This document summarizes the financial projections for a 55-home community across 6 development plans. Total projected revenues are over $16 million with a 24.9% housing direct margin. After indirect costs, the projected gross margin is 20.2%. Expected profit contribution is 14.6% of total revenues, or over $2.3 million. Absorption of homes is projected at 6.1 per month on average over a 9 month delivery period.

1. Community A
Anytown, USA
Finished Lots
Weighted
Previous Activity Balance to Complete Total for Remaining % of
Average per Plan 1 Plan 2 Plan 3 Plan 4 Plan 5 Plan 6
and Balances Community Homes in Community Revenues
Home
Square Footage 102,300 1,860 1,660 1,855 1,986 2,254 0 0
Home Mix 55 21 17 9 8 0 0
Mix % 100.0% 38.2% 30.9% 16.4% 14.5% 0.0% 0.0%
Housing Revenue Base Year Price $250,990 $265,000 $280,000 $290,000 $- $-
Base Sales Price (w/ price appreciation) $0 $15,346,580 $15,346,580 95.5% $279,029 $263,540 $278,250 $294,000 $304,500 $0 $0
Total Location Premium 0 55,000 55,000 0.3% 1,000 1,000 1,000 1,000 1,000 0 0
Option Revenue 0 825,000 825,000 5.1% 15,000 15,000 15,000 15,000 15,000 0 0
Pricing Concessions 0 (162,266) (162,266) -1.0% (2,950) (2,795) (2,943) (3,100) (3,205) 0 0
Total Housing Revenue 0 16,064,314 16,064,314 100.0% 292,078 276,744 291,308 306,900 317,295 0 0
Housing Direct Costs
Land Acquisition (incl escrow costs) 0 2,211,000 2,211,000 13.8% 40,200 40,200 40,200 40,200 40,200 0 0
Impact Fees (excl School Fees) 0 1,815,000 1,815,000 11.3% 33,000 33,000 33,000 33,000 33,000 0 0
Land Development - On-Site 0 55,000 55,000 0.3% 1,000 1,000 1,000 1,000 1,000 0 0
Land Development - Off-Site 0 0 0 0.0% 0 0 0 0 0 0 0
Prepaid Community Costs 0 300,000 300,000 1.9% 5,455 5,455 5,455 5,455 5,455 0 0
Base Construction Cost (w/ price apprec) 0 6,577,734 6,577,734 40.9% 119,595 110,463 119,646 124,034 138,467 0 0
Options 0 618,750 618,750 3.9% 11,250 11,250 11,250 11,250 11,250 0 0
Escrow Closing Costs 0 81,133 81,133 0.5% 1,475 1,398 1,471 1,550 1,603 0 0
In-House Commissions 0 208,836 208,836 1.3% 3,797 3,634 3,825 4,030 4,167 0 0
Realtor/Co-Op Commissions (3) 0 200,804 200,804 1.3% 3,651 3,494 3,678 3,875 4,006 0 0
Low Income Adjustment 0 0 0 0.0% 0 0 0 0 0 0 0
Total Housing Direct Costs 0 12,068,257 12,068,257 75.1% 219,423 209,893 219,525 224,394 239,147 0 0
Housing Direct Margin (0) 3,996,057 3,996,057 24.9% 72,656 66,851 71,783 82,506 78,148 0 0
Housing Direct Margin % 24.9% 24.9% 24.2% 24.6% 26.9% 24.6% 0.0% 0.0%
Indirect Costs
Construction Overhead/POH 0 317,100 317,100 2.0% 5,765 5,765 5,765 5,765 5,765 0 0
Service Overhead/Warranty 0 273,093 273,093 1.7% 4,965 4,965 4,965 4,965 4,965 0 0
Total Property Taxes 0 161,775 161,775 1.0% 2,941 2,941 2,941 2,941 2,941 0 0
Total Association Provision 0 0 0 0.0% 0 0 0 0 0 0 0
Total Indirect Costs 0 751,968 751,968 4.7% 13,672 13,672 13,672 13,672 13,672 0 0
Gross Margin (0) 3,244,088 3,244,088 20.2% 58,983 53,179 58,111 68,834 64,476 0 0
GM% 20.2% 20.2% 19.2% 19.9% 22.4% 20.3% 0.0% 0.0%
Selling Overhead
Selling Salaries & Model Operating Exp 0 190,500 190,500 1.2% 3,464 3,464 3,464 3,464 3,464 0 0
Advertising 0 282,000 282,000 1.8% 5,127 5,127 5,127 5,127 5,127 0 0
General 0 0 0 0.0% 0 0 0 0 0 0 0
Total Selling Overhead 0 472,500 472,500 2.9% 8,591 8,591 8,591 8,591 8,591 0 0
Total Capital Cost & Interest (4) 0 422,510 422,510 2.6% 7,682 7,682 7,682 7,682 7,682 0 0
Community Profit Contribution (0) 2,349,079 2,349,079 14.6% 42,711 36,906 41,838 52,561 48,203 0 0
Other Net - Income/(Loss) 0 0 0 0.0% 0 0 0 0 0 0 0
Contribution to Administrative O/H (0) 2,349,079 2,349,079 14.6% 42,711 36,906 41,838 52,561 48,203 0 0
Contribution % 14.6% 13.3% 14.4% 17.1% 15.2% 0.0% 0.0%
General & Aministrative Expense 0 0 0 0.0% 0 0 0 0 0 0 0
Pre-Tax Profit (0) 2,349,079 2,349,079 14.6% 42,711 36,906 41,838 52,561 48,203 0 0
Profit % 14.6% 13.3% 14.4% 17.1% 15.2% 0.0% 0.0%
Base Contruction Cost Detail
Included in Impact Fee Total Building Permits 0 0.0% 0 0 0 0 0 0 0
$5.20 School Fees 531,960 3.3% 9,672 8,632 9,646 10,327 11,721 0 0
Structure Costs 5,913,339 36.8% 107,515 99,600 107,590 111,216 123,970 0 0
Cost Appreciation on Base Structure 132,435 0.8% 2,408 2,231 2,410 2,491 2,776 0 0
Customer Option Costs 618,750 3.9% 11,250 11,250 11,250 11,250 11,250 0 0
Total Base Construction Costs 7,196,484 44.8% 130,845 121,713 130,896 135,284 149,717 0 0
Per Square Foot Analysis
Base Sales Price $150.02 $158.76 $150.00 $148.04 $135.09 $0.00 $0.00
Total Sales Price $157.03 $166.71 $157.04 $154.53 $140.77 $0.00 $0.00
Building Permit $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
School Fees $5.20 $5.20 $5.20 $5.20 $5.20 $0.00 $0.00
Structure Costs (Base Year) $57.80 $60.00 $58.00 $56.00 $55.00 $0.00 $0.00
Structure Costs (with appreciation) 59.10 $61.34 $59.30 $57.25 $56.23 $0.00 $0.00
Customer Option Costs 6.05 $6.78 $6.06 $5.66 $4.99 $0.00 $0.00
Total Base Construction Costs $128.15 $133.32 $128.56 $124.12 $121.42 $0.00 $0.00
Structure Costs as Percentage of Base Sales Price 39.4% 38.6% 39.5% 38.7% 41.6% 0.0% 0.0%
Total Base Construction Costs as Percentage of Total Sales Price 81.6% 80.0% 81.9% 80.3% 86.3% 0.0% 0.0%
Projected Months of Deliveries = 9 Average Community Absorption (Homes per Month) = 6.1 Est Monthly Construction Overhead = $21,000
Projected Months of Contracts = 13 Average Contracts Absorption (Homes per Month) = 4.3 Est Monthly Selling Salaries & Model Operating Exp = $15,000
Projected Mos. of Construction O/H = 15 Est Monthly Advertising Expenses = $30,000
Maximum Operating Cash Requirement = $8,745,856 Average Inventory Balance = $3,610,810
Industry Definition Finished Lot = $83,872 Inventory Turns = 2.0
Annualized Return on Inventory = 32.5% Internal Rate of Return = 34.5%
Assumptions 1) Absorption assumptions by year: 2) Sales price appreciation assumptions by year:
Land Purchase Date Mar-10 FY 09 = 0 FY 09 =
Model start date May-10 FY 10 = 0 FY 10 = 0.0%
Production start date Jun-10 FY 11 = 55 (6.1 deliveries per month) FY 11 = 5.0%
First delivery Dec-10 FY 12 = 0 FY 12 = 5.0%
FY 13 = 0 FY 13 = 7.0%
FY 14 = 0 FY 14 = 9.0%
FY 15 = 0 FY 15 = 0.0%
FY 16 = 0 FY 16 = 0.0%
FY 17 = 0 FY 17 = 0.0%
3) Broker Co-op % = 5.0% Pct sold with broker = 25.0%
6.0%
4) Annual capital cost rate assumption =
Exec Summary 04/22/2009, 12:02:57