1038217--3/28/2008--TARRAGON

related topics

{loan, real, estate}

{stock, price, share}

{condition, economic, financial}

{investment, property, distribution}

{cost, contract, operation}

{financial, litigation, operation}

{debt, indebtedness, cash}

{loss, insurance, financial}

{capital, credit, financial}

{cost, regulation, environmental}

{personnel, key, retain}

{provision, law, control}

{interest, director, officer}

{acquisition, growth, future}

{stock, price, operating}

We have a significant amount of debt maturing in the near term and are currently not in compliance with covenants in certain of our loan agreements. We have had to take significant impairment charges against certain of our real estate assets, and a continuing decline in the homebuilding industry or other changed circumstances could result in additional write-downs. Our ability to grow our businesses depends on our ability to access capital on favorable terms. Our substantial indebtedness limits our flexibility in adverse market conditions. Risks Related to Market Conditions and Our Development Business We may experience a continuing decline in demand for new homes in the markets in which we operate. Our customers may not be able to obtain suitable mortgage financing. Future cash flows from our development projects may be lower than expected. We may continue to experience high buyer default rates. Our future operations may be adversely affected by high inflation. We may not be able to complete planned development projects or those projects may not be profitable. We may have to hold our condominium conversion inventory longer than we anticipated. Our development business is subject to warranty and liability claims in the ordinary course of business that can be significant. Risks Related to our Businesses Generally Increases in interest rates could materially increase our interest expense or could reduce our revenues. The regional concentration of our assets may increase the effects of adverse trends in those markets. Our growth strategy for our Investment Division is dependent on our ability to identify a suitable joint venture partner. We may not be able to sell our apartment communities at the desired time or price. Property ownership through partnerships and joint ventures generally limits control of those investments and entails other risks. Increased insurance costs and reduced insurance coverage may affect our results of operations and increase our potential exposure to liability. We have in the past, and will continue to, engage in transactions with related parties, which may cause a conflict of interest and negatively affect our business. We are subject to environmental laws and regulations, and our properties may have environmental or other contamination. Our business could be adversely affected by the loss of key personnel. Risks Related to Our Capital Stock and the Securities Markets Generally Failure to satisfy the listing requirements of The Nasdaq Global Select Market could result in our common stock being delisted. The market price of our common stock has been highly volatile. We are subject to class action securities litigation that could be costly to defend and distracting to management. Shares of common stock eligible for public sale could adversely affect the market price of our common stock. Our governing documents contain anti-takeover provisions that may make it more difficult for a third party to acquire control of us.

Full 10-K form ▸

1038217--3/28/2008--TARRAGON_CORP