PHM
#Good morning.
Our comments ---+ this is <UNK>.
Our comments on spec are related to help us with regard to managing production cadence overall.
And it would be on a very limited amount.
We have gotten very, very comfortable and happy with our build to order model, so we're not trying to signal any kind of shift in priority.
We just wanted to let you know we may feather in some additional spec in select communities to give us an opportunity to help even out our production cadence.
I would suggest the margin impact of that would be very minimal.
We are not talking about any significant real change in spec policy.
Yes, so on a sequential basis, actually, our margins are up across all three of our brands as well as a little bit of a benefit from interest.
So no concentrated issue there, just better performance across the entire spectrum.
Hi <UNK>.
<UNK>, this is <UNK>.
I would say absolutely not.
We've tried to be as clear as we can that we run the business based on returns.
Frankly, whether margins go up from here or go down, if we get excellent returns on it, that's the name of the game for us.
Our land priorities are not margin specific.
They are return specific as we look at the 200 communities-plus we are going to open this year, it's all based on return.
I don't think gross margins have trapped us into anything.
We are happy with our gross margins.
We have done a good job with our gross margins.
We are proud of them.
I don't think it limits what we do going forward at all.
And I think you have to appreciate it for returns on what the Company's overall philosophy is.
For us it's related to our overall capital approach.
If we were as focused on land investment exclusively as we were 5 or10 years ago, we might have a little bit of a different to posture here.
But given the fact that we want to be involved in all aspects of capital allocation which we are very convinced over the housing cycle is going to be the best total shareholder return for shareholders has dictated our philosophy.
So, I wouldn't want to comment on what anyone else is doing.
I would just say that we think we are doing a good job quarter in and quarter out in balancing it, and over time we are very confident, it's going to yield the right result.
We have learned our lesson in the past of trying to overdo it on the land side, and we are really pleased with our balanced and prudent approach today.
So I hope that helps.
Just to close that out, <UNK>, it's Jim.
We have talked for a while now about not being so focused on just driving unit volumes and driving volumes for volumes sake and really being more focused on, to <UNK>'s point, about the returns.
And the consequence of the investments and everything to line up accordingly.
Thanks, everybody, for your time this morning.
We'll certainly be around for the remainder of the day.
If you have got any additional questions, we'll look forward to speaking with you on our next call.
