Green Brick Partners, Inc.

Good afternoon and welcome to the Green Brick Partners earnings call for the fourth quarter ended December 31st, 2022. Following today's remarks, we will hold a Q&A session. As a reminder, this call is being recorded and will be available for playback. In addition, a presentation will accompany today's webcast and is also available on the company's website at investors.greenbrickpartners.com. Joining us on the call today is Jim Brickman, co-founder and chief executive officer, Rick Costello, chief financial officer, and Jed Dolson, chief operating officer. Some of the information discussed on this call is forward-looking, including the company's financial and operational expectations for 2023 and beyond. In yesterday's press release and SEC filings, the company detailed material risks that may cause its future results to differ from its expectations. The company's statements are as of today, February 28, 2023, and the company has no obligation to update any forward-looking statements it may make. The comments also include non-GAAP financial metrics. The reconciliation of these metrics and the other information required by Regulation G can be found in the earnings release that the company issued yesterday and in the presentation available on the company's website. With that, I will now turn the call over to Jim Brickman.

Thank you. I am extremely proud that Green Brick finished the year with a record number delivery of over 2,900 homes. Total revenues grew 25% year-over-year to $1.76 billion, with an industry-leading gross margin of 29.8%. Our full-year earnings per share increased 62% to $6.02, and return on equity was up 550 basis points from last year to 31.4%. Both measures are the highest in company history. Despite a record-breaking year, demand was negatively impacted by rising interest rates and consistently high inflation in the second half of the year. However, sales momentum started to pick up in December during a seasonally slower period. December sales were up 43% over the average of the prior six months. Sales activity in the first two months of 2023 continued to be very strong. We believe our sales success is based upon our geographic footprint with desirable lots in supply-constrained locations in Dallas, Atlanta, and Florida. These markets have some of the strongest demographic tailwinds and job growth in the country. Beneficials raised interest rates eight times in the past year and signaled their determination to keep raising interest rates this year, possibly in a less aggressive way until inflation is down to their desirable level. Fortunately, there are several leading indicators that suggest this housing cycle is far different than the back pattern around the 2008 global financial crisis. First, The mortgage market is in a much stronger footing this time. Banks and financial institutions have maintained strict lending standards. Since 2020, borrowers with high credit scores represent close to 70% of originations on average versus 25% in 2006 and 2007. Our homebuyers in the fourth quarter had an average credit score of 742 and a debt-to-income ratio of 39.7%. Second, the supply of single-family homes today remains low compared to the historical norm. As seen on slide four, existing home inventory remains tight. Roughly one-third of homeowners are mortgage-free, and the remaining homeowners, approximately two-thirds, have an interest rate below 4%. Existing homeowners are greatly disincentivized, from entering the resale market because of the resulting need to then trade up from their existing residence to a mortgage with much higher interest rates. This is particularly meaningful to Greenbrick, where 80% of our closing revenues and 75% of our finished and finishing lots are in infill locations. There is already a scarcity of land in infill communities, which translates to fewer new home competitors. So with a much smaller volume of homeowners selling their existing residences, Greenbrick faces a far less competition than in past decades prior to the pandemic when new home sales were only about 10% to 12% of total home sales. Our share of the potential homebuyer pie we think is getting much bigger. Third, job growth in our markets is the best in the nation. Dallas added 235,000 jobs in 2022. Atlanta added 126,000 jobs. As shown on slide 5, an estimated 3 million additional millennials and Gen Z will age into the prime home buying age in the next decade. We believe this will indicate there are significant spent pent-up demand from ready buyers who will purchase as mortgage rates stabilize. GreenBrick is well positioned for a market rebound with a high quality land pipeline. We expect to have approximately 6,000 finished lots at the end of 2023, with 75% of these slots located in infill locations. I would also like to share the success story of Challenger Homes, in which we own a 49.9% unconsolidated interest. Many builders operating in Denver and Colorado Springs had a rough year end. Challenger Homes has been sustaining sales momentum without sacrificing much of its high margin and has been successfully taking market share from both public and private home builders. During the last quarter of the year, they are the number one home builder in Colorado Springs by volume of new orders with approximately 40% market share. They are a perfect example of how a well-managed business that has a strong culture, great lot position, and capital structure can do great even in a more challenging environment. Hats off to Brian Barr and his full Challenger team. Like Challenger, we believe Grebrick has a superior culture, and our brands possess a number of strategic advantages that position us for industry-leading performance in Texas, Georgia, and Florida. We believe these advantages are, first, a significant footprint and infill locations in markets with some of the strongest job growth and demographic fundamentals. A superior and disciplined land and lot pipeline to support long-term growth. A broad spectrum of product types and price points that capture entry level, move up, move down, and luxury home buyers. The highest gross margins among our peers for the trailing 12 months as shown on slide seven. Development timeline flexibility as a result of our self-development business model. A strong balance sheet with one of the lowest net debt to total capital ratios among peers of 25.7% as shown on slide six. And most importantly, an experienced team in place to navigate our business and achieve our long-term goals. Before turning it over to Rick, let me add that we are cautiously optimistic about the spring selling season based upon the significantly increased demand we are seeing, which is always subject to interest rates. Our business playbook remains consistent. We are proactively managing inventory, being capital efficient, maintaining a strong balance of liquidity, and working with our trade network to reduce costs and cycle time. Jed will discuss our sales environment and initiatives in depth later in this call. With that, I'll now turn it over to Rick to provide more detail regarding our financial results.

Rick?