D.R. Horton, Inc.

Good morning and welcome to the D.R. Horton America's Builder, the largest builder in the United States, fourth quarter 2020 earnings call and webcast. At this time, all participants are in a listen-only mode. An interactive 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. I will now turn the call over to Jessica Hansen, Vice President of Investor Relations for D.R. Horton. Thank you. You may begin.

Thank you, Paul, and good morning. Welcome to our call to discuss our fourth quarter and fiscal 2020 financial results. 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.L. Horton on the date of this conference call, and D.L. 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.L. 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.dealhorton.com, and we plan to file our 10-K towards the end of next week. 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. The R. Horton team finished the year with a strong fourth quarter, which included an 81% increase in net sales orders to 23,726 homes, and a 60% increase in consolidated pre-tax income of $1.1 billion, and a 27% increase in revenues to $6.4 billion. Our pre-tax profit margin for the quarter improved 340 basis points to 16.5%, and our earnings per diluted share increased 66% to $2.24. For the year, consolidated pre-tax income increased 40% to $3 billion on $20.3 billion of revenues. Our pre-tax profit margin for the year improved 260 basis points to 14.7%, and our earnings per diluted share increased 49% to $6.41. We closed a record 65,388 homes this year, an increase of over 8,400 homes, or 15% from last year. Our home building return on inventory was 24.6%, and our return on equity was 22.1%. These results reflect the strength of our home building and financial service team, our ability to leverage deal hoarding scale across our broad geographic footprint, and our product positioning to offer homes at affordable price points across multiple brands. Our home building cash flow from operations of 2020 was $1.9 billion. Over the past five years, we have generated over $5 billion of cash flow from home building operations, while growing our consolidated revenues by 88% and our earnings per share by 216%. During this time, we also more than doubled our book value and reduced our home building leverage to 17.5% while significantly increasing our returns on inventory and equity. Housing market conditions are currently very strong, and our teams are focused on maximizing returns while increasing our market share. However, we remain cautious regarding the impact of the COVID-19 pandemic and other external factors may have on the economy and our operations in the future. We believe our strong balance sheet, liquidity, and experienced 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 the return on our inventory investments in each of our communities based on local housing market conditions. With 38,000 homes in inventory, an ample supply of lots, and continued strong sales trends in October, we are well positioned for another great year in 2021. Mike?