Question-and-Answer Session
Operator
(Operator Instructions) First up on our roster is Stephen Kim at Citigroup.
Stephen Kim - Citigroup
Thanks for all the information on your call. I had a quick question regarding your deferred tax asset balance. I just want to make sure that I’m clear on what your residual balance that exists today implies for your ability to harvest deferred tax assets over the next four quarters. My understanding of the ENY interpretation is that they are essentially requiring you to write-off whatever deferred tax assets are unlikely to be harvested through delivering homes or selling land in the next four quarters.
But I was curious as to whether or not that interpretation applied both to the deferred tax asset created by the impairment charges as well as the deferred tax assets that have been built up or accrued related to other corporate activities, like deferred comp and other things like that. So I just want to make sure I understand what exactly we can expect in terms of cash flow implications from the $222 million you have in deferred tax asset on the balance sheet right now.
Domenico Cecere
I’m going to ask Bill Hollinger to respond to you on the 200.
William R. Hollinger
I’ll try to do the best. It might need some multiple follow-ups, but first of all I’ll kind of answer the last part of that question -- the $222 million, we would realize that probably in ’08 and ’09, so that really represents a long-term receivable that we would collect here in ’08, ’09, the years, so we fully expect to get that and there’s really no issue on realizability of that.
The issue of -- you said as far as the auditor’s interpretation, there is really I don’t think any difference or view in terms of the impairment, or in terms of the valuation allowance to either the impaired deferred tax assets or the unimpaired deferred tax assets, so that issue is more or less one and the same.
Stephen Kim - Citigroup
I see. Okay, that’s great. No, that helps greatly. The second thing I wanted to ask relates to what you are seeing in terms of buyer activity in your communities. Can you give us a sense for -- if you have seen any change in the kinds of buyers who are actually stepping forth and actually on whom you are actually closing transactions with? Are you finding that there is an increased number that are currently renting? Are you finding that there is a shift in the age of your buyers? And I’m talking really in the last three months or so, three to four month, or any other salient difference that you have noticed in terms of your actual closed customers in the last quarter or so.
If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!- To read the full transcript on Seeking Alpha, click here »
