Well, welcome everybody. It's like class. Everybody got really quiet. Nobody's sitting in the front row except for Emma and Paul and Bob, and all the questions will go to these three over here. Well, welcome. Appreciate everybody coming. It's great to be in person. I don't know about all of you, but we were just talking about it. You know, I love being with people and having everybody here today is a lot of fun. I know I was talking to a few of you yesterday and I think somebody told me he hasn't been out for almost two years with other people, you know. Don't get scared, you know. It'll all work out. Well, let me start with a couple. I get to play general counsel. Where's David? There he is, our general counsel. He's told me to read the following. Right, David? Thank you. Before we begin, I'd like to make a couple of housekeeping announcements. First, we will be making forward-looking statements during today's presentation, including statements concerning future financial and operating performance that involves risk and uncertainties. I refer you to Tri Pointe Homes SEC filings for a description of the risk and uncertainties that could cause actual results to differ. Except as required by law, Tri Pointe Homes does not undertake a duty to update these forward-looking statements. In addition, a replay of today's webcast presentation will be available on our investor relations website after the conclusion of this event. Linda, is that right? Cool. All works. All right, I got that out of the way. How'd I do? Good. Awesome. Well, listen, before I get going, I'd like to make a couple introductions and in no particular order, I guess it's alphabetical here. I wanted to introduce our Tri Pointe Homes team. James Attwood, you'll hear a lot about from Phoenix. Just raise your hand so everybody can see you. Runs our Arizona division. Paul, you dropped your water there. Well, we've got two board members here, Larry Burrows and Kent Grahl in the back there. We've got Sherri Drew. There's Sherri. In charge of our design centers. Bryan Havel in charge of Austin. You'll see him a little bit later. David Lee, I mentioned, our General Counsel. Drew Mackintosh, who helps us with IR. Drew, thanks for coming. Linda Mamet, who's our CMO. Who am I missing here? Joe Mandola runs Houston. Sean Ricks runs DFW. Kathy Sampson. Big shout out. Is Kathy in here? She's not here. Where is she? Oh, there she is. Hey, thanks, Kathy, for setting this up. Yeah, she's carried a lot of weight there. Gray Shell, running the Carolinas. Elise. Where is Elise? Thank you. Big shout out to Elise on this, too. Thanks. Ron Turner runs our mortgage, escrow, title, everything. Most importantly, he runs mortgage. That's important right now. Glenn Keeler, who you all know, our CFO. Where's Julie, our VP Treasurer? There she is. Great to have her on board. I think Jason. Is Jason here? There he is. VP of Land for Arizona. Anyways, I just, you know, welcome the team and you guys get to meet them last night. Who am I missing? Tom Mitchell. Oh, shit. We've been together for 31 years. I mean, come on. No. We don't forget about each other at all. We probably say the same thing too many times, right? Take over. Yeah, exactly. What's my time? Oh, I got six minutes. I'm good. You know, as we kinda go through today, there's six things I wanna leave with all of you as far as takeaways. It's important to understand that, and I think you'll get a lot of feeling from the divisions as I talk about this. Number one. The number one takeaway, we have a great management team, a very seasoned management team. We've been through a number of cycles. Been doing this for what? Over 31 years. So we've seen a little ups and downs. Growth, and this is one of the big ones on my plate. We wanna debunk the California myth. We're not leaving California, but when you look at our new communities and our deliveries by 2024, 70% of our deliveries will be outside California. California has been great for us, generates a ton of earnings and cash flow, but strategically, years ago, we knew that outside California was much more capital efficient and the returns would generate, we'd generate higher returns outside California 'cause of how capital efficient it was. We're also growing in those divisions outside of California. Right now, our goal is to be in the top 10 in each one of our markets. From a market share standpoint, eight of our 15 divisions are. So we've got plenty of growth in those other seven divisions. The other thing that we're gonna be continuing to look at is growth through M&A and organic. Gray's gonna talk about the organic playbook that he implemented in the Carolinas. We did it with Tri Pointe. I was talking to John Larson, who's here today. He goes, "Yeah, I remember when you and Mike and Tom were in this little office, just the three of you." I'm like, "Geez, that was a long time ago." We're really proud of what we can do organically. You know, we did the big Weyerhaeuser deal. We know how to do M&A. Hopefully, as the market kinda, you know, ebbs and flows, it creates opportunities for us to grow. I think organically is probably one of the better ways to grow for us as we look forward. The third takeaway is returns. We are keenly focused on returns. I think our return on equity was, what? 20.7% at the end of March. We're targeting that 20% and be consistent. I know one of the analysts told me years and years ago, "Doug, it's important to be consistent." That's something that we've aimed to do and will continue to do, even as the markets go up and down. The fourth point, and you'll hear this a lot, is our land position. Tom and I have said this on earnings calls a number of times. It's probably, what? The best land position we've seen in 30 years. Of our open, 65% of our communities that we're opening between now and 2024 were priced before the price run-up of housing. Let's call it January 2021. That means we underwrote those communities at price points that were a lot less than where they are today. That gives us a significant margin profile to absorb any changes in the marketplace. The other things that we're really keenly focused on, the fifth point, is positive cash flow, strong balance sheet, and strong liquidity. I've seen so many cycles and so many builders come and go, and primarily they have too much land, too much debt. It's a recipe for disaster. The one thing in this industry we've done very well in our company is we've put more and more of the land in option contracts. Julie's done a ton of land banking, a ton of joint ventures. Then the last thing, which is really important to us is our programmatic share repurchases. We spent $1.1 billion of buying back our stock. If I'm around another 10 years, we'll be private. It'll be perfect. We won't have to have this meeting. No, just kidding. We'll meet with the lenders. Those are the six takeaways that I hope you get from all the division presidents, and all of us as we talk. With that, let's talk about the current market. Who wants to take this one on? Huh? Nobody? All right. Well, I've been saying this, you know, in a lot of different venues, but, I mean, you've got geopolitical risk, you've got the supply chain issue, you've got the Federal Reserve that's gonna do whatever they can to put inflation out. Supply chain, and you've got China that thinks, I guess, the pandemic or the virus is gonna go away. I'm not here to debate that, but that's kind of an odd situation, which causes big supply chain headaches. When you look at housing, at least the way Tom and I are looking at it, every market cycle we've been through is different. If anybody has the right answer, call me, we'll keep it private, we won't tell anybody else. I mean, I'm driving the management team crazy because I've been doing this for so long, I'm you know, it's just in. It is fascinating to me, with all these dynamics that are going on, how best to run your business. When I look at the macro, though, in the short term, there's macro things that are gonna be speed bumps. Big ones, small ones, I'm not you know, exactly sure, right, Tom? I mean, we're gonna feel some speed bumps. We're feeling some speed bumps right now. A little more normal absorption conditions. It's gonna be an interesting market as we go through with all these macro events. When I look at the supply-demand, I call it Econ 401, we have a significant imbalance between supply and demand. We've been undersupplying housing since 2009. We haven't had enough housing starts to meet household formations since 2009, and we've got the demographics of a millennial homebuyer as a tailwind. I mean, as we pointed out here, you know, the demographics, but more importantly, look at the relative strength of our homebuyers. What, Ron? 50%, over 50% of our homebuyers and backlog are millennials? Yeah, 57%. 57%. You can see the income levels of these buyers are much different and much stronger, and they can afford not only our house price, but also these interest rate increases that we've seen. The other thing that is fascinating to me, and I guess I'm over? No, we're still going. I'm ahead of time. Yeah, that's good. Think about the resale market. How many people have refinanced their house under 3.5%? You guys moving? Nope. Nobody's moving. The biggest competitor to the new home industry has been the resale market. You're gonna see there's. You can't change demographics. You can't change the supply overnight. When you look at those two key factors at 30,000 ft, I believe that the housing industry over the next decade has got a lot of room to grow and to prosper because of all these variables that we're talking about. The other thing that I was talking to a few of you last night is the industry is positioned so much differently than it was back in 2008, you know, the mortgage crisis, the S&L. I've seen a number of them. We're all de-levered. We've moved land, we've optioned land, our balance sheets are stronger. Frankly, the people that are running the top 10 or 15 home builders have been around as long as us old guys up here are doing it, and we're very conservative. We've got an industry that's, you know, making the headline news right now, but it's really just getting back to normal. That's the way I see it, going into the next decade is this supply-demand is really in favor of housing. Tom, you wanna add to that? Sure. Thank you. Thank you all for being here. It really means a lot to us to have your support, and we look forward to today. I think it's gonna be phenomenal for you to get to see and touch and feel what we do because what we do, we think we do very well, and we differentiate ourselves from our peers, and I think you'll see that today. Doug really said it. You know, we are in the middle of some changing market conditions, it's as expected. We have planned for this. You'll hear from our teams today. Their experience levels really have them and their teams prepared for where we're going in the future. It's really a positive, optimistic outlook that we have. I like to say we're positioning ourselves as conservatively opportunistic, and really that's where we are today. I think we're gonna have some great opportunities. Doug talked a little bit about supply-demand environment, and here's a slide on supply specifically, and that's the other side. It really is a unique dynamic. I don't think we've ever been in any cycle previously that has us or the industry positioned like we are currently. On supply, you know, we continue to focus on what we do, and that is relative to being in A locations in core markets that are close to employment centers, have excellent amenities, great schools, and really, we see our buyer profile highly desiring those things. It's unique. 64% of Tri Pointe submarkets are below permit levels of the prior peak. So we still think there's room for growth in all of our existing markets. Doug mentioned the resale supply. It's at all-time lows. We anticipate that will be increasing, but it's still way off of normal levels, and that's driving people towards new housing. New housing is more of an alternative today than it's been in any cycle we've been in in the past. You know, what we've all lived through the last three years with the pandemic, I think has transformationally shifted buyer preferences on housing, and I think that's an important point. I think it's a point where that is here to stay, whether that's, you know, working remotely, work from home, hybrid work schedules, and then just the value people are placing on home. It's different than it has been in previous cycles, and we're capitalizing on that without a doubt. What we do is really have a differentiated product offering. We believe in diversity of geographic locations and product types, and it's all designed to be attainable. You know, we've talked to you all for the last three years about targeting and lowering our overall ASP, and that's been a goal of ours, and that's been hard to realize in the appreciating market we've been in over the last couple of years. But I think as you look at the numbers over the next couple of years, you'll see that being implemented. You know, so where are we at today? I think Doug mentioned speed bumps, headwinds, no doubt. You know, the Fed has implemented monetary policies, and it's beginning to achieve the desired results. So not unexpected at all, and we are beginning to see the front edge of that softening out there. It's evidenced by, you know, our absorption rates. Q1, we finished absorptions at about 5.7. In April, that dropped down to a 4.7. In May, we're not done yet, but it looks like it's coming in around 3.5. We're seeing that front edge, it's real, and there's nothing more important than our strategies around that and how we're going to maintain our absorption paces. We plan our business for, you know, normalized absorptions. Through this whole cycle, we've planned our business for normalized absorption. We've stuck to that disciplined underwriting. We've stuck to that business planning philosophy, and that's what we are on target to do. I think the reality is that we need to make sure our backlog is protected and that our future prospects are protected. We're spending a lot of time and energy on that. We've got Linda Mamet, our Chief Marketing Officer, who oversees our whole sales and marketing effort, and then Ron Turner, the President of our Financial Services here, to talk a little bit more in-depth about the specifics behind what we do because I think it does make a difference, and we're confident that with what they're doing on the front end, we're gonna continue to have success. There's always a needs-based buyer out there, always. We wanna make sure we're putting the right buyers in the process, treating them right, giving them a great customer experience, and ultimately building homes for them as satisfied customers. I'm gonna turn it over to Linda and Ron. Good morning, everyone. You know, it's topic du jour is the mortgage marketplace, right? It's you know, I tried to avoid most of you last night. I do wanna give a quick shout-out to Kathy and Elise and team for putting this together and making sure we had southern fried chicken last night and biscuits and gravy this morning. That was perfect. Thank you. You know, as it relates to the mortgage market, what we wanna share with you today is really the process by which we underwrite to ensure that all the customers that we sell to and put in our backlog have been thoroughly vetted. You know, how do rising rates impact us today and what does that mean for us? I mean, ultimately, we give our customers choice, and you'll see through some of the material that we share with you today that we have a very robust customer backlog demographic. In addition to that, we have programs in place where we give them the opportunity to lock in their interest rate at different timelines throughout the construction process. Just on that note, over 50% of our customers have already locked in through the end of the year, and those who have not locked haven't been because any reason other than they just don't wish to do so. We've presented them with offers to lock in their interest rate. We feel very good about our customer demographics and the qualifications moving forward. In addition to that, we're seeing fixed and adjustable rates become more prolific. We haven't experienced a lot of that move within our backlog yet. We still have a relatively low percentage of adjustable rate customers because obviously, historically, interest rates are still very low. As rates continue to increase, we will still see the spreads between fixed and adjustable move, but then it just gives customers another option to get the payment of their choice. In addition to that, you know, leveraging our in-house mortgage company gives us a lot of advantages. First and foremost is the customer experience. The customers that choose Tri Pointe Connect for their financing have typically rated us at least one percentage point better in our overall alliance scores. We do take care of our customers, we create relationships with them, and we have ongoing discussions throughout the home building journey. In addition to that, I shared with you the long-term interest rates that we provide. We give our customers options to lock in at the time of sale, should they desire. We pre-qualify customers early on in the process and set expectations of what the interest rate market could be. Today, if a customer comes in and they wanna purchase a home, we share with them what rates are today, what the long-term lock opportunities are, just so they know moving forward that, hey, worst case, if rates do continue to rise, what would their payment range be? How we manufacture that through our overall customer journey is a key to our success. Just one quick point on this topic is what is the home buying power? One of the things that we look at is, you know, what is our customer demographics and how will they be impacted through a rising rate environment? As I shared with you, we've locked in over 50% of the remaining deliveries for this year, and we've actually been sharing long-term lock options since late last year when the Fed started predicting changes in their policy. Our average household income is $174,000 with relatively low debt ratios and high FICO scores. Overall, we have a very strong customer demographic, and as we look at sensitivity on our existing backlog, you know, we believe interest rates are gonna be near 6% between now and the end of the year, just with the ongoing pace that we're at. We do some sensitivity testing to see, you know, what percentage of our customers may be, you know, elevated risk as it relates to our overall backlog. We're very low, you know, in terms of that overall statistic. We're really, you know, high single digits, low double digits of customers that may be an elevated risk in our backlog. As you can see, moving forward through our diversification, our overall ASP is gonna continue going down. We feel very comfortable with the current marketplace, with the demographics that we're seeing in our home buyers. We wanted to give you a deeper look into how we go about pre-qualifying our home buyers before they sign their purchase agreement. It all starts with us in the sales and marketing side. We're constantly communicating with customers, what's the next step in the home buying journey? It's a very simple process for them to click on a link or go onto tripointeconnect.com once they've narrowed down which community they're most interested in to go ahead and submit a pre-qualification application on tripointeconnect.com for that community that they're interested in. Then from there, our Tri Pointe Connect team is working with them on the pre-qualification. Yeah. It's great. You know, the customer journey begins with their home builder and they hand the customer off to us. We work with the customer, educate them on the process, and then we actually do pre-qualifications. As I shared with you, we provide them with current market rates. Even if we have customers who may be of elevated risk to rising rates, we give them an option to lock in a rate at time of purchase, so they know that they're secure throughout the production of their home. We obviously, you know, run their credit, make sure that we validate their income and things of that nature, and we provide a pre-qualification letter to the customer so they have the confidence in moving forward with their purchase. Obviously, we share some of that information with our home building partners. Once Tri Pointe Connect has completed their review of the pre-qualification application, on our side, Tri Pointe Connect is passing our sales team an assessment. That gives us a lot more internal information to understand that particular buyer's situation. We're looking at factors like what's their income type, what's the source of their down payment, do they have any contingencies? All of these kinds of things that we would want to know as a home builder before signing a purchase agreement with that home buyer. In the current market, we certainly have opportunities to select who is ready to purchase their home now and who might we need to work a little bit further with Tri Pointe Connect, maybe, help mitigate some of those risk factors before they sign a purchase agreement. After we've sold homes to our customers, there could also be people who might have pre-qualified a few months earlier. Maybe a particular home site that they were interested in, they wanted to wait for that home site to be released. We also work really closely with Tri Pointe Connect to keep their pre-qualification information updated and fresh so that we have the right information before they're signing a purchase agreement. As you can imagine, that refreshing has changed a lot in the last few months, right? I mean, we've seen mortgage rates increase substantially, and through that process, we're able to communicate and give customers different options throughout the process. It's been a real benefit for us. While our customers certainly have the freedom to choose whoever they would like to finance their home with, we do find that over 95% of our customers complete their pre-qualification application process with Tri Pointe Connect. It's giving us a lot of visibility into who it is that's purchasing our homes and their financial situation. Once the customer has signed their purchase agreement, on the sales side, we're really understanding what level of risk we have with that buyer in backlog. Once the purchase agreement has been signed, we very quickly, within just a few days, are assigning a risk rating. All that means to our customer is that we're providing the appropriate level of support and assistance to them through the home buying journey. On the internal side, with our high-risk customers, we're gonna be more focused on those situations. Currently, we rate 13% of our backlog as higher risk, and we look at so many different factors for that risk rating. Some of them are a very, very small proportion of our backlog, like the number of buyers who are getting gifts, gift funds from parents or other family members within the seasoning timeframe that's being looked at for the mortgage process. That's a very small percentage. Similarly, a few customers might have a down payment program that they are gonna be paying us their deposit over a period of time. Again, a very small percentage. Probably of this list of factors, the biggest factor would be customers that have a higher debt-to-income ratio. As Ron said, we're mitigating that once we can get them a rate lock and really, you know, help them understand that that will give them a lot of peace of mind between the time that they purchase their home and when they're gonna be closing. With those risk ratings assigned to our backlog, we also have a very disciplined process every week in all of our divisions where our sales leaders, our closing services team, our construction team, mortgage partners, and sometimes even our design studio team is involved in reviewing each customer in backlog. We start with our high-risk customers because they're always gonna be on the agenda for us in our closing meetings. We're also looking very closely at people who are going to close their home in the next 60 days and staying on top of the miltones that are really important to get them to the finish line on time and have a really great buying experience. Year to date, our cancellation rate is at 8.8% of our gross sales, so still very low from a relative historical perspective. One thing that I would point out in our cancellation rate at Tri Pointe is we report everything. We report a cancellation if somebody is transferring from one home site to another home site within the same community. We report a cancellation if that home was resold on the same day. We report cancellations even if they were, you know, canceled and then sold within the same week. It's a very comprehensive look at every single cancellation situation that's occurred in the business at that 8.8%. For all of our internal teams, we have a live dashboard where they can see the backlog status. They can see the miltones that have been met. They understand what those risk factors are for every one of our customers. That's just a really good process that everybody's very familiar with, and we've had that discipline in our business for many years, and of course, we're continuing it in the current market as well. As you can tell, we have a very rigorous approach to managing our backlog and ensuring that anyone with elevated risk are given tools to mitigate those risks, and we're pulling through a large percentage of some of those customers who may be elevated risk through that ongoing communication. It's definitely helpful to see that information and make management decisions as a result. We did receive some feedback on long-term interest rate locks and how the mechanics around that work. I wanted to share with you a little bit today of, you know, what that looks like to a consumer. We do have rate lock terms available for consumers up to 270 days on most programs. You know, that's within our typical cycle time. The mechanics are very simple in terms of, you know, the mortgage guy. If I, you know, lose you somewhere, please just shout at me. Essentially, what happens on a long-term interest rate lock from a consumer, and maybe some of you have experienced this, is the homebuyer pays a fee to lock in an interest rate for a particular period. Through that process, that fee we provide to them as refundable at closing. There's no additional fee assessed. Now, that marketplace is changing, and it's changing, you know, a lot as the mortgage landscape changes. We may see some of those fees become refundable, become non-refundable going forward. Currently, we provide customers an opportunity to lock in an interest rate for 270 days with an upfront fee that's refundable at closing. Generally, to do that, there's a rate cap. Let's just assume rates are, you know, 5 3/8 today, and the customer wants to lock in on an interest rate. You know, there's an example in your workbook, but if we just take a 180-day lock, a six-month rate lock at a 5.5% interest rate, we would add to that interest rate a 3/8 cap. Interest rates are at, you know, 5.5% today. The customer's cap would be 5 7/8. They'd be able to lock in and know that that's the highest their rate could be. They would pay that fee, and it would be refundable at closing. Then prior to closing, within, you know, 45 days of closing, the customer has a choice to float down that interest rate lock. Let's assume rates didn't change at all. They get to move back down to the 5.5% interest rate. It's a really great product that gives our customers the flexibility to lock in for the long term. There is a cap. It's kind of an insurance cap that shows the highest the rate will be. You know, should the Fed continue to raise rates increase above 6%, they would be capped at 5.875%. The mechanics of that are relatively simple. From a consumer perspective, it gives them multiple options, and we're actually looking to adding a 360-day, a full twelve-month lock beginning tomorrow. We're excited to share that as well. Thank you. Tom? Thank you, Ron. Obviously, that's a key component to our confidence of being able to continue to guide, to give the delivery guidance, and help our year-end happen. Linda mentioned real-time information. Our business has changed so significantly from the days when Doug and I were really in the meat of it. The amount of data and technology we use to have real-time live information to make decisions on is phenomenal. I want you guys all to know that's a big part of the Tri Pointe difference. We wanna talk about a couple things specifically, excuse me. Land is a big one. Doug mentioned we've got an unbelievable land pipeline right now. We spend a lot of time focusing on land. It's the lifeblood of what we do, and we can't be successful without having the right parcels. We're very much about a targeted, intentional approach to our land acquisition, and we just wanna share some of that with you. You know, we've talked a lot about disciplined underwriting. You know, our goal is really to build a diversified product portfolio through our land acquisition strategies. We look at geographic diversity, we look at product diversity. We wanna try to make ourselves as attractive to as many customers as possible, so we build across a broad spectrum. It all starts with core A locations, as I mentioned, close to amenities, transportation corridors, employment centers, great schools. That's just a given. You know, this hasn't changed from the foundation of Tri Pointe. Doug and I set this out on each and every one of our land transactions. Our team do a phenomenal job on that. As we underwrite, we underwrite to our current costs and pricing. We don't make assumptions relative to inflation in the future. The deal must work today, and we've stuck to that discipline. You know, absorptions have swung wildly over the last three years. We continue to underwrite and manage our business to the historical norms of 3-4 homes per month, per project. As you look out, you know, we talk about having the hot slot and making sure that we have a competitive advantage in each and every one of our land acquisitions relative to ultimately our finished product. That's really trying to target value relative to the competition. We wanna make sure we are a choice based on value, based on our product. As we look at different opportunities, we look at variable risk profiles and margins that are gonna relate to those risk profiles. You know, we're building a lot of our business around the core. You've heard us talk about underwriting to 18%-22% gross margins. That does vary based on, you know, the development status of an acquisition, and targeted returns will be adjusted based on risk as we look forward there. A couple things here, you've heard us talk about on prior calls. We really feel good about our current position, especially in the progress we've made on owned versus controlled lots. You can see currently we're at 53% owned and 47% controlled. That's shifted quite a lot over the last three years. That's been an intentional strategy that we've had success implementing. Our future target is really to take that to 40-60, and we're on the path to be able to do that. Doug mentioned our margin profile. You know, the ability to withstand market uncertainty. 65% of our lots were controlled prior to, you know, December 31, 2020. So we've got a great vintage of the land in our portfolio, and it gives us margin cushion. We've got margins above our company average projected for all those lots in the future. It's really a phenomenal position to be in to have 100% of our land owned or controlled through our delivery plan for 2024. We can be highly selective in what we're looking for. Right now, given the uncertainty ahead, it's a good time just to be cautious and to be selective. You know, we're focused on positioning our product for attainable price points. You've heard us talking about making sure our overall ASP is gonna be available for everyone. As we look to our land acquisition strategies, what are we doing right now? You know, we're looking for opportunities for 2025 and beyond, and we're looking cautiously at doing the right deals, you know, highlighted by low risk. We're looking at structured transactions, more off-balance sheet transactions, either land banking, joint ventures, you know, strategic alliances with other builders, and we're beginning to build that portfolio for 2025 and beyond. We're really in strong position and very optimistic about where we're going in the future. One thing to add, and I don't know if all of you know this, but we're probably one of the- Few publics that we're the regional presidents too. Good point. Huh? Good point. Yeah. Every piece of land that we look at and buy in this company, we've seen. We're on the road quite a bit. That may not be a big difference to a lot of you in the room, but it's a huge difference. Jason knows how much I've bugged him on land deals. But it's also a big competitive advantage too, because we're on the ground with our teams, looking at land, looking at the comps and being able to interface with sellers directly. I kid some of my counterparts when we cut a deal that they've never seen this piece of land, but it doesn't matter. We have fun with everybody in this business. That's a big differentiator that we have as we go forward. Yeah, without a doubt. Yeah. We're very intentional about what we do as part of our business planning process. We have all of our teams update their strategic land acquisition plans annually. We're looking for targeted transactions that fit our plan. It's not just a needs-based. We need to get lots. It's very targeted. It's structuring deals, as Julie knows, off balance sheet, whether they're land banks or ventures. You know, we talk about a keen focus on returns. That leads to better returns long term. It takes a while for those things to flow through the balance sheet and the P&L, but that helps us be more consistent as we target that 20% return. Those are the. I mean, there's a lot of factors that go into staying on top of that return focus. Land is obviously a big portion of that. You know, it's the raw materials that feeds the engine. Yeah. On the screen's just an internal example. I talked about, you know, building a portfolio that has geographic diversity and product diversity in it. Here's just an example of how we assess and rate different submarkets within our markets, and James is probably gonna talk a little bit about this more as we go forward. For this division here in Tri Pointe Homes Arizona, you can see some of the factors we're looking at. He's spreading submarkets from the East Valley at the top down to Maricopa, and then we're ranking those markets based on various factors. You can see from employment through an overall rating on the upper chart, and then down below, you can just see some of the highlight metrics that we're looking at as we go forward. Again, this is just a snapshot that helps our teams really be focused on what we're trying to achieve in each one of our submarkets. Linda. Other things that we look at when we're in our land acquisition phase is the analysis of the households around the area where we're purchasing. We use one of the largest household databases in the U.S. The data in that database is updated quarterly, and there are 16,000 attributes that we can look at in that database. Obviously, we boil that down to what's really relevant to us in home building around lifestyle and how people want to live and what's important to them. We analyze the street addresses within a radius of maybe like a 3-mil or a 5-mile radius. We can also look at specific neighborhoods. Maybe it's a neighborhood that we've built before that's relevant to this particular acquisition, and we'll look at the buyer insights of who's living in that community. We can look at that for a competitor community. We can look at that for a particular neighborhood of resale homes. That really helps us understand what is the profile of customers who are living in that area, who do we need to attract to this site, and then how do we design our community in a way that really appeals for those targeted buyers? Is it around the community vision? Is it about the design of the land plan? Is it the product type? Is it how we're messaging the key selling propositions to those target customers in our marketing messaging? Just to give you some idea of the 11 customer segments that we've identified at Tri Pointe Homes, that covers 90% of our buyers who buy homes from us today. In the last 12 months, the top four segments that I'm showing you here represented 62% of our home buyers. Just to give you some flavor for what some of those customer profiles look like, here, one quarter of our home buyers in the last 12 months fitted into our segment of singles and couples, premier suburbia. Let me tell you about these households. These households are more affluent. They're very well educated. They are really quick tech adopters. They like to eat healthy. They like to buy from environmentally friendly companies. Also, when it comes to things like entertaining and eating out, it's all about entertaining at home. They're fully into style and design, which is a key differentiator for us at Tri Pointe Homes. Eating out for them is gonna be more of a gourmet type of experience. Just to contrast with the next group, the school-age families, these are also people who really value premium lifestyle locations, but they have a family. Their children are often a little bit older. In the first group, you're seeing a lot of older gen millennials, and you're seeing some of the younger, my generation, in this singles and couples area here, and you're seeing some of that same generation, but with families of school age in the premier suburbia. Both of those groups love to buy luxury vehicles, but the premier suburbia school-age families, those are luxury SUVs. Their fast food habits in the last 30 days, the most likely place that they would have visited for fast food is a Starbucks. Our younger profile, the growing families that are amenity driven, the singles and couples that are career-focused professionals, those are younger millennials. The group on the far right, they are working hard and playing hard. They are going to bars and clubs. They are not cooking, they are doing DoorDash, and they like very international food. Compared to our growing families that are amenity driven, they're starting their families, and for them, it's all about barbecues at home and a lot of sports and recreation. As you can tell, we know so much about the households. We get updated information from credit card data and everything else that's flowing into the database that helps us make really smart decisions about where to buy land, how to design and plan for customers, who will be wanting to live in that community. When we go out and tour at Waterston North this afternoon, that's a large planned community. You'll see that we have product that's touching many of our 11 customer segments, and all 11 segments are very important in our business. You know, we get caught up in this industry with sales and pricing and numbers and so forth, but we just happen to sell the most expensive durable good that you're ever gonna buy in your life. What we're trying to demonstrate to you, and I mentioned this at the beginning, Linda's amazing and the teams are amazing that take this consumer information because in the end, what you're gonna see in here in Arizona and all our divisions is if we don't. You can buy a piece of land, but if you don't design the right product and tailor it to the right consumer in the right segmentation, you're gonna fail. We take all this very seriously. I know this is probably the thing that people talk less about on the street and with the lending community, but it's right at the top for us. It's very, very important knowing who your consumer is. Yeah. It's what drives us. I mean, Doug and I founded this company based on the customer, and everything we do starts with them at the forefront. I think that's why we're successful, and that's why we'll continue to be successful. I'll add, he and I will take phone calls. To this day, I always kid the division presidents. Jim knows this and a few others. I call homeowners at night. We have an alliance score, scoring system, and I'm an empty nester, and my wife doesn't want me at home at night anyway. I go through the alliance scores, and I pick up the phone, and I love calling. I'll call, you know, Julie, and I say, "Julie, this is Doug Bauer, CEO of Tri Pointe," and they could be in Dallas or the Carolinas, wherever. The first thing they say every time, "What's wrong?" Every time. All I say is, "I just wanna thank you for buying one of our homes." How simple is it to say thank you, and here's my number? I give my number. I mean, we're in the consumer business, so if you're afraid to talk to a consumer, you shouldn't be in home building, right? I mean, it's pretty simple. We often hear what's right. Yeah. We've got a lot of elated, satisfied customers. Yep. One of the big takeaways, excuse me, I think we want you to understand today is our focus on research and data. Because like never before, the industry has transformationally changed because we're using research and data to drive our business and be successful. Technology is helping in a way like it's never been before, and I think we just keep getting better and better every year. You know, just wanted to talk a little bit about to be built and spec strategies. I think there's a little misnomer out there that we're a 100% build to order company, which is not really accurate. I'd say we're really about a balanced 50/50 spec and to be built strategy, and it's working perfectly. It's right where we wanna be, and there's a lot of advantages to that. We get the best of both worlds. I like to say design, innovation, and personalization really is what makes our customer experience so special and so much different from a lot of the other options from our peers. On to be built and home personalization, you know, we've got a really phenomenal offering out there. It's really a curated offering. It's available, it can be done on an à la carte basis with our customers, but we really are doing a great job selecting the options and personalization opportunities that they most want because of the data and research we have on our buyers. It really creates efficiencies in the process. You know, we're gonna hear from Sherri Drew, who's overseeing our design studio business, which is a phenomenal business and differentiator for us. We've been successful now in working our buyers through that whole process within 30 days. Our goal is from the time we have a new contract, is to process our buyers and to be able to have a start of construction within a 30-day timeframe. I'm happy to report we're right on schedule relative to that. Option revenue is really strong. It's a big part of our business, but right now we're on average probably around $70,000 per house. So it's significant. It's a big differentiator, and we're really pleased with the 50/50 mix we have going on. You know, that 50/50 mix on the spec side is largely driven by our western regions and our ability to do phase building. We're beginning to incorporate line building in some of our other areas as well, and that just creates a phenomenal efficiency. What a lot of people don't recognize, you know, even back into the Carolinas, and Gray will talk a little bit about this, a large portion of our business is done through a single-family attached product. When you're building single family attached by nature, you're creating, you know, a phase building model, and so you're increasing your spec opportunities there. We're getting better cycle times relative to that on our spec homes. Then again, based on data and research, we think, we're much more targeted in our ability to deliver the right spec options for that. Currently, our construction cycle time is about 147 days. We're really proud of that. Everybody knows of the supply chain constraints and labor constraints. Our teams are phenomenal at sourcing alternative materials, overcoming obstacles, and again, we're proud that we haven't had to revise our guidance and we're sticking with our guidance going forward. That's approximately 7.4 months on our construction cycle time. Linda, back to you. Okay. I'm gonna borrow your clicker, if that's okay. Thank you. Perfect. We also wanted to give you a deeper dive into some of the virtual tools that we use in selling homes with our customers. When I say virtual, it's really more about virtual reality, because many of these tools we will use in person with customers in a guided experience, either with an online appointment with one of our sales teams or in person at our new home galleries, and we're using a touch screen and showing them a lot of these tools. We use these tools throughout the whole life of the community. They are very important to us before we open model homes, but we continue to have a lot of usage of these tools all throughout the life of the community for our home buyers. The type of tools that we're talking about are everything from renderings, where you can see a fly-through of the community. We often will do that on a lot of our attached communities that have a more complex land plan and building configuration. We'll do virtual reality home tours across all of our floor plans. We have interactive floor plans where customers can see how they can configure a floor plan to fit their lifestyle, changing particular room uses, adding different architectural features within their home design, and they can see the pricing as they're selecting those different structural options within the floor plan. Interior finishes, Sherri, our VP of Design Studios, is gonna share more about what that visualization process looks like when customers are personalizing their homes. We have interactive site maps so that you can see live real-time availability of which home sites are available, what the premiums of those home sites are, and some of the features that that home site would offer. I'm gonna show a video here of what it would look like if we were working together on one of our touch screens or if I was doing an online appointment with you like a Zoom video conference. Let's take a look. We're gonna get an overview of the general lifestyle that's available to you in the community. We're gonna go ahead and talk a lot about what's in the surrounding area, because location is so important to our home buyers that it's all about what's in close proximity for you. Is it work? Is it schools? Is it different, retail amenities, recreation? We can look at things like driving distances so that we can help you understand what that commute time would look like from the particular location. Now we're drilling down into the home site, and we're providing you information about what the premium of that home site is, what floor plans are available on that home site, the elevation, exterior styles of the homes, and then some of the other features about where that home site is located in the context of the overall broader surrounding area. Once we've picked out a particular home site that you might be interested in, we're gonna drill a lot further into what that surrounding area looks like in terms of the street scene view and looking at the exterior styles of the homes of a particular floor plan that you like, which exterior design you're most interested in. We can compare plans and elevation styles side by side to help you make the decision between different floor plans. Getting into the virtual reality side of things, whether it's that customers want to guide themselves through a virtual reality or if they wanna watch it as a video tour of what will look like a beautiful finished model home. For customers who want to put on the 3D, we can do that too. A lot of our millennial customers are very used to this from all the gaming time that they've spent online. Here, we're changing out some of the finishes using the full virtual reality. We'll go into this a little bit more in the design studio section. Then we're also gonna help talk with our customers more about what are the differences when you're buying a Tri Pointe home. What's the experience been with other home buyers? What about our mortgage company, with Tri Pointe Connect, how can we help you through that part of the home buying journey? Then really focusing on some of the above and beyond features that we offer in our LivingSmart program for our customers to have a home that's more comfortable, more lower cost to maintain and own over time. Hopefully, that gave you some idea of what that virtual experience can look like. Some of the benefits, I mean, one of the most obvious ones is we are building fewer model homes today than what we might have done in the past. We can start sales very successfully before the model homes are completed on site. We have a lower broker attachment rate when we use all of these virtual tools to really engage with our customers, give them a lot of transparency and a lot of confidence in the home buying process. Overall, we feel it's a better customer experience when we can provide them this amount of visibility and peace of mind when they're buying one of the most important items that they'll ever purchase in their lives. For just looking at our new neighborhoods that we've opened for sale this year, 91% of our new neighborhoods used our virtual sales tools to generate sales prior to model homes being completed. We sold 405 net homes and an average of 13 homes per new community with the use of the virtual tools. Overall, looking at a higher level, what does this mean from an SG&A perspective on the selling expense side of that? Our broker attachment rate, we've been able to reduce that from 71% the last three years coming down to 61%, and certainly in most recent times, that's an interesting accomplishment when the resale supply has been so low and brokers have been really clamoring to be able to sell new homes. In terms of the compensation, regarding broker expenses, we were at 2.6% of our home building revenues back in April of 2019, and today we're at 1.6% of revenue. Overall, selling and marketing expenses also been able to accomplish more efficiencies there, going from 7.2% in April of 2019 to about 4.2% of revenue today. We certainly recognize that we've been in strong market conditions for much of that time. Our revenues have grown in that time, but at the same time, we also anticipate that a lot of the tools and the technology and the process that we have to work with our home buyers will continue to provide lasting value for our SG&A expenses into the future as well. From here, we're gonna take a deeper dive into the design studio experience with Sherri Drew, our VP of Design Studios. Just as closely as we work with our partners at Tri Pointe Connect on the mortgage side, likewise, we work very closely with the design studio partners as well. Thank you, Linda. Thank you all for being here. Had a great time last night talking with Deepa and Emma quite a bit about this experience and what we offer to our customers. I'm excited to share that with you today. I'm also excited to take a tour later through the design studios after we talk a little bit about today about the experience we create. Our design studios in general, yes, we have beautiful facilities, and we have great studios across the country. We have best-in-class design studios. Several have won national awards for best design studios in the country, and many have won local and regional awards in their areas. Create a better market position. I know our Dallas market just opened their new design studio a couple months ago, already got recognition for that in their market, so helps them with their brand name and also getting out there in front of customers. Our design studios are not just about the location itself, the building itself, it's also about the experience that we create there. We have a lot of specialty things we do with our customers when they come, even our customers that maybe don't have the budget or don't have the funds to add options to their mortgage or have the cash for those options. They still have standard included color choices and choices that we like to give them a design experience, assign them a design consultant, and take them through that process no matter what their budget and their funds available. Here are some of our other locations. San Diego, Bay Area, OC/LA, Anaheim. Prior to that, we were showing some in Texas, Austin, some other areas there. With the digital tools that Linda spoke about, we also have an online digital journey on the design studio side. When a customer contracts with us and they sign their purchase agreement, the first thing they're gonna get in their email the moment they step out of that new home gallery is a login and password for our online design studio experience. What does this do for us? It creates transparency in pricing. Customers can go home the moment that they sign their purchase agreement, look at the options available to them in their community, the pricing that those options are set at, and then create wish lists. They create a wish list of products that they're interested in in talking with us when they come into the design studio, meeting with their design consultant. Is it ovens? Is the kitchen important? Primary bath, cabinetry. We have visualization tools in the online design studio. They can change cabinets. We'll go into that here in just a few minutes. Backsplashes, counters, and see what all those items look like as they're in the comfort of their home with their spouse and their family making these decisions. Prepared home buyers. Our online design studio, Tom talked a little bit about our cycle time and the fact that we're able to finalize our customers within a 30-day window of signing their purchase agreement. In doing so, we're able to help support our construction teams and our sales teams in closing those homes in a timely manner, getting them built on time, and staying within our construction timeframe. Then those customers are able to research their warranty and the products that they're interested in. We have a lot of detailed information from our manufacturers and our national accounts that we deal with across the country that provide warranty information. They provide to us, specifications, reviews, things that customers are interested in researching and learning at home before they come in to visit with us. We're gonna play a little video here on our finish visualizer. Our finish visualizers are available to our consumers on our presale links as well at our community level. If you're able to go into a community on our website and you're a home shopper, you can go through the presale link and see what options are available to you, and you can also try them on per se. You can try different cabinet colors, different backsplashes, counters, and floors. But what this also does is it helps the consumer have a confidence level in the dollars they're spending. Tom mentioned that we're roughly, on an average, about $70,000 per home site in our option revenue. We have a pretty good margin on that, which we'll talk about in just a couple of minutes. But part of that is giving them these digital tools and experience and being able to visualize those products together before they're signing off on that dollar amount and in that addition to their home. It's hard for customers to understand what those things may look like together. The design consultants are good at visualizing that, but getting our consumers to understand and feel comfortable with those products being installed is where the visualization tools come in. Our online design studio has the different options available that you just saw, but also allows them to try them on, and then we continue that experience in the design studio. When we're working with a consumer there, we'll see that you can actually try those products on while you're touching and feeling them in this space as well. Our collection strategy also known as packages. I know Emma and Deepa and I were having a conversation last night. Well, some builders are offering packages. They are. They sure are. We're doing both. We are offering packages, and we're calling them collections at our entry-level and move-up communities. At our entry-level communities, you'll talk to some of our division presidents later and hear from them. Some of the collections are at an entry-level community, and maybe it's only collections that are available. I will tell you that we go through a lot of data and reporting, both from our own internal items that are selling, but also our manufacturers. We're asking them for not only what other builders are selling in those markets, but we're also asking them for what's selling in the retail stores. If I'm a consumer and I can go into any store and buy any faucet that I want to, what am I picking? If I can buy any cabinet that I want to, what am I choosing? I wanna make sure that we're offering those products in those specific markets so that the consumers that are coming in are expecting to see the latest trends and the things that they could buy anywhere. Our program is, SKU-wise, not limited. You'll see when we go today, there's a lot of à la carte choices. There's lots of things there, but we have lots of data to help us create these collections and these packages so that consumers aren't feeling like they're not getting something that they could get elsewhere. The packages you can also visualize in our visualizer tool, so you'll see a whole room change. You might go from one package to another. You're gonna see the whole kitchen change with the colors and products that are available in that collection. One thing the collections have done is it's helped us reduce our cycle time. We talked about finalizing customers within 30 days. When we do a collection appointment, it's one appointment, and we're getting them to come through the process a lot quicker. Historical and forward-looking option results, what does that look like? Over the last couple of years, 2020, 2021, and 2022, you can see our gross margin on our options is increasing. We even last year, with all of the cost increases that we took from our suppliers and manufacturers without warning, you probably heard about some of that. Having to accept those, we've already sold the options to these consumers and had them sign off, and then we're getting cost increases from our manufacturers. That's okay. We did quite well with that. We had worked with our purchasing teams to look ahead and try to anticipate what categories they would have cost increases in and go ahead and increase those costs in those retail price to help kind of close that gap. For our revenue, there are some factors that influence results, and you can see them here. Product mix, single-family attached versus detached, so the size of the home, the options are available at different communities. The included spec level, so where we're starting out with products, maybe you have an included hardwood floor, so you're not gonna get as much of a flooring upgrade as if you had a standard tile carpet vinyl floor wanting to go to wood floors. The option offering in general at that community could influence results. The home buyer profile investment ranges. What are the consumers coming in with as far as budgets and what they can add to their mortgage? We work closely with TPC and the mortgage companies and sales to say, "What is this consumer's budget?" We've been very fortunate the last year. Lots are coming in with cash. They're selling their prior homes for more than they thought they would, and they're Linda kinda talked about the importance of the home and the kitchens and the different areas that they're living in. I think a lot of them, during the pandemic, realized, "Hey, when we're stuck in our house and we have nowhere else to go, we want this to be a phenomenal place." A lot of the option upgrades have come from over the course of time understanding how they're gonna use their kitchen, understanding where the heart of the home is. Are they gonna entertain? You saw the segmentation that Linda went over. Very important for them to spend those extra dollars there. Then our average sales price can also influence those factors. I'm gonna hand this off to Glenn. One thing, Sherri, some phenomenal results. Sherri and her team have worked really hard over the last three years to position us where we are with our consumer. We're moving towards $500 million in revenue that you saw through our design studio business, which is just outstanding. We are in the process of building out our final four studios, which will give us a builder-branded studio in every one of our markets. There's a specific formula to what we do, and we're gonna have that capability in all of our market areas. Great job with that. Glenn? Thanks, Tom. I'm Glenn Keeler, I'm the Chief Financial Officer. I'm glad to be here with everybody today. I'm gonna go over our land position and what that means for our ultimate delivery growth projections over the next couple of years. Some of the summary points we wanna go through today, like Doug and Tom said, we're in the best land position we've ever been in as a company. As of March 31, 2022, we owned or controlled nearly 42,000 lots. Of those, 47% were controlled. Again, as we said, that gives us 100% coverage for our planned deliveries through 2024 and a pretty good coverage actually for 2025. We plan to open approximately 250 new communities over the next three years. That's inclusive of the 90-100 for 2022 that we gave guidance on. That means an additional 150 between 2023 and 2024. As we discussed on previous slides, we have a really favorable land basis. Over 65% of the lots we own or control were contracted and put into place prior to 2020 or in 2020 or prior. One of the key focuses we've had is geographic diversity, and we've talked a lot about that, and that's really coming to fruition. By 2024, you're gonna see our active communities, 40% of those are gonna be located in the West, 42% in the Central, and 18% in the East, and we'll show you how that's changed over the last couple of years. We're targeting the 10% compounded annual growth rate in our deliveries through 2024. You're gonna see how our average sales price, like we said, we're really focused on entry-level, first move up, more attainable price points, and you're gonna see that in our average sales price over the next four years. Talking about our lot summary. Again, 42,000 lots owned or controlled. When you looked at the owned total, that's 22,000 lots owned. If you were to go back three years to March of 2019, that number is basically the same. We've been able to work through. You'll see California is down as we've been able to monetize our long-term California assets, and we've been able to redeploy some of that capital in growth areas like Texas and the Carolinas and Phoenix, some of the divisions you're gonna talk to today. What's really changed, our overall total lots under control has increased 57% over that same three-year time period. It's because our controlled lot percentage has increased significantly over that percentage, and that's been a very strategic focus of ours over the last couple of years. Talking about land vintage, 70% of the lots we own or control in the West were put into contract in 2020 or prior, 50% in the Central and 70% in the East. A really good land vintage for our lot pipeline. Again, wanted to highlight some of the changes and intentional things we've done regarding land over the last three years. If you look, I can't see that. 85% of our lots owned as of March 2019, that has reduced to 53% by the time you get to March 2022. It's a pretty significant change. 82% of the lots we owned were in the West back three years ago. That very intentional focus of growing outside of California has resulted in a bigger shift, and only 52% of the lots now are in the West. What does this mean for active selling community growth? We ended 2021 at 112 active selling communities. The midpoint of our 2022 guidance is 155. That's gonna grow to 195 by 2023 and 205 by 2024. That's a 22% compounded annual growth rate by the time you get to 2024. Again, the other thing to highlight here is we're going from 60% of our communities in the West in 2021 down to 40% by 2024, 42% in the Central in 2024, and again, 18% in the East. The East is growing significantly when you look at the total of the communities. We had 16 active communities at the end of 2021, and that's growing to 37 by the time we get to 2024. What does that mean for new home deliveries? We ended 2021 roughly 6,200 deliveries. We've guided to 2022 at the midpoint of 6,650, and that's growing to 7,900 in 2023 and 8,300 in 2024. Again, some of the geographic diversity stats we wanna point out, you know, the West was 68% of our total deliveries, with 42% of that coming from California. That's down to 32% in California in 2024 and 51% overall for the West. You can see the growth in the Central going from 21% in 2021 to 34% in 2024, and again, growing in the East to 15% from 11%. Overall, that's a 10% compounded annual growth rate. Then other thing we wanna point out is like Tom and Doug mentioned, when we build our plan, we build around our normal, you know, underwriting absorption criteria. When we built this plan, knowing we were going into a strong market in 2022, we built it on an absorption of 4 for the whole year of 2022. 3.7 is the absorption in the plan that results in these delivery numbers in 2023 and 3.6 in 2024. Those are our normal underwriting metrics that we've used. Obviously, actual results will depend on market demand that happens in the future, but that's how we've built these projections. Lastly, on our average sales price, we ended 2021 at $639,000. That is growing to the midpoint of our guidance range of $685,000 in 2022, and that's mainly due to price appreciation that we all understand and have seen in the market. Our intentional focus on more first time move up and entry-level communities, especially in our expansion into the Carolinas and Texas and those new communities that we're opening over the next, you know, three years, results in a lower ASP. We're going to $630 in 2023 and $600 by 2024. Again, we're focused on those attainable price points, even in places like California. You're seeing California going from $750 down to $700 in 2024. Again, that's more entry-level, first move up, still focused on core locations, but attainable price points, attached products like Doug and Tom mentioned. That's how we're achieving that ASP. I think, we're actually ahead of schedule. I think we're gonna go for a break, and then we're gonna talk to our divisions after that and then finish with some remarks in Q&A. What do you say, Linda? It's 9:25 A.M., back by 9:45 A.M.? All right, 9:45 A.M., we'll be back. Glenn, can we get- Well, we're gonna get into the fun stuff now. I always kid these guys that the best job in the company is being a division president, because that's where all the action is, right? Somebody asked me yesterday, why Phoenix? I was talking to Joe yesterday. We could be in Houston and be really hot and humid, right? Yeah, I figured we'd be hot and dry here in Arizona. You know, the reason we talked about this at the beginning, some of my early points is really emphasizing the growth, you know, from Arizona, East Texas to Carolinas. You know, what I love about these guys up here is they really embody the culture and the passion that we have in the business. The key to being successful as a division president, and they all know this, is the ability to attract and retain people, especially in today's market is really, really challenging, making sure you can continue to retain people. We actually have one of the lowest turnover ratios in the industry as a company, so we take a lot of pride in that. It's because of these guys and how they run their business locally and the culture and their relationships they've made in each one of their markets. Again, we're gonna talk about Texas, Arizona and Carolinas. Again, that's part of our overall plan that we started several years ago as far as growing into more capital efficient, more attainable price points, which I think is gonna bode very well for us as we go forward into, you know, the next couple of years when things are a little more unsettled. With that, I'm gonna turn it over to Sean, who's gonna talk about DFW. Sean? Thanks, Doug. They told me before I stood up here, "Hey, no pressure, but you're batting lead off." I'll see if I can leg out a single, and I'll let the heavy hitters behind me bring me home. As Doug mentioned, my name is Sean Ricks. I'm the Division President for our Dallas-Fort Worth division. Just briefly a little bit about me. I started in the industry in 2004. I started working with Tri Pointe in 2013 in connection with our acquisition of the Weyerhaeuser group of builders. I joined the Dallas division in early 2019, shortly after our acquisition of Dunhill Homes, which represented our entrance into the Dallas market. Since joining the Dallas division, I've really been trying to lay the groundwork for our future growth, and that includes building a high functioning leadership team made up of tenured home building professionals, as well as building a strong land pipeline. Doug mentioned it earlier, when I came to Dallas, my goal was to have the Dallas division be a top 10 builder in the market. That a lot of that starts with our land and finding strong land positions. I'm excited over the next few minutes to share with you guys our growth strategy in the Dallas division, talk a little bit about the strength of our land pipeline, and then also talk about our strategy for opening 28 entry-level and first move-up communities through 2024. Up on the screen, there's some select market data for the Dallas-Fort Worth market. As many of you know, Dallas-Fort Worth housing market is one of the largest housing markets in the country, currently annualizing approximately 45,000 new home deliveries. That's up from approximately 35,000 in 2019. Dallas is a big growth market. You know, employment growth in Dallas over the last couple of years and really over the last decade has been pretty tremendous, and a lot of that has been driven by relocation activity, both business relocations, but also what I call family unit relocations or in-migration, people seeking to find more affordable places to live. I'm actually an example of that. I moved from Southern California to Dallas about three and a half years ago, and I've had three different family groups of mine follow me to Dallas. A lot of that is just escaping. I won't say escaping, but you know. You can say it. Okay, escaping California. You know looking for a more affordable place to live. On the overall employment front in Dallas, we're now well above pre-pandemic levels. Over the last couple of years, we've seen a significant number of well-paying white-collar jobs enter the market. Again, a lot of that is driven by business relocation activity. We've you know like a lot of the other Texas markets been the beneficiary of some large corporations moving to Dallas. Companies like Charles Schwab, AECOM, McKesson, CBRE, and others now call Dallas home. In addition, a number of large companies have made significant investments into the market to grow their existing operations. All of that driving a lot of employment growth in DFW. You see median household income at approximately $80,000 per household. That's up approximately 11% from 2019 levels. Again, you know, I talked about in-migration. Median home prices in Dallas-Fort Worth have gone up pretty significantly since 2019 levels. Median existing home prices at $380,000, that's up about 38% from 2019 levels. Median new home pricing at just under $400,000, that's up approximately 21%. But still relatively affordable as compared to some of the more expensive coastal markets, and we're seeing a lot of in-migration from those markets still. Here's a heat map that shows the location of our existing and our future communities through 2024. The green stars represent our current communities in Dallas-Fort Worth. The blue stars represent our future communities through 2024. We've overlaid this on a heat map, so this really shows where a lot of the growth and new community construction is going on in DFW. Since coming into the market in Dallas in 2019, you know, I just wanna explain a little bit about our land acquisition strategy. As Doug and Tom mentioned earlier, we're really focused on the core markets, A locations, close to major employment centers, near major transportation corridors and in locations with good schools. That has been our focus for our land strategy. We've been primarily focused on entry-level and first move-up. In today's market in DFW, those are ASPs between $300,000 -$600,000. Another piece of our land strategy has been to target approximately 60% of our lots from self-developed opportunities, with the balance of the 40% coming from lot takedown or option sources. We target for the self-developed opportunities, community sizes between 100-500 units. For our larger self-developed opportunities, we will often implement land bank strategies with the help of Julie. That's just a more capital efficient model for us. Deal sizes larger than that 500-600 unit range, we'll often seek to implement a joint venture structure, either with a builder partner or another strategic partner, and oftentimes we'll put some level of project financing on that deal. We've been implementing that strategy since 2019. We've built a very strong land pipeline of over 3,500 lots owned or controlled, again, really in those core submarkets. A lot of the deals we put under contract, we did so in 2020 and through early 2021. A number of those are large self-developed opportunities that generally have higher gross margin profiles in the range of 23%-28% gross margins. We feel very good about the strength of those communities and our land basis and those opportunities relative to current market. As I mentioned earlier, we are targeting to open 28 new communities in DFW through 2024. 13 of those coming this year, some of which are already open, and 13 coming next year. Over the next 18 months, quite a bit of growth and quite a bit of activity for us in DFW. Again, focused on those entry-level and first move up price points, with gross margins ranging anywhere from 19%-28% for those new communities that are coming online. Next, we wanted to provide a little bit of a case study. This is a community I'm very excited about. All of our communities I treat as my children, but this one I'm especially excited about, because I think this is gonna be a real flagship for Tri Pointe in the Dallas market. We worked with a well-known developer in DFW that approached us, in part because of our reputation for our design, and willingness to design product. We were able to work with them in one of their existing planned communities to develop a higher density product type, slightly smaller square ftage, in order to target more of that entry-level premier suburbia customer. The opportunity was in Harvest. That's a Hillwood community. Harvest is about a 1,200-acre planned development that launched in late 2013. It sold over 2,500 homes in that time. At build-out, it will be over 4,000 homes in the community. It has been one of the top communities in DFW since inception. It's won national awards for its design and amenities in the community. It fits very well within our land strategy. It's in an A location. It's close to major employers. I've highlighted two of those here. It's within 10 mil of the new Charles Schwab headquarters. It's within 11 mil of Alliance Texas, which is a large employment center within DFW. It also has excellent on-site schools within walking distance of our section of the community. This has been a very popular community for families. There are over 2,000 children under the age of 18 in this community. It's also been a very popular destination for relocation buyers. Again, a personal connection, having moved to Dallas three and a half years ago. I actually know three families from California that relocated and bought within the Harvest community. In 2021, 27% of the customer base in Harvest were relocation buyers, a majority of those coming from California. Year-to-date average sales price for Harvest has gone up, and it's at that mid-$500,000 level, and that's important for the next slide. In 2020, we began working with Hillwood to explore different product types that we could bring into the Harvest community. They had approximately a 64-acre parcel within the community that had very favorable zoning. The challenge they presented to us was to identify some higher density product types that could achieve that low to mid $300,000 price point. They had seen prices within the Harvest community rise, and there was a gap, and that they wanted to help us to help them fill. In addition, Hillwood really cares about placemaking, which is very much in line with our philosophies, and they care about the exterior aesthetics. They asked us to look at product types and architectural styles that did something a little different than Texas traditional. I've got a couple of examples of Texas traditional there, but that's heavy masonry, heavy stone, which is beautiful, but they asked us to bring in some more transitional and modern farmhouse styles, and you'll see a couple renderings of that on the next page. The other opportunity that we've really been trying to take advantage of with our products since coming into DFW is more of a focus on outdoor living. We saw, especially at the entry level, that there was kind of a gap there, that there wasn't a focus on outdoor livability, and that's been a differentiator for us in the market, especially at those attainable price points. Especially since the pandemic hit, customers are much more, you know, they want that outdoor livability. We've really been able to take advantage of that, and that was something that was very important as we started designing this product. After working with the Hillwood team, for more than six months, we proposed three different product types to bring into the Retreat at Harvest. The first is a 35-ft front entry product that's on a 45-ft wide lot. We achieved greater density there by making the lots more shallow, moving the home up on the lot, and to achieve that greater density. We think this product is gonna play very well with those young families that are entering Harvest. The second product type that we proposed was what we call a two-pack. Those are detached units, but that fit together and create higher density. Again, the advantage we saw with this product type, so a 40-ft alley-loaded where the garage is in the rear of the home is a very common product in Texas. However, the way that those products lay out don't really allow you to take advantage of the outside yard space, right? With this product, it's a front entry product. The cost to build is approximately the same. You get rid of the alleyway, give all that space to the backyard, and you can create that connection between the rear yard spaces inside of your home. We think this is a much improved product type, and we think it'll play well. The third product that we recommended to Hillwood was a duplex product. Again, in Texas, or in Dallas at least, not as much duplex product. There's a lot of town home. The advantage that you can achieve with duplex product is, again, access to exterior outside living and making that connection between interior and outside your home. After working with the Hillwood team, proposing these three product types, they were very excited by what we showed them and decided to award us half of the position in the Retreat at Harvest. Really, you know, they liked how our product segmented. They liked the design of our product and that we were willing to design new product to bring into their communities. We currently project that average sales pricing will be between $400,000-$525,000, again, below the averages for Harvest. We project the gross margin in this community to be 19%-21%. Generally, for a very low risk opportunity like this, where we're doing quarter—we structured the acquisition on a quarterly lot takedown basis, we generally target gross margins 18%-20%. This is slightly above that. Here we've got some representations showing the growth that we're projecting for the Dallas-Fort Worth division. We're targeting 40% compound annual growth rate in deliveries from 2021 to 2024, going from about that 300 deliveries last year to 800 deliveries in 2024. We own and control 100% of what we need through 2024. I spoke about it earlier. At that 800 unit level, that'll put us at top 15 builders in the market based on today's deliveries ranges. Well on our way to achieving our goal of being a top 10 builder in the market. Communities, you can see we ended last year with five active selling communities, and that will go up to 22 active selling communities by the end of 2023 and end of 2024. Home sales revenue, similar growth story there. Just to give you guys a flavor for pretax income levels. In 2021, we had pretax income of approximately $8 million, and in 2022, we're projecting our pretax income at around that $23 million mark. Again, at stabilization, in order to be a top 10 builder in the market, we have a long-term delivery target of between 1,000-1,200 units. We have the land pipeline to begin achieving those levels. Good job. Thanks. Before you turn it over to Bryan, Sean's been a little bit very humble. We've talked about organic and acquisition growth opportunities and to get into the, you know, you've got Houston and Dallas, the two largest home building markets in the country. We acquired a little builder in DFW, and I think I was talking to David about this at U.S. Bank. Like, I mean, we found a lot of bones buried in the closet, so we thought we did all our due diligence. The difference between organic and acquisitions is sometimes you run into a few speed bumps, as I keep using that phrase. Sean has just done a wonderful job. You know, in Dallas and Houston, you know, they say you better bring a gun to the fight, not a knife, because it's highly competitive. Sean has just done a wonderful job of melding into the industry in DFW, which is a huge, obviously a huge market, but also building those relationships. I've gotten notes from Ross Perot Jr. and Fred Balda. I mean, this guy has just done a wonderful job of really connecting with everybody in the DFW market. Yeah, hats off to you. You've done a great job. Thanks, Doug. Yeah. Well, with that, I'll turn it over to. Tough to follow, huh? Well, he's got to bring me home still. Yeah. Hopefully, I hit a single. Thanks. Yes. Yes. All right, I may go cross court if that doesn't make anybody mad. My name is Bryan Howell, and I have the pressure 'cause I am bookended by the two rock star Texas VPs, so I will try to do my best today. But I'm Bryan Howell. I'm the Austin division president. I've been in home building since 2006. I had the great fortune for taking the helm in Austin for Tri Pointe in early 2020. I had the misfortune of starting a week before COVID. But they say whenever you go into a new adventure, start with your biggest hurdle first. Once we got past that COVID hurdle, it's been nothing but smooth sailing since, so it's been great. To pick up a point Doug mentioned earlier that I think is so important, having worked for other big national builders, you know, I report to Doug, our CEO. Doug's a land guy like us, and he loves getting on land. It's such a great advantage for me when I'm talking to a land seller or a land developer when I can say, "Hey, my CEO's been on your property. He loves this deal." It really gives us a leg up versus the competition. I wanna appreciate Doug for always doing that for us. With that. I paid him to say that too. You are getting paid to say that. That's a good point. Yeah. Oh, all right. Just very similar to Sean, I'm gonna give you some stats about Austin, give you my case study, which talks about how our premium product drives results in Austin, and then talk a little bit about our growth path as well. Got the clicker down. It's a good first step. Here's a few stats here on Austin. A couple that I'll take you to. Look at that. Laser. Love it. One thing about Austin, obviously, is we've had amazing population and job growth, right? More importantly, we've had that high income job growth. You can really see that right here. Austin actually has, of all the Texas big markets, the highest median household income above 90,000 there. Obviously, I'm sure a lot of you hear the stories. The technology push that we've had come to Austin has just been immense. Obviously, having the corporate headquarters for Dell, for Oracle, you've got Apple, Facebook, Google, all have giant regional campuses in Austin now. Tesla obviously opened up their fourth Gigafactory earlier this year to great acclaim in Austin. Obviously, Samsung just recently announcing their $17 billion semiconductor plant, going right outside of Austin. As we continue to see that technology push come to Austin, we believe it'll continue to fuel that job growth for many years. One other key stat I would point out over here on the single-family permits, there's only three markets in the country that are actually building more homes today than their prior peak, and that's Dallas, Nashville, and Austin. Austin, actually, back in our prior peak, we were at 18,000 permits. You see today we're at 26,000, so 40% above our prior peak, which leads the nation and just shows the amount of growth we've seen from Austin. All right. Then very similar to Sean, you can see here kind of our heat map. Again, our green stars here are active communities in Austin. The blue would be our future. For those of you that know Austin, you know I-35 is the major north-south highway that comes from San Antonio up through Austin, Dallas, and all the way up the U.S. Obviously, you can see all the growth in there. What we anticipate happening in many markets, obviously, is these green stars, our communities close out and our competitors close out. That red area will continue to move over into the blue where you see our communities. One exciting piece I'll just point out to you, mentioning that Tesla Gigafactory here east of Austin, this new community that we have, only six minutes from that Tesla Gigafactory and all the work they're doing there. Just to give you guys a fun stat, that Gigafactory is over 200 acres that they have in Austin, but tax records show that Tesla owns 2,400 acres in that area. Again, it speaks to how much more, not only their suppliers that are coming, but a lot of their ancillary businesses that may come as well. All right. Looking at our lot summary, really, early on, Austin was a startup as well back in kind of 2016, 2017. We really kind of picked up steam in 2019 and 2020 and, really built this great pipeline, almost 2,700 lots owned and controlled, and over 50% of those in 2019 and 2020. In Austin, originally, our division was doing a lot of smaller finished lot deals. As I mentioned in 2019 and 2020, really picked up steam in starting to build out our land team, being able to do self-developed deals. Those became kind of the deals we were focused on over the last few years in building out that pipeline. One of the other exciting things is most of our product today is in that first move up segment. But in many of our new communities, we've incorporated a duplex product. We'll have a section of our kinda typical first move up, but we've added a duplex product that we think we can still build as a premium product for buyers, but still hit some of the affordability that's really tough to get to in the Austin market. If you go back 8-10 years, that wasn't the attached product, wasn't something you would see much in Austin, but over the last three or four years really become accepted and about the only way you can drive down to some of those more attainable price points. As we bring those new communities on, we believe we'll be somewhere in that mid- to $300,000-$600,000 price point range. Today we're a little over $500,000. Again, that duplex product helping us to bring that price point down a bit. All right, jumping into our case study here, I'm gonna talk a little bit about how our premium design drives results, and I'm gonna talk specifically about a community called Bryson. You can see the amenity center up here and some of the kinda Texas Hill Country charm here in the bottom picture. Bryson is a planned community, about 1,100 total lots in Leander, Texas, which is about 30 minutes north of Austin, and the number four sub-market. It's done by Johnson Development, who's a very well-respected developer in Texas. Typically, Johnson's known for doing much like Tri Pointe, kind of a premium brand in their master planned communities. This community very highly amenitized and onsite elementary school as well. Quick sidebar, the only two careers that require you to have perfect 20/20 vision, Naval air fighter pilot and home building division president, because we have to look at maps like this all the time. I'll try to walk you through this a little bit. Here's the whole community, all 1,100 lots. You've got 183, which is a major north-south corridor, and then you've got the main collector road here that bifurcates the community. Just to give you a little background, the existing Bryson community was all on the left-hand side of that road, kind of four or five builders, very traditional, 40, 50 ft wide product. Again, kind of a premium product in neighborhoods, the Leander submarket. Johnson went out and they contracted with another national public builder, and they did 45 ft lots and all 50 ft lots, probably 350, 400 lots in here. As they were doing this development, they had this section that was kind of built into a hillside, and so it was very constrained on the amount of land they had. The section ended up being very unique in the sense that in Texas, most of our lots are about 125 ft deep, and that gets you kind of a 35 to 40-ft deep backyard. These lots were 60 ft wide, a little wider than normal, but only 90 ft deep. So that creates a very, very tiny backyard. When they went out to the builders to kind of talk about this section, you know, the other builder, some of the other large builders, you know, they only wanna do kind of their traditional product that they can reuse in many communities. They don't wanna design new product just for this section. Then some other builders came and proposed to Johnson that, hey, you know, that's really a compromised lot, so we're really gonna have to design a product that's somewhat, you know, very simplified to try to hit a lower price point, because they thought buyers would really discount that. With Tri Pointe, we came to them with a little different idea. We said, "Hey, we think there are really buyers that wanna be in Leander, wanna be in this community, and they'll forego the backyard, because they've got an amenity center, right across the street here, and they've got the new school coming in right here." But they still want a premium product, and that was our suggestion. Johnson really liked that suggestion, and so, they decided to go with us on this deal. We were really excited. Houston has. Our Houston division has an incredible relationship with Johnson, and so this was our first foray to try to really impress them. What was the challenge? The challenge was, with these 60-ft wide, 90-ft deep lots, could we create a product that was still a premium product that took advantage of the width, but could somehow kind of overcome that small backyard? Again, our goal here, accommodate young professionals, future families with small children who would be drawn to the location by the amenity center and future school, but who would forego the backyard size. They say a picture is worth 1,000 words, so I'm gonna kind of give you a little a showcase here of what that ended up looking like. Here on the left, you can see this is our model. What we tried to do when we designed our product, we're really fortunate at Tri Pointe, we have an on staff architect at corporate who's been in the business forever, who's fantastic, who helped us design this product. We said we wanted to start with the elevations, right? In Texas, our typical elevations and every buyer is different, but it kind of goes stone, stucco, brick, right? In terms of what they really like to see or what they consider a premium product. We went with all stone stucco elevations, where our competitors typically were all brick and stucco. In addition to that, you know, again, most of our other builders and competitors have 8 or 9-ft ceilings. We decided because we were gonna have this kind of wider product, but shorter, that we would go with a 10-ft plate, right? Really give it some openness. One of the other great things about that is when you have kind of a 9-ft ceiling, you have your typical 6 ft 8 inch doors, right? In our houses, when you have that 10 ft ceiling, we pop to 8 ft front and interior doors. What you then get is when you walk in, if you think about it, to our competitor's house, they're 35-40 ft wide. It's a little more of a tunnel. You don't quite have that same openness, right? In addition, we've got the larger, more expansive windows to let in more natural light. Again, to give you that picture, you now walk into our home, your periphery takes you out wide. You get these giant ceilings, great doorways, and a lot of big windows to bring in that natural light, right? It also lets me use my hands a lot in this presentation, which is good too. Sorry about that. Again, a great look here, and I'll give you a little idea here on the interior. You can see here our kitchen on the left. Again, some of our standard features are just kind of a better than. You've got the 42-inch cabinets versus our competitors that have 36. You can see here we've got kind of your cooktop, your vent hood, whereas our competitors would have more of a slide-in range and microwave kind of look. Finally, we also did as a standard, to take advantage of that width, we have covered patios, kind of as Sean mentioned, especially in Texas, to really have that outdoor feel. Even though you have a small backyard, you'd have kind of a twice as big covered patio to enjoy the Texas summers, than some of our competitors. I should also note, our competitors in this community were going with the inventory home, as Doug mentioned earlier, kind of all inventory home strategy. You have no options, no changes that you can make. What you see is what you get. We decided to go more with that to-be-built strategy, where buyers could go to our design center and kind of personalize their homes. You can see here on this kitchen, you already get a lot of standard features that are better than, if you will. Then you can also personalize even more. You can get the cabinets to the ceiling with the glass front doors. You can get the pendant lights and other things to really personalize your homes. Finally, one more picture, just of the primary bedrooms. Again, you can see hopefully that, you know, the more windows bringing in that natural light and the higher ceilings, and again, some of that personalization where you can pick trim options and a chandelier in your bedroom if that's something that you like. Just some other differences there. One thing to point out here, maybe a good spot, and Carl, you and I have talked about it a lot. You can see between these two case studies. Our lane that we work in at Tri Pointe, it's kinda to ourselves, so to speak. You know, whether it's Hillwood, whether it's Johnson, they know that we'll take the challenge on to design product to fit the consumer profile. A lot of builders will. We reuse a ton of product too. Listen, I mean, you build the same home over 10 or 20 years, it's gonna get really cost effective. I mean, I know that. There's a way to differentiate yourself in this lane that we're in. I mean, you've got, you know, America's luxury builder at the top over everybody, and then we're kinda in between. Everybody else seems to be in that 400 ASP as a company. These are great examples of how our company, it really loves to focus in on that premium brand strategy and really, you know, it kinda has a lane to itself because I think you'll probably hit on we or talk about, you've got another opportunity here because of that great results that you've had. I played Doug the sales back, so it's a great segue to my next point here. Yeah, thank you for that. Yeah, so what were the results of that, right? The results were, our new product was a grand slam with our home buyers who instantly felt the openness and premium quality of our offering. We opened in January of 2021, and really, just like Doug said, we actually carved out a niche. We had this amazing priority group, which in Austin in the past wasn't something we were very used to. We had this incredible priority group, and what we found as we talked to our first initial buyers and talked to that priority group is a lot of out-of-town folks from California, from Washington State, and they had big checkbooks, and they wanted a premium product, and they were not afraid to pay for it. That allowed us to open up with pricing that was way above our competitors. We had lot premiums in addition, because none of our homes had lots directly behind it that was higher than our competitors'. We also had that additional optional revenue from those buyers being able to go to our design center, like Sherry said, and spend $40,000, $50,000, and $60,000 more. We're really excited. We had great sales. We were able to continue to aggressively raise pricing. You know, buyers continue to tell us that they really like the premium offering that we gave there. That gave them something else they couldn't find in other places in the market. Lucky for us, they were not afraid to pay for it. As we talked about, you know, when we underwrote this deal, it was a finished lot deal, very safe community, you know, an A+ location. We underwrote it around an 18% gross margin. Because of all that pricing, we were able to, again, in the community, along with the lot premiums and the option revenue, as we close homes today, we're sitting here at 35%+. Just a great home run, not only for our buyers, but for our division. As Doug alluded to, the big home run for us is the reason we came in here with this premium product was to try to impress Johnson Development, right? They knew of our reputation from our Houston division. Thank you, Joe. We wanted to build that in Austin. After walking our models last year, Johnson came to us and they said, "Hey, we have another section in this community of 45-ft lots, more traditional lots. But if we talk to you about that section, would you guys also bring a premium product to that section?" And we said, "Absolutely," and even better for us because we had that lot size and that product in other communities. Shortly after walking our models, it was a great day for us because they came back and we contracted on additional 70 lots in the future sections of Bryson. Great home run for us. All right. Talking a little bit finally just about our growth here in Austin. Again, we started as a little smaller division. You can see here. In 2021, 195 deliveries. This year in 2022, we're hoping to bump up to 300 deliveries. Lucky for all of us builders here, those are in the ground today, so we're excited about that. Our growth path going to 475 and 660 lots thereafter. Just like Sean said, the great thing for us is we have all of those lots in our pipeline today, so we can continue to focus on those, and we can be still in the market, but very selective on the land deals we're looking at to make sure we're paying at the right price, the right structure, and the right deals for us. So just puts us in a great spot. Again, 50% compounded annual growth over the next three years. So if I would have said CAGR there, Glenn would have thought I was really cool, so sorry I missed that opportunity. Then again, you know, the biggest thing for us home builders, again, we're seeing that amazing price appreciation from our great product. I mean, just to give you an idea, even though we're only moving from 195 deliveries to 300 deliveries in 2022, what that looks like on a pre-tax basis, you can see the great revenue growth. In 2021, we made about $11 million on those 195 deliveries. On the 300 deliveries, we project we're gonna be north of $35 million in pre-tax in 2022. It just shows the amazing growth we're able to capture there. Then finally, you know, our long-term delivery target, we think if we get to around 750, at today's standards, that would put us kind of in the top ten in Austin. Obviously highly competitive with 40 of our friends fighting us for that in there. That's our goal, hopefully in 2024 and as we move into 2025, to try to hit that top 10 target. With that- I always like giving little stories about these guys, and Tom and I don't bat 100%, right, Tom? Yeah, we're only as good as the people we have, the 1,400 team members at Tri Pointe. We tried more of an organic growth strategy in Austin, but we were very fortunate. Bryan's very humble, but being from Austin, he also spent some time at Standard Pacific, which I think a lot of you remember was probably a comparable home builder in the lane that we operate in. He really appreciated that. He's got a little bit of a numbers background too, so he can throw around CAGR pretty well as well. His relationships have that he has in Austin has allowed us to control that land in one of the more meaningful markets in the U.S. Congrats and great job. Thank you much. With that, I think I will turn it over to Mr. Mandola. Yes, sir. Good morning, everybody. My name is Joe Mandola, Division President of the Houston division. I'm a native Houstonian and been with the company for 29 years in June. Got a lot of tenure as well as my senior management team. My senior management team has got 19.5 years with the company as well. We're kind of an entrenched group and we know the market well. We've got a lot of experience in the market. We've built a lot of relationships in the market, and we've talked about relationships today. It's kinda what the business boils down to. We've got a really good reputation in our market. Got a long-standing relationship with the developer community, with the land broker and real estate broker communities, as well as really our trade base and our suppliers, which is very critical at a time when it's tough to get things done. Those guys know, and it is pretty typical to have a trade or a supplier who's worked with us for 25 or 30 years. Very advantageous when it comes to knowing that you're gonna do what you said you're gonna do, and you're gonna deliver. We've also got a very tenured construction management team. They've been with us about 10 years on average as well, and really about five years outside of us. A very experienced group across the board, and it's really allowed us to build a big, stable community as we grow to be a top ten builder within the marketplace. Little bit of a snapshot on Houston. Houston right now is kinda sandwiched between Dallas and Phoenix as one of the top markets. Very highly competitive. It's got a low barrier to entry. It's got a pro-business environment, so a lot of people wanna be there, and it's kind of a who's who of home building, and a lot of very, very good privates as well. As you can see, Houston, we're gonna do 43,000, call it, home closings with 56,000 permits. As you look at our months of supply for housing and for development, vacant developed lots, I mean, that's pretty much bone dry for us. We go through this stuff pretty quick. We try to take advantage of this situation by doing some self-development on our end, and I'm gonna speak to that in the way that we're doing it through our joint ventures. We've with Doug and Tom's help and guidance, we've been pretty aggressive early on in going out and finding what we needed to make happen in our business in the Houston market and feel really good about where we are. Here's our heat map. You know, we've kind of focused, as Tom mentioned, we do our strategic land planning, and when we rolled this thing out, the very first iteration of it, you know, it was very similar. If this was a clock, you know, we tend to focus on that six to noon. And really, you know, just to let you guys know, we're in all the premier planned communities in the city, so we already participate in those markets, but then we also wanna dovetail off those locations and off our knowledge there and go do our own self-developed communities as well. We've really been able to build that nice pipeline of communities that we opened 11 new communities still this year in our group. We're currently at 11 'cause we opened 10 more, so we'll be at 21 by the end of the year. Feel good about the path of progress for us. Here's kinda where we stand today with owned and controlled, big number, 5,200 lots. 100% of our plan is spoken for, as the other guys have mentioned as well, for lots. 70% of our lots were contracted prior to 2020, so we really feel good about our basis in those lots. You can see our growth, where we're targeting 28 new community openings through 2024. Those new communities largely focus on entry-level and move-up. Our historic performance was based, and our reputation was based more on larger lots, higher price points. For us, what we've been able to do is take that reputation that we built and move it downmarket. It's really refreshing to hear anecdotal stories where a buyer will say, "Well, I grew up in a Trendmaker, but I couldn't afford a Trendmaker." Then when we grew down and we became our Tri Pointe brand and took it downmarket, they get to live in one. It's really a really neat story, and it gives us, it just kinda energizes us that we're on the right path, and we really look to kinda grow our share with that millennial. That millennial buyer, as they move into their entry level, and we've got their first time and their move-up as well. We're enjoying that quite a bit. You can see that we've still got our. We've got a broad price band, and that kinda speaks to where we were and where we're going. We're from the $300,000s. We've still got some stuff that, for Houston, is a really kind of a big number, but we do that because we've got a really cool larger lot product that's very specialty related and hard to find. There's just not a lot of that out there. We feel good about our larger lots because they're in such short supply that it's kinda nice to be in those positions as well and blend the market up and down. I'm gonna talk about joint ventures and we've done several in Houston, as the next slide will show. You know, this gives us a lot of advantages that we really like about joint ventures. Here's just a few of the points, but it obviously de-risks some of that land because we're gonna split this with a 50/50 partner. We can further take advantage of it by going and layering some project debt onto that joint venture, which will lower our capital and boost our returns. It, of course, increases our geographic footprint and all at a lower cost basis, which I'll share on a chart with you guys. It gives us that diversification because we're doing it ourselves, so we can now go into a 40-ft wide, a 45-ft wide, a 55- a 50-ft wide lot, where we were kind of pigeonholed in some developments at the 70-ft- and 80-ft wide lots. It gives us some greater land planning flexibility. This is kind of part of the can-do attitude, in my opinion, of Houston. We can go from raw land to finished lots in 24 months, and that's kind of long for Houston, but it's not long for anywhere else. We also, if we had to, with this land planning flexibility, and we've used it some in the past, can actually go in and, based on what the consumer's telling us, pivot. We've had a situation where we were a little bit too large on the lot size, and we were able to pivot midstream in a section from one to another and go back and answer that request or that buyer profile, and you can do that in about 90 days. You can literally go back, you land plan it, replat it in 90 days, and jump ball and get off and run it again. That flexibility in our market is really cool, and that's another, you know, arrow in our quiver that we have when we do our own land development. Then lastly, we've got that ability to reciprocate with our JV partners on future land deals, and we've already been the beneficiary of some of that reciprocation already in our JVs. Here's kind of where we've been. We've been pretty darn active. We've got seven JVs overall. Six of these we actually sourced ourselves, and then we brought a partner in that really best suited us to come in and make that whole community a success. It totals 6,570 lots. You can see under the contract date how early we were starting this project. Back, all the way back in May of 2018, we initiated this contract for Woodson's Reserve. Then you can see the group there, the four more in 2019. The last two are a little bit more recent, but nonetheless, we are very excited about those and we hold great promise for those. You can see here our lot widths. I'll call your attention to this row because as you'll see, there's a lot of 45, 50, and 60. We do have a sprinkling of 70s and 80s in a couple of these well-established communities. You can see where we are able to kind of take the bull by the horns and go make our own market going forward, and that allows us to broaden our price band, broaden the product, and grow as we take our target into that top ten in the market. One more thing I'll call your attention to is our basis. So as you can see here, as a percentage of the market, we're in these projects well below current market. It gets even better when you consider that in some of these situations, there are just a lot of situations going on where there will not be active communities by the time these deals roll out. So we will be the game in town. We like that. We like being the game in town. We like being the hole in the donut, if you will, where things are built out around us, and we're able to go in there and take advantage of that particular project. Lakes at Creekside is one of our joint ventures that I'm just gonna highlight real quick. Lakes at Creekside is a project that we were actually on 80-ft lots in this project. It was a third-party developer that we were building with. We had six other building competitors in the community with us, and we were there since initiation of this development. We knew the sub-market really well, we knew the development well, and then we decided that it would be great if we could buy it and finish it out. Just to give you an idea of where Creekside is located, North Houston, it would be in the north sub-market. You can see right there, The Woodlands, and this was very important to us. This is a Woodlands play. For those that aren't familiar with Houston, Woodlands' 40-year-long master plan, huge development that is running out. They're basically building out. There's not a lot left. That sub-market is really drying up for new lot supply, but it's a great area to be in. The Woodlands itself's got so much inertia. It's its own job center. It's got everything going for it. If you can be in and around it, you're gonna be have a really good chance of being successful. We took over. These two sections were the first part of the purchase, and it was 116 acres, 357 lots. We got this first piece in 2019 with 265 lots. We actually added on this parcel right here in 2020. It was 92 more lots, and that was just honestly a byproduct of how well the whole thing was going. We're like, "We should take more advantage of what we just did." As you can see, we've got lot widths down there at that price point that's more affordable, the 45, 50s, and 60s. We were able to broaden our price band within Lakes at Creekside. As I mentioned, it's adjacent to The Woodlands. It truly abuts the southern edge of The Woodlands. There's a road right up here, and you just hop over the road, and you are in The Woodlands. We go to the same school district, we go to the same schools as The Woodlands, but you get to enjoy those amenities and that job center, but you get to live over here a little bit cheaper. We like all those things. As you can see, performance to date, our ASPs, little price appreciation there, but we're at $520,000. Tremendous absorption rate, especially for Houston at 7.7 per month, and a healthy gross margin going forward. We feel very, very good about that project. Looking forward, for our Houston division, you can see our growth. As I mentioned there, our community count is going from 11 to 21 by the end of this year, and then we're growing that community count up as we grow our units up. Our long-term delivery, as I've mentioned, to be a top ten builder, puts us at about 1,000 to 1,200 a year. As you can see, our ASPs start to dive down as per plan, so that's as we broaden that price point, go onto those smaller lots in order to make our volume picture really work. You can see, even though we're growing our revenues, even as our price ASPs drop, we're very excited about the land positions we have. They were strategic buys. Really Doug is pretty cool in that it's kinda nice. My counterparts in Houston go through committees and, you know, they're slower, it's a little more bureaucratic typically. I shoot him a text, and I could literally be talking to somebody, shoot him a text, and I don't know how he does it, but he will shoot me a reply back pretty quick. Also, he's a closer, as you can imagine. He had a great relationship with Larry Johnson, always helped us tremendously in our long-term relationships. When Doug comes in to visit, we always do dinners, and we wanna expose him to as many of our developers as we can because he's a good guy, and they need to know that he knows what's going on. He's also closed a deal with us with Archie Dunham, who, believe it or not, was the CEO of ConocoPhillips and then retired and got in the land development business. I don't know how that happens, but it does. Yeah. Doug helped. It was kinda nice to have one CEO talking to another and making that deal work. We're in the Dunham deal, and we're loving it. That's it for Houston. I'm gonna turn it over to Gray Shell to talk about the Carolinas. Awesome. Before Gray. Again, a little inside baseball story. I think, Paul, you were there maybe years ago when Stephen East was working. We were in Houston, and Joe mentioned 29 years. Yep. I've only been working for 13, so I don't know. You know? I'm seasoned, Doug. Yeah, yeah. Yeah. Since Tri Pointe started in 2009. Trendmaker, as Joe mentioned, has a tremendous reputation with the land sellers, the master plan community, so on and so forth. It was always in the larger lot sizes. Yeah. Always the higher ASPs. Credit to Joe to have the vision, and his team. He, as he mentioned, has one of probably the most experienced teams in Houston. In order to grow to get into that top 10 market share, we had to expand our playbook for smaller lots and more attainable price points. Initially, the Johnsons were like, "Oh, no, we wanna keep you in the $60s, $80s." He was very tenacious, and the team to show that we could execute there. What we did was also control our destiny by doing these joint ventures. We do a lot with Toll Brothers, Taylor Morrison, M/I Homes. We've got the cast of people that Tom and I love to do business with, as well as Joe. Credit to that, and that's how we're going to get into that top 10 market share in Houston, is being able to have that playbook from, you know, 35-ft, 40-ft wide lots all the way up to 80s. By the way, the bigger lots, there's less and less people doing them, and those are very successful selling them right now. It's actually. It's been kinda interesting because that everybody wanted to get out of there and go down market, but there's a big gap there for us to play in, a big lane. Gray? I love Texas, and I love to visit, but I'm kind of partial to the Carolinas. Welcome, welcome back East. My name's Gray Shell. I'm the Division President for the Carolinas. I've got 20 years in home building, primarily in the southeast. Markets like Raleigh, Charlotte, Atlanta. I was there for a while, the coastal markets like Charleston. Three and a half years ago, I joined Doug and Tom as the first employee in the Carolinas, and it still kind of gives me goosebumps to say number one, right? It was kind of a heavy lift. I actually wrote this down when you were talking this morning, 'cause as we talk about the organic startup playbook and the strategy, there are four things you mentioned. Doug, geographic diversification. Clearly, we're diversifying geographically. Growth top 10. We should be in the top 10 in Charlotte this year and Raleigh in 2024, right? That's part of the growth. Returns, right? The company's in the low-to-mid 20s%. The Carolinas are very efficient. From a land development, from a deal structure standpoint, we should be in the low-to-mid 20s% this year from a return standpoint. Land position. Pre-2021, 60%-65% of our land deals that we controlled in 2019, 2020, and that advantage land basis is gonna yield us margins in the 22%-32% range. I'm kinda jumping ahead a little bit, but I thought I'd start with the good stuff. Yes. You want to hold that? All right. I'll start with a market overview, and we'll start with Charlotte first. Those of you that have been to Charlotte, tremendous job growth, financial services, fintech, manufacturing, healthcare, also in migration. I think you said fleeing from California. Was that the word? Escaping. Escaping California. Also a lot of folks moving from the Northeast and the Midwest, so we see a lot of population growth. We've seen about 25% price appreciation over the last few years with a median new home price of $430,000. There's still good relative affordability, especially for folks moving from those markets. You know, we talk about our kind of our core sub-market strategy. I mean, Charlotte, for those of you that have been there, has a really active urban core, sort of Downtown, South End, LoSo. Part of our strategy going to market was to serve the first-time, we call it first-time premium buyer with townhome communities close in. You can see our current active and our futures heavily weighted towards that. We call it inside the perimeter. Out in some of the premier suburbs, you can see with single-family detached and attached, again, serving that entry-level premium and first move-up buyer. Raleigh is about three hours north and east, but much the same. It's a little bit bigger market with 14,600 new home closings. Great job growth. In Raleigh, it's more about biotechnology, technology. Apple's building a new campus near Cary, near RTP. Healthcare, the university systems, NC State, UNC. What's that other school? Duke. Yeah. Yeah. Duke, yeah. Sorry, you're either one color blue or the other. Again, still great relative affordability with a median new home price of $445,000. Raleigh's a little bit different. You know, Raleigh here, Durham up here, and Chapel Hill, and the Triangle's kind of in the middle. There's really no core urban center. Everything is much more diversified or much more distributed. We can see through townhome products and some of these really good close-in locations serving that entry-level premium. Then again, out in premier suburban locations like Apex, Cary, Durham, and Wake Forest, has been a part of our core land strategy. For our land pipeline, we've been able to control 4,700 lots over the past three and a half years. Again, I mentioned over 60% of those were contracted 2020 and prior and driving good margin profile. Of the 42 communities that we're gonna open this year, about 70% of those are entry-level, and the other 30% are first move-up. And our average sales price is gonna range from $300-$700. We'll talk about how we got there. 2018, we set out on this organic journey to enter the Carolinas. Then three years ago, so fast-forward about six months, but three years ago today, we had a very clear sub-market and consumer segmentation strategy. We had 5 employees. We had three sitting in a little office in Raleigh, three in Charlotte, two in Raleigh, and we were looking for land and talent, right? That's all we were focused on. We had 78 home sites under control. I think two little deals. Fast-forward three years today, we've got a talented team of over 100 employees. Again, 4,700 home sites under control. We delivered 114 homes in 2021, and we're on pace to deliver over 500 this year. Pretty tremendous growth. How did we get there? I mean, you've heard a lot today about Tri Pointe's culture, its strategy, its premium brand, right, its focus on product design. We really use that as to leverage ourselves as a strategic differentiator in the market. That's both with land sellers, with municipalities, with consumers. We believe home building is a local business. We focus on product design and execution, and we deliver a premium home buying experience. Then we focused on four strategic areas, right? From a strategy and execution standpoint, people, land, product design, and building the Tri Pointe brand in our local market. It really starts with people. You know, I think, Doug, you mentioned attracting and retaining top talent is key to our success, right? People, you win with people first. We invested in talent early, and we really wanted to create a place where people felt engaged, supported, appreciated. We're big believers in you hire smart people, give them the tools they need to be successful, and then you kind of get out of their way and let them do their job. We focused a lot on onboarding, development, training, providing autonomy and support, and then celebrating creativity. Most importantly is a culture of accountability, right? We measure and drive results. There are sub-market and consumer segmentation strategy. We talk about core sub-markets at desirable A locations, good schools, access to employment and entertainment. We wanted to focus primarily on entry-level and first move-up. I wanted to be nimble and quick to respond to market opportunities. We talk about post-pandemic, right? People wanna have multiple workspaces at homes. They wanna have flexible exercise spaces at homes. They wanna have outdoor living opportunities. We focus on all those things. We wanted to have a diversified product portfolio for a greater range of attainability alternatives. Product design and delivering on the premium brand, right? Again, leveraging local design capabilities, focusing on consumers' wants and needs today. Again, that product range to provide for a larger range of attainable alternatives. Linda mentioned digital assets, right? Interactive plans, virtual home tours, the ability for customers to kind of experience the home and feel it before the models are even complete. Then in a market, you are the first things you do, right? We focus heavily on site cleanliness and quality, and then premium home buyer experience. This kind of brings it together, right? This tells the startup story. In 2019, 2020, we invested about $6 million in infrastructure and people and product and technology. In 2021, we closed 114 homes, and we made about $1.6 million in pre-tax, right? Our goal was to break even. In 2022, we're gonna deliver 525 homes and about $35 million in pre-tax. It's pretty steep growth curve. Our land pipeline supports that continued growth to 700-850 deliveries in 2024. Our ultimate goal is to deliver between 1000 and 1200 homes per year. The interesting side story here, when Tom and I were talking to Gray, you started November of 2018. I went, I think we met in D.C., if I recall. Oh, that's right. I went back home for Thanksgiving 'cause I was on the road for a while and I tell my wife, "We're going into the Carolinas." She goes, "Well, why would he wanna come work for you and Tom and be all by himself in the Carolinas?" I'm like, "Well, how do you think Tri Pointe started? That was the way Tom and I started the damn company." You know, kudos to Gray, you know, really having the deep relationships in Charlotte and Raleigh. I don't wanna forget to mention we just hired less than a year ago, Bob Davenport, who's running Raleigh, and he's really built up that part of our business to ramp up both Raleigh and Charlotte. The other takeaway, Jay, you and I were talking about this in a car in New York several years ago about organic startups and what does it cost to do. This is the playbook. We've shown we can do a big Weyerhaeuser deal and do a big M&A deal, but we can also do the organic startup. That's gonna be continued our playbook going forward in the future as we look to the southeast for further growth opportunities. Awesome job and it's been fun to watch. Appreciate it. Now to Phoenix. There we go. The host state. The closer. Yeah. Make sure I know what I'm doing. All right. All right. Thank you, Gray. I'm again, James Attwood, Division President for Tri Pointe Homes Arizona. Brief summary about my history with the company. I've been a part of the team for just over 16 years now. I've had the good fortune of working for a couple of different divisions, so I've spent the majority of my tenure here in the Arizona division, but I've actually spent three years in our San Diego division, overseeing the operations department for that team as well. You know, having the experience across multiple teams, I can definitely say, you know, working closely with my peers here on the stage, Tri Pointe has really strong teams across the country, and I'm just incredibly proud to work for a company like this. Don't want to spend too much time talking about myself, though. Let me click. Market overview. I'm gonna breeze through this portion because I think a lot of it's been kind of said across the country. Of course, first, we've been benefiting from incredibly low levels of resale supply in our market. Even right now, 0.7 months of supply, obviously fueling new home demand. That increased new home demand is resulting in pretty low levels of vacant developed lots available in our market as well. Median new home price. So you can see both the existing and new home price are pretty consistent around the $450,000 mark in our market. I will point out Tri Pointe Homes Arizona, our average selling price is considerably higher than this. In 2021, our average selling price was $677,000. That's really been by design, as we've specifically created this premium brand and premium brand offering and have really strategically targeted the best locations within the Phoenix metropolitan area, areas that are close to high-wage job growth and areas that have great entertainment and lifestyle offerings. That's a good segue here to our heat map. You can see a heavy concentration here in the Southeast Valley. Areas like Chandler, Gilbert, Queen Creek, they've been a big part of our success for many years. They're gonna be a big part of our success as we look forward as well. We focused our acquisition and community efforts in the Southeast Valley pretty heavily because that's where so much of the high-wage job growth is occurring in our market. One example being, Intel, one of our region's largest employers. They're in the Chandler area predominantly. They just recently announced a $20 billion expansion, building two new facilities, on their Chandler campus, and that's just a few mil away from several of our active and future communities that you see on the map here. Looking further west, some of our more infill South Phoenix locations and then further into the West Valley, we have really strategically targeted, premium locations and communities that align with our brand and offering. In each of these instances, I'll talk a little bit more about this in the South Phoenix communities as well. Each one of them really benefit from close proximity to really strong outdoor recreation in the area as well, both South Phoenix and our West Valley communities. The one other thing I just wanted to more broadly point out here, you can notice that even our active and future communities, we're not really targeting some of these further outlying, more emerging submarkets that you see, Florence, Casa Grande, Northwest Surprise, South Buckeye. Those areas have really been focused predominantly on a price sensitive, entry-level buyer. There's a lot of permit activity, obviously, that you can see here, but there's a lot of new home competition in those areas as well. Our locations, not only do they benefit from really being in the best submarkets in Phoenix, but they also benefit from lower levels of new home competition as well. A little bit about our future communities here, or our lot summary. Proud to say that we own or control over 4,000 lots, again, in core submarkets, the best submarkets in the Phoenix metropolitan area. You can see the vast majority of those are controlled, not owned. Certainly worth pointing out, over 70% of those were contracted prior to 2021. Of course, we've seen home prices rising. Land prices in our market have certainly risen, and we're at a very favorable land basis as we look forward with what we have under control. At the bottom, want to point out, you see, similar to Joe mentioned, we have prices ranging from the low $500s to just over $1 million. That's our range that we have for our future. We're really focusing our efforts in that $500,000-$700,000 range because we've always had a strong offering with premium entry level, premium first move up for customers, and we wanna make sure even though prices are rising, we're continuing to focus our acquisitions and communities and targeting that customer that's been a big part of our success. Then, 25 new community openings between this year through 2024. Like others have mentioned, 100% controlled. The one thing that I wanna point out here, and it is a great segue for the case study that I'll be talking about, but all but four of those 25 communities, or said another way, 21 of the 25 communities are all coming from larger planned communities that we're creating that have multiple product offerings, multiple communities within one location. Our Waterston North community that we'll be visiting later today, being a great example of that six communities in one location. It's, you know, that strategy focusing on those larger planned communities has definitely helped facilitate our growth over the last several years. It's created a bunch of operational efficiencies for our company that I'll speak about here shortly. It's also created this opportunity to really unlock the potential within these land positions that we have and maximize the value of the land positions for our customer and for our company, through a process that we call placemaking. That's the case study that I'm presenting here, our history of placemaking, in the Arizona division. Both pictures that you see on the screen here are from our Avance communities. Avance, just a little backstory, is located... It's more of an infill location in South Phoenix. This area had been predominantly targeted for, you know, more of a price-sensitive entry-level buyer, and really because of some of the more, I'll just call them challenged, surrounding uses around the community. We recognized an opportunity when we were in the planning stages for Avance. We had, you know, obviously close proximity to downtown Phoenix, downtown Tempe, Scottsdale, you know, great employment corridors, but also because Avance has this immediate adjacency to South Mountain Regional Park. When we were going through the planning phase and just looking to leverage all the resources that this community had to offer, we knew that there was an opportunity for this, you know, placemaking that we're describing here. The two photos that you see on the screen, the first being some of the, you know, significant investment we put in the entry monumentation right as you arrive at the community. The elements and colors really blending with the natural desert surroundings surrounding the community, and then just welcoming you right before you hit the gates to our gated neighborhoods. Once you come into the community, you can see this, like, resort-style recreation center that we created. You've got community gyms, large community pools, ramadas, outdoor barbecues that are situated just at the base of South Mountain. It creates this, like, resort-style feel that really, honestly rivals, you know, some of the better resorts that we have here in the Phoenix area. Our customers saw this. I mean, they saw the lifestyle that we were creating within the community. The net effect or the benefit was at opening, we were able to open with pricing that was a 20%+ premium above what some of our most immediate new home competitors were in the area, 'cause we had really differentiated the community in that way. Our customers saw the value, they saw the value of the lifestyle that we were creating. We opened, we had that premium, and this was honestly during a time in the market that wasn't seeing significant pricing power, but we were able to steadily increase prices along the way. As we've reached closeout and neared closeout in the community, pretty proud to say that we've had closings surpass the $1.5 million mark in a community that, quite frankly, like I said, or in an area that had been predominantly targeted, you know, for a more price-sensitive buyer. It was a great example of the kind of value we could unlock in a land position through this process that we call placemaking. Speaking just to placemaking more, separate of a community example, I'd say a few things that I would point to. One being, you know, I talk about ensuring harmony between our land positions, our brand, and our product. When we're developing our own communities, and we're controlling the thematics, the elements, the product, and the architecture, we're able to create communities that truly feel intentionally designed in a way that, you know, larger developers that are bringing multiple builders into the community, they just can't replicate. I think that our customers really see the value in what we're able to create. The next bullet point there, talking about much of our activity coming from these multi-program communities and leading to better absorptions. Again, when we're developing our communities, and I've heard you guys talk similarly, we're able to segment across multiple product series. We're able to create more diversity in the neighborhood, appeal to a broader range of customers, appeal to a broader range of price points, and it obviously leads to much better absorptions for the company and community. Creative placemaking that the consumer values. Avance being a great example where, you know, we were able to implement some of these placemaking strategies and achieve a premium, you know, greater than 20% from what some of our most immediate competitors were achieving in the area. Then the last bullet point just include, because of course, you know, these larger plan communities, the amenities that we're putting into them, it requires an upfront investment. Through phased acquisitions, off-balance sheet financing, we've been able to do it in a way that really maximizes our returns, and it's done in a very capital efficient manner as well. I've got a great example with our Waterston communities here. That's, you know, actually our actual case study, I'd say, because we'll be visiting Waterston in just a couple hours here. First location you can see in the Southeast Valley, so Gilbert specifically, Waterston is about 25 minutes from the airport, 30 minutes from downtown Phoenix. Like I mentioned, that Chandler/Gilbert area is just experiencing some of the best job growth in our market. Gilbert in particular, and Chandler, really have some of the best entertainment and lifestyle offerings in our marketplace as well. The location in and of itself is a phenomenal opportunity for our company. To have, you know, the size and scale of what we have here at Waterston. 1,284 home sites across 437 acres, just a phenomenal opportunity for the company. Despite, you know, how great the location, the opportunity was, we knew that in order to, you know, approach it in a capital efficient manner to ensure that we are maximizing returns for the company, we had to break the acquisition up, and our land team, Jason Weber in particular, did a phenomenal job navigating through that process. We were able to break it into three separate acquisitions. You see at the bottom of the screen, you basically see these communities broken into three. The bottom of the screen, I'm not sure I know how. Yeah, there we go. Waterston South, comprised of three different communities. We're now in closeout mode at Waterston South. We're gonna do one loop through there later today just to give you an example of a community in its completion stage that we've created here, but in closeout stage and really a phenomenal success for our company. I've got some stats I'll share on that in a second. Waterston North and Central, those were originally tied up as one acquisition. Again, knowing that we needed to approach it in a capital efficient manner, our land team did a phenomenal job separating it into two acquisitions, closing roughly about 16 months apart, and both closings occurred with a land banking partner. The net result was what would have been $78 million in acquisition spend and an additional $73 million in land development spend, was ultimately controlled by our company for just over $21 million in option deposits. A great example of. You guys will get a sense for the size and the scale of the community, the investment in the amenities. Again, just to reiterate, we are doing it in a very capital efficient manner in a way that's maximizing returns for the company. Oh, let me see here. All right. Actually quickly on. You see some architecture below here, but I debated leading up to this. I didn't know how much to, you know, highlight about the placemaking strategy going into the community knowing that we'd be visiting it a little bit later today. I don't wanna, you know, talk about all the elements and everything that we've incorporated. There's three things that I just wanna quickly point out before some of the deal summary. When we get to Waterston, just take note of the sense of arrival that we've created within the community. Those large entry monumentation, the central amenities when you're greeted into the community, just large open space welcoming you to the community. It really creates. I wish we could have scheduled bus time to drive through some competitors and then our communities, 'cause you'd really get a sense for it then. But that sense of arrival is just such a differentiator for us in our placemaking. The second thing is really that you know that cohesive nature of our you know the elements, the architecture, the product, the amenities, all just really seamlessly blending together. I think that that's something that'll be pretty immediately apparent to everybody. Then the last thing is just that investment in amenities. Between lakes, stream systems, walking trails, rec centers, large pools, ramadas, play structures, splash pads, it really just, you know, immediately kind of evokes a lifestyle that our customers really gravitate toward when they visit the community. We have this up on the screen because, you know, we take a ton of pride in the communities that we create. Our entire team, you know, takes a ton of pride in those communities, but it has to make, you know, great financial sense as well. I wanted to highlight the results from our Waterston South communities. Again, these are in closeout, and I'm just comparing some of our original assumptions to what we were ultimately able to achieve. Average across the three communities, we had originally assumed we'd be selling at 3.4 sales per month at each community. Actual results, 4.3 sales per month, and we could have absorbed at quite a bit quicker pace, but we were managing a rising cost environment and of course, looking to maximize revenue opportunities along the way. Our average selling price, original assumptions, just over $740,000. This is actual and backlog, so the majority of this, well over 200 homes, are homes that have already closed and then started backlog as well. But between the two, nearly $900,000 ASP, between the three communities. Then you can see a 310 basis point improvement on margin, which combined with a much higher selling price is a significant improvement to our overall earnings for the community. Rolled up and looking at the division as a total, the one thing I wanna point out is we have been on an incredible growth trajectory as a company. 2021 was certainly a record year for our company across every metric. 788 closings, $533 million in revenue, and not on the screen here, but we generated just over $100 million in pre-tax earnings for the company. 2022, we're following it up with another record year, so we're projecting 825 deliveries, $618 million in revenue, and again generating just over $100 million in pre-tax earnings for the company. Two things I wanna point out here. You see a little bit of a dip in both deliveries and revenue. That's due to a dip in our community count as we've absorbed through some of the communities a little bit faster than original projections. When we looked at that lot summary and pipeline, you guys see that we've got a lot of communities that we're gonna be backfilling those between this year, 2023 and 2024. The last thing, you see our ASP declining. We've talked about this in several areas. This is really by design. We focused our acquisition efforts to ensure that despite, you know, being in an environment with rising housing costs, we wanna make sure that we're continuing to offer and target a premium entry level offering, premium first move up offering, and still some of the premium second move up offering as well. We've got a declining ASP, but still generating very, very strong revenue for the company. Doug, you know this, I'll just say that our entire company takes a ton of pride knowing that we have, you know, become a stronger and stronger contributor to the company overall. When we look at the land positions we have in place and obviously the team that we have in place, we're looking forward to continue to be a leading contributor for the company. I'll give it off to you here, Doug. Yeah. A couple things there. Some of you in this room have heard of Pacific Highlands Ranch. Generated a lot of income for the company. Strategically, to James' credit, Jason and the Arizona team, Jason teed us up with a ton of land here. Obviously 70% of it was contracted before the so-called run-up here. That has generated a ton of income that he talked about, which was a strategic event, 'cause if you could've seen PHR's income go like this, you kind of hilarious, smiling back there. We're like, "Where are we picking up this income?" It's not only Arizona, but all these guys up here on the stage, and that's part of our overall growth story. The other key takeaway as I was sitting up here, and hopefully you all get this, is location, location. I mean, it's kind of a coined phrase, but, you know, when we get into challenging markets and we have to adjust to higher interest rates, the mortgage meltdowns, S&L crisis, pandemics, whatever, I mean, I've seen it all, location is gonna be your trump card to be successful. You saw from all these guys up here and throughout the company, our strategic land planning objectives is to be close to employment corridors, transportation, amenities, and that is always gonna be a selling point in a challenging market condition. Hopefully that was one of the things you guys all took away from that. Lastly, I mentioned it as one of the key points at the beginning, is the vintage of the land. We were very aggressive prior to, let's call it January of 2021, and all these guys and their teams have done a tremendous job of setting us up for that growth, but also at a underwriting price that was much different back then. We've got a lot of opportunities to be successful in a challenging market environment because of that. Thank you very much. I think got Glenn and Tom coming up. Close it out. We're gonna figure out how to generate long-term shareholder value, right? Yeah. Well, I don't know. Sometimes the stock price reflects something different. Don't get me going on that. We need to have a different look at the industry, right, Alan? Well, one day, yeah. Well, I'll kind of kick it off, and then I wanna open it up for questions. You don't have a mic? Oh, you guys don't have mics? Oh, I'm still mic'd up. Armed and dangerous. Here we go. You know, we've talked about these things today, returns. In the end, we're a public company, and we believe that if we're consistently achieving the type of returns that we talked about today, the investor base, hopefully the analysts that cover us, will reward us with hitting those type of returns, and we're doing that through a number of avenues. I've talked a lot about our capital efficient land positions. I've talked about our programmatic stock repurchases. All those, you know, occur because of the growth and the scale that we're adding to that to be a driver for our shareholder value. It's a key focus. The division presidents get sick and tired of Tom, Glenn and I talking about it, but that's the focus, and we're gonna continue to do that. When you look at little old Tri Pointe, you know, we're doing a little, you know, $4 billion or so in revenues, you know, there is still so much room for growth, and we've talked about that. Eight of our 15 divisions are in top 10. We've got seven that have plenty of room to grow. Then we've demonstrated time and time again between organic and M&A, there's plenty of room for growth for Tri Pointe. Yeah, we've been on this path for over seven years now, and I think by highlighting the five divisions that we did, we're highlighting their growth and their capabilities. Really proud of the results they've turned in, but not only them, the rest of the 15 divisions have all reached a point where they're significant contributors to our operation. We see an opportunity to continue to maximize the potential in each and every one of those markets and more room to grow, to reach optimization and stability. That's a big focus, and we're proud of where we've been and looking forward to the next few years. I think even in a declining or softening demand environment, we have the ability to grow and absolutely increase market share. Hopefully, we're demonstrating through a lot of what we showed today that we differentiate ourselves, and so I'm confident in our ability to capture market share even in a declining market. Yeah. That growth, I think, Glenn, you pointed this out. I mean, we underwrite all these communities at 3-4 sales per month per project, so we've been doing that forever. We will always take pace over price in a tough market. That is just our mantra. These communities will continue to grow. One thing I think a lot of you have been around for this business for a while, it's really about the amount of cash flow that home builders generate as you continue to open and close those communities. That's obviously one of our key points, as we mentioned in the beginning, our positive cash flow, our strong liquidity and our very low leverage. that's gonna stay in place as we continue to navigate some of these speed bumps that I think we're gonna have here in the next year or two. Glenn? Sure. I mean, we talked about our profitability. We've made huge strides in that over the years. You know, for the last 12 months, ended March 31, homebuilding gross margins of 25.4% and 16.3% on a pre-tax income percentage basis. That's, you know, a lot of that is due to our increased size and scale, and that's gonna continue. You know, we're gonna continue to grow revenue, and then that is gonna leverage those fixed costs and become a more efficient company overall. Continued optimization of our technology platforms that we've put in place. We have a really robust technology stack that we're continuing to optimize, and that is gonna also allow us to be more efficient and generate more profits to the bottom line. The other thing I'd point out there is we went to one brand, what about a year ago. Linda led that charge. I think when we bought Weyerhaeuser, we never said we would go to one brand, but I remember Tom and I had a breakfast with Jon Jaffe, and obviously, Lennar's made a few acquisitions in their lifetime, and they have a few brands. I remember Jon telling. He is a dear friend. He looked at Tom, and he goes, "Well, there's only two guys in this business that could check their egos in at the door and have the number of brands. But when there's a significant change in the market, you're gonna go to one brand because it'll be more efficient." Then we have a pandemic. I mean, Linda comes in. It's April 2020, and It couldn't have been a better time. Yeah, it couldn't have been a better time to go to one brand. It was orchestrated so well. Yep. We haven't missed a beat. Yep. It's onward and upward from- Well, it's created huge efficiencies in the SG&A. Closing up on the balance sheet, you know, we're in a great position on the balance sheet. We're low levered, net debt to cap in the mid-20s. You know, you're gonna see that continue. That's a comfortable leverage for us. $1 billion of liquidity as of March 31, and that gives us the ability to be opportunistic. You know, if things do soften, you know, when things slow down for home builders, you tend to generate cash. That's one thing we should highlight here, and I think Doug mentioned it earlier, is we've been growing this company, but generating positive cash flow from operations for the last couple of years. That, I think, is a different industry from that perspective because a lot of our peers are doing the same thing. Yeah. They're generating positive cash flows while still growing the top and bottom line. You know, that puts us in a great position. Yeah. Q&A. Well, before we get to Q&A, let me. A little housekeeping and Glenn or Kathy, let me. It's 11, almost 11:30 A.M. and we're gonna grab box lunches, I think, Kathy, right outside this room at noon. 12:00 after lunch. Then, Glenn, you're gonna meet with the lenders in here at 12:15? Yes. The lenders come back at 12:15. The analysts, investors, don't try to hang around. Carl. We'll have more fun. We're heading out. The rest of us at 12:30 P.M., we're gonna grab buses, and it's the same door right out here, Kathy, that we went to the Topgolf last night. That's at 12:30 P.M. No shorts. No, I'm just kidding. We'll grab the buses at 12:30 P.M., and then the lenders will follow shortly thereafter. Well, we appreciate your patience this morning for us walking you through- Yeah What we did. We think there's extreme value in it, but this is the most important part of the presentation, the Q&A. We wanna get this interactive and hear from all of you. We look forward, Dave, to your questions. Alan. First off, thank you for having us out here. It's been nice to see everybody and get together in person. You know, I think one of the key takeaways for me was obviously the focus over the next few years trying to bring down your average price after the significant appreciation with the whole market's seen, and obviously rates is another uncertain variable there. Focus on affordability. You know, we hear a lot about the focus on A locations and I guess how do you think about that playing out across your ftprint? Because, you know, ASP is not gonna go down 15% over two years unless you're sacrificing something, either location, smaller floor plans. You know, so what's the main driver or main lever that you're pulling to accomplish that goal? How does that, in your mind, affect, you know, just the way the demand environment is? You know, if we are in a softer period, is this more of a B location type, kind of backdrop where you're gonna be more dependent on what the market is doing, smaller square ftage if there's more of a focus on working from home, et cetera, a lot of the pandemic, tailwinds that we've enjoyed. Is that something that puts you at a disadvantage as you try to drive that lower? I think I'll take a shot at it and then turn it over to Doug. From my perspective, it's exactly what you described, and it's really staying true to the core locations, but altering product types to be able to be successful in driving ASP down. Smaller ftages for sure. We look at much more attached product, and that goes throughout almost all of our regions, except Texas. Certainly in Washington state, Colorado, D.C. Metro, the Carolinas, California, Vegas, we're doing a significant amount of attached product, so that's helpful in that regard. I do think the work from home or hybrid work schedules is a positive, but we also have to realize that former B locations because of growth have now become, you know, A-minus locations. There is a transition there. We are further out. The Inland Empire is a great example of that for Southern California. That has probably transitioned from a secondary or tertiary market to a primary market. I guess one other possibility, and I'm not sure if you're thinking this way, is, you know, your margins right now are at incredibly strong levels. So as you open up all these new communities, is there any piece of that ASP decline where you're just gonna be less aggressive on the introductory price of these communities and willing to accept a normalization of margin? Yes. Yeah. No, we're gonna price to the market, Alan, but it's funny you mention. That's a great question. Who was I talking to, was it Joe or one of the DPs, just a few days ago? And we talked just about that, 'cause we've got significant runway in our margins. And I mentioned pace over price. So we will be more intentional to focus in where we can get the right pace, and maybe that's a little bit lower in that ASP profile to make sure we get that volume going and really get that pace going. 'Cause once you get volume and pace going, it's very contagious. So we will definitely look at it. I'm not sitting here telling you that we're gonna open up all these communities in Charlotte or Texas at 5% or 10% less, but we have room to go into the market with, hopefully strong momentum. 'Cause momentum is a winner when you come to these communities. You asked another good question. You always do, but I mean, Gray's a great example of product in Charlotte. As some of you know, you know, the uptown area of Charlotte is the place to be. I mean, there's tons of jobs there. He's come in and what your product is, what? 60% attached? 70%. I'd say it's more affordable, more attainable. We did that intentionally because they're A locations that will attract that millennial buyer, that 30-35 year-old buyer in A locations, but at a more attainable price point. Because they'd rather be closer in to all the amenities and, these great microbreweries and all this great stuff to do in Charlotte. That's how we look at it. Definitely. Thank you. A big part of the ASP decline, Alan, too, is really just mix of- Yeah. More, more Carolinas, more Texas, obviously. Yeah. It's just part of the overall delivery mix. Carl? Thanks. Thanks, guys. One of the big holes in your ftprint relative to some of the other publics is Florida. I was curious about what has prevented you from entering that market to this point. I'd also like to ask a little bit about Georgia. It's sort of a similar question. Mm-hmm. Why was Carolina the right place to go with organic expansion as opposed to another state in the southeast? Well, to organically grow successfully, we're only as good as the people that we hire and put around us and, you know, Gray just put up the playbook for the organic startup. We obviously got lucky and hired the right person, Gray Shell, to lead the charge in Charlotte. If I could replicate him and put him in Florida, I would do it tomorrow. It starts with people, Carl. I mean, you know, in Austin, I tried some, frankly, internal challenges that just weren't right, and I don't bat a hundred percent. You know, thank God we found Brian, and you know, he's an Austinite. He knows everybody. It really starts with people. Florida would definitely, Georgia. We definitely, those are two key markets that we're focused on. I was telling somebody last night over at the Topgolf, we keep looking at every small regional builder. It seems like everybody got the memo about six months ago to sell because it's the peak of the market, and every one of them were for sale for 2x or something. It's not. I'm just not ready to pay 2x. I mean, I'd rather stick to our game plan and look for an opportunity. I've said this a couple times, I'm actually. My wife said, "Why are you so excited about the new housing environment? You're psycho. You've been doing it. You gotta retire. You know, the things are gonna get worse and all this." I go, "When things get challenging, I get more fired up because I think there's gonna be great opportunities for us in those markets, for example." If we're gonna grow, and I would love to find an acquisition. We would love to find an acquisition in Florida, but I'm not gonna pay 2x for it because I wanna keep programmatic share repurchases and generating the type of returns that we talked about. I'm not gonna sacrifice that for the shareholders just to grow in Florida. That's quick. We talk about strategic growth, and we wanna control it. To your question, relative to organic growth, Doug hit it head on. We've talked about all those markets. We love the opportunities, but we have to have an alignment of vision and values with that key leader. Every one of the guys you've heard up here, and we founded this company on it, talked about reputation and relationships. It's a local business. We need the right people to drive those local markets for us. Yeah, the one thing we didn't mention, or Gray, I think we forgot to mention, is we are actually growing in the Carolinas, where Raleigh is growing into Wilmington. We've got our first land deal tied up there. That's probably would add about 150 deliveries at stabilization. Then he and I were just over in Charleston. We're gonna go into Charleston, you know, that Charleston, Myrtle Beach, Savannah corridor. 300 deliveries at stabilization. You know, but again, he and I or he is looking for the right person to kinda lead that effort, falling under Gray, just like Raleigh does as well. That's going on right now, but there's a couple states that we should be in in the long term, that's for sure. Can I ask one follow-up? Sure. About California, which notably absent today in terms of presentations. It was intentional. Yes, I know. What is your real long-term view? Let's put it this way. The coasts are largely built out. Yeah. Mostly the tract builders have moved away. The available land in California is the Valley and Riverside, San Bernardino. The quality of life in these areas may not be what they were on the coast. Mm-hmm. the costs are very high relative to quality of life in places like Denver or Salt Lake or Austin or where things are cheaper. Do you believe in the long-term future of housing growth in California relative to some of the other markets that compete for that customer? Right. Has work from home and the pandemic changed that long term in your view? Yeah, we're still totally believe in California. I don't know if I would call it the growth engine. I mean, if you look at what the way Glenn put up there, California is gonna do 2,500-2,800 deliveries. Stabilize at about 2,500. It stabilizes. We're already there. We have still a lot of land at a really sweet basis in Southern California, from the Pardee Homes acquisition. Nobody can touch us at any point in the Inland Empire in San Diego with the land bases we have. It's not a PHR, but you still can't touch us. That's just the cash flow earnings. Our teams in California, I mean, the one person we should have brought, our Sacramento team. That was, you know. They're no longer organic startup either. I mean, he's gonna make $40 million-$50 million in Sacramento. Now, I think a lot of that had to do with the Bay Area and the pandemic and people moving. You know that area as well as anybody. I believe that California will continue to be that 2,500-2,800 delivery. Our teams know how to navigate through the entitlement, CEQA, kinda stuff that you gotta go through. We know it as well as anybody. You know, our division president in San Diego, Jimmy, I mean, he's been down there forever dealing with all these entitlement issues that you have to play with in California. The barriers to entry in California are very interesting. If you know what you're doing, you can make a lot of money building homes, and you still will. I think obviously more affordable homes will be in Sacramento, the Central Valley and the Inland Empire. The Coastal is gonna be kind of a very expensive little hamlet for people that got a lot of money, right? It's kinda like New York or what, however you wanna compare it. That's. I don't know, Tom. You're I'm- He's a surfer. I'm bullish on California. That's not going away. I think there's gonna be a continued market. For all the conversation we've heard about the exodus of the California buyer going to all those other competitive markets, and it's true, they are there, it has not put a dent in demand for what we're offering now. We don't feel it at all. But- It's still a huge job engine. Yeah. It always has been, and it will be. It's a huge college system, so I like living in California. you know, this is simple Finance 401. I always get back to my MBA school. I mean, diversity is important to being successful in your overall return playbook when you have different ups and downs. Yeah, we were heavily concentrated in California. We, you know, got that label, earned that label, whatever, but California is still gonna be part of the playbook. We've introduced, and the reason we had it here in Phoenix and Texas, and the Carolinas, and Arizona is it creates so much more diversification and a lot more attainability, especially as we go into, you know, some speed bumps, as I mentioned. That's been very intentional. We started years ago. Thanks a lot, guys. Yeah. Thanks. Deepa. Hey, thank you very much for taking my question. Let me also first of all thank you and congratulate you for being brave enough to put out 2023 and 2024 projections, even as we're going into some form of normalization. It's very helpful for some of our modeling purposes. Thanks for that. We're not going out of business. I know the home builder wants to be written off by Wall Street. We're not going anywhere. Fair enough. Let me switch and ask about margin, a couple of margin questions. One short-term question from me, pretty near-term question from me, and then one longer-term question on margins. Near term first is on your 2022 guide. Can you talk to the gross margin and SG&A margin resiliency within your guide? It was very helpful to hear that your revenue assumptions has already incorporated normalized for, you know, 4x absorptions. That's near term. In the longer term, can you talk through the structural margin improvements that have happened and that would stick in any type of market? For example, you mentioned going to one brand has been pretty helpful. Are you able to quantify some of those for us? That would be helpful as well. I'll take the short term first. I think we feel good about the margin guide and the resiliency of it just because of what we have in backlog. We have such a huge backlog, and we know what those margins are. So I think that is, you know, obviously how we're feeling comfortable with the short term. Long term wise, I think, you know, the going to one brand and things like that, I think that is sticky to our net margins. Obviously, that is more an SG&A focus, and those efficiencies should go forward. I don't think we have something to quantify right now, but I think those types of things are sticky. I think we're constantly looking to innovate and shorten cycle times and use technology, and I think that's the long-term implication of margins. I don't know if you wanna add to that. The only thing I would add is you mentioned the word normalization, and I think the reality is we will reach a period of more normalizing margins. You know, what we've been experienced over the last three years is not normal on the revenue front, on the cost front, and, as demand softens, I think you'll see more normalization. Paul. Increased competition for capital. Given where we're at in the cycle, are the terms on those deals getting more expensive or difficult, like, for lack of better terminology? Glenn, you wanna answer that? I would say right now there's still a lot of players in that space, and it's still very competitive. I think some, specifically the land bankers, they've talked about maybe using a floating rate going forward with where rates are going, but there's still quite a few that are willing to go fixed rates. So far we haven't seen any cracks in that or significant changes in that model. What would be the average deposit rate? Has that moved up at all over the past couple of years? No. If anything, it's moved down. I think with increased competition, it used to be 20% was kind of the norm, and now we're seeing deposits at 15%-10%. There's other builders that some will even take a 5% if you do a guarantee up to a certain amount. If you were to walk from a project, you'd give them back some capital. They're being pretty flexible with their underwriting. You know, I was talking about this yesterday with somebody. There's a macro thing going on, Powell. The other thing I'm sure a lot of you have heard, and 'cause we've been on phone calls a couple. There's this little thing called Apollo playing around. There's a macro thesis that is really the same thesis that we talk about. At 30,000 ft, the big PE firms and now some of the big SFR firms, they're different because they wanna have the right vertical stacks. But the big PE firms, I mean, you were at a conference, he flat out said, "We wanna own a home builder." Because you look at the macro in housing, just as what we've talked about today, that's their thesis, all right? The three of us have sat down with one of the biggest ones in the country. You will see the private equity business make a big bet, I think, at home builder. I think that's gonna change the investor outlook on the home builders too, personally. I don't know what you think, but that's my opinion. Because of the macro long-term view that we have had this undersupply of housing since 2009, I think you guys wrote some of this or trimmed it. Then we haven't even kept starts up with household formations, right? They're looking at this whole playbook, and then they're saying, "Well, if I got SFR, and if I got to have a home builder, and if I could have multifamily, I have all the verticals, and I could find some efficiencies or what." I mean, I'm 61, I'm getting a little too old for all that stuff, but, you know, we'll keep growing and keep exploring how to increase shareholder value. That's a very interesting play in the capital markets. The reason I'm bringing it up, it comes to the land side too. You asked about term. I mean, there's more and more money calling Julie to be in the land business. That's kind of interesting, isn't it? When CNBC says, "Home builders and housing's dead." Huh, okay. Somebody's taking a different macro view. It'll be interesting to see how this plays out. That's just how I- A lot of capital, really interested in longer-term land plays. Yeah. Right now. Yeah. Yeah, big land plays. Did we bore all of you? Oh, we got a lender asking a question. A question that we get a lot. By the way, thank y'all for having this, reuniting the bankers in person. That's been very helpful. We get questions all the time about supply chain, and I know y'all touched on it a little bit, but, I mean, do you see it getting better, or is it here to stay, or how has it made you better in dealing with it? Go ahead. Well, if we took a poll amongst our five guys that were up on the stage earlier, I don't think there's been any signs of seeing it get better right now. We know it is getting better. We just haven't seen it or felt it yet. I think it's got some more time to prove itself out. That too will normalize. I don't think the challenges we've experienced are here to stay. We'll get back in balance at some point in time. I do think the more important part of your question is, it absolutely has made us better. I mean, to be in this industry, it's all about being an overcomer and overcoming obstacles. Our teams are creative, and they've proven day in and day out that they're overcoming the obstacles and completing homes in a timely manner with great quality, and we're satisfying our buyers. We've gotten better in a lot of ways because of that. I mean, we're in this inflationary environment. This is a supply induced issue. It's not a demand, personally. I mean, to fix the supply chain, yes, I mean, Powell's gonna raise rates until he gets this inflation bug, so-called, under control. That's naturally gonna bring demand down, right? Absorptions and deliveries and everything else. That makes sense. I mean, I'm actually hoping for that because I know the division presidents, they're still pulling their hair out on every, you know, it's whack-a-mole still as far as the supply chain. I think I would predict more normal, kinda getting back to normal a little bit in 2023. I was with Gray out in the Charlotte area, and we were talking to some of our purchasing teams, and there's a few little positive signs, but I think you just gotta see a little more of a lack of a frenzy. I mean, remember, we're comparing a housing market that was red hot, frenzy. You know, we gotta pull back more to normal. Selling 3-4 homes a month is normal, and then you adjust your supply chain will adjust to it. Since they opened up the lender questions. Only one more. Okay. All right. That's fine. fine. Doesn't matter to me. Another kinda supply chain question, and this is not meant to spark an ESG or climate change discussion, but with respect to water, especially in the West and severe drought, do you all see a challenge with accessing water for these communities to build out? Where's James? Do you wanna answer that? Yeah. No, it's a great question, and we talked a lot about at the board meeting. Go ahead, James. I think it's just become a much bigger part of our acquisition process. The land that we own and control, we absolutely have confidence in. It's just becoming a first checklist item. The water use attorneys we've you know spoken with and consulted with, they've talked about in our market, it's really becoming a story of the haves and have-nots. There's still a lot of haves, so it's just making that a big part of your acquisition strategy and ensuring that you're well-positioned with everything you bring into the company. There's lots of opportunities in our market that have and control water through multiple resources, I'd say. Yeah. We've seen, Jake, in certain markets where the price for water rights is actually higher than the land valuation. It's a key driver, but as James said, there are opportunities out there, and we don't see it as a significant short-term obstacle for our company and its growth. Good. Thank you. I wanted to go back to the land bank real quick, if I could. I think you said 65% under contract before COVID, which is obviously very good considering what's transpired since then. You know, obviously, there's 35% that was put under contract after COVID when the land market was a little bit more inflated, if you will. I mean, how much concern do you have about some of those positions? How much potential risk is there to gross margin? You know, I'm assuming that 35%, majority of that is probably on option. You know, how are you thinking about that in relation to gross margin as well? I'll try, and then these guys can chime in. A lot of that was in 2021. We gave the stats from 2020 prior, but a lot of that was tied up in early 2021, the 35%. I think we've started to get pretty disciplined. We've always been disciplined on land, but I think we've become even more picky because we're in such a good land position over the last six to nine months, where we're really only doing deals that make absolute sense for our markets that we're in. We're playing from a position of strength because we have such a good land pipeline that we've been extra picky on our land, and as I'm sure the five divisions here can attest. We feel good about that 35%. There's nothing in there that scares us. Obviously, if market dynamics change, you know, we'll have to face those. You're right, a lot of those are option lands, so it gives us some optionality. Overall, we feel good about that land position. Just a quick follow-up if I could. I mean, clearly, I think a very compelling growth story here in what you've articulated, you know, the cash generation. You know, obviously, Wall Street and the stock price is perhaps telling a little bit of a different story than the perspective that you provided today. You know, something some investors kind of look at what's going on and are just interested a little bit more. You did hit on this, I think, in the tail end of the presentation. You know, how are you thinking about, you know, creating value? I mean, is it, you know, more stepping up the share repurchase even more? Is there anything else that you're thinking about doing? Is it really just more focused on execution, you know, putting up the numbers, doing what you say you're gonna do, and then, you know, kind of, I think everything else should, in theory, take care of itself? Just interested in your perspective 'cause, you know, definitely I think, there are a lot of folks on the street that are concerned about what's going on out there. Certainly the fundamental picture. Mm-hmm Seems to be quite a bit different. Well, you know, when you're looking out over the ocean, I use a bunch of analogies, and you see a bunch of storm clouds coming in, you know, you don't know if that hurricane is gonna hit landfall or not or what's gonna happen. Obviously the street has kind of written off the home builders. I mean, you got D.R. Horton trading at 3x-4x earnings, forward-looking earnings, if I recall, and their ROEs in the 40% range. So I think the street's got it wrong. And they've got it wrong in a lot of accounts. I think somebody needs to reevaluate the industry. That's my personal opinion. You know, the home builders as a group are the most under-levered, generating positive cash flow, de-lever their risk in the land, to the point that we can withstand the cyclical nature of this business. Now, I've heard it a million times. Well, we gotta prove it. Okay, we'll prove it again. You know, we'll have to prove it to the street that we can withstand, you know, whatever interest rate forecast that goes through the Federal Reserve. But my personal belief is, and I know this for a fact, we're so well positioned, both from a risk standpoint and a liquidity standpoint, that's not really a concern. But I have the investor base telling me that I have impairments in my balance sheet because my stock's trading below book value. I don't have any impairments. It's illogical. The street doesn't know what they're talking about, to be honest with you. It's kind of frustrating, to be honest with you, because nobody's taken a bold step to say, "Hey, the home builders are different this time around." Are we gonna be perfect through this storm? Are we gonna have more normal margins in the 18%-22% range, which is where we underwrite things? Yeah. The investor base and media wants to focus on the negative, and I get that. I mean, that's just the way people sell product and newspapers and all this stuff. I'm focused on the positive. When you look at the supply-demand of housing and obviously the big private equity firms that don't, some of which answer to Wall Street, they're saying, "Well, I better make this bet now, because over the next decade, there's just been a huge lack of housing built in this country, and the barriers to entry aren't getting any easier." That's my little tirade for the investment community, so. But- I'm 61, and I just say what the hell I want to say now. Oh, wow. Okay. If you don't like it, I'll buy you a beer later. You can sit down now. Okay. No, I can keep going, man. Yeah, yeah. I can keep going, baby. Hey, Kent, you wanna come up and give me. Let's go. The answer to your question, though, is that we are very confident in our playbook. Yeah. we're gonna continue executing it. We see opportunity regardless of which way the winds blow. We are gonna continue to perform. The share repurchase is a big component of that playbook, and we think that should signal to the investors our belief in the direction of the company. Consistency. I've said it a couple times. You need to be consistent to hopefully be rewarded from the investors who say, "Wow, Tri Pointe keeps doing what they keep saying." We've been doing that since we're public, but it still doesn't really resonate, but it's fine. You know, we got thick skin, and we'll keep, you know, charging away. I think we got five minutes, and then we gotta- Yeah, we've got time. Now you got Doug all riled up. Yeah. This is the best time to ask the questions, the tough ones. I was so glad you asked that question 'cause it was just perfect. Nothing? All right. Well, hey, I just wanna thank everybody for coming. It's great to see everybody's face in person. Really appreciate you guys taking time to listen to our story. Hopefully, we got across our points to you and let's grab some box lunches. We're gonna head out. I think you're gonna love whoever. Hopefully, most of you can stay for the trip out to Waterston. It's a gorgeous community. Really, again, thank you for coming out this last night and today. Appreciate it.