Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Ivy Zelman - Zelman & Associates.
Ivy Zelman - Zelman & Associates
I think that one of the biggest concerns as it relates to builders right now is understanding the cash flow needs and cash generation in 2009 and realizing you’ve got a lot of finished lots which means you don’t have to develop a lot, that’s good. I don’t if you said this Phil and I apologize if you did, but can you give us your expectation for land spend in 2009 both for option takedown as well as land development.
Then to follow on that to talk a little bit about, what your expectations for cash flow would be even if orders where to continue to weaken, can you in fact generate even in this declining market environment given you’re selling a lot of spec possibly as well as other land sales you can generate?
Phil Creek
Those are really good questions and things that we focus on constantly. We do a lot of different financial scenarios and projections putting those type of projections out publicly in today’s world is pretty difficult. We obviously want to continue generating positive cash every quarter and we are really focused on that.
You are exactly right; we do have fair values on lots that we want to push through our pipeline. We also have been managing our spec levels a little tighter and we push those down, some during the third quarter. We do have the cash tax refund coming in next year.
As far as land spend on the new land and also land development, we talk this year about spending, 30 on land and 40 on development. It’s hard to project those numbers. We are trying very hard to continue generating cash every quarter. As I said before we only spent $3 million on land in the third quarter. We are seeing a lot of opportunities, we are being very, very careful, but its just hard to project those numbers.
Bob Schottenstein
And the only other I’d say, while on the work end we’re pleased to state that our SG&A was down 30% from a year ago, it’s still too high and we are in the process of further of taking further steps to hopefully achieve some meaningful reduction in our expense levels as we begin next year.
Phil Creek
We’re trying to minimize our operating losses as much as we can, but those are just difficult numbers to project.
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