D.R. Horton, Inc.

Good morning and welcome to the third quarter 2022 earnings conference call for Dior Horton, America's builder, the largest builder in the United States. At this time, all participants have been placed on a listen-only mode and we will open the floor for your questions and comments following the presentation. If you would like to enter the queue to ask a question, please press star 1 on your telephone keypad at any time. I will now turn the call over to Jessica Hansen, Vice President of Investor Relations for Dior Horton.

Thank you, Paul, and good morning. Welcome to our call to discuss our results for the third quarter of fiscal 2022. Before we get started, today's call includes 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 D.L. 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.drhorton.com, and we plan to file our 10-Q tomorrow. 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. I am pleased to also be joined on this call by Mike Murray and Paul Romanowski, our executive vice presidents and co-chief operating officers. And Bill Wheat, our Executive Vice President and Chief Financial Officer. The DL team delivered a strong third quarter, highlighted by a 53% increase in earnings to $4.67 per diluted share. Our consolidated pre-tax income increased 54% to $2.2 billion on a 21% increase in revenues. And our consolidated pre-tax profit margin improved 540 basis points to 24.8%. Our home building return on inventory for the trailing 12 months into June 30th was 41.7%, and our consolidated return on equity for the same period was 35.1%. These results reflect our experienced teams, their production capabilities, and our ability to leverage DR Horton's scale across our broad geographic footprint. Housing market demand remained strong during most of the course. In June, we began to see a moderation in demand and an increase in cancellations due to the rapid rise in mortgage rate and continued inflationary pressures across most of the economy. The supply of both new and resale homes at affordable prices remains limited. Although demand has slowed from the frenzy pace we experienced over the past year, there are still qualified buyers in the market today as household formations continue and inflationary pressures drive rents higher. 54% of the homes we closed in the past 12 months were priced under $350,000, and our average sales price is approximately $100,000 lower than the average of other public home builders, positioning us to continue aggregating share. There are still disruptions in the supply chain and tightness in the labor market that continue to delay the completion of our homes under construction. These construction delays and changes in demand environment led us to reduce our full-year closing guidance for fiscal 2022. We purposely slowed our number of home starts in the third quarter to position our inventory to align with market conditions. Although the uncertainty of this market transition may persist from some time, We believe we are well positioned to meet changing market conditions with our experienced teams, affordable product offerings, flexible lot supply, and our strong trade and supplier relationships. The strength of our balance sheet, liquidity, and low leverage provide a significant financial flexibility, and we will continue managing our product offerings, incentives, home pricing, sales pace, and inventory levels to optimize returns. Michael?