D.R. Horton, Inc.

Good morning, and welcome to the third quarter 2020 earnings conference call for D.R. Horton, America's builder, the largest builder in the United States. At this time, all participants are in listen-only mode. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Jessica Hansen, Vice President, 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 third quarter of fiscal 2020, in addition to current market conditions. 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.L. 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 subsequent reports on Form 10-Q, all of which are or will be filed with the Securities and Exchange Commission. This morning's earnings release can be found on our website at investor.deerhorton.com, and we plan to file our 10-Q in the next day or two. After this call, we will post updated investor and supplementary data presentations to our investor relations site on the presentation section under news and events for your reference. Now, I will turn the call over to David Ald, our president and CEO.

Thank you, Jessica, and good morning. I am pleased to also be joined on this call by Mike Murray, our Executive Vice President and Chief Operating Officer, and Bill Wheat, our Executive Vice President and Chief Financial Officer. We'd like to first again express our gratitude to our country's dedicated field of healthcare workers and to all who are on the front lines caring for our communities. Our thoughts remain with those affected by this pandemic, and our priority continues to be the health and safety of our employees, customers, trade partners, and the communities we serve. During the latter part of March, the impacts of COVID-19 and related widespread reductions in economic activity across the United States began to negatively affect our business. During April, when restrictive stay-at-home orders were in place for most of our markets, our sales orders decreased and our cancellations increased, and our April net sales orders were 1% lower than a year ago. However, as restrictive orders began to be lifted across many markets and economic activity resumed, our sales increased significantly and our cancellations rate returned to normal levels. In both May and June, our net sales orders increased by more than 50% compared to the prior year periods, resulting in a net sales order increase of 38% for the quarter. We sold 5,931 more homes this quarter than the same quarter last year, positioning DR Horton to achieve further gains in market share and scale. We have continued to see strong increases in net sales orders in July compared to the same month last year. Despite the disruption from COVID-19 on our operations, the DR Horton team delivered a record third quarter, including net sales orders of 21,519 homes, a 25% increase in consolidated pre-tax income to $782 million, and a 10% increase in revenues to $5.4 billion. Our pre-tax profit margin for the quarter improved 170 basis points to 14.5%, while our EPS increased 37% to $1.72 per diluted share. Our home building return on inventory for the trailing 12 months ended June 30th, was 21.6%, and our consolidated return on equity for the same period was 19.9%. While housing market conditions are very strong today, we remain cautious as to the impact of COVID-19 may have on the overall economy and our operations in the future. We believe our strong balance sheet, liquidity position, and experienced operating teams position us very well to operate effectively through changing economic conditions. We plan to maintain our flexible operational and financial position by generating strong cash flows from our home building operations and managing our product offerings, incentives, home pricing, sales base, and inventory levels to optimize return on our inventory investments in each of our communities based on local housing market conditions. Mike?