GLG News by Accounting & Finance Professionals who Specialize in Homebuilding

David KellerFormer Chief Executive OfficerUNITED SUBCONTRACTORS, INC.

Continued Housing Difficulties

May 14, 2008

Analysis of:The Housing Crisis is Over | online.wsj.com

The housing bust is not over and trends continue to be negative.  The only positive activity is that homebuilding stocks have gone up, without a good reason.  We still have a ways to go to work through all this.

David KellerFormer Chief Executive OfficerUNITED SUBCONTRACTORS, INC.

Direct Expensing of Interest by Homebuilders

May 6, 2008

Analysis of:Hidden Mortgage Risks Abound in U.S. Home Market | www.bloomberg.com

Not capitalizing interest in inventory causes acceleration of losses and deterioration of book value.

David KellerFormer Chief Executive OfficerUNITED SUBCONTRACTORS, INC.

ARE HOMEBUILDING STOCK PRICE INCREASES PREMATURE?

April 24, 2008

Analysis of:Construction Companies Are Clamoring for Managers | online.wsj.com

Recently, stock prices of most public homebuilders have increased 20-30 percent.  This despite no visible signs of improvement in the overall housing industry.  It seems early in the cycle for these stock price upward movements, as it appears the housing market has not yet found bottom.  Equity buyers at the present stock prices must be patient and have a mid- to long-term perspective on their investments. There may be several reasons for the recent price appreciation including: 1. Short sellers covering positions as hedge funds encounter increasing risks in other parts of their portfolios or simply decide to concentrate their efforts in another sector. 2. A perception the government enacted or proposed initiatives will cause significant improvement in homebuilding activities, including sales and financing of homes. 3. A belief the housing downturn is at or nearing bottom and this is the appropriate time to purchase homebuilder stocks.

David KellerFormer Chief Executive OfficerUNITED SUBCONTRACTORS, INC.

IMPAIRMENT REVERSALS – IMPACT ON COST OF GOODS SOLD

April 24, 2008

Analysis of:New-Homes Supply Builds; Durable Goods Orders Slide | online.wsj.com

Homebuilders have recorded large inventory impairments over the last couple of years.  Most of these impairments have been for land and lots.  As these previously impaired lots are built on and a completed home is delivered, the land component as a percentage of Cost of Goods Sold may decline significantly.

David KellerFormer Chief Executive OfficerUNITED SUBCONTRACTORS, INC.

Analyzing Homebuilder Risks

March 3, 2008

Analysis of:Decline in Home Prices Accelerates | online.wsj.com

There are risks associated with homebuilding assets and contingent obligations.  This article alerts the reader to areas of interest.

David KellerFormer Chief Executive OfficerUNITED SUBCONTRACTORS, INC.

Hidden Homebuilding Assets

March 3, 2008

Analysis of:Decline in Home Prices Accelerates | online.wsj.com

Homebuilding impairments and tax valuation reserves provide future accelerated income streams, when the recovery occurs.

David KellerFormer Chief Executive OfficerUNITED SUBCONTRACTORS, INC.

Accelerated Reductions in Book Value

March 3, 2008

Analysis of:Decline in Home Prices Accelerates | online.wsj.com

Issues associated with loss of income tax benefits result in accelerated reduction of book value in homebuilders.

David KellerFormer Chief Executive OfficerUNITED SUBCONTRACTORS, INC.

Joint Venture Completion Agreements

March 3, 2008

Analysis of:Decline in Home Prices Accelerates | online.wsj.com

Unforseen risks associated with homebuilder joint venture agreements and accompanying completion agreements.

David KellerFormer Chief Executive OfficerUNITED SUBCONTRACTORS, INC.

What is the 2008 outlook for homebuilding?

January 14, 2008

Analysis of:Analyzing Homebuilder Risks | seekingalpha.com

What will happen in 2008 for the homebuilding industry? Will cash be generated? Will there be failures? Will there be profits?

David KellerFormer Chief Executive OfficerUNITED SUBCONTRACTORS, INC.

Income tax update for homebuilders

December 31, 2007

Analysis of:INCOME TAX UPDATE FOR HOMEBUILDERS | online.wsj.com

What are the econonmic and cash impacts from a tax standpoint of large impairment losses recorded by homebuilders?  How/when can cash be recovered from these losses?

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