D.R. Horton, Inc.

Good morning and welcome to the third quarter 2026 earnings conference call for Dior Horton, America's Builder. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the call over to Jessica Hansen, Senior Vice President of Communications for Dior Horton.

Thank you, Paul, and good morning. Welcome to our call to discuss our financial results for the third quarter of fiscal 2026. 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.R. Horton on the date of this conference call, and D.R. 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.R. 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 and our supplemental data presentation can be found on our website at investor.drhorton.com and we plan to file our 10-Q later this week. After this call, we will also post our updated investor presentation to our investor relations site on the presentation section under news and events for your reference. Now, I will turn the call over to Paul Romanowski, our president and CEO.

Thank you, Jessica, and good morning. I'm pleased to also be joined on this call by Mike Murray, our chief operating officer, and Bill Wheat, our chief financial officer. The D.R. Horton team delivered a solid third quarter, highlighted by earnings per diluted share of $3.20. Consolidated pre-tax income totaled $1.2 billion on $9.2 million of revenues, resulting in a pre-tax profit margin of 13.3%. We closed 23,983 homes during the quarter, which was at the high end of our guidance range, and achieved a home sales gross margin of 20.7%. We remain focused on capital efficiency to generate strong operating cash flows and deliver compelling returns to our shareholders. Over the past 12 months, we generated $3.4 billion of cash from operations and returned all of it to shareholders through repurchases and dividends. For the trailing 12 months and to June 30th, our home building pre-tax return on inventory was 17%, while our consolidated returns on equity and assets were 12.8% and 8.5%. Our return on assets ranks in the top 20% of all S&P 500 companies for the past 3, 5, and 10-year periods, demonstrating that our disciplined, returns-focused operating model delivers sustainable results and positions us well for continued value creation. We work every day to leverage our industry-leading platform, unmatched scale, Efficient operations and experienced teams to bring homeownership opportunities at affordable price points to more Americans. 65% of our mortgage companies' closings this quarter were to first-time homebuyers. Our teams manage each community with discipline, balancing pace, price, incentives, and inventory levels to meet demand and maximize returns. Affordability constraints and cautious consumer sentiment continue to impact new home demand, and our operators will continue to adjust as market conditions evolve.