Carl Reichardt (Wachovia Securities): Do you expect Lennar to be more active in joint ventures to try to shrink the size of the land position on the balance sheet?
Stuart Miller: As we go forward we will use fewer joint ventures in terms of the numbers of partners that we will have. Having fewer of the smaller type joint ventures would make administratively much more manageable. That would be less inclined to new use joint venture structures at the individual property level. For the next years, the joint venture structure is not going to be needed, there is going to be land available. For many years, we are going to be inclined to take advantage of the market conditions that exist where there will be develop some sites available and we will build our business up about. In terms of the number of joint ventures will be less inclined to use smaller ventures in terms of the need to use ventures it will not be there. It will be a much smaller part of our business. With that said, and using our transaction with Morgan family as a proxy, I classify that more of as a fund. I do think that the opportunities that exist in the open market today to be engaged in the real estate business and to the opportunistic in trouble time, is something that we have a real expertise sense. The joint venture experiences that we have had has given us a great platform for being able to be and an effective fund manager and there will be opportunities for us to put together pools of capital, but stick to engage the risk associated with lands, but buying land at the bottom of the market conditions and we will use those kinds of vehicles to take our expertise and to lever that with land assets that are positioned for recovery. We will use the venture structures in one form or another. It will be more in line with a fund type concept than with an individual venture type contract.
Carl Reichardt (Wachovia Securities): Do you expect, as you see it now, Lennar will deepen its existing market footprint or even shrink and then re-deepen it or do you expect to expand that geographic footprint?
Stuart Miller: We are focused on the footprints that we have in place. If you have to characterize the attitude within our company, it is about looking at what we have got and getting it back to efficiency. We have spent a better part of 2007 focused on being asset managers. We have positioned ourselves now to get back into the primary focus of running operating division the way we know how as profit centers. We are looking at the existing footprint, we are not looking beyond it, we are not looking to materially shrink it either, but we are looking at the platform we have. We have scaled back from a headcount standpoint by almost 15%. We are left with the eight players in all of our markets, and that is what we are going to work with in terms of refining the footprints that we have got.
Ken Zener (Merrill Lynch): With your corporate liquidity rising can you address your expected cash output for land development that you own, and some of the required lot take-downs that you have coming from options or from other joint venture structures that are acquired in 2007?
Bruce Gross: With our option program, they are options and there is not a requirement with respect to those take-downs. Those options that we have remaining continue to remain options. That option ability is to remain in their force. There is virtually no specific performance. There might be no specific performance with respect to any take-down requirements.
Ken Zener (Merrill Lynch): What is your required outflow with respect to home sites that we own?
Bruce Gross: We do not have an exact number there, but our focus has been to manage to the current demand in each local market, with respect to any development that we are taking on and we have aggressively reduced the number of home sites, the number of starts. We are going to manage that tightly with respect to the demand that exists in our markets today.
Ken Zener (Merrill Lynch): How the banks are responding on some of the completion guarantees?
Stuart Miller: Every situation is unique and different in that regard. Each of those completion guarantees is being managed differently and separately. We are going to sit back and wait and see. A lot of it is funded by the underlined venture or debt itself, but each one is going to be looked at specifically. Our properties are well positioned and should be developed for current absorption. The completion not only guarantees, but opportunity is one that is the right thing to do at this point, and we will act accordingly. Additionally there other properties where it is clear to both us and the banks and everybody involved that the strategy is: to not go forward and to not put more money in the ground at this time. One might be talking about an excellent property, but it does not make sense to put the money in the ground. In those instances there are pull back.
Ken Zener (Merrill Lynch): How much of the Morgan Stanley land sale of $1.3 billion as a carried value had been impaired before?
Bruce Gross: That number was about a $150 million in total.
Michael Rehaut (JPMorgan): Could you walk through the rationale on the 109 approach and the tax refund?
Bruce Gross: We have a tax team led by Mike Petrolino, who worked around the clock after year-end to facilitate the quick recoupment of the taxes that were previously paid, and that was hard work effort, planning in order to shepherd that through appropriately in order to get a quick inflow of cash. With respect to FAS 109 which has been a hot topic here lately. From the perspective of the literature as we have looked at it and our auditors have looked at it, you have determine that it is more likely than not, that you will be in a position to realize that tax asset in the future. One strong negative piece of information is, if you have cumulative losses over a certain period of time based on the sick locality of your industry, and based on the cumulative losses so far we are actually positive three years, but based on cyclicality in the business, we are not looking at a three year period, we believe that we can go to a four year period.
Michael Rehaut (JPMorgan): What the changes were to the tangible net worth requirement and some of the other covenants?
Stuart Miller: We are filing an 8K with respect to that amendment that will have all the details relating to those items over the next day or so. Minimum tangible net worth is an easy one. It was basically a reset based on our equity value at the end of November, plus a provision, in case there is a valuation reserved in the future relating to FAS 109.
Michael Rehaut (JPMorgan): What is the benefit in gross margins from prior impairments?
Bruce Gross: That is not something that we report on, because as we look at it there are land positions, they get renegotiated, some are new deals or old deals, and it is just not something that we track.
David Goldberg (UBS): Most of your JV partnerships have worked out as they were planned to work out. Could you talk about the exceptions, what goes wrong and how they play themselves out?
Stuart Miller: They have not worked out the way we had hoped they did. Our valuations for the assets was not to see in a loss position, I was talking about the mechanics of the joint venture. In most instances it has worked out exactly. We got what we have bargained for and that is a shared risk position with a joint venture partner. What happens when they do not work out, and we do have some that have not worked out, you have a partner that, because of the shift in market conditions, who finds himself in financial difficulty and can not uphold his end of day-to-day operations or funding interest or something like that. We have to sit and talk and re-negotiate, this puts us in a position relative to the partnership and relative to the bank relationship, to sit down and negotiate respective rights and obligations, and to reposition our position and the partnership in general.
David Goldberg (UBS): You are brining down the recourse that are in the JVs. How will you achieve that in the next two years?
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