Jeff Kaminski: Yes. I can take that. So on the incentive side, the assumptions on incentives are really baked into what’s already been offered and in some cases what the division needs, or fields they need on a community-by-community basis maybe to incent some of the buyers to actually close on the home. So there is some conservatism baked into the cost side on the incentives whereby, we’ve included a bit more than actually is contracted at this point in those out quarters. So I feel like there’s enough cushion in there to cover what we’ll need to do to get the closings. On the cost side of things, like we’ve mentioned a couple times, once the home starts, the cost of the home are pretty well baked in. So there’s not a lot of offset there coming from any surprises.
Most of it’s just basically the cushion that we have involved there. The other side of this is the percentage that we have locked on current mortgages. It’s a pretty high percent right now with our mortgage company. So we have a higher confidence in closings that’ll occur, so with that less variability on gross margin out in the back half of the year. The final point I guess I’d make is, as we progressed through last year, we did see some costs coming down and as we started those homes, those homes on the lower cost basis, will be hitting in the second, third quarters, fourth quarters a little bit up in here because of some of the starts, we haven’t quite finalized for the fourth quarter, but for the most part we’re seeing some of the cost savings already flowing through, but the bulk of what Rob talked about earlier will actually flow through in the early part of next year.
Rafe Jadrosich: That’s really helpful. And just to clarify, going forward, are you assuming incentives are higher in your deliveries, like the second, third and fourth quarter than what was in the first quarter? Just trying to understand the timing of like when you offered those and when they’ll actually start to flow through?
Jeff Kaminski: I don’t think they’re necessarily higher. One of the more difficult things we’ve had to contend with was the variability in the mortgage market and just buyer behavior. As rates were peaking and we were seeing a high level of cancellations coming through, we were having to get a little more aggressive on incentives to hold some of those buyers. I think the more stable we see rates and again with the high percentage of buyers that are currently locked on mortgage rate, we don’t think we’ll have to do quite as much. But despite that, we still have included a little bit of talk on the cost side just to compensate for whatever we do have to do in the back half. So that’s kind of our outlook right now. I mean we had a nice beat on the first quarter.
We forecasted basically the same way for the rest of the year as we just did for the first quarter. And we’re hoping to be right within that range that we provided earlier for both the second quarter and the full-year.
Operator: And the next question comes from the line of Truman Patterson with Wolfe Research. Please proceed with your question.
Paul Przybylski: Thanks. It’s actually Paul Przybylski. I was wondering, as your construction times normalize, what level of incremental capital do you think you pull out of €“ or cash you can pull out of working capital and the timing of that flowing through the financials?
