midst…

Thank you Steve. I want to thank everyone for your time and attention on the call this morning. We are now prepared to answer your questions. So that everyone gets a chance, participants will be limited to one question and a follow-up after which they will have to get back into the queue. At this time we will open up the call to questions.

Ladies and Gentlemen, if you would like to ask a question at this time, please press *1 on your touchtone telephone. If you’re question has been answered please press *2 to withdraw your question. Please press *1 to begin and please hold while we compile the list of questions. Your first question comes from the line of Alex Barron from Agency Trading. Please proceed.

I wanted to see if we could talk a little bit about the cash this quarter? You said that you received $200-something from a tax refund, but it doesn’t seem like the cash balance went up by that much. So can you talk about where the difference lies, please?

Yeah, Alex, I explained that in my comments, but basically the components were inventory came down by about $111 Million, that contribution came from cash coming in. Tax refund was about $212 Million, and payables and accruals changed by about $281 Million and all other would be the loss and anything else rounded out the balance of that to get to about a $10 Million increase for the quarter.

OK, and $2 Billion dollar projection include significant land sales or where does that come from?

No, basically that is going to come from operations as we talked about last quarter. We continue to see the ability to drive or inventories down. Less investment in land, acquisition and land development and also from generating sales. But no bulk land sales at all.

Ok, my second question has to do with this Kyle Canyon joint venture? It seems like last night Temple Hill filed for bankruptcy and I am wondering how does that effect you guys?

Well, specifically on Kyle Canyon- I can’t talk about that due to confidentiality agreements, and I can’t comment on the Hill transaction either.

Ok, thanks a lot.

Your next question comes from the line of David Goldberg from UBS. Please go proceed.

Thanks, good morning. I was wondering if you could give us any idea Steve, I know you mentioned that Del Webb continues to out-perform in the cancellation rate perspective, but what I’m trying to get an idea of, do you look at it from a return on capital perspective and how Del Webb would fare compared to the traditional home building business, and maybe some thoughts on tenure of communities in Del Webb and where that stands on average now as we look forward.

David, this is Roger. Metrics on returns today are somewhat upside down, so it is very difficult to give you what that it. Most of them are negative in the environment we are in today with its impairments. But typically we are looking for the same type of return on the Del Webb projects, so going forward and the ones we have put on in the past have been relatively the same as we have done on the traditional side. So our expectation there isn’t lower. It’s just the size of the communities and the time period that those communities are open are much longer, but none the less we are looking for roughly the same return on those.

So there is enough profitability in the sale price still, even though terms are upside down today, there’s still enough profitability to make the return similar between the two businesses? Roger Clegg WE think again going forward that certainly the environment has got to change. You generate returns not only on price and profitability but on the velocity of those projects as well, so all those in combination, yes we feel very good about where we are with the current conditions we have.

And David if I could add we have commented in the past that generally speaking the Del Webb Communities perform at or slightly above from a return perspective the traditional communities. And like Roger said return is a little bit of an oxymoron at the moment, but relatively speaking we very much like our Del Webb positions.

Thanks. And I guess the second question would be would you consider changing your policy towards a bulk land sale if the annual provisions were changed to give you a four-year carry back versus the two-year now and I think it was interesting Steve that you mentioned that you prefer to do the land sales on the local basis so you can get a better price, but again I am thinking of the overall cost of doing individual land transactions versus a bulk sale. So maybe you could comment on where that stands and how that might change it if Congress enacts new legislation.

A couple of general thoughts on that. First of all we like our land positions, and from our perspective we have cash on hand and from operations as Roger indicated which effectively is closing more homes and bringing in more dollars than we are going to spend on either new acquisition or development, we think that it’s the most sustainable way to generate cash and other than a couple of selected parcels that w might like to part with, we like our land position. So we are generally not in favor of doing the bulk land sales due to the dramatic discounts you have to take in order to get somebody to be interested. As you’ve seen they’re anywhere from $.20-.30 on the impaired dollar. And I think that from our view as long as we have the balance sheet to be able to weather through it we would prefer to be able to take advantage of those land positions which have been written down to a very fair value given the current market conditions, that we’ll still have the opportunity to take advantage of the profitability on that land when conditions improve. If the NOl laws changed I don’t suspect that would change our view on it dramatically because we have cash on hand. And all things are subject to the environment going forward but if things continue to play out and we can continue to focus on having up to $2Billion or more by the end of the year I don’t suspect we are going to be in the bulk land sale business.

Ok, thanks guys.

Your next question comes from the line of Michael Rehaut from J.P. Morgan. Please proceed.

Good morning everyone. First question is on pricing throughout the quarter. You’d kind of given out order ASPs that was actually up sequentially a little bit, but down greater on a year-over-year standpoint. I was wondering if you could just address that number one, if there was mix involved, or what’ s your sense of apples to apples sequentially. And then if you could drill down to a more regional level and perhaps talk about some of your more harder hit markets if you saw order price or pricing fall throughout the quarter or where the trend was perhaps more severe?

I think sequentially it was probably mostly mixed relative to the fourth quarter. But like I said in my prepared comments, the pricing environment continues to be difficult out there. We see some pockets of stability as conditions change relative to other active new selling communities decreasing and resale opportunities- people pulling their house off the market, those type of things. But on an overall basis, I wish I could point to an area where we are seeing the overall price stability. WE are just not seeing that in the market today. We are seeing it continue to soften almost every p lace. And in some places, i.e. Florida, it’s particularly difficult if you drill down into that. We have seen probably more decreases in pricing in the overall pricing environment there, based on an anecdotal basis. I don’t have the percents handy in backlog, Vinnie may have those for that region. I can’t give you a point-to to say that it is stabilizing in any particular place. I would tell you this, and if it continues to decrease and it is, it is decreasing at a little bit slower rate. In other words we have a lot of room to move a year ago. We just don’t have that much more room to move any more and we are packed in there pretty tight with all of our competitors.

I guess just to end that point Steve before I go to the second question. Are you seeing, given how Florida has already come down so much and you’re saying that it is still not necessarily at a point of stability, what we’ve been hearing is that on a small and mid-size private homebuilder side that there are potentially dozens if not hundreds of looming bankruptcies . Are you seeing that component of the market getting more aggressive in terms of trying to close out their business, or did they pose an incremental negative force in the marketplace? Or is it just more of a general trend than even some of the public still getting aggressive with getting spec out the door?

Yes, as it pertains to that we are seeing a lot of mid-sized local people having difficulty continuing to sell in this environment. I couldn’t give you any information on whether they are teetering on bankruptcy or anything like that. Our local operators tell us though that it is very difficult for them conversely to what you’re thinking, it’s very difficult for them to price, relative to where we are today and what we can move inventory at, so as demand continues to subside in those markets, supply is a little bit consumed as operators close their doors. In a lot of markets we are seeing community counts start to drop relative to that. But Mike I think that comes out the other side eventually because those properties and those investment s get back into the hands of banks sooner or later if those builders end up going that way and that remains to be unknown in those marketplaces as to when those active communities come back out either as relatively underpriced to market value deals, or whether the foreclosure process is long and drawn out as if often is, and we don’t see the inventory piled right back on the market any time soon. Suffice to say if there is a continuing decrease community count in a lot of these very competitive areas in Florida, and that is driven by the inability for some people to price to what the market conditions are there.

Thanks Steve. And I guess my last question is also relating to price. What are you seeing on the resale market side? The comments that yourself and Roger and Richard made is that obviously the resale market inventory is still a big issue. New home prices have come down in many instances below the resale price and resale price is starting to move, but what is your overall kind of feel? And if you have any specific anecdotal or color on market-by-market, where perhaps the resale price is starting to move, I think you mentioned on the coast of California? Any further detail there?

A couple of points. First of all, new home pricing is way below resale, not just in some places below resale, it is substantially below in almost every market. Secondly I would tell you that we saw some statistics in the late fall of last year that indicated in markets like Phoenix where we may have lower price 30-35% from the peak that resale by that point had only come down 8-9%. There is now evidence that it is coming down pretty fast and it appears that the lag effect is beginning to wane. In other words resale pricing is beginning to come down pretty substantially. I think you saw the ***** that is predominantly resale come down 10-11 % in the last twelve month period. I expect each reporting period now going forward you are going to see if come down, because it has to in order for that to happen. I can’t tell you what gap that is today but it is clearly that difference between our 30% + in resale and high single digits has closed some. I would suspect it is down another 4-6% in the last quarter.

And has that applied incremental pressure on new home prices as the lag narrows, or the spread narrows?

I think it all creates pressure Mike. We look at all supply- new home and resale supply. We look at the consumers options that are out there. Certainly in some submarkets it is definitely putting pressure on us. All things considered people still would prefer at the same price same value equation , people still prefer new over resale. If we can drive them back into new, that’s what we continue to try and do, but it’s putting pressure in a lot of our communities on our pricing. It continues. I suppose the other side of that is as pricing comes down, and people can sell their homes, its where do they choose as an option to go live? Versus if it is a foreclosure sale back to a bank, and a statistical number versus a real sale. Right?

The next question comes from the line of Ivey Velleman from Velleman and Associates. Please proceed.

Thanks, good morning guys. Your strategy relative to others might be a little big different. Could you elaborate? My first question would be on spec strategy, realizing that you still want to have some spec on the ground, what your plan is, and as you think about a lot of markets, D.C. we hear only about 90% of what’s being sold are spec units. That says that people don’t want to take a chance on going to contractors, or builders aren’t willing to do that, or banks aren’t willing to finance it, or however you want to phase it. What is your plan as it relates to going forward putting new stick and bricks in the ground or foundations, without an order?

Ivey we continue to want to have a very limited amount of spec. Our goal is to start less than 10% of our production as spec, but with cancellations still looming we’re not going to get very aggressive. Having said that, I think your statistics are pretty accurate that most of the inventory being sold is spec. We haven’t had a problem keeping enough spec inventory out there to keep velocity because of the cancellations, and as Steve indicated we still have a little over 3,000 spec units. That number seems to be coming down slightly but not dramatically. So I suspect that is likely to continue, going forward. But as a policy we are starting, unless it is a multi-family building where we’ve sold half the building or a little more, we’re starting very few new spec.

Looking at the government plan and all the stimulatory initiative by various parties involved which of the proposals do you think will have the most impact and if you were sitting and Washington and you could draw up a plan what would it look like versus what you see today which has the least amount of merit in your opinion, and probably doesn’t get through?

Well, I think there are two different things going right now. One is the series of initiatives you see being proposed that are more social in nature to help out folks who are in distress versus the real stimulus ideas which are there. Our company along with several of our peers have been advocating for specifically three things, Ivey. Number one, far and away would be a temporary large tax credit say from now until the end of the year in the range of $10-15,000 a home that would allow people to have an incentive to get in the market. There’s a lot of evidence of people on the fence who feel like pricing is terrific, deals are strong, but they just don’t want to catch a falling knife. That’s number one I would say by a factor of several over the next initiative would be the biggest help. Second would be FHA modernization on a permanent basis to keep the higher loan limits. Permanently in place versus just through the year which is currently what’s in place. FHA financing has become a godsend for the housing industry, particularly for those who play in the $300,000 and below price range. It has become a huge percentage of what is being done right now. And then thirdly would be some NOL relief for additional years of carry back, which we believe would help the unorderly liquidation of land and inventory that you are seeing in some cases right now. So those three areas. There are other proposals that the big builders working with the NAHP are working on, but those three specifically are being talked about actively. We’ll see what happens.

What about the one that had the least impact, like the Dodd $300 Billion for allowing forbearance and foreclosures, do you think that would help the housing market?

Well, I don’t think that anything in that area would hurt. Unfortunately some of the plans that are being discussed, while they certainly may help folks in distress are not going to be real stimulus. And if you ask me and my peers I think we would say the one thing that would be a direct shot into the vein of housing would be this tax credit idea. And a lot of the items aside from that are going to take longer to play out. Even if FHA modernization, which we think is really going to help, it’s not going to induce someone to buy who is not interested today. So, I think that’s where we really need to concentrate our efforts as in industry.

Can I sneak in another one? Just thinking about what is going on with builders who are more in distress especially the private builder today with capital access now being shut off, and we’re seeing defaults in the single family home building arena, significantly increased. As the banks are doing work-out and moving into REO, even trying to sell loan packages, how does that impact your business and all the supply that might be coming back to the market? Would it be finished lots, and maybe Steve you can answer this end values. You guys obviously had a bigger charge than what we have seen so far by others in the public builder arena in terms of impairments. We do suspect that this could further extend the duration of more impairments to come for the industry?

Ivey I’ll start the answer and then I’ll turn it over to Steve for more specifics. Two quick things. One thing on our charge that Roger tried to point out is a significant portion of the charge is in phases that are way out in the future in existing properties, and by nature out strategy of some of our longer positions in specific communities causes that when the pricing environment continues to decline. So, I think he highlighted that approximately half of the Southwest charge is for things that are not yet open and in some cases will not be open for three or four years, yet they remain very strong property. So, difficult as it is to stomach, they are in many cases we are very excited about the long-term potential on. Getting to your question specifically, I think the short term is that it’s going to add increased pressure and increase supply on the market overall. The flip side is that our operators are clearly talking to all of the banks and other financing sources right now, and are likely to have opportunities that are very capital light going forward once they work through the process. Now having said that, I will tell you that most of our operators right now, and Steve you can comment on this, are not yet finding anything that they feel is priced appropriate to even consider. Steve?

To add to what Richard just ended up with there, Ivey, there is a lot of activity going on right now, and I would tell you that it is pre-foreclosure activity. Given today’s pricing environment, the banks are in a position to potentially own this property, still aren’t realistic for what they want to let it go for. Secondarily the question that you are asking about, does it create a supply glut? Obviously that is always the potential, but the reality is who is going to build on that? In other words, if they are willing to also fund a lot of the working capital, the sticks and bricks capital, I think that creates a supply problem. But if they’re not, if the loan committees, and a lot of these local smaller banks and regional banks, are simply saying no way are we going to fund the sticks and bricks capital. We’re not putting another dime into that real estate, especially if we’re having to take this big of a hit on it. I think that delays the coming to market of that. Something that has always hampered our industry, quite frankly, was that if you had a pickup truck and a hammer you could get into the business if there was a developed lot there. And this is a bit different given the capital markets situation and the ability to simply get working capital. But obviously if the banks feel like they need to supply that as well, that could create an inventory issue for us. And that’s why as Richard said our operators are staying very close to what’s happening with some of these opportunities. Quite frankly we could be in a position to pick up lots on a rolling option basis that are priced very below market and still provide the working capital and enhance our profitability. We stay tuned into that very closely. And also there are fee opportunities for our company just in managing the real estate that may come back. So we’ve got certain infrastructure in place where we could do that.

And Steve I think you guys will be a win-win for longer term. It’s great for the public. I think the problem though is if you are buying lots at pennies on the dollar through any mechanism and the banks are selling them for pennies on the dollar which is likely to be the case, it certainly marks to market the land in your portfolios lower, potentially? It takes down land values overall, whether it be finished or undeveloped. So that’s the risk, right?

Yes it does, it potentially does Ivey. But it also could, depending go the location of the community, could allow us to mothball our community and an opportunity across the street using the same models and those types of things, we haven’t seen that yet, but boy I tell you what, we’ve got our eyes open to it just as you have suggested.

Thanks guys.

The next question comes from the line of Nishu Sood from Deutsche Bank. Please proceed.

Good morning everyone. I would like to follow up on the issue of impairments. Some of your peers have been out publicly saying that they think that the worst of the impairments are behind us. So obviously given the size of the impairment charge you took this quarter and the difficult environment most of the guilders continue to face, do you think that it is just too optimistic to be saying that? Or are we looking at an issue of situations where a builder has longer-term projects such as you folks, or builders that are sitting on a shorter more developed land supply situation?

I have no idea how a competitor could make that statement. The pricing environment has clearly declined and the impairment models suggest that with pricing declines and paces being hard to come by, that land needs to be impaired further. Again, I can’t comment specifically on why someone would make that statement but that ‘s not what we are seeing.

Ok, and just digging in a little more specifically on a particular part of your impairments this quarter. You mentioned impairments on some communities that you are mothballing. I was just wondering, considering that the way that the mechanics work, there is an un-discounted trigger to take an impairment, but once you take the impairment it is done on a discounted or PV basis. If you are mothballing something, and you haven’t really adjusted your pricing in that community, you’re just simply saying we’re going to have to generate these sales later, probably at the same price but later. How does the mothballing decision trigger an impairment in that type of situation.

You can’t ignore it, because the asset is there and you call it mothballed and aren’t working on it. But when you underwrite it, at an average of $300,000 selling price, we look at those – in our examples we look at those every single quarter. The longer it is out there you do assume maybe some price appreciation on it. If it is out three or four years before it ends up starting up. And then you continue to watch where you are today. So what happens if the current pricing continues to fall away, and you’re looking at something that is in the future, the ability to suddenly get a 10% price increase from where you are versus a maybe 20-30% price increase becomes a little more challenging from a modeling stand point. So at that time you go back and say that realistically I probably left my pricing too high to realize the projects out in the future like that. You have to balance it all of course because it’s very difficult to determine 3-4 years out and in the life of a project it may last 4-5 years after that as well. There’s a lot of art that goes with it as well as science, but nonetheless you have to be consistent with the way you approach it.

One quick follow- up on the deferred tax valuation loans you took. You basically took an allowance against the entire amount of the deferred tax benefit that you would have gotten this quarter. As we go forward here, I mean part of that I would imagine is because the impairments that you are taking as you described on later phases or on longer terms you wouldn’t expect to recover that within this year, or even next year. Is that the kind of pattern we would expect to follow in the next quarter if there are more impairments that it would basically offset? That you would take an allowance against the entire deferred tax benefit?

Yes, unless we saw something that was going to change our view of what the bring-back was, and for instance if we were going to have large land sales you might make an adjustment on that, or we saw velocity of our projects all the sudden increase. The opportunity to recover that would be much shorter in our view to be able to recognize it earlier. Yes, we are certainly taking a very conservative approach today looking out not knowing where it’s going in the forward year in the future.

Your next question comes from the line of Megan McGrath from Lehman Brothers.

Hi, good morning. A couple of follow ups. In terms of the inventory situation, I wanted to see how you guys are approaching the foreclosure issue? What are you seeing out there in some of your markets and are you trying to price at all in relation to some of the foreclosures you are seeing in or near your communities?

The reality is that as I’ve stated before, all for sale housing that is within the circle of an active marketing community for us, becomes relatively speaking, competition. So clearly foreclosures , especially in the markets everybody is aware of, the Las Vegas’, the Phoenix, AZ, the north inland empires and parts of southern and northern California, Sacramento, and I could go into just about any market in Florida, present pricing and marketing issues for us. The reality is that not everybody wants to buy a foreclosed home, even at the price that it’s at. But it’s not like a dollar for dollar trade-off or anything like that. Secondarily, just as there are investors for land in today’s current environment we are seeing private investors and markets go in and scoop up large chunks of foreclosure inventory from banks, right after the foreclosure sale takes place at a discounted value and in many cases they have the mentality to hold them and sell later. It’s just so dynamic and all over the board. It’s hard to give you one answer as to what might be going on in a particular market, but generally speaking, the advent of more inventory coming onto the market at more aggressive pricing is not a good thing.

Ok, thanks. And just quickly on the credit situation. You gave us some metrics earlier in your remarks on the percentages of loans that you were doing. And certainly the jumbo market, the non-conforming went down considerably. I wanted to hear your thoughts on the jumbo conforming markets that are higher than $417,000 and are you doing any of those? And what you are seeing there? Is it a supply issue or a demand issue? Are people not able to get these loans, or are you just not seeing the demand for them?

It is both quite frankly. It depends on where you are in the market. Certainly a lot of the underwriting criteria changed. It’s spotty wherever you are in the country based on the pricing of the homes. Again if you look at our average price we are falling into not so much into the jumbo area, so again it is spotty, it’s based in credit worthiness as well, from the individuals. Pricing is a part of that as well. It’s a combination of factors.

Ok, thanks very much.

The next question comes from the line of Jim Wilson from JMP Securities. Please proceed.

Good morning guys. Just a couple of Del Webb questions. It was great to hear the specific impairment at the Webb level of 119. Also to contrast it, can you separate the amount of assets of inventory that is in Webb that is in dollars versus for instance Pulte?

No, we don’t have that Jim.

Is that something that could be available in the future since you are giving impairments now for one?

We’ll have to take a look at it, yes.

Ok, and then a more general question. If you could contrast Webb and if it better works primarily in its primary markets like the southwest, how you see its sales pace and see if you mention profitability of this particular is going versus your conventional product?

In a word Jim, better. It’s better than Pulte.

A lot better or a little, or any other color?

A little better. We still fight the inability to sell the existing home which is the primary source of capital for our primary Del Webb buyers so generally speaking it is better than the traditional built business.

If this will help, you’ve got two things going on. The inability to sell a home and the desire to buy a home. I think a lot of the traditional buyers are hampered by the inability to sell, but they are also afraid of pricing. The Del Webb buyer is not nearly as afraid of the pricing environment, they are making a longer term decision. They are ready to buy they are just having difficulty with their existing home. It is better and primarily because they have at least one of those two factors solved for them.

And any of the other things you have mothballed Del Webb or is it all conventional product?

There is a little bit of both in there Jim. There are some that are Del Webb as well.

OK, thanks.

Your next question comes from the line of James McCanless from FTN Midwest.

Good morning everyone. I wanted to take up the competitive issue you were talking about Steve and the fact that the briefcase and the small builders just don’t have access to credit right now. How much longer do you think that situation lasts and when does it turn into a benefit for Pulte?

Jay, I do not know how much longer I think that will last. Roger could probably speak to where the capital markets are going better than I could. I think that in some way it is already a relative benefit in that as the demand pool shrinks it is shrinking the supply pool as well in the environment that I talked about with the community count going down. Maybe Roger could speak to capital, or Richard.

I can speak a little bit to it. I agree with Steve, no one knows exactly how long it is going to go. I don’t see any evidence of it turning around any time soon in terms of the capital and credit situation. One thing that not anyone’s really talking about but that is clearly going on is that all of the larger players, particularly those that are staying in markets and not exiting, are gaining share as we speak. So I think some of the benefit if you will to the better capitalized players that can stomach what is happening out there today are gaining share. There is a lot of evidence of that as we track statistics whether it is in Orlando or Phoenix or other places around the country. But specifically how long the deteriorating environment for funding the small guys lasts I wish we knew Roger?

Certainly that’s where a lot of the stress is because the working capital doesn’t flow as well as the larger builders do because we have the ability and the diversified portfolio to be better in some markets and less in others where the small builders are basically in one location quite frankly, or one market. That creates a lot more stress on them. The lenders are pulling back. They don’t want to lend in this environment. It is hard to get the cash flow back out. So they are not reticent to let it go. They are looking to pull it in.

Ok, and in terms of comparison, would you compare this period we’re in right now to the early nineties right after the S&L issues, or is this the worst we have ever seen? Could you give a little frame of how bad things are for these smaller builders right now?

What I would tell you having lived through both of those cycles is the difference with the S&L debacle in the late eighties is that there was still working capital for these banks that were lenders on the land to get out of the land, and so they were able to fund a retail outlet for that dirt which was through a builder that might have been in the local marketplace. So there was some of that still available. This is exponentially more difficult of a situation in that the number of retail outlets for the land that has been improved already is just rapidly being diminished. There’s just not as many builders in the marketplace that can get the capital to build the homes.

Jay, pick your statistic whether it is starts, or sales or permits or whatever statistic you look at. The data would indicate that we are at a lower level today than we were at the trough back then. Probably just as bad as the early to mid seventies decline.

OK, great thanks. I have one other question. If you look at the people that you are actually getting to the closing table and signing right now, how would you describe just the general characteristics, whether it is the amount of down payment that they put down? I know that you give FICA scores, but are these people who are investing now in housing because the prices have come down, or is it more just the people who need to move? Can you describe your current customer a little bit?

It’s the people who need a home. Very few investors out there at all. Again, people that are making the decision today need a home. And like I said there is a lot of evidence that there are people who want a home but they don’t absolutely have to have one so they are making a decision to stay with a relative or continue to rent or other alternatives that they have. It’s folks who need a home.

Ok, great. Thank you guys.

Your next question comes from the line of Susan Burlingmeir from Bear Stearns. Please proceed.

Good morning. I was wonder if you could give any color, generically, on any of the joint ventures? I know it is pretty small for you guys, and it just went up a little bit. Was that more from lot option take-downs, or if you could give any color and also what your debt obligations on the joint venture are at this point ?

Sure Susan. Our investment level and equity basis one $110 Million in the first quarter. Our limited recourse debt was $108 Million. So also from a subsequent standpoint from the first of April we paid off about $28 Million on one of those ventures which was debt, so that would reduce the $108 by roughly about $28 Million. We have roughly about two joint ventures that are sizeable at this point. And we continue to focus on those and work them, they are still very good working joint ventures so we’ve minimized our overall approach to the joint ventures and the risk associated with it.

Great. Secondly, on the bank line with your tangible net work pushing going down, are you thinking of approaching the banks earlier in case of additional impairments going forward, or how are you looking at that?

Like anything we continue to look and plan. First thing would be to look at how we end up curing it. That would be a priority for us and certainly we are always talking to the banks, so I think we just have to work it out and continue to look at where we are going and where the market is going that is driving the ratios. But we think we are in pretty good shape from this standpoint, we’re just going to have to play it by what we see in the market almost week to week.

Great, thanks Roger.

Your next question comes from the line of Buck Horne from Raymond James & Associates. Please proceed. Buck Horne- Raymond James & Associates: Thank you. Good morning. I just wanted to talk about the land portfolio for a second if you could just maybe give us a current percentage of fully developed lots you have to the total that is owned, and if there are any specific markets with higher concentration of these lots?

First instead of the lots we own, Steve had given the lots controlled at $147,000. We own 122,800. Of the 122,800 about 34% are finished. Buck Horne- Raymond James & Associates: Great, on the order of magnitude if there is any guidance you might be able to give us of what you think the land acquisition and development spending might be down year over year?

Yeah, I gave that last quarter as well Buck. Last year we spend roughly about $1.9 Billion in land acquisition and development, and this year in 2008 we planned on doing roughly about $1.2 Billion. Buck Horne- Raymond James & Associates: Ok, great, Thanks.

At this time I would like to turn the call back over to management for closing remarks.

Thank you Katie, and thank you everyone for your participation in the call today. If we have any follow-up questions please feel free to give me a call. Have a great day.