Conference Call Tonight

Beau Robertson

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Apr 12, 2010, 7:27:26 AM4/12/10

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Hello Everyone,

Hope everyone had a good weekend! Just a couple of things:

I have uploaded some decisions to get us started tonight. I will try to explain a little of the thought process below.

If you look at the entries made by each team you can definitely tell which teams went by Expert Guide. Teams Baldwin, Chester and Digby went directly from the guide. It looks like they typed ALL of their entries directly from the Expert Guide. They ended the first round in the same position in almost every category.
One thing I noticed on the R &D Page. If you remember, we had the opportunity to adjust Agape in the size segment to the max and it would still put the product 1 year behind the ideal spot for that segment. Therefore for the rest of the game unless you create a new product you will always be “at best” 1 year behind the ideal spot. I think we should go ahead and bite the bullet now and lose 1 to 1 and ½ years of mediocre to slim sales and create new product to obtain ideal spot and hopefully get 4 good to great years of sales. The only way competition could match is to create their own new product in size segment and it looks like everyone will be entering High for now to follow directions from book.
Also, by entering a new product into the size segment, I think Agape would then be of better use to be repositioned to help strengthen our Traditional Segment. Both Adam and Agape have been positioned to enter Round 4 in ideal spot. We should then be very, very strong in Traditional from Round 4 through Round 8.
Also, we need to remember to enter all new or repositioned products to start the year ½ year ahead of the ideal spot and finish the year ½ year behind ideal spot. I don’t think we did this with our first new product. It will still enter segment in a very good position.
I have repositioned Able so that it is in limbo between the Low Segment and Traditional. It should hit ideal spot in low segment at beginning of year 7. We will have to think about repositioning Acre next year. After Acre has been repositioned we should have our strongest years in low end in years 5,6, 7, 8.
Next year we can continue to reposition A1 to leading edge of high end segment and possibly introduce one new product to high end segment. This would then give us two products in High End, Traditional, and Low End and One product in Size and Performance.
In Production, thought process is to max out on Low End Product at 2800 capacity and increase our capacity for next year. If we have inventory for next year we can use the left over inventory combined with maxing out production again in year three combined with a VERY LOW PRICE to put a big punch to the gut to the competitions. IF ANYONE IS PLAYING CLOSE TO THE FENCE WITH THEIR CASH POSITION, THIS MIGHT HURT A LITTLE. POSSIBLE BIG AL OPPORTUNITY TO DELIVER TO COMPETITION IN YEAR THREE
Bought production for A1 in High End which will be introduced next year to market.
We have all contribution margins above 30% with exception of Aft. I don’t think there is any way to get this product above 30% due to our horrid automation setting for this product from last year. I increased Automation wherever possible even in Aft and Agape so that we can get ALL our margins above 30% for next round.
Currently our sales forecast match our ability to produce so we are painting a picture of BEST CASE SCENARIO. That is why cash position looks so high at end of year. We can adjust our sales forecast to worst case scenario tonight so that we can see how it affects our Ending Balance.

By the way from last round.

We had the highest market share in almost every segment.
Our customer satisfaction survey scores and customer awareness was the highest in every segment.
We had the highest Sales Revenue.
We did have lower Net Profit for two reasons. We spent more on Promo Budget and Sales Budget which is the reason we had highest awareness and survey score. Also, we had a couple of products where our prices were slightly lower than competition which led to lower margins.
The lower prices and spending more on Promo and Sales also led to a lower rating on some of the ratios.
Besides that we are basically in about the same position as Chester, Baldwin, and Digby as related to capital Investments going into next round.

Well, I guess we will get started around 9 p.m. I will talk to you all then.

Beau Robertson

Field Manager

Pulte-Centex-Del Webb Homes

Mobile 404.732.4454
Fax 678.245.5393

beau.m.r...@pulte.com

Sun City Peachtree Community

*Service requests may be scheduled by dialing 770.381.3457 Monday-Friday 8:30-5:30 or at delwebb.com*

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Doug Martin

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Apr 12, 2010, 8:16:21 AM4/12/10

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Beau: Thanks for taking the time to put this together. Which conference call # are we using tonight? Ken; Are we using yours?

DOUG

russel...@wachovia.com

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Apr 12, 2010, 8:41:01 AM4/12/10

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Thanks Beau. I think we performed well the first round! I hated to see Ferris take a Big Al loan.

Russell

Beau Robertson <Beau.M.R...@Pulte.com>
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04/12/2010 07:27 AM

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Subject	Conference Call Tonight

Hello Everyone,

Hope everyone had a good weekend! Just a couple of things:

I have uploaded some decisions to get us started tonight. I will try to explain a little of the thought process below.

1. If you look at the entries made by each team you can definitely tell which teams went by Expert Guide. Teams Baldwin, Chester and Digby went directly from the guide. It looks like they typed ALL of their entries directly from the Expert Guide. They ended the first round in the same position in almost every category.
2. One thing I noticed on the R &D Page. If you remember, we had the opportunity to adjust Agape in the size segment to the max and it would still put the product 1 year behind the ideal spot for that segment. Therefore for the rest of the game unless you create a new product you will always be “at best” 1 year behind the ideal spot. I think we should go ahead and bite the bullet now and lose 1 to 1 and ½ years of mediocre to slim sales and create new product to obtain ideal spot and hopefully get 4 good to great years of sales. The only way competition could match is to create their own new product in size segment and it looks like everyone will be entering High for now to follow directions from book.
3. Also, by entering a new product into the size segment, I think Agape would then be of better use to be repositioned to help strengthen our Traditional Segment. Both Adam and Agape have been positioned to enter Round 4 in ideal spot. We should then be very, very strong in Traditional from Round 4 through Round 8.
4. Also, we need to remember to enter all new or repositioned products to start the year ½ year ahead of the ideal spot and finish the year ½ year behind ideal spot. I don’t think we did this with our first new product. It will still enter segment in a very good position.
5. I have repositioned Able so that it is in limbo between the Low Segment and Traditional. It should hit ideal spot in low segment at beginning of year 7. We will have to think about repositioning Acre next year. After Acre has been repositioned we should have our strongest years in low end in years 5,6, 7, 8.
6. Next year we can continue to reposition A1 to leading edge of high end segment and possibly introduce one new product to high end segment. This would then give us two products in High End, Traditional, and Low End and One product in Size and Performance.
7. In Production, thought process is to max out on Low End Product at 2800 capacity and increase our capacity for next year. If we have inventory for next year we can use the left over inventory combined with maxing out production again in year three combined with a VERY LOW PRICE to put a big punch to the gut to the competitions. IF ANYONE IS PLAYING CLOSE TO THE FENCE WITH THEIR CASH POSITION, THIS MIGHT HURT A LITTLE. POSSIBLE BIG AL OPPORTUNITY TO DELIVER TO COMPETITION IN YEAR THREE
8. Bought production for A1 in High End which will be introduced next year to market.
9. We have all contribution margins above 30% with exception of Aft. I don’t think there is any way to get this product above 30% due to our horrid automation setting for this product from last year. I increased Automation wherever possible even in Aft and Agape so that we can get ALL our margins above 30% for next round.
10. Currently our sales forecast match our ability to produce so we are painting a picture of BEST CASE SCENARIO. That is why cash position looks so high at end of year. We can adjust our sales forecast to worst case scenario tonight so that we can see how it affects our Ending Balance.

By the way from last round.

1. We had the highest market share in almost every segment.
2. Our customer satisfaction survey scores and customer awareness was the highest in every segment.
3. We had the highest Sales Revenue.
4. We did have lower Net Profit for two reasons. We spent more on Promo Budget and Sales Budget which is the reason we had highest awareness and survey score. Also, we had a couple of products where our prices were slightly lower than competition which led to lower margins.
5. The lower prices and spending more on Promo and Sales also led to a lower rating on some of the ratios.
6. Besides that we are basically in about the same position as Chester, Baldwin, and Digby as related to capital Investments going into next round.

Doug Martin

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Apr 12, 2010, 12:14:22 PM4/12/10

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Russell: I love sarcasm.

Andrew Caldwell

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Apr 12, 2010, 12:35:18 PM4/12/10

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Guys. Hope all is well.

Beau and I met over lunch and went through Round 2 thoroughly. He has uploaded our latest outlook. Please take time to review the file before our time together tonight. That should help speed our executive session up a little tonight. Take care.