D.R. Horton, Inc.

Greetings and welcome to the first quarter 2019 earnings conference call for D.R. Horton, America's builder, the largest builder in the United States. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jessica Hansen, Vice President of Investor Relations for D.R. Horton. Jessica, please go ahead.

Thank you, Kevin, and good morning. Welcome to our call to discuss our results for the first quarter of fiscal 2019. Before we get started, today's call may include comments that constitute forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Although D.R. Horton believes any such statements are based on reasonable assumptions there is no assurance that actual outcomes will not be materially different. All forward-looking statements are based upon information available to D.R. Horton on the date of this conference call, and D.R. Horton does not undertake any obligation to publicly update or revise any forward-looking statements. Additional information about issues that could lead to material changes in performance is contained in D.R. Horton's annual report on Form 10-K, which is filed with the Securities and Exchange Commission. This morning's earnings release can be found on our website at investor.drhorton.com, and we plan to file our 10-Q early next week. After this call, we will post an investor presentation and supplementary data to our investor relations site on the presentation section under News and Events for your reference. The supplementary data relates to our home building return on inventory, home sales gross margin, changes in active selling communities, product mix, and our mortgage operations. Now, I will turn the call over to David Auld, our President and CEO.

Thank you, Jessica, and good morning. In addition to Jessica, I'm pleased to be joined by Mike Murray, our Executive Vice President and Chief Operating Officer, and Bill Wheat, our Executive Vice President and Chief Financial Officer. The D.R. Horton team delivered a solid first quarter of 2019. Our consolidated revenues increased 6% to $3.5 billion. Pre-tax income was $376 million, and our pre-tax profit margin was 10.7%. For the trailing 12 months, our home building return on inventory improved 230 basis points from a year ago to 19.3%. These results reflect the strength of our operational teams, our ability to leverage dealer and scale across our broad geographic footprint, and our product positioning to offer affordable homes across multiple brands. As we discussed on our call in early November, sales prices for both new and existing homes have increased across most of our markets over the past several years, which coupled with rising interest rates has impacted affordability and resulted in some moderation of demand for homes over the last few months, particularly at higher price points. We continue to see good demand and as limited supply homes at affordable prices across all of our markets, and economic fundamentals and financing availability remain solid. Our net sales orders during the first quarter increased 3% versus last year. As we indicated on our last call, our sales in October were down from the prior year. However, our sales comparisons improved in November, and December was a good sales month. We are pleased with our positioning of affordable product offerings for the upcoming spring selling season, and we will adjust to future changes in market conditions as necessary. Our strategic focus is to continue consolidating market share while growing our revenues and profits, generating strong cash flows and returns, and maintaining a flexible financial position. With a conservative balance sheet that includes an ample supply of homes, lots, and land to support growth, We are well positioned for the remainder of 2019 and future years. Mike?