Good morning and thank you for joining us today for Hovnanian Enterprises Fiscal 2015 Second Quarter Earnings Conference Call. An archive of the webcast will be available after the completion of the call and run for 12 months. This conference is being recorded for rebroadcast and all participants are currently in a listen-only mode. Management will make some opening remarks about the second quarter results and then open up the lines for questions. The company will also be webcasting a slide presentation along with the opening comments from management. The slides are available on the Investor Relations' page on the company's website at www.khov.com. Those listeners who would like to follow along should log on to the website at this time. Before we begin, I'd like to turn the call over to Jeff O'Keefe, Vice President-Investor Relations. Jeff, please go ahead. Jeffrey T. O’Keefe - Vice President of Investor Relations: Thank you, Amanda, and thank you all for participating in this morning's call to review the results for our second quarter, which ended April 30, 2015. All statements in this conference call that are not historical facts should be considered as forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Although we believe that our plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, we can give no assurance such plans, intentions or expectations will be achieved. Such risks, uncertainties and other factors include, but are not limited to, changes in general and local economic,…

The company will now answer questions. And our first question comes from the line of Susan Maklari from UBS. Your line is open. Please go ahead.

Good morning. Ara K. Hovnanian - Chairman, President & Chief Executive Officer: Good morning.

In terms of the spec level, I know that you commented that you expect it – it's already started to come down and you expect that to further come down. Can you just give us some sense of how we should be thinking about a normalized level in terms of the number of homes per community? Ara K. Hovnanian - Chairman, President & Chief Executive Officer: Yes. Well, yes, we don't expect it to come down much further from where we are right now. The issue was not so much the absolute level of specs per community, but our distribution. Normally, in markets like Houston, we ran higher specs per community, but that market has been quite strong and we've been selling the homes early so we have actually fewer specs there. I think some of the mistakes we made, we had specs in areas that we don't customarily have spec homes, that'd be markets like Virginia or Maryland or New Jersey, so – and there the market was not used to as many specs. The market is not particularly strong and that's where we have to take some steep discounts to adjust it. So, it's a long winded way to say the issue is not the number of specs in absolute sense, but the balance in distribution between geographies and product lines. We also started a few specs more than we should have in retrospect on some of our higher-end communities as well. So, we think the key is more bringing in a balance than reducing the number further.

Okay, that's helpful. Thanks. And then my second question is, you noted that in Houston things continue to be strong, but that you have had disclosed sales down where lot of deliveries have been delayed. Given the recent weather down there with the flooding and that situation, could that potentially get pushed further out and have further impacts to that market? Ara K. Hovnanian - Chairman, President & Chief Executive Officer: Sure. I mean they had an extremely wet spring and then they had the flooding that occurred and still fairly rainy. That's not helpful when you're trying to develop lots. So, the lots were already delayed and certainly the weather has caused further delays for developers across Houston as well. J. Larry Sorsby - Chief Financial Officer, Director & Executive VP: Obviously, we're hoping the weather gets a little bit better, so the developers can catch up and get our land developed and delivered to us. In Houston, we are primarily a buyer of finished, developed lots.

Okay. Thank you.

Thank you. Our next question comes from the line of Megan McGrath from MKM Partners. Your line is open.

Good morning. Thanks for taking my question. Some follow-ups on the gross margin. Just want to make sure that when I look at your guidance for the full year, looks like that implies, if I'm doing correct math, about 200 basis points in improvement by the end of the year. Do you – is that about right and do you expect that to come gradually or are we going to see sort of a big bump in the 4Q gross margin? J. Larry Sorsby - Chief Financial Officer, Director & Executive VP: I think you're in the ballpark...

Yeah. J. Larry Sorsby - Chief Financial Officer, Director & Executive VP: ...in terms of your math. Certainly, the fourth quarter is going to be stronger than the third quarter. You'll see sequential increases in the margin that's going to occur.

Okay, great. And then I wanted to follow up on your detail on the to-be-built margin differential that you broke out. Well, we heard from a lot of other builders, their commentary was that this was a reflection of the weak market at the end of 2014 rather than a commentary on the existing market. Would you agree with that, and are you expecting to see that margin improve as we go through the end of the year? J. Larry Sorsby - Chief Financial Officer, Director & Executive VP: To-be-built, is that correct?

Yes, on to-be-builts. J. Larry Sorsby - Chief Financial Officer, Director & Executive VP: Yeah. I would say that the to-be-built margins did decline in the latter half of 2014. That was a – kind of result of the slower sales pace that us and the whole industry was experiencing as compared to the better sales pace per community that we experienced in 2013. So builders were trying to get a disproportionate share, and the way they did that was offer incentives and concessions. I'd say that's been mitigated for the most part this year as the market has shown some strength. So, I think most of the decline in margins related to to-be-built homes is probably either in backlog or already been delivered and that we're seeing slightly stronger to-be-built margins as we move forward.

Okay. Thanks very much.

Our next question comes from the line of Michael Rehaut from JPMorgan. Your line is open.

Hi. Good morning. It's actually Jason Marcus in for Mike. The first question, I was hoping you could talk a little bit more about the overall demand environment. I know you talked about gross margins being below your expectations, but in terms of sales pace, obviously it declined about 4% or 5% during the quarter, and I just wanted to see how that compared to your expectations as you look across different regions throughout the company. And then, furthermore, as you look into 3Q, can you just talk about how you're balanced on price versus pace? J. Larry Sorsby - Chief Financial Officer, Director & Executive VP: I think, again, as I tried to explain, when talked in the script about sales pace, it's partially impacted by tougher comparison we created for our self last year when we did our national sales promotion. So that's part of the answer, but in terms of expectations, I think the candid answer is, we really thought kind of leading into January, sales all the way through January, monthly year-over-year net contracts per community had shown a positive trend for four or five months in a row, and that gave us great optimism that the spring selling season would continue that kind of a pattern. So we were disappointed when February showed a decline. I think we talked about that a little bit during last quarter's conference call. March, that decline didn't surprise us quite as much, but our expectations, being optimists, probably were still that even March would show at least even if not a slight improvement year-over-year. So, I don't know if that is responsive enough to your question but that's kind of my macro view of it. Ara K. Hovnanian - Chairman, President & Chief Executive Officer: Yeah. Just overall adding…

Okay, great. And then just next question quickly on the land market. If you could just talk about what you're seeing there in terms of the competition and pricing from a regional perspective and if you had to adjust your underwriting criteria? Ara K. Hovnanian - Chairman, President & Chief Executive Officer: No. The underwriting criteria is about the same and I can't say there's been any great change in competitiveness on the land deals. As you could see, we really have to do our due diligence, you saw on one of the slides many of our initial options don't withstand the due diligence process. You have to be extremely careful in this environment. And we're remaining true to our discipline and trying to be very analytical in our new acquisitions, which are critical. But on the whole, I'd say the market is balanced. We're finding opportunities as we need them. 2016 is basically all purchased or at least optioned and controlled and in contract. So we're today just working to build our 2017 and that includes counting on significant growth for 2016.

Okay. Thanks.

Our next question comes from Nishu Sood from Deutsche Bank. Your line is open.

Hi, good morning. This is actually on for Nishu. My first question is regarding gross margins. Can you shed some light on why you consider 20% to be a normalized gross margin and do you need pricing power to get there? J. Larry Sorsby - Chief Financial Officer, Director & Executive VP: The reason we consider 20% to be a normalized gross margin is we showed some longer-term history of our gross margin. I'm not sure exactly which slide it is. Jeff will look it up as I'm speaking. Between 1997 and 2002, when it wasn't kind of a boom market or a bust market, we averaged just around that 20%, 21% gross margin. We consider that a normalized gross margin. We actually achieved that gross margin in 2013 and 2014, so we don't really need pricing power per se. We just need our communities; our new communities coming on line should be averaging in that regard. We need the market to hold up to where builders aren't offering as much incentives and concessions as they did in 2014. So I think we'll get back to that 20% over time. Ara K. Hovnanian - Chairman, President & Chief Executive Officer: I'll add that obviously during the stronger markets, we have registered gross margins far in excess of that. In fact, I think, in 2004 and 2005, we had 25% and 26% gross margin. So, certainly, it's capable of exceeding 20% which is about where we consider normalized. Right now we're just anxious to get back to our normal levels.

Okay. Thank you. And then my next question is, can you shed some more light on your backlog and why you're confident that you'll see higher margin in the back half of the year? What factors are going to drive this? J. Larry Sorsby - Chief Financial Officer, Director & Executive VP: We can see the numbers as we sell each house, what the margin is, and we can see what our margin is actually in backlog across the country. And we know what month those are expected to close in. So, we have pretty good visibility and transparency and that's what gives us confidence to make the statement. We did about margins improvement throughout the rest of this year. Ara K. Hovnanian - Chairman, President & Chief Executive Officer: Yeah. Now, the one caveat is that we do sell typically about 25% of each quarter's deliveries during that quarter. Those are specs. And last quarter as we had announced, we were planning to discount the specs and ended up we discounted more than we planned, so we came in a little lower in our gross margin than we had anticipated. At this time, we are seeing the spread narrow on our specs. So we're feeling better about that trend. Still we haven't sold all of the specs that we typically don't for the quarter deliveries, but we just don't anticipate any negative surprises this time based on the current environment.

Ara, thanks.

Thank you. Our next question comes from Alan Ratner from Zelman & Associates. Your line is open. Alan Ratner - Zelman & Associates: Hey. Good morning. Thanks for taking my questions. Ara, as I kind of listened to your commentary, I definitely hear the frustration in your voice just about the recent performance. And I think while all builders agree the recovery hasn't been as robust as we would have expected a few years ago, I think it is fair to say the market's in a materially better position today than back in, say, 2012. Yet your metrics are pretty similar now versus what they were back then. So I guess my bigger-picture question to you as you sit here today and you think about Hovnanian's outlook, I was curious if there's any consideration being paid by management and the boards to a more material strategy shake-up. I know you mentioned the recent management changes at the local level, but was curious is there any consideration to exit weaker-performing markets, sell off some land to shrink the balance sheet, even bringing in an outside consultant to kind of help out craft that longer term vision of the company as some other builders have done over the last few years? Ara K. Hovnanian - Chairman, President & Chief Executive Officer: I appreciate the comment and, yes, you do correctly hear frustration in my voice. But we think we see the path to improvement and we think it's upon us. If we don't meet the positive fourth quarter that we believe we've got with dramatically better results and if we don't kick off 2016 with positive results, and I think we'd look at something more significant. But really we're employing the same strategies, in general, and how we manage that led us to industry-leading performance in the last up-cycle in 2004 and 2005, with largely the same senior management team in place. We not only outperformed almost every single public builder in those two years, but we actually were number two on the Fortune 500 performance in terms of return on equity and growth and profit. So we think we know what we need to do and we don't think the fundamentals have changed that much. Obviously, we were hampered by the mistakes that were made before the downturn, and we've been saddled with some of those mistakes that haven't given us the same flexibility that some of our competitors have had, but we've gone through that. We weren't able to quite do the land purchases we would have liked that some of our competitors did, but we have made some great progress. We've got a lot of communities opening, and we think that performance should be turning around shortly. We look forward to reporting much better results, particularly beginning in the fourth quarter and going on from there. It's only a few months away. Alan Ratner - Zelman & Associates: Great and I appreciate it. Thanks very much.

Our next question comes from Susan Berliner from JPMorgan. Your line is open.

Hi. Good morning. Ara K. Hovnanian - Chairman, President & Chief Executive Officer: Good morning. J. Larry Sorsby - Chief Financial Officer, Director & Executive VP: Good morning.

I want to start, I guess, with land spend. I was wondering in light of the upcoming debt maturities if you may be looking to reduce land spend. I know if you go back to 2011 and 2012, you guys were closer to $400 million and had about $600 million last year? J. Larry Sorsby - Chief Financial Officer, Director & Executive VP: Sue, if you'll recall, on the last quarter's call when we discussed after raising $250 million of debt in the first quarter, that we took some near term steps in order to more fully deploy that cash. Those steps allowed us to avoid that negative arbitrage of paying interest both on our new debt and interest on items such as non-recourse mortgages, model sale leasebacks and banking arrangements, et cetera. And we also said that we would reactivate those programs when we decide to increase our liquidity or deploy additional cash to grow our land position even further. And actually, in the second quarter, towards the end of the second quarter, we reactivated some of those programs, so the $108 million land spend is artificially low. And the land spend that we had in the first quarter, I don't recall exactly what it was, it was probably a little bit high. So if you average our spend over those two quarters, that's kind of what our quarterly spend has been without the white noise of some of those actions we took to reduce interest costs. So we've really been steady on our land spend, I guess, is what I'm really trying to convey.

Okay. And then if I could just turn to market, because I guess I'm still a little confused on the slowdown and absorption pace, and I know you had some in Houston. And I was wondering if you could talk about some of your other large markets, whether it be D.C., New Jersey, Chicago, et cetera? Ara K. Hovnanian - Chairman, President & Chief Executive Officer: Sure. Well, the strong markets overall for us continue to be up, in addition to Texas, the Northern California, Silicon Valley suburbs where we've got communities there, a particular community, a large one with two product lines where we have people camp out and we literally sell out the morning we release the homes. That market has been particularly strong and we're about to open another new and large community there as well. So we think that's going to be beneficial. The D.C. market, overall, has been sluggish compared to where we'd expect it to be at this time in the cycle. Clearly, sequestering is taking its toll and employment has not been as vigorous as it used to be. So that is not giving us the punch that we normally have. In the Northeast, that market has just not recovered as vigorously as other markets have. However, some of our newer communities that we're able to purchase at a solid basis had performed very well. So we're anxious as we continue to open new communities to get a bigger mix of our new communities compared to the old legacy ones in the Northeast, and we think that alone will improve our performance. And finally in Florida, in Southeast and Orlando in particular, they're very strong markets. We've got several communities under way with land development. We're just anxious to get the models open and open for sale there. We think that will be very helpful. We've got some good properties at a good basis, and we're just anxious to get land development done and models built to open up.

Okay. Thanks very much.

At this time, I'd like to turn the call back over to Mr. Hovnanian for any closing remarks. Ara K. Hovnanian - Chairman, President & Chief Executive Officer: Thanks very much. Listen, we understand disappointment in the results. We're disappointed, but we look forward to reporting better results in the very near future. Thank you.