As Stuart mentioned, there we no outstanding borrowings on our revolver but additionally I want to mention that we have been in full compliance with all of our revolver covenants. Additionally, we reduced our financial letters of credit to $239 million. That’s down from $278 million at the start of the year and down from $728 million at the peak back in 2006.
We ended the quarter with substantial equity of 2.5 billion and ended with approximately 175 million shares outstanding which is a book value per share of $14.16 and it is close to $19 per share if we add back our deferred tax asset valuation reserves. Our balance sheet liquidity position improved throughout the same time. We continued our trend of significant progress towards reducing the number of unconsolidated JVs and related recourse indebtedness. The maximum recourse indebtedness is down to $422 million, down $52 million from the previous quarter, first quarter of this year and we continue to see success in restructuring or refinancing joint venture loans as they mature.
The company has continued its focus on reducing the number of JVs. The 83 JVs that we have at the end of the quarter of those, 32 have recourse debt, 19 have non-recourse debt and 32 have no debt at all. We are confident that we will continue the significant progress in further reducing both the number of unconsolidated JVs and the maximum recourse indebtedness to Lennar. And we are happy as Stuart mentioned to go through any questions you have on the additional JV disclosure once that’s filed with our Q.
Turning to the operating results for the quarter, as mentioned in the press release we had a loss per share of $0.11 per share before the impairments and deferred tax asset reserve. If you look at the average sales price to give it a little bit more color by region - the East was down 13% to 220,000, the Central was down 9% to 197,000, the West was down 4% to 350,000, Houston was down 1% to 201,000 and then the other area was down 10% to 271,000. Overall, the average sales price decreased to 8% year over year to 251,000 and that is net of sales incentives which averaged to 53,000 for the quarter versus 49,000 in the prior-year’s quarter.
Our gross margin was 14% before impairments. The pre-impairment gross margin declined 190 basis points over the prior year and the primary driver of this decline was a 220 basis point increase in sales incentives as a percentage of revenues as our primary focus has been on reducing completed unsold inventory and converting it to cash as we did this quarter. These higher sales incentives more than offset the progress that has been made in introducing new plans and reducing construction cost.
Turning to impairments in this quarter we recorded $99 million of valuation adjustments in writeoffs compared to $137 million in the same quarter last year. The categories were as follows – homebuilding was $35 million, land sold or under contract was $6 million, writeoffs of option deposits and pre-acquisition costs, $2 million and joint ventures, $57 million.
We have continued to focus aggressively on reducing SG&A cost which declined $44 million year over year. SG&A as a percentage of revenue was 14.3% which improved 110 basis points from the prior year and 510 basis points sequentially from the first quarter.
Throughout this downturn we have implemented aggressive cost reduction initiatives resulting in a lean and efficient infrastructure and as volumes increase we will see the benefits of leveraging the sufficient overhead as noted by this quarter’s result.
New orders narrowed year over year declining to 19%. However, noted substantial improvement, up 63% sequentially from the first quarter. The cancellation rate was 15% for the quarter versus 22% last year in the second quarter, and last quarter we indicated that we expect to operate at a very high backlog conversion ratio and it came in at a 191% for this quarter.
We recognize significant improvement in our financial services division as we earned a $16.5 million profit this quarter compared with a $3 million loss in the prior year. Financial services also implemented aggressive cost reduction initiatives through the downturn and during the quarter we were able to significantly lever this efficient operation also noted by this quarter’s results.
Mortgage pretax increased to a profit of $14 million from a profit of $8.1 million in the prior year. Low mortgage rates led to increased transactions and a higher profit per loan in the quarter. This quarter’s mortgage capture rate increased to 89% from 85% in the prior year. Our title company returned profitability as it earned $3.2 million compared with a loss of $10.8 million in the prior year.
The company is financially strong and our operations are lean and efficient from our cost reduction initiatives positioning us well for the ultimate recovery. And with that we would like to open it up for questions.
Question-and-Answer Session
Operator
We will now begin the formal question-and-answer session. If you would like to ask your question at this time, please press “*1” on your touchtone phone, you will be announced prior to asking your question. If you would like to withdraw a question, please press “*2”. Once again to ask your question, please press “*1”. One moment for the first question. Our first question is coming from Stephen East of Pali Research. Your line is open.
Stephen East – Pali Research
Good morning, guys. First on the JVs. I guess if you could sort of give an update more broadly speaking where the charges were occurring, your JV loss before charges jumped up year over year and just wondering what was going on there. And then, any land source update you have with the JVs?
Bruce E. Gross
Okay let me answer, relative to the JV charges we had $57 million of charges during the quarter. And to your question Stephen we had $59 or $60 million in total of losses from the JVs. Was your question wondering geographically where those charges were?
Stephen East – Pali Research
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