Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of David Goldberg - UBS
David Goldberg - UBS
In the press release and in your comments you talked about seeing some high quality land come back on the market and not yet at attractive prices, so I guess the question is who are the sellers of the land that you’re seeing and what would have to happen either to home prices or to the offering prices on that land to make it more attractive to you.
Robert Toll
The offerers are banks. In both cases I have two deals in mind that came recently and I think we’re not that far apart on price. We need some terms which will make it less risky for us and of course with the terms it will be less expensive as well.
David Goldberg - UBS
At the pace that you are selling now and with the expectation of 2,000 to 3,000 deliveries in fiscal 2009 do you think you can continue to be free cash flow positive and if so how much sensitivity is there within that should the sales pace fall, should you not be able to hit the 2,000-delivery mark.
Joel Rassman
It’s a hard question to answer as we’ve talked about in the past. When we do our modeling we always end up starting the year saying we’re not going to be cash flow positive and end up the year over the last few years, being cash flow positive. We continually change our business plan during the year as we match production and sales.
So we would think that absence write-downs we have a good chance of being cash flow positive because we have in the last few years but at this point I can’t tell you for sure.
Operator
Your next question comes from the line of Rob Stevenson – Fox-Pitt Kelton
Rob Stevenson – Fox-Pitt Kelton
Can you talk a bit about the jumbo mortgage market and what you’re being able to offer your buyers these days and what you’re expecting given that the 10-year treasury is down around 2.6 and the 30-year for conventional is down under 5.5.
Robert Toll
We’re down under 5.5 but I want to give an opportunity to Don Salmon head of TBI Mortgage to answer these questions.
Don Salmon
The good news is we see real glimmers of hope on the jumbo market. We just struck a deal with a major bank to supply jumbo financing for some of our condo products. We’re having terrific conversations with banks. We’re about to we think consummate a deal with a major life insurance company and we see liquidity is coming back into the market, slowly but surely, but it sure is coming back.
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