D.R. Horton, Inc.

Good morning, and welcome to the third quarter 2021 earnings 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. We ask that you please limit yourself to one question and one follow-up during the Q&A portion of the call. 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, Daryl, and good morning. Welcome to our call to discuss our results for the third quarter of fiscal 2021. Before we get started, today's call includes 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 factors that could lead to material changes in performance is contained in DR Horton's annual report on Form 10-K and its 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.deohorton.com, and we plan to file our 10-Q early 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 Auld, our president and CEO.

Thank you, Jessica, and good morning. How are you? I'm pleased to also be joined on this call by Mike Burry, our Executive Vice President and Chief Operating Officer, and Bill Wheat, our Executive Vice President and Chief Financial Officer. The artwork team delivered an outstanding third quarter, highlighted by a 78% increase in earnings to $3.06 per diluted share. Our consolidated pre-tax income increased 81% on a 35% increase in revenues to $7.3 billion. and our pre-tax profit margin improved 490 basis points to 19.4%. Our home building return on inventory for the trailing 12 months ended June 30th was 34.9%, and our consolidated return on equity for the same period was 29.5%. These results reflect our experienced teams and their production capabilities, our ability to leverage the Overton scale across our broad geographic footprint, and our product positioning to offer homes at affordable price points across multiple brands. Housing market conditions remain very robust, and we are focused on maximizing returns and increasing our market share further. However, multiple disruptions in the supply chain combined with the improvement in economic conditions and strong demand for new homes have resulted in shortages in certain building materials and tightness in the labor market. which has caused our construction time to become less predictable. As our top priority is to consistently fulfill our commitments to our homebuyers, we have slowed our home sales pace to more closely align to our current production levels and are selling homes later in the construction cycle when we can better ensure the certainty of home close date for our homebuyers. We expect to work through these issues and increase our production capacity. We started construction on 22,600 homes this quarter, and our homes in inventory increased 44% from a year ago to 47,300 homes at June 30, 2021, positioning us to finish 2021 strong and to achieve double-digit growth again in 2022. We believe our strong balance sheet, liquidity, and loan leverage 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 pace, and inventory levels to optimize the return on our inventory investments. Mike?