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Q2 2008 Brookfield Homes Corporation Earnings Conference Call - Final.

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Original Source: FD (FAIR DISCLOSURE) WIRE

OPERATOR: Hello, and welcome to the Brookfield Homes Corporation Conference Call and Webcast to present the Company's second quarter 2008 results to shareholders.

As a reminder, all participants are in a listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. (OPERATOR INSTRUCTIONS.)

At this time, I'd like to turn the conference over to Mr. Ian Cockwell, President and Chief Executive Officer.

Please go ahead.

IAN COCKWELL, PRESIDENT AND CEO, BROOKFIELD HOMES CORPORATION: Good afternoon, ladies and gentlemen, and thank you for joining us today for Brookfield Homes' Second Quarter Conference Call.

Before we continue, please note that, in talking about our financial performance and responding to questions, we may make forward-looking statements. Forward-looking statements are subject to known and unknown risks, and results may differ materially.

For further information on such factors or risks, I'd encourage you to see Brookfield Homes' SEC filings and the full text relating to forward-looking statements in our Form 10-K and 10-Qs which are posted on our Website.

We have also posted a supplementary information package on the Website under the Investor Relations section under Reports and Presentations. It provides details of operations and other key measures of performance.

Joining me for the call today are Paul Kerrigan, our Chief Financial Officer, and Linda Northwood, our Director of Investor Relations. I will start today's agenda, and then turn the call over to Paul who will review our performance for the second quarter.

The overall challenges for the homebuilding industry will continue well into 2009 with consumer confidence at all-time lows and amount of supply of resale and new homes for sale at all-time highs. However, the rate of decline in new and existing homes has slowed, and housing affordability has improved. We have addressed the challenges and have successfully increased our sales pace during 2008 when compared to the second half of 2007.

Our focus on monetizing our inventory of fully-developed lots continues with the visibility improving on achieving $100 million of operating cash flow for 2008. Given our current level of finished lot inventory, we are not investing any significant amount in developing the entitled land we own and, in the interim, we'll be using the operating cash flow to repay debt.

Recently, a number of larger land development projects in California and Nevada have faced debt-repayment issues. Also, we are seeing new sources of capital coming into the market to acquire distressed land opportunities. However, we are not aware of any major land transactions that have closed in our market areas.

Our management skills in entitling and developing land are being sought after by those who wish to enter the market or are wanting to monetize or enhance the value of land assets they may now own. Our business model of adding value at each stage of the land development process enables us to participate with either land owners or financial holders to enhance value.

The fundamental shift of economic ownership in land assets should work itself through the market over the next 12 to 18 months, and we are aligning ourselves to participate in acquiring strategic land positions.

I'd now like to turn the call over...

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