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Beginning in the first week of January, demand has picked up beyond the normal seasonality that we typically see at the start of the spring selling season and has continued into February. We've seen demand improve in most markets across the country, including Florida, Atlanta, South Carolina, Charlotte, D.C. Metro, Pennsylvania, New Jersey, Texas Colorado and Southern California. Over the past few weeks, we have also seen signs that demand is improving in markets that struggled the most in the second half of 2022, such as Boise, Phoenix, Reno, Las Vegas and Austin. We attribute the increase in demand to improve buyer sentiment as inflation appears to be receding and the overall economic outlook seems to be more stable than it was a few months ago.

Over the past decade, the housing market has been driven by 75 million millennials entering their prime homebuying years. Baby boomers who have been buying homes as they retire and adopt new lifestyles and migration trends that have favored the Sunshine and Mountain states. At the same time, the U.S. has chronically underproduced new homes. Study after study has shown that home starts have not kept up with household formations for many years. And as a result, they now exists a deficit of anywhere between 3 million and 6 million homes in this country. This supply surge was obvious during the pandemic when buyer urgency surged, demand spiked and prices rapidly increased. It was less obvious in the second half of 2022 when the impact of the sharp and rapid increase in mortgage rates caused many prospective buyers to put their searches on pause.

Now, however, with the traditional spring selling season upon us and consumer confidence improving, buyers are coming off the sidelines. The most telling sign that these fundamentals are real and meaningful is the fact that rates didn't have to go back to 3.5% or even 5.5% for buyers to come back out. In fact, this past week, we had the most deposits we have seen in a month even though rates had moved back up over 6.5%. The improvement in demand is playing well into the strategy we outlined on our December call. In the second half of fiscal '22, with demand inelastic in many markets, that is buyers were not all that moved by price concessions. And with extended delivery times and elevated building costs, we chose not to chase the market down.

Instead, we focused on delivering our large high-margin backlog while taking a more patient and balanced approach to new sales and waiting for what we believed would be a better spring selling season. We are now replenishing our supply of spec homes and increasing community count into the spring selling season, taking advantage of improving supply chains and cycle times and building costs that are stabilizing, all while demand appears to be rebounding. As we execute on this strategy, we continue to make appropriate adjustments to product price and incentives at each of our communities based on a detailed assessment of local market dynamics, including elasticity of demand, the size of each community's backlog and the depth and quality of our landholdings in the market.

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In our first quarter, about 2/3 of the $117,000 sequential decline in the average sales price of new contracts was attributable to mix. The remaining 1/3 was due to increased incentives leading to a first quarter average incentive of about 8%. Today's incentive on the next home sold is about 6.5%. Historically, our average incentive has been approximately 3% over the past 15 years. Based on the recent strength in the market, we expect to continue to pull back on incentives in select communities. With the retail market type and buyers eager to lock their mortgage and contract, and move more quickly into their new homes, demand for spec homes has been very strong. For the past several quarters, approximately 1/2 of our orders were for specs which we have sold at various stages of construction.

Please remember that we define a spec as any unsold home with at least a foundation in the ground. Considering current market conditions, we are strategically starting more spec homes in select markets, but most will be sold early enough in the construction cycle so the buyer will still have the opportunity to personalize their finishes, which is very important to our luxury buyers. We are also pleased that our cancellations have remained low. Cancellations in the first quarter totaled 244, down from the 312 cancellations we recorded in the fourth quarter. As a percentage of backlog cancellations were 3% versus our long-term average of approximately 2.3%. Our low cancellation rates speak to the financial strength of our buyers, the sizable deposits they make and how emotionally invested they become as they personalize their new Toll homes.

While we are encouraged that buyers are returning to the market, we recognize that the direction of the overall economy, mortgage rates in the housing market remains unclear. In light of this uncertainty, we plan to remain prudent as we invest in the growth of our business through disciplined and capital-efficient land buying. We have sufficient land in our existing portfolio to support community count growth in both fiscal '23 and 2024, which allows us to be highly selective as we assess new land opportunities and takedowns under existing options. At the end of our first quarter, we owned or controlled approximately 71,300 lots versus 76,000 lots, at the end of our 2022 fourth quarter and 86,500 lots 1 year ago. 52% of our 2023 first quarter end lots were owned and 48% were controlled through options.

Excluding the loss and backlog, 54% of our total lots were controlled through options. We continue to expect to generate substantial cash flow in 2023, and we have ample liquidity under our credit facilities. We intend to use excess cash to further reduce leverage and return capital to our shareholders. With that, I will turn it over to Marty.

Martin Connor: Thanks, Doug. We are pleased with our first quarter results. We grew both our top and bottom lines and operated more efficiently compared to last year. First quarter net income was $191.5 million or $1.70 per share diluted, up 26% and 37%, respectively, compared to $151.9 million and $1.24 per share diluted a year ago. Our net income and earnings per share were both first quarter records. We delivered 1,826 homes and generated homebuilding revenues of $1.75 billion. The average price of homes delivered in the quarter was $958,000. We signed 1,461 net agreements in the quarter, down 50% compared to the first quarter of fiscal year 2022. However, demand improved each month as the quarter progressed. In fact, our January 2023 net agreements exceeded both November and December combined.

As Doug mentioned earlier, February continues to show strength through this past weekend. The average price of contracts signed in the quarter was approximately $995,000, this was down approximately 3% year-over-year and 11% on a sequential basis. As Doug mentioned, 2/3 of this sequential decline was simply mix. Our first quarter adjusted gross margin was 27.5%, up 190 basis points compared to the 25.6% in the first quarter of 2022. Gross margin exceeded our guidance due to good cost control and less-than-expected incentives in our deliveries. Write-offs in our home sales gross margin totaled $8 million in the quarter. Approximately $3 million of this was related to walkaway costs on 4,100 option lots that we decided not to buy and the balance was related to 1 operating community in the state of Washington.

SG&A as a percentage of revenue was 12.1% in the first quarter compared to 13.4% in the same quarter 1 year ago. Note that our SG&A expense in the first quarter always includes accelerated stock compensation expense. It was $12 million this quarter compared to $10 million last year. This is an annual expense that only hits in the first quarter. The year-over-year 130 basis point reduction in SG&A margin reflects leverage from increased revenues as well as benefits from tighter cost controls. Total SG&A expense declined $15 million in the quarter compared to Q1 of 2022. With this improved operating efficiency, we are lowering our projected SG&A expense as a percentage of homebuilding revenue for the full year by 30 basis points. We now expect the full year 2023 SG&A margin of 11%.

Joint venture, land sales and other income was $16.8 million during the first quarter compared to $29.9 million in the first quarter of fiscal year '22. We exceeded our guidance by approximately $7 million even after a $13 million impairment to mark down land we intend to sell to its fair value. We ended the first quarter with $2.6 billion of liquidity, including approximately $790 million of cash and $1.8 billion of availability under our revolving bank credit facility. Last week, we extended our 22 bank $1.905 billion revolving credit facility up 5 years to February of 2028. We also extended the maturity of $487.5 million of our $650 million term loan out to February of 2018. The remaining $162.5 million of our term loan will mature in part in November of '25 and November of '26.

Importantly, $400 million of our $650 million term loan has been hedged through November of 2025 with interest rate swaps that are fixed at approximately 1.5%. Our net debt-to-capital ratio was 27.5% at first quarter end, down from 31.9% 1 year ago. We plan to further reduce our debt by repaying $400 million of senior notes when they come due in April of 2023. After we repay these notes, we will have no significant maturities of our long-term debt until fiscal 2026. Our book value per share at quarter end was $55.98, and I'll remind you that we have almost no intangibles on our balance sheet. In the first quarter of fiscal 2023, we returned $32 million to shareholders through share repurchases and dividends. We continue to target $400 million of annual share repurchases, and we continue to pay a quarterly dividend of $0.20 per share.

Our community count at quarter end was $328 compared to our guide at $340 million. The variance from our guide was almost entirely due to selling out 11 communities faster than we anticipated. Our openings generally met our plan. Our forward guidance is subject to the usual caveats regarding forward-looking information. That being said, the 7,733 homes in backlog at the first quarter end gives us good visibility for the remainder of the year. We are projecting fiscal 2023 second quarter deliveries of approximately 2,050 to 2,150 homes with an average delivered price of between $980,000 and $1 million. For fiscal year 2023, we are maintaining our guidance and project deliveries of between 8,000 and 9,000 homes with an average price between $965,000 and $985,000.

We expect our adjusted gross margin in the second quarter of fiscal year 2023 and for the full year to be approximately 27%. We expect interest in cost of sales to be approximately 1.5%, and in the second quarter for the full year. This would represent a 20-basis point reduction in interest expense and cost of sales year-over-year as our leverage continues to decline. We project second quarter SG&A as a percentage of home sales revenues to be approximately 11.2%. And as I mentioned, for the full year, we now expect it to be 11.0%. We Other income, income from 1 unconsolidated entities and land sales gross profit is expected to be approximately breakeven in the second quarter and $125 million for the full year. Much of this full year other income is projected from second half sales of our interest in certain stabilized department communities developed by Toll Brothers Apartment Living in joint venture with various partners.

While the market for the sale of these stabilized rental properties is unpredictable due to volatility in the capital markets. Our occupancies remain strong and we do currently expect to sell our interest in 4 of these joint ventures by the end of the fiscal year. We project the second quarter tax rate at approximately 26% and a full year tax rate at 25.7%. Our weighted average share count is expected to be approximately 120 -- I'm sorry, 112 million shares for the second quarter and 111 million shares for the full 2023 fiscal year. This assumes we repurchased a targeted $100 million of common stock for the second quarter and $400 million for the year. Putting this all together, that works out to be between $8 and $9 per share for the full year which would move our book value above $60 at fiscal year-end 2023.

Lastly, as Doug mentioned, we expect to continue generating strong cash flow in 2023 and we remain cautious on new land spend. But based on the land we currently own or control, we continue to expect community count to grow by 10% by the end of fiscal year 2023. This would be off the base of 348 communities that we started the year with. We also control enough land to grow community count in fiscal year 2024. Now let me turn it back to Doug.

Douglas Yearley: Thank you, Marty. Earlier this month, Fortune Magazine named us the #1 World's Most Admired Homebuilding Company. This is the eighth time we have received this honor. I would like to thank all of our Toll Brothers team members for achieving this tremendous recognition. They continue to demonstrate their dedication to our brand and to our customers. And for that, I'm very grateful. I'm so proud of our team and of our company. With that, Keith, let's open it up to questions.

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