Robert Toll – CEO Joel Rassman – CFO Frederick Cooper – SVP Finance, IR Joseph Sicree – CAO Don Salmon – President of TBI Mortgage Co. Greg Zeigler – VP Finance Kira McCarron – CMO Mark Connor – Assistant CFO

David Goldberg - UBS Kenneth Zener - Macquarie Research Equities Ivy Zelman - Zelman & Associates Dan Oppenheim - Credit Suisse Megan McGrath – Barclays Capital Carl Reichardt – Wachovia Michael Rehaut - JPMorgan Rob Stevenson – Fox-Pitt Kelton Nishu Sood - Deutsche Bank Timothy Jones – Wasserman & Associates Joel Locker – FBN Securities [Garland Buchanan – Babson Capital] Buck Horne – Raymond James Jim Wilson – JMP Securities Unspecified Analyst Stuart Friore – Hunter Global

Good afternoon. At this time I would like to welcome everyone to the Toll Brothers first quarter earnings conference call. (Operator Instructions) I would now like to turn the call over to Mr. Robert Toll, Chairman and CEO of Toll Brothers; please go ahead sir.

Welcome everybody and thank you for joining us. With me today are Joel Rassman, Chief Financial Officer; Mark Connor, Assistant CFO; Fred Cooper, Senior Vice President of Finance and Investor Relations; Joe Sicree, Chief Accounting Officer; Kira McCarron, Chief Marketing Officer; Don Salmon, President of TBI Mortgage Co.; and Greg Zeigler, Vice President of Finance. Before I begin, I ask you to read the statement on forward-looking information in today's release and on our website. I caution you that many statements on this call are based on assumptions about the economy, world events, housing and financial markets, and many other factors beyond our control that could significantly affect future results. Those listening on the web can e-mail questions to rtoll@tollbrothersinc.com. We’ll do our best to answer as many as we can. Today we reported fiscal year 2009 first quarter results. We had a net loss of $88.9 million or $0.55 per share diluted which included pretax write-downs totaling $156.6 million. This compared to fiscal year 2008’s first quarter net loss of $96 million or $0.61 per share diluted which included pretax write-downs totaling $245.5 million. Excluding write-downs fiscal year 2009’s first quarter earnings were $9.6 million, $9.55 million of which resulted from the net reversal of a prior tax provision, or $0.06 per share diluted. This compared to $57.3 million diluted or $0.35 per share diluted for fiscal year 2008’s first quarter. In fiscal year 2009’s first quarter revenues were $409 million, backlog was $1.04 billion, and net after cancellations signed contracts were $127.8 million. These totals represent declines of 51%, 56%, and 66% respectively in dollars and 45%, 51%, and 59% respectively in units compared to fiscal year 2008’s first quarter results. We ended fiscal year 2009’s first quarter with $1.53 billion in cash compared to $956.6 million at fiscal year 2008’s first quarter end. Our cash position was down slightly from the $1.63 billion at fiscal year 2008’s fourth quarter end principally due to the payment in 2009’s first quarter of previously accrued taxes and the retirement of purchased money mortgages and other debt. In addition we had $1.32 billion available under our bank credit facility which matures in March, 2011. We ended 2009’s first quarter with a net debt to capital ratio of 14.5%, our lowest first quarter end level. This compared to 26.8% at 2008’s first quarter end. Stockholders equity at fiscal year 2009’s first quarter end of $3.16 billion was down 2% compared to $3.24 billion at fiscal year end 2008 and 7% compared to $3.41 billion at fiscal year 2008’s first quarter end. Faced with a plunging stock market, weak consumer confidence, growing job losses, challenging credit markets, and a hobbled economy, we continue to focus on maintaining a strong balance sheet and significant liquidity. With this capital we have to take advantage of opportunities we believe will arise from the current downturn. We’re beginning to see some properties come to market at reasonable prices. We have not bought any yet, but we are getting closer. Ironically now is a very good time to buy a home with the decline in home prices and historically low mortgage rates, home price affordability is at an all time high according to the National Association of Realtors. As a result in many markets inventory is starting to be absorbed by bargain hunters. We believe there are buyers on the fence. Our recent 3.99% mortgage promotion had a dramatic effect on our website activity. Visitors to our mortgage company website which is www.tbimortgage.com, grew from 84 a day to 1,617 a day. However we believe weak buyer confidence still impedes the market. We have not yet seen a pickup in activity in our communities, other then the ordinary seasonal increases for this time of the year. And now to do the numbers, Joel.

Thank you Robert, first quarter homebuilding cost of sales before interest and write-downs as a percentage of homebuilding revenues was 78.3% which was higher then 2008 fourth quarter of 76.6%. The difference is principally a result of higher incentives, higher overheads per home as a result of fewer deliveries, and some mix issues. Our first quarter interest expense included and cost of sales was 3.7% of revenues which is 70 basis points higher then 2008’s fourth quarter principally a result of inventory turning less quickly and less qualifying inventory under construction over which to spread these costs, a trend which is likely to continue. In addition since qualifying of inventory for purposes of capitalizing interest is now lower then debt, we have $800,000 of interest expense which is also included in G&A for the first time. First quarter pretax write-downs were $156.6 million which included $143.3 million attributable to communities or land owned, $6 million attributable to joint ventures and $3.7 million attributable to options as we continue to reevaluate, renegotiate and in other ways reduce option costs. First quarter SG&A excluding the $800,000 interest charge previously discussed decreased 12% in absolute dollars to $85 million, approximately 20.8% of revenues compared to the $96.8 million approximately 13.9% of revenues in the fourth quarter of 2008 and decreased 29.9% in absolute dollars from the $121.3 million, approximately 14.4% of revenues in the first quarter of 2008. First quarter other income of $11.3 million included approximately $6 million of retained deposits and $4 million of interest income. The effective tax benefit rate was approximately 43.2% for the first quarter. The first quarter benefited from the expiration of the Statute of Limitations on some previous tax provisions. When income or a loss in the quarter is small, small changes in state allocations or small changes in the estimated ordered settlements or in the expiration of Statute of Limitations of previously accrued taxes can have a disproportionate effect on the effective tax rates. The average number of shares used to calculate loss per share was 160.7 million for the three months. The creation of projections is difficult at any time and the current climate is particularly difficult to provide guidance given the numerous uncertainties related to the entire economy, employment, and to items such as sales prices, sales paces, mortgage markets, cancellations, consumer confidence, and the potential for future impairments. As a result we will continue not providing full guidance, however subject to our caveats outlined here and those contained in our statement of forward-looking information included in the release, and in our other public filings we offer the following guidance. We currently estimate that we will deliver between 2,000 and 3,000 homes in fiscal 2009. We currently estimate that the average delivered price for the year will be between $600,000 and $625,000 per home. For those of you who model quarterly, we expect that the average delivered price for the second quarter will be higher then the midpoint of the range and the average prices will decrease sequentially in the third and fourth quarters. We still believe that primarily due to continuing incentives and slower sales per community our cost of sales as a percentage of revenues before taking into account write-downs will be higher in fiscal 2009 then it was in 2008. additionally we believe based on fiscal 2009’s lower projected revenues our SG&A without interest although expected to be lower in absolute dollars in fiscal 2009 versus 2008 will be higher as a percentage of revenues. We also expect that we will have increasing interest expense included in SG&A in each of the next three quarters. At this point, I’ll turn it back to Robert.

Thanks Joel, many experts continue to believe we must first stop home price declines before we can resolve the nation’s economic and financial crisis. The recent stimulus bill shows that Washington is paying greater attention to our industry, however we think more is needed. We advocate a buyer tax credit of $15,000 to be made available to all buyers of homes, not just first time buyers. We must motivate the entire food chain of home buyers to stop the decline of home prices. Creating a sense of urgency is necessary to motivate buyers to act now. Therefore the credit should only be available for a limited period of time. If home prices are stabilized, financial institutions which today cannot value the mortgage-backed securities on their balance sheets will once again be able to trade these securities. This in turn will help stabilize the financial system. Housing starts are at their lowest level since measurement began 50 years ago and the resulting job losses have been brutally damaging to the US economy. The new home industry combined with the related services, building products, and home furnishing industries are together perhaps the largest employer in the United States. If Congress and the Administration can effectively call the bottom and thereby put a floor under home prices we believe the housing market will recover sooner, jobs will be created, bank balance sheets will improve, and millions of people will be able to return to the workforce. Right now the consumer is under the log, in a fox hole, scared about their jobs. And with good reason. If we can motivate the buyer for a short period with an incentive we can perhaps alter the deflationary spiral we find ourselves in. A $15,000 buyer tax credit is a direct way to do it. It doesn’t require a large bureaucracy or complex implementation. It goes directly to those we want to motivate to create demand which should stabilize prices by reducing inventories and freeing up the log jam in the home sale market. This generates purchases such as furniture, flooring, paint, drapery, and thousands of other items. And for those who can now sell their existing homes and want to buy new ones, creates construction and other jobs that go into that part of the market. Also if home prices stabilize and the economy stabilizes, we may not need to keep putting billions and billions of dollars into financial institutions. Its been a tough February, the Dow had its worst February since 1933, today we see automobiles were down 40% plus in sales and we hope that Congress and the President can help straighten this out. If not, we’ll do it the old fashioned way. We’ll just muddle through. I have the first question emailed to me by Evan Fox, Evan says, hi Bob, what is the primary reason you have been given by any government official as to why the $15,000 tax credit you seek has not been approved. Evan I think that was written about in newspapers many times over. A compromise needed to be reached, the Democrats and Republicans actually just three of the Republicans, had a hard time getting together and finally it was agreed that we would have stimulus package passed but what had to go was the dollar amount of that stimulus package downward and in order to get it downward, the Congress gave up the $15,000 and instead adopted an $8,000 for first time buyers only. Which I don’t think will work but I certainly hope does work. And I do think it was more important to get a stimulus package cooking then it was to hold out for the $15,000 and let us just sit there stewing. Evan writes further, most government efforts regarding housing, I think its governmental, have focused on foreclosed properties and keeping people in their homes. While this is obviously important, why do you feel the government has not taken more action to stimulate underlying demand via interest rates or tax initiatives. The answer Evan is I don’t know. I’ve had many discussions with quite a few Senators and members of the House of Representatives, and I still don’t know. It seems to me that there is a consensus among those that I’ve talked to, to recognize that housing is the root cause of a problem how we got into this fix along with the credit markets, and housing probably is the easiest way out of the fix and most of the legislators that I’ve talked to believe in this. I hope to speak to people in the Administration in the next week that have an opportunity to put forth the $15,000 tax credit among other credits and get us moving again. We’ll see what will come out of this conversation. Once there is price stability in the market Evan writes, and housing does begin to rebound assuming there are no further bankruptcies by public builders, thank you very much Evan, do you expect consolidation in the industry to take place as builders prepare for the next cycle and the simple answer to that is yes I do. We are now ready for your questions.

(Operator Instructions) Your first question comes from the line of David Goldberg - UBS David Goldberg - UBS: First question is about the proposal in Obama’s budget to limit the deductibility of the interest portion of mortgage payments and what you think that means for both buyers.

Well as soon as it was announced we got the pencils out, we cranked some numbers. Surprisingly enough if you, and I haven’t got the numbers in front of me, but there’s slight differential. Its not as bad as it sounded. At first cutting it off at 28%, by the way charitable worked the same way as I recall, seemed like it was going to mean quite a bit but when we put pencil to paper it didn’t amount to much and we don’t think it will have much of effect on the sale of homes. If in fact it passes. David Goldberg - UBS: And I would take that to mean psychologically too that’s not going to be a problem, I understand pencil and paper and the actual numbers but psychologically you don’t think its an issue.

Psychologically I think it’s a larger issue and we’ll have to do some explaining in order to get over that. I think one would come into the model, the sample area, discuss it with the salesperson, say why should I and I think we have to take the opportunity given to us in the sales office to explain why the differential is not that meaningful on a numbers basis. But you are right, there will be a psychological impediment that we have to overcome. It may not pass especially since charitable deductions are tied to it. But we may overcome yet. David Goldberg - UBS: I was hoping you could give some more detail, you mentioned in the release this morning that the land market you were starting to see opportunities and I guess I was wondering what it is that’s going kind of cost Toll to go out and pull the trigger, what is it that’s stopping you and what you’d have to see to start going out and acquiring lots that you thought (a) maybe you could deliver on quickly or you thought you were getting great deals.

I think that we just need to be convinced that forgoing some liquidity and cash on hand is better then not buying so we balance very closely with an eye towards the balance sheet and want to make sure that its an absolute screaming bargain, that its shovel ready, that we can get homes to the market quickly, that we don’t have to improve the property of course and that it will be perceived by even the most cautious and conservative to have been a good buy. The last thing we want to do is buy something that just slumps along and sells one a month and doesn’t put the money back on our balance sheet in fast order. David Goldberg - UBS: But just to clarify you are seeing those opportunities at those right prices.

We saw a couple and we had bid numbers into these properties, there was competition and we lost a couple to others. The others were not public builders but they were investors who thought that it was worth more then we did. I hope they’re right.

Your next question comes from the line of Kenneth Zener - Macquarie Research Equities Kenneth Zener - Macquarie Research Equities: Just wanted to get some flavor on the margin decline that you had quarter to quarter, could you talk about the balance between specs, mix, incentives and how did that kind of the margin that you guys ended up reporting shipped versus your expectations throughout the quarter.

Its about 130, its about one-third from incentives, about one-third from, a little bit more then one-third from overheads and a little bit from mix. Kenneth Zener - Macquarie Research Equities: Were you expecting that or did that just really roll away from you as the quarter progressed.

The only part that changed a little bit was the mix because we had a little bit more cancellations then we would have expected. Kenneth Zener - Macquarie Research Equities: Okay so you had a pretty good sense and you obviously talked about the sense going forward, were there any things that kind of changed that made you less optimistic relative to the delta or the run rate that we’re seeing right now or is it kind of just a one time step that we saw in that fourth quarter.

I think that we’ve talked about incentives going up and those incentives going up have a negative impact on margins and I think we’ve talked about the fact that as we slow production per community the overheads per community go up and that has a negative effect on margins. And I would expect that negative impact on margins will be with us for a while. Kenneth Zener - Macquarie Research Equities: You talked the last quarter you had spec counts at about 527, could you update us please.

I think we’re at five, on traditional communities we’re at 527 as of October 31, today we’re at 503.

Your next question comes from the line of Ivy Zelman - Zelman & Associates Ivy Zelman - Zelman & Associates: On your comments on the tax credit what would be the avenue to get a larger tax credit through now that the stimulus package is signed.

I don’t think its too difficult. Somebody throws it in the hopper. I have somebody in mind but won’t mention that somebody. He gets a couple of compatriots to go along with him. You get some help from the other side of the aisle so that’s it a little bit of a joint effort. You pass the bill, send it over to the other Chamber and they pass it and the President signs it. Sounds easy doesn’t it. Ivy Zelman - Zelman & Associates: Yes, real easy but I guess if there was broad support for it given that it was in the initial package, it would seem surprising that it would be able to get pushed through on a standalone basis but I guess your conversations with people there would imply that its something that could be back on the table.

I believe it will be, yes. Ivy Zelman - Zelman & Associates: Can you talk about what you’re seeing in the DC area and traffic wise and [inaudible] that’s different from what you talked about nationally with some of the turnover there.

We’ve seen more interest in DC market, both Maryland and Virginia, more traffic, more deposits, but its more of a churn in that we see I guess we’re up almost 50% 60% in initial deposits but we are up 50% 60% in cancellations. Now I’m not talking about cancellations of agreements, I’m talking about cancellations of initial deposits so we have a good turnout. We have a bunch of people sign up, give us $1,000 up to $5,000 depending upon the community for the initial deposit, go home, talk about it, come back, and ask for the money back. So we see more activity but we also see higher cancellations. Ivy Zelman - Zelman & Associates: And that activity that you’re talking about is that on the year over year basis.

It is not on a year over year basis, its on a week over week basis. Year over year I don’t think we’re doing so well. This year is obviously not as good as last year and last year was not as good as the year before and so on and so forth back to 2005.

Your next question comes from the line of Dan Oppenheim - Credit Suisse Dan Oppenheim - Credit Suisse: Wondering you’ve talked a lot about that tax credit in terms of $15,000, given the importance that you think it would have for homebuyers have you thought about doing a promotion for Toll Brothers that you could lower prices by $15,000, attract the buyers and that you’d have that advantage relative to other builders right now.

Yes, that’s a good question. The reality is of course that I don’t think there’s a homebuilder alive that isn’t willing to give a $15,000 incentive out of the current program. So I think incentives generally run on average a lot more and this would be simply giving this kind of incentive through a tax credit instead of dollars to be spent on options etc. All dollars being [fundable] it wouldn’t make much of a difference. The reason that we fight for an incentive from the government as opposed from ourselves is that if its introduced with some sincerity and fanfare by the Administration and by the Congress, should we get lucky enough to have Obama stand on a platform together with a couple of Senators and couple of Congressmen and say, we believe this is what’s right. What you have is the government calling the bottom and this has an opportunity to spur demand from those who are sitting on the fence who are scared, logically so, to go out and make the plunge, to come back home and tell their friends and family that they bought a new home, and suffer the quizzical looks as exists now to some extent as to why would you do a thing like that. Everybody knows its continuing to go down and anybody who writes about the market says we’re in for nine more months of spiraling downward home prices and then we’ll have the bottom. The problem is those nine months have been spoken about for the last three years. So the difference or the impact is not in the money per say, its in the bottom being called because if it’s a short term and I believe it should be, let’s say for six months, you have six months to contract, if you don’t contract in six months you lose the credit. So with some urgency being created by the Administration and Congress calling the bottom as it were, you have an opportunity to break the log jam called deflationary thought process that I think grips the consumer right now and I think its obvious when you read about 40% plus down car sales. Its obvious that the consumer is in a fox hole. And we’re trying to bring them out. Dan Oppenheim - Credit Suisse: Just wondering if its not so much about the money, want to think that the $8,000 tax credit that has gone through should be enough in terms of and not so much calling the bottom, but I guess you were talking about declaring the bottom, but then I was just wondering about land, if there are any areas in terms of where you would be looking for land at this point as to the opportunities out there.

We’re opportunistic. We like Florida, we like California, we like the northeast and the mid Atlantic states, we like Texas. Also there’s quite a bit of territory where we’re looking for land right now. To offer a retort to your comment about the $8,000, the $8,000 was done as a compromise. It didn’t seem as though anybody was proud of it and worst of all it was only for first time homebuyers. First time homebuyer buys from a homebuyer for the most part. I think new home sales last month were reported at 300,000 units and that didn’t take into consideration cancellations. The average from cancellations is something like 30% so you’re almost down to 200, you’re almost blown away. So where was I, I lost my train of thought on the 300,000, yes if you don’t motivate the whole food chain because the guy you’re buying from now has to get a home, but he’s minus $15, he doesn’t get the $15 because he owns a home so that’s why I don’t think the $8,000 worked.

Your next question comes from the line of Megan McGrath – Barclays Capital Megan McGrath – Barclays Capital: I was wondering if you could give us come clarity on your comments around traffic and in particular when you talk about comparing it to normal seasonal activity, what exactly is normal. Is that last year, is that long-term historical and I guess my question is is it looking like we’re actually going to have a spring selling season this year or is it trending more like it was last year.

The unhappy short answer is that the spring selling season traditionally begins around the last week in January, has much to do with football and probably is over by, traditionally is over by Passover or Easter. So basically you have one more month left of the spring selling season, so far that spring selling season has not come out of its hole and seen its shadow or not seen its shadow. It has rather seen its shadow and gone back into its hole. What I was talking to was the seasonality. You always get an increase of traffic from the, actually just the first weekend after New Year’s Eve, traffic starts to increase and pretty much runs up the height of the traffic is generally President’s Day weekend which has past and it runs down ever so slightly until Passover Easter and then pretty much banks away. Megan McGrath – Barclays Capital: On SG&A costs, you were pretty close depending on how you define it to being unprofitable or unprofitable right down to this quarter does it make you rethink at all how quickly you’re brining down your SG&A expenses, do you think you need to do that faster.

As a matter of fact we had a discussion about that today, sure it makes you focus, numbers hit you between the eyes. We’ve been happy, I wouldn’t use the word happy, we’ve been satisfied with the reduction in overhead that’s taken place both in dollars and in headcount but we may have to become unsatisfied and do better.

Your next question comes from the line of Carl Reichardt – Wachovia Carl Reichardt – Wachovia: I had a question on your priority for use of cash, you’ve talked a bit in this call so far about land opportunities, but I’m wondering why given your guidance for 3,000 closings at the high end, that’s about 13 years of land at your current supply, why wouldn’t you, or what are your thoughts on buying back debt versus land right now.

Buying back debt would have to be as good an opportunity. Buying back debt has a double whammy. Buying land just has a single whammy and we do look at both and we discuss both. We talked about that two days ago Joel.

In this time we think cash is king and having that cash is both protective and an opportunistic asset. We think its very important to bend, we have significant availability of cash to do what maybe needed to do and it protects us on the downside. So we think it’s the right call and when we are ready to buy back debt you’ll see it.

But the debt has a double negative when you buy it back.

It reduces cash and it’s a positive in that it reduces leverage and it reduces the way they count and if you buy it back at less then par it increases your earnings. And most of the debt in the homebuilding industry is trading at below par today. So you couldn’t replace that debt in today’s market at any significant amount of money.

Obviously if we’re looking at a piece of ground that’s around the corner from ground we already have makes no sense. But if we’re looking at ground in the same market, so we’ve got the overhead already there it represents additional opportunity to do business and make money, we think that may be the right call to purchase same. So far it hasn’t been the right call. Carl Reichardt – Wachovia: Have you looked at what the interest incurred right now is on land you’re not developing and what the effects that is has on the increase in the future cost basis for the land. If its land you’re not going to build out for five or six years, is that, have you looked at what that would cost and how that would effect the returns for that. In some cases would buying the debt back in order to reduce that interest help improve your returns.

We still try to buy wholesale and where we’ve had to write-down land we’ve reduced the cost of that land and yes, from an accounting standpoint when you capitalize interest you increase the basis which will reduce your future profitability. We think our land is located in good locations. To give it away is the wrong answer. And when we’re buying new ground its opportunistically at very high returns. Current higher returns maybe then the land we currently owned would yield us.

Your next question comes from the line of Michael Rehaut - JPMorgan Michael Rehaut - JPMorgan: Just to kind of go back to the comments regarding seasonality and first off if its at all possible, I know you don’t like to comment intra quarter regarding trends so far, but given that we just came off of a near 60% year over year decline in orders in the January quarter, are we looking at a similar type of decline for 2Q as far as you’ve seen so far in February, if you just don’t see any type of, anything more then just seasonality. How should we think about order trends for the next couple of quarters.

I don’t we’re, the quarter is not over. When the quarter is over, we’ll report it. Its been a tough season. I think Robert has responded with the fact that its been, its still tough and I think that’s where we’ll leave it. Michael Rehaut - JPMorgan: Just to understand that are you surprised at all that perhaps the 3.99 mortgage or other recent newer types of incentives didn’t create a more positive effect in terms of orders.

No, I’m not surprised. We got a significant response. It wasn’t overwhelming but it was significant enough to boost sales. We think that we paid less for it then the benefit that we received. And I think it goes back to the conversation we had about the consumer being under the log, being scared of losing his job which is a reasonable fear. And the impact that we might see from the calling of the bottom as opposed to one incentive program versus another. And I think until you break the psychology of the deflationary spiral that we’re in, with everybody sitting on their hands, being in the foxhole. Until you break that psychology you’re going to have a very tough time moving the market. The 401K comes back to you and shows you what we all know has happened to the indexes in the past three months rolling backward, that’s got to depress you. And there’s a not a lot of people out there that are immune from 401K results and from fear of losing job that are also in the market for homes or automobiles for that matter. We’ve got to break out of the psychology before we see progress. Michael Rehaut - JPMorgan: you had comments regarding land that’s out there and said that you had bid, made a couple of bids, but didn’t get it, I was wondering if you could give an idea of how large those deals were in terms of either lots and also geographies and lastly certainly the bid that you put in, penciled for you otherwise you wouldn’t have and I was wondering what type of home price assumptions, future assumptions you built in that made the deal work if you were looking for flat or down or whatnot.

Well the assumptions were simple, I’ll just give you the average instead of taking everybody’s time and going through the various opportunities that we’re speaking of, but on average let’s say we’re talking about a $600,000 house, and we’re buying lots all in, improved, tax, tax and [inaudible] code for $50, $60,000. Which is fairly, everybody that’s been associated with our business knows that’s a fairly easy call. The two states that were involved in the several offerings that we bid on were New Jersey and Florida. We lost by $5 to $10,000 a lot. In all of the instances we were happy with our bid, happy with our numbers, thought that it was the right number to go, believed that those purchased will do just fine. But they didn’t make a bad buy, they didn’t overpay. They just weren’t looking for as much of a slam or home run as we were. We’re happy with ending up without the land and with the cash and we’re convinced that sooner rather then later there will be some winnings for us. Michael Rehaut - JPMorgan: And just the rough size of the deal.

They averaged about 100 lots. And there were terms. Michael Rehaut - JPMorgan: These are being sold by a private builder or a bank or –

No in all cases we’re talking to the bank.

Your next question comes from the line of Rob Stevenson – Fox-Pitt Kelton Rob Stevenson – Fox-Pitt Kelton: When you think about construction costs and materials, how far have they come down in the last six months and how much further you think you can take them down in this type of environment.

I haven’t got the numbers.

About $2,000 a house on average in the last three months and I think the number was a little bit higher in the three months before that.

And I think you’ve got a lot more to go if the market stays the way it is and we hope the market doesn’t. Rob Stevenson – Fox-Pitt Kelton: The contracts in the north region in the release looks like that they averaged about $272,000 a piece, what type of assets, what type of houses were those and what type of locations.

I think that’s a net number, I don’t think that’s a gross number. We had if you noted in the

We’re in the wrong business if that’s the number.

I think you’ll notice that we had a number of higher priced cancellations that distorted that. Rob Stevenson – Fox-Pitt Kelton: I was just looking for, $272,000 a home trying to figure out what you were selling at that type of a price.

We’re selling about one-half to one third of the house at that price. Gordon Jones says, has the California 10,000 new home tax credit had any impact on traffic, yes positively, or on sales thus far. No not on sales thus far. Ones and twoseys. It just came out, we just got the marketing piece out. We would expect to see more this weekend. It definitely should have an impact because its not just new home first time home buyer and added to the urgency is that its good for approximately 10,000 homes. And when those are gone, the state created incentive disappears. So we think it will have much greater impact then the federal $8,000 first time homebuyer tax credit has had so far.

Your next question comes from the line of Nishu Sood - Deutsche Bank Nishu Sood - Deutsche Bank: I wanted to ask a question about the opportunities you’re looking at out there in terms of the land purchases, you describe your desired projects as being low risk, short term, shovel ready, I think that’s pretty much the consensus view in terms of the people that are out there looking at opportunities either the public builders that have some cash or the distressed opportunity fund, so if everyone is looking at the same type of projects, wouldn’t that argue that the real opportunities lie elsewhere in the longer term, I guess you could argue higher risk, a larger capital expenditure projects.

Higher risk, higher reward or busto. We tend to concentrate in reverse making sure as my daddy said we’re already rich, the idea is not to get poor. With respect all of the usual suspects bidding we haven’t seen that. In all cases that we bid we were the only builder the other bidders were speculators and investors. But remember they’ve got to go find a builder. Nishu Sood - Deutsche Bank: What does that argue to, does that just argue to that there are so many opportunities out there or—

No not yet, I don’t think it argues to there’s so many opportunities because there are far from so many opportunities. This isn’t even close to what came out in 80, 81, 82, what came out in 89, 90, 91. we’re nowhere near that. You’ve got a strange anomaly cooking here, that on the one had you’ve got government regulators telling banks that this is not, these real estate loans are nonperforming, they’ve got to get them off their books, they gotta get them out their door otherwise they’re going to slam the capital. And on the other hand you’ve got a guy that walks in after and says I’m here from [talcum powder], tarp, talp whatever who wants a billion, who wants a billion. So you’ve got a double edged message going to financial institutions as to what they’ve got to do so you don’t see land popping out as they ordinarily would were it not for the depth of the crisis and the willingness of the government to bail the banks. Nishu Sood - Deutsche Bank: You also mentioned in terms of the impact on your balance sheet the difficulty in replacing your current debt or being able to kind of offer any new debt out there so as you’re looking at these opportunities for investment, how would you expect to be funding that, would that imply an external partner or would you restrict your opportunities to the amount of liquidity you have on hand.

I think both are possible if we saw a big deal, our opportunity to acquire a large amounts, we’ve had ongoing conversations with a number of money sources who would love to partner with us for those large opportunities and for smaller transactions, we would do that out of our own assets.

Your next question comes from the line of Timothy Jones – Wasserman & Associates Timothy Jones – Wasserman & Associates: Last quarter you had one sale per subdivision per quarter, how are you keep going like that. I know of no other builder that can survive on one sale per subdivision per month, let alone per quarter.

We had that same question from some guy who said it was Tim Jones and sounded like— Timothy Jones – Wasserman & Associates: I’m still, I still haven’t got, I still haven’t gotten an answer—

All I said to you, we’ll have to wait and see won’t we. Timothy Jones – Wasserman & Associates: Okay can you do it, will you have to lower prices and if that will cause a bunch of inventory problems.

I don’t think the answer is to lower prices because at a certain point we’ve made, make determinations that it doesn’t pay because if you lowered your prices so that you’re just trying to make back your land then you have to look at what is your land worth and if you’ve determined that your land is worth 100 and by selling at this lower price you’re in effect selling your land for 50, its easy to make the determination that you’re better off holding the land and shutting down the job or banking down the overhead and maintaining the job for as little as you can while you keep the sales effort alive. And you just have to think of whether you want to keep the sales effort alive or not. Timothy Jones – Wasserman & Associates: What you’re saying is your going to utilize your extremely strong balance sheet, if you have to wait it out you wait it out.

Exactly. As I recall you live somewhere near Boca Raton. Timothy Jones – Wasserman & Associates: No I live in Naples now remember.

Oh now you’re in Naples, I’m sorry. Forgive me. Putting it in a Naples kind of equation, take a look at the communities that we have fortuitously, well maybe its not fortuitous but we’re just fortunate, all of the Naples projects are working well and we’re making money. As a matter of fact we’ve even raised some prices. Would be kicking myself if we had dropped the prices and given away the product when you couldn’t give away a home in Naples last year, a little more then last year, about a year and a half ago Naples was a ghost town. Now it’s the best territory in Florida. So you don’t want to write stuff off that doesn’t make any common sense. Timothy Jones – Wasserman & Associates: Your Livingston project is 200 yards from me. You said you put that you could hopefully do between 2 to a maximum of 3,000 units this year, if I just take your backlog, your deliveries for the first quarter—

I didn’t say my maximum, I said we expect to do between 2,000 and 3,000. Timothy Jones – Wasserman & Associates: On the 3,000 and I know you’re in the range, if you have the backlogs the first quarter deliveries, the backlogs and the specs, you get about 2,800 units, I would think that would be the absolute maximum you could expect.

No I have some multifamily specs, and some condos I could sell and some other things I could do to get me over 3,000. I don’t believe that will happen.

Your next question comes from the line of Joel Locker – FBN Securities Joel Locker – FBN Securities: I wanted to get your thoughts on buying back some of your later dated debt, and I know some of its trading at $0.80 on the $1.00, just with your cash balance if that’s an option or if you have any amendments restricting you to do that.

We have no amendments restricting us. it is an option and certainly the last place I’m going to announce our thoughts on that is here and now.

Your next question comes from the line of [Garland Buchanan – Babson Capital] [Garland Buchanan – Babson Capital]: Given your market position as a high end homebuilder are you seeing any competition from foreclosures in your market and if so—

As the dear departed candidate for Vice President once said, you betcha. [Garland Buchanan – Babson Capital]: Can you give any color on which markets are hitting you hardest on foreclosures.

Vegas comes to mind. California, Arizona, that’s about it for outstanding markets for foreclosure that is. [Garland Buchanan – Babson Capital]: You gave ballpark figures for expected unit sales and ASPs for those, can you do the same thing for margins.

No.

I don’t think the answer is no.

We could but we’re not going to given the vagaries of all the things we talked about.

Your next question comes from the line of Buck Horne – Raymond James Buck Horne – Raymond James: On the SG&A front are there any buckets of say low hanging fruit in the SG&A that you can pull to make a big difference in the run rate you’re at in a short period of time.

Yes. Buck Horne – Raymond James: Can you elaborate.

I could fire off senior management starting with me and work down and that would be an easy way to cut some overhead. Just have to weigh whether that’s what we want to do. Buck Horne – Raymond James: Regarding the land here that you’re considering purchasing, just thinking about it is there a risk that if you buy some land in some of your existing markets that you would bring that land, that would become to the front of the line, and you would push back your existing land a little bit further out and push the absorption pace until you sold it out further out in time, wouldn’t that lead to risk incurring additional impairment charges.

If it came anywhere close during the analysis to incurring further impairment charges, obviously you’d be out of the room, you don’t want to look at that any further then having the first thought about incurring additional impairment charges, but your analysis is correct that if, what you’re looking at, let us suppose is so tasty that you say, I’ve got to make a bid on this and then you notice that you’re, as I said earlier, in the market around the corner in the same logical neighborhood that people would shop, then if this is such a bargain then you’ve got to push your other stuff further out and you’re going to incur greater interest charges, real or theoretical use of money kind of analysis. And its just a matter of numbers but I know from where our heads are now that if we think that we’ve got to get into that kind of analysis we’re really not interested. Right now being super conservative I guess out of fear that we have no idea how long this down market is going to last and we have no understanding as to whether we’re headed for inflation, in which case we’ll be buying more land, or deflation in which case, cash is the only thing that makes sense puts us in a spot where as I said earlier, we’re only jumping if its super obvious.

Your next question comes from the line of Jim Wilson – JMP Securities Jim Wilson – JMP Securities: I just want to follow-up on the land issue, if you could give even more color that would be great, as to where you’re seeing opportunities geographically pop up if there is any concentration or part of the country that seems to be willing to start moving land faster and then secondly—

Excuse me, I gave that and that was with specific deals, I would just add California to it. That doesn’t mean that we don’t see stuff in Phoenix and Vegas, if you want to buy land, I can get you all you want in Phoenix and Vegas within the next 24 hours but those markets have been so heavily hit we’re really not entertaining even if a guy came to you for a nickel a lot, right now those markets are not where we want to go. But California makes sense and we are looking in California in addition to Florida, northeast, mid Atlantic states that I mentioned earlier. Jim Wilson – JMP Securities: Coming out of the banks are these the banks now finally being willing to entertain offers at all or were they trying to move the product at higher prices earlier and now just getting more realistic about what they can realize on selling land.

Both, getting more realistic and then just finally deciding to move the product. We’re run into both kinds of scenarios.

Your next question comes from the line of Unspecified Analyst

I was wondering if you might be able to add a little bit more color on the use of cash in the quarter and then also either on a quarterly or annual basis what your mandatory cash spend is for taxes and maintenance etc.

They all change so going forward I don’t think we’re going to respond on what our, our interest number is a disclosed number so its in the Q’s and K’s, you can see what it is. But the taxes and stuff is not a disclosed number and I’m not going to be forecasting what it is because it changes time to time. The use of cash primarily the decrease in cash for the quarter was attributed to two major items, which was the payment of some previously pretaxes and the retirement of some debt which was due during the period and we disclose the debt as we expect it to be paid in the 10-K, there is a footnote on it and if you go back through the 10-K which was only recently filed you get an idea of what else we expect to be retiring this year in terms of debt.

Your next question comes from the line of Stuart Friore – Hunter Global Stuart Friore – Hunter Global: I’m just trying to understand the impairments, it seems like absorption continues to slow and possibly get worse and pricing continues to decline so why are the impairments not getting worse as we kind of move along.

We don’t always use current absorptions, we may in fact build in slower absorptions then we currently had, we may build in different prices then we currently see into the absorption numbers. We generally build in periods of time before economies change and so you would hope that once you set an impairment you don’t have to go back to offering to adjust that again and it does happen. But we have seen a significant change in velocity of sales that took place after mid September, October when Lehman went under and that has continued and that took a number of communities that were not requiring an impairment based on previous paces to the point where they now require, they end up with negative cash flow and that requires us to present value everything and so you continue to have that effect that takes place which is why the number was even as big as it was. Stuart Friore – Hunter Global: Do you feel like the absorption rate that’s being assumed in the communities today essentially reflects this pace post Lehman Brothers.

We hope so. We look at current absorptions when we do the analysis. We are constantly updating it and obviously we use assumptions as to when markets turn and in that evaluation but we hope that we’re using a good, as best information that we have available to us to do those calculations. Stuart Friore – Hunter Global: Is that analysis any different at quarter end versus year-end.

No.

Same process is done every single quarter. There is no difference for us.

There are no additional questions at this time; I would like to turn it back over to management for any additional or closing comments.

Thank you everybody, thank you Jennifer, have a good day. Bye.