Donald J. Tomnitz: We are a very conservative company, but perhaps the second and most important factor has to deal specifically with the fact that this was the first quarter that we reported an operating loss.

Nishu Sood (Deutsche Bank): Is there any element of trying to shore up your cash flow to be able to capitalize on future opportunities?

Donald J. Tomnitz: The opportunities we see in the marketplace are continuing to focus on our business, reducing our land and lot position, and continuing to return to operating profitability.

The rest of the operating cash that we are generating we are going to keep on our balance sheet and we will forget how we are going to do with it later.

Nishu Sood (Deutsche Bank): Have you seen any issues or difficulties in managing all these locations more remotely now that you have consolidated your divisions?

Donald J. Tomnitz: We are not leaving a division in a market operating without at least a city manager, which we have always had. We have a key operator, a profit center manager in each one of our markets managing that particular division.

David Goldberg (UBS): Comment on how much you think foreclosures and prices on foreclosures are impacting the prices in your neighborhood?

Donald J. Tomnitz: Looking across the country, foreclosures are not a significant part of the market. Yet in the vast majority of our markets, such as Las Vegas, they are impacting that market considerably. Foreclosures are definitely going to have a negative impact on the new home market and that''s the way we are positioning the company.

Joel Locker (FBN Securities): Of the 141,000 or so home lots, how many of those are fully developed?

Bill W. Wheat: About 35% of our total lots owned are fully developed today. And another factor along those lines is when we look at our projected closings for fiscal 2009, substantially all of the lots that we need for those closings are fully developed.

Susan Berliner (Bear, Stearns & Co.): Update us on your tangible net worth covenant?

Stacey H. Dwyer: Our tangible net worth covenant is at $3.5 billion. And as of March 31st, we had a cushion of about $290 million.

Scott Cavanagh (Merrill Lynch): Looking at the borrowing base, how much is actually available on your revolver?

Bill W. Wheat: We have approximately $1.3 billion available under our borrowing base arrangement.

Alex Barron (Agency Trading): What are you seeing as kind of a worse competition?

Donald J. Tomnitz:It is not a significant amount of foreclosures ever been blown up by the banks today, although that could increase. Where we have a leg up with a number of our competitors in most of our markets is, a number of our competitors have had a zero spec policy, which has put them in a more difficult position in terms of satisfying relocation buyers and realtors.

On a going-forward basis, we will maintain a limited number of specs in each one of our communities and keeping a limited number will give us more pricing power than at the end of the first quarter when we had excess number of specs in our communities.

Alex Barron (Agency Trading): What percentage of your total communities have been impaired to date?

Donald J. Tomnitz: About 25% of total communities have been impaired.

Jane Haugh (Dwight Asset Management): Can we expect you to be in the market buying back more of your higher cost debt?