D.R. Horton, Inc.

Good morning and welcome to the third quarter 2023 earnings conference call for Dior 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. If you wish to enter the Q&A queue, please press star 1 on your phone 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 2023. Before we get started, today's call includes forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Although DR 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.drhorton.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. 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. For the third quarter, the D.O. Horton team delivered solid results, highlighted by earnings of $3.90 per diluted share. Our consolidated pre-tax income was $1.8 billion on an 11% increase in revenues to $9.7 billion, with a pre-tax profit margin of 18.3%. Our homebody return on inventory for the trailing 12 months into June 30th was 31.8%, and our return on equity for the same period was 24.3%. Despite continued high mortgage rates and inflationary pressures, our net sales orders increased 37% from the prior year quarter. As the supply of both new and existing homes at affordable price points is limited, and demographics supporting housing demand remain favorable. We are focused on consolidating market share by supplying more homes to meet home buyer demand, while maximizing the returns and capital efficiency in each of our communities. With improvements in both labor capacity and availability of materials, our cycle times are decreasing, positioning us to release homes for sale earlier in the construction cycle. We are pleased that we were able to increase our home building starts to 22,900 homes this quarter, which was supported by a 6% sequential increase in our active selling communities. Our home building operating margins are lower than the record high margins we reported last year due to cost inflation and pricing adjustments and incentives we implemented to address home buyer affordability challenges. caused by higher mortgage rates. However, our margins improve sequentially from the March to June quarter as home prices and incentives have stabilized and some reductions in construction costs are now being realized in our homes closed. We are well positioned with our experienced operators, diverse product offerings, flexible supply, and strong capital and liquidity positions to produce and sustain consistent returns growth, and cash flow. We will maintain our disciplined approach to investing capital to enhance the long-term value of our company, including returning capital to our shareholders through both dividends and share repurchases on a consistent basis. Paul?