917857--3/14/2007--DOMINION_HOMES

related topics

{financial, litigation, operation}

{cost, contract, operation}

{condition, economic, financial}

{loan, real, estate}

{debt, indebtedness, cash}

{competitive, industry, competition}

{gas, price, oil}

{loss, insurance, financial}

{personnel, key, retain}

{stock, price, operating}

{cost, operation, labor}

{product, market, service}

{regulation, change, law}

Our business is cyclical and significantly affected by changes in national and local economic, business and other conditions, most of which are beyond our control. We are significantly leveraged and depend on the availability of financing. The homebuilding industry is highly competitive. We have a significant investment in land that exposes us to asset valuation risk, including future losses on the sale of excess land and the potential for recognition of additional impairment reserves that could impact profitability. Interest rate increases or changes in federal lending programs could adversely affect sales of our homes. High foreclosure rates in communities where we build may adversely affect our sales results. The outcome of lawsuits brought against the Company may materially and adversely affect our business, financial condition or operating results. Unfavorable media reports regarding the Company may materially and adversely affect our sales. If we do not satisfy the terms of our debt agreements which include Covenants that restrict our ability to engage in certain activities and specify certain financial performance criteria, our lenders could declare a default Our business is subject to substantial government regulation which could cause delays, increase costs, and restrict or prohibit homebuilding activity in certain regions. We operate in a limited number of geographic areas. Our success depends on our ability to manage our developed lot inventory and speculative home inventory. Adverse weather conditions may prevent or delay the construction of homes and reduce the number of home sales Delays in construction of our homes could cause mortgage commitments to expire. Our new product offerings may not be attractive to customers. The loss of certain key personnel could adversely effect our operations. Our operating results vary on a quarterly basis. We are subject to warranty claims arising in the ordinary course of business that could be costly. Litigation related to construction defects could adversely affect our business. Our financial results are subject to inflation and other cost increases. Material or labor shortages can adversely affect our business. Application of critical accounting policies requires management to make certain estimates and assumptions that may impact our future financial results.

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917857--3/14/2007--DOMINION_HOMES_INC