Good morning. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to the PulteGroup Fourth Quarter 2021 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, again, press star one. Thank you. Jim Zeumer, you may begin your conference. Great. Thank you, Rob. Good morning, and thank you for joining today's call. We look forward to discussing PulteGroup's outstanding fourth quarter earnings for the period ended December 31, 2021. I'm joined on today's call by Ryan Marshall, President and CEO, Bob O'Shaughnessy, Executive Vice President and CFO, and Jim Ossowski, Senior VP Finance. A copy of our earnings release and this morning's presentation slides have been posted to our corporate website at pultegroup.com. We'll also post an audio replay of today's call later. I wanna highlight that we will be discussing our reported fourth quarter numbers as well as our results adjusted to exclude the impact of certain reserve adjustments and tax benefits recorded in the period. A reconciliation of our adjusted results to our reported financials is included in this morning's release and within today's webcast slides. We encourage you to review these tables to assist in your analysis of our business performance. Also, I want to alert everyone that today's presentation includes forward-looking statements about the company's expected future performance. Actual results could differ materially from those suggested by our comments made today. The most significant risk factors that could affect future results are summarized as part of today's earnings release and within the accompanying presentation slides. These risk factors and other key information are detailed in our SEC filings, including our annual and quarterly reports. Now, let me turn the call over to Ryan Marshall. Ryan. Thanks, Jim, and good morning. It's great to speak with you again and to have this opportunity to review PulteGroup's impressive fourth quarter and full year results. I am extremely proud of what our organization has been able to accomplish. For starters, I wanna thank the entire PulteGroup team for the tremendous effort demonstrated throughout 2021, but particularly in the fourth quarter. From sales to procurement and construction to our financial services team, you clearly showed what a proud and talented group of determined people can achieve. In a minute, Bob will review our fourth quarter results, but I want to highlight a few of our full year numbers to clearly demonstrate just how much success we've realized over the past 12 months. Even with all the challenges the home building industry faced in 2021, from supply chain disruptions and labor shortages to municipal delays and COVID waves, we grew our closings by 17% to almost 29,000 homes. Benefiting from the very favorable demand and pricing conditions, we increased home building revenues by an even greater 27% to $13.5 billion. We were then able to fully capitalize on this top-line growth by expanding gross margins by 210 basis points to 26.4% and driving a 43% increase in our reported full year earnings of $7.43 per share. Our financial discussions tend to focus on the income statement, but I would also highlight that over the past 12 months, we lowered our debt-to-capital ratio to a historic low of 21.3% while raising our return on equity to 28%. I would also highlight that over the course of 2021, we continued our disciplined allocation of capital in alignment with our stated priorities. This allocation included investing over $4 billion in land acquisition and land development, increasing our dividend pay rate per share in 2021 by 17%, retiring $726 million of bonds, and repurchasing $900 million of stock, reducing our shares outstanding by approximately 6%. There is a lot to be excited about with regard to PulteGroup's 2021 operating and financial results. In assessing our performance, we fully appreciate that we benefited from a very favorable supply and demand dynamics in the marketplace. On the demand side, we saw a strong desire for homeownership across all markets and buyer groups. At one end, we have maturing millennials driving extraordinary demand for first time and first move-up product, while at the other end, we have empty nesters who are downsizing or retiring into their next stage of life. This demand strength drove an increase of 8% in our 2021 net new orders to almost 32,000 homes, including 6,769 orders in the fourth quarter. The reality is that these numbers could have been significantly higher, but COVID and other challenges impacted our availability of lots, labor, and materials, which caused us to intentionally slow sales. As part of our response strategy to these resource constraints, we raised prices in 2021 and actively restricted new home sales through lot releases or similar practices. We continued to implement these actions in the fourth quarter as we raised prices in effectively all our communities. At the same time, we continued to restrict sales in more than half of our communities. The strong demand experienced in the fourth quarter has continued into January with no signs that higher interest rates are impacting the desire for new homes. As we look forward to the year ahead, we are well-positioned to meet this strong demand. We enter 2022 with twice as many spec homes in the production pipeline compared to last year. Along with a land pipeline that will allow us to expand our community count throughout this year. We also have all the lots we need for our 2022 deliveries and expect to increase our full year gross margins by upwards of 250 basis points. In other words, we enter 2022 with tremendous momentum. While demand conditions are strong, the supply side of the equation has been extremely challenging, with no clear signs as to when things will get better. The limited supply of new and existing homes allowed prices to increase by double digits last year, but labor shortages and significant disruptions in the supply chain are limiting production and extending build cycles. Our suppliers and partners are working hard to provide needed resources, but key products are under allocation, must be ordered months in advance or are simply not available. The ongoing surge in COVID infection rates is impacting our suppliers and is also making it very hard for trades to field crews consistently and expanding their teams is an even bigger challenge. Unfortunately, we expect construction processes to remain difficult through much, if not all, of 2022. In response to these challenges, we continue to implement actions to help ensure we can complete high quality homes and grow our deliveries until supply chain issues are resolved. These actions include increasing spec starts, ordering earlier, narrowing option packages, and even warehousing inventory of critical building products. These efforts are time consuming and we lose some production efficiencies, but for the foreseeable future, they are required to get homes built. We've said in the past that scale, particularly local scale, matters, and this is certainly the case today. Let me now turn the call over to Bob for a review of our Q4 results. Bob? Thanks, Ryan, and good morning. As part of my review of our Q4 performance, I'll discuss our reported results and where appropriate, review our results adjusted for specific items in the current or prior year quarter. Along with reviewing the company's fourth quarter results, I will also be providing guidance on key performance metrics for both the first quarter and full year 2022. Looking at the income statement, home sale revenues in the fourth quarter increased 38% over last year to $4.2 billion. Higher revenues for the period were driven by a 26% increase in closings to 8,611 homes, along with a 10% increase in average sales price to $490,000. The higher ASP in the quarter reflects double-digit pricing gains from all buyer groups, while closings came in slightly above guidance thanks to a tremendous effort on the part of our home building and financial services teams. Consistent with comments made throughout 2021, favorable supply and demand dynamics for housing supported the strong price appreciation we experienced across all markets and from all buyer groups. The mix of closings in the quarter were in direct alignment with our long-term goals and included 34% from first-time buyers, 42% from move-up buyers, and 24% from active adult buyers. Closings in the fourth quarter last year included 31% first-time, 46% move-up, and 23% active adult. Net new orders in the quarter totaled 6,769 homes, which is a decrease of 4% from last year. The decrease in orders reflects a decrease in community count, as well as the ongoing actions to manage sales to better align the pace of our sales and production that Ryan mentioned. Our average community count in the quarter was 785, which is down 7% from the prior year. Buyer demand was strong and order volumes were fairly consistent across all three months of the quarter, as we didn't experience the typical seasonal drop-off in order volumes as we moved through the quarter. I would note that we continued to experience this strength in demand through January. By buyer group, orders by first-time buyers increased 12% to 2,207 homes, while orders by move-up and active adult buyers both declined 10% to 2,812 homes and 1,750 homes, respectively. The primary drivers of the lower order rates among the move-up and active adult buyers was having fewer communities and our decision to restrict sales. We ended the fourth quarter with a large backlog of sold homes, which provides a strong base of production heading into the new year. On a unit basis, our backlog at year-end was 18,003 homes, which is an increase of 19% over last year. Backlog value at year-end was $9.9 billion, which is an increase of 45% over 2020. Even with the well-documented challenges within the supply chain, I can say that thanks to a lot of hard work by our teams, trades and suppliers, we're getting homes into production. As a result, we ended the year with 18,423 homes under construction, which is up almost 50% over last year. I'm also pleased to report that we've been able to increase our spec production as 23% of homes under construction are spec. This is up from 17% in the third quarter, and it's getting us closer to our target of having between 25% and 30% spec. While it's great to see homes getting into production, it's important to note that the overwhelming majority of these units are in the early stages of construction. More specifically, 31% of our production pipeline is at the initial start stage, with another 44% of the homes only at the framing stage. At the other end of the production pipeline, we have only 411 finished homes. This figure includes both sold and spec units. Given the number of homes under production, and equally important, their stage of construction, we currently expect to deliver between 5,600 and 6,000 homes in the first quarter of 2022. In addition to the challenging production environment Ryan discussed, our Q1 delivery guide reflects the impact of limited finished spec inventory and the longer construction cycle times we're experiencing. For the full year 2022, we expect to deliver 31,000 homes. This estimate assumes no meaningful change in the state of the supply chain and in turn, our current cycle times. If the favorable demand conditions allow us to sell at an even higher year-over-year growth rate, we'll have to see if the supply of materials and labor will be equally supportive. Based on what occurred in 2021, we want to be confident we can deliver a high quality and complete home at closing. If the supply of labor and materials does not allow for increased production, we'll continue to emphasize price over pace, restrict sales as needed as we focus on driving the best returns within each community. As we move through 2022, we are well positioned to meet buyer demand given our expectations for sequential increases in our community count throughout the year. For the coming four quarters, we project our average community count to be 790 in Q1, 815 in Q2, 840 in Q3, and 870 in Q4. Given the land investments we've made, we expect this trend to continue and see further community count growth in 2023. As mentioned, strong demand and pricing conditions in 2021 resulted in higher prices across all buyer groups, which has resulted in our average sales price and backlog increasing by 22% compared to last year. Given the price of homes in backlog and the mix of homes we anticipate closing, we expect our average sales price to be between $500,000 and $510,000 in the first quarter. Our average sales price should move higher as we move through the year, and we currently expect our full year average sales price to be approximately $515,000. As always, the ultimate mix of deliveries can influence the average sales price we realize in any given quarter. Driven by the strong price appreciation achieved throughout our markets, our homebuilding gross margin in the fourth quarter increased 180 basis points over last year at 30 basis points sequentially to 26.8%. With 18,000 homes in backlog, we have good visibility on near-term gross margins, but we also know that input costs are moving higher and that we expect to continue to incur what are now commonly called scramble costs as we work to ensure product and labor availability. Based on what we can see today, we expect gross margin to be in the range of 28.5%-29% in the first quarter and for the full year. This guide takes into consideration our current construction costs as well as the recent run-up in lumber prices. Based on these factors, we anticipate being toward the bottom end of the range in the first quarter, but toward the higher end of the range by the end of the year. Speaking of inflation, we are closely monitoring increases that are impacting the cost of labor and materials. As a result, we currently expect house cost inflation exclusive of land costs of 6%-8% for 2022. More than ever, there are a lot of moving pieces, so we'll update our gross margin guidance if needed as we move through the year. For the fourth quarter, our reported SG&A expense of $344 million or 8.2% of home sale revenues includes a net pre-tax benefit of $23 million from adjustments to insurance-related reserves recorded in the fourth quarter. Exclusive of this benefit, our adjusted SG&A expense was $367 million or 8.7% of home sale revenues. In the comparable prior year period, our reported SG&A expense was $280 million or 9.1% of home sale revenues. Excluding a $16 million net pre-tax benefit from adjustments to insurance-related reserves recorded in last year's Q4, our adjusted SG&A expense was $296 million or 9.7% of home sale revenues. Looking at 2022 overheads, we currently expect SG&A expense in the first quarter to be in the range of 10.7%-10.9%, which would be flat to down slightly from last year. For the full year, we expect SG&A expense to decrease as a percentage of revenues and be in the range of 9.3%-9.5% of home sale revenues as we realize incremental overhead leverage on the business. In the fourth quarter, our financial services operations reported pre-tax income of $55 million. Prior year reported pre-tax income of $43 million included a $22 million pre-tax charge for adjustments to our mortgage origination reserves. During the fourth quarter, financial services pre-tax income was driven by increased loan production consistent with the growth in our homebuilding operations, offset by lower profitability per loan resulting from a more competitive market condition. Mortgage capture rate for the quarter was 85%, which is down slightly from last year's 86%. Our reported tax expense for the fourth quarter was $193 million, which represents an effective tax rate of 22.5%. Taxes in the fourth quarter include a tax benefit of $9 million resulting from deferred tax valuation allowance adjustments recorded in the period. For 2022, we expect our tax rate to increase to 25%, driven by changes in certain underlying state tax rates and the fact that legislation to extend the energy tax credits beyond 2021 has not been passed. For the fourth quarter, we reported net income of $663 million or $2.61 per share, and adjusted net income of $637 million or $2.51 per share. Prior year fourth quarter reported net income was $438 million, or $1.62 per share. With adjusted net income of $415 million or $1.53 per share. PulteGroup's earnings per share continue to benefit from our share repurchase program. In the fourth quarter, we repurchased 5.6 million common shares at a total cost of $283 million, or an average price of $50.11 per share. For all of 2021, we repurchased 17.7 million shares, driving a 6% reduction in our shares outstanding at an average cost of $50.80 per share. For the year, we returned $897 million to shareholders through share repurchases, plus an additional $148 million of dividends. This brings the five-year total of share repurchases and dividends to approximately $3.2 billion. Having reduced our common shares outstanding by more than one-third over the past eight years, returning funds to shareholders has been a significant part of our capital allocation strategy. We fully expect such systematic repurchases to continue in the future, so we're extremely pleased with the board's action that we announced today, approving a billion-dollar increase to our repurchase authorization. At the end of 2021, we had $458 million remaining on the existing program. Given our improving financial results and cash flows, 20 basis points from last year. Adjusting for the cash on our balance sheet, our net debt to capital ratio was 2.5%. As part of our overall capital allocation strategy, we have routinely talked about maintaining our gross debt to capital ratio in the range of 30%-40%. As noted in today's press release, we are updating these numbers to better reflect how our business operates today. Over the past several years, we have driven material and sustained gains in our operating performance and capital efficiency. These, in turn, have dramatically increased the cash flows we expect to generate. Taken in combination, we now believe we can grow our business and fund its operations while maintaining our gross debt to capital ratio in the range of 20%-30%. This represents confirmation that the changes we've driven in the business continue to support long-term growth. To further demonstrate this point, in the fourth quarter, we invested $1.4 billion in land acquisition and development. This brings our total land spend for 2021 to $4.2 billion. On paper, this is an increase of almost 50% over 2020 land spend. I would remind you that we suspended land investment for almost 6 months when the pandemic first hit in 2020, so some of the 2021 spend was simply deferred from the prior year. We currently expect to increase our land investment in 2022 to between $4.5 billion and $5 billion. Given that the vast majority of land we acquire is undeveloped, more than half of our spend in 2022 will be for the development of existing land assets. Supported by the higher land spend, we ended 2021 with 228,000 lots under control, of which 109,000 were owned, and 119,000 were controlled through options. On a year-over-year basis, we ended 2021 with an incremental 30,000 lots under option and remain focused on advancing our land light strategy going forward. I would note that included within our land position are approximately 1,400 lots that were approved under our strategic relationship with Invitation Homes, and that we remain on track with our five-year plan of building 7,500 homes under this program, with first closings expected in 2023. Now let me turn the call back to Ryan. Thanks, Bob. For a number of reasons, we remain constructive on the outlook for the housing industry. Earlier, I spoke about the large demographic trends which are aligned to support buyer demand over the long term. In the near term, most economic indicators point to an ongoing expansion of the U.S. economy, which should keep the job market strong and increase wages even further. We recognize that COVID and its various mutations are obviously a wild card, but we hope that this latest surge may have already peaked and that conditions will begin to improve going forward. The impacts from COVID that don't appear to be waning are the desire for single-family living and the ability to work from home indefinitely. We are certainly mindful of rising interest rates and the potential risks to affordability and overall demand, and are prepared to respond appropriately should conditions change. Still, given a strong economy, high employment, and rising wages, this is a market environment in which we can sell homes. Before opening the call to questions, I do want to highlight an initiative that we've launched internally in 2020, but which you may begin hearing more about this year. Called our Hope to Home program, this is our effort to make available for sale more affordable housing and the possibility of homeownership to individuals who might not otherwise get the chance. We all know the benefits that homeownership can afford people over time, but we can appreciate that not everyone has the same opportunity to access this path. We are beginning to pilot Hope to Home in a few communities and believe it's a program that could ultimately result in the sale of 200 homes a year. Hope to Home is a for-sale program designed to complement but run independently of our highly successful Built to Honor program through which we donate mortgage-free homes to wounded veterans. Started in 2013, I'm extremely proud to say that Built to Honor will award its 75th mortgage-free home later this year. Now let me close as I began by thanking our entire organization as well as our suppliers and trade partners. You continue to prove yourselves to be an outstanding group of people focused on serving our customers and supporting each other. Thanks, Ryan. We're now prepared to open the call for questions so we can get to as many questions as possible during the remaining time of this call. We ask that you limit yourself to one question, one follow-up. Rob, if you'll explain the process, we'll get started with Q&A. At this time, I would like to remind everyone, in order to ask a question, press Star, then 1 on your telephone keypad. We'll pause for a brief moment to compile the Q&A roster. Your first question comes from the line of Mike Dahl from RBC Capital Markets. Your line is open. Morning. Nice results. Thanks for taking my questions. Hi, Mike. Hi, Mike. First question just on the gross margin guide. It's great to see it up that much for the full year. It looks like it's, you know, up, but it's relatively stable through the year. Can you talk about some of the moving pieces? I mean, obviously you've had some good sequential pricing. You talked about the full year for cost inflation, but can you talk about the moving pieces throughout the year that keep that guidance a little bit, you know, a little bit flatter through the year, and maybe there's a difference in inflation per se versus the second half, however you wanna kind of frame that? Sure, Mike. You know, obviously inflation is real. You know, and principal among that, interestingly, is lumber, you know, which had trended down. We're getting a little bit of a tailwind in the first half of the year, but pricing has moved right back up, and so that's influenced the back half of the year. But I would tell you know, you heard in the prepared remarks, we're projecting 6%-8% increase in input costs for the house. Plus, you know, kind of every new lot comes with a little bit more expensive cost than the ones that we just costed off, which is consistent with what you've seen for a couple of years now in a rising market. You know, as we bring new assets to market, they're a little bit more expensive. All those things factor in. You know, the good news is that, you know, as we look at the year, we do see margins improving through the year. In the prepared remarks highlighted, you know, we'll be at the lower end of the range in the first quarter and towards the higher end of the range. Despite those cost pressures, we think we're getting enough price to offset some of those increases. You know, margins at 28.5-29% are pretty stout. For sure. Okay, thanks. Second question is around cash flow and capital allocation. I mean, it's nice to see, you know, the new details this morning. I guess if we take into account your land investment will be up a little, but clearly your guide around income drivers are also up year on year. It seems like all sequential cash from ops or free cash flow will be higher in 2022 than 2021. Since you're already in that 20% range or the lower end of that 20% range on gross debt to cap, should we think about effectively all of cash flow in the intermediate term is going to be given back to shareholders via buybacks and dividends? Yeah, Mike, it's an interesting question, and the simple answer is I don't think so. We long said that we've got sort of a priority cadence, invest in the business, pay our dividend, return excess to shareholders. There are a lot of things that we could do with that money. I wouldn't wanna say we'd be restricted to any one thing. The land market, if it's attractive, you could see us investing. We've always told folks we look at M&A, so some money could end up there. The good news is, you've heard this from us before, we're in a position where we have choices to make. You can see with the amount of money that we used to buy back stock in this quarter at $283 million, that's a step up from what we had done throughout the full year to almost $1 billion. The board increased the authorization by $1 billion. We put that out this morning. You know, if you add that to the $400+ million we had at the end of the year, we've got a lot of, you know, capacity there. We'll look at everything, and so I wouldn't wanna, you know, kind of pigeonhole ourselves into saying, "Yeah, it's all going back to shareholders." We'll use the same screen we always do in the business is gonna be our primary driver as long as we can see an opportunity for high return off of it. Your next question comes from the line of Ivy Zelman from Zelman & Associates. Your line is open. Thank you, and congratulations on a great year, guys. Really impressive. Thanks, Ivy. Maybe, Ryan, you can help us a little bit just appreciating what you just said about, you know, with each asset you deliver slightly higher cost. You know, when you think about pre-COVID and you underwriting land, what were you underwriting in terms of absorption, and what are you underwriting you're buying that, let's say, today that might not deliver until 2023, 2024? Just to give us some perspective relative to the sort of normal trend line. Let's start there. Yeah, Ivy, I thanks for the question. I would tell you that I think one of the things that has enabled us to deliver the results that we're delivering is a very consistent land underwriting screen that candidly hasn't changed through time. We're certainly underwriting at current market conditions, and we kind of have to do that in order to remain competitive. The absorptions that we're underwriting communities at today are certainly a little bit higher than probably what we were underwriting land acquisitions at, you know, say, three years ago. That being said, you know, we're cognizant of the fact that absorptions over the last 12-15 months have been, you know, slightly higher than normal. You know, as I think some have said from time to time, you know, trees don't grow to the sky. We wouldn't necessarily expect that to continue kind of in perpetuity. You know, the thing that I would highlight, Ivy, is some of the things I mentioned in my prepared remarks. We think some of the structural changes that have occurred in buyer preferences for single-family living and perpetual work from home will continue to benefit this industry. We're also not in an oversupply environment, and given some of the supply chain challenges that we've highlighted, we don't anticipate that changing anytime in the near future either. probably, you know, what I'd conclude on, the most important thing that I think we've structurally done as an organization is to integrate more optionality into our land pipeline. We're at, you know, north of 52% and over 119,000 lots that are controlled via option, which I think gives us tremendous flexibility, you know, should there be a change in market conditions. No, that's really helpful. Maybe Bob, you know, you can send us some follow-up sort of absorptions historically. I know we've got it in our data, but with mix shift, it's you know I don't know that it's a little bit higher, Ryan. The market conditions right now are back to an absorption per community just for the public companies. It's back to where it was during the great financial boom peak on a trendline basis. That's even with restricting sales. The cost inflation in land has been substantial. Maybe you can give us some perspective on how much is land that you're acquiring today, undeveloped raw land, relative to what maybe you were thinking about it from a baseline of 2019, and what are you paying, if you are, on finished lots? Even if you're optioning, what are the, kind of, cost embedded in those acquisitions? I'm done. Thank you. Yeah. You know, Ivy, that's a hard question to answer kind of apples to apples. I mean, no two parcels are the same. You know, certainly the market is pretty efficient. You know, as Ryan laid out for you, it's a competitive market, so we have to be competitive. So we you know, make our bids and pricing based on what we see in terms of pricing that we can see in the market, what we think our cost to construct is, and the ultimate return we can generate from the asset. You're gonna see different price appreciation in land in different parts of the country and for different buyer groups, honestly. All those things would make it really challenging to blanket say, pricing is up X percent. Suffice to say it is up. You know, it's one of the reasons I highlighted that as part of our margin guide. Hopefully, that answers your question. Your next question comes from the line of Anthony Pettinari from Citigroup. Your line is open. Yeah. Good morning. Morning, Anthony. I was wondering if you could talk about kind of credit metrics for your average buyer or your buyer types in terms of FICO or LTV. I think you indicated that rising rates, you haven't really seen an impact to date. I'm just wondering, you know, as you look at previous hiking cycles, what you would anticipate in terms of, you know, behavior between your different buyer types or, you know, trading downmarket or maybe to more affordable offerings. Any comments you'd give? Sure, Anthony. Good morning. Thanks for the question. We obviously have visibility to the credit metrics as a whole from loans that are running through our mortgage operation, and they've largely remained unchanged for the last probably decade. You know, the FICO scores that we see are north of 750, so incredibly strong credit. You know, loan-to-value ratios very, very strong as well. I think the credit metrics that we're seeing from the buyers would indicate and maybe reiterate the financial strength that I think we've seen of, you know, personal balance sheets. Not a huge concern there, honestly. Bob, anything you'd add on any of the credit metrics that we've seen to this point? Only that, you know, interestingly enough, even among our first-time buyers, you know, if you look at them relative to, kind of, the broader universe, we've got a higher mix of FICO scores even there. So, you know, interestingly, in a rising rate environment, history is a guide. The people we're selling to at that slightly higher price point have a little bit healthier balance sheet than folks that are, you know, just at the edge of qualifying. As far as, you know, rising rates go, Anthony, in our prepared remarks, we highlighted that we have not seen it impact demand. I think, you know, a large part of that is because we've been restricting sales and because demand is outstripping supply. We are closely monitoring the impact of further increases in the 30-year mortgage and what that will ultimately do to affordability. As we've said for a number of years, and we'll continue to talk about it, you know, we do believe that history is a guide. Housing can be strong in a rising rate environment as long as the broader economy continues to show strength, which it is. We've got historically low unemployment. We're seeing some real wage growth, and I think, you know, those are facts. Consumer confidence remains high. You know, those are things that I think will continue to, you know, bode well for the industry, even against a backdrop of slightly higher rates. That being said, you know, even with some increases in the 30-year mortgage, they're gonna remain at, you know, historically really low rates, which we think is encouraging. Okay, that's very helpful. In your comments, I think you stated you're not expecting supply chain snags to ease over the course of the year. You know, you talked about lumber. Can you talk about any other categories that are, I don't know, maybe getting worse versus getting better? There was a comment on potentially warehousing certain building products. To the extent that you can, I don't know if you can talk about sort of the magnitude of that or what that looks like. Yeah. You know, Anthony, we don't actually anticipate things to get better through 2022. We've assumed that we'll continue to have a shortage of what we want in totality, and most of that's coming through either delays or allocations that we and frankly, the entire industry has been given from certain key supplies. You know, I think there are some real bottlenecks in manpower availability due to COVID. You know, some of the factories that our supplies come out of are running at less than full capacity because of manpower issues. We're seeing less availability in terms of transportation in truck drivers. There was a shortage there to begin with, and then you factor in COVID, and that's just further exacerbated. You know, that those domino effects, I think we see flow through the entire supply chain. We are seeing, you know, some green shoots, and we have, over the last six months, kind of gone through some peaks and valleys where one particular supply seems to start getting better and lead times shorten only for, you know, things to go back to where they were. You know, it's for that reason that you know, we're not anticipating that we completely turn the corner and have a fixed supply chain in 2022. Just in, you know, in terms of the items that, you know, we're seeing challenges with, roof trusses, appliances, siding, paint to a certain degree, so, you know, things that are pretty critical for us to build and deliver homes. Cabinets is another one that, you know, I would tell you all the cabinets come out of factories, you know, where they've been challenged by historic high demand and manpower issues. So those are, you know, a few comments on the supply chain side. Your next question comes from the line of Michael Rehaut from J.P. Morgan. Your line is open. Hi. Thanks. Good morning, everyone. You know, want to go back to an earlier question around, you know, that was, Blake was trying to get around triangulating normalized gross margins, let's say, as, you know, you continue to buy land and, you know, to the extent that you're not gonna have, you know, 10, 15, 20% home price appreciation over the next few years. You know, if you look back into, like, 2017, 2018, you were doing, you know, 23%-24% gross margins, which was at the higher end of our, of the broader homebuilding sector. You know, to the extent that home price appreciation normalizes, you know, could you see a scenario over the next 2 - 3 years where, you know, given your current underwriting, you could get back to those types of levels, which again, would still ostensibly be, if there is mean reversion, I would assume still be at the higher level of the broader sector? Or is there anything that's kind of changed in, you know, how you're either approaching land, your own cost structure with greater scale or some of the improvements, et cetera, you know, perhaps on the construction efforts that you're embarking upon that you could see, you know, kind of a slightly even slightly higher gross margin trend over time? Yeah. Hey, Mike. It's Ryan. Good morning. Thanks for the question. I think I'd go back a decade ago when we really laid out a thesis around making investments to drive industry-leading returns. I think the way you have seen us make investments in land, the way that we've managed debt, the way that we've allocated capital to share repurchases and dividends, that has all, and frankly, the way that we've completely restructured our land ownership structure with so much being toward options, that's all been aimed at delivering you know top quartile top-tier returns. Margins are certainly a component of that. It's long been part of our strategy to have you know leading margins. The thing that I would highlight, Mike, is that, you know, we're at 28.5%-29% gross margins through the rest of 2022, which, as Bob, you know, highlighted, is pretty stout. We're not giving any visibility beyond 2022. You know, I think, you know, it's a little early for that. What you have seen from us is continuously a high and top-tier return on invested capital, and that's gonna continue to be our focus. You know, what that's yielded in this past year we just finished was ROEs that are north of 28%. We think, you know, the operating model that we have, Mike, can work in multiple market cycles. You know, this one happens to be, you know, certainly particularly good. Great. No, thank you for that, Ryan. You know, I guess secondly, you know, just wanted to focus in on the community count growth. You know, a nice trajectory that you've laid out for 2022. You know, based on, you know, the land, you know, the land book that you have, you know, how should we think about, you know, community count growth and obviously not, you know, past 2022 and obviously not trying to get too granular and beyond what you're prepared to say in terms of formal guidance. You know, for the. You know, this has been an area where, you know, as I'm sure you know, people have expressed concern around, you know, some of the growth on the community count side. Are we kind of turning a corner here, where we could see, you know, perhaps a little bit, you know, more consistent growth going forward in this metric? You know, any thoughts around, you know, where we would go past the 870 at the end of 2022 would be pretty helpful for people. Yeah, Mike, appreciate the question. It's Bob. We're not gonna give you a guide for 2023. We did wanna give a level of granularity more than we have for 2022 to show the sequencing that shows, you know, growth each quarter sequentially and ultimately to a higher point at the end of the year. In our prepared remarks, I actually said, you know, based on spending, we expect that to continue, like every year. We'll give you a guide for 2023 as we approach 2023. Mike, you know, the only thing that I'd add into that is I think if you look at the trend of our land spend over the last three years, we've been a consistent investor in our land portfolio. With, you know, 225,000 lots under control, you know, those all turn into active communities. We're pleased with, you know, what's coming into the pipeline. Your next question comes from the line of Carl Reichardt from BTIG. Your line is open. Thanks. Hey, everybody. Carl. One for you, Ryan. Hey, on just on pricing strategy headed into the spring, I mean, as you got more demand than you can serve, costs are going up, rates could come up, and we know there's gonna be more competition across the board from other builders, and you've got more specs. So are you approaching pricing this spring, would you say, more conservatively than you have in past springs? I know it's not necessarily a corporate and in Atlanta type of decision, perhaps it's more local, but maybe you can talk a little bit about how you're thinking about pricing strategy given the crosscurrent. Yeah, Carl, it is more than local. It's probably hyperlocal. All of our pricing decisions are made on a community by community basis. That's a company philosophy. We've got very regimented pricing discipline in the way that we break down what the competitive set is, both from a resale and a new environment, both what's on the ground as well as what we see coming into the pipeline over the next 6 to 12 months. I think the tools, the methodology, the proprietary pricing algorithms that we have, we think it's served us very well, and we've got, you know, we've gotten very good results from that. You know, I think, Carl, we always try to be prudent in what we do and never get too far over our skis. You know, I think the industry has seen over the years, if you push things too far, you know, the consumer will be pretty quick to tell you that you've gone too far and it will shut down. You know, in the face of potentially some more inventory coming online with some higher rates, you know, we're gonna continue to run our playbook, but, you know, take into consideration all the data that's available. Great. Thank you, Ryan. Just to follow up on Ivy's question. If you look at the homes you plan to deliver in 2022, I'm assuming that effectively none of them are on lots that you bought post, say, the middle of 2020, so post-pandemic land. When would you start to see the majority of your delivery volume be delivered on land you bought post-pandemic or contracted for post-pandemic? Well, Carl, we're basically turning the majority of the land that we're buying in about three years. Or when we buy it, we essentially are putting under contract about three years worth of land. You know, a third of that year one, a third of that year two, a third of that year three. You've always got old land cycling out and new land cycling in. You know, there's never a time when you're going to have a complete fall off the cliff of the entire land book and a whole new land book comes on. You know, there's always a mixing going on. You know, development timelines are elongated relative to historical as well. You know, land that from the you know the time that we buy it's taken us you know 12 months plus or minus to get it you know fully developed and ready to start selling homes. You know, Carl, I think the simplest way that I can tell you is that we always have new stuff coming in. We always have old stuff going out. All that is factored into the guide that we've given you know certainly for 2022. Your next question comes from the line of Stephen Kim from Evercore ISI. Your line is open. Yeah. Thanks very much, guys. Really impressive results, and I know folks are excited about the guide. I actually wanted to explore a few areas where it seems to me like your guidance could actually be incorporating a nice healthy dose of conservatism. And it's really around ASP volume and the implications of volume on margin. If you look at your ASP, you got it, I think, for the full year around 515. Your order ASP has been running at around 556, I think, for the past 2 quarters. You know, maybe I'm wrong on that, but just if that's the case, 515 seems kind of low for a closings number, ASP number. Regarding your volume, I think you said 31,000 closings, and I know that cycle times is, you know, an issue out there. It looks to me like you started over 34,000 in fiscal 2021 and even 8,200 or so in fourth quarter. Although you're guiding as if there's no improvement in cycle time coming, it would seem that your actual what you're doing on the ground and what you did in terms of starts is leaving open the possibility that they will get better. Otherwise, I don't think you would have started that many in 4Q. If I'm right that closings could actually do better than your guidance, won't you have some benefit on SG&A and scrambling costs? That's kind of like the general framework of my question. Let me ask this SG&A question specifically. If you do better than your guidance on closings, what is the incremental SG&A we should apply to those incremental revenues? Stephen, good morning. Thanks for the question. I think all of these things are related, so I'll do my best to kind of tie them together, and I'll ask for probably a little help from Bob at some point. In terms of ASP, Stephen, we've consciously been starting more spec. Most of the spec that we're starting is in our lower priced communities, specifically in our Centex first time buyer communities, where those price points are significantly lower. Those will sell as specs later in the cycle, and so that's all been factored into the ASP guide that we've given. To your point about orders being at a higher price point over the last couple of quarters, that's largely been because we've been selling more of our Del Webb and our Pulte branded communities that come at a higher price point. You know, it's a fair question you've asked. I understand why you've asked it, but I think we factored in what we see or what we would expect to be our ultimate brand mix as we move throughout the year. In terms of the closing guide, Stephen, and what we've started, you know, as we highlighted in our prepared remarks, we've factored in what we've started, and we're very pleased with how much inventory we've been able to put into the ground, both for sale and spec inventory. We've updated our delivery guide based on our current cycle time and what we anticipate to happen throughout the year with the supply chain. You know, I wouldn't probably go down the path of assuming that there's conservatism in that guide. I can tell you that if 2022 is anything like 2021, it was the hardest year of home building that we've ever seen as an organization. We're gonna stand firm on the 31,000 units that we've guided to. If things can improve, we'll all be thrilled. For sure. Bob, what about that incremental SG&A ratio that we should be thinking about? Then just my only other question long term is your land supply in years. At some point, the pandemic will hopefully, you know, fade, and I'm thinking five years out here, three,four,five years out. What level of land? What's the lower bound, lower range of years of land owned that Pulte can operate at? Is it, like, two years? 'Cause I, you know, some of your competitors are running that low or approaching that low. Could that be a level that you guys get to eventually once things have normalized and, you know, 3 - 5 years down the road? Yes, Stephen, I think we've talked about the SG&A question before. You know, honestly, if you were to toggle the volume, which we wouldn't suggest, you know, it is accretive to our overhead efficiency. I wouldn't want to put a percentage because it depends on how much volume you're talking about. You know, certainly we would if we had more volume leverage the central overheads. You know, your selling costs don't change as a result of more volume. In terms of land supply, you know, we've been consistent honestly since Ryan became the CEO that we're targeting three years owned, three years option. You know, if you use a trailing twelve-month volume, we're a little bit rich on that. If you look forward, it's more in line. You know, it's hard to say where ultimately optionality could go. You know, I think we would love to see it become a bigger part of our business as long as we can do it in a way that for us creates value. And that is, A, to be economically workable, and B, create true market risk. You won't see us creating optionality just to do optionality. You know, we will be seeking some level of market protection from that, i.e. we can walk away from the transaction if something changes. Again, I think very consistent from us, you know, whether the developer base can get big enough to support a lower level of years supply for us, you know, time will tell. You know, certainly if you look back over the last 40 or 50 years, there were points where the developers were active enough that the builders could take lots on a just-in-time basis. That developer base has not reestablished itself since the downturn in 2007, 2008, and 2009. If that happens, I think you'd see us participating in it. Your next question comes from the line of John Lovallo from UBS. Your line is open. Good morning, guys. Thank you for taking my question. First one maybe starting at a high level. We've been hearing that demand and foot traffic may have actually inflected positively in January. Just curious if that's consistent with what you guys have seen? Yeah, it is, John. We're seeing really strong interest from buyers and, you know, we think it's driven by some of the things we highlighted, just, you know, the desire for single-family living and the work from home trends, you know, continue. I would highlight not all the traffic's on foot. I think our digital selling tools have probably advanced, you know, seven, eight years over the last 18 months, which I think is, you know, overall good for the business. Okay, that's helpful. Maybe drilling down just on the west region in particular, deliveries declined slightly year-over-year, you know, versus pretty big gains in most other regions. Was this just a timing-related issue or is there something else to be thinking about there? Yeah, it's really just community turnover. Nothing to note, honestly. Your next question comes from the line of Truman Patterson from Wolfe Research. Your line is open. Hey, good morning, everyone, and thanks for taking my questions. Just had a couple follow-ups from prior questions. You know, on some of the materials and labor supply chain challenges and what it means to cycle times, I'm just hoping to get some clarity. You know, by the end of 2021, call it November, December, had you actually started to see cycle times stabilize? And the reason I'm asking is, you know, outside of the recent flare with Omicron, what we've been hearing that builders, you know, largely become more efficient in working with the whack-a-mole environment and some had stabilized cycle times. Well, Truman, I think like you know any game, if you play it long enough, you certainly get better at it. Whack-a-mole is no different, but it's still whack-a-mole for sure. You know, what we've seen in our business, we've actually seen increased cycle times in the front half of the overall production cycle through kind of frame and window stage, which has been you know really related to truss availability, framing labor, some of those kind of things, and windows, candidly. We've been able to make up some time in the back half of the schedule. You know there have been some pushes and pulls, but overall it's been you know a net increase to cycle time. You know, we've assumed that that doesn't get any better in 2022, and that's all been factored into the guide that we've given. Okay. Thanks for that. You all have mentioned some improvement in your new home inventory in 2022, recognizing all the constraints. In this market today, orders are really a function of inventory and production capabilities in my mind. I'm hoping that you might be able to give us an update on your expectations for starts in the first quarter and whether or not your first quarter orders could inflect positive year-over-year on a pretty challenging comp based on your internal inventory capabilities. Yeah, Truman, we don't guide or haven't guided on either one of those, and so probably I'll stop short of giving you any additional insight. We do feel very good about what we have in the production pipeline, and I think we've demonstrated, you know, really over the last nine months a very predictable start cadence where we have been able to get volume into the ground. It's taking longer for it to move through the overall production cycle. Again, you know, that's been factored into, you know, our delivery guide for the year. The last thing, you know, that I'd really highlight on that note, Truman, is that, you know, we've got. I know I said in my prepared remarks, we've got double the amount of spec inventory, so it's, you know, something north of about 4,000 units. You know, that'll certainly benefit us as we move through 2022. We have reached our allotted time for questions. Mr. Zeumer, I turn the call back over to you for some closing remarks. Great. Thank you, Bob. Appreciate everybody's time this morning. We'll certainly be available over the course of the day for additional questions. Have a good rest of your day, and look forward to speaking with you on our next call. Thanks, everybody. This concludes today's conference call. Thank you for your participation. You may now disconnect.