J. Larry Sorsby:We are exploring various alternatives including additional exchanges going forward.
Alex Barron (Agency Trading Group):On margins, is there a difference in impairments with other builders or do you think it’s more a function of the business model of taking down more option lots?
J. Larry Sorsby: It’s a combination of things. We have been more aggressive on lowering home prices perhaps faster than some of our peers has had an impact. It is also that where we are more aggressive in buying land at the absolute peak of the market and buying companies at the absolute peak of the market has an impact on that.
This fourth quarter impact to where we walked away from options and had to incur costs over the other homes that were delivered during the entire fiscal year just during our fourth quarter kind of skews the number and because we were heavier users of options I don’t think our peers have that same kind of impact that we would have had in that quarter.
There might be one or two of our peers that are more aggressive in their calculations of impairments than we are but we think we’re right in the middle of the pack on how we actually do the impairments.
We also have a disproportionate percentage of our assets in some of the markets that have been harmed the most during this cyclical downturn; California, Arizona, Florida have had huge hits. If you look at our percentage of assets in those markets starting out this downturn compared to some of our peers’ percentage of assets, I think that might be a big part of the explanation.
James Wilson (JMP Securities): Any places that have held up better including the Northeast over the last few months?
Ara K. Hovnanian: In general on the margin front Houston has held up better but on the volume front in recent months Houston is definitely feeling the effect of the national slowdown as well. Up until that point that had been our strongest market.
|
More:
