PulteGroup, Inc.

Thank you for standing by, and welcome to the Pulte Group, Inc. Q4 2023 Earnings Conference Call. I would now like to welcome Jim Zumer, Vice President of Investor Relations, to begin the call. Jim, over to you.

Thanks, Monty. Good morning, and let me welcome participants to today's call. We look forward to discussing Pulte Group's strong fourth quarter and full-year financial results. The period ended December 31, 2023. I'm joined on today's call by Ryan Marshall, President and CEO, Bob O'Shaughnessy, Executive Vice President, CFO, and Jim Osowski, Senior Vice President, Finance. A copy of our earnings release and this morning's presentation slides have been posted to our corporate website at PulteGroup.com. We'll post an audio replay of this call later today. Please note that consistent with this morning's earnings release, we will be discussing our debt ratio on both the gross and net basis, A reconciliation of our adjusted results to our reported financials is included in this morning's release and within today's webcast slides. And finally, I want to alert everyone that today's presentation includes forward-looking statements about the company's expected future performance. Actual results could differ materially from those suggested by our comments made today. The most significant risk factors that could affect future results are summarized as part of today's earnings release and within the accompanying presentation slides. These risk factors and other key information are detailed in our SEC filings, including our annual and quarterly reports. Now, let me turn the call over to Ryan. Ryan? Thanks, Jim, and good morning.

I'm excited to speak with you today about Pulte Group's outstanding fourth quarter and full-year financial results. Over the past few years, we have faced macro challenges ranging from COVID to supply chain disruptions to skyrocketing mortgage rates. Through it all, we've remained disciplined and consistent in running our operations and but when needed, have quickly adjusted key business practices to position Pulte Group for ongoing success. The benefits of this approach can be seen in the strength of our reported results. Bob will detail our Q4 performance, so let me highlight several of our key operating and financial achievements for the full year of 2023. By strategically increasing our spec production, we had more inventory available to meet the demand of first-time homebuyers, and those consumers worried about mortgage rate volatility. Increased house inventory was a critical support to Pulte Group delivering 28,600 homes in 2023 and record home sale revenues of $15.6 billion. In the face of increased costs for land, labor, and materials, we carefully managed product offerings, pricing, incentives, and absorption paces to maintain high profitability while ensuring we continue to turn our assets. The result? We reported outstanding full-year gross margins of 29.3%, which helped drive a 6% increase in earnings per share to a record $11.72 per share and a 27% return on equity. We also continued to efficiently increase our land pipeline as we completed transactions to put approximately 40,000 new lots under control. Inclusive of these lots, 53% of our total land pipeline is under option, either with the land sellers or through our expanding land banking structures. Since making the decision to expand our use of land banking starting 15 months ago, we have placed approximately 25 communities representing $1.5 billion worth of future land and development spend into such structures. And finally, Consistent with our stated capital allocation priorities, we invested $4.3 billion into the business through land acquisition and development spend in 2023 and returned $1.2 billion to investors through share repurchases, dividends, and debt pay down. Inclusive of our 2023 spend, we have repurchased almost half of the 2013 shares outstanding since initiating the program over a decade ago. By remaining consistent in our business practices and making market responsive adjustments where needed, we reported another year of exceptional financial results. I want to thank the entire Pulte Group team for their tireless efforts and support in delivering superior homes and experiences to our homebuyers, while providing outstanding financial returns to our investors. Consistent with the broader housing market, we saw home buying demand being negatively impacted during the early part of the fourth quarter, as 30-year mortgage rates increased toward their 2023 peak of 8%. We then saw buyer sentiment and demand improved as mortgage rates finally rolled over, ultimately dropping more than 100 basis points as we moved through November and December. The decline in rates helped drive our December net new orders and absorption pace to be the highest month in the quarter. The increased home buying activity in December was an important driver of the 57% increase in our Q4 net new orders and demonstrates the desire for home ownership remains high across all buyer groups. It remains our view that the long-term outlook for new home construction is extremely positive. A structural shortage of housing caused by years of underbuilding has only been exacerbated by a lack of resale inventory as owners are financially and or emotionally locked into their low-rate mortgages. While the lack of existing home inventory will resolve itself over time, we believe that land entitlement and labor availability challenges mean it will be difficult to correct for the many years of underbuilding in this country. Given our constructive views on the outlook for housing demand, we are investing in our operations with the goal of growing unit volumes by 5% to 10% annually. Our decision to walk away from option lots as interest rates increased in 2022 will impact our community openings in 2024, leading to our growth this year being closer to the lower end of this range, as we expect closings of approximately 30,000 homes in 2024. For those of you who have followed Pulte Group's story for the past few years, you know it's never been about growth for growth's sake. Our focus is always on investing in our business to build shareholder value, so our objective is to grow our volumes while maintaining high returns on equity. To accomplish this, we must continue to intelligently invest in high quality and high returning projects while continuing to invest in our own assets through the ongoing repurchase of our stock. As we have demonstrated for much of the past decade, we expect to continue to generate strong cash flows, that will allow us to fund our business investment, pay our dividend, and return excess capital to our shareholders, all while maintaining our balance sheet strength and flexibility. Our expectation of continued financial success is reflected in this morning's announcement that our Board approved a $1.5 billion increase to our share repurchase authorization. With many forecasting interest rates to fall, the economy to stay relatively healthy, and conditions in the job market to remain favorable, there are certainly reasons to be optimistic about housing demand in the coming years. Let me now turn over the call to Bob for a review of our fourth quarter results.