Brookfield Homes Corporation (NYSE:BHS) on Oct. 30 reported a net loss of$26 million (-$0.95 per share) for its third quarter ended Sept. 30, including $27 million in impairments and write-downs of $32 million internally and another $9 million related to joint ventures.

Revenues for the quarter fell 9% to $110 million as home closings rose slightly to 184 from 179 during last year's third quarter. Average selling prices, however, fell 13.3% to $578,000 due to a change in product mix, increased sales incentives and lower selling prices.

New home orders were up 25% to 163 and lot sales totaled 22, up one from last year's quarter. Active communities totaled 33, flat with last year.

At September 30, 2008, the company¹s lots owned or controlled total 25,678, 12,161 owned, 2,545 in joint ventures and 10,972 optioned. The total is up marginally from yearend, 2007.

Brookfield generated $12 million in free cash flow during the quarter and listed no cash on hand on its balance sheet. Brookfield utilizes a credit line with Brookfield Asset Management, a subsidiary, which was recently increased to $300 million.

As of Sept. 30, the company net debt-to-capitalization ratio was 67%.

In its earnings released, the company stated, "The company continues to monetize its inventory of lots ready for home construction, which includes over 350 homes completed or under construction. The company¹s inventory of unsold completed homes was 77 units at September 30, 2008, down significantly from the end of 2007. The company does not expect to invest significantly in the development of land while the demand for new homes continues at the current absorption levels."

The company announced that its CFO, Paul G. Kerrigan, was leaving the company for personal reasons and that the board had suspended the company's twice-annual stock dividend payment.

Regarding market conditions, the company said in its statement, "The United States housing industry remains weak, with the impact in recent months of the credit crisis spreading and the corresponding loss of jobs. As a result, consumer confidence has declined and has kept many potential homebuyers from taking advantage of lower home prices. In addition, there are fewer mortgage products and tougher lending criteria, leading to difficulties in obtaining financing for the purchase of a home. Despite these conditions, the company believes there is pent-up demand in certain markets, as evidenced by increased traffic in the third quarter which resulted in more home closings and net new orders. However, if negative market conditions prevail, the company anticipates that increasing foreclosures and job losses could offset this pent up demand."