Good morning, and thank you for joining us today for Hovnanian Enterprises fiscal 2009 fourth quarter and year end earnings conference call. An archive of the webcast will be available after the completion of the call and run for 12 months. (Operator Instructions) Before we begin, I would like to remind everyone that the cautionary language about forward-looking statements contained in the press release also applies to any comments made during this conference call and to the information in the slide presentation. I would now like to turn over the conference call to Ara Hovnanian, President and Chief Executive Officer of Hovnanian Enterprises. Ara, please go ahead.

Good morning and thanks for participating in today’s call to review the results of our fourth quarter and year ended for October of ’09. Joining me today from the company are Larry Sorsby our Executive Vice President and CFO; Paul Buchanan, our Senior Vice President and Chief Accounting Officer; Brad O’Connor, Vice President and Corporate Controller; David Valiaveedan, Vice President Finance and Treasurer; and Jeff O’Keefe, Director of Investor Relations. On Slide 3, you’ll see a brief summary of our full year results. As usual, we give this data and more, as well as the corresponding quarterly results in our press release, which we issued yesterday. 2009 as you know was another disappointing year. The results in almost all key categories were negative when compared to the prior year, but as the year progressed we did see some signs which indicate that the market is at or is at least approaching a bottom. Now that we are comfortable with our liquidity, in addition to focusing on cash flow we can now be more focused on returning to profitability. Unfortunately we can’t flip a switch and get there. There are a number of pieces of the puzzle that need to come together in order for us to accomplish this goal. One piece of the puzzle, Slide 4, that began in the beginning of fiscal ’09 is the improvement in net contracts per active selling community. On a monthly basis, as is shown on Slide 5, we’ve seen an increase in 11 of the 12 months in fiscal ’09. We started our first month of fiscal 2010 with an increase in our sales pace per community as well. On an absolute basis, the seasonally slow period began a little earlier than usual this year, but that could very well be attributed to…

Thanks Ara. Let me start with the discussion of our current inventory from a couple of different perspectives. On Slide 16, you can see that our community count has declined 60% to 179 active selling communities from the peak of 437 communities in July, 2007. For nine quarters in a row, this number has come down. During this time, we only opened a handful of communities and sold out of many others. For the first time in a couple of years, we’re now on the cusp of opening more communities and expect to see this trend of fewer communities slow down, and as we successfully purchase more new communities, the trend will actually reverse. If you turn to Slide 17, you will see our owned and optioned land position broken out by our publicly reported segments. Based on a trailing 12 month delivery basis, we own slightly more than three years worth of land. From the perspective of working off our higher priced legacy land, this compares well to the land each of our peers owns, which is illustrated on Slide 18. The good news is that each quarter we work through the land we purchased at higher prices. At some point in the future, we will have worked through much of the land we purchased at the peak of the housing cycle and will have reloaded our land supply with lots that are purchased near the bottom of the cycle at discounted prices. We expect that this combination will lead to sustainable gross margins back in the 20% range. We do not need to have home price appreciation to see this occur, just a shift in the mix of lots that we own. This will not happen overnight, but we have started down the right road. If pricing power…

Thanks, Larry. As we sit here and look out into 2010, we know that while we’ve accomplished a lot we still have a lot more work to do. As we look back on where we’ve come from, it’s clear that we were too aggressive at the peak of the cycle with land and company acquisitions in ’04 and ’05. Looking at the stockholders deficit that we’ve accumulated, it’s painfully obvious that our target of 50% debt to equity was not conservative enough and didn’t anticipate this kind of market change. We have dug ourselves into a hole, but most of the goals that we have recently accomplished have provided a way out. There is a ladder down here. We have a substantial amount of cash and close to $300 million more cash coming in, thanks to the change in the tax legislation. Our debt maturity schedule is modest over the next several years, thanks to our bond repurchases and our other capital market transactions. We have adequate capital that not only buys us time for the housing markets to get back to normal, but also gives us the ability to take advantage of the many opportunities at the bottom of the market. We have taken advantage of many of the market troughs over the 50 year history, and again we fully intend to do that this time. As the pieces of the puzzle fit together and we get back to profitability, we will not be paying federal taxes on about the first $2 billion that we earn. This should allow us to wipe out our stockholders deficit quickly and then to begin to grow our equity once again. We believe that we have a great franchise in the markets where we operate. We plan to maintain our presence and in…

(Operator Instructions) Your first question comes from Michael Rehaut - J.P. Morgan.

First question, just in terms of the new land deals that you’ve done and then I have a second separate question. But on the new land deals, can you give us an idea as we get to the end of next year what percent of closings you would anticipate those new deals would represent? And you know on the deals, you know you’ve talked about that you’re getting a 20% gross margin, you know there’s been a lot of talk around the fact that the land market has become a lot more competitive and that a lot of builders are accepting gross margins more in the mid to high teens even or even closer to mid teens. Are all your deals essentially the 20% or better and you know what approach are you taking that might be differently? Are you just not competing in some of the markets that are getting more heated up?

Well, I’ll try to address that second part of your question first. While the market is heating up for acquisition, and it is competitive, I would say in general it’s still less competitive than its been over the last seven or eight years. Keep in mind, you know, we’re competing with the public home builders. We’ve always competed with the public home builders. They’re 25% of the market. We’ve also competed historically with the private home builders. They are virtually gone from the marketplace. So while it is competitive, it is less so than it has been. And the good thing about the public home builders is generally speaking, you know, they seem to exhibit a little more discipline and rationale and analysis in making their acquisitions. You tend to have fewer rogue acquisitions among the public home builders. Having said that, in some markets it is just a little bit tighter on returns, but generally speaking most of our acquisitions now are still you know in the 20% range. They are slightly lower in Texas, but that’s primarily because our SG&A costs run lower in Texas, so we can meet our return hurdles with slightly gross margins. Overall, we’re really seeing the amount of deal flow, I’d say over the last six months the amount of deal flow seems to be increasing a little bit each month. And these are solid deals and again I’ll remind you that we are not programming in any return, any price appreciation. Generally speaking our underwriting criteria has historically been 30% plus. We are approving some deals that are on an unlevered 25% plus, but there aren’t many of those and there would be more extenuating circumstances that would require that. But to that extent we’re doing slightly lower return deals but not significantly.

And in terms of the percent of closings by the end of next year you anticipate from these deals?

You know we haven’t done a firm schedule yet, and I prefer to wait on that as we get a little better handle on the timing of openings. I’d say in 2010, they’re not going to be a particularly significant number. In 2011, they will undoubtedly be a much more significant percentage of overall deliveries, but I’d say it’s a little too early yet to project all the way out to 2011 with the deliveries. I mean we’ll still be making many acquisitions through, you know, through 2010 that we’ll be delivering in 2011, so it’s a little early to give that number.

The community count, you know, Larry, I think you spoke to that earlier on in terms of, or I’m sorry it might have been Ara. You know, starting to hopefully turn the corner in the near future, starting to open more and close less per se. When do you anticipate that number stabilizing sequentially or perhaps even growing? Can you give us [inaudible] order next year?

Yes, I project we’re going to hit bottom in the community count in the middle of this year, and then start increasing. You know it would be my goal to end the year with more communities than we began, but we’ll see how we do with the acquisition. But I’d say in the current environment it feels like we should be able to achieve that. So you know first two quarters continued decrease in community count, I’m fairly confident that we’ll see the bottom and we will begin the upward trend by the third quarter and hope to end exceeding the beginning of the year.

Your next question comes from [Unidentified Analyst] for Ivy Zelman - Zelman & Associates. [Unidentified Analyst] for Ivy Zelman - Zelman & Associates: Ara, I was hoping to follow up a little bit on some of your comments about the land acquisition. We were a little bit surprised to see at least the pace of acquisitions slow relative to the third quarter, and I think you mentioned you tied up about 3,100 lots in 3Q and just about 900 in 4Q.

We never disclosed what we did in third quarter so I’m a little confused. [Unidentified Analyst] for Ivy Zelman - Zelman & Associates: Well I’m pretty sure you said last quarter that it was about 3,100 and then this quarter you said about 4,000 through the.

No, I think last quarter we talked about what we had done year-to-date, but I’m not positive. But I believe that’s the case. I’d say our pace of acquisitions has been picking up. [Unidentified Analyst] for Ivy Zelman - Zelman & Associates: Well then the second question would just be on your price. Both order and closing price had a nice pick up in the fourth quarter and yes, some of that may have been mix related, but it looks like it was increasing in just about every region, so can you comment on that a little bit in terms of what you’re seeing there? Is there any type of product mix or are you bumping price in any particular markets? And if so, you know, how much?

We are bumping prices in some markets. Right now it’s more anecdotal. It’s not the majority or the average case, but we are bumping prices. I can’t say that there’s any particular market where I’d make that point. It’s really extremely situational, you know, even within a given market. In general, notwithstanding a particular neighborhood, in general we’re absolutely seeing more stability in pricing and the ability to reduce concessions or discounts or even raise base prices. I’m definitely feeling the tides shifting. It’s interesting, with every one of our, you know, experiences in the cycles, what has happened every time is that the velocity picks up first and then pricing follows. You know there’s usually a time delay for pricing. Well, velocity has really been picking up every quarter as we’ve talked and mentioned. You know, with pricing we shall see. It’s just the beginning so far. It’s hard to tell what’s going to happen. What happens with foreclosures, and I know Ivy’s been very much on top of this and it’s something that concerns her very much, and that’s going to be a big question that will affect pricing I think. You know if we’re not able to get the loan modifications that we’d all hope as a country, then it could delay pricing increases and I know Ivy’s projecting even pricing decreases on existing homes. I’m a little more optimistic on the effect with new homes, particularly those where they’re not particularly, you know, foreclosure high concentrated markets. But that’s the big unknown. So there’s a long winded answer to a short question.

Your next question comes from Daniel Oppenheim - Credit Suisse.

I was wondering if you could elaborate a little bit more in terms of what the plans or goals would be in terms of spec construction over the next couple months and quarters here to beat that June 30 deadline. How high do you think the number of specs would be per community?

Dan, we don’t have a specific goal. What we’ve done is we’ve asked each of our division presidents to look at their communities, especially communities that would be most likely to utilize the first time home buyer component of the tax credit and just make sure that we have enough at the proper stages of construction to meet the anticipated demand. So we’re going to edge it up, but there’s not a specific directive that we’ve given on a specific number, but we don’t want to be caught short. So we are going to be willing to increase, but no specific goals.

And do you worry at all if a lot of builders have the same strategy of not wanting to be caught short that as of May 1 when buyers and sellers sign contracts that we’ll end up with lots of white elephants out there?

Yes, Dan, I’m a CFO so I worry about a lot of things all the time and constantly, so yes I do worry. But when I sent an email out to all of our head operations guys earlier this week I told them they may want to frame the email because the CFO was asking them to build a few extra homes. We don’t want to do something crazy, so we’re going to monitor it closely, but we think it’s prudent to have a few extra especially in light of the slowdown that we saw as we approached the November expiration date or projected initial expiration date before it was extended. So I think you saw an increase in resale home sales, but a slight slowdown in new home sales and I think it’s directly related to us not having any inventory.

The public builders in general I think as a group we’ve been running somewhere around two-and-a-half months supply of started, unsold homes. Even if everybody doubled the number and you know which would be a big number, that would put it at a five month supply which is high but given the tax credit expiration I don’t think that’s a number that would get out of control.

I was wondering about the mothballed communities. It looks if all the mothballed communities are owned communities there would look to be not quite half the owned lots. How far away are those mothballed communities from making sense in terms of the numbers?

It’s a good question and interestingly we had a meeting with our northern California operation that has several mothballed communities, specifically in the northern Central Valley, Stockton, Modesto, Fresno. We have several. The situation has improved there to the point where we could justify un-mothballing some right now and the question is well, okay, you know land is hard to come by, how quickly do we want to un-mothball some of those communities? I mean prices have gone up and we can definitely generate cash flow, but you know we’re feeling a lot more confident about our cash position and liquidity. And we are focusing more on profitability. So now the question is okay, well you know do we want to wait a little bit, even though we can justify some coming out, should we wait just a bit and see what happens in the spring or early summer? That’s an interesting question. I’m happy we have that decision and dilemma to make, but I’m not sure we know how quickly, even when they can justify it, I’m not sure how quickly we want to bring them to the market. We may want to wait just a bit more so we can get the margins up in addition to the cash flow that they will be generating.

Your next question comes from Carl Reichardt - Wells Fargo Securities, LLC.

I’ve got a question about the Slide you have on the land you’ve added to the bank or options you’ve added to the bank, about 4,000 in the last two quarters and you mentioned, I think Larry mentioned that on deals under two years you’re looking at your pro formas with flat price, flat pace and flat inputs. What percentage of those 4,000 are going to fall into that category of under two years on a pro forma versus an over two year pro forma where you might have price appreciation or other assumptions built in?

I’d say ballpark it’s probably close to 50/50. A substantial number of the acquisitions are in terms of number of communities are 40 or 50 lot acquisitions that will have less than a two year life. That’s true everywhere. On the other hand we did a few acquisitions that will have longer life. So if I had to do just a quick ballpark guess, and it’s probably reasonably close, it’d say 50/50.

Carl, keep in mind, I just want to reiterate that in even those longer lived communities no price appreciation is ever assumed, only a very gradual pace increase is assumed, sometime after year two.

As you’re looking at the potential transactions that you’re analyzing now, Ara, and perhaps you can give me a sense over the next couple or three quarters, are you expecting that you’re likely to do maybe half your lots in JV structure? Do you think you’re going to be looking at more deals with longer than two year lives or do you expect a lot of under two year deals? I’m just trying to think about what the mix of your new land might look like as you go forward. I know it’s hard to answer, but I’m just curious what your sense is.

That’s another good question. It’s been on one side a little frustrating because we’d like to do some of the larger transactions. Interestingly, some of the larger transactions get on the radar screen of the hedge funds or equity funds that are out there for distressed properties and the prices you know are driven up a bit so that it makes it tougher to make our hurdles. So you know to some extent, there seem to be better opportunities at this moment on the smaller transactions. But you know it goes in fits and waves. We are looking at a couple right now of larger portfolios that at the moment we think could make sense, but you know they haven’t been bid up yet. So we’ll see. I wish I could answer that. It’s an interesting one. I thought we’d see more large transactions, but we are seeing smaller ones, which are okay too. I mean singles and doubles are not the worst thing in the world at the moment either.

Your next question comes from Nishu Sood - Deutsche Bank.

My first question I wanted to ask was about your turn over ratio, you know the percentage of backlog you converted to closings. It was down on a year-over-year basis and you know that breaks kind of a 11 month streak you’d had of it rising on a year-over-year basis. Now obviously it can’t rise on a year-over-year basis forever. We were a little surprised to see it fall, though, especially in a quarter just ahead of the expiration of the first tax credit. So I just wanted to get a little better understanding of the dynamic that might have happened this quarter, what we should expect going forward especially since you know SG&A absorption is going to be a big part of your returning to profitability.

That is just not something that we monitor or project with, so I know sitting in your chair it’s another data point that you use to kind of gauge the reasonableness of your own internal model, but we have much better data than that that we look at. You know, where communities are, what kind of sales pace we’re having and what the actual projections are. So it’s just not deeply embedded into our radar screen, so I don’t know that we have a lot of clarity we can add.

A similar metric that we do track is the cancellation rate. I mean that’s really the key metric that’s driving. And it’s down to the low 20’s. It bounces around there a little bit, you know, one month could be up just a little bit, one month could be down a little bit or one quarter. But in general, it’s getting back to normalized levels with normalized volatility right now.

Our focus is on you know your SG&A leverage is going to be a critical component of your returning to profitability, so I mean I guess when we look at the picture you know, looking from the external metric, you know, you’ve been closing your backlog at a more rapid pace during the downturn which is what we would expect. There’s no construction delays, you don’t want to let things sit in your backlog, and even be prone to cancellation. Your absorptions as you describe you know in your slideshow are now getting back to even levels that you’ve seen in 2006, and yet in spite of that you’re still having a very poor SG&A leverage ratio. So as you’re looking at it just from kind of a pushing volumes perspective what do you need to see or how are you analyzing it? What are the key drivers of getting back to a lower SG&A percentage ratio in terms of expenses?

Well, I mean, first of all we need absolute number of sales and communities. That helps on the divisional overhead level and that helps at the corporate overhead level. That’s a key component. The other part we need is velocity per community. It has gone up year-over-year, but as we pointed out you know it’s still the second worst velocity per community over the last ten years. So you know it’s not at an efficient level. I say just in terms of the SG&A focus we need overall top line growth and we need better velocity per community. I mean we’re up from under 20 to 23. That’s good. I’m happy to have an uptick but you know the mid 40’s is normal, so we’re still significantly below normal right now. However, you know, as we pointed out in the script, the number of communities, if you take the public home builders, the number of communities that we all have is down dramatically. I mean we’ve all cut our store fronts by half. Our old communities are finishing and we haven’t been replenishing. Secondly, private home builders are closing their store fronts. They’re going out of business and their properties, you know, and models aren’t there. And net new stores aren’t coming online because nobody’s going through the entitlement process. So what that means is as the market continues to improve, and I suspect overall we’ll see new home sales increase in 2010 compared to 2009, as that happens when you have fewer communities from which to sell new homes I think the velocity per community is going to get much healthier in 2010. And that’s going to be an important step to getting better SG&A efficiency.

Your next question comes from [Unidentified Analyst] for David Goldberg – UBS. [Unidentified Analyst] for David Goldberg - UBS: In terms of the $275 million that you expect to get back, and I know you’ve spoken broadly about this, but can you give us some idea of how much of that will be used to further reduce debt or improve your capital structure versus building cash on your balance sheet?

Well I think you can assume that obviously it’s going to improve cash on our balance sheet, and as Ara and I both mentioned during our prepared remarks, you know we’re going to be active in the land market. So it gives us a little extra cushion to be able to reload some land near the bottom of the cycle so that we can get to more efficiency in SG&A and return to kind of normalized margins and return to a path of profitability. So I think that’s going to be the focus, more so than any direct reduction in debt although obviously it’ll help reducing net debt because there’s more cash. But that’s going to be the primary use. [Unidentified Analyst] for David Goldberg – UBS: And then in terms of the comments you made about increasing your community count, given the improvement in liquidity that you’re expecting and you mentioned also your ability to issue equity and those things, how quickly do you think you could grow your business if we did see a real change in the operating environment if demand significantly improved?

Well, we think we have a lot of excess capacity right now, even with the significant reductions in staffing. I mean we are learning to do more with less. It’s just a necessity of the times, but its one of the good outcomes of going through these difficult times. We just, two years ago, three years ago in ’06 delivered 21,000 homes including our JV deliveries. We’re doing a fraction of that now. We think we could ramp up pretty significantly. We have the capital to ramp up pretty significantly, maybe not getting 21,000 homes right away, but to grow a significant amount. The issue will really be just how quickly can we find the land opportunities that meet our financial hurdles and how quickly can we bring those to market? That’s really the key driver right now. And we’re completely focused on that area. We actually had a meeting and we are hiring in the area of land acquisition personnel right now, so after years of reduction we are actually out hiring and growing in our land acquisition departments across the entire country.

Your next question comes from Megan McGrath - Barclays Capital.

I wanted to follow up on your comments around the cancellation rate. Just curious if you saw any increase in cancellations toward the end of November into December when the tax credit got extended and maybe folks realized they had a little bit more time.

Our cancellation rate was relatively stable throughout the entire quarter and when 1% of the cancellation rate we reported in the prior quarter. Nothing unusual really happened during the quarter.

And not since the tax credit extension?

No. Nothing really strange.

And then I was also wondering, you gave us a little bit of analysis around your views on potentially how much the tax credit may have contributed. I’m wondering if you’ve done anything internally on the new FHA restrictions or proposed restrictions that you mentioned, potentially how many of your buyers wouldn’t qualify under the higher FICO score or the higher down payment requirement?

Well, nobody’s actually come up with what those numbers would be so it would be very difficult to do any analysis on it. And even if we had the data, it’d probably be difficult to do the analysis. I think as I mentioned in my comments you know in the short term it won’t be helpful, so the incrementally less people that qualify, but we don’t have any specific data to tell you precisely how many. I don’t think it will be terribly significant because I think the government balance, you know, tightening up FHA underwriting criteria for less defaults with, you know, the impact that it has on the overall U.S. economy to shut down the housing economy again as well. So it really just depends on where those numbers come out, but I don’t expect it to be terribly significant.

And then Larry if I could just ask a quick modeling question for clarification. On the tax refund it sounds like, tell me if I’m wrong, that you’re expecting to get the cash in the second quarter but may reverse the credit in the P&L in the first quarter?

That’s correct.

Your next question comes from Joel Locker - FBN Securities.

Just on your orders, I saw that you know they’re up 14.4% on a net basis but wondering if you had a number just on the gross number? Because I’m sure cancellations affected the net number.

I’m not sure I followed. What’s up 14%?

The average price for the net orders.

That’s really nothing but a mix issue both you know mix of communities, mix of product types, that kind of thing rather than anything you could really draw a trend analysis around.

Do you have any other order numbers for the first half of December? Have they changed any from the November period?

You know you’re in a seasonal slow period, you know, kind of the period between Thanksgiving and the Super Bowl for those of you on the call that are old enough, we call it we’re behind the moon when the space module couldn’t communicate with earth any longer. And you know it’s really hard to tell what’s going on right now, but nothing significant or unusual is happening. It’s a typical seasonal slowdown from our perspective.

Your next question comes from Keith Wiley - Goldman Sachs.

I’m just trying to think about the new land deals that you’re doing at 20% and I’m trying to understand what percentage of your sales would have to come from those land deals before you became profitable? Because you know after the 12% or 15% SG&A, I’m guessing your EBIT would be 5% or so and I’m not sure how much interest is allocated to these new land deals versus your old land deals, but you know I think your interest incurred is about $200 million a year so it would have to be a fairly high gross margin just to cover that. So maybe you could shed some light on that?

Well, first of all, interest incurred is not $200 going forward. With the restructuring it’s somewhere around $150 million.

Closer to $170 million but I’m not sure I’m going to be able to walk you through your entire model, but what has to happen is we’ve got to work through some of our legacy land that even after the impairments isn’t generating normalized margin, and get some top line growth with communities that are generating normalized margins. Call it the 20% range. Now when we underwrite land deals, you know, although they average kind of that 20% margin, what we really underwrite to is a 25% to 30% plus un-levered IRR. And in a Texas market you might have slightly lower than 20% because of the inventory. Turns are higher there because of the way we can control it. But in order to get the SG&A benefit, you know, we can’t continue to cut headcount. I mean we’re already down 75% from the peak. So the only way we’re going to get kind of SG&A efficiency is driving some top line growth which could occur by increasing pace per community, which we kind of began to see in the fiscal 2009 year. We can see more of that and combine that with more new communities opening so that will drive over time SG&A efficiency. It’s not going to be overnight. There’s no flip that we can switch as Ara mentioned, so it’s not something that’s going to be months. Its going to take, you know, multiple quarters for that to happen, so it’s a gradual process that you just shift to a more profitable mix of communities and drive some top line growth in order to get back to a profitable proposition.

If the sales pace just held as it was, and if you were doing let’s say 50% of your sales were coming from these new land deals that are 20% or 25%, would that get you to profitable at a company level? Would you be, you know, clearing your interest expense from profit?

I’m sorry, repeat the number you said earlier?

Oh, 50%. If you got to 50% of your sales coming from these new land deals where you’re getting a 20% to 25% gross margin on, would that be enough to pay for the total company?

That is right about the turning point. If we could get in 2011 50% of our deliveries from new acquisitions, that would be the turning point to get to profitability. You know obviously there are a lot of other factors and what’s the velocity per community, and what’s happening with pricing on our old communities? You know is there a little improvement? You know if there’s a little improvement in pricing between now and 2011, then you know probably less than 50% would get us there.

And are you at 5% now or did you say where you were at now?

No, we didn’t say, but we said it’s a very small percent for 2010.

Your next question comes from Michael Rehaut - J.P. Morgan.

You know when you were talking before about gross margins better in part due to the better mix, you know at the same time this was a pretty dramatic improvement relative to the last several quarters. And so you know, in terms of 2010, is that a number that’s sustainable or even a number that can be worked off of in the positive direction, particularly if incentives come down?

I think probably the way you ought to look at it is that you know if I was sitting in your chair, that’s the best data point that you’ve got and depending on whether you want to assume that certainly something we don’t, but if you wanted to assume that net prices increased because of either we raised base prices or lowered incentives or some combination thereof, it would improve from there. If you had flat prices and flat incentive, it wouldn’t improve from there. And if you assume that we’re going to have declining prices, all of these are market conditions based, margins could potentially go down. So I think that’s how you’ve got to think of it, Mike.

So in other words, Larry, what you’re saying is that the mix that you know contributed along with the benefit from prior impairments, that’s something that you see, is it a reasonable number to work off of going forward?

I don’t think that mix is going to change significantly over the next few quarters so it’s a good base starting point for whatever assumptions you want to tag onto that after.

And in terms of incentives, can you just remind us as a percent of home price where you were at the beginning of the year and where you are now? And what’s kind of normal?

I don’t think we’ve ever made any disclosures and frankly we don’t even track it that way, so I’m confident we’ve never given you any specifics on how much incentives we put out there on average.

But at the same time you’re saying it has come down some and I assume it’s still well above what is historically the norm?

Oh, yes, it’s well above what we historically.

I mean for us, you know, we focus on net pricing and net pricing comes from either an increase of base price through a reduction of incentives, from a change of what you include as standard. It can happen in a number of ways and you know all in all, we’ve seen greater stability. We’ve seen anecdotal situations throughout the country of price increases. And you know we still have a few competitive locations where we’ve seen some price cuts. So on the whole, though, the mix is becoming much more favorable.

The FHA, you gave the mix on a full year basis, this year versus last. I’m sorry if I missed this, but what was the fourth quarter itself?

I gave it. Let me look it up. Its up like 1% or 2% from what the full year is, but hold on and I can get there. 48% in the fourth quarter.

There are no further questions at this time. I would now like to turn the call back over to Mr. Ara Hovnanian, President and Chief Executive Officer, for any closing remarks.

Great. Thanks so much. As we said it was a difficult year. We’re happy to have it behind us. 2010 is going to be a transition year but a critical one to position ourselves to get back into a profitable environment. We’re pleased we’ve taken the steps that will allow that to happen and we’ll look forward to giving you updates throughout the year. Thank you.

This concludes our conference call for today. Thank you all for participating and have a nice day. All parties may now disconnect.