Q4 2023 KB Home Earnings Call

January 10, 2024

Operator: Good afternoon. My name is John, and I will be your conference operator today. I would like to welcome everyone to the KB Home 2023 Q4 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following the company's opening remarks, we will open the lines for questions. Today's conference call is being recorded and will be available for replay at the company's website, kbhome.com, through 9 February 2024. Now I would like to turn the call over to Jill Peters, Senior Vice President, Investor Relations. Thank you, Jill. You may begin.

Operator: Good afternoon, my name is John and I will be your conference operator today. I would like to welcome everyone to the KB Home, 2023, fourth quarter Earnings Conference Call. At this time, all participants are in a listen only mode. Following the Company's opening remarks, we will open the lines for questions. Today's conference call is being recorded and will be available for replay at the company's website kbhome.com through February 9th 2024. And now I would like to turn the call over to Jill Peters Senior Vice President Investor Relations. Thank you Jill you may begin.

Operator: Good afternoon, my name is John and I will be your conference operator today.

Operator: I would like to welcome everyone to the KB Home, 2023, fourth quarter Earnings Conference Call. At this time, all participants are in a listen only mode. Following the Company's opening remarks, we will open the lines for questions. Today's conference call is being recorded and will be available for replay at the company's website kbhome.com through February 9th 2024. And now I would like to turn the call over to Jill Peters Senior Vice President Investor Relations. Thank you Jill you may begin.

Operator: I would like to welcome everyone to the KB Home, 2023, fourth quarter Earnings Conference Call. At this time, all participants are in a listen only mode.

John: I would like to welcome everyone to the Kb home 2023 fourth quarter earnings Conference call. At this time, all participants are in a listen only mode.

John: Following the Companys opening remarks, we will open the lines for questions. Today's conference call is being recorded and will be available for replay at the company's website Kb home Dot com through February nine 2024.

Operator: Following the Company's opening remarks, we will open the lines for questions. Today's conference call is being recorded and will be available for replay at the company's website kbhome.com through February 9th 2024. And now I would like to turn the call over to Jill Peters Senior Vice President Investor Relations. Thank you Jill you may begin.

Operator: Following the Company's opening remarks, we will open the lines for questions.

Operator: Today's conference call is being recorded and will be available for replay at the company's website kbhome.com through February 9th 2024. And now I would like to turn the call over to Jill Peters Senior Vice President Investor Relations. Thank you Jill you may begin.

Operator: Today's conference call is being recorded and will be available for replay at the company's website kbhome.com through February 9th 2024.

Operator: And now I would like to turn the call over to Jill Peters Senior Vice President Investor Relations. Thank you Jill you may begin.

John: And now I would like to turn the call over to Jill Peters Senior Vice President Investor Relations. Thank you Jill you may begin.

Jill Peters: Thank you, John. Good afternoon, everyone, and thank you for joining us today to review our results for Q4 of fiscal 2023. On the call are Jeff Mezger, Chairman, President, and Chief Executive Officer; Rob McGibney, Executive Vice President and Chief Operating Officer; Jeff Kaminski, Executive Vice President and Chief Financial Officer; Bill Hollinger, Senior Vice President and Chief Accounting Officer; and Thad Johnson, Senior Vice President and Treasurer. During this call, items will be discussed that are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future results, and the company does not undertake any obligation to update them.

Jill Peters: Thank you John, good afternoon everyone, and thank you for joining us today to review our results for the fourth quarter of fiscal 2023. On the call are Jeff Mezger, Chairman, President and Chief Executive Officer, Rob McGibney, Executive Vice President and Chief Operating Officer, Jeff Kaminski, Executive Vice President and Chief Financial Officer, Bill Hollinger, Senior Vice President and Chief Accounting Officer, and Thad Johnson, Senior Vice President and Treasurer. During this call items will be discussed that are considered forward looking statements, within the meaning of the private Securities Litigation Reform Act of 1995. These statements are not guarantees of future results, and the company does not undertake any obligation to update them. Due to various factors, including those detailed in today's press release and in our filings with the Securities and Exchange Commission, actual results could be materially different from those stated or implied in the forward looking statements. In addition, a reconciliation of the non-GAAP measure of adjusted housing gross profit margin, which excludes inventory-related charges and any other non-GAAP measures referenced during today's discussion, to it's most directly comparable GAAP measure can be found in today's press release and on the investor relations page of our website at kbhome.com. And with that here is Jeff Mezger.

Jill Peters: Thank you John, good afternoon everyone, and thank you for joining us today to review our results for the fourth quarter of fiscal 2023.

Jill Peters: On the call are Jeff Mezger, Chairman, President and Chief Executive Officer, Rob Mcgivney, Executive Vice President and Chief operating Officer.

Jill Peters: On the call are Jeff Mezger, Chairman, President and Chief Executive Officer, Rob McGibney, Executive Vice President and Chief Operating Officer, Jeff Kaminski, Executive Vice President and Chief Financial Officer, Bill Hollinger, Senior Vice President and Chief Accounting Officer, and Thad Johnson, Senior Vice President and Treasurer. During this call items will be discussed that are considered forward looking statements, within the meaning of the private Securities Litigation Reform Act of 1995. These statements are not guarantees of future results, and the company does not undertake any obligation to update them. Due to various factors, including those detailed in today's press release and in our filings with the Securities and Exchange Commission, actual results could be materially different from those stated or implied in the forward looking statements. In addition, a reconciliation of the non-GAAP measure of adjusted housing gross profit margin, which excludes inventory-related charges and any other non-GAAP measures referenced during today's discussion, to it's most directly comparable GAAP measure can be found in today's press release and on the investor relations page of our website at kbhome.com. And with that here is Jeff Mezger.

Jeff Kaminski Executive Vice President and Chief Financial Officer, Bill Hollinger, Senior Vice President and Chief Accounting Officer, and Thad Johnson Senior Vice President and Treasurer.

Jill Peters: During this call items will be discussed that are considered forward looking statements, within the meaning of the private Securities Litigation Reform Act of 1995. These statements are not guarantees of future results, and the company does not undertake any obligation to update them. Due to various factors, including those detailed in today's press release and in our filings with the Securities and Exchange Commission, actual results could be materially different from those stated or implied in the forward looking statements. In addition, a reconciliation of the non-GAAP measure of adjusted housing gross profit margin, which excludes inventory-related charges and any other non-GAAP measures referenced during today's discussion, to it's most directly comparable GAAP measure can be found in today's press release and on the investor relations page of our website at kbhome.com. And with that here is Jeff Mezger.

Jill Peters: During this call items will be discussed that are considered forward looking statements, within the meaning of the private Securities Litigation Reform Act of 1995.

Jill Peters: During this call items will be discussed that are considered forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995. These statements are not guarantees of future results and the company does not undertake any obligation to update them.

Jill Peters: These statements are not guarantees of future results, and the company does not undertake any obligation to update them. Due to various factors, including those detailed in today's press release and in our filings with the Securities and Exchange Commission, actual results could be materially different from those stated or implied in the forward looking statements. In addition, a reconciliation of the non-GAAP measure of adjusted housing gross profit margin, which excludes inventory-related charges and any other non-GAAP measures referenced during today's discussion, to it's most directly comparable GAAP measure can be found in today's press release and on the investor relations page of our website at kbhome.com. And with that here is Jeff Mezger.

Jill Peters: These statements are not guarantees of future results, and the company does not undertake any obligation to update them.

Jill Peters: Due to various factors, including those detailed in today's press release and in our filings with the Securities and Exchange Commission, actual results could be materially different from those stated or implied in the forward-looking statements. In addition, a reconciliation of the non-GAAP measure of adjusted housing gross profit margin, which excludes inventory-related charges, and any other non-GAAP measure referenced during today's discussion to its most directly comparable GAAP measure can be found in today's press release and/or on the investor relations page of our website at kbhome.com. With that, here is Jeff Mezger.

Jill Peters: Due to various factors, including those detailed in today's press release and in our filings with the Securities and Exchange Commission, actual results could be materially different from those stated or implied in the forward looking statements. In addition, a reconciliation of the non-GAAP measure of adjusted housing gross profit margin, which excludes inventory-related charges and any other non-GAAP measures referenced during today's discussion, to it's most directly comparable GAAP measure can be found in today's press release and on the investor relations page of our website at kbhome.com. And with that here is Jeff Mezger.

Jill Peters: Due to various factors, including those detailed in today's press release and in our filings with the Securities and Exchange Commission actual results could be materially different from those stated or implied in the forward looking statements.

Jill Peters: In addition, a reconciliation of the non-GAAP measure of adjusted housing gross profit margin, which excludes inventory related charges and any other non-GAAP measures referenced during today's discussion to its most directly comparable GAAP measure can be found in today's press release <unk> on the investor.

Jill Peters: In addition, a reconciliation of the non-GAAP measure of adjusted housing gross profit margin, which excludes inventory-related charges and any other non-GAAP measures referenced during today's discussion, to it's most directly comparable GAAP measure can be found in today's press release and on the investor relations page of our website at kbhome.com. And with that here is Jeff Mezger.

<unk> page of our website at <unk> Dot com and with that here is Jeff Mezger.

Jill Peters: And with that here is Jeff Mezger.

Jeff Mezger: Thank you, Jill. Good afternoon, everyone, and happy New Year. We finished the year strong with a Q4 performance that exceeded our guidance across our key financial metrics. We produced total revenues of $1.7 billion and diluted earnings per share of $1.85. Our outperformance on closings at just over 3,400 homes was driven primarily by our continued improvement in build times, along with a strong backlog of buyers who are committed to a timely closing when their home is completed. With respect to margins, they remain solid at just under 21% in gross and 11% in operating income margin. In addition, we returned nearly $180 million of capital to shareholders, primarily through share repurchases. These results contributed to a healthy financial performance for 2023.

Jeffrey Mezger: Thank you Jill and good afternoon, everyone and happy new year. We finished the year strong with our fourth quarter performance that exceeded our guidance across our key financial metrics. We produced total revenues of $1 7 billion. Diluted earnings per share of $1 85. Our outperformance on closings at just over 3400 homes was driven. Primarily by our continued improvement in Bill times. Along with a strong backlog of buyers who are committed to a timely closing when they're home is completed. With respect to margins they remained solid at just under 21% and growth in. 11% and operating income margin. In addition, we returned nearly $180 million of capital to shareholders primarily through share repurchases. These results contributed to our healthy financial performance for 2023. We delivered more than 13200 homes driving revenues of $6 4 billion and diluted earnings above $7 per share. Our top line together with an operating margin exceeding 11%. And the repurchase of 11% of our shares outstanding at the start of the year contributed. Contributed to 15% growth in book value per share to over $50. The strength of our results is notable when considering that our initial 2023 revenue guidance was about $5 5 billion equating to roughly 11400 deliveries given. Given the uncertainty in market conditions at the start of the year. As our new fiscal year gets underway market conditions are improving with rates, having declined and consumer confidence increasing all while resale inventory remains low. We believe our company is well positioned given shorter build times, a solid backlog normalized cancellation rates and planned community count growth. The same factors that characterize the market today. Low inventory levels solid employment and wage growth are those that we believe will sustain the longer term health of the housing market. Demographics have been and will continue to be a significant factor with the largest generational cohorts.

Jeffrey Mezger: Thank you Jill, good afternoon everyone and happy new year. We finished the year strong, with a fourth quarter performance that exceeded our guidance across our key financial metrics. We produced total revenues of $1.7 billion, and diluted earnings per share of $1.85 dollars. Our outperformance on closings, at just over 3,400 homes, was driven primarily by our continued improvement in build times, along with a strong backlog of buyers, who are committed to a timely closing when they're home is completed. With respect to margins, they remained solid at just under 21% in growth, and 11% in operating income margin. In addition, we returned nearly $180 million dollars of capital to shareholders, primarily through share repurchases, these results contributed to a healthy financial performance for 2023. We delivered more than 13,200 homes, driving revenues of $6.4 billion, and diluted earnings above $7 dollars per share. Our top line, together with an operating margin exceeding 11%, and the repurchase of 11% of our shares outstanding at the start of the year, contributed to 15% growth in book value per share, to over $50 dollars. The strength of our results is notable, when considering that our initial 2023 revenue guidance was about $5.5 billion, equating to roughly 11,400 deliveries, given the uncertainty in market conditions at the start of the year. As our new fiscal year gets underway, market conditions are improving with rates having declined, and consumer confidence increasing, all while resale inventory remains low. We believe our company is well positioned, given shorter build times, a solid backlog, normalized cancellation rates, and planned community count growth. The same factors that characterize the market today, low inventory levels, solid employment and wage growth, are those that we believe will sustain the longer term health of the housing market.

Jeffrey Mezger: Thank you Jill, good afternoon everyone and happy new year.

Jeffrey Mezger: We finished the year strong, with a fourth quarter performance that exceeded our guidance across our key financial metrics. We produced total revenues of $1.7 billion, and diluted earnings per share of $1.85 dollars. Our outperformance on closings, at just over 3,400 homes, was driven primarily by our continued improvement in build times, along with a strong backlog of buyers, who are committed to a timely closing when they're home is completed. With respect to margins, they remained solid at just under 21% in growth, and 11% in operating income margin. In addition, we returned nearly $180 million dollars of capital to shareholders, primarily through share repurchases, these results contributed to a healthy financial performance for 2023. We delivered more than 13,200 homes, driving revenues of $6.4 billion, and diluted earnings above $7 dollars per share. Our top line, together with an operating margin exceeding 11%, and the repurchase of 11% of our shares outstanding at the start of the year, contributed to 15% growth in book value per share, to over $50 dollars. The strength of our results is notable, when considering that our initial 2023 revenue guidance was about $5.5 billion, equating to roughly 11,400 deliveries, given the uncertainty in market conditions at the start of the year. As our new fiscal year gets underway, market conditions are improving with rates having declined, and consumer confidence increasing, all while resale inventory remains low. We believe our company is well positioned, given shorter build times, a solid backlog, normalized cancellation rates, and planned community count growth. The same factors that characterize the market today, low inventory levels, solid employment and wage growth, are those that we believe will sustain the longer term health of the housing market.

Jeffrey Mezger: We finished the year strong, with a fourth quarter performance that exceeded our guidance across our key financial metrics.

Jeffrey T. Mezger: We finished the year strong with our fourth quarter performance that exceeded our guidance across our key financial metrics.

Jeffrey T. Mezger: We produced total revenues of $1 7 billion.

Jeffrey Mezger: We produced total revenues of $1.7 billion, and diluted earnings per share of $1.85 dollars. Our outperformance on closings, at just over 3,400 homes, was driven primarily by our continued improvement in build times, along with a strong backlog of buyers, who are committed to a timely closing when they're home is completed. With respect to margins, they remained solid at just under 21% in growth, and 11% in operating income margin. In addition, we returned nearly $180 million dollars of capital to shareholders, primarily through share repurchases, these results contributed to a healthy financial performance for 2023. We delivered more than 13,200 homes, driving revenues of $6.4 billion, and diluted earnings above $7 dollars per share. Our top line, together with an operating margin exceeding 11%, and the repurchase of 11% of our shares outstanding at the start of the year, contributed to 15% growth in book value per share, to over $50 dollars. The strength of our results is notable, when considering that our initial 2023 revenue guidance was about $5.5 billion, equating to roughly 11,400 deliveries, given the uncertainty in market conditions at the start of the year. As our new fiscal year gets underway, market conditions are improving with rates having declined, and consumer confidence increasing, all while resale inventory remains low. We believe our company is well positioned, given shorter build times, a solid backlog, normalized cancellation rates, and planned community count growth. The same factors that characterize the market today, low inventory levels, solid employment and wage growth, are those that we believe will sustain the longer term health of the housing market.

Jeffrey Mezger: We produced total revenues of $1.7 billion, and diluted earnings per share of $1.85 dollars.

Jeffrey T. Mezger: Diluted earnings per share of $1 85.

Jeffrey T. Mezger: Our outperformance on closings at just over 3400 homes was driven.

Jeffrey Mezger: Our outperformance on closings, at just over 3,400 homes, was driven primarily by our continued improvement in build times, along with a strong backlog of buyers, who are committed to a timely closing when they're home is completed. With respect to margins, they remained solid at just under 21% in growth, and 11% in operating income margin. In addition, we returned nearly $180 million dollars of capital to shareholders, primarily through share repurchases, these results contributed to a healthy financial performance for 2023. We delivered more than 13,200 homes, driving revenues of $6.4 billion, and diluted earnings above $7 dollars per share. Our top line, together with an operating margin exceeding 11%, and the repurchase of 11% of our shares outstanding at the start of the year, contributed to 15% growth in book value per share, to over $50 dollars. The strength of our results is notable, when considering that our initial 2023 revenue guidance was about $5.5 billion, equating to roughly 11,400 deliveries, given the uncertainty in market conditions at the start of the year. As our new fiscal year gets underway, market conditions are improving with rates having declined, and consumer confidence increasing, all while resale inventory remains low. We believe our company is well positioned, given shorter build times, a solid backlog, normalized cancellation rates, and planned community count growth. The same factors that characterize the market today, low inventory levels, solid employment and wage growth, are those that we believe will sustain the longer term health of the housing market.

Primarily by our continued improvement in Bill times.

Jeffrey T. Mezger: Along with a strong backlog of buyers who are committed to a timely closing when they're home is completed.

Jeffrey T. Mezger: With respect to margins they remained solid at just under 21% and growth in.

Jeffrey Mezger: With respect to margins, they remained solid at just under 21% in growth, and 11% in operating income margin. In addition, we returned nearly $180 million dollars of capital to shareholders, primarily through share repurchases, these results contributed to a healthy financial performance for 2023. We delivered more than 13,200 homes, driving revenues of $6.4 billion, and diluted earnings above $7 dollars per share. Our top line, together with an operating margin exceeding 11%, and the repurchase of 11% of our shares outstanding at the start of the year, contributed to 15% growth in book value per share, to over $50 dollars. The strength of our results is notable, when considering that our initial 2023 revenue guidance was about $5.5 billion, equating to roughly 11,400 deliveries, given the uncertainty in market conditions at the start of the year. As our new fiscal year gets underway, market conditions are improving with rates having declined, and consumer confidence increasing, all while resale inventory remains low. We believe our company is well positioned, given shorter build times, a solid backlog, normalized cancellation rates, and planned community count growth. The same factors that characterize the market today, low inventory levels, solid employment and wage growth, are those that we believe will sustain the longer term health of the housing market.

Jeffrey Mezger: With respect to margins, they remained solid at just under 21% in growth, and 11% in operating income margin.

Jeffrey T. Mezger: 11% and operating income margin.

Jeffrey T. Mezger: In addition, we returned nearly $180 million of capital to shareholders primarily through share repurchases.

Jeffrey Mezger: In addition, we returned nearly $180 million dollars of capital to shareholders, primarily through share repurchases, these results contributed to a healthy financial performance for 2023. We delivered more than 13,200 homes, driving revenues of $6.4 billion, and diluted earnings above $7 dollars per share. Our top line, together with an operating margin exceeding 11%, and the repurchase of 11% of our shares outstanding at the start of the year, contributed to 15% growth in book value per share, to over $50 dollars. The strength of our results is notable, when considering that our initial 2023 revenue guidance was about $5.5 billion, equating to roughly 11,400 deliveries, given the uncertainty in market conditions at the start of the year. As our new fiscal year gets underway, market conditions are improving with rates having declined, and consumer confidence increasing, all while resale inventory remains low. We believe our company is well positioned, given shorter build times, a solid backlog, normalized cancellation rates, and planned community count growth. The same factors that characterize the market today, low inventory levels, solid employment and wage growth, are those that we believe will sustain the longer term health of the housing market.

Jeffrey T. Mezger: These results contributed to our healthy financial performance for 2023.

Jeff Mezger: We delivered more than 13,200 homes, driving revenues of $6.4 billion and diluted earnings above $7 per share. Our top line, together with an operating margin exceeding 11% and the repurchase of 11% of our shares outstanding at the start of the year, contributed to 15% growth in book value per share to over $50. The strength of our results is notable when considering that our initial 2023 revenue guidance was about $5.5 billion, equating to roughly 11,400 deliveries, given the uncertainty in market conditions at the start of the year. As our new fiscal year gets underway, market conditions are improving with rates having declined and consumer confidence increasing, all while resale inventory remains low.

Jeffrey T. Mezger: We delivered more than 13200 homes driving revenues of $6 4 billion and diluted earnings above $7 per share.

Jeffrey Mezger: We delivered more than 13,200 homes, driving revenues of $6.4 billion, and diluted earnings above $7 dollars per share. Our top line, together with an operating margin exceeding 11%, and the repurchase of 11% of our shares outstanding at the start of the year, contributed to 15% growth in book value per share, to over $50 dollars. The strength of our results is notable, when considering that our initial 2023 revenue guidance was about $5.5 billion, equating to roughly 11,400 deliveries, given the uncertainty in market conditions at the start of the year. As our new fiscal year gets underway, market conditions are improving with rates having declined, and consumer confidence increasing, all while resale inventory remains low. We believe our company is well positioned, given shorter build times, a solid backlog, normalized cancellation rates, and planned community count growth. The same factors that characterize the market today, low inventory levels, solid employment and wage growth, are those that we believe will sustain the longer term health of the housing market.

Jeffrey Mezger: We delivered more than 13,200 homes, driving revenues of $6.4 billion, and diluted earnings above $7 dollars per share.

Jeffrey Mezger: Our top line, together with an operating margin exceeding 11%, and the repurchase of 11% of our shares outstanding at the start of the year, contributed to 15% growth in book value per share, to over $50 dollars. The strength of our results is notable, when considering that our initial 2023 revenue guidance was about $5.5 billion, equating to roughly 11,400 deliveries, given the uncertainty in market conditions at the start of the year. As our new fiscal year gets underway, market conditions are improving with rates having declined, and consumer confidence increasing, all while resale inventory remains low. We believe our company is well positioned, given shorter build times, a solid backlog, normalized cancellation rates, and planned community count growth. The same factors that characterize the market today, low inventory levels, solid employment and wage growth, are those that we believe will sustain the longer term health of the housing market.

Our top line together with an operating margin exceeding 11%.

Jeffrey T. Mezger: And the repurchase of 11% of our shares outstanding at the start of the year contributed.

Jeffrey T. Mezger: Contributed to 15% growth in book value per share to over $50.

Jeffrey T. Mezger: The strength of our results is notable when considering that our initial 2023 revenue guidance was about $5 5 billion equating to roughly 11400 deliveries given.

Jeffrey Mezger: The strength of our results is notable, when considering that our initial 2023 revenue guidance was about $5.5 billion, equating to roughly 11,400 deliveries, given the uncertainty in market conditions at the start of the year. As our new fiscal year gets underway, market conditions are improving with rates having declined, and consumer confidence increasing, all while resale inventory remains low. We believe our company is well positioned, given shorter build times, a solid backlog, normalized cancellation rates, and planned community count growth. The same factors that characterize the market today, low inventory levels, solid employment and wage growth, are those that we believe will sustain the longer term health of the housing market.

Jeffrey T. Mezger: Given the uncertainty in market conditions at the start of the year.

Jeffrey T. Mezger: As our new fiscal year gets underway market conditions are improving with rates, having declined and consumer confidence increasing all while resale inventory remains low.

Jeffrey Mezger: As our new fiscal year gets underway, market conditions are improving with rates having declined, and consumer confidence increasing, all while resale inventory remains low. We believe our company is well positioned, given shorter build times, a solid backlog, normalized cancellation rates, and planned community count growth. The same factors that characterize the market today, low inventory levels, solid employment and wage growth, are those that we believe will sustain the longer term health of the housing market.

Jeffrey Mezger: As our new fiscal year gets underway, market conditions are improving with rates having declined, and consumer confidence increasing, all while resale inventory remains low.

Jeff Mezger: We believe our company is well-positioned given shorter build times, a solid backlog, normalized cancellation rates, and planned community count growth. The same factors that characterize the market today, low inventory levels, solid employment and wage growth, are those that we believe will sustain the longer-term health of the housing market. Demographics have been and will continue to be a significant factor with the largest generational cohorts, Millennial and Gen Z, demonstrating a strong desire for homeownership. One of our most important operational achievements of this past year was a significant reduction in our build times, which favorably impacted our business in several respects. Rob will share the details in a moment, but for now, I will highlight the shorter construction times helped to drive the outperformance in our deliveries and in revenue relative to our expectations.

Jeffrey Mezger: We believe our company is well positioned, given shorter build times, a solid backlog, normalized cancellation rates, and planned community count growth. The same factors that characterize the market today, low inventory levels, solid employment and wage growth, are those that we believe will sustain the longer term health of the housing market.

Jeffrey Mezger: We believe our company is well positioned, given shorter build times, a solid backlog, normalized cancellation rates, and planned community count growth.

We believe our company is well positioned given shorter build times, a solid backlog normalized cancellation rates and planned community count growth.

Jeffrey Mezger: The same factors that characterize the market today, low inventory levels, solid employment and wage growth, are those that we believe will sustain the longer term health of the housing market.

Jeffrey T. Mezger: The same factors that characterize the market today.

Low inventory levels solid employment and wage growth are those that we believe will sustain the longer term health of the housing market.

Jeffrey T. Mezger: Demographics have been and will continue to be a significant factor with the largest generational cohorts.

Jeffrey Mezger: Demographics have been and will continue to be a significant factor with the largest generational cohorts. Millennial and Gen Z demonstrating a strong desire for homeownership. One of our most important operational achievements of this past year was a significant reduction in our build times. Which favorably impacted our business in several respects. Rob will share the details in a moment, but for now I will highlight the shorter construction times helped to drive the outperformance in our deliveries and in revenue relative to our expectations. In addition, the quicker conversion of homes in production two deliveries has unlocked a meaningful amount of cash. Going forward faster build times will boost our selling efforts as our built to order homes with quicker delivery dates. <unk>, even more compelling to our homebuyer. And the cost to lock the interest rate on the mortgage for a shortened period of time will be lower. We begin 2024 with a healthy backlog of more than 5500 homes valued at approximately $2 7 billion. Typically our ending backlog represents about 40% of our subsequent years deliveries, which aligns with our anticipated closings for this year. We expect our remaining deliveries in 'twenty four to come from net orders in the first half of the year that will drive starts as well as sales of inventory homes. We have nearly 7000 homes in production of which approximately 30% are unsold. On our last earnings call in September we shared our projection of a monthly absorption pace per community and a range of net orders for our 2023 fourth quarter <unk>. Based on normal seasonality, assuming that current market conditions. As the quarter progressed interest rates increased each week from late September through the end of October.

Jeffrey Mezger: Demographics have been and will continue to be a significant factor, with the largest generational cohorts, Millennial and Gen Z, demonstrating a strong desire for homeownership. One of our most important operational achievements of this past year was the significant reduction in our build times, which favorably impacted our business in several respects. Rob will share the details in a moment, but for now I will highlight the shorter construction times, helped to drive the outperformance in our deliveries and in revenue, relative to our expectations. In addition, the quicker conversion of homes in production to deliveries has unlocked a meaningful amount of cash. Going forward, faster build times will boost our selling efforts as our built to order homes with quicker delivery dates becomes even more compelling to a homebuyer, and the cost to lock the interest rate on the mortgage for a shortened period of time will be lower. We begin 2024 with a healthy backlog of more than 5,500 homes, valued at approximately $2.7 billion, typically our ending backlog represents about 40% of our subsequent years deliveries, which aligns with our anticipated closings for this year. We expect our remaining deliveries in '24 to come from net orders in the first half of the year that will drive starts, as well as sales of inventory homes, we have nearly 7,000 homes in production, of which approximately 30% are unsold. On our last earnings call in September, we shared our projection of a monthly absorption pace per community, and a range of net orders for our 2023 fourth quarter, based on normal seasonality, assuming that current market conditions.

Jeffrey Mezger: Demographics have been and will continue to be a significant factor, with the largest generational cohorts, Millennial and Gen Z, demonstrating a strong desire for homeownership.

Jeffrey T. Mezger: Millennial and Gen Z demonstrating a strong desire for homeownership.

Jeffrey Mezger: One of our most important operational achievements of this past year was the significant reduction in our build times, which favorably impacted our business in several respects. Rob will share the details in a moment, but for now I will highlight the shorter construction times, helped to drive the outperformance in our deliveries and in revenue, relative to our expectations. In addition, the quicker conversion of homes in production to deliveries has unlocked a meaningful amount of cash. Going forward, faster build times will boost our selling efforts as our built to order homes with quicker delivery dates becomes even more compelling to a homebuyer, and the cost to lock the interest rate on the mortgage for a shortened period of time will be lower. We begin 2024 with a healthy backlog of more than 5,500 homes, valued at approximately $2.7 billion, typically our ending backlog represents about 40% of our subsequent years deliveries, which aligns with our anticipated closings for this year. We expect our remaining deliveries in '24 to come from net orders in the first half of the year that will drive starts, as well as sales of inventory homes, we have nearly 7,000 homes in production, of which approximately 30% are unsold. On our last earnings call in September, we shared our projection of a monthly absorption pace per community, and a range of net orders for our 2023 fourth quarter, based on normal seasonality, assuming that current market conditions.

Jeffrey Mezger: One of our most important operational achievements of this past year was the significant reduction in our build times, which favorably impacted our business in several respects.

Jeffrey T. Mezger: One of our most important operational achievements of this past year was a significant reduction in our build times.

Jeffrey T. Mezger: Which favorably impacted our business in several respects.

Jeffrey Mezger: Rob will share the details in a moment, but for now I will highlight the shorter construction times, helped to drive the outperformance in our deliveries and in revenue, relative to our expectations. In addition, the quicker conversion of homes in production to deliveries has unlocked a meaningful amount of cash. Going forward, faster build times will boost our selling efforts as our built to order homes with quicker delivery dates becomes even more compelling to a homebuyer, and the cost to lock the interest rate on the mortgage for a shortened period of time will be lower. We begin 2024 with a healthy backlog of more than 5,500 homes, valued at approximately $2.7 billion, typically our ending backlog represents about 40% of our subsequent years deliveries, which aligns with our anticipated closings for this year. We expect our remaining deliveries in '24 to come from net orders in the first half of the year that will drive starts, as well as sales of inventory homes, we have nearly 7,000 homes in production, of which approximately 30% are unsold. On our last earnings call in September, we shared our projection of a monthly absorption pace per community, and a range of net orders for our 2023 fourth quarter, based on normal seasonality, assuming that current market conditions.

Jeffrey T. Mezger: Rob will share the details in a moment, but for now I will highlight the shorter construction times helped to drive the outperformance in our deliveries and in revenue relative to our expectations.

Jeff Mezger: In addition, the quicker conversion of homes in production to deliveries has unlocked a meaningful amount of cash. Going forward, faster build times will boost our selling efforts as a built-to-order home with quicker delivery dates becomes even more compelling to a homebuyer, and the cost to lock the interest rate on the mortgage for a shorter period of time will be lower. We begin 2024 with a healthy backlog of more than 5,500 homes valued at approximately $2.7 billion. Typically, our ending backlog represents about 40% of our subsequent year's deliveries, which aligns with our anticipated closings for this year. We expect our remaining deliveries in 2024 to come from net orders in the H1 of the year that will drive starts as well as sales of inventory homes.

Jeffrey Mezger: In addition, the quicker conversion of homes in production to deliveries has unlocked a meaningful amount of cash. Going forward, faster build times will boost our selling efforts as our built to order homes with quicker delivery dates becomes even more compelling to a homebuyer, and the cost to lock the interest rate on the mortgage for a shortened period of time will be lower. We begin 2024 with a healthy backlog of more than 5,500 homes, valued at approximately $2.7 billion, typically our ending backlog represents about 40% of our subsequent years deliveries, which aligns with our anticipated closings for this year. We expect our remaining deliveries in '24 to come from net orders in the first half of the year that will drive starts, as well as sales of inventory homes, we have nearly 7,000 homes in production, of which approximately 30% are unsold. On our last earnings call in September, we shared our projection of a monthly absorption pace per community, and a range of net orders for our 2023 fourth quarter, based on normal seasonality, assuming that current market conditions.

Jeffrey Mezger: In addition, the quicker conversion of homes in production to deliveries has unlocked a meaningful amount of cash.

Jeffrey T. Mezger: In addition, the quicker conversion of homes in production two deliveries has unlocked a meaningful amount of cash.

Jeffrey Mezger: Going forward, faster build times will boost our selling efforts as our built to order homes with quicker delivery dates becomes even more compelling to a homebuyer, and the cost to lock the interest rate on the mortgage for a shortened period of time will be lower. We begin 2024 with a healthy backlog of more than 5,500 homes, valued at approximately $2.7 billion, typically our ending backlog represents about 40% of our subsequent years deliveries, which aligns with our anticipated closings for this year. We expect our remaining deliveries in '24 to come from net orders in the first half of the year that will drive starts, as well as sales of inventory homes, we have nearly 7,000 homes in production, of which approximately 30% are unsold. On our last earnings call in September, we shared our projection of a monthly absorption pace per community, and a range of net orders for our 2023 fourth quarter, based on normal seasonality, assuming that current market conditions.

Jeffrey T. Mezger: Going forward faster build times will boost our selling efforts as our built to order homes with quicker delivery dates.

<unk>, even more compelling to our homebuyer.

Jeffrey T. Mezger: And the cost to lock the interest rate on the mortgage for a shortened period of time will be lower.

Jeffrey T. Mezger: We begin 2024 with a healthy backlog of more than 5500 homes valued at approximately $2 7 billion.

Jeffrey Mezger: We begin 2024 with a healthy backlog of more than 5,500 homes, valued at approximately $2.7 billion, typically our ending backlog represents about 40% of our subsequent years deliveries, which aligns with our anticipated closings for this year. We expect our remaining deliveries in '24 to come from net orders in the first half of the year that will drive starts, as well as sales of inventory homes, we have nearly 7,000 homes in production, of which approximately 30% are unsold. On our last earnings call in September, we shared our projection of a monthly absorption pace per community, and a range of net orders for our 2023 fourth quarter, based on normal seasonality, assuming that current market conditions.

Typically our ending backlog represents about 40% of our subsequent years deliveries, which aligns with our anticipated closings for this year.

Jeffrey Mezger: We expect our remaining deliveries in '24 to come from net orders in the first half of the year that will drive starts, as well as sales of inventory homes, we have nearly 7,000 homes in production, of which approximately 30% are unsold. On our last earnings call in September, we shared our projection of a monthly absorption pace per community, and a range of net orders for our 2023 fourth quarter, based on normal seasonality, assuming that current market conditions.

We expect our remaining deliveries in 'twenty four to come from net orders in the first half of the year that will drive starts as well as sales of inventory homes.

Jeff Mezger: We have nearly 7,000 homes in production, of which approximately 30% are unsold. On our last earnings call in September, we shared our projection of a monthly absorption pace per community and range of net orders for our 2023 Q4 based on normal seasonality, assuming then current market conditions. As the quarter progressed, interest rates increased each week from late September through the end of October, which over this period significantly curbed demand and impacted our net order results. We elected not to take a sales at any price approach and pursue lower-margin orders in a softer demand period, as we did not need additional orders to achieve our fourth-quarter delivery target, and we're also well-positioned for deliveries in our 2024 Q1. As interest rates have now declined since the end of our fiscal year, demand has improved significantly.

Jeffrey T. Mezger: We have nearly 7000 homes in production of which approximately 30% are unsold.

Jeffrey Mezger: On our last earnings call in September, we shared our projection of a monthly absorption pace per community, and a range of net orders for our 2023 fourth quarter, based on normal seasonality, assuming that current market conditions.

Jeffrey T. Mezger: On our last earnings call in September we shared our projection of a monthly absorption pace per community and a range of net orders for our 2023 fourth quarter <unk>.

Jeffrey T. Mezger: Based on normal seasonality, assuming that current market conditions.

Jeffrey T. Mezger: As the quarter progressed interest rates increased each week from late September through the end of October.

Jeffrey Mezger: As the quarter progressed, interest rates increased each week from late September through the end of October, which over this period significantly curbed demand and impacted our net order results. We elected not to take a sales at any price approach and pursue lower margin orders and a softer demand period, as we did not need additional orders to achieve our fourth quarter delivery target, and we're also well positioned for deliveries in our 2024 first quarter. As interest rates have now declined since the end of our fiscal year, demand has improved significantly. For the first five weeks of our first quarter, our net orders are 904, as compared to 403 in the comparable period of the prior year. Our orders in December were higher than November, which is unusual given that December is typically a slower sales month, to us, this speaks to the pent up demand for homeownership. That said, on a year over year basis, the comparison is somewhat distorted due to the low net orders in the prior year period. While we expect our net order comparison to moderate from the quarter-to-date level for the full quarter, we do expect it will be very favorable. We believe we are well positioned to respond to the strengthening in buyer demand, given our product positioning and price points, as well as planned community count growth. With that, I'll pause for a moment and ask Rob to provide an operational update, Rob.

Which over this period significantly curb demand and impacted our net order results.

Jeffrey Mezger: We elected not to take a sales at any price approach and pursue lower margin orders and a softer demand period, as we did not need additional orders to achieve our fourth quarter delivery target, and we're also well positioned for deliveries in our 2024 first quarter. As interest rates have now declined since the end of our fiscal year, demand has improved significantly. For the first five weeks of our first quarter, our net orders are 904, as compared to 403 in the comparable period of the prior year. Our orders in December were higher than November, which is unusual given that December is typically a slower sales month, to us, this speaks to the pent up demand for homeownership. That said, on a year over year basis, the comparison is somewhat distorted due to the low net orders in the prior year period. While we expect our net order comparison to moderate from the quarter-to-date level for the full quarter, we do expect it will be very favorable. We believe we are well positioned to respond to the strengthening in buyer demand, given our product positioning and price points, as well as planned community count growth. With that, I'll pause for a moment and ask Rob to provide an operational update, Rob.

Jeffrey T. Mezger: We elected not to take our sales at any price approach.

Jeffrey T. Mezger: Pursue lower margin orders and a softer demand period.

Jeffrey T. Mezger: As we did not need additional orders to achieve our fourth quarter delivery target.

Jeffrey T. Mezger: And we're also well positioned for deliveries in our 2020 for first quarter.

Jeffrey Mezger: As interest rates have now declined since the end of our fiscal year, demand has improved significantly. For the first five weeks of our first quarter, our net orders are 904, as compared to 403 in the comparable period of the prior year. Our orders in December were higher than November, which is unusual given that December is typically a slower sales month, to us, this speaks to the pent up demand for homeownership. That said, on a year over year basis, the comparison is somewhat distorted due to the low net orders in the prior year period. While we expect our net order comparison to moderate from the quarter-to-date level for the full quarter, we do expect it will be very favorable. We believe we are well positioned to respond to the strengthening in buyer demand, given our product positioning and price points, as well as planned community count growth. With that, I'll pause for a moment and ask Rob to provide an operational update, Rob.

Jeffrey T. Mezger: As interest rates have now declined since the end of our fiscal year demand has improved significantly.

Jeff Mezger: For the first five weeks of our Q1, our net orders are 904 as compared to 403 in the comp period of the prior year. Our orders in December were higher than November, which is unusual given that December is typically a slower sales month. To us, this speaks to the pent-up demand for homeownership. That said, on a year-over-year basis, the comparison is somewhat distorted due to the low net orders in the prior year period. While we expect our net order comparison to moderate from the quarter-to-date level for the full quarter, we do expect it will be very favorable. We believe we are well-positioned to respond to this strengthening in buyer demand given our product positioning and price points as well as planned community count growth. With that, I'll pause for a moment and ask Rob to provide an operational update. Rob?

Jeffrey T. Mezger: For the first five weeks of our first quarter. Our net orders are 904 as compared to 403 in the comparable period of the prior year.

Jeffrey Mezger: Our orders in December were higher than November, which is unusual given that December is typically a slower sales month, to us, this speaks to the pent up demand for homeownership. That said, on a year over year basis, the comparison is somewhat distorted due to the low net orders in the prior year period. While we expect our net order comparison to moderate from the quarter-to-date level for the full quarter, we do expect it will be very favorable. We believe we are well positioned to respond to the strengthening in buyer demand, given our product positioning and price points, as well as planned community count growth. With that, I'll pause for a moment and ask Rob to provide an operational update, Rob.

Jeffrey T. Mezger: Our orders in December were higher than November which is unusual given that December is typically a slower sales month.

Jeffrey T. Mezger: To us this speaks to the pent up demand for homeownership.

Jeffrey Mezger: That said, on a year over year basis, the comparison is somewhat distorted due to the low net orders in the prior year period. While we expect our net order comparison to moderate from the quarter-to-date level for the full quarter, we do expect it will be very favorable. We believe we are well positioned to respond to the strengthening in buyer demand, given our product positioning and price points, as well as planned community count growth. With that, I'll pause for a moment and ask Rob to provide an operational update, Rob.

Jeffrey Mezger: That said, on a year over year basis, the comparison is somewhat distorted due to the low net orders in the prior year period.

Jeffrey T. Mezger: That said on a year over year basis. The comparison is somewhat distorted due to the low net orders in the prior year period.

Jeffrey Mezger: While we expect our net order comparison to moderate from the quarter-to-date level for the full quarter, we do expect it will be very favorable.

Jeffrey T. Mezger: While we expect our net order comparison to moderate from the quarter to date level for the full quarter.

Jeffrey T. Mezger: We do expect it will be very favorable.

Jeffrey Mezger: We believe we are well positioned to respond to the strengthening in buyer demand, given our product positioning and price points, as well as planned community count growth. With that, I'll pause for a moment and ask Rob to provide an operational update, Rob.

Jeffrey Mezger: We believe we are well positioned to respond to the strengthening in buyer demand, given our product positioning and price points, as well as planned community count growth.

We believe we are well positioned to respond to the strengthening and buyer demand.

Given our product positioning and price points as well as planned community count growth.

Jeffrey Mezger: With that, I'll pause for a moment and ask Rob to provide an operational update, Rob.

Speaker Change: With that I'll pause for a moment and ask Rob to provide an operational update Rob.

Rob McGibney: Thank you, Jeff. I will begin by providing some additional color on our Q4 net order results and discuss the steps we took to help buyers address higher mortgage interest rates. Our business strategy remains consistent in optimizing each asset on a community-by-community basis, balancing pace, price, and margin. As a component of that strategy, we elected not to chase a sales target at significantly lower margins during Q4 amid the rapid rise in interest rates and their impact on affordability. Mortgage rates on the average thirty-year fixed loan rose approximately 60 basis points from the time of our last earnings call in September to their peak in late October.

Robert V. McGibney: Thank you Jeff. I will begin by providing some additional color on our fourth quarter net order results and discuss the steps we took to help buyers address higher mortgage interest rates are. Our business strategy remains consistent and optimizing each asset on a community by community basis balancing pace price and margin. As a component of that strategy, we elected not to chase the sales target at significantly lower margins during the fourth quarter amid the rapid rise in interest rates and their impact on affordability. Mortgage rates on the average 30 year fixed loans rose approximately 60 basis points from the time of our last earnings call in September to their peak in late October. Put it in perspective. This has the same effect as a nearly 6% increase in the purchase price of a home and impactful change that would have been costly for us to offset particularly in a slower demand period. With our built to order model, we work from a large backlog, which allows us to thoughtfully execute our sales strategy without the pressure of having to cover inventory at any price to achieve our quarterly delivery plan. We worked with buyers as they adjusted to the rising rate environment. During the fourth quarter and took steps to promote targeted rate buy down programs roughly 60% of orders had some form of mortgage concessions associated with them, including rate locks. This as an important tool, especially for our built to order buyers as we provide customer. So the ability to lock the rate upfront as a result, there is a higher degree of confidence both for buyers and for us of the likelihood of closing even if rates continue to rise. A lot program comes with a onetime float down option that customers can utilize if rates decline between the time of the initial work and the close of escrow, which lessens rate related anxiety in the buying decision. A lot program comes with a onetime float down option that customers can utilize if rates decline between the time of the initial work and the close of escrow, which lessens rate related anxiety in the buying decision.

Robert V. McGibney: Thank you Jeff. I will begin by providing some additional color on our fourth quarter net order results, and discuss the steps we took to help buyers address higher mortgage interest rates. Our business strategy remains consistent in optimizing each asset on a community by community basis, balancing pace, price and margin. As a component of that strategy, we elected not to chase the sales target at significantly lower margins during the fourth quarter, amid the rapid rise in interest rates and their impact on affordability. Mortgage rates on the average 30 year fixed loans rose approximately 60 basis points from the time of our last earnings call in September, to their peak in late October. To put it in perspective, this has the same effect as a nearly 6% increase in the purchase price of a home, an impactful change that would have been costly for us to offset, particularly in a slower demand period. With our built-to-order model, we work from a large backlog, which allows us to thoughtfully execute our sales strategy, without the pressure of having to cover inventory at any price to achieve our quarterly delivery plan. We worked with buyers as they adjusted to the rising rate environment during the fourth quarter, and took steps to promote targeted rate buy down programs. Roughly 60% of the orders had some form of mortgage concessions associated with them, including rate locks. This as an important tool, especially for our built-to-order buyers, as we provide customers the ability to lock the rate upfront. As a result, there is a higher degree of confidence, both for buyers and for us of the likelihood of closing, even if rates continue to rise.

Robert V. McGibney: Thank you Jeff.

Robert V. McGibney: I will begin by providing some additional color on our fourth quarter net order results, and discuss the steps we took to help buyers address higher mortgage interest rates. Our business strategy remains consistent in optimizing each asset on a community by community basis, balancing pace, price and margin. As a component of that strategy, we elected not to chase the sales target at significantly lower margins during the fourth quarter, amid the rapid rise in interest rates and their impact on affordability. Mortgage rates on the average 30 year fixed loans rose approximately 60 basis points from the time of our last earnings call in September, to their peak in late October. To put it in perspective, this has the same effect as a nearly 6% increase in the purchase price of a home, an impactful change that would have been costly for us to offset, particularly in a slower demand period. With our built-to-order model, we work from a large backlog, which allows us to thoughtfully execute our sales strategy, without the pressure of having to cover inventory at any price to achieve our quarterly delivery plan. We worked with buyers as they adjusted to the rising rate environment during the fourth quarter, and took steps to promote targeted rate buy down programs. Roughly 60% of the orders had some form of mortgage concessions associated with them, including rate locks. This as an important tool, especially for our built-to-order buyers, as we provide customers the ability to lock the rate upfront. As a result, there is a higher degree of confidence, both for buyers and for us of the likelihood of closing, even if rates continue to rise.

Robert V. McGibney: I will begin by providing some additional color on our fourth quarter net order results, and discuss the steps we took to help buyers address higher mortgage interest rates.

Rob Mcgivney: I will begin by providing some additional color on our fourth quarter net order results and discuss the steps we took to help buyers address higher mortgage interest rates are.

Robert V. McGibney: Our business strategy remains consistent in optimizing each asset on a community by community basis, balancing pace, price and margin. As a component of that strategy, we elected not to chase the sales target at significantly lower margins during the fourth quarter, amid the rapid rise in interest rates and their impact on affordability. Mortgage rates on the average 30 year fixed loans rose approximately 60 basis points from the time of our last earnings call in September, to their peak in late October. To put it in perspective, this has the same effect as a nearly 6% increase in the purchase price of a home, an impactful change that would have been costly for us to offset, particularly in a slower demand period. With our built-to-order model, we work from a large backlog, which allows us to thoughtfully execute our sales strategy, without the pressure of having to cover inventory at any price to achieve our quarterly delivery plan. We worked with buyers as they adjusted to the rising rate environment during the fourth quarter, and took steps to promote targeted rate buy down programs. Roughly 60% of the orders had some form of mortgage concessions associated with them, including rate locks. This as an important tool, especially for our built-to-order buyers, as we provide customers the ability to lock the rate upfront. As a result, there is a higher degree of confidence, both for buyers and for us of the likelihood of closing, even if rates continue to rise.

Robert V. McGibney: Our business strategy remains consistent in optimizing each asset on a community by community basis, balancing pace, price and margin.

Rob Mcgivney: Our business strategy remains consistent and optimizing each asset on a community by community basis balancing pace price and margin.

Robert V. McGibney: As a component of that strategy, we elected not to chase the sales target at significantly lower margins during the fourth quarter, amid the rapid rise in interest rates and their impact on affordability. Mortgage rates on the average 30 year fixed loans rose approximately 60 basis points from the time of our last earnings call in September, to their peak in late October. To put it in perspective, this has the same effect as a nearly 6% increase in the purchase price of a home, an impactful change that would have been costly for us to offset, particularly in a slower demand period. With our built-to-order model, we work from a large backlog, which allows us to thoughtfully execute our sales strategy, without the pressure of having to cover inventory at any price to achieve our quarterly delivery plan. We worked with buyers as they adjusted to the rising rate environment during the fourth quarter, and took steps to promote targeted rate buy down programs. Roughly 60% of the orders had some form of mortgage concessions associated with them, including rate locks. This as an important tool, especially for our built-to-order buyers, as we provide customers the ability to lock the rate upfront. As a result, there is a higher degree of confidence, both for buyers and for us of the likelihood of closing, even if rates continue to rise.

Rob Mcgivney: As a component of that strategy, we elected not to chase the sales target at significantly lower margins during the fourth quarter amid the rapid rise in interest rates and their impact on affordability.

Robert V. McGibney: Mortgage rates on the average 30 year fixed loans rose approximately 60 basis points from the time of our last earnings call in September, to their peak in late October. To put it in perspective, this has the same effect as a nearly 6% increase in the purchase price of a home, an impactful change that would have been costly for us to offset, particularly in a slower demand period. With our built-to-order model, we work from a large backlog, which allows us to thoughtfully execute our sales strategy, without the pressure of having to cover inventory at any price to achieve our quarterly delivery plan. We worked with buyers as they adjusted to the rising rate environment during the fourth quarter, and took steps to promote targeted rate buy down programs. Roughly 60% of the orders had some form of mortgage concessions associated with them, including rate locks. This as an important tool, especially for our built-to-order buyers, as we provide customers the ability to lock the rate upfront. As a result, there is a higher degree of confidence, both for buyers and for us of the likelihood of closing, even if rates continue to rise.

Robert V. McGibney: Mortgage rates on the average 30 year fixed loans rose approximately 60 basis points from the time of our last earnings call in September, to their peak in late October.

Rob Mcgivney: Mortgage rates on the average 30 year fixed loans rose approximately 60 basis points from the time of our last earnings call in September to their peak in late October.

Robert V. McGibney: To put it in perspective, this has the same effect as a nearly 6% increase in the purchase price of a home, an impactful change that would have been costly for us to offset, particularly in a slower demand period. With our built-to-order model, we work from a large backlog, which allows us to thoughtfully execute our sales strategy, without the pressure of having to cover inventory at any price to achieve our quarterly delivery plan. We worked with buyers as they adjusted to the rising rate environment during the fourth quarter, and took steps to promote targeted rate buy down programs. Roughly 60% of the orders had some form of mortgage concessions associated with them, including rate locks. This as an important tool, especially for our built-to-order buyers, as we provide customers the ability to lock the rate upfront. As a result, there is a higher degree of confidence, both for buyers and for us of the likelihood of closing, even if rates continue to rise.

Rob McGibney: To put it in perspective, this has the same effect as a nearly 6% increase in the purchase price of a home, an impactful change that would have been costly for us to offset, particularly in a slower demand period. With our built-to-order model, we work from a large backlog, which allows us to thoughtfully execute our sales strategy without the pressure of having to cover inventory at any price to achieve our quarterly delivery plan. We worked with buyers as they adjusted to the rising rate environment during Q4 and took steps to promote targeted rate buydown programs. Roughly 60% of our orders had some form of mortgage concession associated with them, including rate locks. This is an important tool, especially for our built-to-order buyers, as we provide customers the ability to lock their rate up front.

Rob Mcgivney: Put it in perspective. This has the same effect as a nearly 6% increase in the purchase price of a home and impactful change that would have been costly for us to offset particularly in a slower demand period.

Robert V. McGibney: With our built-to-order model, we work from a large backlog, which allows us to thoughtfully execute our sales strategy, without the pressure of having to cover inventory at any price to achieve our quarterly delivery plan. We worked with buyers as they adjusted to the rising rate environment during the fourth quarter, and took steps to promote targeted rate buy down programs. Roughly 60% of the orders had some form of mortgage concessions associated with them, including rate locks. This as an important tool, especially for our built-to-order buyers, as we provide customers the ability to lock the rate upfront. As a result, there is a higher degree of confidence, both for buyers and for us of the likelihood of closing, even if rates continue to rise.

With our built to order model, we work from a large backlog, which allows us to thoughtfully execute our sales strategy without the pressure of having to cover inventory at any price to achieve our quarterly delivery plan.

Robert V. McGibney: We worked with buyers as they adjusted to the rising rate environment during the fourth quarter, and took steps to promote targeted rate buy down programs. Roughly 60% of the orders had some form of mortgage concessions associated with them, including rate locks. This as an important tool, especially for our built-to-order buyers, as we provide customers the ability to lock the rate upfront. As a result, there is a higher degree of confidence, both for buyers and for us of the likelihood of closing, even if rates continue to rise.

Robert V. McGibney: We worked with buyers as they adjusted to the rising rate environment during the fourth quarter, and took steps to promote targeted rate buy down programs.

Rob Mcgivney: We worked with buyers as they adjusted to the rising rate environment. During the fourth quarter and took steps to promote targeted rate buy down programs roughly 60% of orders had some form of mortgage concessions associated with them, including rate locks. This as an important tool, especially for our built to order buyers as we provide customer.

Robert V. McGibney: Roughly 60% of the orders had some form of mortgage concessions associated with them, including rate locks. This as an important tool, especially for our built-to-order buyers, as we provide customers the ability to lock the rate upfront. As a result, there is a higher degree of confidence, both for buyers and for us of the likelihood of closing, even if rates continue to rise.

Robert V. McGibney: Roughly 60% of the orders had some form of mortgage concessions associated with them, including rate locks.

Robert V. McGibney: This as an important tool, especially for our built-to-order buyers, as we provide customers the ability to lock the rate upfront. As a result, there is a higher degree of confidence, both for buyers and for us of the likelihood of closing, even if rates continue to rise.

Robert V. McGibney: This as an important tool, especially for our built-to-order buyers, as we provide customers the ability to lock the rate upfront.

Robert V. McGibney: As a result, there is a higher degree of confidence, both for buyers and for us of the likelihood of closing, even if rates continue to rise.

So the ability to lock the rate upfront as a result, there is a higher degree of confidence both for buyers and for us of the likelihood of closing even if rates continue to rise.

Robert V. McGibney: A lot program comes with a onetime float down option that customers can utilize if rates decline between the time of the initial work and the close of escrow, which lessens rate related anxiety in the buying decision. A lot program comes with a onetime float down option that customers can utilize if rates decline between the time of the initial work and the close of escrow, which lessens rate related anxiety in the buying decision. For buyers that use our rate buy down program. The cost of the work is built into the rate. With mortgage rates retreating to selling environment has become more favorable and we have resumed the faster pace of sales at higher margins than we would have otherwise achieved during the fourth quarter. Position ourselves for 2024 deliveries and increase the number of homes available available to close during the spring selling season, we ramped up our starts during the fourth quarter. We started 2589 homes ending the quarter with nearly 7000 homes in production of which about 70% are sold consistent with our targeted range. Shifting now to operations once again, our divisions did an excellent job in reducing their build times during the quarter contributing to a substantial improvement over the course of 2023. In December 2022, our construction times exceeded eight five months by year end 2023. They were five five months are. Our progress earlier in the year was primarily on the front end of the build cycle, we maintain those improvements and picked up nearly two weeks in the fourth quarter in the latter stages from drywall to file which is the bucket that most of our deliveries came from. We expect to continue driving efficiency throughout our construction process to return to our historical build times of between four and five months. While compressing our build times, we also reduced our direct construction costs. We finished the year with an average savings of about $18000 per home relative to peak cost in August of 2022.

Robert V. McGibney: Our lock program comes with a onetime float down option that customers can utilize if rates decline between the time of the initial lock, and the close of escrow, which lessens rate-related anxiety in the buying decision. For buyers that use our rate buy down program, the cost of the work is built into the rate. With mortgage rates retreating, the selling environment has become more favorable, and we have resumed the faster pace of sales at higher margins than we would have otherwise achieved during the fourth quarter. To position ourselves for 2024 deliveries, and increase the number of homes available to close during the spring selling season, we ramped up our starts during the fourth quarter. We started 2,589 homes, ending the quarter with nearly 7,000 homes in production, of which about 70% are sold, consistent with our targeted range. Shifting now to operations, once again our divisions did an excellent job in reducing their build times during the quarter, contributing to a substantial improvement over the course of 2023. In December 2022, our construction times exceeded eight and a half months, by year end 2023, they were five and a half months. Our progress earlier in the year was primarily on the front end of the build cycle, we maintain those improvements, and picked up nearly two weeks in the fourth quarter in the latter stages from drywall to file, which is the bucket that most of our deliveries came from. We expect to continue driving efficiency throughout our construction process to return to our historical build times of between four and five months. While compressing our build times, we also reduced our direct construction costs.

Rob McGibney: As a result, there is a higher degree of confidence both for buyers and for us of the likelihood of closing, even if rates continue to rise. Our lock program comes with a one-time float-down option that customers can utilize if rates decline between the time of the initial lock and the close of escrow, which lessens rate-related anxiety in the buying decision. For buyers that use our rate buydown program, the cost of the lock is built into the rate. With mortgage rates retreating, the selling environment has become more favorable, and we've resumed a faster pace of sales at higher margins than we would have otherwise achieved during Q4. To position ourselves for 2024 deliveries and increase the number of homes available to close during the spring selling season, we ramped up our starts during Q4.

Rob Mcgivney: A lot program comes with a onetime float down option that customers can utilize if rates decline between the time of the initial work and the close of escrow, which lessens rate related anxiety in the buying decision.

Robert V. McGibney: For buyers that use our rate buy down program, the cost of the work is built into the rate. With mortgage rates retreating, the selling environment has become more favorable, and we have resumed the faster pace of sales at higher margins than we would have otherwise achieved during the fourth quarter. To position ourselves for 2024 deliveries, and increase the number of homes available to close during the spring selling season, we ramped up our starts during the fourth quarter. We started 2,589 homes, ending the quarter with nearly 7,000 homes in production, of which about 70% are sold, consistent with our targeted range. Shifting now to operations, once again our divisions did an excellent job in reducing their build times during the quarter, contributing to a substantial improvement over the course of 2023. In December 2022, our construction times exceeded eight and a half months, by year end 2023, they were five and a half months. Our progress earlier in the year was primarily on the front end of the build cycle, we maintain those improvements, and picked up nearly two weeks in the fourth quarter in the latter stages from drywall to file, which is the bucket that most of our deliveries came from. We expect to continue driving efficiency throughout our construction process to return to our historical build times of between four and five months.

Robert V. McGibney: For buyers that use our rate buy down program, the cost of the work is built into the rate.

Robert V. McGibney: With mortgage rates retreating, the selling environment has become more favorable, and we have resumed the faster pace of sales at higher margins than we would have otherwise achieved during the fourth quarter. To position ourselves for 2024 deliveries, and increase the number of homes available to close during the spring selling season, we ramped up our starts during the fourth quarter. We started 2,589 homes, ending the quarter with nearly 7,000 homes in production, of which about 70% are sold, consistent with our targeted range. Shifting now to operations, once again our divisions did an excellent job in reducing their build times during the quarter, contributing to a substantial improvement over the course of 2023. In December 2022, our construction times exceeded eight and a half months, by year end 2023, they were five and a half months. Our progress earlier in the year was primarily on the front end of the build cycle, we maintain those improvements, and picked up nearly two weeks in the fourth quarter in the latter stages from drywall to file, which is the bucket that most of our deliveries came from. We expect to continue driving efficiency throughout our construction process to return to our historical build times of between four and five months.

For buyers that use our rate buy down program. The cost of the work is built into the rate.

With mortgage rates retreating to selling environment has become more favorable and we have resumed the faster pace of sales at higher margins than we would have otherwise achieved during the fourth quarter.

Robert V. McGibney: To position ourselves for 2024 deliveries, and increase the number of homes available to close during the spring selling season, we ramped up our starts during the fourth quarter. We started 2,589 homes, ending the quarter with nearly 7,000 homes in production, of which about 70% are sold, consistent with our targeted range. Shifting now to operations, once again our divisions did an excellent job in reducing their build times during the quarter, contributing to a substantial improvement over the course of 2023. In December 2022, our construction times exceeded eight and a half months, by year end 2023, they were five and a half months. Our progress earlier in the year was primarily on the front end of the build cycle, we maintain those improvements, and picked up nearly two weeks in the fourth quarter in the latter stages from drywall to file, which is the bucket that most of our deliveries came from. We expect to continue driving efficiency throughout our construction process to return to our historical build times of between four and five months.

Rob Mcgivney: Position ourselves for 2024 deliveries and increase the number of homes available available to close during the spring selling season, we ramped up our starts during the fourth quarter. We started 2589 homes ending the quarter with nearly 7000 homes in production of which about 70% are sold consistent with our targeted range.

Robert V. McGibney: We started 2,589 homes, ending the quarter with nearly 7,000 homes in production, of which about 70% are sold, consistent with our targeted range. Shifting now to operations, once again our divisions did an excellent job in reducing their build times during the quarter, contributing to a substantial improvement over the course of 2023. In December 2022, our construction times exceeded eight and a half months, by year end 2023, they were five and a half months. Our progress earlier in the year was primarily on the front end of the build cycle, we maintain those improvements, and picked up nearly two weeks in the fourth quarter in the latter stages from drywall to file, which is the bucket that most of our deliveries came from. We expect to continue driving efficiency throughout our construction process to return to our historical build times of between four and five months.

Robert V. McGibney: We started 2,589 homes, ending the quarter with nearly 7,000 homes in production, of which about 70% are sold, consistent with our targeted range.

Rob McGibney: We started 2,589 homes, ending the quarter with nearly 7,000 homes in production, of which about 70% are sold, consistent with our targeted range. Shifting now to operations. Once again, our divisions did an excellent job in reducing their build times during the quarter, contributing to substantial improvement over the course of 2023. In December 2022, our construction times exceeded 8.5 months. By year-end 2023, they were 5.5 months. Our progress earlier in the year was primarily on the front end of the build cycle. We maintained those improvements and picked up nearly 2 weeks in the Q4 in the latter stages from drywall to final, which is the bucket that most of our deliveries came from.

Robert V. McGibney: Shifting now to operations, once again our divisions did an excellent job in reducing their build times during the quarter, contributing to a substantial improvement over the course of 2023. In December 2022, our construction times exceeded eight and a half months, by year end 2023, they were five and a half months. Our progress earlier in the year was primarily on the front end of the build cycle, we maintain those improvements, and picked up nearly two weeks in the fourth quarter in the latter stages from drywall to file, which is the bucket that most of our deliveries came from. We expect to continue driving efficiency throughout our construction process to return to our historical build times of between four and five months.

Rob Mcgivney: Shifting now to operations once again, our divisions did an excellent job in reducing their build times during the quarter contributing to a substantial improvement over the course of 2023.

Robert V. McGibney: In December 2022, our construction times exceeded eight and a half months, by year end 2023, they were five and a half months. Our progress earlier in the year was primarily on the front end of the build cycle, we maintain those improvements, and picked up nearly two weeks in the fourth quarter in the latter stages from drywall to file, which is the bucket that most of our deliveries came from. We expect to continue driving efficiency throughout our construction process to return to our historical build times of between four and five months.

Robert V. McGibney: In December 2022, our construction times exceeded eight and a half months, by year end 2023, they were five and a half months.

Rob Mcgivney: In December 2022, our construction times exceeded eight five months by year end 2023. They were five five months are.

Robert V. McGibney: Our progress earlier in the year was primarily on the front end of the build cycle, we maintain those improvements, and picked up nearly two weeks in the fourth quarter in the latter stages from drywall to file, which is the bucket that most of our deliveries came from. We expect to continue driving efficiency throughout our construction process to return to our historical build times of between four and five months.

Rob Mcgivney: Our progress earlier in the year was primarily on the front end of the build cycle, we maintain those improvements and picked up nearly two weeks in the fourth quarter in the latter stages from drywall to file which is the bucket that most of our deliveries came from.

Rob McGibney: We expect to continue driving efficiency throughout our construction process to return to our historical build times of between 4 and 5 months. While compressing our build times, we also reduced our direct construction cost. We finished the year with an average savings of about $18,000 per home relative to peak cost in August 2022. Although the cost of some materials, such as stucco, masonry, flooring, and concrete pressured the cost of homes started in Q4, we experienced a reduction in lumber cost, which offset some of the cost increases. Most importantly, we were able to maintain the vast majority of our savings throughout the year. Our key operational priorities remain consistent for 2024, executing our built-to-order model and providing the combination of best price and value to our customers while continuing to deliver high satisfaction levels to our buyers.

Robert V. McGibney: We expect to continue driving efficiency throughout our construction process to return to our historical build times of between four and five months.

Rob Mcgivney: We expect to continue driving efficiency throughout our construction process to return to our historical build times of between four and five months.

Robert V. McGibney: While compressing our build times, we also reduced our direct construction costs. We finished the year with an average savings of about $18,000 per home, relative to peak cost in August of 2022. Although the cost of some materials, such as stucco, masonry, flooring and concrete pressured the cost of homes started in the fourth quarter, we experienced a reduction in lumber cost, which offset some of the cost increases. Most importantly, we were able to maintain the vast majority of our savings throughout the year. Our key operational priorities remain consistent for 2024, executing our built-to-order model, and providing the combination of best price and value to our customers, while continuing to deliver high satisfaction levels to our buyers. We are focused on the reduction in our build times, incremental cost reductions through value engineering, and community count growth for longtime grand openings. And with that I will turn the call back over to Jeff.

Rob Mcgivney: While compressing our build times, we also reduced our direct construction costs. We finished the year with an average savings of about $18000 per home relative to peak cost in August of 2022.

Robert V. McGibney: We finished the year with an average savings of about $18000 per home relative to peak cost in August of 2022. Though the cost of some materials, such as stucco masonry flooring 'n' country pressured the cost at home started in the fourth quarter, we experienced a reduction in lumber cost, which offset some of the cost increases most. Most importantly, we were able to maintain the vast majority of our savings throughout the year. Our key operational priorities remain consistent for 2020 for executing our built to order model and providing the combination of best price and value to our customers, while continuing to deliver high satisfaction levels to our buyers. We are focused on the reduction in our build times incremental cost reductions through value engineering and community count growth for longtime grand openings and with that I will turn the call back over to Jeff.

Robert V. McGibney: Although the cost of some materials, such as stucco, masonry, flooring and concrete pressured the cost of homes started in the fourth quarter, we experienced a reduction in lumber cost, which offset some of the cost increases. Most importantly, we were able to maintain the vast majority of our savings throughout the year. Our key operational priorities remain consistent for 2024, executing our built-to-order model, and providing the combination of best price and value to our customers, while continuing to deliver high satisfaction levels to our buyers. We are focused on the reduction in our build times, incremental cost reductions through value engineering, and community count growth for longtime grand openings. And with that I will turn the call back over to Jeff.

Rob Mcgivney: Though the cost of some materials, such as stucco masonry flooring 'n' country pressured the cost at home started in the fourth quarter, we experienced a reduction in lumber cost, which offset some of the cost increases most.

Most importantly, we were able to maintain the vast majority of our savings throughout the year.

Robert V. McGibney: Most importantly, we were able to maintain the vast majority of our savings throughout the year. Our key operational priorities remain consistent for 2024, executing our built-to-order model, and providing the combination of best price and value to our customers, while continuing to deliver high satisfaction levels to our buyers. We are focused on the reduction in our build times, incremental cost reductions through value engineering, and community count growth for longtime grand openings. And with that I will turn the call back over to Jeff.

Robert V. McGibney: Most importantly, we were able to maintain the vast majority of our savings throughout the year.

Rob Mcgivney: Our key operational priorities remain consistent for 2020 for executing our built to order model and providing the combination of best price and value to our customers, while continuing to deliver high satisfaction levels to our buyers.

Robert V. McGibney: Our key operational priorities remain consistent for 2024, executing our built-to-order model, and providing the combination of best price and value to our customers, while continuing to deliver high satisfaction levels to our buyers. We are focused on the reduction in our build times, incremental cost reductions through value engineering, and community count growth for longtime grand openings. And with that I will turn the call back over to Jeff.

Rob McGibney: We are focused on the reduction in our build times, incremental cost reductions through value engineering, and community count growth from on-time grand openings. With that, I will turn the call back over to Jeff.

Robert V. McGibney: We are focused on the reduction in our build times, incremental cost reductions through value engineering, and community count growth for longtime grand openings. And with that I will turn the call back over to Jeff.

Robert V. McGibney: We are focused on the reduction in our build times, incremental cost reductions through value engineering, and community count growth for longtime grand openings.

Rob Mcgivney: We are focused on the reduction in our build times incremental cost reductions through value engineering and community count growth for longtime grand openings and with that I will turn the call back over to Jeff.

Robert V. McGibney: And with that I will turn the call back over to Jeff.

Jeff Mezger: Thanks, Rob. Switching gears to our mortgage joint venture, KBHS Home Loans, 87% of the mortgages funded during the quarter were financed through our JV, which is more than 10 percentage points higher year over year. This is a positive development as higher capture rates help us manage our backlog more effectively. The average cash down payment was 16%, consistent throughout the year, equating to roughly $78,000. The household income of our KBHS customers averaged $127,000, and they had an average FICO score of 741, the highest credit score reported for the past several years. Even with one-half of our customers purchasing their first home, we are attracting buyers with strong credit that are able to qualify at elevated mortgage rates while making a significant down payment.

Jeff J. Kaminski: Thanks, Rob. Switching gears to our mortgage joint venture K VHS home loans. 87% of the mortgages funded during the quarter were financed through our JV. Which is more than 10 percentage points higher year over year. This is a positive development as higher capture rates help us manage our backlog more effectively. The average cash down payment was 16% consistent throughout the year. Waiting to roughly $78000. The household income of our kv hff's customers averaged 127000. At an average FICO score of 741. The highest credit score reported for the past several years. Even with one half of our customers purchasing their first home, we're attracting buyers with strong credit that are able to qualify at elevated mortgage rates, while making a significant down payment. We spent approximately $485 million to acquire and develop land during the quarter. Contributing to our full year investment of $1 8 billion. The majority of which was spent on developing land we already owned. In 2024, we expect to accelerate our investment activity to support our future growth, while remaining diligent with respect to our underwriting criteria product strategy and price points. As to our lot position it stood at roughly 56000 lots owned or controlled at quarter end of which 4800 are owned. About 65% of these owned lots were tied up in 2020 or prior before the run up in land prices. We remain focused on capital efficiency developing lots from smaller phases and balancing development with our starts pace to manage our inventory and finished lots. We believe we are well positioned as we currently own or control essentially all the lots we need to achieve our delivery growth targets through 2025. Our objective remains to achieve at least the top five position in each of our served markets and all our divisions have a roadmap in place to achieve this ranking. Our ending community count was essentially flat relative to the prior year. We opened 24, new communities during the fourth quarter.

Jeffrey Mezger: Thanks, Rob. Switching gears to our mortgage joint venture, KBHS Home Loans, 87% of the mortgages funded during the quarter were financed through our JV, which is more than 10 percentage points higher year over year. This is a positive development as higher capture rates help us manage our backlog more effectively. The average cash down payment was 16%, consistent throughout the year, equating to roughly $78,000 dollars. The household income of our KBHS customers, averaged $127,000, and an average FICO score of 741, the highest credit score reported for the past several years. Even with one half of our customers purchasing their first home, we're attracting buyers with strong credit that are able to qualify at elevated mortgage rates, while making a significant down payment. We spent approximately $485 million to acquire and develop land during the quarter, contributing to our full year investment of $1.8 billion, the majority of which was spent on developing land we already owned. In 2024, we expect to accelerate our investment activity, to support our future growth, while remaining diligent with respect to our underwriting criteria, product strategy and price points. As to our lot position, it stood at roughly 56,000 lots owner-controlled at quarter end, of which 4,800 are owned, about 65% of these owned lots were tied up in 2020 or prior, before the run up in land prices. We remain focused on capital efficiency, developing lots from smaller phases, and balancing development with our starts pace to manage our inventory in finished lots. We believe we are well positioned, as we currently own or control, essentially all the lots we need to achieve our delivery growth targets through 2025. Our objective remains to achieve at least the top five position in each of our served markets, and all our divisions have a roadmap in place to achieve this ranking. Our ending community count was essentially flat relative to the prior year.

Jeffrey Mezger: Thanks, Rob.

Jeffrey Mezger: Switching gears to our mortgage joint venture, KBHS Home Loans, 87% of the mortgages funded during the quarter were financed through our JV, which is more than 10 percentage points higher year over year. This is a positive development as higher capture rates help us manage our backlog more effectively. The average cash down payment was 16%, consistent throughout the year, equating to roughly $78,000 dollars. The household income of our KBHS customers, averaged $127,000, and an average FICO score of 741, the highest credit score reported for the past several years. Even with one half of our customers purchasing their first home, we're attracting buyers with strong credit that are able to qualify at elevated mortgage rates, while making a significant down payment. We spent approximately $485 million to acquire and develop land during the quarter, contributing to our full year investment of $1.8 billion, the majority of which was spent on developing land we already owned. In 2024, we expect to accelerate our investment activity, to support our future growth, while remaining diligent with respect to our underwriting criteria, product strategy and price points. As to our lot position, it stood at roughly 56,000 lots owner-controlled at quarter end, of which 4,800 are owned, about 65% of these owned lots were tied up in 2020 or prior, before the run up in land prices. We remain focused on capital efficiency, developing lots from smaller phases, and balancing development with our starts pace to manage our inventory in finished lots. We believe we are well positioned, as we currently own or control, essentially all the lots we need to achieve our delivery growth targets through 2025. Our objective remains to achieve at least the top five position in each of our served markets, and all our divisions have a roadmap in place to achieve this ranking. Our ending community count was essentially flat relative to the prior year.

Jeffrey T. Mezger: Switching gears to our mortgage joint venture K VHS home loans.

Jeffrey T. Mezger: 87% of the mortgages funded during the quarter were financed through our JV.

Jeffrey T. Mezger: Which is more than 10 percentage points higher year over year.

Jeffrey Mezger: This is a positive development as higher capture rates help us manage our backlog more effectively. The average cash down payment was 16%, consistent throughout the year, equating to roughly $78,000 dollars. The household income of our KBHS customers, averaged $127,000, and an average FICO score of 741, the highest credit score reported for the past several years. Even with one half of our customers purchasing their first home, we're attracting buyers with strong credit that are able to qualify at elevated mortgage rates, while making a significant down payment. We spent approximately $485 million to acquire and develop land during the quarter, contributing to our full year investment of $1.8 billion, the majority of which was spent on developing land we already owned. In 2024, we expect to accelerate our investment activity, to support our future growth, while remaining diligent with respect to our underwriting criteria, product strategy and price points. As to our lot position, it stood at roughly 56,000 lots owner-controlled at quarter end, of which 4,800 are owned, about 65% of these owned lots were tied up in 2020 or prior, before the run up in land prices. We remain focused on capital efficiency, developing lots from smaller phases, and balancing development with our starts pace to manage our inventory in finished lots. We believe we are well positioned, as we currently own or control, essentially all the lots we need to achieve our delivery growth targets through 2025. Our objective remains to achieve at least the top five position in each of our served markets, and all our divisions have a roadmap in place to achieve this ranking. Our ending community count was essentially flat relative to the prior year.

Jeffrey Mezger: This is a positive development as higher capture rates help us manage our backlog more effectively.

Jeffrey T. Mezger: This is a positive development as higher capture rates help us manage our backlog more effectively.

Jeffrey T. Mezger: The average cash down payment was 16% consistent throughout the year.

Jeffrey Mezger: The average cash down payment was 16%, consistent throughout the year, equating to roughly $78,000 dollars. The household income of our KBHS customers, averaged $127,000, and an average FICO score of 741, the highest credit score reported for the past several years. Even with one half of our customers purchasing their first home, we're attracting buyers with strong credit that are able to qualify at elevated mortgage rates, while making a significant down payment. We spent approximately $485 million to acquire and develop land during the quarter, contributing to our full year investment of $1.8 billion, the majority of which was spent on developing land we already owned. In 2024, we expect to accelerate our investment activity, to support our future growth, while remaining diligent with respect to our underwriting criteria, product strategy and price points. As to our lot position, it stood at roughly 56,000 lots owner-controlled at quarter end, of which 4,800 are owned, about 65% of these owned lots were tied up in 2020 or prior, before the run up in land prices. We remain focused on capital efficiency, developing lots from smaller phases, and balancing development with our starts pace to manage our inventory in finished lots. We believe we are well positioned, as we currently own or control, essentially all the lots we need to achieve our delivery growth targets through 2025. Our objective remains to achieve at least the top five position in each of our served markets, and all our divisions have a roadmap in place to achieve this ranking. Our ending community count was essentially flat relative to the prior year.

Jeffrey Mezger: The average cash down payment was 16%, consistent throughout the year, equating to roughly $78,000 dollars.

Jeffrey T. Mezger: Waiting to roughly $78000.

Jeffrey Mezger: The household income of our KBHS customers, averaged $127,000, and an average FICO score of 741, the highest credit score reported for the past several years. Even with one half of our customers purchasing their first home, we're attracting buyers with strong credit that are able to qualify at elevated mortgage rates, while making a significant down payment. We spent approximately $485 million to acquire and develop land during the quarter, contributing to our full year investment of $1.8 billion, the majority of which was spent on developing land we already owned. In 2024, we expect to accelerate our investment activity, to support our future growth, while remaining diligent with respect to our underwriting criteria, product strategy and price points. As to our lot position, it stood at roughly 56,000 lots owner-controlled at quarter end, of which 4,800 are owned, about 65% of these owned lots were tied up in 2020 or prior, before the run up in land prices. We remain focused on capital efficiency, developing lots from smaller phases, and balancing development with our starts pace to manage our inventory in finished lots. We believe we are well positioned, as we currently own or control, essentially all the lots we need to achieve our delivery growth targets through 2025. Our objective remains to achieve at least the top five position in each of our served markets, and all our divisions have a roadmap in place to achieve this ranking. Our ending community count was essentially flat relative to the prior year.

Jeffrey Mezger: The household income of our KBHS customers, averaged $127,000, and an average FICO score of 741, the highest credit score reported for the past several years.

Jeffrey T. Mezger: The household income of our kv hff's customers averaged 127000.

Jeffrey T. Mezger: At an average FICO score of 741.

Jeffrey T. Mezger: The highest credit score reported for the past several years.

Jeffrey Mezger: Even with one half of our customers purchasing their first home, we're attracting buyers with strong credit that are able to qualify at elevated mortgage rates, while making a significant down payment. We spent approximately $485 million to acquire and develop land during the quarter, contributing to our full year investment of $1.8 billion, the majority of which was spent on developing land we already owned. In 2024, we expect to accelerate our investment activity, to support our future growth, while remaining diligent with respect to our underwriting criteria, product strategy and price points. As to our lot position, it stood at roughly 56,000 lots owner-controlled at quarter end, of which 4,800 are owned, about 65% of these owned lots were tied up in 2020 or prior, before the run up in land prices. We remain focused on capital efficiency, developing lots from smaller phases, and balancing development with our starts pace to manage our inventory in finished lots. We believe we are well positioned, as we currently own or control, essentially all the lots we need to achieve our delivery growth targets through 2025. Our objective remains to achieve at least the top five position in each of our served markets, and all our divisions have a roadmap in place to achieve this ranking. Our ending community count was essentially flat relative to the prior year.

Even with one half of our customers purchasing their first home, we're attracting buyers with strong credit that are able to qualify at elevated mortgage rates, while making a significant down payment.

Jeffrey Mezger: We spent approximately $485 million to acquire and develop land during the quarter, contributing to our full year investment of $1.8 billion, the majority of which was spent on developing land we already owned. In 2024, we expect to accelerate our investment activity, to support our future growth, while remaining diligent with respect to our underwriting criteria, product strategy and price points. As to our lot position, it stood at roughly 56,000 lots owner-controlled at quarter end, of which 4,800 are owned, about 65% of these owned lots were tied up in 2020 or prior, before the run up in land prices. We remain focused on capital efficiency, developing lots from smaller phases, and balancing development with our starts pace to manage our inventory in finished lots. We believe we are well positioned, as we currently own or control, essentially all the lots we need to achieve our delivery growth targets through 2025. Our objective remains to achieve at least the top five position in each of our served markets, and all our divisions have a roadmap in place to achieve this ranking. Our ending community count was essentially flat relative to the prior year.

Jeff Mezger: We spent approximately $485 million to acquire and develop land during the quarter, contributing to a full-year investment of $1.8 billion, the majority of which was spent on developing land we already owned. In 2024, we expect to accelerate our investment activity to support our future growth while remaining diligent with respect to our underwriting criteria, product strategy, and price points. As to our lot position, it stood at roughly 56,000 lots owner-controlled at quarter end, of which 40,800 are owned. About 65% of these owned lots were tied up in 2020 or prior before the run-up in land prices. We remain focused on capital efficiency, developing lots in smaller phases, and balancing development with our starts pace to manage our inventory of finished lots.

We spent approximately $485 million to acquire and develop land during the quarter.

Jeffrey T. Mezger: Contributing to our full year investment of $1 8 billion.

Jeffrey T. Mezger: The majority of which was spent on developing land we already owned.

Jeffrey Mezger: In 2024, we expect to accelerate our investment activity, to support our future growth, while remaining diligent with respect to our underwriting criteria, product strategy and price points. As to our lot position, it stood at roughly 56,000 lots owner-controlled at quarter end, of which 4,800 are owned, about 65% of these owned lots were tied up in 2020 or prior, before the run up in land prices. We remain focused on capital efficiency, developing lots from smaller phases, and balancing development with our starts pace to manage our inventory in finished lots. We believe we are well positioned, as we currently own or control, essentially all the lots we need to achieve our delivery growth targets through 2025. Our objective remains to achieve at least the top five position in each of our served markets, and all our divisions have a roadmap in place to achieve this ranking. Our ending community count was essentially flat relative to the prior year.

Jeffrey T. Mezger: In 2024, we expect to accelerate our investment activity to support our future growth, while remaining diligent with respect to our underwriting criteria product strategy and price points.

Jeffrey Mezger: As to our lot position, it stood at roughly 56,000 lots owner-controlled at quarter end, of which 4,800 are owned, about 65% of these owned lots were tied up in 2020 or prior, before the run up in land prices. We remain focused on capital efficiency, developing lots from smaller phases, and balancing development with our starts pace to manage our inventory in finished lots. We believe we are well positioned, as we currently own or control, essentially all the lots we need to achieve our delivery growth targets through 2025. Our objective remains to achieve at least the top five position in each of our served markets, and all our divisions have a roadmap in place to achieve this ranking. Our ending community count was essentially flat relative to the prior year.

Jeffrey T. Mezger: As to our lot position it stood at roughly 56000 lots owned or controlled at quarter end of which 4800 are owned.

Jeffrey T. Mezger: About 65% of these owned lots were tied up in 2020 or prior before the run up in land prices.

Jeffrey Mezger: We remain focused on capital efficiency, developing lots from smaller phases, and balancing development with our starts pace to manage our inventory in finished lots. We believe we are well positioned, as we currently own or control, essentially all the lots we need to achieve our delivery growth targets through 2025. Our objective remains to achieve at least the top five position in each of our served markets, and all our divisions have a roadmap in place to achieve this ranking. Our ending community count was essentially flat relative to the prior year.

Jeffrey Mezger: We remain focused on capital efficiency, developing lots from smaller phases, and balancing development with our starts pace to manage our inventory in finished lots.

Jeffrey T. Mezger: We remain focused on capital efficiency developing lots from smaller phases and balancing development with our starts pace to manage our inventory and finished lots.

Jeffrey Mezger: We believe we are well positioned, as we currently own or control, essentially all the lots we need to achieve our delivery growth targets through 2025. Our objective remains to achieve at least the top five position in each of our served markets, and all our divisions have a roadmap in place to achieve this ranking. Our ending community count was essentially flat relative to the prior year.

Jeffrey Mezger: We believe we are well positioned, as we currently own or control, essentially all the lots we need to achieve our delivery growth targets through 2025.

Jeff Mezger: We believe we are well positioned as we currently own or control essentially all the lots we need to achieve our delivery growth targets through 2025. Our objective remains to achieve at least a top five position in each of our served markets, and all our divisions have a roadmap in place to achieve this ranking. Our ending community count was essentially flat relative to the prior year. We opened 24 new communities during Q4, achieving nearly all our planned grand openings, although many opened at the end of November, which limited their contribution to net orders. That said, these new communities, along with our Q1 openings, have us well positioned for the spring selling season. We expect our ending community count to grow sequentially as the year unfolds, and we believe we will exit the year with a meaningfully higher number of open communities.

Jeffrey T. Mezger: We believe we are well positioned as we currently own or control essentially all the lots we need to achieve our delivery growth targets through 2025.

Jeffrey Mezger: Our objective remains to achieve at least the top five position in each of our served markets, and all our divisions have a roadmap in place to achieve this ranking. Our ending community count was essentially flat relative to the prior year.

Jeffrey Mezger: Our objective remains to achieve at least the top five position in each of our served markets, and all our divisions have a roadmap in place to achieve this ranking.

Jeffrey T. Mezger: Our objective remains to achieve at least the top five position in each of our served markets and all our divisions have a roadmap in place to achieve this ranking.

Jeffrey Mezger: Our ending community count was essentially flat relative to the prior year.

Jeffrey T. Mezger: Our ending community count was essentially flat relative to the prior year.

Jeffrey Mezger: We opened 24 new communities during the fourth quarter, achieving nearly all our planned grand openings, although many open at the end of November, which limited their contribution to net orders. That said, these new communities, along with our first quarter openings, have us well positioned for the spring selling season. We expect our ending community count to grow sequentially as the year unfolds and we believe we will exit the year with a meaningfully higher number of open communities. Our balance sheet is in excellent shape, and we intend to continue allocating our strong operating cash flow, towards reinvestment in growth, and a return of capital to our shareholders in 2024. Since we began our share repurchase initiative in our 2021 third quarter, we have deployed approximately $750 million dollars to buyback over 20% of the outstanding shares at that time, at an average price of $39.79 dollars per share, which has been significantly accretive to both our book value and diluted earnings per share. During the same timeframe, including our regularly, quarterly dividends, we have returned roughly $885 million dollars to shareholders. In closing, I want to recognize the entire KB Home team, for their dedication to our buyers, and their contributions to our achievements in 2023. There was another year during which we navigated changing market conditions, while remaining strategic and flexible with a focus on the longer term. Our business is solid profitable, and we remain the industry leader in third party customer satisfaction rankings, we have a recognized brand that consumers trust, and an award-winning sustainability program. We look forward to sharing our results with you as 2024 unfolds, with that, I'll now turn the call over to Jeff for the financial review, Jeff.

Jeffrey T. Mezger: We opened 24, new communities during the fourth quarter.

Jeffrey T. Mezger: <unk> nearly all of our planned grand openings, although many open at the end of November which limited their contribution to net orders.

Jeffrey T. Mezger: Said these new communities, along with our first quarter openings have us well positioned for the spring selling season.

Jeffrey Mezger: That said, these new communities, along with our first quarter openings, have us well positioned for the spring selling season. We expect our ending community count to grow sequentially as the year unfolds and we believe we will exit the year with a meaningfully higher number of open communities. Our balance sheet is in excellent shape, and we intend to continue allocating our strong operating cash flow, towards reinvestment in growth, and a return of capital to our shareholders in 2024. Since we began our share repurchase initiative in our 2021 third quarter, we have deployed approximately $750 million dollars to buyback over 20% of the outstanding shares at that time, at an average price of $39.79 dollars per share, which has been significantly accretive to both our book value and diluted earnings per share. During the same timeframe, including our regularly, quarterly dividends, we have returned roughly $885 million dollars to shareholders. In closing, I want to recognize the entire KB Home team, for their dedication to our buyers, and their contributions to our achievements in 2023. There was another year during which we navigated changing market conditions, while remaining strategic and flexible with a focus on the longer term. Our business is solid profitable, and we remain the industry leader in third party customer satisfaction rankings, we have a recognized brand that consumers trust, and an award-winning sustainability program. We look forward to sharing our results with you as 2024 unfolds, with that, I'll now turn the call over to Jeff for the financial review, Jeff.

Jeffrey Mezger: That said, these new communities, along with our first quarter openings, have us well positioned for the spring selling season.

Jeffrey T. Mezger: We expect our ending community count to grow sequentially as the year unfolds and we believe we will exit the year with a meaningfully meaningfully higher number of open communities.

Jeffrey Mezger: We expect our ending community count to grow sequentially as the year unfolds and we believe we will exit the year with a meaningfully higher number of open communities. Our balance sheet is in excellent shape, and we intend to continue allocating our strong operating cash flow, towards reinvestment in growth, and a return of capital to our shareholders in 2024. Since we began our share repurchase initiative in our 2021 third quarter, we have deployed approximately $750 million dollars to buyback over 20% of the outstanding shares at that time, at an average price of $39.79 dollars per share, which has been significantly accretive to both our book value and diluted earnings per share. During the same timeframe, including our regularly, quarterly dividends, we have returned roughly $885 million dollars to shareholders. In closing, I want to recognize the entire KB Home team, for their dedication to our buyers, and their contributions to our achievements in 2023. There was another year during which we navigated changing market conditions, while remaining strategic and flexible with a focus on the longer term. Our business is solid profitable, and we remain the industry leader in third party customer satisfaction rankings, we have a recognized brand that consumers trust, and an award-winning sustainability program. We look forward to sharing our results with you as 2024 unfolds, with that, I'll now turn the call over to Jeff for the financial review, Jeff.

Jeffrey Mezger: We expect our ending community count to grow sequentially as the year unfolds and we believe we will exit the year with a meaningfully higher number of open communities.

Jeff Mezger: Our balance sheet is in excellent shape, and we intend to continue allocating our strong operating cash flow toward reinvestment in growth and a return of capital to our shareholders in 2024. Since we began our share repurchase initiative in our 2021 Q3, we have deployed approximately $750 million to buy back over 20% of the outstanding shares at that time at an average price of $39.79 per share, which has been significantly accretive to both our book value and diluted earnings per share. During this same time frame, including our regularly quarterly dividend, we have returned roughly $885 million to shareholders. In closing, I want to recognize the entire KB Home team for their dedication to our buyers and their contributions to our achievements in 2023.

Our balance sheet is in excellent shape, and we intend to continue allocating our strong operating cash flow toward reinvestment in growth and a return of capital to our shareholders in 2024.

Jeffrey Mezger: Our balance sheet is in excellent shape, and we intend to continue allocating our strong operating cash flow, towards reinvestment in growth, and a return of capital to our shareholders in 2024. Since we began our share repurchase initiative in our 2021 third quarter, we have deployed approximately $750 million dollars to buyback over 20% of the outstanding shares at that time, at an average price of $39.79 dollars per share, which has been significantly accretive to both our book value and diluted earnings per share. During the same timeframe, including our regularly, quarterly dividends, we have returned roughly $885 million dollars to shareholders. In closing, I want to recognize the entire KB Home team, for their dedication to our buyers, and their contributions to our achievements in 2023. There was another year during which we navigated changing market conditions, while remaining strategic and flexible with a focus on the longer term. Our business is solid profitable, and we remain the industry leader in third party customer satisfaction rankings, we have a recognized brand that consumers trust, and an award-winning sustainability program. We look forward to sharing our results with you as 2024 unfolds, with that, I'll now turn the call over to Jeff for the financial review, Jeff.

Jeffrey T. Mezger: Since we began our share repurchase initiative and our 2021 third quarter, we have deployed approximately $750 million.

Jeffrey Mezger: Since we began our share repurchase initiative in our 2021 third quarter, we have deployed approximately $750 million dollars to buyback over 20% of the outstanding shares at that time, at an average price of $39.79 dollars per share, which has been significantly accretive to both our book value and diluted earnings per share. During the same timeframe, including our regularly, quarterly dividends, we have returned roughly $885 million dollars to shareholders. In closing, I want to recognize the entire KB Home team, for their dedication to our buyers, and their contributions to our achievements in 2023. There was another year during which we navigated changing market conditions, while remaining strategic and flexible with a focus on the longer term. Our business is solid profitable, and we remain the industry leader in third party customer satisfaction rankings, we have a recognized brand that consumers trust, and an award-winning sustainability program. We look forward to sharing our results with you as 2024 unfolds, with that, I'll now turn the call over to Jeff for the financial review, Jeff.

Jeffrey T. Mezger: The buyback over 20% of the outstanding shares at that time at an average price of $39 79 per share.

Jeffrey T. Mezger: Which has been significantly accretive to both our book value and diluted earnings per share.

During the same timeframe <unk>.

Jeffrey Mezger: During the same timeframe, including our regularly, quarterly dividends, we have returned roughly $885 million dollars to shareholders. In closing, I want to recognize the entire KB Home team, for their dedication to our buyers, and their contributions to our achievements in 2023. There was another year during which we navigated changing market conditions, while remaining strategic and flexible with a focus on the longer term. Our business is solid profitable, and we remain the industry leader in third party customer satisfaction rankings, we have a recognized brand that consumers trust, and an award-winning sustainability program. We look forward to sharing our results with you as 2024 unfolds, with that, I'll now turn the call over to Jeff for the financial review, Jeff.

Jeffrey Mezger: During the same timeframe, including our regularly, quarterly dividends, we have returned roughly $885 million dollars to shareholders.

Jeffrey T. Mezger: Included in our regularly quarterly dividends, we have returned roughly $885 million to shareholders.

Jeffrey Mezger: In closing, I want to recognize the entire KB Home team, for their dedication to our buyers, and their contributions to our achievements in 2023. There was another year during which we navigated changing market conditions, while remaining strategic and flexible with a focus on the longer term. Our business is solid profitable, and we remain the industry leader in third party customer satisfaction rankings, we have a recognized brand that consumers trust, and an award-winning sustainability program. We look forward to sharing our results with you as 2024 unfolds, with that, I'll now turn the call over to Jeff for the financial review, Jeff.

Jeffrey Mezger: In closing, I want to recognize the entire KB Home team, for their dedication to our buyers, and their contributions to our achievements in 2023.

Jeffrey T. Mezger: In closing I want to recognize the entire Kb home team for their dedication of our buyers and their contributions to our achievements in 2023.

Jeff Mezger: It was another year during which we navigated changing market conditions while remaining strategic and flexible with a focus on the longer term. Our business is solidly profitable, and we remain an industry leader in third-party customer satisfaction rankings. We have a recognized brand that consumers trust and an award-winning sustainability program. We look forward to sharing our results with you as 2024 unfolds. With that, I'll now turn the call over to Jeff for the financial review. Jeff?

Jeffrey Mezger: There was another year during which we navigated changing market conditions, while remaining strategic and flexible with a focus on the longer term. Our business is solid profitable, and we remain the industry leader in third party customer satisfaction rankings, we have a recognized brand that consumers trust, and an award-winning sustainability program. We look forward to sharing our results with you as 2024 unfolds, with that, I'll now turn the call over to Jeff for the financial review, Jeff.

Jeffrey Mezger: There was another year during which we navigated changing market conditions, while remaining strategic and flexible with a focus on the longer term.

Jeffrey T. Mezger: There was another year during which we navigated changing market conditions.

Jeffrey T. Mezger: While remaining strategic and flexible with a focus on the longer term.

Jeffrey Mezger: Our business is solid profitable, and we remain the industry leader in third party customer satisfaction rankings, we have a recognized brand that consumers trust, and an award-winning sustainability program. We look forward to sharing our results with you as 2024 unfolds, with that, I'll now turn the call over to Jeff for the financial review, Jeff.

Jeffrey T. Mezger: Our business is solid profitable.

Jeffrey T. Mezger: And we remain the industry leader in third party customer satisfaction rankings.

Jeffrey T. Mezger: We are a recognized brand that consumers Trust and an award winning sustainability program.

Jeffrey Mezger: We look forward to sharing our results with you as 2024 unfolds, with that, I'll now turn the call over to Jeff for the financial review, Jeff.

We look forward to sharing our results with you as 2024 unfold.

Jeffrey T. Mezger: With that I'll now turn the call over to Jeff for the financial review Jeff.

Jeff Kaminski: Thank you, Jeff, and good afternoon, everyone. I will now cover highlights of our financial performance for the 2023 Q4 and full year, as well as comment on our outlook for 2024. In the quarter, we produced solid results, with housing revenues exceeding the high end of our guidance range and an operating income margin of nearly 11%. In addition, our robust cash flow supported significant share repurchases along with $483 million in land investment. Entering our 2024 Q1, improving housing market conditions and our well-positioned portfolio of open selling communities have generated strong momentum with significantly higher net orders in the first five weeks compared to the corresponding year-earlier period.

Jeff J. Kaminski: Thank you, Jeff and good afternoon, everyone. I will now cover highlights of our financial performance for the 2023 fourth quarter and full year as well as comment on our outlook for 2024. In the quarter, we produced solid results with housing revenues exceeding the high end of our guidance range and an operating income margin of nearly 11%. In addition, our robust cash flow supported significant share repurchases, along with $483 million in land investment. Entering 2024 first quarter, improving housing market conditions, and our well positioned portfolio of open selling communities have generated strong momentum. With significantly higher net orders in the first five weeks compared to the corresponding year earlier period. And the 2023 fourth quarter, our housing revenues were $1 $66 billion compared. Compared to $1 93 billion in the prior year period, reflecting a 10% decrease in the number of homes delivered and a 5% decline in your overall average selling price. Fourth quarter deliveries were down relative to our 2022 results. We achieved our third consecutive quarter of sequential cycle time improvement, which contributed to the higher than expected number of homes delivered. Looking ahead to the 2020 for first quarter and the full year, we anticipate improved housing market conditions and continued favorable supply chain trends. As a result for the first quarter, we expect to generate housing revenues in a range of one four to $1 5 billion. For the 2020 for full year, we are forecasting housing revenues in a range of six 4% to six 8 billion. Supported by our backlog of sold homes. <unk> net orders per community reduced construction cycle time and expected growth in community count. In the fourth quarter, our overall average selling price of homes delivered decreased to approximately $487000 due to both mix shifts and the impact of pricing adjustments and other homebuyer concessions such as mortgage rate locks and buy downs. We believe our 2024 first quarter average selling price will be approximately $477000.

Jeff J. Kaminski: Thank you, Jeff and good afternoon, everyone. I will now cover highlights of our financial performance for the 2023 fourth quarter and full year, as well as comment on our outlook for 2024. In the quarter, we produced solid results with housing revenues exceeding the high end of our guidance range, and an operating income margin of nearly 11%. In addition, our robust cash flow supported significant share repurchases, along with $483 million dollars in land investment. Entering our 2024 first quarter, improving housing market conditions, and our well positioned portfolio of open selling communities have generated strong momentum, with significantly higher net orders in the first five weeks, compared to the corresponding year earlier period. In the 2023 fourth quarter, our housing revenues were $1.66 billion dollars, compared to $1.93 billion in the prior year period, reflecting a 10% decrease in the number of homes delivered, and a 5% decline in your overall average selling price. So fourth quarter deliveries were down, relative to our 2022 results, we achieved our third consecutive quarter of sequential cycle time improvement, which contributed to the higher-than-expected number of homes delivered. Looking ahead to the 2024 first quarter and the full year, we anticipate improved housing market conditions, and continued favorable supply chain trends. As a result, for the first quarter, we expect to generate housing revenues in a range of $1.4 to $1.5 billion dollars. For the 2024 full year, we are forecasting housing revenues in a range of $6.4 to $6.8 billion dollars, supported by our backlog of sold homes, projected net orders per community, reduced construction cycle time, and expected growth in community count. In the fourth quarter, our overall average selling price of homes delivered decreased to approximately $487,000 dollars, due to both mix-shifts, and the impact of pricing adjustments and other homebuyer concessions, such as mortgage rate locks and buy downs.

Jeff J. Kaminski: Thank you, Jeff and good afternoon, everyone.

Jeffrey T. Mezger: I will now cover highlights of our financial performance for the 2023 fourth quarter and full year as well as comment on our outlook for 2024.

Jeff J. Kaminski: I will now cover highlights of our financial performance for the 2023 fourth quarter and full year, as well as comment on our outlook for 2024. In the quarter, we produced solid results with housing revenues exceeding the high end of our guidance range, and an operating income margin of nearly 11%. In addition, our robust cash flow supported significant share repurchases, along with $483 million dollars in land investment. Entering our 2024 first quarter, improving housing market conditions, and our well positioned portfolio of open selling communities have generated strong momentum, with significantly higher net orders in the first five weeks, compared to the corresponding year earlier period. In the 2023 fourth quarter, our housing revenues were $1.66 billion dollars, compared to $1.93 billion in the prior year period, reflecting a 10% decrease in the number of homes delivered, and a 5% decline in your overall average selling price. So fourth quarter deliveries were down, relative to our 2022 results, we achieved our third consecutive quarter of sequential cycle time improvement, which contributed to the higher-than-expected number of homes delivered. Looking ahead to the 2024 first quarter and the full year, we anticipate improved housing market conditions, and continued favorable supply chain trends. As a result, for the first quarter, we expect to generate housing revenues in a range of $1.4 to $1.5 billion dollars. For the 2024 full year, we are forecasting housing revenues in a range of $6.4 to $6.8 billion dollars, supported by our backlog of sold homes, projected net orders per community, reduced construction cycle time, and expected growth in community count. In the fourth quarter, our overall average selling price of homes delivered decreased to approximately $487,000 dollars, due to both mix-shifts, and the impact of pricing adjustments and other homebuyer concessions, such as mortgage rate locks and buy downs.

Jeff J. Kaminski: I will now cover highlights of our financial performance for the 2023 fourth quarter and full year, as well as comment on our outlook for 2024.

Jeffrey T. Mezger: In the quarter, we produced solid results with housing revenues exceeding the high end of our guidance range and an operating income margin of nearly 11%.

Jeff J. Kaminski: In the quarter, we produced solid results with housing revenues exceeding the high end of our guidance range, and an operating income margin of nearly 11%. In addition, our robust cash flow supported significant share repurchases, along with $483 million dollars in land investment. Entering our 2024 first quarter, improving housing market conditions, and our well positioned portfolio of open selling communities have generated strong momentum, with significantly higher net orders in the first five weeks, compared to the corresponding year earlier period. In the 2023 fourth quarter, our housing revenues were $1.66 billion dollars, compared to $1.93 billion in the prior year period, reflecting a 10% decrease in the number of homes delivered, and a 5% decline in your overall average selling price. So fourth quarter deliveries were down, relative to our 2022 results, we achieved our third consecutive quarter of sequential cycle time improvement, which contributed to the higher-than-expected number of homes delivered. Looking ahead to the 2024 first quarter and the full year, we anticipate improved housing market conditions, and continued favorable supply chain trends. As a result, for the first quarter, we expect to generate housing revenues in a range of $1.4 to $1.5 billion dollars. For the 2024 full year, we are forecasting housing revenues in a range of $6.4 to $6.8 billion dollars, supported by our backlog of sold homes, projected net orders per community, reduced construction cycle time, and expected growth in community count. In the fourth quarter, our overall average selling price of homes delivered decreased to approximately $487,000 dollars, due to both mix-shifts, and the impact of pricing adjustments and other homebuyer concessions, such as mortgage rate locks and buy downs.

Jeff J. Kaminski: In the quarter, we produced solid results with housing revenues exceeding the high end of our guidance range, and an operating income margin of nearly 11%.

Jeffrey T. Mezger: In addition, our robust cash flow supported significant share repurchases, along with $483 million in land investment.

Jeff J. Kaminski: In addition, our robust cash flow supported significant share repurchases, along with $483 million dollars in land investment. Entering our 2024 first quarter, improving housing market conditions, and our well positioned portfolio of open selling communities have generated strong momentum, with significantly higher net orders in the first five weeks, compared to the corresponding year earlier period. In the 2023 fourth quarter, our housing revenues were $1.66 billion dollars, compared to $1.93 billion in the prior year period, reflecting a 10% decrease in the number of homes delivered, and a 5% decline in your overall average selling price. So fourth quarter deliveries were down, relative to our 2022 results, we achieved our third consecutive quarter of sequential cycle time improvement, which contributed to the higher-than-expected number of homes delivered. Looking ahead to the 2024 first quarter and the full year, we anticipate improved housing market conditions, and continued favorable supply chain trends. As a result, for the first quarter, we expect to generate housing revenues in a range of $1.4 to $1.5 billion dollars. For the 2024 full year, we are forecasting housing revenues in a range of $6.4 to $6.8 billion dollars, supported by our backlog of sold homes, projected net orders per community, reduced construction cycle time, and expected growth in community count. In the fourth quarter, our overall average selling price of homes delivered decreased to approximately $487,000 dollars, due to both mix-shifts, and the impact of pricing adjustments and other homebuyer concessions, such as mortgage rate locks and buy downs.

Jeff J. Kaminski: In addition, our robust cash flow supported significant share repurchases, along with $483 million dollars in land investment.

Jeffrey T. Mezger: Entering 2024 first quarter, improving housing market conditions, and our well positioned portfolio of open selling communities have generated strong momentum.

Jeff J. Kaminski: Entering our 2024 first quarter, improving housing market conditions, and our well positioned portfolio of open selling communities have generated strong momentum, with significantly higher net orders in the first five weeks, compared to the corresponding year earlier period. In the 2023 fourth quarter, our housing revenues were $1.66 billion dollars, compared to $1.93 billion in the prior year period, reflecting a 10% decrease in the number of homes delivered, and a 5% decline in your overall average selling price. So fourth quarter deliveries were down, relative to our 2022 results, we achieved our third consecutive quarter of sequential cycle time improvement, which contributed to the higher-than-expected number of homes delivered. Looking ahead to the 2024 first quarter and the full year, we anticipate improved housing market conditions, and continued favorable supply chain trends. As a result, for the first quarter, we expect to generate housing revenues in a range of $1.4 to $1.5 billion dollars. For the 2024 full year, we are forecasting housing revenues in a range of $6.4 to $6.8 billion dollars, supported by our backlog of sold homes, projected net orders per community, reduced construction cycle time, and expected growth in community count. In the fourth quarter, our overall average selling price of homes delivered decreased to approximately $487,000 dollars, due to both mix-shifts, and the impact of pricing adjustments and other homebuyer concessions, such as mortgage rate locks and buy downs.

Jeffrey T. Mezger: With significantly higher net orders in the first five weeks compared to the corresponding year earlier period.

Jeff Kaminski: In the 2023 Q4, our housing revenues were $1.66 billion compared to $1.93 billion in the prior year period, reflecting a 10% decrease in the number of homes delivered and a 5% decline in our overall average selling price. Though Q4 deliveries were down relative to our 2022 results, we achieved our third consecutive quarter of sequential cycle time improvement, which contributed to the higher-than-expected number of homes delivered. Looking ahead to the 2024 Q1 and the full year, we anticipate improved housing market conditions and continued favorable supply chain trends. As a result, for the Q1, we expect to generate housing revenues in a range of $1.4 to 1.5 billion.

Jeffrey T. Mezger: And the 2023 fourth quarter, our housing revenues were $1 $66 billion compared.

Jeff J. Kaminski: In the 2023 fourth quarter, our housing revenues were $1.66 billion dollars, compared to $1.93 billion in the prior year period, reflecting a 10% decrease in the number of homes delivered, and a 5% decline in your overall average selling price. So fourth quarter deliveries were down, relative to our 2022 results, we achieved our third consecutive quarter of sequential cycle time improvement, which contributed to the higher-than-expected number of homes delivered. Looking ahead to the 2024 first quarter and the full year, we anticipate improved housing market conditions, and continued favorable supply chain trends. As a result, for the first quarter, we expect to generate housing revenues in a range of $1.4 to $1.5 billion dollars. For the 2024 full year, we are forecasting housing revenues in a range of $6.4 to $6.8 billion dollars, supported by our backlog of sold homes, projected net orders per community, reduced construction cycle time, and expected growth in community count. In the fourth quarter, our overall average selling price of homes delivered decreased to approximately $487,000 dollars, due to both mix-shifts, and the impact of pricing adjustments and other homebuyer concessions, such as mortgage rate locks and buy downs.

Jeffrey T. Mezger: Compared to $1 93 billion in the prior year period, reflecting a 10% decrease in the number of homes delivered and a 5% decline in your overall average selling price.

Jeffrey T. Mezger: Fourth quarter deliveries were down relative to our 2022 results.

Jeff J. Kaminski: So fourth quarter deliveries were down, relative to our 2022 results, we achieved our third consecutive quarter of sequential cycle time improvement, which contributed to the higher-than-expected number of homes delivered. Looking ahead to the 2024 first quarter and the full year, we anticipate improved housing market conditions, and continued favorable supply chain trends. As a result, for the first quarter, we expect to generate housing revenues in a range of $1.4 to $1.5 billion dollars. For the 2024 full year, we are forecasting housing revenues in a range of $6.4 to $6.8 billion dollars, supported by our backlog of sold homes, projected net orders per community, reduced construction cycle time, and expected growth in community count. In the fourth quarter, our overall average selling price of homes delivered decreased to approximately $487,000 dollars, due to both mix-shifts, and the impact of pricing adjustments and other homebuyer concessions, such as mortgage rate locks and buy downs.

Jeffrey T. Mezger: We achieved our third consecutive quarter of sequential cycle time improvement, which contributed to the higher than expected number of homes delivered.

Jeffrey T. Mezger: Looking ahead to the 2020 for first quarter and the full year, we anticipate improved housing market conditions and continued favorable supply chain trends.

Jeff J. Kaminski: Looking ahead to the 2024 first quarter and the full year, we anticipate improved housing market conditions, and continued favorable supply chain trends. As a result, for the first quarter, we expect to generate housing revenues in a range of $1.4 to $1.5 billion dollars. For the 2024 full year, we are forecasting housing revenues in a range of $6.4 to $6.8 billion dollars, supported by our backlog of sold homes, projected net orders per community, reduced construction cycle time, and expected growth in community count. In the fourth quarter, our overall average selling price of homes delivered decreased to approximately $487,000 dollars, due to both mix-shifts, and the impact of pricing adjustments and other homebuyer concessions, such as mortgage rate locks and buy downs.

Jeff J. Kaminski: Looking ahead to the 2024 first quarter and the full year, we anticipate improved housing market conditions, and continued favorable supply chain trends.

Jeffrey T. Mezger: As a result for the first quarter, we expect to generate housing revenues in a range of one four to $1 5 billion.

Jeff J. Kaminski: As a result, for the first quarter, we expect to generate housing revenues in a range of $1.4 to $1.5 billion dollars. For the 2024 full year, we are forecasting housing revenues in a range of $6.4 to $6.8 billion dollars, supported by our backlog of sold homes, projected net orders per community, reduced construction cycle time, and expected growth in community count. In the fourth quarter, our overall average selling price of homes delivered decreased to approximately $487,000 dollars, due to both mix-shifts, and the impact of pricing adjustments and other homebuyer concessions, such as mortgage rate locks and buy downs.

Jeff J. Kaminski: As a result, for the first quarter, we expect to generate housing revenues in a range of $1.4 to $1.5 billion dollars.

Jeff Kaminski: For the 2024 full year, we are forecasting housing revenues in a range of $6.4 to 6.8 billion, supported by our backlog of sold homes, projected net orders per community, reduced construction cycle time, and expected growth in community count. In Q4, our overall average selling price of homes delivered decreased to approximately $487,000 due to both mix shifts and the impact of pricing adjustments and other homebuyer concessions, such as mortgage rate locks and buydowns. We believe our 2024 Q1 average selling price will be approximately $477,000. For the full year, we are projecting an overall average selling price in a range of $480,000 to 490,000.

Jeffrey T. Mezger: For the 2020 for full year, we are forecasting housing revenues in a range of six 4% to six 8 billion.

Jeff J. Kaminski: For the 2024 full year, we are forecasting housing revenues in a range of $6.4 to $6.8 billion dollars, supported by our backlog of sold homes, projected net orders per community, reduced construction cycle time, and expected growth in community count. In the fourth quarter, our overall average selling price of homes delivered decreased to approximately $487,000 dollars, due to both mix-shifts, and the impact of pricing adjustments and other homebuyer concessions, such as mortgage rate locks and buy downs.

Jeffrey T. Mezger: Supported by our backlog of sold homes.

<unk> net orders per community reduced construction cycle time and expected growth in community count.

Jeffrey T. Mezger: In the fourth quarter, our overall average selling price of homes delivered decreased to approximately $487000 due to both mix shifts and the impact of pricing adjustments and other homebuyer concessions such as mortgage rate locks and buy downs.

Jeff J. Kaminski: In the fourth quarter, our overall average selling price of homes delivered decreased to approximately $487,000 dollars, due to both mix-shifts, and the impact of pricing adjustments and other homebuyer concessions, such as mortgage rate locks and buy downs.

We believe our 2024 first quarter average selling price will be approximately $477000.

Jeff J. Kaminski: We believe our 2024 first quarter average selling price will be approximately $477000. For the full year, we are projecting an overall average selling price in a range of 480 to $490000. Homebuilding operating income for the 2023 fourth quarter totaled $189 million compared to $278 2 million for the year earlier quarter. Our homebuilding operating income margin was 10, 9% compared to 14, 4% in 2020 to fourth quarter. Excluding inventory related charges of approximately $1 $2 million in 2023 period versus approximately $27 9 million a year ago. Our operating margin was 10, 9% compared to 15, 8%. We anticipate our 2024 first quarter homebuilding operating income margin will be approximately 10, 5% and the full year metric to be approximately 11%. Our 2023 fourth quarter housing gross profit margin declined 170 basis points from the year earlier quarter to 27%. Excluding inventory related charges, our margin for the quarter was 28% down from 23, 9% in 2022 fourth quarter, mainly due to price decreases and other home by our concessions along with higher construction costs. We are forecasting a housing gross profit margin for the 2020 for first quarter and full year of approximately 21%. This gross margin outlook assumes the current improved market environment remained stable. However, if the recent favorable economic trends continue through the spring selling season and beyond. We believe there is upside to our full year estimate is further declines in mortgage interest rates combined with the pent up demand for housing and continued tight resale inventory conditions would provide an opportunity to reduce hellfire concessions. Our selling general and administrative expense ratio for the 2023 fourth quarter increased 190 basis points from a year ago to nine 9%, mainly reflecting higher costs associated with certain performance based employee compensation plans and sales commissions as well as reduced opera.

Jeff J. Kaminski: We believe our 2024 first quarter average selling price will be approximately $477,000 dollars. For the full year, we are projecting an overall average selling price in a range of 480 to $490,000 dollars. Homebuilding operating income for the 2023 fourth quarter totaled $180.9 million dollars, compared to $278.2 million for the year earlier quarter. Our homebuilding operating income margin was 10.9%, compared to 14.4% in 2022 fourth quarter. Excluding inventory-related charges of approximately $1.2 million dollars in 2023 period, versus approximately $27.9 million a year ago, our operating margin was 10.9% compared to 15,8%. We anticipate our 2024 first quarter homebuilding operating income margin will be approximately 10.5% and the full year metric to be approximately 11%. Our 2023 fourth quarter housing gross profit margin declined 170 basis points from the year earlier quarter to 20.7%, excluding inventory-related charges, our margin for the quarter was 20.8%, down from 23.9% in the 2022 fourth quarter, mainly due to price decreases and other home buyer concessions, along with higher construction costs. We are forecasting a housing gross profit margin for the 2024 first quarter and full year of approximately 21%. This gross margin outlook assumes the current improved market environment remained stable, however, if the recent favorable economic trends continue through the spring selling season and beyond. We believe there is upside to our full year estimate as further declines in mortgage interest rates, combined with the pent up demand for housing and continued tight resale inventory conditions would provide an opportunity to reduce hellfire concessions.

Jeff J. Kaminski: We believe our 2024 first quarter average selling price will be approximately $477,000 dollars.

Jeffrey T. Mezger: For the full year, we are projecting an overall average selling price in a range of 480 to $490000.

Jeff J. Kaminski: For the full year, we are projecting an overall average selling price in a range of 480 to $490,000 dollars. Homebuilding operating income for the 2023 fourth quarter totaled $180.9 million dollars, compared to $278.2 million for the year earlier quarter. Our homebuilding operating income margin was 10.9%, compared to 14.4% in 2022 fourth quarter. Excluding inventory-related charges of approximately $1.2 million dollars in 2023 period, versus approximately $27.9 million a year ago, our operating margin was 10.9% compared to 15,8%. We anticipate our 2024 first quarter homebuilding operating income margin will be approximately 10.5% and the full year metric to be approximately 11%. Our 2023 fourth quarter housing gross profit margin declined 170 basis points from the year earlier quarter to 20.7%, excluding inventory-related charges, our margin for the quarter was 20.8%, down from 23.9% in the 2022 fourth quarter, mainly due to price decreases and other home buyer concessions, along with higher construction costs. We are forecasting a housing gross profit margin for the 2024 first quarter and full year of approximately 21%. This gross margin outlook assumes the current improved market environment remained stable, however, if the recent favorable economic trends continue through the spring selling season and beyond. We believe there is upside to our full year estimate as further declines in mortgage interest rates, combined with the pent up demand for housing and continued tight resale inventory conditions would provide an opportunity to reduce hellfire concessions.

Jeff J. Kaminski: For the full year, we are projecting an overall average selling price in a range of 480 to $490,000 dollars.

Jeff Kaminski: Homebuilding operating income for the 2023 Q4 totaled $180.9 million compared to $278.2 million for the year-earlier quarter. Our homebuilding operating income margin was 10.9% compared to 14.4% in the 2022 Q4. Excluding inventory-related charges of approximately $1.2 million in the 2023 period versus approximately $27.9 million a year ago, our operating margin was 10.9% compared to 15.8%. We anticipate our 2024 Q1 homebuilding operating income margin will be approximately 10.5% and the full-year metric to be approximately 11%. Our 2023 Q4 housing gross profit margin declined 170 basis points from the year-earlier quarter to 20.7%.

Homebuilding operating income for the 2023 fourth quarter totaled $189 million compared to $278 2 million for the year earlier quarter.

Jeff J. Kaminski: Homebuilding operating income for the 2023 fourth quarter totaled $180.9 million dollars, compared to $278.2 million for the year earlier quarter. Our homebuilding operating income margin was 10.9%, compared to 14.4% in 2022 fourth quarter. Excluding inventory-related charges of approximately $1.2 million dollars in 2023 period, versus approximately $27.9 million a year ago, our operating margin was 10.9% compared to 15,8%. We anticipate our 2024 first quarter homebuilding operating income margin will be approximately 10.5% and the full year metric to be approximately 11%. Our 2023 fourth quarter housing gross profit margin declined 170 basis points from the year earlier quarter to 20.7%, excluding inventory-related charges, our margin for the quarter was 20.8%, down from 23.9% in the 2022 fourth quarter, mainly due to price decreases and other home buyer concessions, along with higher construction costs. We are forecasting a housing gross profit margin for the 2024 first quarter and full year of approximately 21%. This gross margin outlook assumes the current improved market environment remained stable, however, if the recent favorable economic trends continue through the spring selling season and beyond. We believe there is upside to our full year estimate as further declines in mortgage interest rates, combined with the pent up demand for housing and continued tight resale inventory conditions would provide an opportunity to reduce hellfire concessions.

Jeff J. Kaminski: Homebuilding operating income for the 2023 fourth quarter totaled $180.9 million dollars, compared to $278.2 million for the year earlier quarter.

Jeffrey T. Mezger: Our homebuilding operating income margin was 10, 9% compared to 14, 4% in 2020 to fourth quarter.

Jeff J. Kaminski: Our homebuilding operating income margin was 10.9%, compared to 14.4% in 2022 fourth quarter. Excluding inventory-related charges of approximately $1.2 million dollars in 2023 period, versus approximately $27.9 million a year ago, our operating margin was 10.9% compared to 15,8%. We anticipate our 2024 first quarter homebuilding operating income margin will be approximately 10.5% and the full year metric to be approximately 11%. Our 2023 fourth quarter housing gross profit margin declined 170 basis points from the year earlier quarter to 20.7%, excluding inventory-related charges, our margin for the quarter was 20.8%, down from 23.9% in the 2022 fourth quarter, mainly due to price decreases and other home buyer concessions, along with higher construction costs. We are forecasting a housing gross profit margin for the 2024 first quarter and full year of approximately 21%. This gross margin outlook assumes the current improved market environment remained stable, however, if the recent favorable economic trends continue through the spring selling season and beyond. We believe there is upside to our full year estimate as further declines in mortgage interest rates, combined with the pent up demand for housing and continued tight resale inventory conditions would provide an opportunity to reduce hellfire concessions.

Jeff J. Kaminski: Our homebuilding operating income margin was 10.9%, compared to 14.4% in 2022 fourth quarter.

Jeff J. Kaminski: Excluding inventory-related charges of approximately $1.2 million dollars in 2023 period, versus approximately $27.9 million a year ago, our operating margin was 10.9% compared to 15,8%. We anticipate our 2024 first quarter homebuilding operating income margin will be approximately 10.5% and the full year metric to be approximately 11%. Our 2023 fourth quarter housing gross profit margin declined 170 basis points from the year earlier quarter to 20.7%, excluding inventory-related charges, our margin for the quarter was 20.8%, down from 23.9% in the 2022 fourth quarter, mainly due to price decreases and other home buyer concessions, along with higher construction costs. We are forecasting a housing gross profit margin for the 2024 first quarter and full year of approximately 21%. This gross margin outlook assumes the current improved market environment remained stable, however, if the recent favorable economic trends continue through the spring selling season and beyond. We believe there is upside to our full year estimate as further declines in mortgage interest rates, combined with the pent up demand for housing and continued tight resale inventory conditions would provide an opportunity to reduce hellfire concessions.

Jeffrey T. Mezger: Excluding inventory related charges of approximately $1 $2 million in 2023 period versus approximately $27 9 million a year ago. Our operating margin was 10, 9% compared to 15, 8%.

Jeff J. Kaminski: We anticipate our 2024 first quarter homebuilding operating income margin will be approximately 10.5% and the full year metric to be approximately 11%. Our 2023 fourth quarter housing gross profit margin declined 170 basis points from the year earlier quarter to 20.7%, excluding inventory-related charges, our margin for the quarter was 20.8%, down from 23.9% in the 2022 fourth quarter, mainly due to price decreases and other home buyer concessions, along with higher construction costs. We are forecasting a housing gross profit margin for the 2024 first quarter and full year of approximately 21%. This gross margin outlook assumes the current improved market environment remained stable, however, if the recent favorable economic trends continue through the spring selling season and beyond. We believe there is upside to our full year estimate as further declines in mortgage interest rates, combined with the pent up demand for housing and continued tight resale inventory conditions would provide an opportunity to reduce hellfire concessions.

Jeff J. Kaminski: We anticipate our 2024 first quarter homebuilding operating income margin will be approximately 10.5% and the full year metric to be approximately 11%.

Jeffrey T. Mezger: We anticipate our 2024 first quarter homebuilding operating income margin will be approximately 10, 5% and the full year metric to be approximately 11%.

Jeff J. Kaminski: Our 2023 fourth quarter housing gross profit margin declined 170 basis points from the year earlier quarter to 20.7%, excluding inventory-related charges, our margin for the quarter was 20.8%, down from 23.9% in the 2022 fourth quarter, mainly due to price decreases and other home buyer concessions, along with higher construction costs. We are forecasting a housing gross profit margin for the 2024 first quarter and full year of approximately 21%. This gross margin outlook assumes the current improved market environment remained stable, however, if the recent favorable economic trends continue through the spring selling season and beyond. We believe there is upside to our full year estimate as further declines in mortgage interest rates, combined with the pent up demand for housing and continued tight resale inventory conditions would provide an opportunity to reduce hellfire concessions.

Jeffrey T. Mezger: Our 2023 fourth quarter housing gross profit margin declined 170 basis points from the year earlier quarter to 27%.

Jeff Kaminski: Excluding inventory-related charges, our margin for the quarter was 20.8%, down from 23.9% in the 2022 Q4, mainly due to price decreases, other homebuyer concessions, along with higher construction costs. We are forecasting a housing gross profit margin for the 2024 Q1 and full year of approximately 21%. This gross margin outlook assumes the current improved market environment remains stable. However, if the recent favorable economic trends continue through the spring selling season and beyond, we believe there is upside to our full year estimate as further declines in mortgage interest rates, combined with the pent-up demand for housing and continued tight resale inventory conditions, would provide an opportunity to reduce homebuyer concessions.

Jeffrey T. Mezger: Excluding inventory related charges, our margin for the quarter was 28% down from 23, 9% in 2022 fourth quarter, mainly due to price decreases and other home by our concessions along with higher construction costs.

Jeff J. Kaminski: We are forecasting a housing gross profit margin for the 2024 first quarter and full year of approximately 21%. This gross margin outlook assumes the current improved market environment remained stable, however, if the recent favorable economic trends continue through the spring selling season and beyond. We believe there is upside to our full year estimate as further declines in mortgage interest rates, combined with the pent up demand for housing and continued tight resale inventory conditions would provide an opportunity to reduce hellfire concessions.

Jeff J. Kaminski: We are forecasting a housing gross profit margin for the 2024 first quarter and full year of approximately 21%.

Jeffrey T. Mezger: We are forecasting a housing gross profit margin for the 2020 for first quarter and full year of approximately 21%.

Jeff J. Kaminski: This gross margin outlook assumes the current improved market environment remained stable, however, if the recent favorable economic trends continue through the spring selling season and beyond. We believe there is upside to our full year estimate as further declines in mortgage interest rates, combined with the pent up demand for housing and continued tight resale inventory conditions would provide an opportunity to reduce hellfire concessions.

Jeffrey T. Mezger: This gross margin outlook assumes the current improved market environment remained stable.

However, if the recent favorable economic trends continue through the spring selling season and beyond.

Jeff J. Kaminski: We believe there is upside to our full year estimate as further declines in mortgage interest rates, combined with the pent up demand for housing and continued tight resale inventory conditions would provide an opportunity to reduce hellfire concessions.

Jeffrey T. Mezger: We believe there is upside to our full year estimate is further declines in mortgage interest rates combined with the pent up demand for housing and continued tight resale inventory conditions would provide an opportunity to reduce hellfire concessions.

Jeff Kaminski: Our selling, general, and administrative expense ratio for the 2023 Q4 increased 190 basis points from a year ago to 9.9%, mainly reflecting higher costs associated with certain performance-based employee compensation plans and sales commissions, as well as reduced operating leverage from lower housing revenues. We are forecasting our 2024 Q1 SG&A ratio to be approximately 10.5%, up from 10.1% in the year earlier quarter, mainly reflecting higher costs, including marketing and advertising expenses associated with the planned increase in our community count during the year as we position our operations for growth. We expect that our 2024 full year SG&A expense ratio will be approximately 10%.

Jeff J. Kaminski: Our selling general and administrative expense ratio for the 2023 fourth quarter increased 190 basis points from a year ago to nine 9%, mainly reflecting higher costs associated with certain performance based employee compensation plans and sales commissions as well as reduced opera. Leverage from lower housing revenues. We are forecasting our 2024 first quarter SG&A ratio to be approximately 10, 5% up from 10, 1% in the year earlier quarter, mainly reflecting higher costs, including marketing and advertising expenses associated with the planned increase in our community count during the year as we position our. Operations for growth. We expect that our 2020 for full year SG&A expense ratio will be approximately 10%. Our income tax expense of $49 3 million for the fourth quarter represented an effective tax rate of approximately 25%. The rate was favorably impacted by $5 8 million. <unk> energy tax credits, reflecting a benefit of our industry, leading sustainability initiatives. However, these credits were lower than expected largely due to the impact of recently issued the IRS guidance that unexpectedly specified a higher energy standards for single family homes built in California than for other states. We expect our effective tax rate for the 2020 for first quarter and full year to be approximately 24%. Overall, we reported net income of $153 million or $1 85 per diluted share for the 2020 through fourth quarter compared to $216 $4 million or $2 47 per diluted share for the prior year period, which were among the highest fourth quarter Lee. Levels in our history. Reflecting on the full year, we're very pleased with our operational execution in 2023, and which we overcame volatile housing market conditions and stiff headwinds from rising mortgage rates to perform significantly better than our original expectations for the year. Relative to the full year guidance, we provided during our 2023 first quarter earnings call in March our. Our full year housing revenue of $6 $37 billion exceeded. We exceeded the midpoint of our guidance range by over $800 million. We're approximately 15%. In addition, our 11, 3% operating income margin exceeded the midpoint of our guidance range by 80 basis points. Turning now to community count our fourth quarter average was essentially flat year over year at 236.

Jeff J. Kaminski: Our selling general administrative expense ratio for the 2023 fourth quarter increased 190 basis points from a year ago to 9.9%, mainly reflecting higher costs, associated with certain performance based employee compensation plans and sales commissions, as well as reduced operating leverage from lower housing revenues. We are forecasting our 2024 first quarter SG&A ratio to be approximately 10.5%, up from 10.1% in the year earlier quarter, mainly reflecting higher costs, including marketing and advertising expenses associated with the planned increase in our community count during the year as we position our operations for growth. We expect that our 2024 full year SG&A expense ratio will be approximately 10%. Our income tax expense of $49.3 million dollars for the fourth quarter, represented an effective tax rate of approximately 25%. The rate was favorably impacted by $5.8 million dollars of federal energy tax credits, reflecting a benefit of our industry-leading sustainability initiatives. However, these credits were lower than expected, largely due to the impact of recently issued the IRS guidance that unexpectedly specified a higher energy standard for single family homes built in California than for other states. We expect our effective tax rate for the 2024 first quarter and full year to be approximately 24%. Overall, we reported net income of $150.3 million dollars, or $1.85 dollars per diluted share, for the 2022 fourth quarter, compared to $216.4 million dollars, or $2.47 dollars per diluted share for the prior year period, which were among the highest fourth quarter levels in our history. Reflecting on the full year, we're very pleased with our operational execution in 2023, in which we overcame volatile housing market conditions and stiff headwinds from rising mortgage rates, to perform significantly better than our original expectations for the year. Relative to the full year guidance we provided during our 2023 first quarter earnings call in March, our full year housing revenue of $6.37 billion dollars exceeded the midpoint of our guidance range by over $800 million dollars to approximately 15%. In addition, our 11.3% operating income margin exceeded the midpoint of our guidance range by 80 basis points.

Jeffrey T. Mezger: Our selling general and administrative expense ratio for the 2023 fourth quarter increased 190 basis points from a year ago to nine 9%, mainly reflecting higher costs associated with certain performance based employee compensation plans and sales commissions as well as reduced opera.

Leverage from lower housing revenues.

Jeff J. Kaminski: We are forecasting our 2024 first quarter SG&A ratio to be approximately 10.5%, up from 10.1% in the year earlier quarter, mainly reflecting higher costs, including marketing and advertising expenses associated with the planned increase in our community count during the year as we position our operations for growth. We expect that our 2024 full year SG&A expense ratio will be approximately 10%. Our income tax expense of $49.3 million dollars for the fourth quarter, represented an effective tax rate of approximately 25%. The rate was favorably impacted by $5.8 million dollars of federal energy tax credits, reflecting a benefit of our industry-leading sustainability initiatives. However, these credits were lower than expected, largely due to the impact of recently issued the IRS guidance that unexpectedly specified a higher energy standard for single family homes built in California than for other states. We expect our effective tax rate for the 2024 first quarter and full year to be approximately 24%. Overall, we reported net income of $150.3 million dollars, or $1.85 dollars per diluted share, for the 2022 fourth quarter, compared to $216.4 million dollars, or $2.47 dollars per diluted share for the prior year period, which were among the highest fourth quarter levels in our history. Reflecting on the full year, we're very pleased with our operational execution in 2023, in which we overcame volatile housing market conditions and stiff headwinds from rising mortgage rates, to perform significantly better than our original expectations for the year. Relative to the full year guidance we provided during our 2023 first quarter earnings call in March, our full year housing revenue of $6.37 billion dollars exceeded the midpoint of our guidance range by over $800 million dollars to approximately 15%. In addition, our 11.3% operating income margin exceeded the midpoint of our guidance range by 80 basis points.

Jeffrey T. Mezger: We are forecasting our 2024 first quarter SG&A ratio to be approximately 10, 5% up from 10, 1% in the year earlier quarter, mainly reflecting higher costs, including marketing and advertising expenses associated with the planned increase in our community count during the year as we position our.

Jeffrey T. Mezger: Operations for growth.

Jeff J. Kaminski: We expect that our 2024 full year SG&A expense ratio will be approximately 10%. Our income tax expense of $49.3 million dollars for the fourth quarter, represented an effective tax rate of approximately 25%. The rate was favorably impacted by $5.8 million dollars of federal energy tax credits, reflecting a benefit of our industry-leading sustainability initiatives. However, these credits were lower than expected, largely due to the impact of recently issued the IRS guidance that unexpectedly specified a higher energy standard for single family homes built in California than for other states. We expect our effective tax rate for the 2024 first quarter and full year to be approximately 24%. Overall, we reported net income of $150.3 million dollars, or $1.85 dollars per diluted share, for the 2022 fourth quarter, compared to $216.4 million dollars, or $2.47 dollars per diluted share for the prior year period, which were among the highest fourth quarter levels in our history. Reflecting on the full year, we're very pleased with our operational execution in 2023, in which we overcame volatile housing market conditions and stiff headwinds from rising mortgage rates, to perform significantly better than our original expectations for the year. Relative to the full year guidance we provided during our 2023 first quarter earnings call in March, our full year housing revenue of $6.37 billion dollars exceeded the midpoint of our guidance range by over $800 million dollars to approximately 15%. In addition, our 11.3% operating income margin exceeded the midpoint of our guidance range by 80 basis points.

Jeffrey T. Mezger: We expect that our 2020 for full year SG&A expense ratio will be approximately 10%.

Jeff Kaminski: Our income tax expense of $49.3 million for Q4 represented an effective tax rate of approximately 25%. The rate was favorably impacted by $5.8 million of federal energy tax credits, reflecting a benefit of our industry-leading sustainability initiatives. However, these credits were lower than expected, largely due to the impact of recently issued IRS guidance that unexpectedly specified a higher energy standard for single-family homes built in California than for other states. We expect our effective tax rate for the 2024 Q1 and full year to be approximately 24%.

Jeffrey T. Mezger: Our income tax expense of $49 3 million for the fourth quarter represented an effective tax rate of approximately 25%.

Jeff J. Kaminski: The rate was favorably impacted by $5.8 million dollars of federal energy tax credits, reflecting a benefit of our industry-leading sustainability initiatives. However, these credits were lower than expected, largely due to the impact of recently issued the IRS guidance that unexpectedly specified a higher energy standard for single family homes built in California than for other states. We expect our effective tax rate for the 2024 first quarter and full year to be approximately 24%. Overall, we reported net income of $150.3 million dollars, or $1.85 dollars per diluted share, for the 2022 fourth quarter, compared to $216.4 million dollars, or $2.47 dollars per diluted share for the prior year period, which were among the highest fourth quarter levels in our history. Reflecting on the full year, we're very pleased with our operational execution in 2023, in which we overcame volatile housing market conditions and stiff headwinds from rising mortgage rates, to perform significantly better than our original expectations for the year. Relative to the full year guidance we provided during our 2023 first quarter earnings call in March, our full year housing revenue of $6.37 billion dollars exceeded the midpoint of our guidance range by over $800 million dollars to approximately 15%. In addition, our 11.3% operating income margin exceeded the midpoint of our guidance range by 80 basis points.

Jeff J. Kaminski: The rate was favorably impacted by $5.8 million dollars of federal energy tax credits, reflecting a benefit of our industry-leading sustainability initiatives.

Jeffrey T. Mezger: The rate was favorably impacted by $5 8 million.

Jeffrey T. Mezger: <unk> energy tax credits, reflecting a benefit of our industry, leading sustainability initiatives.

Jeff J. Kaminski: However, these credits were lower than expected, largely due to the impact of recently issued the IRS guidance that unexpectedly specified a higher energy standard for single family homes built in California than for other states. We expect our effective tax rate for the 2024 first quarter and full year to be approximately 24%. Overall, we reported net income of $150.3 million dollars, or $1.85 dollars per diluted share, for the 2022 fourth quarter, compared to $216.4 million dollars, or $2.47 dollars per diluted share for the prior year period, which were among the highest fourth quarter levels in our history. Reflecting on the full year, we're very pleased with our operational execution in 2023, in which we overcame volatile housing market conditions and stiff headwinds from rising mortgage rates, to perform significantly better than our original expectations for the year. Relative to the full year guidance we provided during our 2023 first quarter earnings call in March, our full year housing revenue of $6.37 billion dollars exceeded the midpoint of our guidance range by over $800 million dollars to approximately 15%. In addition, our 11.3% operating income margin exceeded the midpoint of our guidance range by 80 basis points.

However, these credits were lower than expected largely due to the impact of recently issued the IRS guidance that unexpectedly specified a higher energy standards for single family homes built in California than for other states.

Jeff J. Kaminski: We expect our effective tax rate for the 2024 first quarter and full year to be approximately 24%. Overall, we reported net income of $150.3 million dollars, or $1.85 dollars per diluted share, for the 2022 fourth quarter, compared to $216.4 million dollars, or $2.47 dollars per diluted share for the prior year period, which were among the highest fourth quarter levels in our history. Reflecting on the full year, we're very pleased with our operational execution in 2023, in which we overcame volatile housing market conditions and stiff headwinds from rising mortgage rates, to perform significantly better than our original expectations for the year. Relative to the full year guidance we provided during our 2023 first quarter earnings call in March, our full year housing revenue of $6.37 billion dollars exceeded the midpoint of our guidance range by over $800 million dollars to approximately 15%. In addition, our 11.3% operating income margin exceeded the midpoint of our guidance range by 80 basis points.

Jeff J. Kaminski: We expect our effective tax rate for the 2024 first quarter and full year to be approximately 24%.

Jeffrey T. Mezger: We expect our effective tax rate for the 2020 for first quarter and full year to be approximately 24%.

Jeff J. Kaminski: Overall, we reported net income of $150.3 million dollars, or $1.85 dollars per diluted share, for the 2022 fourth quarter, compared to $216.4 million dollars, or $2.47 dollars per diluted share for the prior year period, which were among the highest fourth quarter levels in our history. Reflecting on the full year, we're very pleased with our operational execution in 2023, in which we overcame volatile housing market conditions and stiff headwinds from rising mortgage rates, to perform significantly better than our original expectations for the year. Relative to the full year guidance we provided during our 2023 first quarter earnings call in March, our full year housing revenue of $6.37 billion dollars exceeded the midpoint of our guidance range by over $800 million dollars to approximately 15%. In addition, our 11.3% operating income margin exceeded the midpoint of our guidance range by 80 basis points.

Jeff Kaminski: Overall, we reported net income of $150.3 million, or $1.85 per diluted share for the 2023 Q4, compared to $216.4 million, or $2.47 per diluted share for the prior year period, which were among the highest Q4 levels in our history. Reflecting on the full year, we are very pleased with our operational execution in 2023, in which we overcame volatile housing market conditions and stiff headwinds from rising mortgage rates to perform significantly better than our original expectations for the year.

Jeffrey T. Mezger: Overall, we reported net income of $153 million or $1 85 per diluted share for the 2020 through fourth quarter compared to $216 $4 million or $2 47 per diluted share for the prior year period, which were among the highest fourth quarter Lee.

Jeff J. Kaminski: Reflecting on the full year, we're very pleased with our operational execution in 2023, in which we overcame volatile housing market conditions and stiff headwinds from rising mortgage rates, to perform significantly better than our original expectations for the year. Relative to the full year guidance we provided during our 2023 first quarter earnings call in March, our full year housing revenue of $6.37 billion dollars exceeded the midpoint of our guidance range by over $800 million dollars to approximately 15%. In addition, our 11.3% operating income margin exceeded the midpoint of our guidance range by 80 basis points.

Jeffrey T. Mezger: Levels in our history.

Jeffrey T. Mezger: Reflecting on the full year, we're very pleased with our operational execution in 2023, and which we overcame volatile housing market conditions and stiff headwinds from rising mortgage rates to perform significantly better than our original expectations for the year.

Jeff Kaminski: Relative to the full year guidance we provided during our 2023 Q1 earnings call in March, our full year housing revenue of $6.37 billion exceeded the midpoint of our guidance range by over $800 million, or approximately 15%. In addition, our 11.3% operating income margin exceeded the midpoint of our guidance range by 80 basis points. Turning now to community count, our Q4 average was essentially flat year over year at 236. We ended the year with 242 active communities, up 5% sequentially. We expect to end the 2024 Q1 with approximately 240 communities, which would result in a year-over-year decrease in the average community count for the quarter in the low double-digit range.

Jeff J. Kaminski: Relative to the full year guidance we provided during our 2023 first quarter earnings call in March, our full year housing revenue of $6.37 billion dollars exceeded the midpoint of our guidance range by over $800 million dollars to approximately 15%. In addition, our 11.3% operating income margin exceeded the midpoint of our guidance range by 80 basis points.

Relative to the full year guidance, we provided during our 2023 first quarter earnings call in March our.

Jeffrey T. Mezger: Our full year housing revenue of $6 $37 billion exceeded.

Jeffrey T. Mezger: We exceeded the midpoint of our guidance range by over $800 million.

Jeffrey T. Mezger: We're approximately 15%.

Jeff J. Kaminski: In addition, our 11.3% operating income margin exceeded the midpoint of our guidance range by 80 basis points.

Jeffrey T. Mezger: In addition, our 11, 3% operating income margin exceeded the midpoint of our guidance range by 80 basis points.

Jeff J. Kaminski: Turning now to community count our fourth quarter average was essentially flat year over year at 236. We ended the year with 242 active communities up 5% sequentially. We expect to end the 2024th first quarter with approximately 240 communities, which would result in a year over year decrease in the average community count for the quarter in the low single digit range. We expect a quarter and community count to increase sequentially through the remainder of 2024, starting in the second quarter as openings each quarter I expected to outpace sellouts. We anticipate ending the year with approximately 270 communities, an increase of 12% and higher compared to the expectations last quarter, a 265 communities at year end. We believe our full year average count will be up about 5%. We invested $483 million in land land development and fees during the 2023 fourth quarter up 9% compared to the $443 million for the year earlier period with $136 million of the total representing new land acquisitions. We ended the quarter with a pipeline of approximately 56000 lots owned or under contract that we expect will drive significant new community openings and community count growth in 2024, and as I noted earlier. During the fourth quarter, we repurchased approximately three 6 million shares of our common stock at a total cost of $162 million for. For the year, we repurchased nine 2 million shares at an average cost of 11% below our year end book value per share. With $164 million remaining under our current common stock repurchase authorization, we intend to continue to repurchase shares with the pace volume and timing based on considerations of our operating cash flow liquidity outlook. NAND investment opportunities and needs the market price of our shares in the housing market and general economic environments. We generated nearly $1 $1 billion of cash flows from operations in 2023 as compared to $183 million in 2022, which drove an increase of nearly $400 million. Year end cash balance, while also funding $411 million of stock repurchases and $150 million of debt repayments and $57 million of dividends, which included a 33% increase in the dividend rate effective in the third quarter. At year end, we had total liquidity of 181 billion, including $727 million in cash and 1.08 billion available under our unsecured revolving credit facility with no cash borrowings outstanding.

Jeff J. Kaminski: Turning now to community count, our fourth quarter average was essentially flat year over year at 236, we ended the year with 242 active communities, up 5% sequentially. We expect to end the 2024 first quarter, with approximately 240 communities, which would result in a year over year decrease in the average community count for the quarter in the low single digit range. We expect our quarter and community count to increase sequentially through the remainder of 2024, starting in the second quarter, as openings to each quarter are expected to outpace sellouts. We anticipate ending the year with approximately 270 communities, an increase of 12%, and higher compared to the expectations last quarter of 265 communities at year end. We believe our full year average count will be up about 5%. We invested $483 million dollars in land, land development and fees during the 2023 fourth quarter, up 9% compared to the $443 million dollars for the year earlier period, with $136 million of the total representing new land acquisitions. We ended the quarter with a pipeline of approximately 56,000 lots, owned or under contract, that we expect will drive significant new community openings and community count growth in 2024, as I noted earlier. During the fourth quarter, we repurchased approximately 3.6 million shares of our common stock at a total cost of $162 million dollars, for the year, we repurchased nine 2 million shares at an average cost of 11%, below our year end book value per share. With $164 million dollars remaining under our current common stock repurchase authorization, we intend to continue to repurchase shares, with the pace, volume and timing based on considerations of our operating cash flow, liquidity outlook, land investment opportunities and needs, the market price of our shares, and the housing market in general economic environments. We generated nearly $1.1 billion dollars of cash flows from operations in 2023, as compared to $183 million dollars in 2022, which drove an increase of nearly $400 million dollars in our Year end cash balance, while also funding $411 million dollars of stock repurchases, $150 million dollars of debt repayments, and $57 million of dividends, which included a 33% increase in the dividend rate, effective in the third quarter.

Jeff J. Kaminski: Turning now to community count, our fourth quarter average was essentially flat year over year at 236, we ended the year with 242 active communities, up 5% sequentially.

Jeffrey T. Mezger: Turning now to community count our fourth quarter average was essentially flat year over year at 236.

Jeffrey T. Mezger: We ended the year with 242 active communities up 5% sequentially.

Jeff J. Kaminski: We expect to end the 2024 first quarter, with approximately 240 communities, which would result in a year over year decrease in the average community count for the quarter in the low single digit range. We expect our quarter and community count to increase sequentially through the remainder of 2024, starting in the second quarter, as openings to each quarter are expected to outpace sellouts. We anticipate ending the year with approximately 270 communities, an increase of 12%, and higher compared to the expectations last quarter of 265 communities at year end. We believe our full year average count will be up about 5%. We invested $483 million dollars in land, land development and fees during the 2023 fourth quarter, up 9% compared to the $443 million dollars for the year earlier period, with $136 million of the total representing new land acquisitions. We ended the quarter with a pipeline of approximately 56,000 lots, owned or under contract, that we expect will drive significant new community openings and community count growth in 2024, as I noted earlier. During the fourth quarter, we repurchased approximately 3.6 million shares of our common stock at a total cost of $162 million dollars, for the year, we repurchased nine 2 million shares at an average cost of 11%, below our year end book value per share. With $164 million dollars remaining under our current common stock repurchase authorization, we intend to continue to repurchase shares, with the pace, volume and timing based on considerations of our operating cash flow, liquidity outlook, land investment opportunities and needs, the market price of our shares, and the housing market in general economic environments. We generated nearly $1.1 billion dollars of cash flows from operations in 2023, as compared to $183 million dollars in 2022, which drove an increase of nearly $400 million dollars in our Year end cash balance, while also funding $411 million dollars of stock repurchases, $150 million dollars of debt repayments, and $57 million of dividends, which included a 33% increase in the dividend rate, effective in the third quarter.

Jeffrey T. Mezger: We expect to end the 2024th first quarter with approximately 240 communities, which would result in a year over year decrease in the average community count for the quarter in the low single digit range.

Jeff Kaminski: We expect our quarter-end community count to increase sequentially through the remainder of 2024, starting in Q2, as openings each quarter are expected to outpace sellouts. We anticipate ending the year with approximately 270 communities, an increase of 12% and higher compared to the expectation last quarter of 265 communities at year-end. We believe our full-year average count will be up about 5%. We invested $483 million in land development, and fees during the 2023 Q4, up 9% compared to the $443 million from the year earlier period, with $136 million of the total representing new land acquisitions.

Jeffrey T. Mezger: We expect a quarter and community count to increase sequentially through the remainder of 2024, starting in the second quarter as openings each quarter I expected to outpace sellouts.

Jeff J. Kaminski: We expect our quarter and community count to increase sequentially through the remainder of 2024, starting in the second quarter, as openings to each quarter are expected to outpace sellouts. We anticipate ending the year with approximately 270 communities, an increase of 12%, and higher compared to the expectations last quarter of 265 communities at year end. We believe our full year average count will be up about 5%. We invested $483 million dollars in land, land development and fees during the 2023 fourth quarter, up 9% compared to the $443 million dollars for the year earlier period, with $136 million of the total representing new land acquisitions. We ended the quarter with a pipeline of approximately 56,000 lots, owned or under contract, that we expect will drive significant new community openings and community count growth in 2024, as I noted earlier. During the fourth quarter, we repurchased approximately 3.6 million shares of our common stock at a total cost of $162 million dollars, for the year, we repurchased nine 2 million shares at an average cost of 11%, below our year end book value per share. With $164 million dollars remaining under our current common stock repurchase authorization, we intend to continue to repurchase shares, with the pace, volume and timing based on considerations of our operating cash flow, liquidity outlook, land investment opportunities and needs, the market price of our shares, and the housing market in general economic environments. We generated nearly $1.1 billion dollars of cash flows from operations in 2023, as compared to $183 million dollars in 2022, which drove an increase of nearly $400 million dollars in our Year end cash balance, while also funding $411 million dollars of stock repurchases, $150 million dollars of debt repayments, and $57 million of dividends, which included a 33% increase in the dividend rate, effective in the third quarter.

Jeffrey T. Mezger: We anticipate ending the year with approximately 270 communities, an increase of 12% and higher compared to the expectations last quarter, a 265 communities at year end.

Jeff J. Kaminski: We anticipate ending the year with approximately 270 communities, an increase of 12%, and higher compared to the expectations last quarter of 265 communities at year end. We believe our full year average count will be up about 5%. We invested $483 million dollars in land, land development and fees during the 2023 fourth quarter, up 9% compared to the $443 million dollars for the year earlier period, with $136 million of the total representing new land acquisitions. We ended the quarter with a pipeline of approximately 56,000 lots, owned or under contract, that we expect will drive significant new community openings and community count growth in 2024, as I noted earlier. During the fourth quarter, we repurchased approximately 3.6 million shares of our common stock at a total cost of $162 million dollars, for the year, we repurchased nine 2 million shares at an average cost of 11%, below our year end book value per share. With $164 million dollars remaining under our current common stock repurchase authorization, we intend to continue to repurchase shares, with the pace, volume and timing based on considerations of our operating cash flow, liquidity outlook, land investment opportunities and needs, the market price of our shares, and the housing market in general economic environments. We generated nearly $1.1 billion dollars of cash flows from operations in 2023, as compared to $183 million dollars in 2022, which drove an increase of nearly $400 million dollars in our Year end cash balance, while also funding $411 million dollars of stock repurchases, $150 million dollars of debt repayments, and $57 million of dividends, which included a 33% increase in the dividend rate, effective in the third quarter.

Jeff J. Kaminski: We anticipate ending the year with approximately 270 communities, an increase of 12%, and higher compared to the expectations last quarter of 265 communities at year end.

Jeffrey T. Mezger: We believe our full year average count will be up about 5%.

Jeff J. Kaminski: We believe our full year average count will be up about 5%. We invested $483 million dollars in land, land development and fees during the 2023 fourth quarter, up 9% compared to the $443 million dollars for the year earlier period, with $136 million of the total representing new land acquisitions. We ended the quarter with a pipeline of approximately 56,000 lots, owned or under contract, that we expect will drive significant new community openings and community count growth in 2024, as I noted earlier. During the fourth quarter, we repurchased approximately 3.6 million shares of our common stock at a total cost of $162 million dollars, for the year, we repurchased nine 2 million shares at an average cost of 11%, below our year end book value per share. With $164 million dollars remaining under our current common stock repurchase authorization, we intend to continue to repurchase shares, with the pace, volume and timing based on considerations of our operating cash flow, liquidity outlook, land investment opportunities and needs, the market price of our shares, and the housing market in general economic environments. We generated nearly $1.1 billion dollars of cash flows from operations in 2023, as compared to $183 million dollars in 2022, which drove an increase of nearly $400 million dollars in our Year end cash balance, while also funding $411 million dollars of stock repurchases, $150 million dollars of debt repayments, and $57 million of dividends, which included a 33% increase in the dividend rate, effective in the third quarter.

Jeffrey T. Mezger: We invested $483 million in land land development and fees during the 2023 fourth quarter up 9% compared to the $443 million for the year earlier period with $136 million of the total representing new land acquisitions.

Jeff Kaminski: We ended Q4 with a pipeline of approximately 56,000 lots owned or under contract that we expect will drive significant new community openings and community count growth in 2024, as I noted earlier. During Q4, we repurchased approximately 3.6 million shares of our common stock at a total cost of $162 million. For the year, we repurchased 9.2 million shares at an average cost 11% below our year-end book value per share. With $164 million remaining under our current common stock repurchase authorization, we intend to continue to repurchase shares with the pace, volume, and timing based on considerations of our operating cash flow, liquidity outlook, land investment opportunities and needs, the market price of our shares, and the housing market and general economic environments.

Jeffrey T. Mezger: We ended the quarter with a pipeline of approximately 56000 lots owned or under contract that we expect will drive significant new community openings and community count growth in 2024, and as I noted earlier.

Jeff J. Kaminski: We ended the quarter with a pipeline of approximately 56,000 lots, owned or under contract, that we expect will drive significant new community openings and community count growth in 2024, as I noted earlier. During the fourth quarter, we repurchased approximately 3.6 million shares of our common stock at a total cost of $162 million dollars, for the year, we repurchased nine 2 million shares at an average cost of 11%, below our year end book value per share. With $164 million dollars remaining under our current common stock repurchase authorization, we intend to continue to repurchase shares, with the pace, volume and timing based on considerations of our operating cash flow, liquidity outlook, land investment opportunities and needs, the market price of our shares, and the housing market in general economic environments. We generated nearly $1.1 billion dollars of cash flows from operations in 2023, as compared to $183 million dollars in 2022, which drove an increase of nearly $400 million dollars in our Year end cash balance, while also funding $411 million dollars of stock repurchases, $150 million dollars of debt repayments, and $57 million of dividends, which included a 33% increase in the dividend rate, effective in the third quarter.

Jeffrey T. Mezger: During the fourth quarter, we repurchased approximately three 6 million shares of our common stock at a total cost of $162 million for.

Jeff J. Kaminski: During the fourth quarter, we repurchased approximately 3.6 million shares of our common stock at a total cost of $162 million dollars, for the year, we repurchased nine 2 million shares at an average cost of 11%, below our year end book value per share. With $164 million dollars remaining under our current common stock repurchase authorization, we intend to continue to repurchase shares, with the pace, volume and timing based on considerations of our operating cash flow, liquidity outlook, land investment opportunities and needs, the market price of our shares, and the housing market in general economic environments. We generated nearly $1.1 billion dollars of cash flows from operations in 2023, as compared to $183 million dollars in 2022, which drove an increase of nearly $400 million dollars in our Year end cash balance, while also funding $411 million dollars of stock repurchases, $150 million dollars of debt repayments, and $57 million of dividends, which included a 33% increase in the dividend rate, effective in the third quarter.

Jeffrey T. Mezger: For the year, we repurchased nine 2 million shares at an average cost of 11% below our year end book value per share.

Jeffrey T. Mezger: With $164 million remaining under our current common stock repurchase authorization, we intend to continue to repurchase shares with the pace volume and timing based on considerations of our operating cash flow liquidity outlook.

Jeff J. Kaminski: With $164 million dollars remaining under our current common stock repurchase authorization, we intend to continue to repurchase shares. With the pace, volume and timing based on considerations of our operating cash flow, liquidity outlook, land investment opportunities and needs, the market price of our shares, and the housing market in general economic environments. We generated nearly $1.1 billion dollars of cash flows from operations in 2023, as compared to $183 million dollars in 2022, which drove an increase of nearly $400 million dollars in our Year end cash balance, while also funding $411 million dollars of stock repurchases, $150 million dollars of debt repayments, and $57 million of dividends, which included a 33% increase in the dividend rate, effective in the third quarter.

Jeff J. Kaminski: With $164 million dollars remaining under our current common stock repurchase authorization, we intend to continue to repurchase shares.

Jeff J. Kaminski: With the pace, volume and timing based on considerations of our operating cash flow, liquidity outlook, land investment opportunities and needs, the market price of our shares, and the housing market in general economic environments. We generated nearly $1.1 billion dollars of cash flows from operations in 2023, as compared to $183 million dollars in 2022, which drove an increase of nearly $400 million dollars in our Year end cash balance, while also funding $411 million dollars of stock repurchases, $150 million dollars of debt repayments, and $57 million of dividends, which included a 33% increase in the dividend rate, effective in the third quarter.

Jeffrey T. Mezger: NAND investment opportunities and needs the market price of our shares in the housing market and general economic environments.

Jeff Kaminski: We generated nearly $1.1 billion of cash flows from operations in 2023 as compared to $183 million in 2022, which drove an increase of nearly $400 million in our year-end cash balance, while also funding $411 million of stock repurchases, $150 million of debt repayments, and $57 million of dividends, which included a 33% increase in the dividend rate effective in Q3.

Jeffrey T. Mezger: We generated nearly $1 $1 billion of cash flows from operations in 2023 as compared to $183 million in 2022, which drove an increase of nearly $400 million.

Jeff J. Kaminski: We generated nearly $1.1 billion dollars of cash flows from operations in 2023, as compared to $183 million dollars in 2022, which drove an increase of nearly $400 million dollars in our Year end cash balance. While also funding $411 million dollars of stock repurchases, $150 million dollars of debt repayments, and $57 million of dividends, which included a 33% increase in the dividend rate, effective in the third quarter.

Jeffrey T. Mezger: Year end cash balance, while also funding $411 million of stock repurchases and $150 million of debt repayments and $57 million of dividends, which included a 33% increase in the dividend rate effective in the third quarter.

Jeff J. Kaminski: While also funding $411 million dollars of stock repurchases, $150 million dollars of debt repayments, and $57 million of dividends, which included a 33% increase in the dividend rate, effective in the third quarter.

Jeff Kaminski: At year-end, we had total liquidity of $1.81 billion, including $727 million of cash and $1.08 billion available under our unsecured revolving credit facility, with no cash bonds outstanding. Regarding our financial leverage, we are very pleased with the steady progress and favorable trend over the past five years that resulted in a 19 percentage point improvement in our leverage ratio. Over the past year, our debt-to-capital ratio improved by 270 basis points to 30.7% at year-end 2023, compared to 33.4% at the end of the previous year. We have no debt maturities until our term loan's 2026 expiration, with our next senior note maturity in June 2027.

Jeffrey T. Mezger: At year end, we had total liquidity of 181 billion, including $727 million in cash and 1.08 billion available under our unsecured revolving credit facility with no cash borrowings outstanding.

Jeff J. Kaminski: At year end, we had a total liquidity of $1.81 billion dollars, including $727 million dollars in cash, and $1.08 billion available under our unsecured revolving credit facility, with no cash borrowings outstanding. Regarding our financial leverage, we're very pleased with the steady progress and favorable trend over the past five years, that resulted in a 19 percentage point improvement in our leverage ratio. Over the past year, our debt-to-capital ratio improved by 270 basis points to 30.7% at year end 2023, compared to 33.4% at the end of the previous year. We have no debt maturities until our term loans in 2026 exploration, with our next senior note maturity in June 2027. In conclusion, we are pleased with our strong 2023 operational and financial performance, and remain optimistic about the outlook for the housing market, given the favorable fundamental demographic trends, constrained inventory of resale homes available for sale, and continued underproduction of new homes. In addition, we believe our strong financial position, including our liquidity profile and long runway for debt maturities, will allow us to continue to be opportunistic with capital deployment in 2024 and beyond. In 2024, we plan to execute on our core principles of our unique build-to-order business model, and returns focused growth strategy, carefully allocating capital with a focus on enhancing long term stockholder value. We believe we are well positioned to achieve our objectives, supported by the recent decline in mortgage interest rates, a solid portfolio of communities, and an anticipated expanded community count, improving cycle times and healthy net order activity during the first five weeks of the new fiscal year, ahead of the spring selling season. We will now take your questions, John Please open the lines.

Jeffrey T. Mezger: Regarding our financial leverage we're very pleased with the steady progress in favorable trend over the past five years that resulted in a 19 percentage point improvement in our leverage ratio.

Jeff J. Kaminski: Regarding our financial leverage, we're very pleased with the steady progress and favorable trend over the past five years, that resulted in a 19 percentage point improvement in our leverage ratio. Over the past year, our debt-to-capital ratio improved by 270 basis points to 30.7% at year end 2023, compared to 33.4% at the end of the previous year. We have no debt maturities until our term loans in 2026 exploration, with our next senior note maturity in June 2027. In conclusion, we are pleased with our strong 2023 operational and financial performance, and remain optimistic about the outlook for the housing market, given the favorable fundamental demographic trends, constrained inventory of resale homes available for sale, and continued underproduction of new homes. In addition, we believe our strong financial position, including our liquidity profile and long runway for debt maturities, will allow us to continue to be opportunistic with capital deployment in 2024 and beyond. In 2024, we plan to execute on our core principles of our unique build-to-order business model, and returns focused growth strategy, carefully allocating capital with a focus on enhancing long term stockholder value. We believe we are well positioned to achieve our objectives, supported by the recent decline in mortgage interest rates, a solid portfolio of communities, and an anticipated expanded community count, improving cycle times and healthy net order activity during the first five weeks of the new fiscal year, ahead of the spring selling season. We will now take your questions, John Please open the lines.

Jeffrey T. Mezger: Over the past year, our debt to capital ratio improved by 270 basis points to 37% at year end 2023 <unk>.

Jeff J. Kaminski: Over the past year, our debt-to-capital ratio improved by 270 basis points to 30.7% at year end 2023, compared to 33.4% at the end of the previous year. We have no debt maturities until our term loans in 2026 exploration, with our next senior note maturity in June 2027. In conclusion, we are pleased with our strong 2023 operational and financial performance, and remain optimistic about the outlook for the housing market, given the favorable fundamental demographic trends, constrained inventory of resale homes available for sale, and continued underproduction of new homes. In addition, we believe our strong financial position, including our liquidity profile and long runway for debt maturities, will allow us to continue to be opportunistic with capital deployment in 2024 and beyond. In 2024, we plan to execute on our core principles of our unique build-to-order business model, and returns focused growth strategy, carefully allocating capital with a focus on enhancing long term stockholder value. We believe we are well positioned to achieve our objectives, supported by the recent decline in mortgage interest rates, a solid portfolio of communities, and an anticipated expanded community count, improving cycle times and healthy net order activity during the first five weeks of the new fiscal year, ahead of the spring selling season. We will now take your questions, John Please open the lines.

Jeff J. Kaminski: Over the past year, our debt-to-capital ratio improved by 270 basis points to 30.7% at year end 2023, compared to 33.4% at the end of the previous year.

Jeffrey T. Mezger: Compared to 33, 4% at the end of the previous year.

Jeff J. Kaminski: We have no debt maturities until our term loans in 2026 exploration, with our next senior note maturity in June 2027. In conclusion, we are pleased with our strong 2023 operational and financial performance, and remain optimistic about the outlook for the housing market, given the favorable fundamental demographic trends, constrained inventory of resale homes available for sale, and continued underproduction of new homes. In addition, we believe our strong financial position, including our liquidity profile and long runway for debt maturities, will allow us to continue to be opportunistic with capital deployment in 2024 and beyond. In 2024, we plan to execute on our core principles of our unique build-to-order business model, and returns focused growth strategy, carefully allocating capital with a focus on enhancing long term stockholder value. We believe we are well positioned to achieve our objectives, supported by the recent decline in mortgage interest rates, a solid portfolio of communities, and an anticipated expanded community count, improving cycle times and healthy net order activity during the first five weeks of the new fiscal year, ahead of the spring selling season. We will now take your questions, John Please open the lines.

Jeff J. Kaminski: We have no debt maturities until our term loans in 2026 exploration, with our next senior note maturity in June 2027.

Jeffrey T. Mezger: We have no debt maturities until our term loans in 2026th exploration with our next senior note maturity in June 2027.

Jeff J. Kaminski: In conclusion, we are pleased with our strong 2023 operational and financial performance, and remain optimistic about the outlook for the housing market, given the favorable fundamental demographic trends, constrained inventory of resale homes available for sale, and continued underproduction of new homes. In addition, we believe our strong financial position, including our liquidity profile and long runway for debt maturities, will allow us to continue to be opportunistic with capital deployment in 2024 and beyond. In 2024, we plan to execute on our core principles of our unique build-to-order business model, and returns focused growth strategy, carefully allocating capital with a focus on enhancing long term stockholder value. We believe we are well positioned to achieve our objectives, supported by the recent decline in mortgage interest rates, a solid portfolio of communities, and an anticipated expanded community count, improving cycle times and healthy net order activity during the first five weeks of the new fiscal year, ahead of the spring selling season. We will now take your questions, John Please open the lines.

Jeff Kaminski: In conclusion, we are pleased with our strong 2023 operational and financial performance and remain optimistic about the outlook for the housing market given the favorable fundamental demographic trends, constrained inventory of resale homes available for sale, and continued underproduction of new homes. In addition, we believe our strong financial position, including our liquidity profile and long runway for debt maturities, will allow us to continue to be opportunistic with capital deployment in 2024 and beyond. In 2024, we plan to execute on the core principles of our unique built-to-order business model and returns-focused growth strategy, carefully allocating capital with a focus on enhancing long-term stockholder value.

Jeffrey T. Mezger: In conclusion, we are pleased with our strong 2023 operational and financial performance and remain optimistic about the outlook for the housing market given the favorable fundamental demographic trends constrained inventory of resale homes available for sale and continued underproduction of new homes.

Jeff J. Kaminski: In addition, we believe our strong financial position, including our liquidity profile and long runway for debt maturities, will allow us to continue to be opportunistic with capital deployment in 2024 and beyond. In 2024, we plan to execute on our core principles of our unique build-to-order business model, and returns focused growth strategy, carefully allocating capital with a focus on enhancing long term stockholder value. We believe we are well positioned to achieve our objectives, supported by the recent decline in mortgage interest rates, a solid portfolio of communities, and an anticipated expanded community count, improving cycle times and healthy net order activity during the first five weeks of the new fiscal year, ahead of the spring selling season. We will now take your questions, John Please open the lines.

In addition, we believe our strong financial position, including our liquidity profile and long runway for debt maturities will allow us to continue to be opportunistic with capital deployment in 2024 and beyond.

Jeff J. Kaminski: In 2024, we plan to execute on our core principles of our unique build-to-order business model, and returns focused growth strategy, carefully allocating capital with a focus on enhancing long term stockholder value. We believe we are well positioned to achieve our objectives, supported by the recent decline in mortgage interest rates, a solid portfolio of communities, and an anticipated expanded community count, improving cycle times and healthy net order activity during the first five weeks of the new fiscal year, ahead of the spring selling season. We will now take your questions, John Please open the lines.

In 2024, we plan to execute on our core principles of our unique build to order business model and returns focused growth strategy carefully allocating capital with a focus on enhancing long term stockholder value.

Jeff J. Kaminski: We believe we are well positioned to achieve our objectives, supported by the recent decline in mortgage interest rates, a solid portfolio of communities, and an anticipated expanded community count, improving cycle times and healthy net order activity during the first five weeks of the new fiscal year, ahead of the spring selling season. We will now take your questions, John Please open the lines.

Jeff Kaminski: We believe we are well-positioned to achieve our objectives supported by the recent decline in mortgage interest rates, our solid portfolio of communities and anticipated expanding community count, improving cycle times, and healthy net order activity during the first five weeks of the new fiscal year ahead of the spring selling season. We will now take your questions. John, please open the lines.

Jeffrey T. Mezger: We believe we are well positioned to achieve our objective is supported by the recent decline in mortgage interest rates a solid portfolio of communities.

Jeffrey T. Mezger: <unk> expanded community count improved.

Jeffrey T. Mezger: Improving cycle times and healthy net order activity during the first five weeks of the new fiscal year ahead of the spring selling season.

Jeff J. Kaminski: We will now take your questions, John Please open the lines.

We will now take your questions John Please open the lines.

Operator: Thank you, sir. We will now conduct the question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the queue. You may press star two to remove a question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We ask that you please limit yourself to one question and one follow-up. Thank you. One moment, please, while we poll for questions. The first question comes from the line of John Lovallo with UBS. Please proceed with your question.

Operator: Thank you Sir, we will now conduct the question and answer session. If you would like to ask a question, please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the queue, you May press star two to remove a question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We ask that you please limit yourself to one question and one follow up, thank you. One moment, please while we pull for questions. And the first question comes from the line of John Lovallo with UBS, please proceed with your question.

Operator: Thank you Sir, we will now conduct the question and answer session.

Operator: If you would like to ask a question, please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the queue, you May press star two to remove a question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We ask that you please limit yourself to one question and one follow up, thank you. One moment, please while we pull for questions. And the first question comes from the line of John Lovallo with UBS, please proceed with your question.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We ask that you please limit yourself to one question and one follow up, thank you. One moment, please while we pull for questions. And the first question comes from the line of John Lovallo with UBS, please proceed with your question.

Speaker Change: We ask that you please limit yourself to one question and one follow up thank you.

Speaker Change: A moment, please when we pull for questions.

Operator: One moment, please while we pull for questions. And the first question comes from the line of John Lovallo with UBS, please proceed with your question.

Operator: One moment, please while we pull for questions.

Operator: And the first question comes from the line of John Lovallo with UBS, please proceed with your question.

Speaker Change: And the first question comes from the line of John Lovallo with UBS. Please proceed with your question.

John Lovallo: Hi, guys. Thank you for taking my questions. The first one is, you know, it appears that the sort of slight downshift in home sales revenue, the outlook from $6.5 to $7 billion to $6.4 to $6.8 billion was driven by the lower Q4 orders. The first question is, you know, is that correct? You know, if that is correct, rates are down about 50 basis points from when you gave that initial guide. Is there not enough time, you know, in H1 to sort of make up the 300 to 400 home delta, and sort of stay on that $6.5 to $7 billion trend?

John Lovallo: Hi, guys, thank you for taking my questions. The first one is, it appears that the sort of slight down shift in home sales revenue, the outlook from $6.5 to $7 billion to $6.4 to $6.8 billion was driven by the lower 4Q orders. So the first question is, is that correct? And if that is correct, rates are down about 50 basis points from when you gave that initial guide, so is there not enough time in the first half of the year to sort of make up to 300 to 400 home Delta, into sort of stay on that $6.5 to 7 billion trend?

John Lovallo: Hi, guys, thank you for taking my questions.

John Lovallo: The first one is, it appears that the sort of slight down shift in home sales revenue, the outlook from $6.5 to $7 billion to $6.4 to $6.8 billion was driven by the lower 4Q orders. So the first question is, is that correct? And if that is correct, rates are down about 50 basis points from when you gave that initial guide, so is there not enough time in the first half of the year to sort of make up to 300 to 400 home Delta, into sort of stay on that $6.5 to 7 billion trend?

John Lovallo: The first one is, it appears that the sort of slight down shift in home sales revenue, the outlook from $6.5 to $7 billion to $6.4 to $6.8 billion was driven by the lower 4Q orders.

John Lovallo: So the first question is, is that correct? And if that is correct, rates are down about 50 basis points from when you gave that initial guide, so is there not enough time in the first half of the year to sort of make up to 300 to 400 home Delta, into sort of stay on that $6.5 to 7 billion trend?

John Lovallo: So the first question is, is that correct?

John Lovallo: And if that is correct, rates are down about 50 basis points from when you gave that initial guide, so is there not enough time in the first half of the year to sort of make up to 300 to 400 home Delta, into sort of stay on that $6.5 to 7 billion trend?

Speaker Change: From when you gave that initial guide so is there not enough time in the first half of the year, just sort of make up to 300 to 400 home Delta.

Speaker Change: It's sort of stay on that $6 $5 7 billion trend.

Jeff Kaminski: Right. Yeah, I think I can take that. Yeah, thanks for the question. When we look at the change in the full year, it wasn't a terribly significant move. It was about 2% at the midpoint or about $150. You are right in saying there was about $70 million of pull forward into the Q4. You know, what happened in the Q4, we had higher deliveries than we expected, and those sales were a little bit lighter than what we were planning for. Our year-end backlog came down a little bit more than what we were anticipating when we provided that guide. I would term it, John, mostly as just refinement of the full year guide. We do believe there is upside.

Jeff J. Kaminski: Right, Yes, I think I can take that, so yes, thanks for the question. When we look at the change in the full year, it wasn't a terribly significant move, it was about 2% at the midpoint or about $150 dollars. You are right in saying it was about $70 million dollars of pull forward into the fourth quarter, and what happened in the fourth quarter, we had higher deliveries than we expected and the sales were a little bit lighter than what we're planning for, so our year end backlog came down a little bit more than what we were anticipating when we provided that guide. But I would term it, John, mostly as just refinement of the full year guide. We do believe there is upside, we're trying to forecast the year based on the improved conditions that we have today, not necessarily looking at continued improvement as we go through the year. We're very encouraged by the start of the year in the first five week sales, five weeks of sales that we've seen, and remain optimistic about our potential in 2024.

Jeff J. Kaminski: Right, Yes, I think I can take that, so yes, thanks for the question.

Jeff J. Kaminski: When we look at the change in the full year, it wasn't a terribly significant move, it was about 2% at the midpoint or about $150 dollars. You are right in saying it was about $70 million dollars of pull forward into the fourth quarter, and what happened in the fourth quarter, we had higher deliveries than we expected and the sales were a little bit lighter than what we're planning for, so our year end backlog came down a little bit more than what we were anticipating when we provided that guide. But I would term it, John, mostly as just refinement of the full year guide. We do believe there is upside, we're trying to forecast the year based on the improved conditions that we have today, not necessarily looking at continued improvement as we go through the year. We're very encouraged by the start of the year in the first five week sales, five weeks of sales that we've seen, and remain optimistic about our potential in 2024.

Jeff J. Kaminski: When we look at the change in the full year, it wasn't a terribly significant move, it was about 2% at the midpoint or about $150 dollars.

Jeff J. Kaminski: You are right in saying it was about $70 million dollars of pull forward into the fourth quarter, and what happened in the fourth quarter, we had higher deliveries than we expected and the sales were a little bit lighter than what we're planning for, so our year end backlog came down a little bit more than what we were anticipating when we provided that guide. But I would term it, John, mostly as just refinement of the full year guide. We do believe there is upside, we're trying to forecast the year based on the improved conditions that we have today, not necessarily looking at continued improvement as we go through the year. We're very encouraged by the start of the year in the first five week sales, five weeks of sales that we've seen, and remain optimistic about our potential in 2024.

Speaker Change: Into the fourth quarter and what happened in the fourth quarter, we had higher deliveries than we expected and the sales were a little bit lighter.

Speaker Change: And then what we're planning for so our year end backlog came down a little bit more than what we were anticipating when we provided that guide, but I would term it John mostly as just refinement of the full year guide. We do believe there is upside were trying to forecast the year based on.

Jeff J. Kaminski: But I would term it, John, mostly as just refinement of the full year guide. We do believe there is upside, we're trying to forecast the year based on the improved conditions that we have today, not necessarily looking at continued improvement as we go through the year. We're very encouraged by the start of the year in the first five week sales, five weeks of sales that we've seen, and remain optimistic about our potential in 2024.

Jeff J. Kaminski: But I would term it, John, mostly as just refinement of the full year guide.

Jeff Kaminski: We're trying to forecast the year based on the improved conditions that we have today, not necessarily looking at continued improvement as we go through the year. We're very encouraged by the start of the year and the first five weeks of sales that we've seen and remain optimistic about our potential in 2024.

Jeff J. Kaminski: We do believe there is upside, we're trying to forecast the year based on the improved conditions that we have today, not necessarily looking at continued improvement as we go through the year. We're very encouraged by the start of the year in the first five week sales, five weeks of sales that we've seen, and remain optimistic about our potential in 2024.

Speaker Change: The improved conditions that we have today not necessarily looking at continued improvement as we go through the year.

Speaker Change: We're very encouraged by the start of the year in the first five week sales five weeks of sales that we've seen and remain optimistic about our potential in 2024.

Jeff J. Kaminski: We're very encouraged by the start of the year in the first five week sales, five weeks of sales that we've seen, and remain optimistic about our potential in 2024.

John Lovallo: Okay, that's helpful. Seems like a little bit of conservatism maybe. All right, in terms of the gross margin, it's expected to be about 21% in Q1 and then 21% for the full year. I mean, are you expecting a relatively flat gross margin in each quarter? And if so, what would drive that consistency versus the normal kind of H2 step-up that we would expect?

John Lovallo: Okay, that's helpful, so it seems like a little bit of conservatism maybe. In terms of the gross margin it's expected to be about 21% in the first quarter and then 21% for the full year. I mean are you expecting a relatively flat gross margin in each quarter? And if so, what would drive that consistency versus the normal kind of second half step up that we would expect?

John Lovallo: Okay, that's helpful, so it seems like a little bit of conservatism maybe.

John Lovallo: In terms of the gross margin it's expected to be about 21% in the first quarter and then 21% for the full year. I mean are you expecting a relatively flat gross margin in each quarter? And if so, what would drive that consistency versus the normal kind of second half step up that we would expect?

John Lovallo: In terms of the gross margin it's expected to be about 21% in the first quarter and then 21% for the full year.

John Lovallo: I mean are you expecting a relatively flat gross margin in each quarter? And if so, what would drive that consistency versus the normal kind of second half step up that we would expect?

John Lovallo: I mean are you expecting a relatively flat gross margin in each quarter?

John Lovallo: And if so, what would drive that consistency versus the normal kind of second half step up that we would expect?

Jeff Kaminski: Right. Yeah, we had a relatively steady trend in 2023, a little less variability than what we normally see. You know, it's been a pretty choppy market, as you know, so we're trying to base everything off of sort of current sales rates and current backlog margins, and what we're seeing embedded in the orders right now. You know, our current backlog margins are actually a little bit higher than our guide, but we always like to have a little bit of room there in case there's some contingencies relating to either quick move-in units or a continued need for incentives, or whatever. So yeah, I would expect to see a relatively consistent gross margin profile for the year at this point in time.

Jeff J. Kaminski: Right, Yes. We had a relatively steady trend in 2023, a little less variability than we normally see. It's been a pretty choppy market as you know, so we're trying to base everything off of sort of current sales rates and current backlog margins and what we are seeing embedded in the orders right now. Our current backlog margins are actually a little bit higher than our guide, but we always like to have a little bit of room there in case there are some contingencies relating to either quick move-in units, or continued need for incentives or whatever. So, yes, I would expect to see a relatively consistent gross margin profile for the year at this point in time, that said, we still have a lot of sales to make for the back half of the year and we'll have a better visibility of that as we get more into the spring selling season to see how that variability can go on the gross margin side. But we like the favorable economic trends we're seeing, mortgage rates coming down, solid employment, growing economy, pent up demand for housing, the resale inventory tightness. All of those to me suggest opportunities to reduce concessions, which would be pretty much right to the gross margin line to the extent we're able to do that if market conditions continue to improve.

Jeff J. Kaminski: Right, Yes.

Jeff J. Kaminski: We had a relatively steady trend in 2023, a little less variability than we normally see. It's been a pretty choppy market as you know, so we're trying to base everything off of sort of current sales rates and current backlog margins and what we are seeing embedded in the orders right now. Our current backlog margins are actually a little bit higher than our guide, but we always like to have a little bit of room there in case there are some contingencies relating to either quick move-in units, or continued need for incentives or whatever. So, yes, I would expect to see a relatively consistent gross margin profile for the year at this point in time, that said, we still have a lot of sales to make for the back half of the year and we'll have a better visibility of that as we get more into the spring selling season to see how that variability can go on the gross margin side. But we like the favorable economic trends we're seeing, mortgage rates coming down, solid employment, growing economy, pent up demand for housing, the resale inventory tightness. All of those to me suggest opportunities to reduce concessions, which would be pretty much right to the gross margin line to the extent we're able to do that if market conditions continue to improve.

Jeff J. Kaminski: We had a relatively steady trend in 2023, a little less variability than we normally see.

Speaker Change: Little less variability than we normally see.

Jeff J. Kaminski: It's been a pretty choppy market as you know, so we're trying to base everything off of sort of current sales rates and current backlog margins and what we are seeing embedded in the orders right now. Our current backlog margins are actually a little bit higher than our guide, but we always like to have a little bit of room there in case there are some contingencies relating to either quick move-in units, or continued need for incentives or whatever. So, yes, I would expect to see a relatively consistent gross margin profile for the year at this point in time, that said, we still have a lot of sales to make for the back half of the year and we'll have a better visibility of that as we get more into the spring selling season to see how that variability can go on the gross margin side. But we like the favorable economic trends we're seeing, mortgage rates coming down, solid employment, growing economy, pent up demand for housing, the resale inventory tightness. All of those to me suggest opportunities to reduce concessions, which would be pretty much right to the gross margin line to the extent we're able to do that if market conditions continue to improve.

Speaker Change: It's been a pretty choppy market as you know so we're trying to base everything off of.

Speaker Change: Current sales rates and current backlog margins and what we are seeing embedded in and the orders right now.

Jeff J. Kaminski: Our current backlog margins are actually a little bit higher than our guide, but we always like to have a little bit of room there in case there are some contingencies relating to either quick move-in units, or continued need for incentives or whatever. So, yes, I would expect to see a relatively consistent gross margin profile for the year at this point in time, that said, we still have a lot of sales to make for the back half of the year and we'll have a better visibility of that as we get more into the spring selling season to see how that variability can go on the gross margin side. But we like the favorable economic trends we're seeing, mortgage rates coming down, solid employment, growing economy, pent up demand for housing, the resale inventory tightness. All of those to me suggest opportunities to reduce concessions, which would be pretty much right to the gross margin line to the extent we're able to do that if market conditions continue to improve.

Speaker Change: Our current backlog margins are actually a little bit higher than our guide, but we always like to have a little bit of room. There in case. There are some contingencies relating to either quick move in units or continued need for incentives or whatever.

Jeff J. Kaminski: So, yes, I would expect to see a relatively consistent gross margin profile for the year at this point in time, that said, we still have a lot of sales to make for the back half of the year and we'll have a better visibility of that as we get more into the spring selling season to see how that variability can go on the gross margin side. But we like the favorable economic trends we're seeing, mortgage rates coming down, solid employment, growing economy, pent up demand for housing, the resale inventory tightness. All of those to me suggest opportunities to reduce concessions, which would be pretty much right to the gross margin line to the extent we're able to do that if market conditions continue to improve.

Speaker Change: So, yes, I would expect to see a relatively consistent gross margin profile for the year at this point in time.

Jeff Kaminski: That said, you know, we still have a lot of sales to make for the H2, and we'll have a better visibility of that as we get more into the spring selling season to see how that variability can go, you know, on the gross margin side. You know, we like the favorable economic trends we're seeing, you know, mortgage rates coming down, solid employment, growing economy, pent-up demand for housing, and the resale inventory tightness. All of those, to me, suggest opportunities to reduce concessions, which would be pretty much right to the gross margin line to the extent we're able to do that if market conditions continue to improve.

That said we are.

Speaker Change: We still have a lot of sales to make for the back half of the year.

Speaker Change: We'll have a better.

Speaker Change: Better visibility of that as we get more into the spring selling season to see how that variability can go on the gross margin side, but.

Jeff J. Kaminski: But we like the favorable economic trends we're seeing, mortgage rates coming down, solid employment, growing economy, pent up demand for housing, the resale inventory tightness. All of those to me suggest opportunities to reduce concessions, which would be pretty much right to the gross margin line to the extent we're able to do that if market conditions continue to improve.

Speaker Change: But we like the favorable economic trends, we're seeing mortgage rates coming down solid employment growing economy.

Speaker Change: Pent up demand for housing the.

The resale inventory tightness all of those to me suggest opportunities to reduce concessions.

Jeff J. Kaminski: All of those to me suggest opportunities to reduce concessions, which would be pretty much right to the gross margin line to the extent we're able to do that if market conditions continue to improve.

Speaker Change: Which would be pretty much right to the right to the gross margin line to the extent, we're able to do that.

Market conditions continue to improve.

Operator: Thank you. Our next question comes from the line of Stephen Kim with Evercore ISI. Please proceed with your question.

Operator: Thank you, and our next question comes from the line of Stephen Kim with Evercore ISI. Please proceed with your question.

Stephen Kim: Great. Thanks a lot, guys. Lots to like here. You know, obviously strong performance, and the market helped you out, but clearly it's clear the market's helped you out here in the first five weeks, but you also executed very well. Congratulations on that. My first question relates to just the absorption rate implied. You didn't really give out, you know, obviously an order number, but certainly sounds like 2024 in terms of sales per community per month is, yeah, I don't wanna put words in your mouth, but it certainly seems like it's gonna be based on your closings guide, but at least as good as what you saw in 2023 and maybe and probably better.

Stephen Kim: Great, thanks a lot guys lots to like here, obviously the strong performance in the market helped you out, but clearly, it's clear the markets helped you out here in the first five weeks, but you also executed very well, so congratulations on that. My first question relates to, just the absorption rate implied, you didn't really give up, obviously an order number, but it certainly sounds like 2024 in terms of sales per community per month is. I don't want to put words in your mouth, but it certainly seems like it's going to be, based on your closings guide, at least as good as what you saw in 2023, and maybe and probably better. So in that regard, when we look at your historical absorption rate. In the past you were very comfortably in the four plus range, on average for the year, you got as high as in the sixes in 2021, and I'm kind of curious as, where you feel comfortable with where absorption rates can ultimately settle out? And the reason I am curious about this is because, if I look way back into the early 2000's for example, your absorption rates were substantially higher, at seven per month and that kind of a thing. So just curious if you could give us some commentary about where you think a sort of sustainable level for absorptions is for your company? Given the way it's configured today.

Stephen Kim: Obviously strong performance in the market helped you out but clearly.

Stephen Kim: It's clear that the market has helped you out here in the first five weeks, but you also executed very well so congratulations on that.

Stephen Kim: My first question relates to just.

Stephen Kim: My first question relates to, just the absorption rate implied, you didn't really give up, obviously an order number, but it certainly sounds like 2024 in terms of sales per community per month is. I don't want to put words in your mouth, but it certainly seems like it's going to be, based on your closings guide, at least as good as what you saw in 2023, and maybe and probably better. So in that regard, when we look at your historical absorption rate. In the past you were very comfortably in the four plus range, on average for the year, you got as high as in the sixes in 2021, and I'm kind of curious as, where you feel comfortable with where absorption rates can ultimately settle out? And the reason I am curious about this is because, if I look way back into the early 2000's for example, your absorption rates were substantially higher, at seven per month and that kind of a thing. So just curious if you could give us some commentary about where you think a sort of sustainable level for absorptions is for your company? Given the way it's configured today.

Stephen Kim: The absorption rate.

Implied you didn't really give up obviously in order number but it certainly sounds like 2024 in terms of sales per community per month.

Stephen Kim: I don't want to put words in your mouth, but it certainly seems like it's going to be, based on your closings guide, at least as good as what you saw in 2023, and maybe and probably better. So in that regard, when we look at your historical absorption rate. In the past you were very comfortably in the four plus range, on average for the year, you got as high as in the sixes in 2021, and I'm kind of curious as, where you feel comfortable with where absorption rates can ultimately settle out? And the reason I am curious about this is because, if I look way back into the early 2000's for example, your absorption rates were substantially higher, at seven per month and that kind of a thing. So just curious if you could give us some commentary about where you think a sort of sustainable level for absorptions is for your company? Given the way it's configured today.

Speaker Change: Yes, I want to put words in your mouth, but it certainly seems like it's going to be. Just on your closings guide. At least as good as what you saw in 2023, and maybe and probably better. So in that regard when we look at your historical absorption rate. In the past you were very comfortably in the four plus range on average for the year you got as high as in the sixes. In 2021, and I'm kind of curious where you feel comfortable with where absorption rates can ultimately settle out. And the reason I am curious. It's about this is because if I look way back into the early two thousands for example, your absorption rates were substantially higher seven per month and that kind of a thing. So just curious if you could give us some commentary about where you think are sort of sustainable level for absorptions is for your company. Given the way it's configured today.

Speaker Change: Just on your closings guide.

Speaker Change: At least as good as what you saw in 2023, and maybe and probably better.

Stephen Kim: In that regard, when we look at your historical absorption rate, you know, in the past, you were very comfortably, you know, in the 4+ range on average for the year. You know, you got as high as in the 6s, you know, in 2021. I'm kind of curious about where you feel comfortable with where absorption rates can ultimately settle out. The reason I'm curious about this is because if I look way back, you know, into the early 2000, for example, your absorption rates were substantially higher, you know, like 7 per month and that kind of a thing. Just curious if you could give us some commentary about where you think a sort of sustainable level for absorptions is for your company, given the way it's configured today.

Stephen Kim: So in that regard, when we look at your historical absorption rate. In the past you were very comfortably in the four plus range, on average for the year, you got as high as in the sixes in 2021, and I'm kind of curious as, where you feel comfortable with where absorption rates can ultimately settle out? And the reason I am curious about this is because, if I look way back into the early 2000's for example, your absorption rates were substantially higher, at seven per month and that kind of a thing. So just curious if you could give us some commentary about where you think a sort of sustainable level for absorptions is for your company? Given the way it's configured today.

So in that regard when we look at your historical absorption rate.

Speaker Change: In the past you were very comfortably in the four plus range on average for the year you got as high as in the sixes.

Speaker Change: In 2021, and I'm kind of curious where you feel comfortable with where absorption rates can ultimately settle out.

Stephen Kim: And the reason I am curious about this is because, if I look way back into the early 2000's for example, your absorption rates were substantially higher, at seven per month and that kind of a thing. So just curious if you could give us some commentary about where you think a sort of sustainable level for absorptions is for your company? Given the way it's configured today.

Speaker Change: And the reason I am curious.

It's about this is because if I look way back into the early two thousands for example, your absorption rates were substantially higher seven per month and that kind of a thing. So just curious if you could give us some commentary about where you think are sort of sustainable level for absorptions is for your company.

Stephen Kim: So just curious if you could give us some commentary about where you think a sort of sustainable level for absorptions is for your company? Given the way it's configured today.

Speaker Change: Given the way it's configured today.

Jeff Mezger: Steve, I can start. First, thanks for the recognition on the job we did in Q4. Over the last 5 or 6 years, we've gone through kind of a whipsaw. We came out with returns-focused growth. We were working on lifting our margins. We capped our absorptions at 4 until we got our margins higher. Now our margins are higher, and we keep using the term optimize the asset. Every community is a different story, but I would expect that it's probably around 5 on average. As we look at 2023, we were soft coming into the year, and then it picks up, then it softened again later in the year. We fully expect our absorptions in 2024 will be higher than 2023 for the year.

Jeff Mezger: Steve I can start, first thanks for the recognition on the job we did in Q4. Over the last five or six years, we've gone through kind of a whipsaw, we came out with returns-focused growth, we were working on lifting our margins. So we capped our absorptions of four, and so we got our margins higher and our margins are higher, and we keep using the term optimize the asset, and every community is a different story, but I would expect that is it's probably around 5% on average. And as we look at '23, we were soft coming into the year and that picked up, that had softened again later in the year, so we fully expect our absorptions in '24 will be higher than '23 for the year. I would think five a month, market run, we could go higher than that, but it's a per-community analysis, how many last we have left is easily replaceable, how do you run it, how big is the community. But I think 5 is probably a good number.

Jeff Mezger: Steve I can start, first thanks for the recognition on the job we did in Q4.

Steve: First thanks for the recognition on the job we did in Q4.

Jeff Mezger: Over the last five or six years, we've gone through kind of a whipsaw, we came out with returns-focused growth, we were working on lifting our margins. So we capped our absorptions of four, and so we got our margins higher and our margins are higher, and we keep using the term optimize the asset, and every community is a different story, but I would expect that is it's probably around 5% on average. And as we look at '23, we were soft coming into the year and that picked up, that had softened again later in the year, so we fully expect our absorptions in '24 will be higher than '23 for the year. I would think five a month, market run, we could go higher than that, but it's a per-community analysis, how many last we have left is easily replaceable, how do you run it, how big is the community. But I think 5 is probably a good number.

Jeff Mezger: Over the last five or six years, we've gone through kind of a whipsaw, we came out with returns-focused growth, we were working on lifting our margins.

Steve: We've over the last five or six years, we've gone through kind of a whipsaw. We came out with returns focused growth we were.

Jeff Mezger: So we capped our absorptions of four, and so we got our margins higher and our margins are higher, and we keep using the term optimize the asset, and every community is a different story, but I would expect that is it's probably around 5% on average. And as we look at '23, we were soft coming into the year and that picked up, that had softened again later in the year, so we fully expect our absorptions in '24 will be higher than '23 for the year. I would think five a month, market run, we could go higher than that, but it's a per-community analysis, how many last we have left is easily replaceable, how do you run it, how big is the community. But I think 5 is probably a good number.

Steve: Working on lifting our margins so we capped our absorptions of four and.

Steve: So we got our margins higher and our margins are higher and we keep using the term optimize the asset.

Speaker Change: Every community has a different story, but I would expect.

Speaker Change: That is it's probably around 5% on average as we look at 'twenty three.

Jeff Mezger: And as we look at '23, we were soft coming into the year and that picked up, that had softened again later in the year, so we fully expect our absorptions in '24 will be higher than '23 for the year. I would think five a month, market run, we could go higher than that, but it's a per-community analysis, how many last we have left is easily replaceable, how do you run it, how big is the community. But I think 5 is probably a good number.

Speaker Change: We were soft coming into the year.

Speaker Change: That picked up that had softened again later in the year. So we fully expect our absorptions.

Speaker Change: In.

24 will be higher than 2003 for the year.

Jeff Mezger: I would think five a month, market run, we could go higher than that, but it's a per-community analysis, how many last we have left is easily replaceable, how do you run it, how big is the community. But I think 5 is probably a good number.

Jeff Mezger: I would think five a month. Market runs, we could go higher than that. It's a per community analysis. How many lots do we have left? Is it easily replaceable? How do you run it? How big is the community? I think five is probably a good number.

Speaker Change: I would think five a month.

Speaker Change: Runs, we could go higher than that but.

Speaker Change: So per community analysis, how many last we have left is easily replaceable audio run it how big of that community.

Jeff Mezger: But I think 5 is probably a good number.

Speaker Change: <unk> is probably a good number.

Stephen Kim: All right. That's yeah, that's really helpful. I appreciate that. Your commentary about the margins and the incentives and all that. You've talked about the fact that the first 5 weeks here have gotten off to a good start. The way you're talking about the incentives or the concessions, it sounds like you have not really reduced those concessions yet, and you think you may as you go forward. Can you help us understand what it is that you think would be the trigger for reducing incentives? Would it be, in fact, absorptions, let's say, in the late Q1, early Q2, kind of getting to that 5 threshold in absorptions, or, you know, would it be something else?

Stephen Kim: Alright, yes, that's really helpful, I appreciate that. And then your commentary about the margins and the incentives and all that. You've talked about the fact that the first five weeks here have gotten off to a good start. And the way You're talking about the incentives or the concessions, it sounds like you haven't really, have not really reduce those concessions yet, and you think you may, as you go forward. Can you help us understand what it is that you think would be the trigger for reducing incentives? Would it be in fact absorptions, let's say, in the in the late 1Q, early 2Q kind of getting to that five threshold in absorptions, or would it be something else?

Stephen Kim: Alright, yes, that's really helpful, I appreciate that.

Stephen Kim: And then your commentary about the margins and the incentives and all that. You've talked about the fact that the first five weeks here have gotten off to a good start. And the way You're talking about the incentives or the concessions, it sounds like you haven't really, have not really reduce those concessions yet, and you think you may, as you go forward. Can you help us understand what it is that you think would be the trigger for reducing incentives? Would it be in fact absorptions, let's say, in the in the late 1Q, early 2Q kind of getting to that five threshold in absorptions, or would it be something else?

Stephen Kim: And then your commentary about the margins and the incentives and all that.

Speaker Change: And then your commentary about the margins in the incentives and all that.

Stephen Kim: You've talked about the fact that the first five weeks here have gotten off to a good start. And the way You're talking about the incentives or the concessions, it sounds like you haven't really, have not really reduce those concessions yet, and you think you may, as you go forward. Can you help us understand what it is that you think would be the trigger for reducing incentives? Would it be in fact absorptions, let's say, in the in the late 1Q, early 2Q kind of getting to that five threshold in absorptions, or would it be something else?

Stephen Kim: You've talked about the fact that the first five weeks here have gotten off to a good start.

Speaker Change: You've talked about the fact that the first five weeks here I've gotten off to a good start.

Speaker Change: And the way Youre talking about the incentives or the concessions. It sounds like you haven't really have not really reduce those concessions.

Stephen Kim: And the way You're talking about the incentives or the concessions, it sounds like you haven't really, have not really reduce those concessions yet, and you think you may, as you go forward. Can you help us understand what it is that you think would be the trigger for reducing incentives? Would it be in fact absorptions, let's say, in the in the late 1Q, early 2Q kind of getting to that five threshold in absorptions, or would it be something else?

Speaker Change: Yes.

Speaker Change: And you think you may as you go forward can you help us understand.

Stephen Kim: Can you help us understand what it is that you think would be the trigger for reducing incentives? Would it be in fact absorptions, let's say, in the in the late 1Q, early 2Q kind of getting to that five threshold in absorptions, or would it be something else?

Stephen Kim: Can you help us understand what it is that you think would be the trigger for reducing incentives?

Speaker Change: What it is that you think would be the trigger for reducing incentives would it be in fact absorptions, let's say.

Stephen Kim: Would it be in fact absorptions, let's say, in the in the late 1Q, early 2Q kind of getting to that five threshold in absorptions, or would it be something else?

In the in the late <unk> early <unk> kind of getting to that five threshold in absorptions or would it be something else.

Jeff Mezger: Yeah. Rob, you want to take that? You can walk through what we're doing and where we're trying to get to.

Speaker Change: Yes, Rob you want to take that you can walk through what we're doing and where we're trying to get to. Yes, so Steve you're right, we haven't really done anything different than what we were doing in Q3 as far as concessions that we were offering obviously. From the prepared remarks, we've seen a big uptick in sales. So that is how we're going to manage it we always talk about optimizing each asset balancing base price and margin and if we as we go through Q1 or into Q2, when we start to see that at a community level get above what we think is optimal for that we're going to we're first going to reduce those incentive. Ill take it the price we're going to be looking to lift margins on all of those communities, where we're seeing that happen and we're encouraged by what we're seeing here in the first part of Q1, so that seems pretty realistic for us.

Jeff Mezger: Yes. Rob you want to take that? You can walk through what we're doing and where we're trying to get to.

Rob McGibney: Yeah. Steve, you're right. We haven't really done anything different than what we were doing in Q3 as far as concessions that we were offering. Obviously, you know, you heard from the prepared remarks, we've seen a big uptick in sales. That is how we're going to manage it. We always talk about optimizing each asset, balancing pace, price, and margin. If we, you know, as we go through Q1 or into Q2, and we start to see that at a community level get above what we think is optimal for that, we're first gonna reduce those incentives, take it to price. We're gonna be looking to lift margins on all those communities where we're seeing that happen. We're encouraged early by what we're seeing here in the first part of Q1. That seems pretty realistic for us.

Rob Mcgivney: Yes, so Steve you're right, we haven't really done anything different than what we were doing in Q3 as far as concessions that we were offering obviously.

Robert V. McGibney: Yes, so Steve you're right. We haven't really done anything different than what we were doing in Q3 as far as concessions that we were offering, obviously you've heard from the prepared remarks, we've seen a big uptick in sales. So that is how we're going to manage it, we always talk about optimizing each asset, balancing base price and margin, and if we, as we go through Q1 or into Q2, when we start to see that at a community level get above what we think is optimal for that, we're going to. We're first going to reduce those incentives, take it to price, we're going to be looking to lift margins on all of those communities where we're seeing that happen. And we're encouraged really by what we're seeing here in the first part of Q1, so that seems pretty realistic for us.

Robert V. McGibney: Yes, so Steve you're right.

Robert V. McGibney: We haven't really done anything different than what we were doing in Q3 as far as concessions that we were offering, obviously you've heard from the prepared remarks, we've seen a big uptick in sales. So that is how we're going to manage it, we always talk about optimizing each asset, balancing base price and margin, and if we, as we go through Q1 or into Q2, when we start to see that at a community level get above what we think is optimal for that, we're going to. We're first going to reduce those incentives, take it to price, we're going to be looking to lift margins on all of those communities where we're seeing that happen. And we're encouraged really by what we're seeing here in the first part of Q1, so that seems pretty realistic for us.

Rob Mcgivney: From the prepared remarks, we've seen a big uptick in sales. So that is how we're going to manage it we always talk about optimizing each asset balancing base price and margin and if we as we go through Q1 or into Q2, when we start to see that at a community level get above what we think is optimal for that we're going to we're first going to reduce those incentive.

Robert V. McGibney: So that is how we're going to manage it, we always talk about optimizing each asset, balancing base price and margin, and if we, as we go through Q1 or into Q2, when we start to see that at a community level get above what we think is optimal for that, we're going to. We're first going to reduce those incentives, take it to price, we're going to be looking to lift margins on all of those communities where we're seeing that happen. And we're encouraged really by what we're seeing here in the first part of Q1, so that seems pretty realistic for us.

Robert V. McGibney: We're first going to reduce those incentives, take it to price, we're going to be looking to lift margins on all of those communities where we're seeing that happen. And we're encouraged really by what we're seeing here in the first part of Q1, so that seems pretty realistic for us.

Robert V. McGibney: We're first going to reduce those incentives, take it to price, we're going to be looking to lift margins on all of those communities where we're seeing that happen.

Rob Mcgivney: Ill take it the price we're going to be looking to lift margins on all of those communities, where we're seeing that happen and we're encouraged by what we're seeing here in the first part of Q1, so that seems pretty realistic for us.

Robert V. McGibney: And we're encouraged really by what we're seeing here in the first part of Q1, so that seems pretty realistic for us.

Operator: Thank you. And the next question comes from the line of Alan Ratner with Zelman and Associates. Please proceed with your question.

Operator: Thank you. The next question comes from the line of Alan Ratner with Zelman & Associates. Please proceed with your question.

Speaker Change: Thank you and the next question comes from the line of Alan Ratner with Zelman and Associates. Please proceed with your question.

Alan Ratner: Hey, guys. Happy New Year. Good afternoon. Thanks for all the great detail as always. Yeah, my first question, you know, in a similar vein on the incentives, you know, it doesn't sound like you really got, you know, kind of played that incentive game in Q4, and I think that makes a lot of sense given your sales strategy and whatnot. Clearly other builders did, which I think is, you know, perhaps maybe why orders were a bit lighter than you were expecting coming into the quarter. Have you seen, you know, maybe more of the spec builders begin to dial back those incentives that they were offering at the year-end?

Alan Ratner: Hey guys, happy new year, good afternoon, and thanks for all the great detail as always. My first question on a similar vein, on the incentives, it doesn't sound like you really got kind of played that incentive game in the fourth quarter, and I think that makes a lot of sense, given giving yourself strategy and whatnot. But clearly other builders did, which I think is perhaps maybe why orders were a bit lighter than you were expecting coming into the quarter. Have you seen maybe more of the spec builders begin to dial back those incentives that they were offering in the year end? And if so, do you have any idea kind of how much net pricing has moved year to date from some of your competitors that did play that discounting game?

Alan Ratner: Hey guys, happy new year, good afternoon, and thanks for all the great detail as always.

Alan Ratner: My first question on a similar vein, on the incentives, it doesn't sound like you really got kind of played that incentive game in the fourth quarter, and I think that makes a lot of sense, given giving yourself strategy and whatnot. But clearly other builders did, which I think is perhaps maybe why orders were a bit lighter than you were expecting coming into the quarter. Have you seen maybe more of the spec builders begin to dial back those incentives that they were offering in the year end? And if so, do you have any idea kind of how much net pricing has moved year to date from some of your competitors that did play that discounting game?

Alan Ratner: Yes, My first question on <unk>.

Alan Ratner: <unk> vein on the incentives it doesn't sound like you really got a kind of played that incentive game in the fourth quarter and I think that makes a lot of sense, given giving yourself strategy and whatnot, but clearly other builders did which I think is perhaps maybe why orders were a bit lighter than you were expecting coming into the quarter.

Alan Ratner: But clearly other builders did, which I think is perhaps maybe why orders were a bit lighter than you were expecting coming into the quarter. Have you seen maybe more of the spec builders begin to dial back those incentives that they were offering in the year end? And if so, do you have any idea kind of how much net pricing has moved year to date from some of your competitors that did play that discounting game?

Alan Ratner: But clearly other builders did, which I think is perhaps maybe why orders were a bit lighter than you were expecting coming into the quarter.

Alan Ratner: Have you seen maybe more of the spec builders begin to dial back those incentives that they were offering in the year end? And if so, do you have any idea kind of how much net pricing has moved year to date from some of your competitors that did play that discounting game?

Alan Ratner: Have you seen maybe more of the spec builders begin to dial back those incentives that they were offering in the year end?

Alan Ratner: <unk> seen maybe more of the spec builders begin to dial back those incentives that they were offering into year end and if so any idea kind of how much net pricing has moved the year to date from some of your competitors that did play that discounting game.

Alan Ratner: If so, you know, any idea kind of how much net pricing has moved year to date from some of your competitors that did play that discounting game?

Alan Ratner: And if so, do you have any idea kind of how much net pricing has moved year to date from some of your competitors that did play that discounting game?

Jeff Mezger: Rob, you got any thoughts on that?

Jeff Mezger: Rob do you have any thoughts on that?

Rob McGibney: Yeah, I really haven't. I mean, we've seen some change in behavior. It's kind of hard to track, you know, what's going on with individual builders, and they'll have, you know, certain deal of the day, deal of the week type things. But we do expect to see incentives overall come down as we move forward just based on the uptick in demand that we've seen. You know, we did do a little more in Q3, especially in Q4, towards the beginning, to generate some additional net orders. But as rates got to that, you know, 8% kind of threshold, we saw buyers really pull back, and it just didn't seem prudent to chase sales with that going on in the market.

Robert V. McGibney: Yeah, I really haven't. I mean we're seeing some change in behavior, it's kind of hard to track what's going on with individual builders, and they'll have certain, deal of the day, deal or the wheat type things. But we do expect to see incentives overall come down as we move forward just based on the uptick in demand that we've seen. We did do a little more in Q3, especially in Q4 towards the beginning to generate some additional net orders, but as rates got to that 8% kind of threshold, we saw buyers really pull back, and it just didn't seem prudent to chase sales with that going on in the market. We continued to start homes, and we're happy as we look back on it now that that's the approach that we took, because we're seeing better sales obviously, we didn't take the margins and sales are really picking up, so that's been our approach.

Robert V. McGibney: Yeah, I really haven't.

Robert V. McGibney: I mean we're seeing some change in behavior, it's kind of hard to track what's going on with individual builders, and they'll have certain, deal of the day, deal or the wheat type things. But we do expect to see incentives overall come down as we move forward just based on the uptick in demand that we've seen. We did do a little more in Q3, especially in Q4 towards the beginning to generate some additional net orders, but as rates got to that 8% kind of threshold, we saw buyers really pull back, and it just didn't seem prudent to chase sales with that going on in the market. We continued to start homes, and we're happy as we look back on it now that that's the approach that we took, because we're seeing better sales obviously, we didn't take the margins and sales are really picking up, so that's been our approach.

Robert V. McGibney: But we do expect to see incentives overall come down as we move forward just based on the uptick in demand that we've seen. We did do a little more in Q3, especially in Q4 towards the beginning to generate some additional net orders, but as rates got to that 8% kind of threshold, we saw buyers really pull back, and it just didn't seem prudent to chase sales with that going on in the market. We continued to start homes, and we're happy as we look back on it now that that's the approach that we took, because we're seeing better sales obviously, we didn't take the margins and sales are really picking up, so that's been our approach.

Robert V. McGibney: But we do expect to see incentives overall come down as we move forward just based on the uptick in demand that we've seen.

Rob Mcgivney: We did do a little more in Q3, especially in Q4 towards the beginning to generate some additional net orders, but as rates got to that.

Robert V. McGibney: We did do a little more in Q3, especially in Q4 towards the beginning to generate some additional net orders, but as rates got to that 8% kind of threshold, we saw buyers really pull back, and it just didn't seem prudent to chase sales with that going on in the market. We continued to start homes, and we're happy as we look back on it now that that's the approach that we took, because we're seeing better sales obviously, we didn't take the margins and sales are really picking up, so that's been our approach.

Rob Mcgivney: 8% kind of threshold, we saw buyers really pull back and it just didn't seem prudent to chase sales with that going on.

Rob McGibney: You know, we continued to start homes, and we're happy as we look back on it now that that's the approach that we took because, you know, we're seeing better sales. Obviously, we didn't tank the margins, and sales are really picking up. That's been our approach.

Without going on in the market, we continued to start homes and we're happy as we look back on it now that that's the approach that we took because we're seeing better sales. Obviously, we didn't take the margins and sales are really picking up so that's been our approach.

Robert V. McGibney: We continued to start homes, and we're happy as we look back on it now that that's the approach that we took, because we're seeing better sales obviously, we didn't take the margins and sales are really picking up, so that's been our approach.

Michael Rehaut (JP Morg: Got it. Okay. Makes sense. Maybe a little bit early, but more of the expectation into the spring that should come down. Second question, you know, on the margin guidance, and Jeff, I appreciate, you know, kind of the commentary there. Just curious, you know, what your underlying assumptions are on costs because, you know, obviously lumber was a big tailwind in 2023 versus 2022. You kind of mentioned some of the moving pieces there. I would imagine, you know, beginning of the year is kind of typically when you start to get some price increase announcements from your trades, and you know, they're probably seeing and hearing the same things you guys are as far as lower rates.

Alan Ratner: Got it. Okay. Makes sense. Maybe a little bit early, but more of the expectation into the spring that should come down. Second question, you know, on the margin guidance, and Jeff, I appreciate, you know, kind of the commentary there. Just curious, you know, what your underlying assumptions are on costs because, you know, obviously lumber was a big tailwind in 2023 versus 2022. You kind of mentioned some of the moving pieces there. I would imagine, you know, beginning of the year is kind of typically when you start to get some price increase announcements from your trades, and you know, they're probably seeing and hearing the same things you guys are as far as lower rates.

Alan Ratner: Got it okay, it makes sense, so maybe a little bit early but more the expectation into the spring that that should come down. Second question on the margin guide, and Jeff I appreciate kind of the commentary there. Im just curious to what your underlying assumptions are on costs? Because, obviously lumber was a big tailwind in 23 versus 22, you kind of mentioned some of the moving pieces there. I would imagine beginning of the year is kind of typically when you start to get some price increase announcements from your trades, and they're probably seeing and hearing the same things you guys are as far as lower rates. So has that embolden the suppliers, the trades to try to push the envelope a little bit on cost yet? Or are they still kind of content with the current level? And what's your expectation there for the year?

Alan Ratner: Got it okay, it makes sense, so maybe a little bit early but more the expectation into the spring that that should come down.

Speaker Change: Second question on the margin guide and Jeff I appreciate kind of the commentary there.

Alan Ratner: Second question on the margin guide, and Jeff I appreciate kind of the commentary there. Im just curious to what your underlying assumptions are on costs? Because, obviously lumber was a big tailwind in 23 versus 22, you kind of mentioned some of the moving pieces there. I would imagine beginning of the year is kind of typically when you start to get some price increase announcements from your trades, and they're probably seeing and hearing the same things you guys are as far as lower rates. So has that embolden the suppliers, the trades to try to push the envelope a little bit on cost yet? Or are they still kind of content with the current level? And what's your expectation there for the year?

Alan Ratner: Second question on the margin guide, and Jeff I appreciate kind of the commentary there.

Alan Ratner: Im just curious to what your underlying assumptions are on costs? Because, obviously lumber was a big tailwind in 23 versus 22, you kind of mentioned some of the moving pieces there. I would imagine beginning of the year is kind of typically when you start to get some price increase announcements from your trades, and they're probably seeing and hearing the same things you guys are as far as lower rates. So has that embolden the suppliers, the trades to try to push the envelope a little bit on cost yet? Or are they still kind of content with the current level? And what's your expectation there for the year?

Alan Ratner: Im just curious to what your underlying assumptions are on costs?

Speaker Change: Im just curious what your underlying assumptions are on costs, because obviously lumber was a big tailwind in.

Alan Ratner: Because, obviously lumber was a big tailwind in 23 versus 22, you kind of mentioned some of the moving pieces there. I would imagine beginning of the year is kind of typically when you start to get some price increase announcements from your trades, and they're probably seeing and hearing the same things you guys are as far as lower rates. So has that embolden the suppliers, the trades to try to push the envelope a little bit on cost yet? Or are they still kind of content with the current level? And what's your expectation there for the year?

Alan Ratner: Because, obviously lumber was a big tailwind in 23 versus 22, you kind of mentioned some of the moving pieces there.

Speaker Change: In 23 versus 22, you kind of mentioned some of the moving pieces. There I would imagine beginning of the year is kind of typically when you start to get some price increase announcements from your trades and they are probably seeing and hearing the same things you guys are as far as lower rates. So has that embolden the suppliers the trades to try to.

Alan Ratner: I would imagine beginning of the year is kind of typically when you start to get some price increase announcements from your trades, and they're probably seeing and hearing the same things you guys are as far as lower rates. So has that embolden the suppliers, the trades to try to push the envelope a little bit on cost yet? Or are they still kind of content with the current level? And what's your expectation there for the year?

Alan Ratner: So has that embolden the suppliers, the trades to try to push the envelope a little bit on cost yet? Or are they still kind of content with the current level? And what's your expectation there for the year?

Alan Ratner: So has that embolden the suppliers, the trades to try to push the envelope a little bit on cost yet? Or are they still kind of content with the current level?

Michael Rehaut (JP Morg: Has that emboldened the suppliers, the trades to try to push the envelope a little bit on cost yet? Or are they still kind of content at the current levels, and what's your expectation there for the year?

Alan Ratner: Has that emboldened the suppliers, the trades to try to push the envelope a little bit on cost yet? Or are they still kind of content at the current levels, and what's your expectation there for the year?

Speaker Change: Pushed the envelope a little bit on cost yet or are they.

Are they still kind of content with the current level and what's your expectation there for the year.

Alan Ratner: And what's your expectation there for the year?

Jeff Mezger: Yeah. First of all, on the suppliers, I mean, we haven't seen any significant change in behavior from the supply base. So, you know, it's pretty early, I'd say, on the market recovery and the mortgage rate decline to see that. You know, as we forecast margin, you know, we generally look at current pricing, current costs as we go forward and assume current market conditions. So as things get better, you know, there's more upside. You know, we've just talked about concessions a little bit with the last couple questions. You know, one of the other important things on the concessions is to the extent they're tied to mortgage rates, so we're buying a rate down to X percent, for example. The lower the rates go, the less cost of that concession.

Robert V. McGibney: Yes first of all, on the suppliers, I mean we haven't seen any significant change in behavior from the supply base so, it's pretty early I would say on the market recovery and the mortgage rate decline to see that. As we forecast margin, we generally look at current pricing, current cost as we go forward and assume current market conditions, so if things get better, there's more upside, and we've just talked about concessions a little bit with the last couple of questions. One of the other important things on the concessions is to the extent they're tied to mortgage rates, so we're buying the rate down to X percent for example, the lower the rates go, the less cost for that concession. So even if we were to maintain some of those incentives out there, they'd be less costly to us and less of a hit to gross margins, which is a real favorable. So, and anyway, coming back to the cost side, yes. I think it's still a little bit early on, lets see, hopefully we won't see from some of our supply base [Inaudible] on that, we did see cost coming down quite nicely over the last 12 months to the extent those costs are baked into the backlog. Those are already included in the forward guide, and just assuming kind of business as usual from there.

Speaker Change: Significant change in behavior from the supply base so.

Speaker Change: Pretty early I would say.

Speaker Change: On the market recovery.

Speaker Change: Mortgage rate decline to see that.

Robert V. McGibney: As we forecast margin, we generally look at current pricing, current cost as we go forward and assume current market conditions, so if things get better, there's more upside, and we've just talked about concessions a little bit with the last couple of questions. One of the other important things on the concessions is to the extent they're tied to mortgage rates, so we're buying the rate down to X percent for example, the lower the rates go, the less cost for that concession. So even if we were to maintain some of those incentives out there, they'd be less costly to us and less of a hit to gross margins, which is a real favorable. So, and anyway, coming back to the cost side, yes. I think it's still a little bit early on, lets see, hopefully we won't see from some of our supply base [Inaudible] on that, we did see cost coming down quite nicely over the last 12 months to the extent those costs are baked into the backlog. Those are already included in the forward guide, and just assuming kind of business as usual from there.

As we forecast margin, we generally look at current pricing current cost as we go forward.

Speaker Change: Assume current market conditions so.

Speaker Change: Things get better Theres more upside.

Speaker Change: Talked about concessions are a little bit with the last couple of questions.

Robert V. McGibney: One of the other important things on the concessions is to the extent they're tied to mortgage rates, so we're buying the rate down to X percent for example, the lower the rates go, the less cost for that concession. So even if we were to maintain some of those incentives out there, they'd be less costly to us and less of a hit to gross margins, which is a real favorable. So, and anyway, coming back to the cost side, yes. I think it's still a little bit early on, lets see, hopefully we won't see from some of our supply base [Inaudible] on that, we did see cost coming down quite nicely over the last 12 months to the extent those costs are baked into the backlog. Those are already included in the forward guide, and just assuming kind of business as usual from there.

Speaker Change: One of the other important things on the concessions is to the extent, they're tied to mortgage rates. So we're buying the right down to X percent for example below and rates go the less cost for that concession. So even if we were to maintain some of those.

Jeff Mezger: Even if we were to maintain some of those incentives out there, they'd be less costly to us on a and less of a hit to gross margins, which is a real favorable. At any rate, coming back to the cost side, yeah, I think it's still a little bit early on. We'll see. Hopefully we won't see from some of our supply base, you know, aggressiveness on that. We did see costs come down quite nicely over the last 12 months. To the extent those costs are baked into the backlog, those are already included in the forward guide and just assuming kind of business as usual from there.

Robert V. McGibney: So even if we were to maintain some of those incentives out there, they'd be less costly to us and less of a hit to gross margins, which is a real favorable. So, and anyway, coming back to the cost side, yes. I think it's still a little bit early on, lets see, hopefully we won't see from some of our supply base [Inaudible] on that, we did see cost coming down quite nicely over the last 12 months to the extent those costs are baked into the backlog. Those are already included in the forward guide, and just assuming kind of business as usual from there.

Robert V. McGibney: So even if we were to maintain some of those incentives out there, they'd be less costly to us and less of a hit to gross margins, which is a real favorable.

Speaker Change: Centers out there they.

<unk> be less costly to us on our end.

Speaker Change: And less of a hit to gross margins, which is a real favorable so anyway going back to the cost side, yes.

Robert V. McGibney: So, and anyway, coming back to the cost side, yes. I think it's still a little bit early on, lets see, hopefully we won't see from some of our supply base [Inaudible] on that, we did see cost coming down quite nicely over the last 12 months to the extent those costs are baked into the backlog. Those are already included in the forward guide, and just assuming kind of business as usual from there.

Robert V. McGibney: So, and anyway, coming back to the cost side, yes.

Speaker Change: I think it's still a little bit early on lets see.

Robert V. McGibney: I think it's still a little bit early on, lets see, hopefully we won't see from some of our supply base [Inaudible] on that, we did see cost coming down quite nicely over the last 12 months to the extent those costs are baked into the backlog. Those are already included in the forward guide, and just assuming kind of business as usual from there.

Speaker Change: Hopefully hopefully we wont see from some of our supply base.

Speaker Change: And Thats on that we did see cost coming down quite nicely over the last 12 months.

Speaker Change: To the extent those costs are baked into the backlog. Those are already included in the forward guide and just assuming kind of business as usual from there.

Robert V. McGibney: Those are already included in the forward guide, and just assuming kind of business as usual from there.

Operator: Thank you. Our next question comes from the line of Matthew Bouley with Barclays. Please proceed with your question.

Operator: Thank you. And our next question comes from the line of Matthew Bouley with Barclays. Please proceed with your question.

Matthew Bouley: Good afternoon, everyone. Thanks for taking the questions. You know, you guided your ending backlog or you guided your deliveries, the ratio of ending backlog to deliveries of 40%, which, you know, is very normal versus pre-COVID times, as you mentioned. It's a lot better in the past couple of years, of course. Do cycle times where they stand today kind of get you there or would you still need some further improvement in cycle times, you know, in order to get to that number relative to where your backlog is today?

Matthew Bouley: Good afternoon everyone, thanks for taking the questions. So you guided your ending backlog, or you've got in your deliveries and the ratio of ending backlog to deliveries of 40%, which it's very normal versus pre-Covid times as you mentioned, it's a lot better than the past couple of years of course. So just cycle times, where they stand today, kind of get you there? Or would you still need some further improvement in cycle times in order to get to that number relative to where your backlog is today? We built the year met based on current cycle times. So if we can continue to compress and Rob has got a lot of plans of play to do that it could could help us. But we're sort of steady state when we're making our projections for the year.

Matthew Bouley: Good afternoon everyone, thanks for taking the questions.

Matthew Bouley: So you guided your ending backlog, or you've got in your deliveries and the ratio of ending backlog to deliveries of 40%, which it's very normal versus pre-Covid times as you mentioned, it's a lot better than the past couple of years of course. So just cycle times, where they stand today, kind of get you there? Or would you still need some further improvement in cycle times in order to get to that number relative to where your backlog is today?

Matthew Bouley: So you guided your ending backlog or you've got in your deliveries the ratio ending backlog to deliveries of 40%, which.

Matthew Bouley: It was very normal versus pre Covid times as you mentioned, it's a lot better than the past couple of years of course.

Matthew Bouley: So just cycle times, where they stand today, kind of get you there? Or would you still need some further improvement in cycle times in order to get to that number relative to where your backlog is today?

Matthew Bouley: So just cycle times, where they stand today, kind of get you there?

Matthew Bouley: Just cycle times, where they stand today kind of get you there or would you still need some further improvement in cycle times.

Matthew Bouley: Or would you still need some further improvement in cycle times in order to get to that number relative to where your backlog is today?

Matthew Bouley: In order to get to that number relative to where your backlog is today. We built the year met based on current cycle times. So if we can continue to compress and Rob has got a lot of plans of play to do that it could could help us. But we're sort of steady state when we're making our projections for the year.

Jeff Mezger: We built the year met based on current cycle times. So if we can continue to compress, and Rob has got a lot of plans of play to do that it could could help us. But we're sort of steady state when we're making our projections for the year.

Jeff Mezger: We built the year met based on current cycle times.

Jeff Mezger: We've built the year met based on current cycle times. If we can continue to compress, and Rob's got a lot of plans at play to do that, it could help us. We assume steady state when we're making our projections for the year.

Matthew Bouley: We built the year met based on current cycle times.

Jeff Mezger: So if we can continue to compress, and Rob has got a lot of plans of play to do that it could could help us. But we're sort of steady state when we're making our projections for the year.

Jeff Mezger: So if we can continue to compress, and Rob has got a lot of plans of play to do that it could could help us.

Matthew Bouley: So if we can continue to compress and Rob has got a lot of plans of play to do that it could could help us.

Jeff Mezger: But we're sort of steady state when we're making our projections for the year.

Matthew Bouley: But we're sort of steady state when we're making our projections for the year.

Matthew Bouley: Yep. Got it. Okay. Thank you. I think in terms of spec, I think you said 30% of your production was unsold. Correct me if I'm wrong, but I recall in years past that that may be a little higher. You know, you might have been closer to more like 20%, you know, today is a little higher than normal. Can you remind us if there is any margin differential and on kind of spec homes versus the built-to-order and, you know, how you're thinking about any margin impact from mix of higher spec in 2024?

Matthew Bouley: Yes, got it okay, thank you and then. So I think in terms of spec, I think you said, 30% of your production was unsold, correct me if I'm wrong, but I recall in years past that that may be a little higher, you might've been closer to more like 20%? today is a little higher than normal. Can you remind us if there is any margin differential on kind of spec-homes, versus the build-to-order and how you're thinking about any margin impact from mix of higher spec in '24?

Matthew Bouley: Yes, got it okay, thank you and then.

Matthew Bouley: So I think in terms of spec, I think you said, 30% of your production was unsold, correct me if I'm wrong, but I recall in years past that that may be a little higher, you might've been closer to more like 20%? today is a little higher than normal. Can you remind us if there is any margin differential on kind of spec-homes, versus the build-to-order and how you're thinking about any margin impact from mix of higher spec in '24?

Speaker Change: So I think in terms of spec I think you said, 30% of your production was unsold.

Speaker Change: Correct me, if I'm wrong, but I recall in years past that may be a little higher you might've been closer to more like 20% today is a little higher than normal.

Speaker Change: Can you remind us if there is any margin differential on kind of spec homes versus the build to order and how youre thinking about any margin impact from mix of higher spec in 'twenty four.

Matthew Bouley: Can you remind us if there is any margin differential on kind of spec-homes, versus the build-to-order and how you're thinking about any margin impact from mix of higher spec in '24?

Jeff Mezger: Yeah. Matt, we typically run about 25% unsold, and we're up at 30%. It's about 300 units, so it's not a crazy number. You know, as the year unfolds, we'll see how our orders are on the built-to-order because we like the predictability of the delivery with a predictable margin. We just think it's a far better business. Typically, our inventory sales are running 2 to 3 percentage points lower than the built-to-order. We would much rather prefer to keep running our business the way we have for the last 15 years. There's a certain pace for the starts you have to maintain in order to have your scale and your franchise in that city with the contractor base.

Jeff Mezger: Yes, Matt we typically run about 25% unsold, and we're up at 30%, it's about 300 units, so it's not a crazy number. And as the year unfolds, we'll see how our orders are on the build-to-order because we like the predictability of the delivery, with a predictable margin, and we just think it's a far better business. Typically our inventory sales are running two to three percentage points lower, than the built-to-order, so we would much rather prefer to keep running our business the way we have for the last 15 years. But there's a certain pace of [Inaudible] you have to maintain in order to have your scale and your franchise in that city with the contractor base. And we'll keep [Inaudible] and we'll get all the dirt sales we can, the BTO sales and if we have still some inventory, we will do that.

Jeff Mezger: Yes, Matt we typically run about 25% unsold, and we're up at 30%, it's about 300 units, so it's not a crazy number.

Speaker Change: Matt we typically run about 25% unsold.

Speaker Change: Up at 30%, it's about 300 units so it's not a crazy number.

Jeff Mezger: And as the year unfolds, we'll see how our orders are on the build-to-order because we like the predictability of the delivery, with a predictable margin, and we just think it's a far better business. Typically our inventory sales are running two to three percentage points lower, than the built-to-order, so we would much rather prefer to keep running our business the way we have for the last 15 years. But there's a certain pace of [Inaudible] you have to maintain in order to have your scale and your franchise in that city with the contractor base. And we'll keep [Inaudible] and we'll get all the dirt sales we can, the BTO sales and if we have still some inventory, we will do that.

Speaker Change: And.

Speaker Change: As the year unfolds, we'll see how our orders are on on the build to order because we like the the.

Speaker Change: Predictability of the delivery with a predictable margin.

Jeff Mezger: Typically our inventory sales are running two to three percentage points lower, than the built-to-order, so we would much rather prefer to keep running our business the way we have for the last 15 years. But there's a certain pace of [Inaudible] you have to maintain in order to have your scale and your franchise in that city with the contractor base. And we'll keep [Inaudible] and we'll get all the dirt sales we can, the BTO sales and if we have still some inventory, we will do that.

Speaker Change: And we just think it's a far better business typically our inventory sales are running two to three percentage points lower.

Speaker Change: And then the built to order so we would much rather prefer to keep running our business. The way we have for the last 15 years, but but there's a certain pace. So it starts you have to maintain.

Jeff Mezger: But there's a certain pace of [Inaudible] you have to maintain in order to have your scale and your franchise in that city with the contractor base. And we'll keep [Inaudible] and we'll get all the dirt sales we can, the BTO sales and if we have still some inventory, we will do that.

Jeff Mezger: But there's a certain pace of [Inaudible] you have to maintain in order to have your scale and your franchise in that city with the contractor base.

Speaker Change: In order to have your scale and your franchise in that city with the contractor base.

Jeff Mezger: And we'll keep [Inaudible] and we'll get all the dirt sales we can, the BTO sales and if we have still some inventory, we will do that.

Jeff Mezger: We'll keep toggling. We'll get all the dirt sales we can, the BTO sales. If we have to fill them with some inventory, we'll do that.

Speaker Change: We'll keep Taiwan will get all the dirt sales, we can the bto sales.

Speaker Change: Films inventory, we will do that.

Operator: Thank you. Our next question comes from the line of Michael Rehaut with JP Morgan. Please proceed with your question.

Operator: Thank you. And our next question comes from the line of Michael Rehaut with Jpmorgan. Please proceed with your question.

Michael Rehaut (JP Morg: Hi. Thanks. Good afternoon, and thanks for taking my questions. First, I just wanted to zero in a little bit again on the Q1 gross margin. You know, looking for a roughly flat or even, I guess, slightly up result, you know, or, apologies, maybe roughly flattish result. You know, it's actually in a positive contrast to typically when you have Q1 lower revenues and you are expecting lower revenues sequentially, Q4 versus first qu-, sorry, Q1 versus Q4. You, in the past, have kind of pointed to some negative operating leverage, and we've seen sequential contraction of gross margins anywhere of 100, 200 basis points at times over the last five, six, seven years.

Michael Rehaut: Hi. Thanks. Good afternoon, and thanks for taking my questions. First, I just wanted to zero in a little bit again on the Q1 gross margin. You know, looking for a roughly flat or even, I guess, slightly up result, you know, or, apologies, maybe roughly flattish result. You know, it's actually in a positive contrast to typically when you have Q1 lower revenues and you are expecting lower revenues sequentially, Q4 versus first qu-, sorry, Q1 versus Q4. You, in the past, have kind of pointed to some negative operating leverage, and we've seen sequential contraction of gross margins anywhere of 100, 200 basis points at times over the last five, six, seven years.

Michael Rehaut: Alright, thanks, good afternoon, and thanks for taking my questions. Of course, I, just wanted to zero in a little bit again on the first quarter gross margin. Looking for a roughly flat, or even slightly up result, I apologize, maybe roughly flattish results. It's actually in a positive contrast to, typically when you have, first quarter lower revenues than you are expecting lower revenues sequentially first quarter versus 4Q. You in the past have kind of pointed to some negative operating leverage, and we've seen a sequential contraction of gross margins anywhere of 100-200 basis points at times over the last 5, 6, 7 years. So I was wondering, kind of what happened to that negative operating leverage? If there had been any differences in mix, or other drivers, because normally I think we would have expected some type of sequential step down.

Michael Rehaut: Alright, thanks, good afternoon, and thanks for taking my questions.

Speaker Change: Of course, I, just wanted to zero in a little bit again.

Michael Rehaut: Of course, I, just wanted to zero in a little bit again on the first quarter gross margin. Looking for a roughly flat, or even slightly up result, I apologize, maybe roughly flattish results. It's actually in a positive contrast to, typically when you have, first quarter lower revenues than you are expecting lower revenues sequentially first quarter versus 4Q. You in the past have kind of pointed to some negative operating leverage, and we've seen a sequential contraction of gross margins anywhere of 100-200 basis points at times over the last 5, 6, 7 years. So I was wondering, kind of what happened to that negative operating leverage? If there had been any differences in mix, or other drivers, because normally I think we would have expected some type of sequential step down.

Michael Rehaut: Of course, I, just wanted to zero in a little bit again on the first quarter gross margin.

Speaker Change: On the first quarter gross margin.

Speaker Change: Looking for a roughly flat or even slightly up result.

Michael Rehaut: Looking for a roughly flat, or even slightly up result, I apologize, maybe roughly flattish results. It's actually in a positive contrast to, typically when you have, first quarter lower revenues than you are expecting lower revenues sequentially first quarter versus 4Q. You in the past have kind of pointed to some negative operating leverage, and we've seen a sequential contraction of gross margins anywhere of 100-200 basis points at times over the last 5, 6, 7 years. So I was wondering, kind of what happened to that negative operating leverage? If there had been any differences in mix, or other drivers, because normally I think we would have expected some type of sequential step down.

Michael Rehaut: Looking for a roughly flat, or even slightly up result, I apologize, maybe roughly flattish results.

Speaker Change: I apologize maybe roughly flattish.

Speaker Change: Results.

Michael Rehaut: It's actually in a positive contrast to, typically when you have, first quarter lower revenues than you are expecting lower revenues sequentially first quarter versus 4Q. You in the past have kind of pointed to some negative operating leverage, and we've seen a sequential contraction of gross margins anywhere of 100-200 basis points at times over the last 5, 6, 7 years. So I was wondering, kind of what happened to that negative operating leverage? If there had been any differences in mix, or other drivers, because normally I think we would have expected some type of sequential step down.

Michael Rehaut: It's actually in a positive contrast to, typically when you have, first quarter lower revenues than you are expecting lower revenues sequentially first quarter versus 4Q.

It's actually.

Speaker Change: And a positive contrast to typically when you have first quarter lower revenues than you are expecting lower revenues sequentially.

Michael Rehaut: You in the past have kind of pointed to some negative operating leverage, and we've seen a sequential contraction of gross margins anywhere of 100-200 basis points at times over the last 5, 6, 7 years. So I was wondering, kind of what happened to that negative operating leverage? If there had been any differences in mix, or other drivers, because normally I think we would have expected some type of sequential step down.

Speaker Change: <unk> versus first.

Speaker Change: I'm, sorry first quarter versus <unk>.

Speaker Change: In the past have kind of pointed to some negative operating leverage and we've seen a sequential.

Speaker Change: Sequential contraction of gross margins anywhere of 100.

200 basis points.

Speaker Change: At times over the last 567 years.

Michael Rehaut (JP Morg: I was wondering, you know, kind of what happened to that negative operating leverage, you know, if there had been any differences in mix or other drivers, because normally I think we would have expected some type of sequential step down.

Michael Rehaut: I was wondering, you know, kind of what happened to that negative operating leverage, you know, if there had been any differences in mix or other drivers, because normally I think we would have expected some type of sequential step down.

Michael Rehaut: So I was wondering, kind of what happened to that negative operating leverage? If there had been any differences in mix, or other drivers, because normally I think we would have expected some type of sequential step down.

Speaker Change: So I was wondering.

Speaker Change: Kind of what happened to that negative operating leverage.

Speaker Change:

Speaker Change: If there had been any differences in mix or other drivers because normally I think we would have expected some type of.

Speaker Change: Sequential step down.

Jeff Kaminski: Right. Yeah, that's a good question, Mike. A couple of things. One, you're not seeing quite the same magnitude of change between our Q4 and Q1 as we have in certain years. You know, I think it's about $200 million or so at the midpoint, which isn't a tremendous impact on the leverage. But there is some, you know, leverage loss there. But fundamentally, it's just offset by other factors, you know, and where we see the backlog coming through with the mix of deliveries that we expect in the Q1 that slightly higher margins than we've been tracking to.

Jeff J. Kaminski: Right Yeah, that's a good question Mike, a couple of things. One, you're not seeing quite the same magnitude of change between our fourth quarter and first quarter as we have in certain years, so I think is about a couple of hundred million Bucks or so at the midpoint, which isn't a tremendous impact on the leverage, but there is some there is some leverage last year. But fundamentally it's just offset by other factors and where we see the backlog coming through with the mix of deliveries that we expect in the first quarter that slightly higher margins and we've been tracking too. We did think we'd hit an inflection point in the fourth quarter with the low point of margin, which we have seen and we do expect, even though it's only up incrementally still up and hopefully we'll leave that in the rear view mirror for us. So those are really the two main factors, it's just the mix of the business. And I think the other thing is, we used to have a fairly large mix impact between fourth quarter, and first quarter between west coast and some of the other divisions, that's been moderated a bit as we've been trying to rebalance the business. And frankly some of the margins in the other regions have come up over the years quite nicely, where we're just not seeing that same type of impact on the first quarter.

Jeff J. Kaminski: Right Yeah, that's a good question Mike, a couple of things.

Jeff J. Kaminski: One, you're not seeing quite the same magnitude of change between our fourth quarter and first quarter as we have in certain years, so I think is about a couple of hundred million Bucks or so at the midpoint, which isn't a tremendous impact on the leverage, but there is some there is some leverage last year. But fundamentally it's just offset by other factors and where we see the backlog coming through with the mix of deliveries that we expect in the first quarter that slightly higher margins and we've been tracking too. We did think we'd hit an inflection point in the fourth quarter with the low point of margin, which we have seen and we do expect, even though it's only up incrementally still up and hopefully we'll leave that in the rear view mirror for us. So those are really the two main factors, it's just the mix of the business. And I think the other thing is, we used to have a fairly large mix impact between fourth quarter, and first quarter between west coast and some of the other divisions, that's been moderated a bit as we've been trying to rebalance the business. And frankly some of the margins in the other regions have come up over the years quite nicely, where we're just not seeing that same type of impact on the first quarter.

It is about.

Speaker Change: Couple of hundred million Bucks or so at the midpoint.

Speaker Change: Which isn't a tremendous impact on the leverage but there is some there is some leverage last year, but fundamentally it's just offset by other factors.

Jeff J. Kaminski: But fundamentally it's just offset by other factors and where we see the backlog coming through with the mix of deliveries that we expect in the first quarter that slightly higher margins and we've been tracking too. We did think we'd hit an inflection point in the fourth quarter with the low point of margin, which we have seen and we do expect, even though it's only up incrementally still up and hopefully we'll leave that in the rear view mirror for us. So those are really the two main factors, it's just the mix of the business. And I think the other thing is, we used to have a fairly large mix impact between fourth quarter, and first quarter between west coast and some of the other divisions, that's been moderated a bit as we've been trying to rebalance the business. And frankly some of the margins in the other regions have come up over the years quite nicely, where we're just not seeing that same type of impact on the first quarter.

Speaker Change: Where we see the backlog coming through with the mix of deliveries that we expected in the first quarter that slightly higher margins and we've been tracking too. We did think we'd hit an inflection point in the fourth quarter with the low point of margin.

Jeff Kaminski: We did think we'd hit an inflection point in the Q4 with a low point of margin, which we have seen, or we do expect, even though it's only up incrementally, still up. Hopefully we'll leave that in the rearview mirror for us. Those are really the two main factors, just a mix of business. You know, I think the other thing is, we used to have a fairly large mix impact between Q4 and Q1 between West Coast and some of the other divisions. That's been moderated a bit as we've been trying to rebalance the business. Frankly, some of the margins in the other regions have come up over the years quite nicely, where we're just not seeing that same type impact on the Q1.

Jeff J. Kaminski: We did think we'd hit an inflection point in the fourth quarter with the low point of margin, which we have seen and we do expect, even though it's only up incrementally still up and hopefully we'll leave that in the rear view mirror for us. So those are really the two main factors, it's just the mix of the business. And I think the other thing is, we used to have a fairly large mix impact between fourth quarter, and first quarter between west coast and some of the other divisions, that's been moderated a bit as we've been trying to rebalance the business. And frankly some of the margins in the other regions have come up over the years quite nicely, where we're just not seeing that same type of impact on the first quarter.

Speaker Change: Which we have seen and we do expect.

Speaker Change: Even though it's only up incrementally.

Speaker Change: Still up and hopefully we will do that.

Speaker Change: Review mirror for us.

Jeff J. Kaminski: So those are really the two main factors, it's just the mix of the business. And I think the other thing is, we used to have a fairly large mix impact between fourth quarter, and first quarter between west coast and some of the other divisions, that's been moderated a bit as we've been trying to rebalance the business. And frankly some of the margins in the other regions have come up over the years quite nicely, where we're just not seeing that same type of impact on the first quarter.

Jeff J. Kaminski: So those are really the two main factors, it's just the mix of the business.

Speaker Change: So those are really the two main factors just the mix of the business.

I think the other thing is we used to have.

Jeff J. Kaminski: And I think the other thing is, we used to have a fairly large mix impact between fourth quarter, and first quarter between west coast and some of the other divisions, that's been moderated a bit as we've been trying to rebalance the business. And frankly some of the margins in the other regions have come up over the years quite nicely, where we're just not seeing that same type of impact on the first quarter.

Speaker Change: A fairly large mix impact between fourth quarter, and first quarter between west coast and some of the other divisions thats been moderated a bit as we've been trying to rebalance the business.

Speaker Change: And frankly some of the margins in the other regions have come up over the years quite nicely, where we're just not seeing that same type of impact on the first quarter.

Jeff J. Kaminski: And frankly some of the margins in the other regions have come up over the years quite nicely, where we're just not seeing that same type of impact on the first quarter.

Michael Rehaut (JP Morg: Right. Okay. No, that's helpful, Jeff, appreciate that. I guess secondly, on the SG&A guide, looking for it to be about flattish or, you know, maybe up 10 basis points year-over-year. And that is, you know, against a revenue range that is flat to up 7%. I'm just kind of curious, you know, let's for argument's sake, and I know the midpoint is obviously maybe up 3%, 3.5%. Perhaps you're just, you know, kind of saying relatively modest revenue growth, you know, not a lot of operating leverage. But to the extent that, you know, we were to see the higher end of that range, up 7%, you know, would it be fair to assume or expect some level of modest SG&A leverage on that scenario?

Michael Rehaut: Right. Okay. No, that's helpful, Jeff, appreciate that. I guess secondly, on the SG&A guide, looking for it to be about flattish or, you know, maybe up 10 basis points year-over-year. And that is, you know, against a revenue range that is flat to up 7%. I'm just kind of curious, you know, let's for argument's sake, and I know the midpoint is obviously maybe up 3%, 3.5%. Perhaps you're just, you know, kind of saying relatively modest revenue growth, you know, not a lot of operating leverage. But to the extent that, you know, we were to see the higher end of that range, up 7%, you know, would it be fair to assume or expect some level of modest SG&A leverage on that scenario?

Speaker Change: Right.

Michael Rehaut: Right, okay no that's helpful Jeff, I appreciate that. I guess secondly on the SG&A guide, looking forward to be about flattish or maybe up 10 bps year over year, and that is against a revenue range that is flat to up 7%. I'm just kind of curious, let's for argument's sake, now I know the mid point is obviously maybe up three 3%, 3.5%, perhaps you're just kind of seeing relatively modest revenue growth, not a lot of operating leverage. But to the extent that we were to see the higher end of that range up 7%. Would it be fair to assume or expect some level of modest SG&A leverage on that scenario? Or are there other factors that would kind of prep that for fiscal '24?

Jeffrey T. Mezger: Looking forward to be about flattish or.

Jeffrey T. Mezger: Maybe up 10 bps year over year.

Jeffrey T. Mezger: And that is.

Jeffrey T. Mezger: Against a revenue range that is flat to up 7%.

Michael Rehaut: I'm just kind of curious, let's for argument's sake, now I know the mid point is obviously maybe up three 3%, 3.5%, perhaps you're just kind of seeing relatively modest revenue growth, not a lot of operating leverage. But to the extent that we were to see the higher end of that range up 7%. Would it be fair to assume or expect some level of modest SG&A leverage on that scenario? Or are there other factors that would kind of prep that for fiscal '24?

Jeffrey T. Mezger: Just kind of curious.

Jeffrey T. Mezger: Argument's sake.

Jeffrey T. Mezger: The mid point is obviously, maybe up three 3%, 3%, perhaps you're just kind of thing.

Jeffrey T. Mezger: <unk> modest revenue growth.

Not a lot of operating leverage but to the extent that.

Michael Rehaut: But to the extent that we were to see the higher end of that range up 7%. Would it be fair to assume or expect some level of modest SG&A leverage on that scenario? Or are there other factors that would kind of prep that for fiscal '24?

Michael Rehaut: But to the extent that we were to see the higher end of that range up 7%.

Jeffrey T. Mezger: We were to see the higher end of that range.

Jeffrey T. Mezger: Up 7%.

Jeffrey T. Mezger: Would it be fair to assume or expect some level of modest SG&A leverage on that scenario or.

Michael Rehaut: Would it be fair to assume or expect some level of modest SG&A leverage on that scenario? Or are there other factors that would kind of prep that for fiscal '24?

Michael Rehaut: Would it be fair to assume or expect some level of modest SG&A leverage on that scenario?

Michael Rehaut (JP Morg: kind of are there other factors that are, you know, would kind of suppress that for fiscal 2024?

Michael Rehaut: kind of are there other factors that are, you know, would kind of suppress that for fiscal 2024?

Jeffrey T. Mezger: Or are there other factors that are kind of depressed that FERC for fiscal 'twenty four.

Michael Rehaut: Or are there other factors that would kind of prep that for fiscal '24?

Jeff Kaminski: Sure. Yeah. For starters, we always estimate, you know, the leverage impacts on both the gross margin, the fixed costs included in the cost of sales, and the impact on gross margin, as well as our SG&A percentage. We always basically calculate those at the midpoint of the ranges. As we, you know, have beats on the top line, you should be incrementally better on those two metrics, which is the case. You know, as far as the uptick, you know, like I, as I mentioned in prepared remarks, we're in a different situation this year in January than we were last year. You know, we were really facing the stiff headwinds of these mortgage rate increases, not quite sure how the year was going to sort out.

Jeff Mezger: Sure, Yes, so for starters. We always estimate the leverage impact on both gross margin and fixed costs, included in the cost of sales and the impact on gross margin, as well as our SG&A percentage. We always basically calculate those at the midpoint of the ranges, so as we have beats on the top line, you should be incrementally better on those two metrics which is the case. As far as the uptick, like as I mentioned in prepared remarks, we're in a different situation this year in January than we were last year. We had a, we're really facing the stiff headwinds of these mortgage rate increases, not quite sure how the year was going to sort out, we did way better than we thought we were going to during the let's say February-March of last year, and where the year ended up. And we had a little different approach on expenses, you always get a little more tighter on expenses, you're a little slower in replacing openings, sometimes you freeze head count regardless of what's happening with the underlying positions. And this year, we're in more of a growth-minded mindset, we anticipate growth in community count, we want to grow the business and continue to take share. We're really happy with what we've seen on cycle times and our ability to take customers from order to close in a much shorter period of time. So we're just in a more optimistic environment internally, as we look at the market, and we look at the company, and then also, I mean if you want to grow the business you have to invest in the business, so we're putting a few more dollars into various areas, in order to support that growth. So, I'd say it's at a high level those are the drivers, when you really look at it, a lot of this you're almost talking rounding, it's a 40 basis points, is 6 million bucks or something at the mid point, so it's not a not a huge huge issue. And like I was saying, on the growth mindset with the community count going up we're going to spend some money on particularly advertising and marketing supporting those new openings. And our openings are up significantly as we plan them today, they are up about 50% over the prior year or so, we have a lot of work to do and we want to support it at the right level of expense.

Jeff Mezger: Sure, Yes, so for starters.

Jeff Mezger: We always estimate the leverage impact on both gross margin and fixed costs, included in the cost of sales and the impact on gross margin, as well as our SG&A percentage. We always basically calculate those at the midpoint of the ranges, so as we have beats on the top line, you should be incrementally better on those two metrics which is the case. As far as the uptick, like as I mentioned in prepared remarks, we're in a different situation this year in January than we were last year. We had a, we're really facing the stiff headwinds of these mortgage rate increases, not quite sure how the year was going to sort out, we did way better than we thought we were going to during the let's say February-March of last year, and where the year ended up. And we had a little different approach on expenses, you always get a little more tighter on expenses, you're a little slower in replacing openings, sometimes you freeze head count regardless of what's happening with the underlying positions. And this year, we're in more of a growth-minded mindset, we anticipate growth in community count, we want to grow the business and continue to take share. We're really happy with what we've seen on cycle times and our ability to take customers from order to close in a much shorter period of time. So we're just in a more optimistic environment internally, as we look at the market, and we look at the company, and then also, I mean if you want to grow the business you have to invest in the business, so we're putting a few more dollars into various areas, in order to support that growth. So, I'd say it's at a high level those are the drivers, when you really look at it, a lot of this you're almost talking rounding, it's a 40 basis points, is 6 million bucks or something at the mid point, so it's not a not a huge huge issue. And like I was saying, on the growth mindset with the community count going up we're going to spend some money on particularly advertising and marketing supporting those new openings. And our openings are up significantly as we plan them today, they are up about 50% over the prior year or so, we have a lot of work to do and we want to support it at the right level of expense.

Jeff Mezger: We always estimate the leverage impact on both gross margin and fixed costs, included in the cost of sales and the impact on gross margin, as well as our SG&A percentage.

Jeffrey T. Mezger: We always estimate the leverage impact on both gross margin and the fixed costs included in cost of sales and the impact on gross margin as well as our SG&A percentage, we always basically calculate those at the midpoint of the ranges.

Jeff Mezger: We always basically calculate those at the midpoint of the ranges, so as we have beats on the top line, you should be incrementally better on those two metrics which is the case. As far as the uptick, like as I mentioned in prepared remarks, we're in a different situation this year in January than we were last year. We had a, we're really facing the stiff headwinds of these mortgage rate increases, not quite sure how the year was going to sort out, we did way better than we thought we were going to during the let's say February-March of last year, and where the year ended up. And we had a little different approach on expenses, you always get a little more tighter on expenses, you're a little slower in replacing openings, sometimes you freeze head count regardless of what's happening with the underlying positions. And this year, we're in more of a growth-minded mindset, we anticipate growth in community count, we want to grow the business and continue to take share. We're really happy with what we've seen on cycle times and our ability to take customers from order to close in a much shorter period of time. So we're just in a more optimistic environment internally, as we look at the market, and we look at the company, and then also, I mean if you want to grow the business you have to invest in the business, so we're putting a few more dollars into various areas, in order to support that growth. So, I'd say it's at a high level those are the drivers, when you really look at it, a lot of this you're almost talking rounding, it's a 40 basis points, is 6 million bucks or something at the mid point, so it's not a not a huge huge issue. And like I was saying, on the growth mindset with the community count going up we're going to spend some money on particularly advertising and marketing supporting those new openings. And our openings are up significantly as we plan them today, they are up about 50% over the prior year or so, we have a lot of work to do and we want to support it at the right level of expense.

Jeff Mezger: We always basically calculate those at the midpoint of the ranges, so as we have beats on the top line, you should be incrementally better on those two metrics which is the case.

Jeffrey T. Mezger: So as we have beats on the top line you should be incrementally better on those two metrics, which is which is the case.

Jeff Mezger: As far as the uptick, like as I mentioned in prepared remarks, we're in a different situation this year in January than we were last year. We had a, we're really facing the stiff headwinds of these mortgage rate increases, not quite sure how the year was going to sort out, we did way better than we thought we were going to during the let's say February-March of last year, and where the year ended up. And we had a little different approach on expenses, you always get a little more tighter on expenses, you're a little slower in replacing openings, sometimes you freeze head count regardless of what's happening with the underlying positions. And this year, we're in more of a growth-minded mindset, we anticipate growth in community count, we want to grow the business and continue to take share. We're really happy with what we've seen on cycle times and our ability to take customers from order to close in a much shorter period of time. So we're just in a more optimistic environment internally, as we look at the market, and we look at the company, and then also, I mean if you want to grow the business you have to invest in the business, so we're putting a few more dollars into various areas, in order to support that growth. So, I'd say it's at a high level those are the drivers, when you really look at it, a lot of this you're almost talking rounding, it's a 40 basis points, is 6 million bucks or something at the mid point, so it's not a not a huge huge issue. And like I was saying, on the growth mindset with the community count going up we're going to spend some money on particularly advertising and marketing supporting those new openings. And our openings are up significantly as we plan them today, they are up about 50% over the prior year or so, we have a lot of work to do and we want to support it at the right level of expense.

Jeff Mezger: As far as the uptick, like as I mentioned in prepared remarks, we're in a different situation this year in January than we were last year.

As far as the uptick like as I mentioned in prepared remarks, we're in a different situation. This year in January than we were last year.

Jeff Mezger: We had a, we're really facing the stiff headwinds of these mortgage rate increases, not quite sure how the year was going to sort out, we did way better than we thought we were going to during the let's say February-March of last year, and where the year ended up. And we had a little different approach on expenses, you always get a little more tighter on expenses, you're a little slower in replacing openings, sometimes you freeze head count regardless of what's happening with the underlying positions. And this year, we're in more of a growth-minded mindset, we anticipate growth in community count, we want to grow the business and continue to take share. We're really happy with what we've seen on cycle times and our ability to take customers from order to close in a much shorter period of time. So we're just in a more optimistic environment internally, as we look at the market, and we look at the company, and then also, I mean if you want to grow the business you have to invest in the business, so we're putting a few more dollars into various areas, in order to support that growth. So, I'd say it's at a high level those are the drivers, when you really look at it, a lot of this you're almost talking rounding, it's a 40 basis points, is 6 million bucks or something at the mid point, so it's not a not a huge huge issue. And like I was saying, on the growth mindset with the community count going up we're going to spend some money on particularly advertising and marketing supporting those new openings. And our openings are up significantly as we plan them today, they are up about 50% over the prior year or so, we have a lot of work to do and we want to support it at the right level of expense.

We had.

Jeffrey T. Mezger: And we're really facing stiff headwinds of these mortgage rate increases not quite sure. How the year was going to sort out we did way better than we thought we were going to.

Jeff Kaminski: We did way better than we thought we were going to during the, let's say, February, March of last year and where the year ended up. We had a little different approach on expenses. You always get a little more. You're tighter on expenses. You're a little slower in replacing openings. Sometimes you freeze head count regardless of what's happening with the underlying positions. This year, we're in more of a growth-minded mindset. We anticipate growth in community count. We want to grow the business and continue to take share. We're really happy with what we've seen on cycle times and our ability to take customers from order to close in a much shorter period of time.

Jeffrey T. Mezger: During the let's say February March of last year, and where the year ended up.

Jeff Mezger: And we had a little different approach on expenses, you always get a little more tighter on expenses, you're a little slower in replacing openings, sometimes you freeze head count regardless of what's happening with the underlying positions. And this year, we're in more of a growth-minded mindset, we anticipate growth in community count, we want to grow the business and continue to take share. We're really happy with what we've seen on cycle times and our ability to take customers from order to close in a much shorter period of time. So we're just in a more optimistic environment internally, as we look at the market, and we look at the company, and then also, I mean if you want to grow the business you have to invest in the business, so we're putting a few more dollars into various areas, in order to support that growth. So, I'd say it's at a high level those are the drivers, when you really look at it, a lot of this you're almost talking rounding, it's a 40 basis points, is 6 million bucks or something at the mid point, so it's not a not a huge huge issue. And like I was saying, on the growth mindset with the community count going up we're going to spend some money on particularly advertising and marketing supporting those new openings. And our openings are up significantly as we plan them today, they are up about 50% over the prior year or so, we have a lot of work to do and we want to support it at the right level of expense.

Jeffrey T. Mezger: And we had a little different approach on expenses, you always get a little more.

Jeffrey T. Mezger: Tighter on expenses Youre, a little slower in replacing openings, sometimes you freeze head count regardless of what's happening with the underlying positions and this year, we're in more of a growth minded mindset.

Jeff Mezger: And this year, we're in more of a growth-minded mindset, we anticipate growth in community count, we want to grow the business and continue to take share. We're really happy with what we've seen on cycle times and our ability to take customers from order to close in a much shorter period of time. So we're just in a more optimistic environment internally, as we look at the market, and we look at the company, and then also, I mean if you want to grow the business you have to invest in the business, so we're putting a few more dollars into various areas, in order to support that growth. So, I'd say it's at a high level those are the drivers, when you really look at it, a lot of this you're almost talking rounding, it's a 40 basis points, is 6 million bucks or something at the mid point, so it's not a not a huge huge issue. And like I was saying, on the growth mindset with the community count going up we're going to spend some money on particularly advertising and marketing supporting those new openings. And our openings are up significantly as we plan them today, they are up about 50% over the prior year or so, we have a lot of work to do and we want to support it at the right level of expense.

Jeff Mezger: And this year, we're in more of a growth-minded mindset, we anticipate growth in community count, we want to grow the business and continue to take share.

Jeffrey T. Mezger: We anticipate growth in community count, we want to grow the business and continue to take share.

Jeff Mezger: We're really happy with what we've seen on cycle times and our ability to take customers from order to close in a much shorter period of time. So we're just in a more optimistic environment internally, as we look at the market, and we look at the company, and then also, I mean if you want to grow the business you have to invest in the business, so we're putting a few more dollars into various areas, in order to support that growth. So, I'd say it's at a high level those are the drivers, when you really look at it, a lot of this you're almost talking rounding, it's a 40 basis points, is 6 million bucks or something at the mid point, so it's not a not a huge huge issue. And like I was saying, on the growth mindset with the community count going up we're going to spend some money on particularly advertising and marketing supporting those new openings. And our openings are up significantly as we plan them today, they are up about 50% over the prior year or so, we have a lot of work to do and we want to support it at the right level of expense.

Jeff Mezger: We're really happy with what we've seen on cycle times and our ability to take customers from order to close in a much shorter period of time.

Jeffrey T. Mezger: We're really happy with what we've seen on cycle times.

Jeff Mezger: So we're just in a more optimistic environment internally, as we look at the market, and we look at the company, and then also, I mean if you want to grow the business you have to invest in the business, so we're putting a few more dollars into various areas, in order to support that growth. So, I'd say it's at a high level those are the drivers, when you really look at it, a lot of this you're almost talking rounding, it's a 40 basis points, is 6 million bucks or something at the mid point, so it's not a not a huge huge issue. And like I was saying, on the growth mindset with the community count going up we're going to spend some money on particularly advertising and marketing supporting those new openings. And our openings are up significantly as we plan them today, they are up about 50% over the prior year or so, we have a lot of work to do and we want to support it at the right level of expense.

Our ability to take <unk>.

Customers from order to close a much shorter period of time. So we're just in a more optimistic environment internally as we look at the market and we look at the company and then also.

Jeff Kaminski: We're just in a more optimistic environment, internally as we look at the market and we look at the company. Then also, you know, I mean, if you want to grow the business, you have to invest in the business. We're putting a few more dollars into various areas in order to support that growth. That's, I'd say at the high level, those are the drivers. When you really look at it, I mean, a lot of this, you're almost talking rounding. You know, it's 40 basis points, you know, $6 million or something at the midpoint. It's not a huge issue.

Jeffrey T. Mezger: I mean, if you want to grow the business you have to invest in the business. So we're putting a few more dollars into various areas in order to support that growth.

Jeff Mezger: So, I'd say it's at a high level those are the drivers, when you really look at it, a lot of this you're almost talking rounding, it's a 40 basis points, is 6 million bucks or something at the mid point, so it's not a not a huge huge issue. And like I was saying, on the growth mindset with the community count going up we're going to spend some money on particularly advertising and marketing supporting those new openings. And our openings are up significantly as we plan them today, they are up about 50% over the prior year or so, we have a lot of work to do and we want to support it at the right level of expense.

Jeffrey T. Mezger: I'd say, it's a high level those are the drivers when you really look at it.

Jeffrey T. Mezger: A lot of this you're almost talking rounding.

Jeffrey T. Mezger: 40 basis points is 6 million box or something at the mid point. So it's not a not a huge huge issue in.

Jeff Mezger: And like I was saying, on the growth mindset with the community count going up we're going to spend some money on particularly advertising and marketing supporting those new openings. And our openings are up significantly as we plan them today, they are up about 50% over the prior year or so, we have a lot of work to do and we want to support it at the right level of expense.

Jeff Kaminski: Like I was saying, on the growth mindset, you know, with the community count going up, we're gonna have to spend some money on, particularly advertising and marketing, supporting those new openings. Our opens are up significantly as we plan them today. They're up about 50% over the prior year. We have a lot of work to do, and we want to support it with the right level of expense.

Like I was saying on the growth mindset with the community count going up we're going to spend some money on.

Jeffrey T. Mezger: Particularly advertising and marketing supporting those new openings in our openings are up significantly.

Jeff Mezger: And our openings are up significantly as we plan them today, they are up about 50% over the prior year or so, we have a lot of work to do and we want to support it at the right level of expense.

Jeffrey T. Mezger: We plan them today.

Jeffrey T. Mezger: They are up about 50% over the prior year or so.

Jeffrey T. Mezger: We have a lot of work to do and we want to support it was the right level of expense.

Operator: Thank you. Our next question comes from the line of Jay McCanless with Wedbush Securities. Please proceed with your question.

Operator: Thank you. And our next question comes from the line of Jay McCanless with Wedbush Securities. Please proceed with your question.

Jay McCanless: Hey, good afternoon. Thanks for taking my question. The first one I had, it seems like you have more tailwinds this year between the cycle time getting better, and sounds like incentives may be coming off a little bit. Could you talk about why you're not expecting any improvement in the full year gross margin for 2024 versus 2023?

Jay McCanless: Hey, good afternoon, Thanks for taking my question. The first one I had it seems like you have more tailwind this year between the cycle time getting better and. And it sounds like incentives, maybe coming off a little bit, but could you talk about why youre not expecting any improvement in the full year gross margin for 24 versus 23%. Well, we like I said, we forecasted based on current cost current conditions in the current market, even though it's an improved market. We didnt look forward and say, let's assume a large increase.

Jay McCanless: Hey, good afternoon, thanks for taking my question. The first one I had, it seems like you have more tailwind this year between the cycle time getting better, and it sounds like incentives maybe coming off a little bit but, could you talk about why you're not expecting any improvement in the full year gross margin for '24 versus '23?

Jay McCanless: Hey, good afternoon, thanks for taking my question.

Jay Mccanless: The first one I had it seems like you have more tailwind this year between the cycle time getting better and.

Jay McCanless: The first one I had, it seems like you have more tailwind this year between the cycle time getting better, and it sounds like incentives maybe coming off a little bit but, could you talk about why you're not expecting any improvement in the full year gross margin for '24 versus '23?

Jay Mccanless: And it sounds like incentives, maybe coming off a little bit, but could you talk about why youre not expecting any improvement in the full year gross margin for 24 versus 23%.

Jeff Kaminski: Well, you know, like I said, we forecast it based on current costs, current conditions in the current market. Even though it's an improved market, we didn't look forward and say, you know, let's assume a large increase or a significant increase in margins in Q3 and Q4 reflecting, for example, a reduction in concessions and customer incentives. We didn't want to take that type of an outlook into the forecast, based on a relatively short period of time of improvement. We do expect that improvement to happen. We do, you know, anticipate that we'll see that improving market condition.

Robert V. McGibney: Well, we, like I said, we forecasted based on current cost current conditions in the current market, even though it's an improved market, we didn't looked forward and say, let's assume a large increase or a significant increase in margins in the third and fourth quarter, reflecting for example, a reduction in concessions and customer incentives. We didn't want to take that type of an outlook into the forecast based in a relatively short period of time improvement. We do expect that improvement to happen, we do anticipate that we'll see that improving market condition, but at this point in time we just wanted to be a little bit cautious, we've taken that in the future guidance numbers. And I'll leave it up to you guys, I mean if you have more bullish outlook on this space and you're ready to make that stand right now, then you can just as you think appropriate. But right now we're forecasting basically what we're seeing in the backlog, what we're seeing in the current sales rates, the type of incentives that we need today to book our sales, and our visibility is only about 40% of the year right now with your backlog so. The spring selling season, it's also a lot, and I think next quarter's call we'll be able to dial in on a lot of these metrics more precisely, and hopefully give you a little bit more detail on what's going on in the markets. And hopefully talk a lot about the improvements that we're seeing continue as we get through the first quarter and the spring selling season.

Speaker Change: Well, we like I said, we forecasted based on current cost current conditions in the current market, even though it's an improved market. We didnt look forward and say, let's assume a large increase.

Speaker Change: A significant increase in margins in the third and fourth quarter, reflecting for example, a reduction in concessions and customer incentives.

Robert V. McGibney: We didn't want to take that type of an outlook into the forecast based in a relatively short period of time improvement. We do expect that improvement to happen, we do anticipate that we'll see that improving market condition, but at this point in time we just wanted to be a little bit cautious, we've taken that in the future guidance numbers. And I'll leave it up to you guys, I mean if you have more bullish outlook on this space and you're ready to make that stand right now, then you can just as you think appropriate. But right now we're forecasting basically what we're seeing in the backlog, what we're seeing in the current sales rates, the type of incentives that we need today to book our sales, and our visibility is only about 40% of the year right now with your backlog so. The spring selling season, it's also a lot, and I think next quarter's call we'll be able to dial in on a lot of these metrics more precisely, and hopefully give you a little bit more detail on what's going on in the markets. And hopefully talk a lot about the improvements that we're seeing continue as we get through the first quarter and the spring selling season.

Speaker Change: We didn't want to take that type of an outlook into the forecast.

Speaker Change: <unk> set a relatively short period of time improvement.

Speaker Change: We do expect that improvement to happen we do.

Speaker Change: We do anticipate that we'll see that improving market condition, but.

Jeff Mezger: You know, at this point in time, we just wanted to be a little bit cautious with baking that in the future guidance numbers and, you know, leave it up to you guys. I mean, if you have more bullish outlooks on the space and you're ready to make that stand right now, then, you know, you can adjust as you think appropriate. Right now, we're forecasting based on what we're seeing in the backlog, what we're seeing in the current sales rates, the type of incentives that we need today to book our sales. You know, our visibility is only about 40% of the year right now with their backlogs.

Jeff Kaminski: You know, at this point in time, we just wanted to be a little bit cautious with baking that in the future guidance numbers and, you know, leave it up to you guys. I mean, if you have more bullish outlooks on the space and you're ready to make that stand right now, then, you know, you can adjust as you think appropriate. Right now, we're forecasting based on what we're seeing in the backlog, what we're seeing in the current sales rates, the type of incentives that we need today to book our sales. You know, our visibility is only about 40% of the year right now with their backlogs.

Speaker Change: At this point in time, we just wanted to be a little bit cautious we've taken that in the future guidance numbers and.

Robert V. McGibney: And I'll leave it up to you guys, I mean if you have more bullish outlook on this space and you're ready to make that stand right now, then you can just as you think appropriate. But right now we're forecasting basically what we're seeing in the backlog, what we're seeing in the current sales rates, the type of incentives that we need today to book our sales, and our visibility is only about 40% of the year right now with your backlog so. The spring selling season, it's also a lot, and I think next quarter's call we'll be able to dial in on a lot of these metrics more precisely, and hopefully give you a little bit more detail on what's going on in the markets. And hopefully talk a lot about the improvements that we're seeing continue as we get through the first quarter and the spring selling season.

Speaker Change: I'll leave it up to you guys I mean, if you have more bullish outlook.

Speaker Change: On the space and you're ready to make that stand right. Now then you can adjust as you think appropriate but right now we're forecasting basically what we're seeing in the backlog what we're seeing in the current sales rates.

Robert V. McGibney: But right now we're forecasting basically what we're seeing in the backlog, what we're seeing in the current sales rates, the type of incentives that we need today to book our sales, and our visibility is only about 40% of the year right now with your backlog so. The spring selling season, it's also a lot, and I think next quarter's call we'll be able to dial in on a lot of these metrics more precisely, and hopefully give you a little bit more detail on what's going on in the markets. And hopefully talk a lot about the improvements that we're seeing continue as we get through the first quarter and the spring selling season.

Speaker Change: The type of incentives that we need today to.

Speaker Change: To book our sales.

Speaker Change: Our visibility is only about 40% of the year right now with your backlog so.

Robert V. McGibney: The spring selling season, it's also a lot, and I think next quarter's call we'll be able to dial in on a lot of these metrics more precisely, and hopefully give you a little bit more detail on what's going on in the markets. And hopefully talk a lot about the improvements that we're seeing continue as we get through the first quarter and the spring selling season.

Jeff Mezger: The spring selling season will tell us a lot, and I think next quarter's call, we'll be able to dial in on a lot of these metrics, you know, more precisely and hopefully give you a little bit more detail on what's going on in the markets and hopefully talk a lot about the improvements that we're seeing, you know, continue as we get through Q1 in the spring selling season.

Speaker Change: The spring selling season, it's awful lot and I think next quarter's call, we'll be able to dial in on a lot of these metrics.

More precisely.

And hopefully give you a little bit more detail on what's going on in the markets.

Robert V. McGibney: And hopefully talk a lot about the improvements that we're seeing continue as we get through the first quarter and the spring selling season.

Speaker Change: We talked a lot about the improvements that we're seeing.

Speaker Change: Continue as we get through the first quarter and the spring selling season.

Jay McCanless: Thanks. My second question, could you talk about how many communities you were able to raise price in during the quarter? And as part of that, as kind of a two-parter, was the price action in terms of competition from the other builders, was it as frenetic as what you saw in 2022 or in the fall of 2022, or was it a little more well-behaved this year?

Jay McCanless: And my second question. Could you talk about how many communities you were able to raise price in during the quarter? And as part of that, as kind of a two parter. Was the price action in terms of competition from the other builders, was it as frenetic as what you saw in '22, or in the fall of '22 or was it a little more well behaved this year?

Jay McCanless: And my second question.

Jay McCanless: Could you talk about how many communities you were able to raise price in during the quarter? And as part of that, as kind of a two parter. Was the price action in terms of competition from the other builders, was it as frenetic as what you saw in '22, or in the fall of '22 or was it a little more well behaved this year?

Jay McCanless: Could you talk about how many communities you were able to raise price in during the quarter? And as part of that, as kind of a two parter.

Speaker Change: Question could you talk about how many communities you were able to raise prices during the quarter.

Speaker Change: And as part of that is kind of a two parter.

Jay McCanless: Was the price action in terms of competition from the other builders, was it as frenetic as what you saw in '22, or in the fall of '22 or was it a little more well behaved this year?

Speaker Change: Was the price action in terms of competition from the other builders was it asked for <unk> is what you saw in 'twenty two or in the fall of 'twenty, two or was it a little more well behaved this year.

Jeff Mezger: Rob.

Rob McGibney: Yeah. You know, we didn't have as much pricing action during Q4 as what we talked about in Q3. I think we had 65% of our communities with price increases. Because of mortgage rates going up the way that they did, you know, that just wasn't in the cards. The market wasn't there. We weren't, you know, as we optimize each community and asset, we weren't seeing the need to raise prices to slow down absorption. You know, I think price increases, maybe it was about 25% of our communities, fairly small increases in the range of $5,000 or $6,000 during the quarter. You know, most of what we saw from other builders was incentive action, not necessarily price moves.

Robert V. McGibney: Yes, so we didn't have as much pricing action during Q4 as what we talked about in Q3, I think we had 60% to 65% of our communities at price increases, because of mortgage rates going up the way that they did, that's just wasn't of the car, the market wasn't there. We optimize each community an asset, we weren't seeing the need to raise prices to slow down absorptions. So, we, I think price increases maybe it was about 25% of our community in fairly small increases in the range of 5 or 6K during the quarter. Most of what we saw from other builders was incentive action, not necessarily price moves.

Rob Mcgivney: That just wasn't of the car to the market wasn't there.

Rob Mcgivney: As we optimize each community an asset we weren't seeing the need to raise prices to slow down absorptions. So.

Robert V. McGibney: We optimize each community an asset, we weren't seeing the need to raise prices to slow down absorptions. So, we, I think price increases maybe it was about 25% of our community in fairly small increases in the range of 5 or 6K during the quarter. Most of what we saw from other builders was incentive action, not necessarily price moves.

Robert V. McGibney: We optimize each community an asset, we weren't seeing the need to raise prices to slow down absorptions.

Rob Mcgivney: We I think price increases maybe it was about 25% of our community is fairly small increases in the range of five or 6K during the quarter.

Robert V. McGibney: So, we, I think price increases maybe it was about 25% of our community in fairly small increases in the range of 5 or 6K during the quarter. Most of what we saw from other builders was incentive action, not necessarily price moves.

Robert V. McGibney: So, we, I think price increases maybe it was about 25% of our community in fairly small increases in the range of 5 or 6K during the quarter.

Rob Mcgivney: Most of what we saw from other builders was incentive action not necessarily price moves.

Robert V. McGibney: Most of what we saw from other builders was incentive action, not necessarily price moves.

Jay McCanless: Thank you. The next question comes from the line of Susan Maklari with Goldman Sachs. Please proceed with your question.

Operator: Thank you. And the next question comes from the line of Susan Maklari with Goldman Sachs. Please proceed with your question.

Susan Maklari: Thank you. Good afternoon, everyone. Thanks for squeezing. My first question is, can you talk a bit about the just the level of activity you're seeing in the design centers, anything that's changed there as we've seen the move-in rates?

Susan Maklari: Thank you, good afternoon everyone and thanks for squeezing. My first question is can you talk a bit about the, just the level of activity you're seeing in the design centers? Anything that changed there as we've seen the move in rates.

Susan Maklari: Thank you, good afternoon everyone and thanks for squeezing.

Susan Maklari: My first question is can you talk a bit about the, just the level of activity you're seeing in the design centers? Anything that changed there as we've seen the move in rates.

Susan Marie Maklari: My first question is can you talk a bit about the just the level of activity you're seeing in the design centers anything that changed there as we've seen the move in rates.

Jeff Mezger: Susan, I'm not sure I heard the end of your question. I heard you say design centers, and then I didn't hear the rest of it.

Jeff Mezger: So I'm not sure I heard the end of your question I heard you say design centers. Here the rest of it.

Susan Marie Maklari: Here the rest of it.

Susan Maklari: Yeah. I'm sorry. I'm on a train. Can you hear me better now?

Susan Maklari: Yes, I'm, sorry, I'm on a train and so, can you hear me better now? Yes. Okay. Yeah. So just wondering if there was any change in the input or the trends that you were seeing in the design centers through the quarter and even into the first couple of weeks of this year just given the move in rates.

Susan Maklari: Yes, I'm, sorry, I'm on a train and so, can you hear me better now?

Jeff Mezger: Yes.

Susan Maklari: Yes. Okay. Yeah. So just wondering if there was any change in the input or the trends that you were seeing in the design centers through the quarter and even into the first couple of weeks of this year just given the move in rates.

Jeff Mezger: Yes.

Susan Maklari: Okay, So just wondering if there was any change in the input or the trends that you were seeing in the design centers through the quarter? And even into the first couple of weeks of this year just given the move in rates?

Susan Maklari: Okay. Yeah. Just wondering if there was any change in the in sort of the trends that you were seeing in the design centers through the quarter and even into the first couple weeks of this year, just given the move-in rates.

Susan Marie Maklari: Yes.

Speaker Change: Okay. Yeah. So just wondering if there was any change in the input or the trends that you were seeing in the design centers through the quarter and even into the first couple of weeks of this year just given the move in rates.

Jeff Mezger: Yeah. No, they're very similar to what we saw all of last year, and frankly, the last several years. The spend in the studio has been very consistent. It's moved to more what I'll call value items, more permanent things, not necessarily finished, but room layouts, and optional islands, and things like that, less jacuzzis and sizzle stuff. The spend has been very consistent.

Jeff Mezger: No they're very similar to what we saw all of last year, and frankly the last last several years has been in the studio has been very consistent. It's moved to a more, what I'll call value items, more permanent things not necessarily finished but rune layouts and optional islands, and things like that, less jacuzzis and several stuff, but but the spend has been very consistent.

Jeff Mezger: No they're very similar to what we saw all of last year, and frankly the last last several years has been in the studio has been very consistent.

Speaker Change: Very similar to what we saw all of last year and frankly, the last last several years has been in the studio has been very consistent it's moved to more what I'll call value items.

Jeff Mezger: It's moved to a more, what I'll call value items, more permanent things not necessarily finished but rune layouts and optional islands, and things like that, less jacuzzis and several stuff, but but the spend has been very consistent.

More permanent things not not necessarily finished but.

Speaker Change: Rune layouts in.

Speaker Change: Optional islands, and things like that less jacuzzi.

Speaker Change: So the old stuff, but but the spend has been very consistent.

Susan Maklari: Okay. I guess any thoughts just as we think about this year, priorities for uses of cash. You know, you talked about still having some availability on the buybacks in there and just how you're thinking about that relative to perhaps land spend and some of the other larger buckets.

Susan Maklari: Okay, and then I guess any thoughts just, as we think about this year priorities for uses of cash. I know you talked about still having some availability on the buybacks in there, and just how you're thinking about that relative to perhaps land spend and some of the other larger buckets? But as you can tell from our balance sheets, those and we're in a very strong position right now.

Susan Maklari: Okay, and then I guess any thoughts just, as we think about this year priorities for uses of cash.

Speaker Change: 44 for uses of cash I know you talked about still having some.

Susan Maklari: I know you talked about still having some availability on the buybacks in there, and just how you're thinking about that relative to perhaps land spend and some of the other larger buckets?

Speaker Change: Availability on the buybacks in there and just how youre thinking about that relative to perhaps land spend and some of the other larger buckets.

Jeff Mezger: Well, as you can tell from our balance sheet, Susan, we're in a very strong position right now. First and foremost, we're always gonna be growing the company, and that's where our first dollars would go. What we saw as 2023 evolved was a lot of idle cash, I'll call it. Nice problem to have, but the cash that wasn't needed to fuel our growth and position us, and we were opportunistic and bought back a lot of our stock. We've been somewhat programmatic about it for a few years now.

Jeff Mezger: Well, as you can tell from our balance sheets, we're in a very strong position right now. And first and foremost, we're always going to be growing the company, and that's where are our 1st dollars would go. But what we saw in '23 about, was a lot of idle cash I'll call, nice problem to have but, the cash that wasn't needed to fuel our growth and position us and, we were opportunistic and bought back a lot of our stock. And we have been somewhat programmatic about it for a few years now, we intend to continue to be active and the level will be determined based on all the factors Jeff rattled off in the prepared comments. On how are we doing on land spend and how is our liquidity position? How do we look? What's the stock price? and that will that will influence our behavior, but we do intend to stay in the market and continue to buy stock.

Jeff Mezger: Well, as you can tell from our balance sheets, we're in a very strong position right now.

Speaker Change: But as you can tell from our balance sheets, those and we're in a very strong position right now.

Jeff Mezger: And first and foremost, we're always going to be growing the company, and that's where are our 1st dollars would go. But what we saw in '23 about, was a lot of idle cash I'll call, nice problem to have but, the cash that wasn't needed to fuel our growth and position us and, we were opportunistic and bought back a lot of our stock. And we have been somewhat programmatic about it for a few years now, we intend to continue to be active and the level will be determined based on all the factors Jeff rattled off in the prepared comments. On how are we doing on land spend and how is our liquidity position? How do we look? What's the stock price? and that will that will influence our behavior, but we do intend to stay in the market and continue to buy stock.

Jeff Mezger: And first and foremost, we're always going to be growing the company, and that's where are our 1st dollars would go.

Speaker Change: <unk>. First and foremost, we're always going to be growing the company and Thats, where are our $1st would go but look what. What we saw is 23 evolve. A lot of idle cash I'll call. It nice problem to have but the cash that wasn't needed to fuel our growth. Position us and we were opportunistic and bought back a lot of a lot of our stock and we have been. Somewhat programmatic about it for a few years now we intend to continue to. Be active. Level will be determined based on all the factors, Jeff rattled off. The prepared comments on how are we doing on land spend. How is our liquidity position, how do we look what's the stock price and. That will that will influence. Our behavior, but we do intend to stay in the market and continue to buy stock.

First and foremost, we're always going to be growing the company and Thats, where are our $1st would go but look what.

Jeff Mezger: But what we saw in '23 about, was a lot of idle cash I'll call, nice problem to have but, the cash that wasn't needed to fuel our growth and position us and, we were opportunistic and bought back a lot of our stock. And we have been somewhat programmatic about it for a few years now, we intend to continue to be active and the level will be determined based on all the factors Jeff rattled off in the prepared comments. On how are we doing on land spend and how is our liquidity position? How do we look? What's the stock price? and that will that will influence our behavior, but we do intend to stay in the market and continue to buy stock.

Speaker Change: What we saw is 23 evolve.

Speaker Change: A lot of idle cash I'll call. It nice problem to have but the cash that wasn't needed to fuel our growth.

Speaker Change: Position us and we were opportunistic and bought back a lot of a lot of our stock and we have been.

Jeff Mezger: And we have been somewhat programmatic about it for a few years now, we intend to continue to be active and the level will be determined based on all the factors Jeff rattled off in the prepared comments. On how are we doing on land spend and how is our liquidity position? How do we look? What's the stock price? and that will that will influence our behavior, but we do intend to stay in the market and continue to buy stock.

Speaker Change: Somewhat programmatic about it for a few years now we intend to continue to.

Jeff Mezger: We intend to continue to be active, and the level will be determined based on all the factors Jeff rattled off in the prepared comments on how are we doing on land spend, and how's our liquidity position, how do we look, what's the stock price? That will influence our behavior. We do intend to stay in the market and continue to buy stock.

Speaker Change: Be active.

Speaker Change: Level will be determined based on all the factors, Jeff rattled off.

Speaker Change: The prepared comments on how are we doing on land spend.

Jeff Mezger: On how are we doing on land spend and how is our liquidity position? How do we look? What's the stock price? and that will that will influence our behavior, but we do intend to stay in the market and continue to buy stock.

Speaker Change: How is our liquidity position, how do we look what's the stock price and.

Speaker Change: That will that will influence.

Speaker Change: Our behavior, but we do intend to stay in the market and continue to buy stock.

Jay McCanless: The next question comes from the line of Alex Barron with Housing Research Center. Please proceed with your question.

Operator: And the next question comes from the line of Alex Barron with housing Research Center. Please proceed with your question.

Speaker 14: Thanks, guys. You know, in the last couple of years with the rising rates, a lot of builders moved more towards offering spec homes and, I guess, it was understandable. Now that rates are going down, are you guys seeing more demand for built-to-order? Is there any way you can gauge or measure that?

Alex Barron: Thanks, guys. You know, in the last couple of years with the rising rates, a lot of builders moved more towards offering spec homes and, I guess, it was understandable. Now that rates are going down, are you guys seeing more demand for built-to-order? Is there any way you can gauge or measure that?

Alex Barron: Thanks, guys. On the last couple of years with the rising rates a lot of builders moved towards offering spec homes, and I guess it was understandable. But now that rates are going down, are you guys seeing more demand for build-to-order, is there any way you can measure that?

Alex Barron: Thanks, guys. On the last couple of years with the rising rates a lot of builders moved towards offering spec homes, and I guess it was understandable.

Alex Barron: Over the last couple of years with the rising rates.

Alex Barron: Builders.

Alex Barron: More towards.

Alex Barron: Offering spec homes and I guess it was understandable, but now that rates are going down are you guys more demand for build to order or is there any way you can measure that.

Alex Barron: But now that rates are going down, are you guys seeing more demand for build-to-order, is there any way you can measure that?

Jeff Mezger: Well, Alex, we always tilt heavily to built to order, and it was certainly the case in our deliveries in Q4 as well. It's kind of interesting to me that the debate rages on built to order versus spec. If you look at our delivery cadence and our revenues, one of the values of built to order with a backlog is consistency in your results. If you look back over the last two to three years, our deliveries quarter after quarter after quarter are in a very narrow range. We've been 2,800 to 3,300, 3,400, no broader than that from Q1 to Q4, from 2021 to 2022 to 2023. It speaks to the consistency that we've been able to produce, irrespective of what people say about what's a better selling approach.

Jeff Mezger: Well Alex we're always tilt heavily to built-to-orderer, and it will be certainly the case in our deliveries in the fourth quarter as well, it's kind of interesting to me that the debate rates is on build-to-order versus spec. If you look at our delivery cadence and our revenues, one of the values of built-to.order with the backlog is consistency in your results. And if you look back over the last two to three years, our deliveries quarter, after quarter, after quarter are in a very narrow range. We've been 2,800 to 33, 3,400, no broader than that from Q1 to Q4, from '21 to '22 to '23, so it speaks to the consistency that we've been able to produce, irrespective of what people say about what's a better selling approach. And we still maintain that we get better margins, we have predictability, we can align our land development with our pace of sales and starts, and it's just a far better rhythm and a better way to run the business. So my expectation as you look forward in the '24, we add some inventory to sell, and we always will but we'll tilt heavily as 70% built-to-order.

Alex Barron: Alex we're always tilt heavily built to order.

Alex Barron: Certainly the case in our deliveries in the fourth quarter as well.

Alex Barron: It's kind of interesting to me the debate rages on build to order versus spec. If you look at our delivery cadence and our revenues one of the values of built to order where the backlog is consistency in your results and if you look back over the last two to three years, our deliveries quarter after quarter after quarter are in.

Jeff Mezger: If you look at our delivery cadence and our revenues, one of the values of built-to.order with the backlog is consistency in your results. And if you look back over the last two to three years, our deliveries quarter, after quarter, after quarter are in a very narrow range. We've been 2,800 to 33, 3,400, no broader than that from Q1 to Q4, from '21 to '22 to '23, so it speaks to the consistency that we've been able to produce, irrespective of what people say about what's a better selling approach. And we still maintain that we get better margins, we have predictability, we can align our land development with our pace of sales and starts, and it's just a far better rhythm and a better way to run the business. So my expectation as you look forward in the '24, we add some inventory to sell, and we always will but we'll tilt heavily as 70% built-to-order.

Jeff Mezger: If you look at our delivery cadence and our revenues, one of the values of built-to.order with the backlog is consistency in your results.

Jeff Mezger: And if you look back over the last two to three years, our deliveries quarter, after quarter, after quarter are in a very narrow range. We've been 2,800 to 33, 3,400, no broader than that from Q1 to Q4, from '21 to '22 to '23, so it speaks to the consistency that we've been able to produce, irrespective of what people say about what's a better selling approach. And we still maintain that we get better margins, we have predictability, we can align our land development with our pace of sales and starts, and it's just a far better rhythm and a better way to run the business. So my expectation as you look forward in the '24, we add some inventory to sell, and we always will but we'll tilt heavily as 70% built-to-order.

Jeff Mezger: And if you look back over the last two to three years, our deliveries quarter, after quarter, after quarter are in a very narrow range.

In a very narrow range, we've been 2800 to 33 3400.

Jeff Mezger: We've been 2,800 to 33, 3,400, no broader than that from Q1 to Q4, from '21 to '22 to '23, so it speaks to the consistency that we've been able to produce, irrespective of what people say about what's a better selling approach. And we still maintain that we get better margins, we have predictability, we can align our land development with our pace of sales and starts, and it's just a far better rhythm and a better way to run the business. So my expectation as you look forward in the '24, we add some inventory to sell, and we always will but we'll tilt heavily as 70% built-to-order.

Alex Barron: No broader than that from Q1 to Q4 from 'twenty, one to 'twenty two to 'twenty three so it speaks to the consistency that we've been able to produce.

Alex Barron: Irrespective of what people say about what's a better.

Jeff Mezger: We still maintain that we get better margins, we have predictability, we can align our land development with our pace of sales and start. It's just a far better rhythm and a better way to run the business. My expectation as you look forward into 2024, we have some inventory to sell, and we always will, but we'll build heavily at a 70% built-to-order.

Alex Barron: Selling approach and we still maintain that we get better margins, we have predictability we can.

Jeff Mezger: And we still maintain that we get better margins, we have predictability, we can align our land development with our pace of sales and starts, and it's just a far better rhythm and a better way to run the business. So my expectation as you look forward in the '24, we add some inventory to sell, and we always will but we'll tilt heavily as 70% built-to-order.

Alex Barron: And align our land.

Alex Barron: <unk> with our pace of sales and starts and it's just a far better rhythm and a better way to run.

Alex Barron: Run the business. So my expectation as you look forward in the 'twenty four we add some inventory to sell and we always will but we'll still heavily 70% built to order.

Jeff Mezger: So my expectation as you look forward in the '24, we add some inventory to sell, and we always will but we'll tilt heavily as 70% built-to-order.

Rob McGibney: Great. Well, best of luck. Thank you.

Alex Barron: Great. Well, best of luck. Thank you.

Alex Barron: Great well best of luck. Thank you.

Operator: The next question comes from the line of Rafe Jadrosich with Deutsche Bank. Please proceed with your question.

Christopher John Shook: And the next question comes from the line of Joe Ahlersmeyer with Deutsche Bank. Please proceed with your question.

Speaker 15: Hey, thanks a lot, everybody, for the question. I'll actually just batch my questions into one here, given the time. The first one, on the percentage of your land that you own and put under control before land inflation, can you just speak to maybe the development cost inflation that may have come in after that or will continue to come in, after inflation took hold in that part of the process? Then two, if you could just maybe provide a little additional detail on this California tax credit surprise.

Rafe Jadrosich: Hey, thanks a lot, everybody, for the question. I'll actually just batch my questions into one here, given the time. The first one, on the percentage of your land that you own and put under control before land inflation, can you just speak to maybe the development cost inflation that may have come in after that or will continue to come in, after inflation took hold in that part of the process? Then two, if you could just maybe provide a little additional detail on this California tax credit surprise.

Joe Ahlersmeyer: Hey, thanks, a lot everybody for the questions, I'll actually just batch my questions into one here given the time. The first one on the percentage of your land that you own, and put under control before land inflation. Can you just speak to maybe the development cost inflation that may have come in after that? Or will continue to come in after inflation took hold in that part of the process? And then two if you could just maybe provide a little additional detail on this California tax credit surprise?

Joe Ahlersmeyer: Hey, thanks, a lot everybody for the questions, I'll actually just batch my questions into one here given the time.

Joe Ahlersmeyer: The first one on the percentage of your land that you own, and put under control before land inflation. Can you just speak to maybe the development cost inflation that may have come in after that? Or will continue to come in after inflation took hold in that part of the process? And then two if you could just maybe provide a little additional detail on this California tax credit surprise?

Joe Ahlersmeyer: The first one on the percentage of your land that you own, and put under control before land inflation.

Joe Ahlersmeyer: Can you just speak to maybe the development cost inflation that may have come in after that? Or will continue to come in after inflation took hold in that part of the process? And then two if you could just maybe provide a little additional detail on this California tax credit surprise?

Joe Ahlersmeyer: Can you just speak to maybe the development cost inflation that may have come in after that? Or will continue to come in after inflation took hold in that part of the process?

Speaker Change: Development cost inflation that may have come in after that or will continue to come in after inflation took hold in that part of the process and then two if you could just maybe provide a little additional detail on this California tax credit surprise.

Joe Ahlersmeyer: And then two if you could just maybe provide a little additional detail on this California tax credit surprise?

Jeff Mezger: Rob, you wanna talk to the development cost? Jeff can go over tax.

Jeff Mezger: Rob do you want to talk to the development cost. And then Jeff can go over the tax.

Speaker Change: And then Jeff can go overtaxed.

Rob McGibney: Sure, yeah. You know, on the development cost, the vintage of our lots, you know, we've got the majority of our lots going back to 21 or before. Our land basis is solid. We have seen development cost increase. You know, there's been a lot of work, whether it's new home communities being built or the government work that's going on that's spreading that trade base pretty thin. There was some pretty significant increases in inflation and development costs. We think that that's settled down now, but it's kind of settled at a higher baseline. Although, you know, when we combine where we are current development costs on those communities plus our land basis, you know, we're in really good shape for our portfolio of the communities and how that all balances out.

Robert V. McGibney: Sure Yes. On the development cost, the advantage of our lots are, we've got the majority of our lots going back to '21 or before, so our land basis is solid. We have seen a development cost increase, and there's been a lot of work, whether its new home communities being built, or the government work that's going on at spreading that trade base pretty bad. So there was some pretty significant increases in inflation and development cost, we think that that's settled down now, but it's kind of settled at a higher baseline. Although when we combine where we are current development costs on those communities plus our land basis, we're in really good shape for our portfolio of the communities and how it all balances out.

Robert V. McGibney: Sure Yes. On the development cost, the advantage of our lots are, we've got the majority of our lots going back to '21 or before, so our land basis is solid.

Rob Mcgivney: On the development cost.

<unk> of our lots are we've got the majority of our lots going back to 'twenty, one or before so our land basis is solid we have seen development cost increase there has been a lot of work whether its new home communities being built or the government work that's going on at spreading that trade base pretty bad. So there was some pretty significant increases in place.

Robert V. McGibney: We have seen a development cost increase, and there's been a lot of work, whether its new home communities being built, or the government work that's going on at spreading that trade base pretty bad. So there was some pretty significant increases in inflation and development cost, we think that that's settled down now, but it's kind of settled at a higher baseline. Although when we combine where we are current development costs on those communities plus our land basis, we're in really good shape for our portfolio of the communities and how it all balances out.

Robert V. McGibney: So there was some pretty significant increases in inflation and development cost, we think that that's settled down now, but it's kind of settled at a higher baseline. Although when we combine where we are current development costs on those communities plus our land basis, we're in really good shape for our portfolio of the communities and how it all balances out.

Robert V. McGibney: So there was some pretty significant increases in inflation and development cost, we think that that's settled down now, but it's kind of settled at a higher baseline.

Rob Mcgivney: And development cost, we think that Thats settled down now, but it's kind of settled at a higher baseline.

Rob Mcgivney: Although when we combine.

Robert V. McGibney: Although when we combine where we are current development costs on those communities plus our land basis, we're in really good shape for our portfolio of the communities and how it all balances out.

Rob Mcgivney: Where we are current development thoughts on those communities plus our land basis, we're in really good shape for our portfolio of communities.

Rob Mcgivney: It all balances out.

Jeff Mezger: Okay, yeah. In relation to the tax credit, the energy credit, it was pretty specific. It was on the homes that had been built in California, really affected the 2023 energy credit relating to those homes. It came from a little bit of clarification from the IRS in early Q4, where they talked about where they actually changed the standard for ENERGY STAR specific to California to a higher standard than we see in other states. We were assuming the national standard for all of our operations, including our California operations. Once this new guidance came out, we had to make the adjustment to the rate or to the energy credits, which ticked the rate up.

Jeff Kaminski: Okay, yeah. In relation to the tax credit, the energy credit, it was pretty specific. It was on the homes that had been built in California, really affected the 2023 energy credit relating to those homes. It came from a little bit of clarification from the IRS in early Q4, where they talked about where they actually changed the standard for ENERGY STAR specific to California to a higher standard than we see in other states. We were assuming the national standard for all of our operations, including our California operations. Once this new guidance came out, we had to make the adjustment to the rate or to the energy credits, which ticked the rate up.

Jeff J. Kaminski: Okay, Yeah in relation to the tax credit, the energy credit. It was pretty specific, it was that in the homes that had been built in California really affected the 2023 energy credit relating to those homes. It came from a little bit of clarification from the IRS in early fourth quarter, where they talked about, where they actually changed the standard for energy Star, specific to California to a higher standard than we see in other states. So we are assuming the national standard for all of our operations, including our California operations, but once this new guidance came out we had to make the adjustments to the rate, or to the energy credits, which take the rate up. I think it was actually, it rounded up a percent, but it was less than 1% impact on the tax rate for the year. Thank you and our final question will come from the line from Jade Rahmani with <unk>. Please proceed with your question.

Rob Mcgivney: It really affected the 2023 energy credit relating to those homes. It came from a little bit of clarification from the IRS.

Jeff J. Kaminski: It came from a little bit of clarification from the IRS in early fourth quarter, where they talked about, where they actually changed the standard for energy Star, specific to California to a higher standard than we see in other states. So we are assuming the national standard for all of our operations, including our California operations, but once this new guidance came out we had to make the adjustments to the rate, or to the energy credits, which take the rate up. I think it was actually, it rounded up a percent, but it was less than 1% impact on the tax rate for the year.

Rob Mcgivney: Early fourth quarter.

Rob Mcgivney: They talked about where they actually changed the standard for energy Star specific to California to a higher standard than we see in other states. So we are assuming the national standard for all of our operations, including our California operations.

Jeff J. Kaminski: So we are assuming the national standard for all of our operations, including our California operations, but once this new guidance came out we had to make the adjustments to the rate, or to the energy credits, which take the rate up. I think it was actually, it rounded up a percent, but it was less than 1% impact on the tax rate for the year.

Rob Mcgivney: But once this new guidance came out we have to make the adjustments.

Rob Mcgivney: To the right or to the energy credits, which.

Jeff Mezger: I think it was actually rounded up 1%, but it was less than 1% impact on the tax rate for the year.

Jeff Kaminski: I think it was actually rounded up 1%, but it was less than 1% impact on the tax rate for the year.

Rob Mcgivney: Take the rate up I think it was actually it rounded up a percent, but it was less than 1% impact on the on the tax rate for the year.

Jeff J. Kaminski: I think it was actually, it rounded up a percent, but it was less than 1% impact on the tax rate for the year.

Operator: Thank you. Our final question will come from the line from Jade Rahmani with KBW. Please proceed with your question.

Operator: Thank you and our final question will come from the line from Jade Rahmani with KBW. Please proceed with your question.

Speaker Change: Thank you and our final question will come from the line from Jade Rahmani with <unk>. Please proceed with your question.

Speaker 16: Thank you very much. Could you provide any regional commentary on how demand is holding up, specifically on California, and if possible, also Phoenix and the Sun Belt markets? Thanks.

Jade Rahmani: Thank you very much. Could you provide any regional commentary on how demand is holding up, specifically on California, and if possible, also Phoenix and the Sun Belt markets? Thanks.

Jade Rahmani: Thank you very much. Could you provide any regional commentary on how demand is holding up? Specifically on California, and if it's possible also Phoenix and the Sun belt markets. Thanks.

Jade Rahmani: Thank you very much.

Jade Rahmani: Could you provide any regional commentary on how demand is holding up? Specifically on California, and if it's possible also Phoenix and the Sun belt markets. Thanks.

Jeff Mezger: Rob, you wanna take that?

Jeff Mezger: Rob you want to take that.

Rob McGibney: Sure, yeah. You know, since we've seen rates come down, really the pickup in demand has been pretty widespread across our portfolio. The West, California has remained strong, really. They've done really well. Don't have anybody that's a big, you know, concern as far as sales pace or demand out on the West Coast or California. You know, really across the whole portfolio, Texas, Florida, you know, the demand pickup that we've seen since rates started coming down has really influenced sales in a positive direction. No real outliers to speak of there and optimistic about sales here as we progress throughout Q1.

Robert V. McGibney: Sure, yes, since the, since we've seen rates come down, really the pickup in demand has been pretty widespread across our portfolio. The West, California has remained strong really, they've done really well, don't have anybody that's, a big concern as far as sales pace or demand out of the west coast or California. Really across the whole portfolio, Texas, Florida the demand pickup that we've seen since rates started coming down has really influenced sales in a positive direction. So, no real outliers to speak up there, and optimistic about sales here to progress throughout Q1.

Robert V. McGibney: Sure, yes, since the, since we've seen rates come down, really the pickup in demand has been pretty widespread across our portfolio.

Robert V. McGibney: The West, California has remained strong really, they've done really well, don't have anybody that's, a big concern as far as sales pace or demand out of the west coast or California. Really across the whole portfolio, Texas, Florida the demand pickup that we've seen since rates started coming down has really influenced sales in a positive direction. So, no real outliers to speak up there, and optimistic about sales here to progress throughout Q1.

Rob Mcgivney: The West, California has remained strong really they've done really well don't have anybody thats, a big concern as far as sales pace, our demand out of the west coast or California.

Rob Mcgivney: Really across the whole portfolio, Texas, Florida.

Robert V. McGibney: Really across the whole portfolio, Texas, Florida the demand pickup that we've seen since rates started coming down has really influenced sales in a positive direction. So, no real outliers to speak up there, and optimistic about sales here to progress throughout Q1.

Robert V. McGibney: Really across the whole portfolio, Texas, Florida the demand pickup that we've seen since rates started coming down has really influenced sales in a positive direction.

Rob Mcgivney: The demand pickup that we've seen since rates started coming down is really influence sales in a positive direction. So.

Rob Mcgivney: No real outliers to speak up there and optimistic about sales here.

Robert V. McGibney: So, no real outliers to speak up there, and optimistic about sales here to progress throughout Q1.

Rob Mcgivney: Throughout Q.

Rob Mcgivney: Q1.

Speaker 16: Thank you. As a follow-up, the Sun Belt market has really high multifamily supply right now. Any concerns about competition with that, going into the spring selling season?

Jade Rahmani: Thank you. As a follow-up, the Sun Belt market has really high multifamily supply right now. Any concerns about competition with that, going into the spring selling season?

Joe Ahlersmeyer: Thank you, and as a follow up. The sunbelt market has really had multifamily supply right now, any concerns about competition with that going into the spring selling season?

Speaker Change: Going into the spring selling season.

Rob McGibney: You want me to take that, Jeff?

Robert V. McGibney: You want me to take that Jeff?

Jeff Mezger: Yeah. Yeah, go.

Speaker Change: Take that Jeff, Yes, yes no.

Rob McGibney: Yeah. I mean, as far as you know, there are a lot of multifamily completions coming online. You know, we're seeing the starts of those multifamily units come down. I mean, they are a competitor to some extent, but we're primarily focused on, you know, resale. That's always our biggest competitor. You know, while resales have been down somewhat, it's created an opportunity for us for new homes, especially on personalized homes. You know, we have to stay connected to what's going on with rents because that's an alternative, but we don't really see that as our primary competitor. We think people, you know, they want the American dream. They want to own a home, and we're trying to make those homes as affordable as we can for them to get them into a new one.

Robert V. McGibney: Yes, I mean as far as, you know, there are a lot of multifamily completions coming online, and we're seeing the starts of those multifamily units come down. I mean, they are a competitor to some extent, but we're primarily focused on resale, that's always our biggest competitor. And although re-sales have been down somewhat, it's created an opportunity for us for new homes, especially on personalized homes. And we have to stay connected to what's going on with rents, because thats an alternative, but we don't really see that as our primary competitor. We think people, they want the American dream, they want to own a home and we're trying to make those homes as affordable as we can for then to get them into a new one.

Robert V. McGibney: Yes, I mean as far as, you know, there are a lot of multifamily completions coming online, and we're seeing the starts of those multifamily units come down.

Robert V. McGibney: I mean, they are a competitor to some extent, but we're primarily focused on resale, that's always our biggest competitor. And although re-sales have been down somewhat, it's created an opportunity for us for new homes, especially on personalized homes. And we have to stay connected to what's going on with rents, because thats an alternative, but we don't really see that as our primary competitor. We think people, they want the American dream, they want to own a home and we're trying to make those homes as affordable as we can for then to get them into a new one.

Robert V. McGibney: I mean, they are a competitor to some extent, but we're primarily focused on resale, that's always our biggest competitor.

Robert V. McGibney: And although re-sales have been down somewhat, it's created an opportunity for us for new homes, especially on personalized homes. And we have to stay connected to what's going on with rents, because thats an alternative, but we don't really see that as our primary competitor. We think people, they want the American dream, they want to own a home and we're trying to make those homes as affordable as we can for then to get them into a new one.

Robert V. McGibney: And although re-sales have been down somewhat, it's created an opportunity for us for new homes, especially on personalized homes.

All while re sales have been down somewhat it's created an opportunity for us for new homes, especially on personalized films and we have to stay connected to what's going on with rents because thats an alternative but we don't really see that as our primary competitor we think people.

Robert V. McGibney: And we have to stay connected to what's going on with rents, because thats an alternative, but we don't really see that as our primary competitor. We think people, they want the American dream, they want to own a home and we're trying to make those homes as affordable as we can for then to get them into a new one.

Robert V. McGibney: And we have to stay connected to what's going on with rents, because thats an alternative, but we don't really see that as our primary competitor.

Robert V. McGibney: We think people, they want the American dream, they want to own a home and we're trying to make those homes as affordable as we can for then to get them into a new one.

Speaker Change: They want the American dream, they want to own a home and we're trying to make.

Speaker Change: To make those homes as affordable as we can for them to get them into a new one.

Operator: Ladies and gentlemen, this concludes today's teleconference. Thank you for your participation. You may now disconnect your lines.

Operator: And ladies and gentlemen. This concludes today's teleconference. Thank you for your participation you may now disconnect your lines.

Speaker Change: [music].

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