As Motorola has increased focus on smartphones, potentially higher smartphone sales could also prompt upside in average pricing and, consequently, gross margins.

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Adjusted homebuilding gross margin expanded 210 basis points to 23.2% on the back of an increased average sales price, increased deliveries from new higher margin communities and reduced incentives.

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In addition, gross margin percentage on home sales improved over year-earlier levels on the back of an increase in average sales prices and lower valuation adjustments.

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