Good day, everyone and welcome to KB Home's fourth quarterearnings conference call. As a reminder, today’s conference call is beingrecorded and webcast on KB Home's website at kbhome.com. The recording willalso be available via telephone replay until midnight on January 16, 2008. Youcan access this recording by dialing area code 719-457-0820, or 888-203-1112and entering the replay passcode of 9544624. KB Home's discussion today may include certain predictionsand other forward-looking statements. These statements may cover market oreconomic conditions, KB Home's business and prospects, its future financial andoperational performance, and/or future actions and their expected results. Theyare based on management’s current expectations and projections about futureevents but are not guarantees of future performance. Due to a number of risks, assumptions, uncertainties, andthe events outside its control, KB Home’s actual results could differmaterially from those expressed in or implied by the forward-lookingstatements. Many of these risk factors are identified in the company’speriodic reports and other filings with the SEC, which the company urges you toread with care. For opening remarks and introductions, I’d now like to turn thecall over to KB Home's President and Chief Executive Officer, Mr. JeffreyMezger. Please go ahead, sir.

Thanks, Kevin. Good morning, everyone. Thank you for joiningus today for an update on our business and financial results for our fourthquarter and fiscal year ended November 30, 2007. With me this morning are Dom Cecere, our Executive VicePresident and Chief Financial Officer; Bill Hollinger, our Senior VicePresident and Chief Accounting Officer; and Kelly Masuda, Senior Vice Presidentof Investor Relations and Treasurer. We can debate the details but I think you will all agreethat the last 18 months represent one of the most challenging periods the homebuilding industry has confronted in recent history. By mid 2006, demand forsingle family homes had approached near-term saturation levels, prices peakedand began falling back from their historically high levels, and speculationdistorted conditions in some of the country’s fastest growing markets. Since that time, the industry has grappled with a series ofproblems that continue to feed off one another and intensify the challenges ofan already weakened housing market. These include an over-supply of new andresell inventories, rising foreclosure activity, intense competition for sales,reduced affordability, declining consumer confidence, and most recently turmoilin mortgage lending and other credit markets. Our fourth quarter and full year results clearly reflect theimpact of these issues. In the fourth quarter, we booked an additional pretaxnon-cash charge related to inventory and joint venture impairments and theabandonment of land option contracts totaling $403 million. This charge wastriggered by price declines and slower sales rates, both of which impactedinventory values. We also were required for book purposes to establish avaluation allowance on our deferred tax assets that resulted in a non-cash,after-tax charge of $514 million. The allowance was determined in consultationwith our independent registered public accounting firm. For tax purposes, thebenefits associated with our deferred tax assets may be carried forward for upto 20 years. Given KB Home's track record of results over its…

Thanks, Jeff. Let’s start with operating results -- netorders of 2,574 new homes in the fourth quarter were down 32% on ayear-over-year basis. Community counts entering 2008 are down over 30% from theprior year. We had 380 active selling communities in 2007 and expect communitycounts in 2008 will be down 25% to 30% from this level. We entered the fourth quarter with 11,880 sold homes inbacklog and converted 8,132, or 68% of our backlog to revenue. That compares toa conversion ratio of 42% in the third quarter and 60% in the fourth quarter of2006. Cancellations in the fourth quarter were 30% to beginningbacklog and over the last six quarters, this ratio of cancellations tobeginning backlog has ranged between 29% and 33%. The average sales price of the homes we delivered in thefourth quarter decreased 12% to $247,800 from $280,000 in the fourth quarter of2006. That average sales price was just slightly below the $256,800 averagesales price for a resale home in November. Year over year, sales prices were down 19% on the WestCoast, 14% in the Southwest, and 7% in the Southeast. Sales prices were up 4%in the Central region, solely due to mix. Our housing gross margin in the fourth quarter, excludingimpairments and abandonments, was 10.1%. That’s down from 13.9% in the thirdquarter and 14.9% in the second quarter of 2006. The average sales price hasdropped 9% in the last two quarters, while resale pricing was down nearly 8%. SG&A expenses in the fourth quarter decreased 31% from ayear ago and at 11.3% of housing revenue was slightly better than 11.4% in thefourth quarter of 2006. This improvement primarily resulted from a more than50% reduction in G&A in the fourth quarter compared to the year earlierquarter. Homebuilding’s pretax loss from continuing operations forthe fourth quarter included $320 million of…

Thanks, Dom. In closing, I would like to reiterate a few keymessages -- as we’ve now demonstrated, we moved quickly to strengthen ourfinancial position and generate cash. In fact, we exceeded our goals in thatregard for 2007. Our strong balance sheet and ample liquidity provide us theopportunity to selectively reload our land pipeline with higher margincommunities in 2008. We’ve intensified the execution on our unique corecompetencies and proven KB next operating disciplines, and we continue to builda highly visible brand, pursuing strategies that successfully differentiate KBHome from other builders in the marketplace. We have a proud 50-year history in which we’ve navigatedthrough difficult times like this before, every time coming out a strongercompany. Our past experience managing through downturns helped us inidentifying the appropriate steps to take and these actions now have KB Homewell positioned to capitalize on opportunities as they arise. It is unclear when the markets will stabilize and thereforedifficult to provide a forecast for 2008. I can assure you that we will remaindiligent in prudently running the business at whatever volume marketcircumstances support, with the primary goal of restoring profitability. With that, let me open the call for your questions.

(Operator Instructions) First up on our roster is StephenKim at Citigroup.

Thanks for all the information on your call. I had a quickquestion regarding your deferred tax asset balance. I just want to make surethat I’m clear on what your residual balance that exists today implies for yourability to harvest deferred tax assets over the next four quarters. Myunderstanding of the ENY interpretation is that they are essentially requiringyou to write-off whatever deferred tax assets are unlikely to be harvestedthrough delivering homes or selling land in the next four quarters. But I was curious as to whether or not that interpretationapplied both to the deferred tax asset created by the impairment charges aswell as the deferred tax assets that have been built up or accrued related toother corporate activities, like deferred comp and other things like that. So Ijust want to make sure I understand what exactly we can expect in terms of cashflow implications from the $222 million you have in deferred tax asset on thebalance sheet right now.

I’m going to ask Bill Hollinger to respond to you on the200.

I’ll try to do the best. It might need some multiplefollow-ups, but first of all I’ll kind of answer the last part of that question-- the $222 million, we would realize that probably in ’08 and ’09, so thatreally represents a long-term receivable that we would collect here in ’08,’09, the years, so we fully expect to get that and there’s really no issue onrealizability of that. The issue of -- you said as far as the auditor’sinterpretation, there is really I don’t think any difference or view in termsof the impairment, or in terms of the valuation allowance to either theimpaired deferred tax assets or the unimpaired deferred tax assets, so thatissue is more or less one and the same.

I see. Okay, that’s great. No, that helps greatly. Thesecond thing I wanted to ask relates to what you are seeing in terms of buyeractivity in your communities. Can you give us a sense for -- if you have seenany change in the kinds of buyers who are actually stepping forth and actuallyon whom you are actually closing transactions with? Are you finding that thereis an increased number that are currently renting? Are you finding that thereis a shift in the age of your buyers? And I’m talking really in the last threemonths or so, three to four month, or any other salient difference that youhave noticed in terms of your actual closed customers in the last quarter orso.

I can talk to the period through November. We don’t makecomments intra-quarter, but I don’t know that things have changed much sinceNovember in terms of buyer profile. We’re definitely seeing a buyer that viewsowning a home as their lifestyle and something they intend to live in for awhile. The days of buying it to flip it six months from now as an easy make oras an investment really are gone, so this is a true, normal housing climate,traditional buyer. A lot of the move-up buyers are having difficulty disposingof their existing home, in many cases, upside down on their equity so thosebuyers for the most part in our business have left the market because theycan’t dispose of their current residence and that’s why we’re focusing verydiligently on lower price points and reaching out to the first-time buyer whohas the ability to close on a transaction.

Moving on to our next question, this is Ivy Zelman at Zelmanand Associates.

It’s actually Dennis McGill. The first question just had todo with the dividend -- is there any covenants that you guys would have torevisit in response to the dividend over the next year, or do you feel thatthat’s fairly safe?

Dennis, I’ll have Kelly Masuda answer that one.

From a covenant compliance perspective, Dennis, we havecushion both under our revolver and our senior subordinated debt.

Implying that you would not have to make any adjustmentscurrently?

Correct.

Okay, and then just a second question would be kind of a bigpicture view -- realizing where you guys are today, you’re in a great liquiditysituation, you’ve got a lot of cash on the books, you’ve got $17 of cash pershare, which is basically where your stock is trading today. The market ismaking a pretty dire case for what the fair value of your assets, [looking at]what your debt’s currently at. I’m just wondering what your interpretation ofthat view is right now. It seems overly bearish in our mind, looking at whereyour balance sheet situation is and looking out over the next five to sevenyears, but maybe you guys could answer what you think is going on in the viewof the market, just thinking about what you know about your assets right now.

I think the market now at least understands that we have a-- you know, [inaudible] cash and as you all pointed out, at $17 a share. Wealso have $700 million of deferred tax assets -- that’s another $9 per share offuture cash. So we look at it as a $26 value and the market has our stock downunder $18, so we believe that the stock is under-valued compared to theliquidity of the assets that we have in place.

I guess that’s it for us now. Thanks.

Moving on to our next question, this is Carl Reichardt atWachovia Securities.

Good morning. Jeff, last year some of your peers talkedabout attempting to hold margin headed into the spring selling seasontactically. I’m curious if you’ve had sort of a broad overview of what yourbase marketing strategy is headed into this spring, if it’s much different thanwhat you’ve been running the last couple of quarters. I’d just like yourthoughts on that.

I think you will see a shift, Carl, as I said in my finalclosing comments, we’re focused on the primary goal of restoring profitabilityand we have this war chest of cash now and it’s patient money for us. We’re notgoing to jump and do anything with it. We’re going to stay opportunistic andwe’re focused on increasing margins. So we don’t need -- you can always use more cash. We don’tneed it right now to run the business. What we need is more profit and that’swhere the focus will be in ’08.

Is that a function of the -- well, I mean, this is a -- isthat a function of the mix of your stores likely changing in 2008 and into 2009because you are able to reinvest into some deals that make more sense, or isthat a function of in existing communities where absorptions are slow sayingwe’re willing to take those slower absorptions?

I think it’s both, Carl but clearly we think we’rewell-positioned to acquire new lots that are aligned with our strategy at lowerprice points and higher margins and that’s where our focus will be.

Okay, great. I’ll get back in queue. Thanks, Jeff.

Next up we have Michael Rehaut of JP Morgan.

Thanks. Good morning. First question, just on the orders andthe order ASP numbers, were you surprised given the sharp drop-off in ordersrelative to the fact that your order ASPs came down another 20% from the thirdquarter? And if you could give us a little bit of color on in terms of theorder ASP number, which we have at 174 on average, I know region by region it’svery different but particularly like the West Coast, how much of that changewas mix versus pure price declines?

Mike, we can work with you offline on the numbers becauseyou are trying to track back from backlog to backlog at the end of eachquarter. Our prices are not down anywhere near the kind of numbers that youjust quoted. In terms of our price drops, however, it’s a combination ofthings. In part, the markets have softened a bit, so prices came down in thenormal course but we’ve strategically moved to reposition to lower price pointsand smaller product that’s more affordable. In many of the land constrained,high-price areas, frankly our product got too big for the normal consumer. So we’re moving our prices down strategically with thesesmaller products. However, at the same time, our community count is way down sosales -- in part, the negative sales comp is that we’ve intentionally reducedcommunity count because we don’t want to fuel a bunch of cash in thecommunities where we can’t get our returns. So in terms of sales rates, the last thing I was going tosay is in terms of sales rates, our lower priced products are actually sellingwell. It’s the move-up communities that continue to struggle.

So your community count on average for 4Q was 418, did Ihear that right?

Yeah, but those were a lot of close-out communities.Entering 2008, our community counts were down over 30% and that’s what affectedthe order trends. And the reason the prices were down is because resale prices,we’ve been pricing against resale. Resale prices dropped 8% and we dropped 8%with them. So our pricing is tracking against resale, which is, you know, we’reat about $250,000 right now.

Okay, so just --

But it’s really a question of whether you invest in openingmore communities in a market where there’s no demand. We’ve decided that we’drather generate cash than open new communities and be prepared to grow thebusiness when the market starts to recover.

Okay, so what was the average community count for 4Q and the4Q end community count?

Well, the average for 4Q I believe was 418, but that -- youknow, that’s the peak always in the air, and then going into ’08, it’s going tobe -- we averaged 380 and we’re going to be down to just under 300, I believe.

Okay, last question, if you have it -- in the quarter, canyou give us what the gross margin benefit was from impairments in priorquarters?

I don’t really think it means anything, so probably theanswer is no.

Okay. Other builders have been able to provide that, but --

Some do and some don’t, I think, Mike.

Sorry?

Some do and some don’t.

Okay. All right, well, thanks a lot.

Moving on now to Daniel Oppenheim, Banc of AmericaSecurities.

Thanks very much. I was wondering if you could talk aboutthe -- a little bit more in terms of move-up and price points. If you look atyour cancellations, if you were to think about that, how much of that wascoming from move-up buyers who weren’t able to sell versus low-end buyers wherethere’s a financing issue, or just getting cautious in the environment?

Dan, that’s a moving number by market so I really -- wedon’t have the data that would detail entry level buyer versus a move-up buyerat hand. I’ve seen a lot of media coverage or analyst coveragetalking about the first-time buyers’ inability to get a mortgage. It’sabsolutely not true. FHA, VA Financing, or in the price points that areslightly above that conventional conforming, there’s ample liquidity out there.They just have to have a 3%, 4% down payment on FHA loans and they go. So as we shared in our statistics, we’ve quickly moved to a differentmortgage product that is qualifying the buyer.

And by the way, in our backlog now, one out of every threebuyers are government loan.

Okay, and then in terms of the inventory, you were talkingabout how it takes some time to work through that, what are you thinking aboutyour community count plans for 2008?

Well, we said they’d be down 25% to 30% in ’08 from ’07.

Sorry, I missed that. Thank you.

Next from Merrill Lynch, this is Kenneth Zener.

I wonder, how many of your owned lots, the 45,000, are inactive communities?

The vast majority.

Okay, so when you talk about not investing, upwards of 80%,90% of your lots are in those active communities?

I would say yes -- maybe probably closer to 80 than 90.

Okay, and then can you talk about what you expect to spendon land development and land acquisitions in ’08 versus ’07?

It’s probably down another 30% -- [inaudible] is spendingabout $3 billion a year, half purchased land and half development and that’sbeen cut by two-thirds. But it’s going to be dependent on what demand is goingto be throughout the year. But it’s definitely less than $1 billion.

Okay, and I guess of the -- going back to the FAS-109, the514, is it -- you’re under this opinion that you have to actually reporttaxable income in each period to recognize it or do you just have to reversethe trend where you now start having positive taxable income?

I think it was kind of both but I’m not sure I understoodthe question. Can you repeat it again?

Once you start reporting positive taxable income, can yourecognize or reverse the whole piece that was turned around based upon yourcurrent negative taxable income?

I mean, again there’s a lot of judgment and facts andcircumstances that surround this issue but you are first going to have to getyourself out of the -- in all likelihood, the three-year cumulative loss issuebefore you can start recognizing it. So you might turn profitable but you maynot be able to recognize it until you get yourself out of again this cumulativeloss situation.

Okay, good, and just one last question; Jeff, on the lastquarter, I asked you about this large Inspirada joint venture in Vegas. Wasthat part of the joint venture impairment this quarter?

We did take an impairment in Inspirada this quarter.

And what was the change in assumptions? Because lastquarter, it was kind of described as something bought really well below themarket. Was it volume or pricing?

Prices have continued to come down a bit in Vegas; inparticular, resales and we still view Inspirada as a great asset. It’s in thetop sub-market. It’s entry level product but it got squeezed a little bit inprice like the rest of the market.

Thank you.

A question now from Jim Wilson, JMP Securities.

Thanks. Good morning, guys. I was wondering if you couldgive a little color regionally on two things, that’d be my two questions; oneon impairments during the quarter, where you took them, and I’m not sure Imissed it; and the second on margins pre-impairments. I know your overallnumber but I was wondering what it -- could you give any color in general whatit looks like by region?

Let me look for the -- in the fourth quarter, over 30% ofthe impairments were in California, 46% were in the Southwest, 17% were in theSoutheast. Those are the major three areas for the impairments. And that was in57 communities, which includes 11 JVs. On margins by region, I’m not sure I could give you that. Iwouldn’t have that. I just don’t have it in front of me.

Okay. I was just wondering, any sense of where is higher,where is lower, things of that nature? I can get back to you on it.

Yeah. There’s not as big a swings as they used to be.

Okay. All right, fair enough. That’s good. Thanks.

Now from UBS, this is David Goldberg.

I was wondering if you could give us some more color -- youwere talking about the percent of the average selling price that was comingfrom options in the design studio. I was wondering if you give us a little bitof color if there’s been a change in what kind of options people are choosingand maybe the profitability of the options that they are choosing?

One of the shifts we saw through ’07 was less money on thesizzle type options and more focus on the core things, like cabinets, flooring-- less of the luxury lifestyle and more of those things that are fundamentalin need for the consumer. But we really don’t right now expect that our studio saleswill change much going into ’08. I think they will continue to spend the samedollars, just move it around to more core items.

Great, and then I guess my follow-up question was just aboutCountrywide, if you’re thinking at all about changing the JV -- any concernsabout liquidity and availability or capital or anything like that, maybebringing in a [inaudible] or someone like that moving forward?

Well, we don’t have that concern right now. Countrywide’sbeen a great business partner. They’ve stepped up in every way along the wayand we had a great fourth quarter in our closings, in large part because oftheir performance. We have our own line in the JV and it operates independent,so to us it’s a great partnership and we’ll just keep running it with them.

Thanks.

Next up is Timothy Jones, Wasserman & Associates. Timothy Jones -Wasserman & Associates: Congratulations on the $2.4 billion reduction ininventories. Nice to see for once -- not for you, for the industry. First, a question -- I’m really surprised on this 46%impairments in the Southwest. But you include more -- that’s not just Texas, sothat -- was that in the other markets you have in the Southwest?

No, that was actually Las Vegas and Arizona. Timothy Jones -Wasserman & Associates: Okay, because I don’t think you’d have any in Texas. Okay --

And a little bit in Albuquerque. Timothy Jones -Wasserman & Associates: Okay. I’m intrigued and I’m pleased with your 30% reductionin communities. You have the strength, financial strength to rather than haveto sell these marginal communities to mothball them. Do you have any kind of anumber there that you’ll just put it aside, either partially completed orcommunities and just mothball them and just carry them?

We don’t have that many. Remember, we’re down to 45,000 lotsowned so we really have just gotten ourselves into a very lean land positionoverall. Timothy Jones -Wasserman & Associates: I see. That’s a nice position to be in. And lastly, can youtell me what’s going on in the Central region, why the sales are down sosharply there?

As I mentioned in my comments, Tim, while Indianapoliswasn’t a large business for us, it was 600, 700 units a year in ’06, so that’sgone now. We pulled out of Texas Valley, which was 300 or 400 units in sales in’06 and also now from the Gulf Coast. So we’ve knocked down our community countand that, on an annual basis, is probably -- from the markets we withdrew inthat region, it’s probably 1,000 sales a year. But even in the markets thatwe’re in, like Houston, Dallas, San Antonio, our community count is down yearover year and that’s driving a lot of the negative sales comp. The Texas marketis actually holding up okay relative to the coast. Timothy Jones -Wasserman & Associates: That’s what I thought. Thank you very much.

Next up we have Joel Locker, FBN Securities.

Just wondering if you had a breakdown of the other 90%, witha 10% gross margin, just the 90% expenses between land, labor, and materials?

I don’t know if I can -- I don’t think I quite understandthe question. You mean the 90%, what is the -- how much is land and how much isthe construction of a house?

Land, labor, and materials, if you have.

Well, off the top of my head, I would say it’s 55% is theconstruction of the house, 25% is land, and then another 10% is expenses. Idon’t know if I hit that right but 55 and 35 would be 85 --

Right, another 10 -- 10% expenses --

It’s 55% -- 54% direct construction and -- that’s got theimpairment in it, Kelly, so it’s hard for me to get. Yeah, 55, 25, and 10,roughly.

And the other question, you had $290.3 million of justimpairments between land and option walk-aways. What part was the actual optionand pre-acquisition cost charges?

$72 million is abandonment.

All right. Thanks a lot. I’ll jump back in the queue.

And we’ll move on to Andrew [Brausa] at Banc of AmericaSecurities.

I wanted to know if you could comment on the absorptiontrends you saw throughout the quarter and whether you saw month to month anysort of major changes.

We don’t typically get into too much of the month-to-monthtrends, Andrew. I can tell you, and this is a ways back -- keep in mind thequarter ended in November, but September clearly got rattled because that wason the heels of the credit market tightening up and a lot of the mortgageproduct having been eliminated in June, July, and August, but I don’t recall inreflection that it was materially different from month to month.

Okay, and I guess obviously you don’t have anything maturinguntil late 2008 and obviously plenty of cash on hand, as you guys alluded to.When you look out into 2008, you see community count down 25% to 30%. Is thereany sort of order of magnitude of cash flow you guys might be expecting to getinto the company?

We do expect in ’08 to be cash flow positive, if things holdand, you know, we run the --

We’ll know later in the year. The big swing factor is howmany homes do we get delivered in ’08 and once that’s solidified and we see theselling season, then we’ll know how much cash we generate. But our goal is tobe definitely cash flow positive, just like we’ve been in the past -- just notthe same level.

Okay, thanks, guys.

We have a question now from Alex Barron at Agency TradingGroup.

I was hoping you could break out the impairments betweenwhat you did for option write-offs versus the community write-downs, landwrite-downs?

Well, we said options was -- go ahead.

$72 million and $218 million.

And $218 million community impairments.

Okay, thanks. I was also wondering, as far as your jointventures, were there any sales of any of the joint ventures or did you walkaway from any that maybe some other partners have gone, or vice versa? Anyjoint ventures that you had to consolidate where somebody else walked away?

We did dispose of three in the quarter through a sale, Alex.We manage all our JVs just like every other community and it is our intent tolessen our investment in JVs through ’08.

Okay. Can you comment at all on the purchase price orlocation?

Of the three that we disposed of?

Right.

One in Texas, one in Sacramento, and one in Tucson.

Okay, great. Also, I didn’t catch here if you mentioned yourfinished specs for the quarter.

I think it was about 484 I believe is what I said -- just alittle over one per community in the quarter.

Okay, got it. Last question, as far as your community count,it seemed to have gone up slightly from last quarter. I was just wondering howto interpret that.

You really can’t. I mean, it’s a -- the fourth quarter iswhen we are closing out of a lot of communities and we are opening newcommunities to enter 2008, so it’s an anomaly. It comes right back down in Q1.It’s best [inaudible] just to look at the year-to-year and notquarter-to-quarter.

We’ll go to Lark Research and Stephen Percoco.

Thanks. Could you give us some additional information on theimpairments? For example, what was the fair value after impairment of thoseproperties that you took charges on?

I wouldn’t have that, to be honest with you, in front of me.

Okay. Can you give us any idea of the assumptions that youhave used to determine the threshold for impairment going forward?

We’re using the same assumptions every quarter onimpairments. I mean, the good news is we’re down to 45,000 lots owned and only20,000 options and land which was at peak $7.2 billion is down to $3.3 billion,so we are working our way through it but we’ve really got a pretty lean lotposition and inventories have been shrunk significantly since the beginning ofthe -- well, since six quarters ago.

Next up we have Larry Taylor at Credit Suisse.

Thanks very much. I wonder if you could talk about thepotential uses for free cash flow in 2008. Do you have a priority and if marketconditions don’t change, do you intend to continue to stockpile cash? Would youreduce other debt on the balance sheet?

Well, we did say that we would generate free cash flow nextyear so we are going to continue to generate cash. There’s no debt that wouldbe reduced until December 2008 when $200 million of the senior subordinateddebt becomes due.

Okay, and can you envision -- so I think that answers thequestion that you would basically be stockpiling cash? In other words,continuing to build liquidity?

Unless we see a change in the market.

We intent to keep ample liquidity until there are signs thatthe markets are stabilized and we’ll reinvest as opportunities come up.

And that may already answer my second question, but let meask it anyway to be clear; are there any markets today that you would invest inor opportunities going into the first quarter here, given your liquidity andfinancial wherewithal where you could see yourselves putting money into thosemarkets in --

Are you referring to our existing markets or new markets?

Either existing or new markets, but basically where youwould be increasing your investment, essentially building a larger block ofavailable lots, for example.

Well, I was asking in that we do not see the need to enteradditional markets right now. There’s so much upside in market share gainswhere we are at. In any given market, we’re absolutely interested in investingin the right opportunity at the right price point. There’s demand in every marketthat we’re in. You just have to figure out how to make margin at an affordableprice point and that’s where we’re headed in ’08.

But you would say we’re not there yet, or --

We think there will be better opportunities in the future.

Thanks very much.

With that, ladies and gentlemen, we’ll wrap up thequestion-and-answer session and I’ll turn things back over to our speakers forany additional or closing remarks.

Thank you for joining us today. We hope to speak again withall of you in the near future. Have a great day.

Again, that concludes today’s conference call. Thank youagain for joining us, ladies and gentlemen. Have a good day.