D.R. Horton, Inc.

Greetings, and welcome to the second 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. Please go ahead, Jessica.

Thank you, Kevin, and good morning. Welcome to our call to discuss our results for the second 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 DR Horton on the date of this conference call, and DR 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 DR Horton's annual report on Form 10-K and most recent quarterly report on Form 10-Q, both of which are 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 humbling 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 second quarter of 2019. Our consolidated revenues increased 9% to $4.1 billion. Pre-tax income was $463 million, and our pre-tax profit margin was 11.2%. The spring selling season is going well, as our net sales orders increased 52% sequentially and 6% from the prior year quarter. These results reflect the strength of our operational teams, our ability to leverage the Orton scale across our broad geographic footprint, and our product positioning to offer affordable homes across multiple brands. As we have discussed on our last two calls, affordability concerns have caused some moderation of demand for homes since late 2018. particularly at higher price points. However, this spring, we have continued to see good demand and a limited supply of homes at affordable prices across our markets, while economic fundamentals and financing availability remain solid. We are pleased with our product positioning and our April sales trends to date. Our strategic focus is to continue consolidating market share while growing our revenues and profits, generating strong annual 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?