KB Home F2Q08 (Qtr End 05/31/08) Earnings Call Transcript

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2008-06-27 12:47:12.0

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Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from the line of Dan Oppenheim – Credit Suisse

Dan Oppenheim – Credit Suisse

Can you talk about some of the markets where you saw better order trends and kind of what did you have to do on pricing in those markets to get there?

Jeffrey Mezger

I don’t know that we have that kind of detail because the story will vary by community and by submarket within a city. I think we do have the sales by region. It’s in the press release. What I can tell you is that our entry level products and our more affordably priced products are selling better then the move-up products where the buyer has a home to sell.

Dan Oppenheim – Credit Suisse

Could you give us an idea of how orders trended throughout the quarter?

Jeffrey Mezger

We don’t normally disclose that data. You can’t respond too much to what happens in one month. It’s a quarterly look for us.

Operator

Your next question comes from the line of Dennis McGill – Zelman & Associates

Dennis McGill – Zelman & Associates

On the carry back opportunity for what you get in 2009, what’s the amount that you paid a couple of years ago?

Kelly Masuda

I think we’ve used it all up.

Dennis McGill – Zelman & Associates

Did you say the $21 million of option abandonments related to 800 option lots or 8,000?

Domenico Cecere

It was 800.

Operator

Your next question comes from the line of Michael Rehaut - JP Morgan

Michael Rehaut - JP Morgan

Your comments about the low exposure to the down payment assistance program really surprised me, a few years ago we had it that you had about 13% of your consumers using down payment assistance, the FHA as an overall entity about 35% of their loans have down payment assistance, and yesterday [Lenar] said about a third of their loans use down payment assistance, so its just kind of surprising to hear you say only 74 closings, I was wondering if you could describe how you get to that conclusion, how you track your mortgages?

Jeffrey Mezger

Within our venture we have the ability to track loan specific, what loan type it was. I can tell you that a few years ago we moved away from DPA, stopped offering it altogether. There is a lot of pressure as you’ve seen in the news from congress to eliminate the program and we’re sensitive to that so we don’t want to create a business that relies on something that could possibly go away in the future.

 

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