D.R. Horton, Inc.

Good morning and welcome to the fourth quarter 2023 earnings conference 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. If you wish to enter the queue, you may press star 1 on your phone at any time. I will now turn the call over to Jessica Hansen, Senior Vice President of Communications for D.R. Horton.

Thank you, Tom, and good morning. Welcome to our call to discuss our fourth quarter and fiscal 2023 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.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.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.dohorton.com and we plan to file our 10-K late 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 Executive Vice Chair.

Thank you, Jessica, and good morning. I am pleased to also be joined on this call by Paul Romanowski, our President and Chief Executive Officer. Mike Murray, our Executive Vice President and Chief Operating Officer, and Bill Wheat, our Executive Vice President and Chief Financial Officer. When we talk about our results, I'd like to congratulate Paul on his well-deserved promotion to CEO that was effective the first of October. We have been preparing for this transition internally for quite some time. We are positioning our leadership throughout the company for the future and I will still be actively involved as Executive Vice Chair of the Board of Directors. Our executive team remains in place with the same individuals, and Paul has the support of our executive, region, and division leadership. He is a proven leader who has been successful throughout his career. Now onto our results. The Dale Horton team finished the year with a solid fourth quarter results, highlighted by earnings of $4.45 per diluted chair, Our consolidated pre-tax income was $2 billion on a 9% increase in revenues to $10.5 billion with a pre-tax profit margin of 19.2%. For the year, earnings per diluted share was $13.82, and our consolidated pre-tax income was $6.3 billion on a 6% increase in revenues to $35.5 billion with a pre-tax profit margin of 17.8%. We closed a record 91,204 homes and apartments this year in our home building and rental operations. Our cash flow from operations for 2023 was $4.3 billion. Our home building return on inventory for the year was 29.7%, and our return on equity was 22.7%. Despite continued high mortgage rates and inflationary pressures, our net sales orders increased 39% from the prior year quarter. As a result 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 at affordable price points 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 improve our housing inventory terms. We are well positioned with our experienced operators, affordable product offerings, flexible lot supply, and strong capital and liquidity positions to generate strong cash flows and produce consistent returns. We will maintain our disciplined approach to investing capital to enhance the long-term value of the company including returning capital to our shareholders through both dividends and share repurchases on a consistent basis. Paul?