David Goldberg (UBS): Your own land position went up sequentially by about 10,000. What margins you have on the land that you are taking down now?

Stuart Miller: I can not think of an exception to this and I am always reluctant to say in all cases, but in the vast majority of cases our margins are recalibrated to what I would call a responsible margin. It is in that kind of a range on land that we are taking down. We have either impaired the land or we have renegotiated the deal on land that we are taking down. Virtually anything that we are taking down is recalibrated to an acceptable margin for the future. Part of the problem with answering the question is in a market where you are continuing to see decline and decline of pricing it is hard to represent a margin.

David Goldberg (UBS): In your opening statements you were talking about possibly being able to build on the margin from where it is today and based upon the pace of sales and the deterioration of the market it would seem like that would be hard on new land as it flows through. Could you comment on that?

Stuart Miller: In most instances we are taking down land as needed. To the extent that we are doing that we are basically putting homes in construction where the margin is being carefully crafted and capped at the time that we are taking down the land. There is no question that you will have some pull outs and cancellations and some situations where a home does not get sold or started immediately and the market will continue to deteriorate. I noticed today listening to CNBC that home prices will continue to go down. In that scenario some of the margins will not be as high as projected but we continue to renegotiate land take down and renegotiate any of the land contracts that we have under contract to match up with a margin potential given market conditions as they exist at this time.

Carl Reichardt (Wachovia Securities): Can you talk about your store count relative to last year and what it might be in 2008?

Bruce Gross: We have not given any community data. Overall I would say that it is down approximately a couple hundred communities compared to the same time last year.

Stuart Miller: We have always felt that store count data is more confusing than it adds value. We have always been reluctant to talk much about store count but there is no question that the number of communities we have under development is declining and we would expect that as we look ahead it will continue to decline.

Carl Reichardt (Wachovia Securities): As you look at the 150 basis points in gross margin improvement year-over-year, how would you divide that out as far as a reduction in the durax versus building on land that you had previously impaired and you have lowered the basis on?

Stuart Miller: We have tried to put pencil to paper on some of that. Our construction costs year-over-year has come down north of 10%. In all instances we are working off of impaired land. We have either impaired it on our books or we have renegotiated the land contract or we are buying new land at today’s market value or we are renegotiating an options price. When you get down to it, the price of land is now recalibrated across the board. You could almost argue that our entire margin comes from the recapturing of pricing of land across the board.

Dennis McGill (Zellman & Associates): What are you assumptions when you think about buying land today at market price about where home prices go for the industry over the next year or two years?

Stuart Miller: Absorptions are down but one of the things that is becoming better known and better documented is that there is a clearing site in the market. It just happens to be particularly low. In all instances where we are buying new property we are recognizing that we are going to have to find our absorption levels that are acceptable at that site, which is a low clearing site. Therefore, we have adjusted our view of the market so that we are expecting absorption to be modest. We are taking down home sites only as we need them where it is possible. We are pricing to market, recognizing that this is not a market where pricing can be pushed. So that is the thinking that is injected in all the negotiations surrounding any new land acquisitions or renegotiated option positions.

Dennis McGill (Zellman & Associates): Are you assuming that absorptions can maintain their pace where they are at and you are comfortable at running well below one per community per week and pricing can stay where it is and it is just a function of time and confidence in the community which will allow you to get absorptions back where they are Or are prices going to clear lower to generate absorptions that are going to generate returns for you?

Stuart Miller: We are assuming that pricing is a moving target and one that we can not peg down. Pricing is going to be the determinant of absorption. So in instances wherever we can where we are not dealing with a fast contract wherever we can we are injecting flexibility to task our take downs, our absorptions, our pricing to whatever the market brings to us. It is one of the hardest adjustments that is happening or is going to happen in the land market right now. That is land holders are going to have to be flexible if they are going to move their properties because this market is not going to be pushed. It is a market where we are going to have to take the pricing that is available, both land seller and home builder. I think home prices to be under pressure, but land prices are under greater pressure. I think that home prices especially in the new home world have recalibrated themselves more dramatically than land prices have. Land prices still have a ways to go.

Dennis McGill (Zellman & Associates): In a lot of your markets where are you seeing into the price relative to the existing home sales?

Stuart Miller: I think the anomaly that we see in the market place generally, not just for us but for the new home market, is that new home prices are generally below existing home prices. The existing home market has not corrected as much as the new home market. That is a relative position that is going to right itself over time as the existing home market continues to adapt to market reality.

Tom Martego (Martego Capital): Can you comment on the recent actions within FHA and also Fanny Mae and Freddie Mac expanding the borrowing limits as to the impact that you have seen it have on activity and traffic?

Stuart Miller: These are important changes and I wish there was more color to give. These are recent changes and the filtering through to the field; we do not have data points yet to be able to give information. But I would just highlight that as we go forward the starting points that we have relative to FHA and GSE’s is an important starting point. I think there is more work to be done and these will be important parts of what helps us get out of the supply/demand imbalance.

Tom Martego (Martego Capital): Have you put together marketing plans associated around the various prices that you can now charge in those markets to be within these GSE and FHA plans so you might build a smaller house to fit under the cap whereas before that might not have been something that you anticipated?

Stuart Miller: In every one of our communities today we are acutely aware of what those caps are and we have recalibrated our product to fit within the limit that either exists today or where those limits are going. Realistically the deals that are getting done today are conforming type products. There is not a lot of jumbo business out there. There is not an AltA kind of product or market out there or anything sub-prime. You have got to be conforming and product across the country has to be aligned with where FHA and the GSE’s are positioned.

Bruce Gross: Our average sales price today, we are positioned well within the new limits and although it is early FHA limits just went into place, the lower down payment of 3% is something that we are hopeful will help sales in our market place.

Stephen East (Pali Research): Land spend ignoring JV’s is going to be down in 2008. What do you think you will spend this year between acquisition and development?