Good morning and welcome to the Beazer Homes Earnings Conference Call for the quarter ended June 30, 2015. Today’s call is being recorded; a replay will be available on the company’s website later today. In addition, PowerPoint slides intended to accompany this call are available in the Investor Relations section of the company’s website at www.beazer.com. At this point, I will turn the call over to David Goldberg, Vice President and Treasurer.

Thank you, Jen. Good morning and welcome to the Beazer Homes conference call discussing our results for the third quarter of fiscal year 2015. Before we begin, you should be aware that during this call we will be making forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors, which are described in our SEC filings including our Form 10-K, which may cause actual results to differ materially from our projections. Any forward-looking statements speaks only as of the date on which such statement is made, and except as required by law, we do not undertake any obligation to update or revise any forward-looking statements whether as a result of new information, future evidence or otherwise. New factors emerge from time-to-time and it is not possible for management to predict all such factors. Joining me today are Allan Merrill, our President and Chief Executive Officer; and Bob Salomon, our Executive Vice President and Chief Financial Officer. Following our prepared remarks, we will take questions in the time remaining. I will now turn the call over to Allan.

Thanks, David. And good morning, thank you for joining us. Our fiscal third quarter represented more evidence of the operational and financial progress we are making, highlighted by increased home sales, home closings, sales prices and profitability. At the same time, it wasn’t a perfect quarter, as historically bad weather in Texas delayed our home deliveries and contributed to gross margin pressures. While these challenges will linger to our fourth quarter, our huge backlog and our overhead discipline will still allow us to generate higher earnings for the quarter and the full-year. With that overview, let’s review the key accomplishments for the quarter. Orders rose 18% year-over-year, driven by a 17% increase in average community count. We maintained our industry-leading absorption rates at 3.1 sales per community per month, even as we grew our community count. As expected, our average selling prices increased both in our closings, which grew 12% versus the prior year to $318,000, ending our backlog, where the average price was $325,000 at June 30. The robust sales pace allowed us to end the quarter with nearly $900 million of future closings in backlog, which was up $236 million, or nearly 36% versus the prior year and represented the highest value we’ve recorded since 2007. On a profitability front, we reported $37 million of adjusted EBITDA, up 17% versus the prior year. On a trailing 12-month basis, we have generated $134.4 million of adjusted EBITDA, up $21 million, or 19% versus the same time last year. And we generated $12.2 million of net income, or $0.38 per share, representing the first time we posted a profit in the third quarter since 2006. Turning to our fiscal 2015 outlook, we now expect adjusted EBITDA to be up approximately $10 million versus the prior year, which in reality is closer to $16 million, after accounting for the benefit we had in fiscal 2014, from the sale of our interest in Beazer Pre-Owned Rental Homes. But, however, we describe it. This is a lower expectation than we had earlier in the year, driven almost entirely by fewer closings in Texas. Despite this quarter’s challenges, the sales strength resulting from our expanded community count will enable us to close more homes and make more money this year. This will allow us to post our fourth straight year of improvements in adjusted EBITDA and the second straight year of increased net income. Our 2B-10 goal is to get the $2 billion in revenue and $200 million in EBITDA as soon as possible. Nothing that happened this quarter has diminished or delayed our expectations to reaching that goal. With that, let me turn the call over to Bob to take you through some of the more detailed results for the quarter.

Thanks, Allan. We continue to focus on the metrics to drive the achievement of our 2B-10 objectives. While we will likely reach certain targets before reaching others, the expectation that we will reach $2 billion in revenue with a 10% EBITDA margin has not changed. As a reminder, we consider our metrics on a trailing 12-month basis to make them more easily comparable to what 2B-10 targets. So looking at our progress today, our LTM total revenue at June 30, was $1.54 billion, which is up almost $185 million, or 13.6% compared to this time last year. And our LTM adjusted EBITDA of $134.4 million, is up 18.6% versus the same time last year, excluding certain previously disclosed charges, which are detailed in our presentation. Demand was strong in the quarter, allowing us to achieve a sales base of 3.1 sales per community per month in line with last year and our expectations. On a trailing 12-month basis, our sales base was 2.8, near our 2B-10 goal, or three sales per community per month. For the fiscal fourth quarter, we expect our sales base to be around 2.5 sales per community per month, reflecting normal seasonal patterns and allowing us to achieve our anticipated year-over-year order growth. Turning now to average selling prices. As Allan noted, our ASP rose 12% this quarter to $318,000, which represented the highest level we’ve achieved in the company’s history. Each of our regions experienced a significant price improvement relative to last year, but by the West and Southeast, where prices were up 14% and 12% respectively. On a trailing 12-month basis, ASPs rose to about $304,000, compared with $274,000 a year ago. And ASP and backlog at June 30 was $325,000, providing visibility into further year-over-year increases in our ASP in future quarters. For…

Thanks, Bob. Recognizing the improvements we’ve made in our performance and financial position, Moody’s upgraded our corporate family rating to B3 from Caa1 in June. As we have told the rating agencies, we remain focused on making further improvements to return our balance sheet to a less leveraged position. We expect to take steps over the next several years to strengthen our balance sheet and reduce our cost of capital. We currently have no appetite to issue equity to pay down debt. Instead, we expect to de-lever the company’s balance sheet to the use of our deferred tax assets, more efficient capital allocation and the accumulation of retained earnings. We also expect to reduce interest expense by refinancing several of our higher cost debt instruments as market conditions allow. And in the fall, at the time when we released our full-year results we expect to put a new revolving credit facility in place. With that, let me turn the call back over to Allan for his conclusion.

On Slide 18, we’ve laid out our revised expectations for fiscal year 2015. The headline is that we lowered our adjusted EBITDA primarily due to the loss of about 150 higher-margin closings in Texas. The full story is more compelling. We are generating strong sales with higher prices from an expanding community count, while controlling overheads and increasing profitability. I’m pleased with the improvements we’ve made and with the resiliency our team has demonstrated. With their efforts, we remain on track to reach our 2B-10 objectives. With that, I’d like to turn the call over to the operator to take us into Q&A. Operator?

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Alan Ratner from Zelman & Associates.

Hey, thanks for all the color.

Your line is now open.

Hey, guys, good morning. Thanks for all the color and guidance. Allan, the first question on the gross margin here I think that if you kind of see the market’s reaction today, my guess is, people might be a little bit surprised that the margin wasn’t stronger and you certainly said that as well. I understand the Texas headwind on the deliveries, but this is the fourth quarter in a row where margins have ticked lower and I think other builders are facing that headwind as well and seem to be showing some improvement at this point, or at least talking a bit more positively about the next quarter or two. So maybe if you can just give a little bit of numbers behind it, what type of spread are those Texas closing sort of being pushed out, how much above company average were those going to generate? And generally, what are you seeing on the pricing side right now as far as your ability to push price? And when you kind of normalize out this weather impact, where do you think that margin can get to over the next two or three quarters?

All right, great; thanks, Allan. So, one thing to kind of set the context, we knew all year that margins were going to be under some pressure on a year-over-year basis, just on a mix basis. So when we talked about 21.7%, 21.8%, we were talking about lower levels than the prior year and kind of expecting that to be stable in the back-half of the year. So I think the first thing is to kind of put this in context that we’re talking about 30, 40 basis points; not some significantly larger quantum. And I’ll get to the forward-looking part in a second, but I think it’s important to anchor our conversation around where did we expect to be based on the book of business that we had, that we feel very good about. In Texas, I think one of the things that we need to kind of point out is, the way to think about it and the way it impacted us is there are kind of two sets of impacts. The easiest one to understand is we did miss 50 closings approximately, as Bob said in the third quarter. We think we’re going to miss around 100 in the fourth quarter. And those closings have margins 3 to 5 points higher than company average. So there is a direct effect on the weighted average impact or the weighted average reporting margin. But just to sort of push through the math and say, hey, that this percent or that percent of the closings, it doesn’t look really significant. The rest of the story is really around the margin impact on the closings we did have. And, I think Bob said it in the script, we had approximately – I think we’re just under 300 closings in the third…

Great. Thanks. Thank you for all that detail, very helpful. One follow-up then on the absorption, I think your guidance in Q4 of 2.5 that would actually be down about 5% year-over-year I believe. And you have been running flat to up a little bit. So just curious is that just more rounding on your part or is there something specific that the absorption do you think are going start to tail off on a year-over-year basis?

Yes, we’re just trying to be a little smarter, I mean, Alan, with it. I think we’re too precise. We’ve gotten that feedback from you and others. I mean, about 2.5, that’s a statement that would put us very consistent with last year. I don’t add to the second or third decimal point what last year was, I think it was 2.6. But I don’t know off the top of my head was that 2.57 or some other number, so around 2.5 to us is essentially flat with last year.

Understood. Thanks a lot and good luck.

Thanks.

Thank you. Our next question comes from the line of Michael Rehaut from JP&C. your line is now open.

Thanks. Good morning everyone. First question I had was on community count. You ended the third quarter 168 and obviously gave guidance for 4Q about a 10%. So maybe slightly or similar in an average community count to – or slightly up sequentially. You’re more or less right around that 170, slightly below. How should we think about next year given your current land spend and the ability? I would expect – obviously, there are still some further leverage you want to achieve. Any thoughts around growth from next year and maybe over the next two or three years how you’re thinking about community count growth?

Michael, it’s Bob. Thanks for the question. I think we’re continuing to target the 170 2B-10 goal. What that means for all in 2016, it’s a bit early to kind of project that. We’ll have more to say about that in November, but I think we are still driving towards the 170 goal that we have in our 2B-10 plan objectives.

Oh, yes, and I appreciate that. I guess, maybe that’s why I kind of folded it in the question as well, that, being so close and not necessarily asking for guidance next year. But as you think over the next two or three years, I mean, is – I would presume community count growth of some level is part of the plans and the thinking, and I’m just trying to get a sense, a, if that’s correct, and b, if it’s a mid single, low double-digit, or how to think about that?

Well, for a guy not asking for 2016 guidance, that’s a pretty specific question. But let me try and help.

Well, over the two to three years, Allan.

I understand that. I think we will target higher community counts in 2017 and 2018, when we get into and beyond 2B-10. I’m not prepared right now to tell you where on a growth trajectory that’s going to be. I think capital allocation is something we’ve talked a lot about. And I think we want to make sure that between growing the top line, which we accept is important, both on the – a volume and on a price basis, and improving the balance sheet, those are both objectives. And I think our focus is on increasing shareholder value, while growth is a part of that, improving the balance sheet is also a part of that.

Great, thanks. And then just following on to your comments, Allan, about the improved returns and for a balance sheet perspective, some other builders have talked about and focused on, perhaps, selling off some assets that weren’t necessarily income-producing and things that were held for sale, and obviously, you had some land sales this year. Maybe you can give us an update on some of the assets that you expect to activate over the next couple of years? And, obviously, there has been a lot of talk around Sacramento, but if there are others where you think that you would be able to get increased returns off of some of the pieces of inventory that aren’t necessarily working for you today?

Well, that’s a great question, so really kind of two pieces to it. One, I don’t know, I don’t read the other transcripts may be as closely as you do exactly what others have said. But we’ve been very clear for the last two years that we bought some larger parcels in our core markets with the explicit intent of not owning every product line and selling those off, so that we had kind of complementary programs going within the communities that was a big part of our land sale program in 2014. It’s a big part of our land sale program, which we target $50 million or so this year, which leaves us what, Bob, another $15 million or so in the fourth quarter?

Yes.

So that is definitely been part of our strategy to make sure we were in the A locations, as we bought some bigger deals than we thought it was appropriate for us to own, as I say, all of the product lines. And there will be some more of that in 2016. At this point, I think, there is less value in those bigger deals at this point in the cycle, and we’re being more focused on filling in particular product lines in particular submarkets. That isn’t to absolutely rule out a larger deal, but we just say, there was a period of time in a land market, where 50, 70 finished lots have achieved such premiums to where 300 or 400 lots that needed land development, where it was pretty clear where the higher return on capital was. And I would say that’s a little less true today, because I think some others have gotten more aggressive on those bigger deals. And it turns out, but that’s a very dynamic market by market thing, where is value on the risk continuum or land deal strategy. Now, the other part of your question, because it kind of morphs into the land held discussion, and we’ve talked a lot about that, we’re down to about 15% of our inventory is in that land held for future development, that’s a dramatic reduction from where it was a couple of years ago. And I’m pretty confident in 2016 that number is coming down in a meaningful way. 75% of that land held is in California, which we’ve talked about before, over half of that is in Southern California. We expect to bring active some of those assets. Now, it’s important that I reiterate, because not everyone necessarily follows this all the way through. When we bring those active, they are likely to going to have gross margins that are below the company average, but they’re going to do something very important. They’re going to generate cash, and they’re going to generate EBITDA. And so we’ll be anxious to get them active. We’ve also talked about and I think we’ll do this for next year. We will be pretty transparent about what the impact of land held assets is on gross margins. So that people can kind of analyze the core business versus us taking legacy assets in allocating them or creating a capital allocation strategy that make some sense. They won’t sit there indefinitely. We will get them to work. And I think, as I said, you’ll see a big chunk of that again in 2016.

Great. Thank you.

Thank you. Our next question comes from the line of Susan McClary from UBS. Your line is now open.

Good morning.

Good morning, Susan.

First question, diving into Texas a bit, your order trend in that region were very strong despite the weather and some of the issues down there. Can you just give us a sense of what you did see down there during the quarter? And as part of that did the weather have any impact on potential land development, and maybe the opening up some future communities that could shift your geographic footprint mix in the future at some point?

Okay. So, yes, there’s a lot in there. So the land development piece is something that’s worthy of just a little bit of explanation. I think one thing that everyone can intuitively understand when it’s raining like crazy and you can’t get on construction sites, it’s very hard to finish houses. What’s a little bit less obvious is, when you can’t even commence development, you’re creating delays in projects, where you’re not even vertical yet. And that’s really one of the things, it’s not just a Beazer issue clearly, it’s effective land development in a very significant way. I mean, water on the ground was a huge problem. I think the statistic was that if you took the month of May and the aggregate quantity of water that fell in Texas, it was the equivalent of eight or nine inches across the entire state. And it didn’t fall across the entire state. So you essentially had a foot’s worth in many places. Until that is drained off, dried out, and you can start to do land development, it clearly has an impact on the timing of those projects. But I think if we kind of take a step back then and say, well, is it going to affect the geographic mix? I don’t think so. We’ve talked about Texas being kind of 10 and 10-ish, Houston and Dallas 4s. And I think that’s still approximately right, relative to revenue or orders or EBITDA, it’s all a little bit different. But I don’t think it’s going to have any really material effect on us in terms of that mix. Then in terms of what we saw during the quarter, if I can ex-out weather for a second, demand patterns in Dallas were pretty persistently strong. And it’s really a market that…

Okay. That’s very helpful. And then, just following-up, in terms of the potential savings that could come once you do bring the DTA back on the balance sheet. Can you help us understand maybe the potential timing, then, and how we should be thinking about that benefit going forward?

Susan, this is Bob. We’re definitely targeting Q4, as release – substantial majority of our DTA. I don’t know that there’s any cost savings related to that. They’re certainly going to be income tax cash savings going forward like there’s today, even though the valuation allowance is on the DTA.

Yes. I think that’s an important point to understand is that whether or not the VA is removed, and whether you can see the deferred tax asset are not, we have access to that to offset taxable income. From an accounting standpoint what Bob has said is that, we’ll remove a significant majority of the valuation allowance in the fourth quarter, so it will be evident. You’ll be able to see it on the balance sheet and that will ripple through to the equity in the book value in the company.

Yes. I think what I was getting to is more – some of the potential interest cost savings that you could save?

Well, it certainly, well, go ahead, David.

Well, look, Sue, I think the answer is, we kind of have to see what the market looks like at that time. We think there are going to be interest costs savings, as we go forward, but it’s hard to predict just given the volatility in interest rates. Certainly, we’re trying to be opportunistic with our refinancing. So we’ll have more to report as we move forward.

Yes, look, I think one way to think about that, and I’m not going to do the math for everybody, but the fact is, most of our cap structure is trading above par. And I think getting a few hundred million dollars to our net worth is not going to hurt the value of our bonds. Those bonds are trading above par. Call provisions aside for a second, that gives you pretty good indication of what the opportunity is for cost savings.

Okay. That’s helpful. Thank you.

Thank you. Our next question comes from Will Randow from Citigroup. Your line is now open.

Hey, good morning, and thank you for taking my questions.

Sure, Will.

So based on what the other builders have reported, we kind of perceive that July 2015 orders were up single-digit percentages year-on-year with absorptions roughly flattish, is that a fair way to characterize Beazer’s July orders? And can you talk about any regional differences?

Yeah, July is, I don’t actually have all of the analytics on it, because it actually closes for us today, but in gross terms, it’s going to be pretty flat. It’s I think a continuation of what we saw in the third quarter. In terms of regional commentary, I don’t see a difference in July versus Q3. For us, the Southeast has been awfully strong. Charleston, Atlanta, Raleigh, Myrtle was been good markets. Dallas and Nashville had been pretty strong. We had more challenges in the third quarter in the Mid-Atlantic, and a little bit in Las Vegas. But we got so few communities there, I’m not sure that’s a great read through to the market as a whole.

Thanks for that. And then last quarter’s, it was in your prepared comments, you discussed activating a large land parcel near Sacramento, which was encumbered by a levy issue, as well as slowing or stopping operations in New Jersey. Can you share an update on timing on both of those initiatives and the financial impact of the P&L and cash flow?

Yes, great question. So in New Jersey, our exit of that market is well underway. I think it’s probably not a giant surprise that leaving is hard. It takes longer and costs a little bit more. And I would assess today that relative to where we were in May, it’s probably going to cost us a couple of million more to exit New Jersey than what we thought when we made the decision to do it. I do exactly the same thing. We have far better opportunities to reinvest that capital. And those costs arise from a number of things. We’re going to take some lower prices to sell some homes. We’re going to pay brokers more to help sell some homes. I’m sure we will draw and have drawn some additional warranty calls which is entirely normal. And the effect of that is it’s going to cost us a little bit in the fourth quarter. I think we’ll be out of the homebuilding business at the end of September. And I expect that the communities or the assets, the remaining land positions that were our active communities, I think will be closed out by the end of December. So we’re in, I think, pretty good shape, plus or minus $2 million. On the Sacramento side, we have activated our Natomas parcel. We had previously activated something called Capital Village, which is in a different submarket of Sacramento. But we expect to start models at Natomas this month and I expect that we will have sales next quarter, and I don’t want to get too far in front of my California team in terms of predicting closings, but I will say we will have closings on that Natomas sector in 2016 for sure. Give me a – let’s get the model started before I start calling the shot in terms of which quarter the closings fall into, but that’s a big deal. And I think we’re going to be the first builder in that Natomas submarket actively selling, if not, we’re going to be awfully close. So we’re in hot and heavy pursuit of turning that asset into earnings and cash. We will activate other assets in California in 2016. I’m not prepared to name exactly which assets or which quarter, but that is receiving a large share of our attention. And I think based on some of the positions that we’ve got, I would expect pretty good demand for those when we activate them.

Thanks for that and good luck on the next quarter.

All right. Thanks, Will.

Thank you. Our next question comes from the line Jay McCanless from Sterne Agee CRT. Your line is now open.

Good morning, everyone. First question I had – it looks like the interest expense came down sequentially from 2Q. Should we expect, I think it was roughly $5.5 million number, should we use that as a run rate going forward?

Jay, this is Bob. As talked in the past, it’s we expect it to trend towards $35 million for the year. I think we’re still kind of on that glide path, maybe a little bit less direct expense this quarter, since our assets were up a little bit more due to the wind [ph] little bit we’ve had. But I think keeping – continuing to think about 35 is probably the right general area to be thinking about for the direct expense.

Okay. And then the second question I had and I apologize if I’m putting words in your mouth, but it sounds like with the Texas deliveries with exiting New Jersey, most likely you guys are going to be seeing less volume leverage on gross margin over the next two to three quarters, is that the right way for us to think about it when remodeling it out?

I think, for sure we’ve guided, we said, trending towards 21. It’s very hard to know all the moving parts and pieces. But I think we’re going to be under some further pressure in Q4. But looking at the margins in backlog, looking at our pricing strategies, looking at the mix of specs in 2B built, I would expect Q1 to be up nicely from that level. And as Bob said in the script and we want to reiterate, there is no reason why we can’t get back to the levels we were achieving before what happened this quarter.

Okay. And then if I could sneak one more in on SGA, I know you guys said it was going to be up only about $2 million to $3 million over last year for 4Q. Could you give us any insight into how you’re thinking for 2016, what we should model for just base increases there?

Well, it’s pretty hard, Jay. It’s pretty hard to get precision based on 2016 at this point.

It will be a lower percentage of revenue.

Lower percentage of revenue would be the way to think about it.

I think we’re going to drive more leverage in SG&A. But I think it is in Bob’s point, it’s awfully hard right now to give you the dollar amounts on a quarterly basis for next year.

Okay, great. Thanks, guys.

Okay.

Thank you. And our last question comes from the line of Susan Berliner from JPMorgan. Your line is now open.

Hi, good morning.

Good morning.

Hi, Sue.

I want to do a refresh, I guess, on Houston. If you could just, I guess, kind of quantify versus your portfolio whether it’d be on assets or land, what Houston makes up. And then I’m curious if you’ve seen any cancellations in that market tick up?

So we don’t break out as you know, Sue, we don’t break out complete detail on a single division. But we’ve talked about Houston and Dallas respectively of each comprising approximately 10% of the business. Depending on the quarter and depending on the metric that you look at it, it can be more or less. I think Texas will be more than 20% of our Q4 closings by a little bit, 2, 3, 4 percentage points kind of thing. But it really – you’d have to ask such a precise question that I’d get into a level of detail on an individual division that is tough. I don’t feel like there is any one of those metrics that’s wildly out of line, where it’s misleading to think about 10%. We’re pretty efficient with our capital in that market, but we don’t have the position. Some builders have where they’re only doing takedowns in master-planned communities. We’ve developed a lot of our own lots, which is one of the reasons why our margins are very strong in that market. But our velocities are good, the margins are good. So, we’re getting excellent returns there. So I would just say if you think on the order of 10%, you’re awfully close on every metric that matters.

And with regards to cancellation, have you seen cancellations tick up?

The only thing that I would tell you, and I don’t have the exact percentage, in June and July as we’ve had to reset customers’ expectations for closing dates, for some folks moving 60, 90 days hasn’t worked. They’ve got life issues, the baby is due. They can’t wait 90 days to move into their home. So, we’ve had a little bit of that. I wouldn’t tell you that there is anything other than weather or construction delay related increases in cancellations. And even that hasn’t been that significant, because as I said, we have gotten on this and been very transparent with the customers about slotting their home for delivery and we have made some concessions to have both of them into the trades to accommodate that.

Gotcha. And then just turning to, I guess, a few things on the balance sheet with regard to DTA revolver and future issuance. Is it fair to say that the DTA that’s coming back on the balance sheet is a tad bit lower just with the earnings? And then with regards to the revolver, David, I don’t know if you can talk it all about, is it still going to be secured or magnitude of size or price decreases? And then lastly for Bob, if you can talk about – it sounds like you are not in any rush to refinance the secured bonds that are callable. Can you just give us an update on what you’re thinking with regards to refinancing?

Hey, Sue, it’s Bob. I think it is fair to say that the DTA released the valuation allowance. It will be a little bit less due to the lower level of profitability. As it relates to the revolver, we’re still looking at different structures. And I can’t really quite tell you today, whether it would be secured or unsecured. Obviously, we have a desire to go unsecured, but we’re working with our banks, we’ve got a lot of good interest. And as we drive towards the end of our fiscal year into October, so we’ll land it on the right structure for us. And then you had one more question that was relating to refinancings. And certainly, we’re going to be looking at market conditions and getting the DTA on the balance sheet certainly influences a bit how we think about the timing. The 2019s are – have a call date reset in November downward, and that also is going to impact our thinking a little bit.

Great. Thanks very much.

Yes.

We have another question that just came in from Stephen Kim from Barclays. Your line is now open.

Thanks very much, guys. Wanted to just ask you a clarifying question about your landholdings, as I could. You gave a Slide on 14 with your lot position. I was curious, couple of things. One, could you give us a sense for how many of those lots that you own an option or what you would say finished?

Well, Steve, on the slide, you can see that the finished home – finished lots are about 3,700, and then there are 3,000 homes under construction. So taking together, that’s almost 7,000 finished lots, because we’re not building homes on lot that aren’t finished.

Got it. I’m sorry, I didn’t see that clearly, got it. Okay, so you gave the finished lots there. And then, I guess, the next slot down near-term availability of the owned land under development and lots under option, can you give us a sense for just roughly the stage of development you would say those are on average, or is there a dollar value we could be thinking about that would be incremental to what you’ve already got there, that would be required to take them to the finished state?

Well, any percentage I come up with is going to be a little wonky. Let’s think about it maybe in a little different way, and I think this will get us the root of the question. If we think about 2016, clearly, we have all the land in front of us to deliver an even larger 2016. And we can do that in a context of our land and land development spending, not having to be unnatural relative to the pattern that we’ve been on. There’s no big spike building. I expect that we’ll still be in a neutral to slight invest mode next year, where our land and land development spending will exceed what is running through cost of sales, that would be my guess right now. But that’s not going to have anything to do with needing to finish lots for 2016 deliveries. That’s going to have to do with the growth trajectory for 2017 and 2018.

Got it. Okay, that’s – that actually is where I was going. So that’s very helpful. Thanks very much, guys.

You bet. Thanks.

Speaker, we have no further questions.

Well, thank you, everybody for joining us today. We appreciate it. That concludes today’s call. Thank you for dialing in. We’ll talk in next quarter. Thank you very much.