Ian J. McCarthy – President, Chief Executive Officer & Director Allan P. Merrill – Chief Financial Officer & Executive Vice President Robert L. Salomon – Chief Accounting Officer Jeffery S. Hoza – Vice President & Treasurer

David Goldberg - UBS Michael Rehault – JP Morgan Nishu Sood – Duetsche Bank [Alex Baron – The Housing Research Center] Dennis McGill – Zelman & Associates Joel Locker – FBN Securities Jim Wilson – JMP Securities

Welcome to the Beazer Homes first quarter fiscal 2010 earnings conference call. Today’s call is being recorded and will be hosted by Mr. Ian McCarthy the company’s Chief Executive Officer. Joining him on the call today will be Allan Merrill, the company’s Chief Financial Officer and Bob Salomon, the company’s Chief Accounting Officer. Before he begins Jeff Hoza, Vice President and Treasurer will give instructions on accessing the company’s slide presentation over the Internet and will make comments regarding forward-looking information. Robert L. Salomon: Welcome Beazer Homes’ conference call on our results for the quarter ended December 31, 2009. During this call we will webcast the synchronized slide presentation. To access the slide presentation go the investor homepage of Beazer.com and click on the webcast link in the center of the screen. Before we begin you should be aware that during this call we will be making forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. Such risk and uncertainties and other factors are described in our SEC filings including our annual report on Form 10K. Any forward-looking statements speaks only as of the date on which such statement is made and except as required by law we do not undertake any obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. New factors emerge from time-to-time and it is not possible for management to predict all such factors. Ian McCarthy, our President and Chief Executive Officer and Allan Merrill our Executive Vice President and Chief Financial Officer will give a brief presentation after which they will address which you may have for the duration of this one hour conference call. We are also joined by Bob Salomon, our Chief Accounting Officer. In the interest of time and allowing everyone a chance to ask questions we kindly request that you limit yourself to one question and then one follow up. I would now like to turn the call over to Ian McCarthy. Ian J. McCarthy: In our first quarter we were pleased to generate substantially higher new home orders from continuing operations compared to the prior year helped by a lower cancellation rate as well as improved gross margins and lower operating SG&A costs also compared to the prior year. We’re also pleased with the progress we made improving our balance sheet both during and after the end of the quarter. The increase in equity and reduction of debt better position us to fully participate in the eventual recovery. During the first quarter we experienced very high volatility in our sales patterns with October and December relatively strong and November quite disappointing. In part, we can contribute this pattern to the initial expiration of the housing tax credit on November 30th which was subsequently extended until April 30th. More broadly we see home buyers caught between the factors that favor a resumption of growth in the new home market and those that weigh against a meaningful recovery in the near term. As we have previously noted attractive interest rates, historically high housing affordability and the federal tax credit are attractive more positive buyers to purchase a new home and recent signs of home price stabilization are very encouraging. On the other hand, elevated unemployment, the overhang of foreclosures and the threat of rising mortgage rates as the feds withdraw from the MBS market make it difficult to predict when and to what extent the housing market with sustainably recover. While our visibility remains quite low, we continue to be cautiously and patiently optimistic about this fiscal year. As I noted we have made significant progress in improving our cancellation but we’ll continue to maintain a disciplined operating approach focused on gradually improving profitability while continuing to protect our liquidity. While our first quarter financial results show signs of improvement, they still reflect the extremely difficult economic and home building conditions we and our peers have been dealing with for the past three years. We continue to execute on our operational and strategic priorities to move our business forward for the benefit of the company’s stakeholders. These priorities include generating and maintaining sound liquidity, effectively allocating capital and resources, differentiating Beazer to our customers, positioning for a return to profitability and addressing our capital structure, all with the aim of generating profitable growth and shareholder value over an entire housing cycle. As it pertains to capital allocation, while we continue to exercise discipline in land acquisitions we are cautiously exploring opportunities in many of our markets. We have the benefit of owning a good supply of finished lots so our efforts are really aimed at controlling positions that can generate home closings in 2011 and 2012. As such, our current emphasis is on controlling additional rolling option deals at favorable prices and terms. We’ve acquired several distressed deals, finished lots well below their improvement costs with a view to supplying our needs over the next several years. We aren’t contemplating any speculative land banking, each deal we have improved with a holding option or bulk take down has fallen within our target notes represented by the buyer profiles we serve in very specific submarkets. As we anticipate improving conditions for selling new homes, we are focused on creating a home buying experience that differentiates Beazer in the eye of the consumer. A great example is the recently announced expansion of our industry leading eSMART program. We have committed that every home we build will be a high performance home that saves energy, conserves water and improves indoor air quality. Through our four year investment in the Imagine Homes in San Antonio we have been able to develop award winning technology and then incorporate that technology in to every home in every market across the country. The investment we have made in the envelope of our homes by enhancing the insulation and ceiling gives our homes a competitive advantage compared to other new homes, resale homes and importantly foreclosed homes. In addition to the expanded range of features included in every home we build, we have developed integrated advanced packages through eSMART Plus and eSMART Green that our customers can purchase. I’d encourage you to review the eSMART features we offer on our website. Now, let’s review the results for the first fiscal quarter. Beginning last quarter we have classified the results of operations historically included in the other home building segment as discontinued operations for all periods presented. These results related to markets we’ve previously determined to exit and where home building operations are completed. For the first quarter, total revenue was essentially unchanged from the same period in the prior year. Income from continuing operations was $1.09 per diluted share including a significant tax benefit compared to a loss of $2.05 per share in the prior year. For the first quarter home closing increased 8% year-over-year to 961 units while the average selling price of $222,600 was 8.8% below the same period in the prior year. As previously disclosed, net new home orders of 728 for the quarter represented an increase of 36.6% year-over-year. This increase was primarily due to a significant reduction in our cancellation rate which was 26.9% this quarter compared to 46.1% in the prior year. Home sales benefitted from attractive interest rates, historically high housing affordability and home buyer tax credits. In August we expressed confidence that we would generate positive year-over-year new home orders for the September quarter and again in the December quarter. This proved to be the case. We have also said that we expect fiscal year 2010 orders to exceed fiscal year 2009 levels although not necessarily in each quarter. We still believe that but the caveat relating to quarterly variability is important. We cannot fully anticipate the impact of the extended tax credit that will have on our home sales or the extent to which any increase may simply reflect a pulling forward of demand. As such the seasonality of our order pattern this year is likely to be somewhat different than in prior years. It’s worth noting that at these very low levels of new home activity it is not a foregone conclusion that home sales will slow appreciably with the expiration of the tax credit. An improvement in employment coupled with stability in home prices could improve buyer’s confidence which in turn should sustain higher new home order levels compared to last year. Having said that, we are planning for a softer second half of the year but hoping for something better. Resulting backlog as of December 31st was 960 units with a value of $232.3 million, essentially flat in units terms compared to last year. The average selling price in backlog did improve by about $7,000 but this was entirely due to a change in the mix of backlog units away from the southeast segment towards the higher priced east and west segments. I’ll now turn it over to Allan to further discuss our financial results and other items. Allan P. Merrill: We continue to be very focused on increasing efficiency in our business and diligently managing overhead expenses. In absolute dollars total SG&A declined 15.1% year-over-year. As a percentage of revenue total SG&A declined from 24.7% in the first quarter a year ago to 20.9% in the first quarter of this year. As provided in previous quarters, Slide 12 is a breakdown of our SG&A expense. Since the reported aggregate number is significantly impacted by the various legal, severance and settlement expenses we have incurred over the past several quarters, by removing commissions which are a purely variable component as well as G&A costs related to severance, legal and professional fees stock compensation, we arrive at an operating G&A totaling 12.1% of revenue in the first quarter compared to 15.9% of revenue a year ago. In dollar terms, operating G&A is now at a level that is sustainable until we see material increasing in closings. Total gross profit margin for the quarter was 12.9% before impairment and abandonment charges, a 160 basis point improvement from the first quarter of last year but a 170 basis point reduction from the September quarter. As we said last quarter, gross margin trends are difficult to evaluate over short periods of time. We expect our gross margin for fiscal 2010 to be higher than our full year gross margin for 2009 but there will continue to be some volatility between quarters due to differences in mix and volume. In the December quarter we also had a million dollar warranty charge for water intrusion in the condo building. We expect to recover a portion of these costs from subcontractors but our policy is not to record it until we collect it. Since we don’t attempt to predict these major warranty items we have to live with some margin volatility. After impairment and abandonments, we generated a positive gross margin of 8.8% for the quarter compared to a gross profit of 5.6% for the comparable period of the prior year as a result of lower inventory impairments and option contract abandonment charges. Inventory impairments totaled $8.8 million in the December quarter. Of that amount $7.8 million related to properties held for development and $1.1 million related to land held for sale. Impairments on held for development inventory were primarily in our Las Vegas and Florida markets. The December quarter impairments represented 392 lots in eight communities. Lot option abandonment charges were minimal at $3,000. In our discontinued operations we had a $2.7 million joint venture write off. We cannot say that the impairment cycle is done but we can say that improving absorption rates and firming prices are currently reducing the probability of significant additional impairments. Of course, if prices or absorptions deteriorate materially, our impairment calculations will reflect those factors. As with our previous filings, you will find additional disclosures as it relates to impairment charges by segment in our 10Q which we expect to file later today. Our land position as of December 31st totaled just under 30,000 lots, 83% of which were owned and 17% of which were controlled under options. This reflects reductions of approximately 19% from the level as of December 31, 2008. Our total controlled lot count as of December 31st is less than a third of what it was the peak in 2005. Excluding property held for sale, approximately 39% of our remaining owned lots were either finished lots or lots upon which home construction had commenced. None of our active land was in the form of raw land. Over the past several years we have dramatically reduced land and land development spending. Last year our total land spending was just under $200 million compared to $333 million in the prior year. In the first quarter land and land development spending was approximately $30 million compared with $59 million in the prior year. For the full year we now expect cash expenditures on land and land development to be similar to 2009 levels although this could be adjusted up or down based on market conditions. While we continue to maintain strong discipline with respect to new home starts and spec inventory, we modestly increased starts this quarter reflecting both anticipated seasonality and our better selling results. At December 31st we had 641 unsold homes under construction representing an increase of 7.5% from year ago levels. Despite the increase in starts we had only 291 unsold finished homes at the end of the quarter representing a decline of 42% from last year. We do not contemplate further structural reductions in our unsold home inventory levels but rather the resumption of more normal seasonal patterns. Over the last year we have stated that the primary [inaudible] from our recapitalization are to protect our liquidity, increase our net worth and reduce total indebtedness. We are not announcing any new recapitalization plans today but I will spend a few minutes just describing what we have accomplished since the end of the quarter on the next slide. At December 31st our total debt stood at $1.5 billion decreasing about $235 million during the past 12 months. Stockholders’ equity and consolidated tangible net worth were $247 million and $189 million respectively. These figures include the book value pick up from our $101 million cash tax refund but not the receipt of the cash. The refund is reflected as a receivable which we expect to collect prior to March 31st. As Ian mentioned, since the end of the quarter we have made substantial additional progress in our recapitalization effort which we have reflected in a pro forma column on the slide. First, we issued both common stock and a mandatory convertible subordinated note. These transactions resulted in net proceeds of just over $150 million and substantially increased our equity. Since the mandatory convertible debt will automatically become equity within three years, we have treated that as perspective shareholders’ equity in the pro forma column. Second, we used the bulk of the proceeds of the two offerings to redeem our unsecured 2011 senior notes totaling $127 million and third, we modified our previously issued subordinated notes. The modification of terms resulted in a onetime non-cash gain of between $54 and $61 million. This gain which is represented by a reduction in the carrying value of the notes on our balance sheet, will amortize against income over the next 26 years. The pro forma column reflects all of these transactions plus the receipt of the cash from the tax refund. With more cash, more equity and less debt than we had just three months ago, we think these steps significantly improved our ability to capitalize on future opportunities. Going forward, our attention will be on managing our remaining near term maturities and accelerating our return to profitability. Between cash redemptions and secured or unsecured financing transactions, we believe we have the means to manage these remaining maturities and still fully participate in the eventually housing recovery. At December 31, 2009, we had total cash and cash equivalents of $480.5 million including restricted cash at $47.7 million to sufficiently collateralize outstanding letters of credit under our current LC facilities. The September quarter is historically a high watermark for us as it relates to cash balances because it is generally our strongest quarter in terms of home closings. Conversely, the December quarter is traditionally a significant use of cash quarter. Despite the seasonality in cash, on a pro forma basis for the items discussed a few moments ago, we will have the largest cash balance in the history of the company. We appreciate the importance investors place on our cash position and we continue to place great emphasis on maintaining significant liquidity. As such, our current expectation is that we will end the year with a cash balance similar to the balance at the beginning of the year. This expectation is before the impact of any potential incremental recapitalization transactions but does reflect the financing transactions we completed, the repayment of our 2011 unsecured senior notes, the receipt of our tax refund and land spending roughly comparable to last year. It is important that investors understand that whether we ultimately have a higher or lower cash balance at the end of the year will be a function of both the market conditions and the decisions we make with respect to potential recapitalization and investment strategies. Since we can’t speculate about every potential macro and operating scenario, I will simply say that we believe we have plenty of liquidity to operate the business in a range of scenarios we can foresee. With that, I will turn the call back over to Ian. Ian J. McCarthy: We’ve been encouraged by the early signs of improvement in our business which started in the September quarter and has continued since. We expect that 2010 will remain challenging and we realize the housing market will be heavily influenced by the home buyer tax credit and other forms of governmental stimulus this year. Nonetheless, we believe we are taking the right steps to position the company to benefit from improving conditions in the years ahead. Finally, I would like to again express my appreciation for the support of our many stakeholders as we continue to work diligently through these challenging times. Importantly, I’d like to extend a special welcome to our newest shareholders whose support allowed us to substantially improve the company’s balance sheet last month. We’d now be happy to answer your questions. Operator could you please give instructions to our participants so they may register their questions?

(Operator Instructions) Your first question comes from David Goldberg – UBS. David Goldberg – UBS: I wanted to maybe start by asking you about digging a little bit more in to your comments Allan and Ian of Slide Six the Venn diagram chart. I’m just trying to get an idea now that the balance sheet is maybe sured up a little bit, how you guys are thinking about strategy wise maybe looking at focusing on margins? What do you change about this strategy to maybe bring the margins more in line with your peers and what kind of time frames are you thinking about in terms of being able to do that? Obviously, it depends a lot on the macro environment but I’m just trying to get an idea of how the strategy changes at this point? Ian J. McCarthy: I think what we’re going to try and do is execute what we really started to last year which is taking costs out of the business still in terms of our purchasing deliveries. We were very successful last year in terms of taking costs out. We didn’t have the benefit of a full year of that but we’re going to see that coming through as we go in to this year so I think that’s one of the primary goals for us there. We’re also seeing in some markets some real stabilization in pricing so I think we’re able where we can to actually look for very small incremental improvements in pricing. I think both of those factors are going to help profitability and certainly we’re very focused on that. We’re very focused on enhancing our margins. I will say also though that we do believe that we’ll be able to capture some market share as we go through this period. We’ve said before that it’s certainly going to be difficult for the private builders to get financing here so I think the public builders and certainly we fully expect to capture market share. We’re also extremely excited about the introduction of our enhanced eSMART program. We’re getting a terrific response from the market to that so I think that’s really giving us position there where we can add some value to our homes for our buyers but enhance the position of our homes so it’s all with a view to firstly gaining some volume gains and then we certainly know we have to work on profitability and bring that up but that process is certainly in place. David Goldberg – UBS: Do you think your incentives are in line with peers? Ian J. McCarthy: I think they are. They’ve certainly come down over the last year. I mean, that’s the first thing that we see is that incentives are coming down. We still have to negotiate with buyers, they expect to negotiate and we’ve got that built in but I would say we’re definitely I would think in line with our peers though. David Goldberg – UBS: Then just a quick follow up if I could sneak it in here and it might be too early to tell but I’m trying to get a better idea if presuming there was a change in ownership in the stock issuance, I’m trying to get an idea of what that did in terms of potentially limitations on the deferred tax assets and how we should be thinking about that on a go forward basis? Robert L. Salomon: At this point our advisors are working through whether we actually had a change in ownership under Section 382 but if we did have a change we certainly would have to revalue the carry forward limitations based on the calculation and it is certainly possible it will change and potentially decline somewhat. Allan P. Merrill: We were already, as you know David, subject to a $17 million cap and a prior ownership change so if we had one that may come down a little bit but we don’t know. As you said, it’s a bit early yet.

Your next question comes from Michael Rehault – JP Morgan. Michael Rehault – JP Morgan: The first question just goes to Slide Seven where you’re talking about differentiating Beazer Homes and some of the initiatives. I was wondering if you could describe, I mean it’s always been a goal to kind of create a Beazer brand and I was wondering if you could share any statistics in terms of how you measure the success of that either in terms of if you have consumer recognition statistics or I think ultimately the goal would be to be able to charge a premium relative to your competitors in a given market? That’s my first question. Ian J. McCarthy: You certainly recognize that we have worked on a brand. Very much for our Internet strategy, we wanted to have a consistent message that we delivered to our home owners and perspective home owners. Over the last four years now, it’s a full four years we’ve been working on differentiating ourselves and taking a leading position there in the green position. As you know we invested in the company, Imagine Homes in San Antonio. We’ve used that as an R&D lab. We’ve developed ideas there, we won home builder of the year twice, 2008 and 2009 with that company and we have now brought all of those ideas over in to Beazer Homes. We don’t integrate every idea in to our basic eSMART package but we do as you move up to eSMART Plus and eSMART Green. eSMART Green is the total package from San Antonio. No one else offers this on a nationwide production basis so I think we certainly have differentiated ourselves there. We only have one month’s results of that. We spent the December quarter focused internally making sure everyone of our investors within the company understood this program. We’ve had training for our sales team in San Antonio, we’ve had building science experts talk to our production managers, our division presidents and we launched it at the beginning of January. So, it’s very early to say on the success but I’m very pleased with the response so far. I think we really do have an opportunity to differentiate ourselves and help us increase pricing going forward as I was mentioning to David just now. I think we will be able to do that, we’ll be able to show home owners the substantial improvement in terms of their energy costs going forward and in total cost of ownership between a Beazer Home and another non-energy saving water conserving home in that way. I think we’ll be able to show them how much they can pay for our home and what the total cost of ownership is going to be. Allan P. Merrill: Michael, one other thing just a bit more of a numeric reaction which is I look at one of the big objectives of the Beazer brand and the eSMART program is to lower the acquisition costs of customers. It’s not entirely about raising prices or charging more but if people are generally aware of us and we are attracting that customer base in to our models and on to our website because there is recognition of what we are doing is different, lowering that acquisition cost of customers is also an important aspect of the program. Michael Rehault – JP Morgan: One other question on the SG&A, you’ve broken out some of the different components of that and just trying to get a sense of number one it does seem like the JV accrual reversal is probably more of a onetime item. That’s kind of the first comment or if you had thoughts on that. The other is when you break out commissions and the legal professional and stock compensation it appears that those are to some degree ongoing costs and perhaps you can talk to those numbers going forward? Because otherwise it doesn’t seem to me why I wouldn’t just look at them all together as part of the overall SG&A. Allan P. Merrill: We’ve not tried to over dramatize this. We just wanted to provide more clarity so people can kind of evaluate it but let’s talk about a couple of things on that page. On the legal and the professional fees, it is sadly the case that those do appear to be recurring so they are certainly not labeled non-recurring. I think the magnitude of those does diminish over time. We do have our continuing cooperation with authorities that reflects in that line item but there are settlements and other things that are lumpy that I do think we will get beyond and so I would expect going forward that that line will come down and it will come down materially. The severance as you can see has sort of runoff and I think we’re kind of out of that phase unless again there is another significant leg down. The stock comp number, as you point out, it kind of is what it is. I would tell you that 70% plus of that relates to grants that will never be vested. It’s just accounting. We have to live with it and we will. Then finally, on this JV accrual reversal, I didn’t spend any time in the script talking about it but what we wanted to make sure that we didn’t take undue credit for an operating G&A that was even lower than what was probably sustainable. We did have in the quarter and interesting situation where we restructured a liability or a potential liability in the form of a guarantee on one of our very, very few remaining JVs. We had already reserved for that potential guarantee exposure but when we got through it turned out we needed to reverse the accruals because the value of the position that we had was entirely defensible. We had over accrued essentially and so that had to come back in to income. That’s why I added that back just to try and be as clear as we could about those things that were consistent quarter-to-quarter. We made the comment, we think we’re down to the level that is sustainable. There may be a little more opportunity for savings but I don’t think we’re trying to send a message that reductions in this operating G&A are really going to be the important component of our resumption or moves towards profitability. Michael Rehault – JP Morgan: Just to finish this off and then I’ll move back in to the queue again but the legal and professional given that you have concluded a good part of the actions out there, the issues, when would we expect to see that come down? And what type of a level do you imagine that should be in two or four quarters? Allan P. Merrill: The reason we have and will continue to break it out is the only thing I can do is look silly trying to make that guess, I just don’t know. I am confident that it will come down going forward but trying to put a date and a dollar amount on it I think it is silly for us because we can’t control all of the factors that give rise to that line item. So we’ll continue to show it to folks and we’ll be judged accordingly but I really am uncomfortable trying to make an estimate.

Your next question comes from Nishu Sood – Duetsche Bank. Nishu Sood – Duetsche Bank: I wanted to focus in on the topic of land purchases, obviously it has been a main theme through the earnings point the last couple of weeks. Now, just drawing a contrast between how you were describing your land purchase strategy and some of the other builders, you were describing looking at new los that would support your growth looking at to 2011 and 2012. This certainly is a longer time frame than we have been hearing from some of the other builders who are talking about turnaround times of as even as low of several weeks and pick up some of these distressed finished lots? That may be overstating it but it certainly sounds like you’re being somewhat less aggressive than what we have heard from some other builders and I just want to run through a possible list of reasons as to why that may be? Maybe if you could just let me know which of these are more accurate? That could be for example because you’re not facing as significant of lot shortages in a lot of your markets and obviously that’s driving some of the builders? Perhaps the liquidity even despite the capital raisings is still an issue and you can’t be as aggressive in deploying land? Maybe you don’t expect the growth to be as robust as some of your peers? You’re not being as ambitious in terms of market share you’re really focusing on profitability? I’m just throwing a number of possibilities out there to just get your sense of how you’re going to approach land purchases. Ian J. McCarthy: You probably answered the question yourself but let me just kind of give you our position exactly on that. As you well know we only really address the capital structure at the beginning of this year so in January we were able to get to the market and we had very positive response there. We got the full effect of realizing what the tax credit was going to be. We restructured the sub debt so we have really done a lot in terms of capitalization here in January. Before that we didn’t want to be too aggressive. We had to do that, we had to make those moves, we had to get that behind us before we could be that aggressive. Now, we’ve been looking for some time but we haven’t pulled the trigger on too many deals. The other point you make is we have 9,000 lots already to hand. In most of our markets we’re well covered for 2010. That’s the point I was really making so the investments we’re making today we don’t have to rush at it, we don’t have to scramble, we can look selectively for deals that are going to position us well as we go forward and certainly again, coming back to the very first question we want to enhance our profitability. That’s another way we can do that going forward. I would say we’re not holding back. We’ve got the resources now. Through the last year we certainly had to hold back, we had to be very cautious and protect our liquidity. Now, we feel slightly more inclined to move forward and take positions where we think we can foster our position going forward profitably. I would also say you talked about market share. I do expect us to take market share and if that means we use the existing lots we have faster, which I hope is the case then certainly bringing these new deals in place now they may supplement some parts of ’10 but we’re really looking forward. To us it has been a cautious strategy. It’s picked up substantially since we were able to change the capitalization structure of the company and I would expect going forward we’ll certainly be a participant there. Nishu Sood – Duetsche Bank: Suppose growth comes I much stronger than expected and the recovery is not drawn out but it’s a little bit sharper, your current land bank as it’s positioned, would that be able to support a sharper growth trajectory or would that force you out in to the market to pick up substantially more lots? Ian J. McCarthy: Well, I hope what you’re saying happens. I hope that the markets certainly does improve. We’re seeing signs of that, we’ve seen it through September, we’ve seen it through December and I’ll tell you momentums continued through January so that is very, very positive. In addition to addressing new deals, what we can also do is address the deals, the land positions that are held for future development. I’m very pleased to say that a number of those deals now are coming back in to active development, active home building areas there. So as the market improves we also have that portfolio which is outside the lots that are finished already, we can also bring those back in as well. So we have fire power in that way that’s going to come in as each individual market responds and starts to come back. We’ll be able to bring those back in. Nishu Sood – Duetsche Bank: Just one other theme if maybe I could ask you about as well, obviously some builders have been making statements about profitability, some statements are bolder than others of course. I was just wondering if you folks would be willing to give us some kind of sense of your thinking on your trajectory of your return to profitability. Ian J. McCarthy: Nishu, we’re not giving guidance right now but we’re not stating that we will be profitable this year. That’s not a statement that we’re making at this time. Certainly, we want to see how the market comes out but getting back to profitability is certainly our primary objective.

Your next question comes from [Alex Baron – The Housing Research Center]. [Alex Baron – The Housing Research Center]: I had a question here I guess regarding kind of your view or analysis of the shadow inventory that I guess there’s been a lot of discussion about. Is that something you guys are analyzing in your communities and that’s something you are concerned about? Allan P. Merrill: In certain markets yes, in other markets it hasn’t been a real issue. We’ve looked at the data that we can get our hands on and clearly one of the ways it manifests itself is the appraisals that come back in homes when we sell them and whether or not there is a large population of foreclosures within the solution set of comparable transactions. That’s a pretty good indicator of places where there are issues and often times is an indication of where there will be issues. Where we anticipate any significant effect, we have to do two things, we have to be effective and competitive on price and then we have to be very clear about what our points of differentiation are. Being competitive on price is not the same as matching price and that puts pressure to really differentiate. I think it wouldn’t surprise you or anyone else to know that Florida is a grave concern for us from a shadow inventory perspective and so it’s an area where we’ve been particularly cautious and it is one I think will probably be somewhat longer in recovering as a result so it’s very much on our minds but it certainly isn’t a lone or singular issue that we’re focused on. [Alex Baron – The Housing Research Center]: The other question I guess was I was wondering if you had a couple of percentages in terms of your units. One was what percentage of your homes are FHA, what percentage are entry level and what percentage are E series? Robert L. Salomon: The entry level as we have kind of consistently been over the last year two thirds are homes under 2,000 square feet. It’s very hard to know what people’s definition of entry level is but I think that’s a pretty good standard. I think in terms of FHA, we have some visibility through our relationship with B of A who is a mortgage provider, we have a marketing agreement with them. We’re not in the mortgage business but over half of our activity right now is FHA. [Alex Baron – The Housing Research Center]: Your new type of E series, or what do you guy’s call it? Robert L. Salomon: Well there are three levels there eSMART, eSMART Plus and eSMART Green. As Ian said we’ve unveiled this, particularly the Plus and the Green in the last 30 days so I think it’s a little bit early to be counting percentages but the fact is that the base house that we build in every market today, 100% are eSMART.

Your next question comes from Dennis McGill – Zelman & Associates. Dennis McGill – Zelman & Associates: Just one question around the spec, you guys mentioned that your spec was up a little bit sequentially in anticipation of the tax credit and others have talked about that as well. How do you guys analyze it internally to understand what the right threshold would be of making sure you have enough to satisfy potential demand but not raising too much risk should you have excess inventory after the tax credit expires? Ian J. McCarthy: Dennis what I would say on that is that in December we did release additional specs incrementally to look at the tax credit period but we were very cautious how we did that going back again to the fact that we hadn’t really gone through our recap at that time. We are now really seeing additional specs there based on sales we saw in January and sales that we expect going forward. It is really case by case, we look at it community by community. We do have visibility of that from here. We know exactly where the specs are being released so we can monitor the cash that’s going in to each of the markets in to each community. I would say it is seeing how the markets are reacting, it’s seeing where the opportunities are and we’re being a little bit more aggressive now. There’s an opportunity here again, to capture some market share over these next few months and that is certainly what we are after. Allan P. Merrill: I think the other piece of it is margins. If we were witnessing really significant reductions in margins in order to make specs move that would be a pretty good indicator that we had too many specs. We’re not having that problem. Dennis McGill – Zelman & Associates: But the concern is not necessarily today, it’s in the back half of the year and I guess it’s difficult to know where demand is going to be at that point but you feel comfortable that you’re managing that balance well obviously. Robert L. Salomon: We do and I think we’re being cautious here in February and March and I think we’ll be more cautious as we get in to April and May but the build time is small enough or short enough that risks at the end of the year are things we can still control. Dennis McGill – Zelman & Associates: From an industry standpoint are you seeing your competitors balance that risk as well? Ian J. McCarthy: I think that some people have got slightly more out there than we have and I think we expected that. We have to take a slow start to this but I think we’re quite comparable and I think we’ve worked quite hard on our cycle times and we’ve got our cycle time down as tight as we can in many markets and I think that is going to help us as well. Dennis McGill – Zelman & Associates: Then Allen, just one accounting question on the mandatory converts, on the pro forma you had shown them within the equity bucket, is that how GAAP requires it to be treated or how should we expect that? Allan P. Merrill: No, it’s going to show up as debt, subordinated debt. But, three years from the issuance date it’s going to flip in to equity automatically so I was at great pains to call that both pro forma and prospective on a GAAP basis that’s debt. Dennis McGill – Zelman & Associates: Same issue on the share count? Allan P. Merrill: Yes.

Your next question comes from Joel Locker – FBN Securities. Joel Locker – FBN Securities: Just on the tax valuation allowance, where does this stand now? Allan P. Merrill: The valuation allowance right now is about $372 million [inaudible] roughly $100 million due to the carry back. Joel Locker – FBN Securities: Your gross margins they’re pretty choppy, they were up 600 basis points last quarter and now they came back down 180 basis points or 170 just on the home building side. What you see in backlog should that start being a little more smooth? Allan P. Merrill: Joel, smooth is not the goal and I said two things, I said I think this year for the full year our gross margin will be higher than it was last year and last year it was up over 200 basis points from the year before that so I think we’re moving in the right direction. I think between orders we absolutely flagged that there will be some volatility. Mix and volume will play a role and that and we’ve got a fairly strict warranty program where we are not trying to estimate things that will happen and so there will be an element of volatility in our numbers from that. I’m not going to take any bold stands quarter-to-quarter sequentially but we have said that we think for the full year we’ll be up. Joel Locker – FBN Securities: Just the last question, on January net orders do you have a number for that? Ian J. McCarthy: We don’t but I think I was pretty clear that the momentum that we had through December was certainly continued in to January so we feel very good that the buyers are coming back. Unfortunately, there’s some bad weather on the east coast that’s going to affect numbers but we’re very comfortable with the amount of traffic and the conversions that we’re getting at this time. Joel Locker – FBN Securities: Is it safe to say they were up year-over-year in January? Ian J. McCarthy: It’s safe to say that the momentum we had in December continues.

Your next question comes from Jim Wilson – JMP Securities. Jim Wilson – JMP Securities: I think most of my questions have been answered but on the land side I missed Allan your comments about what you thought spend would be on new lots this year? Then I guess tied to that where are you targeting acquisitions in particular strategically and/or where you pick them up geographically in the last three to six months? Allan P. Merrill: A couple of questions there, we targeted today that our spend for fiscal ’10 would be in the range of or similar to fiscal ’09 which was about $200 million. In terms of where we have contracted for deals in all three of our segments actually but I would tell you the mid Atlantic markets and western markets are certainly areas of higher focus. As Ian said, the mix includes more rolling option type deals than purchase deals but it does include a few purchase deals where we think the margin opportunity is significant and the carry is not material. We’re not buying 1,000 lot tracts or anything like that just because they’re cheap. As you well know, there are certain markets where the land conditions are such that option terms are readily available and others where that is less the case. I think that’s enough spend to have us be well positioned through the end of this year in to ’11 and ’12. But, as I also said it could go up or down a little bit based on what we are seeing. Jim Wilson – JMP Securities: Any comment that you can make on the relative margin levels that you expect in what you’ve acquired so far compared to what you’re reporting? Allan P. Merrill: I would say that generally the newer deals are higher on average than the existing deals. Clearly, the purchase deals have higher margins necessarily than the option deals and I think that’s also the case and so trying to dial in the right mix of those things within our capital capabilities to accelerate the return to profitability is really the objective.

Your last question comes from [Alex Baron – The Housing Research Center]. [Alex Baron – The Housing Research Center]: I think last quarter you guys had indicated that you expected a tax refund of roughly $50 million because you were limited by the Section 382 and I was hoping you could help us understand what changed? Then my second follow up was if you had benefits from previous impairments to gross margins? Robert L. Salomon: The difference in the tax refund from $51 million to $101 million was that as we began preparations of our tax returns we made the determination to veil ourselves under the tax law that went in to effect in early 2009 that allowed us to defer tax payments on COD income generated from the bond purchases that we made last fiscal year. That was roughly about $148 million from a gain basis that we were able to differ that translated in to the $51 million difference. [Alex Baron – The Housing Research Center]: On the gross margin, what was the impact from the previous impairments? Allan P. Merrill: Alex, that’s not a number that we give out every quarter. I would tell you it’s clearly significant, I mean when you’ve got as few dollars of gross margins on the small volume of business that we’re doing and the magnitude of impairments that we’ve taken in the past, it’s not a number that we look at particularly important or material. I know it’s a big number but I don’t have that at my fingertips.

We have no questions in queue at this time. Ian J. McCarthy: I’d just like to take this opportunity to thank all of you for joining us today and remind you that a recording of this conference call with the slide presentation will be available this afternoon in the investor relations section of our website at Beazer.com. Thanks very much.