Good day ladies and gentlemen and welcome to the third quarter 2008 Pulte Homes Inc. earnings conference call. My name is Heather and I’ll be your coordinator for today. (Operator Instructions) I would now like to turn the presentation over to your host for today’s conference, Mr. Calvin Boyd, Vice President, Investor Relations. Please proceed sir.

Good morning and thank you for joining us to discuss Pulte Homes financial results for the three and nine months ended September 30, 2008; Calvin Boyd, Vice President Investor and Corporate Communications. You’ve all had a chance to review the press release we issued last night detailing Pulte’s third quarter 2008 operating and financial performance. On the call to discuss these results are Richard Dugas Jr., President and Chief Executive Officer; Steven C. Petruska, Executive Vice President and Chief Operating Officer; Roger A. Cregg, Executive Vice President and Chief Financial Officer; and [Vinnie Freeze], Vice President and Controller. For those who have access to the Internet, this live presentation available at www.pulteinc.com will accompany this discussion. The presentation will be archived on the site for the next 30 days for those who want to review it at a later time. As with the prior conference calls, I want to alert everyone listening on the call and via the Internet that certain statements and comments 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 based on the information available to the company on the date of this call and the company does not undertake any obligation to publicly update or revise any forward-looking statements as a result of new information in the future. Participants in today’s call are referred to Pulte’s annual report on Form 10-K for the year ended December 31, 2007 and last night’s press release 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 for opening the queue for questions. I will now turn over the call to Richard Dugas for his opening comments. Richard.

Thank you Calvin and good morning everyone. After experiencing an already very difficult operating environment for the first half of 2008, the market conditions for housing further deteriorated in the third quarter. Home prices continued to slide, mortgage lending standards tightened further, and the demand for housing continued to fall under these pressures. Months supply of unsold new and existing homes remained at historically high levels, and the increase in foreclosures made this oversupply problem worse. In addition to those housing specific concerns, our country is reacting to an unprecedented combination of economic turmoil, uncertainty in the credit and financial markets, and worldwide concerns of a financial collapse. The rescue plan signed into law by the president a few weeks ago appears to only just now be starting to thaw the credit markets and help ease the panic of investors. These broader conditions wreaked havoc on the homebuilding industry in the third quarter and have into October as well. Potential home buyers, reacting to industry specific factors and these broader economic concerns, are likely to stay on the sidelines until the picture becomes clearer. The challenge to achieve our corporate goals is heightened in such a difficult operating environment, but Pulte Homes has been diligent and unwavering in its pursuit of its near term strategy, namely cash flow generation, operating with a lean overhead structure in response to the weak demand environment, and managing our house and land inventory. We generated cash during the third quarter, and ended the period with $1.2 billion of cash on hand. The ability to generate cash in such a challenging environment becomes increasingly difficult for any builder, but we have been able to generate cash this entire year and remain focused on delivering more cash by year end as you can see from our…

Thank you and good morning everyone. Our third quarter home building net new unit order rate decreased approximately 34% from the third quarter last year on approximately 16% less communities versus the same quarter last year and down approximately 12% in communities from the year end 2007. Revenues from home settlements for home building operations decreased approximately 37% from the prior year quarter to approximately $1.5 billion. Lower revenues reflected lower unit closings that were below prior year by approximately 28%. The average sales price decreased approximately 13% versus the prior year quarter to an average of $281,000. Third quarter land sales generated approximately $13 million in total revenues, which is a decrease of approximately $18 million versus the previous year’s quarter. Home building gross profits from home settlements including home building interest expense for the quarter was a loss of approximately $90 million, versus a loss of $293 million in the prior year quarter. Home building gross margins from home settlements as a percentage of revenues was a negative 6% compared with a negative 12.2% in the third quarter of 2007. The change in margin conversion versus the prior year quarter is attributed to lower community valuation adjustments in the current quarter, offset by reduced closing volumes and increased selling incentives. Adjusting the current quarter for land and community valuation charges of approximately $250 million, the gross margins from home settlements as a percent of revenues was at a run rate of approximately 10.6% for the quarter. The current quarter benefited from the impact of prior quarters land and community valuation adjustments by approximately 783 basis points or approximately $118 million. Home building interest expense decreased during the quarter to approximately $53 million versus approximately $98 million in the prior year. Included in the interest expense of $53 million…

Thanks Roger and good morning everyone. Back to Richard’s comments earlier, the housing market did become more challenging during the third quarter of 2008. Although the absolute number of new unsold homes continues to fall, the month’s supply of new homes remains at historically high levels. With lending standards tightening in the mortgage market and the continued slide in home prices, buyer demand for new homes continues to be under enormous pressure. The difficulty of potential customers to sell their existing homes also continues to negatively impact new home sales volume. In short, it’s a tough market that just got more difficult with the current uncertainties. It’s now more important than ever that we diligently follow our near term strategy of cash generation, maintaining a lower cost structure and managing inventory levels continues to be our focus. Richard and Roger have already covered our progress as it relates to our cash goals, so let me comment on our cost structure initiatives and inventory management strategies. First, our overhead savings for the quarter shows our ongoing effort to adjust our operating structure given the pervasively challenged sales environment for housing. If things get worse, there are additional steps we can take and I am confident in our ability to get more efficient. Second, from the house cost perspective we continue to analyze each phase of construction process to identify opportunities to improve operational efficiencies. Our supply contained strategies reach beyond the vendors and suppliers and searches for ways to reduce costs directly with manufacturers. We look for better, more efficient ways to deliver materials to the construction site, partnering with the most efficient providers of these building materials and reducing cycle time it takes to build each home. These and other efforts have been ongoing for some time and the payoff…

Thank you Steve. I want to thank everyone for your time and attention on the call this morning. We’re 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’ll open up the call to questions. Heather.

Thank you sir. (Operator Instructions) Your first question comes from Joel Locker – FBN Securities. Joel Locker – FBN Securities: Just was wanting to know about your SG&A I saw it increased as a percentage of revenue from the second quarter and I just wanted to see if you could shed some light on that?

Basically with declining – we had declining revenues of course, so on a percentage basis the percentage actually went up. When you look at some of things we’ve been doing throughout the year and even against last year, we’re actually down about $45 million from last year. As I mentioned in my prepared comment that during the third quarter we also took an adjustment in one of our insurance reserves by about $28 million for product claims. So some of those that we’ve been talking about, I know the $28 million specifically wasn’t something that quite frankly we had forecasted, but that happens from quarter to quarter. We do that on an actuarial basis, so again from the controllable costs and the SG&A has been down against last year by about $45 million.

Your next question comes from [Unidentified Analyst] – Zelman & Associates. Unidentified Analyst – Zelman & Associates: Roger I was hoping maybe you could, with regards to the line of credit, just kind of give us a sense from your side of the table why you’re confident in getting the amendment and just kind of the thought process as you’re talking with some of the lenders. Because obviously the perception from outside of the – from the outside world would be that in this environment no one’s willing to extend credit under any circumstances, particularly for someone tied to the housing industry. So just kind of alleviate concerns that might be out there regarding your ability to get a waiver.

I think when you look at the players in the industry, I don’t think the comment is true among all players, I think certainly there are a lot of private builders as this industry is very fragmented as you well know. I think a lot of the banks are looking at the companies and the quality of the companies in the industry. So I think Pulte has been and continues to be one of the premier companies in the industry. I think also that we continue to deliver on what we’ve been talking about for the last couple of years and our focus on the strategy of how we’re running our business and again I don’t know that everybody else is there. I think certainly the banks are under stress and the industry as well, so there’s no doubt about that. I think the size of the capacities are coming down. I think the cost of the money is going up and I think that’s going to be indicative of the industry going forward for some period of time. I think again for us to be continuing to focus on delivering what we said we would do and just our overall relationships with the banks are very good. Unidentified Analyst – Zelman & Associates: And then a follow-up question which has to do with your land supply. Could you maybe just run through of your most important markets where you feel like you’re maybe light right now and then kind of in that same vein, from a development standpoint, what do you think would be kind of the maintenance level of spend that you’d have to put out there in 2009, if the environment kind of holds at this level?

I’ll give you an overview and then flip it to Roger and Steve for a little more specifics. In general, we’re not looking to add to our land position anywhere right now, because deals that make financial sense are few and far between, if existent at all. While we continue to look, in many markets the refrain we keep getting back from our key operators is that we just can’t find things that make sense in today’s environment. Having said that, there are select markets that we would like to put investment where we’re relatively under-invested. I would highlight the Carolinas as an example where we’ve run off a good bit of our projects that have still been profitable for us. We have a market in the Midwest such as Minnesota that’s a good housing market long term where we don’t have a lot of lots left. And then I would highlight Texas as well. Pulte has historically been relatively under-invested in Texas and we would like to put a few more dollars there. So those would be kind of overview comments, but I want to stress that we’re not going to buy dirt just to impair it the following quarter in this kind of environment. So with that I don’t know if Roger or Steve want to add anything?

We talked about this year coming into this year, roughly investing in the business close to $1.2 billion. We have broken that out by about $300 million in land acquisition, a lot of those in rolling lot option takedowns and about $900 million in investment from land development and some of the soft costs. Definitely we’re going to be short of that investment this year so next year we’re really putting our plans together at this point to take a look at really what the environment is and of course that’s very difficult. But on the order of magnitude, I wouldn’t see it exceeding what we had thought we would do this year and potentially what we even wind up doing. But nonetheless there still is as Richard had mentioned a number of markets that we are still focused on and if the land is available at the price to give us a return, then that will be something that we continue to push forward with.

The reality is that we’re selling houses today probably below the replacement cost and therefore, even in the case of foreclosures, the banks haven’t gotten realistic yet and they’re not selling the land at prices that would support profitable operations at today’s selling prices. And until that changes, even in places where we’re running a little light on land and Richard highlighted some of those, it’s just difficult to make an investment that makes sense. And so we won’t do that.

Your next question comes from Megan McGrath – Barclays Capital. Megan McGrath – Barclays Capital: Richard, last quarter and throughout the third quarter you talked about doing some promotions for the end of down payment assistance and for the tax credit, so I’m curious did you not really get any traction at all with those? No buyers in the door? Or was any traction you got offset by other buyers just leaving the market?

Megan, specifically on the tax credit, the $7,500 credit that was passed at the end of July, I think that’s what you’re referring to, yes that was a non-starter for us and the rest of the industry through the quarter. Unfortunately the repayment provision that came with that was resoundingly rejected by buyers. They viewed it for exactly what it was which was an interest free loan from the government but not a true inducement to buy. Down payment assistance there was certainly some activity, particularly earlier in the quarter related to people trying to get in under that, but the offset was just the incredible turmoil, particularly toward the end of the quarter. As we got into mid and late September the financial chaos that ensued in the markets just froze people from buying completely. And we kept hearing the refrain, “Boy I’d like to buy at these prices, but I just don’t feel like my money’s safe.” So I think it’s a tale of two stories. The tax credit was not effective and the DPA going away provided some lift for people trying to get in but that was offset by the incredible uncertainty. Megan McGrath – Barclays Capital: Just as a follow-up, you mentioned in your remarks a little bit around San Francisco. Any other areas that are either out-performing or under-performing in the market that are doing anything different?

Our sales, Megan, were down across the board and that I think was in some of the information we released yesterday. But the reality is is that we continue to do pretty well in the Carolinas relative to our overall business. And pretty much every place else is down year-over-year in that 12% to like we talked about in Northern California 46% range.

Your next question comes from Nishu Sood – Deutsche Bank. Nishu Sood – Deutsche Bank: First thing I wanted to ask you about was your cash flow guidance. You lowered it by about $100 million. You were just mentioning that you’re probably going to come in lighter on the land development expenditure side, so just wanted to drill down into what the incremental drivers of that were. Has it been less cash coming in the door or are there some incremental expenses?

I think clearly it is of the sales activity and the closing activity. By now pretty much anything we spent on land development is pretty well committed. We’re into almost November now so the ability to come back and change those and pull those back is almost nonexistent. Most of it’s – I would say pretty much all of it was driven really from our view here of what potentially the closings could be given the economic conditions. And again I put a range in there. I could easily see it to the upper side and easily see it to the downside. It just depends on what happens. If we have a backlog coming through, we have a certain amount of homes that we typically sell and close in a quarter, and all those things could be influenced which will really just influence the cash end flow. And pretty much all the outflow is programmed at this point.

I’d also add that we had that guidance out there since the beginning of the year so as we’ve seen closings fall all year, we’ve been managing that development expenditure as well. So it’s been a tale of two throttles there. So on a relative basis, we believe it’s still a good cash performance for the year given the environment. Nishu Sood – Deutsche Bank: Just a follow-up question I wanted to ask on your land that you own. I mean, obviously as the downturn has progressed here, you have been cutting discretionary land spend so let’s say projects that probably wouldn’t come to market for another year or two. You’ve probably been pushing through the development on projects that you can deliver in the short term. Does that leave you with call it a barbell shaped land supply where you’ve got a lot that’s either finished or close to finished and a lot that’s raw? And so you’ve got those two big buckets, and if so kind of what does that imply for your operations and your land development expenditures next year?

Yes I think all of those things are things we certainly push on as we look at what the level of activity is. And yes if the level of activity falls off, you don’t need to develop as many lots. We have a number of lots out in front of us in developed in certain communities that some are a little bit more, some are a little bit less. It depends on the activity in those markets. And as they’ve ebbed and flowed we’ve had to respond to those and pretty much on a short term basis. But yes eventually if this continues and you go out a year to year to year, with three years into this, trying to slow it down as the overall demand has declined, that’s certainly going to create pressure for the future. Now we continue to look out two and three years in each one of our areas and in each one of our markets to take a look at potentially what that could mean. The hardest thing to do is actually today pinpoint what that demand is. So again we can assume that it’s going to be at a higher level or a lower level in each one of those markets, it’ll mean a different thing on overall cash development into those communities. So all those things we do balance, but we do keep have to work through the short term to get to the long term as I say, but we do have the long term in focus as we look out over the number of years to make sure that we have a healthy business.

Just to add to that, a lot of our lots are controlled in large, master planned communities. So much of the first mile costs, the backbone infrastructure, those type of things have been done. And we’re into pod development in a lot of those communities. And as this thing has gone on for the last couple of years, land developers both on our side of the fence and certainly the trade base has gotten much more efficient at delivering much smaller pods of lots as we need them. And we have a lot of opportunity to develop lots relatively quickly, especially in our sunbelt communities where you can develop all year round. So the diminishing demand doesn’t create quite the barbell that you’re talking about. And our ability to put lots back on the ground much quicker than what we were two, three years ago is also in our favor there if and when the time comes that we need some lots. Nishu Sood – Deutsche Bank: Where are your cash balances invested?

Well we have over 25 banks in our consortium so we’ve got them spread out through all of our relationship banks quite frankly. And our money is invested in money market funds and coordinated through our banking relationships. And again we continue to focus on where that money is with the expected ability to maintain the value and the liquidity of the cash in itself. So our overall efforts there are daily communications with the banks and also with the various fund managers to make sure that our investments are as safe as possible.

Your next question comes from Michael Rehaut – J.P. Morgan. Michael Rehaut – J.P. Morgan: First question just to get back to the land spend and cash flow for a second. You mentioned at the beginning of the year you thought you’d do $1.2 billion in land spend and now it’s probably less than that, but bigger driver to the drop in guidance due to less unexpected closings. How much could that come down in ’09 and if you look at that land spend, can you give us an idea roughly on a percentage basis what of that relates to Del Webb, which are communities that I assume are a little bit longer term and still important to continue to build out?

I think number one when we talked this year, roughly the $900 million in land investment quite frankly maybe $250 million of that is what we consider soft costs, you know, taxes, maintenance, that type of thing, the HOA fees that we have to maintain because we haven’t turned it over to the community yet and the homeowners. So there’s an amount we can pull back on that but again you have to continue to look at where it is. So we talk about developed land, it may not be all in the right place at the right time where the demand is. So we do have inflow with that. As far as land itself and development yes, there is a portion, still roughly 40% of our business is active. Adult Webb is part of that, so again when you look at the ability to move that cash around, the timing you put in, amenity centers and that type of thing are all the things that we continue to look at, phases of the projects. So again, and I don’t have a specific number, but generally it’s been in that 40% range overall. Now again you have to step back and look at land acquisition and the majority at Del Webb we quite frankly own. And again if we’re looking at the market today for investment in the attritional side of the business, we would be looking at developed lots that exist in markets today. Michael Rehaut – J.P. Morgan: So just taking it a step forward, and I understand you’re really not talking about guidance for ’09, but it’s pretty hard for me to get to a scenario given the backlog down the way it is, I believe 58% on a dollar basis that you guys wouldn’t have less cash flow generation, lower cash flow generation in ’09 versus ’08, particularly given some of the as you said taxes and maintenance in the active adult communities. Is that fair to look at it like that?

Yes it is Mike and I think we’ve been talking about this for a number of quarters now that 2009 will not look like 2008 from a cash generation in the industry in general, because again the demand continues to fall and that’s of course the driver of cash inflow. And then our responsibility is to make sure we’re looking at the cash outflow. So we definitely try and match that up. Now there’s no doubt about that. And there’s also no doubt about the fact that 2009 will be less cash generation. So what we do this year and how we manage the business and what we do next year for the cash outflow in investment will be critical to the levels of cash that we maintain. But I do still, again looking at potentially next year, think that even at a level where we are this year could wind up with slight positive cash flow. And again that would be a goal, but we’d still look to invest again in land development and potentially some takedowns on the land side. But again we’ve got to come through the fourth quarter to look at what demand is. If the world is still rocked by this volatility and uncertainty and we’re looking at a global recession, there’s going to be a big influence on the United States that we have to take into consideration as well. And everybody’s got a crystal ball, but it’s for us to continue to manage on a quarter by quarter basis. Michael Rehaut – J.P. Morgan: The down payment assistance, what was it as a percent of homes closed this quarter? And looking forward into the fourth quarter, and obviously the absorption rates continue to be challenged and with DPA finally being eliminated, how do you feel where you are in terms of your pricing? And obviously everyone’s been hearing about pricing coming down more. With DPA, are you guys particularly just to hold absorptions at a certain level, readying yourselves to take price down again?

I’ll take the first part. The DPA of our closings in the third quarter were roughly about 12% and in the second quarter they were roughly about 10%. And I’ll flip it over to Steve. Maybe just talk a little bit about the pricing environment.

You know, Mike, the pricing environment is very, very dynamic. And I will also tell you this. It’s been very inelastic. We have found that early on we were able to, and I say early on – a year ago, we were able to generate significant improvement in sales paces where we made some price adjustments. At this point, because of the overall lack of demand, we’re not seeing much hit for anything that we do and quite frankly what we’ve tried to do is stay very close to what’s going on in the foreclosure market. We know that if we can, with entry level communities, price close to that we have a significant advantage because there’s usually a lot of hair on a foreclosed home that the buyer has to put cash into and those type of things that they don’t have to in new homes. So we balance those two things out. But on an overall basis, yes, price has continued to decline. They’re not declining at the rate that we saw and I would suspect that that would continue because we just don’t get any punch out of it. And it comes to a point for our operators where they look at it and say “Hey, I’m going to sell one a quarter in this community one way or the other. I might as well sell it at a margin that makes sense and keep squeezing down the cost,” versus just lowering the sales price and give you nothing for it.

Your next question comes from David Goldberg – UBS. David Goldberg – UBS: Question’s about the Del Webb business and how much you think the decline in the stock market and individual’s wealth is going to impact what I think is probably a pretty discretionary purchase by most active adult buyers.

The Del Webb buyer continues to be plagued with the inability to sell their existing home. The difference we continue to see between that buyer and the traditional buyer is that once they make up their mind to move and change their lifestyle, they are less impacted by the pricing environment that we see. Now having said that, we’ve said all along that they’re just affected to a slightly lesser degree. That’s why we continue to see a little better out performance in our business in the Del Webb said than we do on the traditional side. But the fact is 80% of homes sold in this country are resale, and almost every one of our Del Webb buyers need to sell an existing home to make their additional purchase, or at least they choose to. Therefore, they’re impacted. But I think the best way to characterize it is it’s a little better than the Pulte business, but still not healthy.

Yes, I think the big thing there, David, that Richard hit on is most of their net worth is in their home that they own. And that has already been impacted. Yes they have equities that they may hold or they may have debt instruments that they hold for longer term investments, but that’s not primarily what they’re using to buy their home. They’re trading one for the other. And we’ve been experiencing that as we’ve gone along. Our quarterly statistics, we’ve been averaging right about 35% of our closings being Del Webb branded closings. That’s not just all of our active adult, but Del Webb branded. And this quarter was right around the same number. It was about 34%. So I would tell you that certainly what’s going on in the economic world is having an impact on Del Webb buyers just like it is on everybody else. But you’ve got to remember that the equity in their home is what they were using to buy a home and they’ve been experiencing that for several quarters. It’s not just new this quarter. David Goldberg – UBS: So I guess the question I would ask then Steve maybe kind of a follow-up is how do the pricing – I mean, do you have any kind of like typical or on average for people that are trading into a Del Webb home or into an active adult home at all, do you have any idea what the pricing looks like versus what they’re selling, i.e., is it potentially they’re going to cash out some of the equity in the existing home? I just have a feeling that in the last three or four weeks, the market’s are down so significantly, if you were a retiree on a fixed income budget and you’ve lost a certain percentage of your capital, you’ve got to find a way to cash out a little bit, maybe some of the equity in their home. Is there a chance to do more move down in that kind of case?

Yes and that’s exactly what we’ve been focusing on. A lot of our product mix has been shifted towards to smaller homes, still offering the lifestyle. Because 70% of the buy in at Del Webb community is first in the lifestyle, and so to your point we can offer them some alternatives for some of this loss in “purchasing power” or long term income power. But I can’t really give you a dollar for dollar on the equity loss side because even in Arizona our folks come from several different states, and the conditions are different in each one of those. But suffice it to say they’ve lost equity in their home, they’ve lost buying power in the Del Webb community, we’re trying to match that as much as we can with product mix in shifts down to lower priced products, but yes they’re still spooked by what’s going on with the rest of their investments. And I think what we’re seeing is with that buyer in particular, is they’re putting off the decision to buy, not necessarily eliminating the decision to buy. And we’re just going to have to continue to fight through that.

Your next question comes from Josh Levin – Citigroup. Josh Levin – Citigroup: Hey Richard in the past you’ve said that you can’t reduce expenses too much more without, I think your phrase was “cutting into the cultural arteries of the company”? I guess given the economic slowdown and just the turmoil, is that still the case? Or do you think there really are some more cuts you can make if you need to?

Well I think Steve indicated it in, Josh, his prepared remarks, or maybe it was Roger, we definitely are going to continue to look at expenses aggressively. And if we cut into some of the cultural arteries of the company, we’re going to have to do what we have to do to maintain a reasonable balance there. It does get more difficult. We’ve got a lot of communities open. We’ve got certain things that have to be done. We have to file taxes. We have to abide by all kind of normal corporate expenses that are necessary. So it gets more difficult, but I would never say never in terms of further cuts being available. So having said that, we’re focused on revenue generation as well, and cost reduction on the house cost side. To get to – we’re very focused on getting to profitability, and our view around that is it’s not just going to be through overhead reductions. It’s got to be a focus on house costs, disposition costs, incremental margin pickup where we can on an option here or there on some of the more selected options, and our operators are keenly focused in that regard. But we still have room to trim expenses if we need to. Josh Levin – Citigroup: I just want some clarification on one of the previous cash flow questions, and I know there’s a tremendous lack of visibility right now, but as you go about your internal planning for ’09, are you assuming you’ll be cash flow neutral, positive or negative next year?

You know, it all depends. We’ve got to come through the first quarter to get a better view of what the demand is, and if a couple of weeks is representative of a full year, it may be difficult. On the other hand, if there is some continuation of stability in the industry, then there’s a chance that it’s positive. And we haven’t given any guidance on it yet. We’re in the throes of putting our plans together. But again a crystal ball is very difficult to get a view of, given what we’ve seen coming through the end of the third quarter and into the fourth quarter. So that’s why there’s really not an answer to tell you, because I don’t have a good view of it. And as you can imagine, we try to get everything from the organization, what they think that they see, and it’s difficult. You know the environment is evidence low on a day by day, week by week basis. So at this point I don’t have a good answer for that.

It’s theoretically possible to accomplish a lot of things. It all has to do with your view of the future. And you know literally if you wanted to take the view that you’re not going to sell another house for a couple of years, you could just maintain soft costs and it would be easier to say “Yes, we could be cash flow positive” but obviously our job is to look out beyond that. So it’s pretty volatile at the moment, but we do have levers in our control and it’s not lost on us how important cash is in this environment.

Your next question comes from Chris Hussey – Goldman Sachs. Chris Hussey – Goldman Sachs: Question on the product that you’re trying to sell and what might be selling better than others. Are you making any sort of efforts outside the Del Webb to sort of change your products physically that can help sell the product to maybe a more cost conscious customer? And then are you seeing any particular type of customer who’s buying more than other customers?

Chris what I would tell you is that’s exactly what we’re doing. We’ve probably repositioned upwards of 100 communities this year where we can, where we can get city approval to do that. It’s essentially under building the lot size. We’ve impaired the land down to a value that will now support when you put a smaller house on it, and you’ve got a lower building cost, we can get to a price point that, as I indicated, is much more competitive with what we’re seeing out there in the resale market. So our efforts have been to do that. And then continue to try to maintain some sort of [inaudible] in that. But it’s difficult. I mean, you know, that is – as the sands continue to shift underneath us, as more foreclosures come into the market, but it’s what we get paid to do and our operators are very, very good at it. All of the efforts that I talked about in the supply chain, I know they’re invisible to you guys, you can’t see them because the sales prices are decreasing as fast as we take house costs out, it seems like. But they’re real and they’re sustainable. When the market turns around, and when we know that we can get some price stability, those things will become more evident. But it doesn’t stop us from setting goals and continuing to work on those things to drive more cost out of the house cost line item. Which quite frankly is our largest spend and it is the place where we can get the most traction. Chris Hussey – Goldman Sachs: On the revolver, do you need the revolver? Or could you exist without it?

You know, we do have our letter of credits which is roughly about $350 to $400 million. It’s always good insurance to have a revolver to fall back on, especially in uncertain economic times. On the other hand, we don’t think we’ll be into the lines this year or even potentially next year. But who knows what the time brings. And so from our perspective it’s good insurance to have a line.

Your next question comes from Alex Barron – Agency Trading Group. Alex Barron – Agency Trading Group: I just wanted to ask you, I’ve been kind of looking at the trend in your inventories as well as your sales and backlog, and it seems to be down anywhere from, it depends on where you measure it, maybe 40%, maybe 50% year-over-year. But on the liability side accounts payable, accrued expenses, etc., it doesn’t seem to be down in line with those kind of percentages so I was hoping you could help me understand why that might be the case?

I’m not sure exactly what you look at, how you measure that, but if I looked at the payables as a percent of inventory on a quarter by quarter basis, it’s been running maybe since the second quarter of 2007 anywhere between 22 and 27% of inventory. Now you have to again take a look at the impairments that come through, because you still have the physical asset if you make an impairment. It doesn’t necessarily change your payables. And so again I don’t know what relationship you’re taking a look at there, but it’s been pretty consistent and reasonable quite frankly from a quarter by quarter basis, even since 2006 roughly, again payables as a percent of inventory. But again you’re going to get some skew in there because of the impairment write offs. Alex Barron – Agency Trading Group: My second question had to do relative to a story I guess that came up in Bearence about I think it’s your chairman has like 12% of the outstanding shares pledged? I was hoping you could elaborate on that and is there some price threshold at which he might be forced to have to sell those?

A year ago, I guess maybe it was earlier this year, we put out the press release and a public filing on what that was, and it’s a forward contract on a stock. So quite frankly all the parameters were laid out in that as well, but that’s all I’ll really comment on. It’s hard to tell again the future. Again he’s got some contracts that go out for some period of time for those, and again what will that be then. It’s very difficult to speculate on that today.

Your next question comes from Daniel Oppenheim – Credit Suisse. Daniel Oppenheim – Credit Suisse: I wanted to ask in terms of the areas where you’re hitting against significant volumes of foreclosures, some of the other builders have talked about they’re building different homes there, trying to compete at a lower price point, larger square footage of those homes, have you thought about that and how are you addressing that overall?

Yes, Dan, I think I said it a couple of times already today that’s exactly what we’re doing is – you know, we have the land there, in some cases it’s developed lots so we have to move through those and we have introduced many new products, typically smaller square footages designed to attack what’s coming down in the foreclosure market. We know that if we can get relatively price competitive, and I say relatively because there are always things, there’s very few foreclosures where you can just walk in and go live in them, but where we can get price competitive with the foreclosures, we compete fairly well. And that’s in the markets like Phoenix and Las Vegas. We’ve been kind of holding our own as we’ve repositioned our product down. Daniel Oppenheim – Credit Suisse: How have your – is there any color you can give in terms of the sale activity there in those markets and communities where you have –

It’s held up reasonably well. I mean, Arizona continues to be one of our best markets. We continue to gain market share there in the new home market, which is always a positive sign. But at the same time, it’s a daily fight and we try to look at what’s coming at us and then react.

I’ll just add that it’s helped. It doesn’t mean that it solves any of the global issues, but it’s helped on a relative basis.

Your next question comes from Carl Reichardt – Wachovia Securities. Carl Reichardt – Wachovia Securities: Steve I’m curious. You’ve obviously seen and looked at the data here in California, at least where we’re seeing a substantial increase in some parts of the state in turnover activity in the existing house market, and a lot of that’s foreclosures. In talking to your guys in the field, do you think that the foreclosure activity turnover is investor related or do you think it is your customers, your potential customers buying that product instead? Because I think the answer to the question has some influence on how a recovery might look in the new housing market.

Yes Carl it’s clearly some of both. I mean, I can anecdotally tell you stories in some of the larger markets where investors have gone out and pooled money and they’re turning those right over into rentals, quite frankly. They’re going in and doing certain things and they’re in it for the long haul. But clearly too we get individuals that were shopping new home and end up buying foreclosure. I think that it appears, just again without any statistics and we’ve been digging hard to get numbers on who’s buying what, and we kind of get a little closer every time we look into it. But it appears to be a lot of the former. And that there are investors out there [inaudible] properties at much lower prices. And as long as they become long term investors and holders of the property, I think that bodes a little bit better for us. But it is still a supply side relative to demand side issue on an overall basis. And it’s just tough. Carl Reichardt – Wachovia Securities: Roger I wanted to ask the [congress] of Dennis’s question about half an hour ago about markets, or that you might be interested in investing in? Given the thought that your cash flow will be less in ’09 and you [don’t] have to think about renegotiating the revolver if business is tight, are there markets that you would consider getting out of? Or would you consider more seriously now potential bulk land sales, especially given that you paid taxes in ’06? Is that a consideration beyond what’s on the balance sheet already in land held for sale?

Right. Again the bulk sale was not part of our strategy. And I think you can clearly see that right now our view of a tax refund before next year, early spring, based on this year close to $248 million is what we have on the balance sheet, again we don’t feel that it was necessary to try to hurry up and do bulk land sales. Quite frankly, bulk land sales you’re getting roughly $0.10 on the $1 to capture that, and those that are doing it are doing it for a reason because it’s rolling into their strategy having to pay down debt early in next year. And again as I mentioned earlier, if cash flows are going to be less in 2009, where are they going to get it, this is a way to do it. We felt that we’ve had a cash balance to be able to maintain ourselves through that, and that we don’t have any debt due in ’09. There’s about $25 million left on the notes of ’09 and then nothing until 2011. So we’re in good shape from that standpoint overall. As far as leaving markets, I think Richard has mentioned this in past quarters as well, that we’re comfortable in the markets we’re in and we don’t see ourselves exiting quite frankly. As perverse as it may sound we’re picking up market share in a lot of markets because a lot of people are pulling out of those markets. It’s not that our business is that robust in that market, but we are picking up share just because other builders are leaving. So we do think we’re in a better position there when the market does turn. And again we’ve not selected any markets that we’re unhappy with today, from where we’re invested. Carl Reichardt – Wachovia Securities: Do you guys have the actual community count for the quarter?

Yes, we ended up the third quarter roughly about 561 communities. Carl Reichardt – Wachovia Securities: That’s an average or quarter end?

That’s quarter end.

Your next question comes from Rob Stevenson – Fox-Pitt Kelton. Rob Stevenson – Fox-Pitt Kelton: Richard, you talked at the beginning of the call about a $20,000 tax credit and possible mortgage buy downs as programs that might be able to help the industry. Historically you guys, and I’m taking all the home builders collectively, Fannie, Freddie, the realtors and others have formed a very powerful housing lobbying effort. But now you have Fannie and Freddie dropping out and so I’m curious when you’re talking with the trade groups and the lobbyists, how receptive is Congress to a program like this these days?

Rob I think just recently we have formed a much stronger alliance than we probably have working collectively with the National Association of Homebuilders, reaching out to other trade groups. So the discussions are beginning in more earnest. Clearly the question that was asked earlier about the existing tax credit not being effective has upped the ante for something else to be done in the industry. It seems like every politician including members of Treasury and the Fed have agreed that housing is at the epicenter of this problem, yet none of the stimulus that’s being discussed is directly aimed at the heart of the patient. So I believe we have a much more receptive audience than we had and frankly we’re much better organized in the last couple of weeks to push for that effort than we have been. More to follow, and I personally am very involved as are many of my peers, just in the last couple of weeks on really focusing on that issue. Because as I indicated in my prepared comments, in our view it’s either that or a lot more time for this to work itself out. Rob Stevenson – Fox-Pitt Kelton: I mean are you worried at this point? I mean Congress is basically going to recess so there may be some sort of lame duck session but I mean basically you’re not going to have any real sort of movement on this until probably like February? I mean, given the way that things are, I mean are you worried that even if something like this passes that it may be too little, too late?

Clearly the longer it takes, Rob, the less effect it’s going to have on near term results. But frankly even just on the liquidity that the Fed has pumped into the system takes some time to have effect. Whatever we get done will take time. But I would not rule out a lame duck session that gets something done for housing. The water is getting incredibly deep and I suspect that the news is not going to be great in the near term about the economy. So we’re focused on that, and then if that fails clearly we’re focused on early in next year. But your point’s not wrong. The longer it takes to get something done, the longer it’s going to take to get recovery.

Your next question comes from James Mccanless – Ftn Midwest Securities Corp. James Mccanless – Ftn Midwest Securities Corp.: I wanted to ask another question about the tax refund, I guess a different way. What is the upper boundary of the tax refund that you could reclaim this year based on previous taxes paid?

If you look at the tax payments roughly we $450 to $470 million was what taxes we had paid in 2006, so that’s what would be basically available to carry back. James Mccanless – Ftn Midwest Securities Corp.: Should we factor that upper boundary into what impairments might be in the fourth quarter?

You know, I think what’s happening more so in the impairments is they’re later phases. So we’re not seeing the benefit in the current quarters from some of the impairments that have happened in the last quarter. So if you’ve got out phases that may not hit until 2010 and 2011, that wouldn’t be the case. So again I think quite frankly we don’t know what impairments might be in the next quarter, so that’s why we’re not projecting any of those and haven’t been able to do that. All I’ll tell you is what’s on the balance sheet today is the $248 million. It’s all dependent on what you sell quite frankly to be able to capture. We’re not doing bulk land sales so it’s just a matter of what you can actually sell through there. We do have some land positions out there for sale, but we’re not doing like others are doing to bulk sale to try to capture that. So I don’t know what you do, but again we’ve got $248 and that’s the view for the end of the year. It’s a view that you have to look at towards the end of the year and not quarter by quarter. So our expectation right now is $248 million. James Mccanless – Ftn Midwest Securities Corp.: In the negotiations that Pulte’s having with banks looking to sell property to Pulte, what has the tenor of those negotiations been? We’ve heard anecdotal reports that now that the TARP money may be flowing to some of the banks, that banks have decided to start holding price. Just wanted to see if that’s been Pulte’s experience or not.

I would tell you that generally speaking throughout this year there’s not been a lot of conversation. A lot of banks have not pushed it out. I think what the banks did this time around on a lot of these is they’ve had consortiums even with the banks where a number of them were in some of these ventures, so it is a group thing now. It is a number of banks sitting at the table and a number of people involved. And so there’s not been a lot of land that’s come out of the banks at all. I think generally a lot of the banks have not written down the assets to the way I think the builders have. And I think there’s enough unrealistic expectation on the bid and the ask there still. There’s a spread. And that’s going to make it much more difficult. I know that we’ve had some conversations, and I think what the banks don’t realize is that yes they may get the land back. The bad news is for them is they get it back, but they have to put money into it because there’s taxes and maintenance and all that other stuff still continue. So I don’t know that they understand it all that well, from the servicing that has to go on in the future. But again said, there’s not a lot of it flowing in the market and those that have, again there’s still a spread between that. And I would tell you not a lot of transaction has taken place. Some of the hedge funds up and stuff like that are out there buying up some of the land, but the builders themselves you can see by what everybody’s talked about in the industry is, there’s just not a lot of land being acquired by builders today.

Your next question comes from Michael Rehaut – J.P. Morgan. Michael Rehaut – J.P. Morgan: I was wondering if you could give the homes under construction number, and also I just had a quick question on the can rate.

Sure Mike let me get the homes under construction.

While Vinnie’s getting that, what’s your question on can rate, Mike? Michael Rehaut – J.P. Morgan: Just obviously it kind of bumped up this quarter and maybe not what you had been expecting, more of a continuation of the last couple of quarters, and just wanted to know if in your opinion that was more just due to consumer trepidation and pulling back? Or was there a pick up in financing issues and tighter credit in terms of people getting turned back for mortgages?

Mike I think I indicated earlier, I alluded to this, but things changed in the middle of September again. And it was all the above. Effectively a lot of folks that were on contract decided to not go on contract, or not stay rather due to financing issues and maybe just a concern over the value of their home. But also the net new orders slowed down dramatically toward the end of the quarter, based on the incredible financial turmoil that happened the last bit of September and then I indicated into October. So it was kind of a tale of maybe one expectation that had been experienced earlier in the quarter and then things changed at the end. But a combination of things. And Vinnie’s got your answer on the homes under construction.

Hey Mike its 8,600 homes under construction at the end of the quarter.

Your next question comes from James Wilson – JMP Securities. James Wilson – JMP Securities: On Del Webb I’m just looking for a couple of piece of information, basically if you could give any rough type of remaining total of company inventory, how much of it either in lots or dollars is a Webb? And then the second one is just could you compare the relative level of profitability between Del Webb communities versus conventional holding?

Again, we don’t disclose it that way quite frankly and we do it more on a market basis, not specifically on a product group basis, if you classify it that way. But roughly 40 to 45% of our business has been focused on the active adult segment and the majority of that is Del Webb. So typically again if you look at our vested capital from that, even an asset basis, roughly we’re in that range. It’s very hard to give a very specific number. Again, we don’t break down all of our balance sheets and payables and all that other stuff specifically by the product group. So again general direction our business has been in the 40 to 45% range. James Wilson – JMP Securities: Is there a relative level of profitability? I think you mentioned before that Del Webb margins had typically been better, but is that still generally true or anything you could say?

Yes I would say still generally the active adult, even Del Webb specifically, is a higher margin business. And you would expect that quite frankly. We’re working on a return basis typically in those communities, and of course that’s changed quite dramatically over the last number of years. But still we have that gap between the traditional side of the business and the active adult where the active adult does garner higher margins relative to the traditional side. And then of course as a mix that flows through that as well because again you look at what the traditional side is and the price points of the entry level and the first time buyer relative to the active adult buyer. But again generally the direction has been that margins have been higher, yes.

Ladies and gentlemen, the time for Q&A has expired. I would now like to turn the call back over to Calvin Boyd for closing remarks.

Thank you Heather. Thanks to everyone for your participation on the call today. If you have any follow-up questions please feel free to give me a call. Have a great day.

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Have a great day.