chad no limits speech final

NORTH CENTRAL REGION “NO LIMITS” SALES RALLYChad Dreier Speaking Notes

Mandalay Bay Convention Center August 10, 2006

5:10 p.m.

Good evening. It’s great to be here. I always love coming to Las

Vegas, but more than that, I always enjoy speaking to the region

sales force that delivers half of the company’s sales.

I’m also excited about your theme of “No Limits,” because I think

that’s the right mindset for the current market conditions.

It’s certainly no secret that the entire homebuilding industry is

feeling the effects of a slowdown across the nation.

Last month, Ryland announced that our new orders for the second

quarter were down 39.5%. You might have seen that some of our

competitors had similar announcements. (MDC was down 43%;

Pulte reported a 30% decline; Beazer was off 16%; Standard

Pacific went down 41%; and Centex, even with its “$100,000 OFF”

sale, saw its new orders decline by 21%.)

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North Central Region “NO LIMITS” Sales RallyChad Dreier Speaking Notes

I want you to rest assured that I’m not here to beat anyone up

about sales. One of the things I always hated in church was a

priest that yelled at the congregation about how they needed to go

to church more often. So, I don’t need to tell you we need more

sales.

Instead, I’m here to offer you some words of encouragement. You

guys are the best we have and I know you work tirelessly.

Besides, if life wasn’t a challenge, what fun would it be? You

don’t get better if you don’t face challenges.

As I look around, I know we have the right team to do it.

I compare the current slowdown to a cold. When you catch a cold,

you feel like it’s never going to go away. We’ve just caught a cold,

but it’s going to go away -- because the health and fundamentals

for Ryland and the big homebuilders are all still strong.

In fact, Ryland is in a better financial position than ever.

o Even with the slowdown in the industry, we expect 2006

to be the second-best year in Ryland’s history.

o We’re at $1.4 billion in book equity.

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o We’re investment-grade and have a $750 million line of

credit to continue to grow and support our business.

o We think our return on equity will be around 25.5% --

which puts us in the top 10% of all companies in the

Fortune 500.

In addition to the company’s great financial position, I believe

we’ve got some other fundamentals in our favor:

o Sooner or later, the industry will absorb all of the excess

inventory, incentives will start drying up and new houses

will have an advantage.

o The Fed has indicated that it’s probably at the end of its

rate hikes – and rates are still reasonably favorable for

housing. (Note: You may have to adjust this comment

based on what the Fed does to rates on Aug. 8).

o The economy is still strong and unemployment is still

relatively low nationally at just under 5%.

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o By the time we get to the fourth quarter, the financial

comparisons will be more favorable because that’s when

we began to see the market shift last year.

o Smaller builders are more vulnerable to the slowdown.

We will have opportunity to seize some of their

customers, leveraging our strength and stability as a

leading national homebuilder with 40 years of experience.

o We’ve got demographics on our side. With the projected

growth in population and immigration, we know there will

be a lot more demand for new homes in the future than

ever before. Experts say we’ll need two million new

homes a year.

o Plus, the American Dream of owning a new home is a

constant that prevails through all market conditions.

o And, last, our strategy of geographic diversity,

decentralization and profits over units has made us the

nation’s eighth-largest homebuilder and one of the top-

performing companies in the Fortune 500. It has

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remained constant and guided our success for the last 13

years. And if we stay focused on our strategy and don’t

do anything rash, it will help keep us on track.

Despite all of the new challenges you faced this year, you folks in

this room (145 sales counselors of the North Central region)

managed to collectively exceed your sales goals in this contest by

109%.

That tells us something very important. And the message is a

simple one:

o IT CAN BE DONE.

o And, most importantly: THE DIFFERENCE IS YOU.

By this I mean that all of you set “No Limits” to exceed your goals

in the sales contest and you succeeded. You ignored the market

obstacles and found ways to overcome them to outsmart and

outsell the competition.

I encourage you to bring that same mental attitude of winning and

accepting “No Limits” that you brought to this sales challenge to

your jobs every day.

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Right now, buyers are being bombarded with discounts and offers

that make it hard for them to see the value in our homes over

anyone else’s. There’s one thing that makes the biggest

difference in cutting through the clutter.

I’ll say it again: The difference is YOU. The difference is the effort

you make to drive traffic and convert prospects to sales. The

difference is having “No Limits” to your goals and motivation.

So, what can you do to make the difference?

o Walk every customer through our models.

o Follow up with every customer every time.

o Keep training and trying new things.

o Reach out to brokers; work for referrals.

o Use Ryland’s resources. See what’s working around the

company and adapt it to your market.

o Know your competition.

We’re already in the third quarter, and we’re down on sales, but

the game can still be won.

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When I learned about the theme of “No Limits” for this sales trip, I

thought a lot about what “No Limits” means to me.

And I came up with “Chad’s Five Commandments to Living

With No Limits.” These five commandments have guided me

through some challenges in my own life and career. I hope they

can also help inspire you:

1. First and foremost, THINK POSITIVE. My belief has

always been: “If you think you can, you can. If you

think you can’t, you’re right.” That goes along with my

next point…

2. BELIEVE IN YOURSELF. Don’t buy into the negativity

and hype expressed in the media. It’s like how I deal

with Wall Street. If I believed and reacted to

everything the analysts and the media said about

homebuilding, I would have run screaming into the

night a long time ago. But I know better. I believe in

this company and in all of you. We have outperformed

95% of the industries in America and have made

ourselves one of the top-performing companies in the

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Fortune 500. No analyst’s report or Wall Street

Journal article can undermine that. So, believe in

yourself, have confidence in your ability to sell through

a tougher market, and you will be a success.

3. DON’T BE AFRAID TO TRY SOMETHING NEW. A

lot of people limit themselves because they fear the

unknown. They worry: “If I try something new and it

doesn’t work, I’ll get in trouble.” Or “I might make

things worse.” This is what I call “paralysis by

analysis.” While we debate the merits of doing

something new and innovative, we let valuable time

pass, get indecisive and – potentially – miss out on

opportunity. I want to remind you that if we don’t

challenge ourselves to try new things, we will never

make progress. In this newer, tougher market, we

have to adapt, react fast, be decisive, and step out of

our comfort zones in order to continue to be our best.

4. KEEP BROADENING YOUR HORIZONS. Like

Michael Jordan or Lance Armstrong, the best athletes

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never stop training. It’s important to keep on improving

yourself, through practice, training, taking classes,

going back to school for a higher degree, or just setting

and achieving higher personal and professional goals.

When I was the CEO of a $2 billion company, I wanted

to be CEO of a $3 billion company. When it was $3

billion, I wanted it to be $4 billion. Now, Ryland’s a

$4.8 billion company… and we have the potential to

keep climbing.

5. MAINTAIN A HEALTHY BALANCE. This is very

important. In today’s tougher climate, a lot of you are

probably experiencing more stress and working harder

than ever. Don’t forget yourself and your family. They

keep you at your best and are also looking to have you

at your best at home. So, take time to decompress,

recharge and treat yourself well.

So, what is ahead of us now? 2007.

As many of you know, 2007 will be Ryland’s 40th anniversary.

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It’s a landmark event for a company to celebrate 40 years in

business – especially with the kind of success we’ve had.

I’m very proud to be part of this chapter in the company’s history

and to have a great 13-year stake in it.

But I’m especially proud of the time that each of you has spent

here and your contributions to our success.

Whether you’ve been with Ryland for 24 years like Alan

Goldsticker (Note to Chad: Alan’s 24-year anniversary with

Ryland is Aug. 15) or just recently joined us, it’s HOW you’ve

marked your time with this company that counts. You are all here

because you accepted “No Limits” and exceeded your goals for

sales and I commend you for it.

Our longevity as a company is important to us, but it’s also a great

benefit to our customers. Ryland’s four decades in business

signal to our customers that they are dealing with one of the most

trusted and stable companies in America.

Now, those of you who know me know I don’t like to wait, so

starting next month, we will begin celebrating Ryland’s 40th

anniversary early. After all, why wait for a good party?

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But it’s more than a celebration. We’re going to turn Ryland’s 40th

anniversary into an opportunity to create value for our customers

and help YOU sell homes.

We’re launching our first national marketing campaign – one of the

biggest Ryland sales and marketing events ever – on Labor Day

weekend.

And I couldn’t think of a better audience than you – half of the

divisions of our company and our top producers – to be the first to

see it.

But before I wrap things up and show it to you, I just want to tell

you again how much I appreciate all of you and your extra effort in

these challenging times.

Let’s keep working hard, making money, having fun and accepting

“No Limits” as we celebrate Ryland’s 40th together!

[PAUSE FOR APPLAUSE]

Thank you.

Now, sit back and watch this.

[TECHNICAL INSTRUCTIONS:

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Audience applause. Exit the stage. Room fades to black.

Dancers and video presentation of the 40th anniversary begins.]

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chad no limits speech final

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