M.D.C. Holdings, Inc.

And welcome to the MDC Holdings Third Quarter 2022 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone. To withdraw your question, please press star then two. Please note today's event is being recorded. I would now like to turn the conference over to Derek Kimmerle, Vice President and Corporate Controller. Please go ahead.

Thank you. Good morning, ladies and gentlemen, and welcome to MDC Holdings 2022 Third Quarter Earnings Conference Call. On the call with me today, I have Larry Meisel, our Executive Chairman, David Mandrich, Chief Executive Officer, and Bob Martin, Chief Financial Officer. At this time, all participants are in a listen-only mode. After finishing our prepared remarks, we will conduct a question and answer session, at which time we request that participants limit themselves to one question and one follow-up question. Please note that this conference is being recorded and will be available for replay. For information on how to access the replay, please visit our website at mdcholdings.com. Before turning the call over to Larry and David, it should be noted that certain statements made during this conference call including those related to MDC's business, financial condition, results of operation, cash flows, strategies and prospects, and responses to questions may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties, and other factors that may cause the company's actual results, performance, or achievements to be materially different from the results performance, or achievements expressed or implied by the forward-looking statements. These and other factors that could impact the company's actual performance are set forth in the company's third quarter 2022 Form 10Q, which is expected to be filed with the SEC today. It should also be noted that SEC Regulation G requires that certain information accompany the use of non-GAAP financial measures. Any information required by Regulation G is posted on our website with our webcast slides. And now I will turn the call over to Mr. Meisel for his opening remarks.

Good morning and thank you for joining us today as we go over our results for the third quarter of 2022 and provide an update on current market conditions. MDC generated net income of $144 million or $1.98 per diluted share in the third quarter of 2022. Home sales revenues increased 12% year over year to $1.4 billion, and home sales gross margins for the quarter were 22.7%. Excluding home impairments, home sales gross margins expanded 120 basis points year over year to 24.7. As our team did an excellent job of delivering homes in backlog and maintaining price integrity in what continues to be a difficult market environment. Since our last quarterly update, mortgage rates have risen another 100 basis points year putting additional strain on new home affordability and demand in our markets. Gross orders for the third quarter came in at 1569, which equated to an absorption pace of 2.4 homes per community per month. However, due to a spike in cancellations, our net order total for the quarter came in significantly below our expectations. We believe the combination of rising interest rates and a steady stream of negative news surrounding the future of housing and the overall economy eroded the confidence of prospective homebuyers and led them to reconsider their purchase. Another factor that contributed to the order's shortfall was our strategic decision to focus on delivering homes in backlog rather than aggressively chasing sales during a typically slower seasonal period for industry. We continue to believe that the long-term fundamentals driving new home construction remain positive and that there is a strong desire to own a home in this country. However, we expect the near-term sales environment will remain challenging until there is more clarity around the future of interest rates. In light of these industry headwinds, we have refocused our efforts on generating cash, fortifying the balance sheet, and taking costs out of the business. We ended the third quarter with $744 million in cash and cash equivalents and marketable securities. A debt to capital ratio of 33.2% and a net debt to capital ratio of 19.9%. Our control lot count declined 20% year over year as we approved virtually no new land deals during the quarter. and walked away from over $11 million in option deposits and pre-acquisition costs. For the option agreements we still have in place, we have renegotiated or we are in the process of renegotiating the terms of many of those agreements. These actions, coupled with our focus on delivering homes at backlog, and right-sizing our cost structure could put us in a very strong financial position at year-end. Our leadership team has been through several housing downturns over the course of our careers, giving us a broad perspective on how to navigate difficult operating environments. Market corrections are a natural and oftentimes healthy occurrence in our industry and usually lead to market share gains for the well-capitalized builders when things do improve. We plan on being one of those builders and are positioning our company accordingly. We have no senior note maturities coming due the remainder of this decade and enough lots in the pipeline to fulfill our delivery projections through 2024 allowing us to operate from a position of strength during this period of uncertainty our financial strength should also give investors confidence in our ability to pay our industry leading dividend which currently stands at two dollars per share on an annualized basis as a result I continue to be optimistic about long-term outlook for our company. With that, I'd like to turn the call over to David, who will provide more detail on our operating performance this quarter.