Anthony Pettinari: Hi, good morning. There was an earlier question on the large builder acquisition we saw last week. I guess we also saw a large acquisition in SFR. And I’m just wondering if you could talk about how institutional demand for build-to-rent homes has been trending, maybe relative to earlier expectations. Do you expect that to grow as a portion of your homebuilding operations and just maybe the impact of that business in this kind of rate environment?
Michael J. Murray: Certainly we have seen that with the change in the capital markets, that demand environment became much choppier last year. But we still had institutional buyers that were anxious to get the product we were delivering to the market, and they continue to be so. We delivered projects in the first quarter, we expect to deliver more in the second quarter and then throughout the year with the pipeline that’s there. I mean, for us, it’s a strategy to help us derisk land positions and more rapidly monetize our land portfolio. And so we are still seeing good demand for the product, good demand on the rentals and the lease-ups when we’re taking the stabilization process on and continue to expect that to become a growing part of our business.
Anthony Pettinari: Okay, that’s helpful. And then just last quarter, I think 60% of your buyers took some form of a buy down and you were offering 6.25 on a conventional loan. Just wondering if you can update where that stands coming out of fiscal 1Q and I guess you talked about this earlier a bit but do you think about kind of a rate level where buy-downs maybe stop becoming kind of the chief incentive mechanism or where incentives start to shift back to more kind of traditional ones?
Jessica Hansen: We’re probably up, call it, roughly 10% sequentially in terms of the take rate on that buy downs. So we were in the 70s and now we’d be in the 80% range of the buyers that utilize our mortgage company. So the 60% you said was on our overall business, so say 60% to roughly 70% of buyers took that this quarter.
Paul J. Romanowski: And the use of those rate buy downs is not just new to us over the last 12 months. We’ve been 24-plus months utilizing that incentive. So I believe on a go-forward basis, staying competitive to not only the new home market, but especially to the resale market for us, and the ability to have a lower monthly payment for same cost of home is advantageous. So we have no plan in the near-term to stop utilizing it even if we see rates shift down.
Anthony Pettinari: Okay, that’s helpful. I will turn it over.
Operator: Your next question is coming from Ken Zener with Seaport Research Partners.
Kenneth Zener: Good morning everybody.
Paul J. Romanowski: Good morning Ken.
Kenneth Zener: I wonder, with the industry, everybody likes to focus on the income statement, right. So the gross margin has obviously been a focus today. However, your initial comments were about inventory returns, which together gets you returns on inventory. So because you took up volume for the year modestly and all we see is one quarter forward guidance, is it fair to say that you guys’ internal metrics are generating the same or higher ROI than you had started the year at, I know you kept the $3 billion cash flow the same but I’m just trying to understand we see one part of the business, but not necessarily the output of the other?
Bill W. Wheat: Sure, yes. I mean our returns are in line with our plans, and our divisions are out there executing on their plans, their start plans week-to-week, month-to-month and deliver the homes that we expected to this quarter, plus a few hundred more. And so as we enter the Spring, we’re continuing with that and very consistent with our expectations from an inventory turn standpoint and a return on our assets, our investments in inventory.
Kenneth Zener: Right. So you talked about improving cycle times, obviously, part of that stuff. Do you see — when you started 20,000, the last three years starts to have been 14,000, 25,000 all over the place. Can you talk to that level, I mean, do you see some degree of maybe use the word seasonality or what’s kind of affecting that, is it orders or is it just a plan that you have to reach your closings, A? And then B, what do you expect your inventory units to be at the end of the year given your underlying assumptions right now? Thank you very much.
Paul J. Romanowski: Yes, Ken, as you look at our past year plus starts space, it has been inconsistent and a lot of that has been in response to the market, in response to the elongation of cycle times and then further reduction of cycle times. As you look at our inventory today and our guide to basically turn a little more than two times that inventory, we can expect to see consistent and sustainable starts expansion over the next few quarters. We want to maintain the level of inventory that we have and be in a position as we respond to the Spring selling season to stay consistent with our starts, but we do need to grow our starts consistently quarter-to-quarter over the remainder of the year.
Bill W. Wheat: And as we consistently look to position ourselves to grow, we would certainly love one position ourselves to grow fiscal 2025 over fiscal 2024. So we would expect our inventory at the end of the year to be a little higher than it was at the start of the year with the expectation of turning it a little more than two times in fiscal 2025.
Kenneth Zener: Thank you.
Operator: Your next question is coming from Susan Maklari with Goldman Sachs.
Susan Maklari: Thank you. Good morning everyone. I wanted to talk a bit more about thinking of the competitive dynamics on the ground. As you think about some of the smaller new home markets that you have recently entered and the potential for more existing home turnover to perhaps come through as we move through the year, any thoughts on what those competitive dynamics could mean for you in various markets and perhaps how you’re positioned relative to that?
Michael J. Murray: I think, Susan, that we’re continually looking to provide affordable homes that hit a payment that’s going to work in the monthly budget for our buyers. And that is what’s oftentimes overlooked, especially by the smaller markets, a lot of the builders that are currently existing have capital constraints on what they’re able to build and start. And so they’re looking generally to maximize revenue per lot or margin per lot and go with the lower volume. And so they’re leaving that first-time homebuyer, that family that needs a more affordable home, kind of not really their target. So that’s the target customer we seek out and we see good results when we go into a new market, greenfield a new market and focus on the affordable price points.
Susan Maklari: Okay, that’s helpful. And then thinking about the cash generation and the balance sheet, what — as things have normalized, what level of cash, I guess you’re comfortable holding on the balance sheet today, and how do you think about the potential for perhaps increasing the buybacks or allocating capital as some of the other growth initiatives that you have out there as you continue to bolster the balance sheet?
