1. FINAL TRANSCRIPT CTX - Q1 2009 Centex Corporation Earnings
Conference Call Event Date/Time: Jul. 30. 2008 / 10:00AM ET
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2. FINAL TRANSCRIPT Jul. 30. 2008 / 10:00AM, CTX - Q1 2009
Centex Corporation Earnings Conference Call CORPORATE PARTICIPANTS
Tim Eller Centex Corporation - Chairman & CEO Cathy Smith
Centex Corporation - EVP & CFO Matt Moyer Centex Corporation -
VP of IR CONFERENCE CALL PARTICIPANTS Ivy Zelman Zelman &
Associates - Analyst David Goldberg UBS - Analyst Nishu Sood
Deutsche Bank - Analyst Michael Dahl Credit Suisse - Analyst Megan
McGrath Lehman Brothers - Analyst Susan Berliner JPMorgan Chase
& Co. - Analyst Mike Rehaut JPMorgan Chase & Co. - Analyst
Ken Zener McCorey Capital - Analyst Stephen East Pali Capital/Pali
International - Analyst Carl Reichardt Wachovia Securities -
Analyst Joel Locker FBN Securities - Analyst Chris Hussey Goldman
Sachs - Analyst Gary Gordon Portales Partners - Analyst Andrew
Fenton Cliffwood Partners - Analyst PRESENTATION Operator Good
morning, and welcome to the Centex Corporation fiscal year 2009
first quarter earnings call with senior management. Today's call
will be recorded and transcribed. Today's call will also be
simultaneously webcast at ir.centex.com. A copy of today's
www.streetevents.com Contact Us 1 2008 Thomson Financial.
Republished with permission. No part of this publication may be
reproduced or transmitted in any form or by any means without the
prior written consent of Thomson Financial.
3. FINAL TRANSCRIPT Jul. 30. 2008 / 10:00AM, CTX - Q1 2009
Centex Corporation Earnings Conference Call presentation was filed
last night with the SEC on Form 8-K. A link to that document is now
available on that website. Centex wishes to emphasize to everyone
listening on the call and via the internet that certain statements
made during the course of this call are forward-looking. These
statements are not guarantees of future performance, and are
subject to significant risks and uncertainties that could cause
actual results to differ materially from those discussed during the
call. For further information regarding these risks and
uncertainties, and Centex's forward-looking statements, please
refer to the forward-looking statements disclosure in the
presentation and to Centex's reports on Forms 10-K and 10-Q filed
with the SEC. All participants will be in a listen-only mode. There
will be a question-and-answer session after management's remarks.
(OPERATOR INSTRUCTIONS) In the interest of time, we will limit each
person to one question and one follow-up question. If you have
additional questions following today's call, please contact Matt
Moyer, Vice President of Investor Relations at 214-981-5000. I will
now turn the call over to Tim Eller, Chairman and CEO. Please go
ahead, sir. Tim Eller - Centex Corporation - Chairman & CEO
Thank you, Celeste. Good morning, everyone. Thanks for joining us
for the fiscal year 2009 first quarter conference call. With me
today is Cathy Smith, our Chief Financial Officer; Mark Kemp, our
Chief Accounting Officer; and Matt Moyer, Head of Investor
Relations. I'll start our call today with some introductory
comments on the quarter as well as a few thoughts about the months
ahead. Next Cathy will provide details about our financial
performance. Then I'll offer some closing comments and we'll take
your questions. Turning to Slide 3, conditions in the housing
markets worsened in the quarter, and we don't see any improvements
in market conditions the remainder of this fiscal year.
Foreclosures are rising dramatically in most markets. Employment
growth is slowing. Mortgage interest rates are on the rise, and
we're seeing stricter mortgage qualification requirements for
homebuyers. Energy costs have increased substantially for our
subcontractors, suppliers, and customers. All of these factors are
causing consumer confidence to erode further. This uncertainty with
the consumer is reflected directly in our diminished traffic and
sales volumes, compared to last quarter and a year ago. Our sales
team did a great job selling 4,200 homes in the quarter. However,
that was a decrease of 35% from the same quarter last year.
Closings for the quarter also dropped about 35% to just over 3,900
homes. Turning to Slide 4, despite the economic headwinds, we built
a strong cash position in the quarter and we expect to maintain
that. We had $1.24 billion in cash on hand at June 30th. We expect
positive operating cash flow from home-building operations for the
full year, and we're expecting to further improve our cash position
at fiscal year end while also reducing outstanding debt by another
$250 million. I'm comfortable that we have enough cash to manage
our medium-term debt maturities and take advantage of
opportunities. In these uncertain conditions, however, maintaining
a strong cash position is critical. Accordingly, we're planning to
conservative our cash resources for future flexibility. We're
actively evaluating every internal opportunity to bolster our
capital position in this difficult operating environment, including
our dividend, though no decisions have been made at this time.
Turning to Slide 5, we remain focused on asset efficiency and
achieving a more flexible land position. Both our historical and
recent experience shows the build-to-order business model results
in higher margins, though at the sacrifice of some sales in the
near term. As we continue the transition to the build-to-order
lighter asset operating model, unsold inventory declined again in
the quarter, down 23% sequentially, and down 72% over last year. We
have made considerable progress in improving core Centex business
processes in purchasing and construction. Despite rising commodity
costs, we systematically achieved overall monthly savings in direct
construction costs. Category by category, we're working closely
with our trade partners and suppliers to capture savings. For
instance, we reduced our overall cost in the drywall category by
more than 5%, despite two announced 10% material price increases
the last six months. www.streetevents.com Contact Us 2 2008 Thomson
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4. FINAL TRANSCRIPT Jul. 30. 2008 / 10:00AM, CTX - Q1 2009
Centex Corporation Earnings Conference Call Turning to Slide 6, we
recently announced the Centex Energy Advantage. This is a great
example of sustainable innovation that builds a better Centex. This
suite of energy-saving features will be standard on all new homes
starting in January 2009. Affordability is an issue for homebuyers
today and energy costs directly impact affordability. Centex Energy
Advantage takes direct aim at making home ownership more
affordable. Home buyers' budgets are impacted by the operating
costs of a home. New homes equipped with Centex Energy Advantage
features will be up to 22% more energy efficient than comparable
new homes built to the current energy and code requirements and up
to 40% more efficient than a typical 10-year old home. The
efficiency gains for each 10,000 homes we build will result in
nearly 18,000 fewer metric tons of carbon emissions each year. I
believe this initiative is positive for our customers, our
employees, for our shareholders, and for our environment. To
summarize, market conditions worsened in the quarter as a result of
a range of economic factors that have dramatically dampened
consumer confidence, which is reflected in our new orders. Still,
Centex built a strong cash position in the quarter, and we expect
to improve on that by fiscal year end. Profitability remains our
highest focus. And we're taking advantage of the opportunities to
build a better Centex for the long term during this historic
housing cycle. With that, I'll turn it over to Cathy to take us
through some of the specifics for the quarter. Cathy Smith - Centex
Corporation - EVP & CFO Thanks, Tim. And good morning,
everyone. I'm on Slide 7. One of the more noteworthy items of our
first quarter is our homebuilding operations were cash-flow
positive, even before the $600 million we received from our tax
refund. As far as I can tell, this is the first time we were cash
flow positive from homebuilding in our first quarter and reflects
our keen focus on cash and the change in our business processes. We
strengthened our balance sheet and now have a homebuilding net debt
to cap ratio below 50%. We continue to generate cash through asset
reductions, both working capital and speculative inventory, and
more exciting with regards to the longer-term implications, we are
becoming more asset efficient and more profitable as we transition
to a build to order production model. In the quarter just ended,
our gross margins of 11.8% improved 410 basis points sequentially.
Our discounts and incentives came down again this quarter --
specifically, our sales discounts and incentives were 10.5% of the
average selling price, down from 14.3% last quarter, marking the
second consecutive sequential decrease. And although our sales for
neighborhoods were down mainly due to lower traffic and the lack of
spec sales versus last year, we still reduced our unsold inventory
by 23% sequentially. We also made good strides toward achieving
operational profitability through overhead cost reductions. We
reduced our home-building overhead per closing by 19%
year-over-year, and actually lowered SG&A as a percent of
revenue by 80 basis points. Although our homebuilding SG&A was
lower, our corporate G&A increased year-over-year. We recognize
even in these unprecedented times, it is important to continue to
invest in the future. We have been doing much to centralize
processes and functions, as well as standardize and simplify our
business, and some of the associated costs show up in Corp G&A.
I'm confident these investments will enable Centex to have an
industry-leading cost structure. I was pleased to see impairments
and land-related charges lower this quarter than the last seven
quarters. Sales prices declined only slightly in the quarter and
the reductions are largely contemplated in our impairment analysis.
Additionally in the quarter, we were profitable in our financial
services business. We're winding down our retail mortgage
operations. CTX Mortgage will be solely focused on Centex
homebuyers. Having a dedicated mortgage operation where we control
the loan approval and underwriting process enables us to sell to
homes to a backlog so we can build to a cadence. Additionally, this
structure is one of the key's to our industry-leadership position
in customer satisfaction. CTX Mortgage has adequate committed
warehouse lines, and aside from wind-down costs that we are looking
to minimize or offset, we expect financial services business to
remain operationally profitable. We have made a lot of progress
again this quarter, although the housing environment continues to
struggle. We're doing much to optimize our business processes and
business model to be more efficient and asset light. These efforts
are starting to show www.streetevents.com Contact Us 3 2008 Thomson
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5. FINAL TRANSCRIPT Jul. 30. 2008 / 10:00AM, CTX - Q1 2009
Centex Corporation Earnings Conference Call results with improved
profitability and asset efficiency. And I am confident the results
will be more meaningful in the fiscal year and beyond. Slide 8
provides details around the homebuilding operations for the first
quarter. We closed 3,939 homes in the quarter, 35% fewer than last
year. The average price of homes closed in the quarter declined 10%
to $262,000. This is a lower decline than experienced over the last
couple of quarters. We have evidenced a significant decline in the
Southwest of 36%, while central US and Texas showed year-over-year
average sales price increases. Sales units were also down 35%
year-over-year. However, on a per-neighborhood basis, sales were
down 23%. As Tim said earlier, traffic slowed more this quarter
than any quarter in the past several years. Consumer confidence is
at the lowest level in over 15 years, and is directly affecting
volume. Let me also address a question that I know you'll have. 25%
of our closings this quarter used a down payment assistance
program. We know that some portion of these buyers don't need it,
but make use of a DPA simply because it is available. We're
preparing for DPAs to come to an end, and frankly, it's probably a
good thing over the long term. Our mortgage and title group have
developed a great program that helps our potential homebuyers save
the money needed for down payment. The new tax credit for
first-time homebuyers may help with the transition. The end of DPA
will probably pressure industry sales in the near term, but over
time, our buyers and the market will adjust. We continue to believe
that a return to more normal qualification standards is a very good
thing long term, even if it carries with it a little short-term
pain. Our backlog was actually up from the fourth quarter, and now
stands at 8,022 units and $2.05 billion. This marks the first
quarter in three years where our backlog increased sequentially.
The right level of backlog will be increasingly important to us.
Creating a sold backlog allows us to build to a cadence. Building
to a cadence using standardized business processes yields operating
efficiencies and more predictable results, and developing a backlog
through presales is essential for our asset-light business model.
We're moving rapidly in this direction. With the spec unit
reduction largely complete, and as we move to the presold model we
expect lower backlog conversion over the next couple of quarters.
Today I'm seeing evidence if we sell homes before construction
starts, they have materially higher gross margins. This gives me
confidence that as we move to our build-to-order model, margins
should improve. We have also done a great job reducing our total
lot position. We now own 66,766 lots and control just 14,550 lots.
This is less than a four-year supply of total lots -- one of the
best positions in the industry. On a pre-tax basis this quarter, we
recorded a total of $80 million in land-related charges, including
$50 million in land impairments, $10 million in option walkaway
cost, and $20 million of JV impairments. We impaired 36
neighborhoods this quarter, bringing the total to 384 neighborhoods
that we've impaired at least once. We take a consistent, methodical
approach to land valuation. We recognize this is a dynamic
environment. We'll continue to take the same disciplined approach
to valuing our assets each quarter. Along with the impairment
analysis, it's essential to assess each neighborhood for positive
incremental cash flow. We evaluate every asset every quarter to
make sure we have the right strategy for that particular asset. We
assess whether the highest return is to sell, build through, or
hold. We're still finding that the best answer most of the time is
to continue build through our assets, but you will see that our
land held increased this quarter as a result of our evaluation that
the best strategy is to hold some land rather than add more
developed lots to the already glutted supply in some markets.
Continuing to build to our assets will leave us with our a leaner
balance sheet and an opportunity to add faster-turning
higher-producing assets in the future. We also increased our
valuation allowance related to our deferred tax asset by $49
million. In total, the balance of our DTA is $1.02 billion, with a
valuation allowance against it of $879 million, or just over $7 per
share. This represents over 40% of our current book value. We'll
realize this asset when we see stability and improving environment
and a return to profitability. Let me take a few minutes to review
the regional results. Slide 9 details sales and closing by region.
In the quarter, we sold 4,215 homes, down 22.5% on a
per-neighborhood basis. This is the first quarter where we sell the
lower goal of three sales per neighborhood per month, and we don't
expect to achieve that rate this year. As Tim mentioned,
foreclosures are still growing and consumer confidence is waning.
Our average neighborhoods were down 16% in the quarter, a rate that
will likely accelerate through the year. Our cancellation rate was
similar to last quarter at 30%. www.streetevents.com Contact Us 4
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6. FINAL TRANSCRIPT Jul. 30. 2008 / 10:00AM, CTX - Q1 2009
Centex Corporation Earnings Conference Call In our East region,
sales were down 21%. While Raleigh-Durham and DC Metro achieved
higher sales per neighborhood, Charlotte and Southern Virginia were
down. Texas is slowing, although our central Texas operations are
still doing well, with a 10% increase in total sales and a 26%
increase in sales per neighborhood. The Southwest markets,
including Phoenix, Las Vegas and Inland Empire, are impacted the
hardest by foreclosures, and sales reflect that. Our Northwest
region reversed last quarter's gain with sales down 35%,
illustrating the volatility that happens at the bottom of a cycle.
The Bay Area saw sales down almost 50%, but most of that was due to
a big decrease in neighborhoods. Sales per neighborhood in that
division, in fact, were up 20%. Year-over-year closings were down
across the board pretty consistently, reflecting the soft market
environment and the reductions in neighborhoods. Moving to Slide
10, in the first quarter, we improved our balance sheet and
liquidity. We ended the quarter with a cash balance of $1.24
billion, and we're expecting our cash balance to increase by the
end of the fiscal year. As I mentioned, our homebuilding operations
were cash flow positive in the quarter, and we're focused on
continuing that trend for the remainder of the fiscal year. In the
second quarter we expect to be cash neutral from our homebuilding
operations. During the quarter, we proactively bought back nearly
$70 million of senior notes in the open market at a discount to
PAR, and reduced our ongoing interest expense. In the second
quarter, we will retire another $150 million of senior notes at
maturity, and expect to reduce our joint venture debt by an
additional $70 million. Assuming this happened as planned, our
share of joint venture debt will fall to approximately $90 million
by September 30th. At June 30th, we had only 11 JVs with leverage,
with our share of that debt totaling about $166 million. As we said
before, we're actively reducing our exposure to JVs with debt and
expect our share of joint venture debt to be about $30 million by
fiscal year end. As a result of our strong cash position, we
significantly increased the availability of our bank revolver, and
we don't have plans to use the revolver at any point this year.
With the lack of stability in price and volume, it's prudent to
conserve and accumulate cash. Along with restoring profitability,
this is a company priority. Consistent with the priorities, we'll
continue to scrutinize all uses of cash. Historically, one of the
bigger uses of cash was land development. Of the active lots we
own, approximately 50% are fully developed. Given this, we continue
to reduce our development spending to meet the bare minimum of our
volume needs and compulsory obligations. Our sell to a backlog,
build to a cadence model helps to better know exactly where and
when we need finished lots. Furthermore, we expect to take
advantage of the fully and partially developed lots in most markets
using a very cash-light model for the foreseeable future. In all of
our markets, we're actively assets and cataloging future potential
land. For this acquisition model to be effective, we're
establishing important relationships now both with developers and
capital sources. We have dramatically reduced our land-spend budget
this year to approximately $400 million for the remainder of the
year. This gives us confidence that we'll be cash-flow positive
this fiscal year. Additionally, given what we know today, I'm
confident we'll remain capital sufficient and have the necessary
cash to service our debt for the foreseeable future. Turning to
Slide 11, I'm comment on what we're doing to restore operational
profitability. Gross margins tend to be significantly higher,
cancellation rates and incentives are lower when we sell a home
before construction is started. At this stage, we have 92% of our
September quarter projected closings already on backlog. This
should result in lower costs, lower discounts and incentives,
better predictability, and better asset utilization. In the
quarter, we closed fewer spec than in the fourth quarter, and our
gross margin improved sequentially by over 400 basis points.
Internal data shows that gross margins on presold homes are on
average 500 basis points higher than those on inventory homes. Our
operators and trade partners are working hard to take advantage of
the efficiencies gained in our production cadence model, and this
is helping us offset the price increases we're seeing due to higher
commodity and energy costs. Also contributing to expense reduction
this quarter, we prepaid some senior notes, lowered our joint
venture debt, and eliminated JVs with maintenance guarantees. This
will lower our interest expense and capital calls that may come
with joint ventures, thus giving us more predictable cash flow. We
remain highly focused on overhead cost reductions. Our homebuilding
G&A was down 19% per closing in the first quarter. We expect
this trend to continue throughout fiscal year 2009. As mentioned
earlier, our corporate G&A line was higher year-over-year.
However, we still expect corporate G&A to be lower this year
when compared to last. On a combined basis SG&A was down 35%
year-over-year, and our headcount today is lower than any time in
the past seven years. We'll continue to concentrate our
neighborhood footprint. We're exiting some markets, combining some
divisions where it makes sense, and moving out of underperforming
assets. These efforts are also part of our path to profitability.
We're doing much inside our www.streetevents.com Contact Us 5 2008
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7. FINAL TRANSCRIPT Jul. 30. 2008 / 10:00AM, CTX - Q1 2009
Centex Corporation Earnings Conference Call company today to ensure
we have a leading cost structure that is sustainable through the
cycle. I'll now turn the call back over to Tim for his concluding
remarks. Tim Eller - Centex Corporation - Chairman & CEO
Thanks, Cathy. As I said earlier, market conditions worsened in the
quarter as a result range of negative economic factors such as
higher mortgage interest rates, rising foreclosures, lower
employment growth and higher energy costs. We don't expect these
conditions to improve for the rest of this fiscal year. Consumer
confidence has weakened. As a result, we experienced diminished
traffic and orders for the quarter. However, we achieved a strong
cash position of $1.24 billion at quarter's end, and we expect to
improve on this by year end, even after repaying another $250
million of debt. We're expecting positive cash flow from
homebuilding operations for the fiscal year. At Centex we intend to
be capital self-sufficient. Our leadership team at the entire
organization are highly focused on profitability. We're adjusting
overhead spending by restructuring divisions and winding down our
retail mortgage network. Incentives and discounts are diminishing.
We're building a better Centex by improving our core business
processes. We realize monthly savings in our direct construction
costs, despite rising commodity prices. We've maintained our
commitment to executing a simple strategy of selling homes,
reducing costs, and generating cash, and that remains our focus
today. And now, Celeste, let's address questions. QUESTIONS AND
ANSWERS Operator (OPERATOR INSTRUCTIONS) Please remember that in
the interest of time, we must limit everyone to one question and
one followup question. Our first question is from Ivy Zelman with
Zelman. Ivy Zelman - Zelman & Associates - Analyst Good
morning, everyone. I'm glad to see the cash flow better than
anticipated. I think people obviously are relieved to see that. And
Cathy -- appreciating your comments on the developed lands or
finished lots being 50% of your total portfolio, if you can help us
sort of paint a picture, assuming absorptions continue to be weaker
than anticipated and the economy's in a recession, what happens to
land spend in total in fiscal '09? Or as much color as you can give
us, sort of a bare-case scenario on why the company will still
generate cash or at least find themselves not, as many people
think, going out of business? Cathy Smith - Centex Corporation -
EVP & CFO Thanks, Ivy for the kind words too. We're 66,000
owned lots, 56% are developed. They're not going to be in exact
perfect locations,as you can imagine, because you can't move
finished lots around, but that would be a sufficient amount to
accommodate any reasonable sales pace, I suspect. So we do have
sufficient amount of finished, developed lots. And then we did say,
as I said in the call -- or in the prepared remarks, that we expect
to spend about $400 million for the remainder of this year. And
that's down about half of what we told you last time, as we
continue to scrutinize based on where the volumes are, we'll
continue to address that, but right now expect it to be down around
$400 million for the remainder. Tim Eller - Centex Corporation -
Chairman & CEO If we look out into fiscal year '10, if the
conditions continue, we wouldn't expect land spend or development
spend to be any higher than that, in fact probably could actually
be less. So we'll continue to reduce our inventories even at
reduced sales paces. www.streetevents.com Contact Us 6 2008 Thomson
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8. FINAL TRANSCRIPT Jul. 30. 2008 / 10:00AM, CTX - Q1 2009
Centex Corporation Earnings Conference Call Ivy Zelman - Zelman
& Associates - Analyst And do you think that if your cost
initiatives and your to-be-built more profitable margins that you
are generating today could generate enough sales in a market
environment where sales are getting worse and we clearly have seen
your absorptions fall from last quarter, maybe because you're doing
more to-be-builts, I don't know. But what type of absorption pace
in your outlook could you actually go down to and still generate
cash flow? I mean, if you went to three houses in a neighborhood
you are at today, I don't know if that's the right number, but what
happens if it goes to one a neighborhood, because you are doing
to-be-builts and not specing anymore? Just some sensitivities
around where cash flow is no longer positive, but you are actually
using cash? That would be very helpful. Cathy Smith - Centex
Corporation - EVP & CFO Think about it this way, Ivy. First of
all, to address your volume question as we said, we did fall below
three sales per neighborhood per month and don't expect to reach
that level this year given what we're seeing, and I think we're on
average closer to 2.5 sales per neighborhood per month this last
quarter. So that will help you -- and then just do average number
of neighborhoods, and that will help you where volumes could
possibly be. To address your question around cash, though, we
actually -- as we have done for a number of months and quarters
now, we look at every single neighborhood, every quarter to look at
incremental houses built and sold for the cash flow. So we look for
its profitability economics as well as its cash flow, and if
something is not cash flow positive, we'll stop building it there,
which is what you see as we continue to assess some of our assets
each quarter. So what I guess I'm telling you is that even at
fairly low levels we're having to address overhead by combining
divisions, but we still should continue to be cash flow positive
from the majority of our homes sold. Tim Eller - Centex Corporation
- Chairman & CEO Another way to think about it too is based on
our neighborhood reviews, which we do every quarter for every
neighborhood. The general market seems to be selling about two
homes a month per neighborhood. We have been outselling and
outperforming in many neighborhoods, and so if you just thought
that we would drop down to what the market is doing, two per month
per neighborhood may be more practical. Operator Your next question
is from David Goldberg with UBS. David Goldberg - UBS - Analyst
Thanks, good morning. And nice job in a tough market. Cathy Smith -
Centex Corporation - EVP & CFO Thank you. David Goldberg - UBS
- Analyst Guess the -- the first question is really about the
discounts and incentives that you guys are offering, and the
decline that Tim mentioned. I guess I'm trying to understand if
that was a conscious decision? And how you think about the level of
discount that you are offering versus your competitors, and what
that is doing to the sales base? www.streetevents.com Contact Us 7
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9. FINAL TRANSCRIPT Jul. 30. 2008 / 10:00AM, CTX - Q1 2009
Centex Corporation Earnings Conference Call Tim Eller - Centex
Corporation - Chairman & CEO Well, we -- early on, if you
remember back even in the March quarter talked about transparent
pricing, which is pricing to what is affordable for our customers.
That's our pricing strategy. We price to the affordability levels
of our customers, so as -- the affordability level changes for
those customers, that could impact price. We do offer some small
discounts in addition to that, but it's primarily around financing
incentives, and that kind of thing, generally less than 5% of
revenue on discounts. So I think our transparent pricing allowed us
to sell -- probably outsell the market for the last six months, and
-- the early part of this year, and most everybody is starting to
do the same, so we're probably becoming more like the market.
Affordability is an issue. Energy costs are a factor. They may not
have baked themselves completely in to the affordability equation
yet. We are continuing to look at in our neighborhood reviews, how
we are priced in every neighborhood every quarter. David Goldberg -
UBS - Analyst I guess what I'm trying to understand is on a
like-like basis, where are you pricing relative to the competition,
do you think, given that you guys maybe have a slower starting
price with the transparent pricing, but then are offering less
discounts? Do you think it's fairly competitive? You guys are
fairly in line? Tim Eller - Centex Corporation - Chairman & CEO
Absolutely, we take all of that in to consideration and factor in
all of the discounts. We're not going to try to chase somebody who
is generating a lot of sales with a neighborhood or a market-wide,
say, sale over a weekend or something like that, and we're not
trying to chase foreclosures. We're trying to take a very
thoughtful approach to pricing and focus on affordability. Operator
Our next question comes from the line of Nishu Sood with Deutsche
Bank. Nishu Sood - Deutsche Bank - Analyst Thanks, good morning,
everyone. Tim Eller - Centex Corporation - Chairman & CEO Good
morning. Cathy Smith - Centex Corporation - EVP & CFO Good
morning. Nishu Sood - Deutsche Bank - Analyst I want to follow up
on the land spend issue, the $400 million that you are going to be
spending on development this year, obviously down a lot from what
you had said previously. I wanted to dig down -- obviously in this
environment, where pricing makes it difficult in many cases to even
recover your development costs -- I mean, in extreme cases it's
tough to recover any land residual value. Trying to understand the
kind of criteria you are applying as you evaluate your land spend
in terms of -- I think the word you were using was necessary,
Cathy. Let's say if it is in the back end of a subdivision, if it's
in later phases, I would imagine you don't want to leave that
undeveloped as opposed to a completely raw piece of dirt. You could
padlock it and take www.streetevents.com Contact Us 8 2008 Thomson
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10. FINAL TRANSCRIPT Jul. 30. 2008 / 10:00AM, CTX - Q1 2009
Centex Corporation Earnings Conference Call the carrying costs on
it. I want to understand the kind of criteria you are applying
there, and also a sense of how low could that number go if you just
completely eliminated anything that wasn't necessary operationally?
Cathy Smith - Centex Corporation - EVP & CFO Back to the
neighborhood reviews, Tim mentioned that we do every single quarter
on every neighborhood. Part of that review that we do is
incremental spend. So we look at their finished lot supply and
partially developed lot supply in that neighborhood and their sales
pace. And as part of that assessment, we'll say do we -- and if
they are proposing some additional incremental spend to complete
some lots, we'll look at the cash-flow criteria of the home sold
with that incremental spend included. To your point, I think it's a
good one -- that you have to be very thoughtful about where you
want to put additional dollars into development these days because
you may not be able to recover it. We think we have a pretty
methodical approach to that, so we are fairly confident that as we
put additional dollars into the land, it is recoverable and it
makes a lot of sense on an earnings and a cash basis. That's just
to help you understand kind of the criteria we use. Just to be
clear on the $400 million that we talked about for the remainder of
the year, that's acquisition and development. It is primarily
development, but there is some acquisition explained in there too.
And then lastly, my only other point would be, you have to think
about some markets like Texas, for example, where we talked about
central Texas having year-over-year increases on a sales-per
neighborhood basis as well as the price. They are still doing
really quite well. It's absolutely prudent to continue to put some
lots on the ground there. So that is also what's contributing,
because we have in raw numbers, the absolute number of finished
lots is sufficient, it's not in the right places in all cases.
Nishu Sood - Deutsche Bank - Analyst Got it. And just a second
follow-up question, you mentioned something -- something
interesting in your mortgage operation. Obviously dealing with the
loss of the down payment assistance, coming up with ways to help
people come up with a down payment. You mentioned the homebuyer tax
credit. Is there some way that you folks are working on to link the
two, maybe an advance against some type of refund that they might
get to help them with the down payment? Tim Eller - Centex
Corporation - Chairman & CEO We are. And we don't have a
solution to that yet, but we're looking at ways to monetize that
tax credit early. And we're hopeful that we'll be able to do that
certainly as we get closer to the end of the tax year. Operator Our
next question is from Dan Oppenheim with Credit Suisse. Michael
Dahl - Credit Suisse - Analyst Hi, this is actually Mike on for
Dan. Just wondering could you give us some more details on what
went in to the reserves and restructuring expenses we saw in
corporate G&A this quarter? And what type of benefit you would
expect to come from those actions? Cathy Smith - Centex Corporation
- EVP & CFO Sure. The -- our corporate G&A was up about $14
million year-over-year. And it's really kind of equally weighted
between three things, some reserves, some cost associated with
centralizing functions, and then costs associated with investing
into our future www.streetevents.com Contact Us 9 2008 Thomson
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11. FINAL TRANSCRIPT Jul. 30. 2008 / 10:00AM, CTX - Q1 2009
Centex Corporation Earnings Conference Call as we think about our
business process changes. The reserves -- in these kinds of times,
with where we are in the housing industry, it just -- we thought it
was prudent to make that sure we continue to address reserves for
possibly unhappy employees and/or homeowners or something, so we
took that opportunity to increase reserves a little bit. On the
centralizing functions piece, if you think about it we have been
talking -- it is smaller, but a great example, talking about
centralizing accounting shared services, so we went from profiting
transactions in 45 locations, and now they are all centrally
located. Those are the kinds of costs now starting to show up in
our corporate G&A line, so that's associated with centralizing
functions. And the last one is investing in our future. This is
really us as well as using some third-party resources. Really
addressing our core Centex business processes to make sure those
are optimal, so those costs are now showing up in corporate G&A
as well. To remind you on a combined basis, though, if you look at
homebuilding and corporate SG&A, we were down 35%
year-over-year, and corporate G&A is expected to be down
year-over-year at the end of the year. Michael Dahl - Credit Suisse
- Analyst Okay. Thanks. And just a follow-up on -- going off the
whole shift to the build-to order model. As you continue in that
transition, how do you plan on competing with -- clearly not all
builders are taking the same approach, but how do you compete with
the spec homes offered by competitors, and how are you viewing that
spec inventory that's out there? Tim Eller - Centex Corporation -
Chairman & CEO Well, we will end up with some spec inventory
ourselves through cancellations, but it will be a very manageable
amount. And we don't look at -- we don't believe that we'll need to
incentivize those heavily to get those sold. We find that our
homebuyers are continuing to sell, very pleased with the notion and
the process of building a home. They are more satisfied. Our
margins are higher. We make more money. It's more predictable, and
we think our costs be will lower overall as we sell to a backlog
and then build to a cadence from that backlog. It's really a
business model decision that we feel confident we'll be able to
execute. We're not going to be able to compete with builders who
dump speck on the market -- that happens from time to time, but
it's largely isolated now. Very few builders are building specs
today to drive volume. It's just not a prudent approach. Operator
Your next question comes from Megan McGrath with Lehman Brothers.
Megan McGrath - Lehman Brothers - Analyst Hi, thanks. Wanted to
follow up on that last point a little bit in terms of slowdown in
your traffic this quarter. Do you think any of that is due to the
fact you have reduced your incentives? And how are you handing that
in terms of marketing your product and getting more people in the
door? Tim Eller - Centex Corporation - Chairman & CEO Well, we
don't think it has anything to do with reduced incentives, because
we sold extremely well with that model earlier on. So we think it's
just a combination of things. Other builders moving towards that
model, which is transparent pricing. Combination of consumer
confidence erosion, and probably the transition to the
build-to-order model from a much heavier spec position, so a
combination of things this summer. We'll see where we settle out in
terms of sales pace. As I said, I think the market is selling
generally in most places about two homes per month per
neighborhood. We're still doing a little bit better than that, but
it would -- it may be entirely possible that we're going to sell
relative to a market cadence in the future here.
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12. FINAL TRANSCRIPT Jul. 30. 2008 / 10:00AM, CTX - Q1 2009
Centex Corporation Earnings Conference Call Megan McGrath - Lehman
Brothers - Analyst Okay. Thank. And then Cathy, just a fix
follow-up on the financial services business. You mentioned exiting
the retail arm of that business. Can you give us any sense on
timing there? And any potential costs that might come up from that?
Cathy Smith - Centex Corporation - EVP & CFO It will happen
throughout the course of our fiscal year. It will take a little bit
of time to wind that down, and then we'll provide an estimate of
the cost as we're trying to solidify that in our Q most likely. But
we are trying to offset and minimize those winddown costs, the one
time winddown costs. Operator Your next is from the line of Susan
Berliner with JPMorgan. Susan Berliner - JPMorgan Chase & Co. -
Analyst Good morning. Sorry about that. A couple of, I guess
housekeeping questions. Can you tell me what your availability is
on your bank line? Tim Eller - Centex Corporation - Chairman &
CEO It will be in the Q. Cathy Smith - Centex Corporation - EVP
& CFO It will be in the Q. Prior to the cash forward feature,
we're fairly significantly available, but then we'll have to
address with the cash forward feature. Susan Berliner - JPMorgan
Chase & Co. - Analyst Okay. I guess I was a little unclear, the
$400 million you are spending. That's not for the year. You spent
some this quarter I assume as well? Cathy Smith - Centex
Corporation - EVP & CFO Right. $400 million for the remainder
of the year. Susan Berliner - JPMorgan Chase & Co. - Analyst
Can you tell us what you spent this past quarter? Cathy Smith -
Centex Corporation - EVP & CFO Just a second, Matt or Mark is
going to help me with that. I think I know, but I would rather make
sure I'm right. www.streetevents.com Contact Us 11 2008 Thomson
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13. FINAL TRANSCRIPT Jul. 30. 2008 / 10:00AM, CTX - Q1 2009
Centex Corporation Earnings Conference Call Tim Eller - Centex
Corporation - Chairman & CEO Let's move on to the next question
and then we'll come back and answer that one. Operator (OPERATOR
INSTRUCTIONS) Your next question comes from the line of Mike Rehaut
with JPMorgan. Mike Rehaut - JPMorgan Chase & Co. - Analyst Hi,
thanks, good morning. Cathy Smith - Centex Corporation - EVP &
CFO Good morning. Tim Eller - Centex Corporation - Chairman &
CEO Good morning, Mike. Mike Rehaut - JPMorgan Chase & Co. -
Analyst First question, just about the down payment assistance.
Appreciate you giving out the number there, and just trying to get
a sense if you have any data in terms of where the DPA is most
prominent, and if you've seen some of those houses -- and if you
know what the -- that 25% number was last quarter, and maybe a year
ago? Cathy Smith - Centex Corporation - EVP & CFO Yes, hey,
Mike. DPA is really used in most of our markets. It is more heavily
concentrated in some, which I think others have said too, which is
like Texas is the one that stands out in my mind. But it is used in
pretty much all of our markets. Yes, bigger ones would be -- like I
said -- Texas, Las Vegas. Tim Eller - Centex Corporation - Chairman
& CEO The more affordable markets. Mike Rehaut - JPMorgan Chase
& Co. - Analyst I'm sorry. Do you have a sense of what that 25%
was a quarter ago and a year ago? Tim Eller - Centex Corporation -
Chairman & CEO That's probably less because it's associated
with FHA mortgages. Our FHA utilization has gone up steadily for
the past 18 months, so it generally runs about a third to a half of
the FHA loans that we originate. www.streetevents.com Contact Us 12
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14. FINAL TRANSCRIPT Jul. 30. 2008 / 10:00AM, CTX - Q1 2009
Centex Corporation Earnings Conference Call Cathy Smith - Centex
Corporation - EVP & CFO We looked at that statistic for like
four years, and it was very consistent, the percentage of DPAs of
the FHA. The difference is FHA volume has gone up so much, as Tim
said. Matt Moyer - Centex Corporation - VP of IR Right. You can
imagine several years ago it was a very small amount. FHA was a
very small amount. Operator Our next question comes from the line
of Ken Zener with [McCorey Capital]. Ken Zener - McCorey Capital -
Analyst Good morning. Tim Eller - Centex Corporation - Chairman
& CEO Good morning, Ken. Ken Zener - McCorey Capital - Analyst
I'm interested -- your units -- could you give the number for your
units under construction as well as your unsold spec count? And I'm
interested to see how those change, so in the absence of large unit
declines affected your order rates that you saw in the quarter?
Matt Moyer - Centex Corporation - VP of IR Our inventory came in at
1,356 units at the end of the quarter, down from 1,754 at the
fourth quarter, and 4,815 a year ago in the first quarter. Ken
Zener - McCorey Capital - Analyst Unsold, right? Matt Moyer -
Centex Corporation - VP of IR That's unsold inventory. Homes under
construction was essentially flat with fourth quarter at 7,349,
including the model homes, versus 7,324 in the fourth quarter of
'08, and 14,167 a year ago. Ken Zener - McCorey Capital - Analyst
Do you guys think it's kind of the stabilization, which is good --
of your units under construction which led to that larger decline
in orders? www.streetevents.com Contact Us 13 2008 Thomson
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15. FINAL TRANSCRIPT Jul. 30. 2008 / 10:00AM, CTX - Q1 2009
Centex Corporation Earnings Conference Call Tim Eller - Centex
Corporation - Chairman & CEO I think it's a transition. It's --
again, we have transisted in a number of markets from building
specs to preselling, and so that transition takes a bit of
different behaviors. But it's happening and it's manageable, and
like I say, we also expect that with our pricing strategy and our
pricing model, focused on affordability. Not trying to chase
foreclosures, not trying to chase others who are trying to generate
cash out of a particular neighborhood has also some impact as well.
We -- and again, if you look at our sales the past 12 months, we
have generally been outselling the market, and I think we're
probably kind of approaching more market-like sales right now.
Operator Our next question comes from the line of Stephen East with
Pali Capital. Stephen East - Pali Capital/Pali International -
Analyst Good morning. Cathy Smith - Centex Corporation - EVP &
CFO Good morning. Stephen East - Pali Capital/Pali International -
Analyst Going back to the cash flow one more time, Cathy. If 50% of
your lots are done -- are finished, if you look at what you expect
to deliver in '09 and 2010 fiscal years, what percentage would you
estimate are actually completed versus what you are going to have
to put money into? Cathy Smith - Centex Corporation - EVP & CFO
Let me make sure I understand what you are asking, Stephen. So out
of our finished lots, how many of those are we actually going to
utilize based on '09 and '10? Stephen East - Pali Capital/Pali
International - Analyst Exactly. You made a comment earlier that
obviously you can't move some of them around, so you are going to
have to invest. I'm just trying to get an idea of if you look, what
you have on the board for this year and next. Tim Eller - Centex
Corporation - Chairman & CEO Stephen based on -- as we go
through each neighborhood we make those determinations in terms of
what we're going to invest and when we are going to invest it. And
right now we're finding very little additional investment
necessary. A lot of what our land development spend is right now is
related to the houses we have under construction. It's completing
sidewalks, and drive aprons and final lifts of streets and that
kind of thing. So it is really kind of part and parcel of
completing the infrastructure, as we complete the homes.
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16. FINAL TRANSCRIPT Jul. 30. 2008 / 10:00AM, CTX - Q1 2009
Centex Corporation Earnings Conference Call Stephen East - Pali
Capital/Pali International - Analyst Okay. And then also staying on
that, if you look at your cash -- I know in some markets, you're --
and getting close to cash construction costs, et cetera. If you
look across all of your closings, though, what type of cash are you
generating per household -- per home sold right now? Cathy Smith -
Centex Corporation - EVP & CFO It's about -- just do an
adjusted finished lot cost or a home-site cost, and that -- good
rough average is around $60,000 to $65,000 per unit. Operator Our
next question comes from the line of Carl Reichardt with Wachovia.
Carl Reichardt - Wachovia Securities - Analyst Hey, guys, how are
you. Tim Eller - Centex Corporation - Chairman & CEO Hi, Carl.
Carl Reichardt - Wachovia Securities - Analyst Just following up on
Steve's question a different way. If 50% of your lots are finished,
that includes lots where homes are in the air, or it doesn't? Cathy
Smith - Centex Corporation - EVP & CFO No, it does not. Carl
Reichardt - Wachovia Securities - Analyst Okay. Doesn't. So what
would be the budget -- to get the lots that aren't finished up to
finished whenever you do it, what would be the estimated cost to do
that? Cathy Smith - Centex Corporation - EVP & CFO Oh, gosh,
Stephen -- Tim Eller - Centex Corporation - Chairman & CEO
Carl. www.streetevents.com Contact Us 15 2008 Thomson Financial.
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17. FINAL TRANSCRIPT Jul. 30. 2008 / 10:00AM, CTX - Q1 2009
Centex Corporation Earnings Conference Call Cathy Smith - Centex
Corporation - EVP & CFO Carl. Sorry. Stephen was before you.
Sorry. Carl. As we talked about, we expect about $400 million of
additional spend for the remainder of this year. And as Tim said,
much of that cost is really associated with homes that are already
kind of under construction with things like HOA deficit spending
and stuff. The partially developed lots which are another 30% or
35% or so -- have -- will run out of the course of the next several
years based on the volumes. And as Tim said, we could be lower next
year in spending than we are this year if volumes stay around where
they are. So I guess my -- not a great answer but a roundabout way
is it's going to be decreasing and it's not a large amount of
dollars every subsequent year going forward. Carl Reichardt -
Wachovia Securities - Analyst Okay. I'm just trying -- last
question, could you give me a sense maybe over the course of the
last six months or so, maybe year, the two markets where you think
you have gained the most share from an MSA perspective? And whether
or not you have seen any benefits from that over the course of the
last six or 12 months from a cost perspective or some other way?
Tim Eller - Centex Corporation - Chairman & CEO We're seeing
the benefits on our cost initiatives more around our processes.
Standardizing our processes, and moving towards our build-to-order
model is proving to create a lot of efficiencies in terms of how
schedule our subcontractor suppliers. That's what enabled us, for
example, to lower our overall drywall cost nationwide, despite
those two announced price increases. So it's much more around
processes right now than it is around share. In terms of share,
we're -- I think it's safe to say we're growing share in most every
market that we're focused on, and we have determined that we're
going to participate in the future. So -- and I would say probably
in our central Texas and San Antonio markets is probably where we
have increased the most share recently. Matt Moyer - Centex
Corporation - VP of IR Carl, this is Matt. I would say what comes
to my mind is the markets that had sizable private builders,
certainly. So some of the Midwest markets, DC, certainly our
business in the Carolinas, because of our dominant market-share
position throughout those -- North and South Carolina has probably
grown nicely. So that's how I would characterize it without exactly
knowing the numbers. Cathy Smith - Centex Corporation - EVP &
CFO Let me answer Sue Berliner's question earlier about how much
land spend did we incur in the first quarter. We don't have the
exact number in front of us, but it's somewhere between $80 million
and $100 million. We can get you a better answer later. Operator
Our next question comes from the line of Joel Locker with FBN
Securities. Joel Locker - FBN Securities - Analyst Just wanted to
talk to you about your backlog conversion a little bit. Just saw it
was down, I think 6% year-over-year, and that's the first decrease
in about 10 years. And would you expect that with the
build-to-order model going into full implementation. But just
wanted to see if that was going to be the trend going forward, or
the same decline year-over-year? www.streetevents.com Contact Us 16
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18. FINAL TRANSCRIPT Jul. 30. 2008 / 10:00AM, CTX - Q1 2009
Centex Corporation Earnings Conference Call Matt Moyer - Centex
Corporation - VP of IR This is Matt, Joel. I think it will show
some seasonality, but you should continue certainly throughout this
year to see lower backlog conversion because of the lack of -- Joel
Locker - FBN Securities - Analyst I'm just saying versus, say, the
second quarter was 67% last year, you might see another down 6%
there where it's only 60% or 61% or something like that. Just like
you did in the first quarter, versus 57% last year where it came in
51% this year. Matt Moyer - Centex Corporation - VP of IR It sounds
a tricky way to get me to tell you what closings are going to be in
the second quarter. But I do think it will be down both
year-over-year. It may even be down a little sequentially. At some
point, we're not going to lower specs much more than they are. They
are already lower than at any point on record that I can find. And
there is some level of spec with cancellation and things. So I
would say that -- lower year-over-year, maybe even a little
sequentially. Operator Our next question comes from the line of
Chris Hussey with Goldman Sachs. Chris Hussey - Goldman Sachs -
Analyst Hi, guys. Thanks for taking my call. The question I have --
two questions. One is around your land spend. If you spent about
$500 million this year, how big a company are you? You are running,
looks like maybe 16,000 to 20,000 homes a year, which would put
that spend to $25,000 to $30,000 per home for land spend. So how
much of that $500 million is new lots for future sales and how much
is for these? Because that seems -- I don't know, that seems like a
lot of money. Cathy Smith - Centex Corporation - EVP & CFO
Think about it this way too, our land spend over the course -- it
peaked at about $4.5 billion, down to $3.5 billion to $3.2 billion,
down to $1.7 billion last year, down to roughly $0.5 billion this
year. It has come down very dramatically, and then as Tim
suggested, given pace and volume, we could be down even lower again
next year. So it has come down dramatically. You also have to
remember that although we're trying to time our land development to
exactly our lot need based on our cadence, we're not perfect yet,
and we're getting there. So you don't perfectly develop your lots
just in time of need. So some of that development spend is for
future lots, and some compulsory obligations as well as to complete
the existing neighborhoods. So what I'm trying to tell you is it's
not perfectly timed. Chris Hussey - Goldman Sachs - Analyst I hear
you, I'm just trying to get around, though -- we're getting towards
-- I would say most people would agree a pretty reasonably bad
market for the housing market right now. So one would expect you
guys not to be investing much in land. But when you have say you
have 50% of your lots are finished lots, in a finished lot, how
much investment do you have to make in that lot in order to sell
the house? www.streetevents.com Contact Us 17 2008 Thomson
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19. FINAL TRANSCRIPT Jul. 30. 2008 / 10:00AM, CTX - Q1 2009
Centex Corporation Earnings Conference Call Tim Eller - Centex
Corporation - Chairman & CEO Well, you may have the
infrastructure to complete the final lift of payment. Perhaps
offsite improvements to complete. We want to release our bonds, so
we're very cognizant about doing that. Right now it's going to take
-- we have developed a lot of property over the past five years, a
lot of it -- and actually last couple of years. So a lot of it
still has bonds associated it with that we want to get released. A
lot of it is just around getting our previously developed
properties released from the bonding, and well as completing the
infrastructure for houses under construction. There's not too much,
really, going into new lots and new land. And it's entirely
possible we'll come in less than $500 million too if the market
continues to deteriorate. Tim Eller - Centex Corporation - Chairman
& CEO Chris, the only thing I would add is if you remember
three or four years ago, probably 90% of our lot supply was coming
in raw, and needed to be fully developed. Whereas moving to the
asset-light model and optioning more finished lots, I would expect
that number to decrease. So even as we move back to the -- 20,000
to 30,000 to 40,000 units that we were doing in the past, as we
move up to that, you should expect much less land spend than we had
in the past. Operator Our next question comes from Gary Gordon with
Portales Partners. Gary Gordon - Portales Partners - Analyst Thank
you. Two questions. One, practical. What was your cancellation rate
in the quarter? Cathy Smith - Centex Corporation - EVP & CFO
About the same as last last quarter. Around 30%. Gary Gordon -
Portales Partners - Analyst Okay. Thanks. Two, on your new business
model, I would assume -- and your numbers about land spend I would
assume you are not really a bidder for bank-foreclosed properties
that should obviously be growing in volume. Is that the case? And
two, could that potentially put you at competitive risk if some of
your peers are much more active buyers of that land? Tim Eller -
Centex Corporation - Chairman & CEO We are bidders. We're in
the market right now. We're actively seeking developed lots in many
of our markets where we are in shorter lot positions. So it's not
determined yet how the banks will come up to the market with the
properties. We are able to do acquisitions on takedowns with terms
in some cases. We haven't really seen bulk sales of land by banks
yet. We're working with other partners and teaming up with other
providers and developers in terms of looking at some properties. We
have our Corona transaction that we did in partnership with
Farallon and RSF Partners that is available to us as well to look
at new properties. We think we have right now enough oars in the
water, if you will, to be participating in the land market -- which
I think for all practical purposes we won't see materialize until
next calendar year, calendar year 2009. Operator Our next question
comes from Andrew Fenton with Cliffwood Partners.
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20. FINAL TRANSCRIPT Jul. 30. 2008 / 10:00AM, CTX - Q1 2009
Centex Corporation Earnings Conference Call Andrew Fenton -
Cliffwood Partners - Analyst Good morning. How was traffic in July
versus a year ago, and also versus June? Cathy Smith - Centex
Corporation - EVP & CFO We don't normally comment on beyond the
quarter, so we're not going to help with July. But we talked about
traffic being down really some of the lowest levels we've seen this
last quarter. Andrew Fenton - Cliffwood Partners - Analyst In
percentage terms? 40%? 50%? Tim Eller - Centex Corporation -
Chairman & CEO Quarter over quarter, it was down about 45%.
Matt Moyer - Centex Corporation - VP of IR 40.7% in the quarter.
Tim Eller - Centex Corporation - Chairman & CEO I'm corrected.
40%. Operator We have reached the end of our allotted time for
questions. I will now turn the call over to Tim Eller for his
closing remarks. Tim Eller - Centex Corporation - Chairman &
CEO Thanks, Celeste. And thanks to all of you for joining us today.
If you have any additional questions, please don't hesitate to
contact Cathy, Matt, or myself. We look forward to discussing our
progress during our second quarter conference call later this fall.
Operator This concludes Centex's fiscal year 2009 first quarter
earnings conference call. Thank you for your participation.
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21. FINAL TRANSCRIPT Jul. 30. 2008 / 10:00AM, CTX - Q1 2009
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