D.R. Horton, Inc.

Good morning and welcome to the fourth quarter 2022 earnings conference call for D.R. 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 after the presentation. If you would like to join the queue at any time, you may press star 1 on your telephone keypad to enter the queue. Should you wish to remove yourself from the queue, you may press star two. I will now turn the call over to Jessica Hansen, Vice President of Investor Relations for D.R. Horton. Jessica, the floor is yours.

Thank you, Tom, and good morning. Welcome to our call to discuss our fourth quarter and fiscal 2022 financial results. Before we get started, today's call includes forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Although D.O. 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.O. Horton on the date of this conference call, and D.O. 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 D.O. Horton's annual report on Form 10-K and subsequent reports on Form 10-Q all of which are 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-K towards the end of next week. After this call, we will post updated investor and supplementary 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. We are also 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 D.R. Horton team finished the year with a solid fourth quarter, which included a 20% increase in consolidated pre-tax income to $2.1 billion and a 19% increase in revenues to $9.6 billion. Our pre-tax profit margin for the quarter improved 10 basis points to 21.4%, and our earnings for diluted share increased 26% to $4.67. For the year, consolidated pre-tax income increased 42% to $7.6 billion on $33.5 billion of revenue, which increased 21%. Our pre-tax profit margin for the year improved 350 basis points, 22.8%, and our earnings per diluted chair increased 45% to $16.51. We closed a record 83,518 homes this year in our home building and single-family rental operations, and our home building SG&A as a percentage of revenues of 6.8% was an all-time low. Our home building return on inventory for the year was 42.8%, and our consolidated return on equity was 34.5%. Our strong financial performance during a year of significant challenges and volatility reflects the strength of our experienced teams, industry-leading market share, broad geographic footprint, and diverse product offerings. Our home building cash flow from operations for 2022 was $1.9 billion. Over the past five years, we have generated $7.5 billion of cash flow from home building operations, while growing our consolidated revenues by 138% and our earnings per share by 503%. During this time, we also more than doubled our book value per share, consistently kept our home building leverage under 20%, and increased our home building liquidity by $1.8 billion, all while significantly increasing our returns on inventory and effort. During most of the year, demand for our homes was strong. In June, we began to see a moderation in housing demand that has continued and accelerated through today. The rapid rise in mortgage rates coupled with high inflation and general economic uncertainty have made many buyers pause in their home buying decision or choose to not move forward with their home purchase. The supply of both new and resale homes at affordable price points remains limited, and the demographics supporting housing demand remain favorable. The uncertainty of this market transition may persist for some time and could get more challenging if mortgage rates continue increasing. However, we are well positioned to meet changing market conditions with our experienced teams, affordable product offerings, flexible lot supply, and great trade and supplier relationships. Our strong balance sheet, liquidity, and low leverage provide us financial flexibility. We will continue to focus on turning our inventory and managing our product offerings, incentives, home pricing, sales pace, and inventory levels to meet the market, optimize returns, increase market share, and generate increased cash flow from our home building operations. Mike?