Jay McCanless: My second question, could you talk about how many communities, you were able to raise prices during the quarter? And as part of that as kind of a two-parter. Was the price action in terms of competition from the other builders, was it as frenetic as what you saw in 2022 or in the fall of 2022, or was it a little more well-behaved this year?
Jeffrey Mezger: Rob?
Robert McGibney: So we didn’t have as much pricing action during Q4, which is what we talked about it in Q3. I think we had 60%, 65% of our community’s price increases because of mortgage rates going up, the way that they did that just wasn’t in the cards. The market wasn’t there. We work as we optimize each community and asset we aren’t seeing the need to raise prices to slow down absorption. So, we, I think price increases, maybe it was about 25% of our communities, fairly small increases in the range of 5-K or 6-K during the quarter. Most of what we saw from other builders was incentive action, not necessarily price moves.
Operator: Thank you. And the next question comes from the line of Susan McCleary with Goldman Sachs. Please proceed with your question.
Susan McCleary: Thank you. Good afternoon everyone and thanks for squeezing. My first question is, can you talk a bit about the just the level of activity you’re seeing in the design centers, anything that’s changed there as we’ve seen the move-in rates?
Jeffrey Mezger: Susan, I’m not sure. I heard the earlier question, I heard you say design centers. I didn’t hear the rest of it.
Susan McCleary: Yes, I’m sorry, I’m on a train, and so I don’t, can you hear me better now?
Jeffrey Mezger: Yes.
Susan McCleary: Okay, yes. So just wondering if there was any change in the input of the trends that you were seeing in the design centers through the quarter and even into the first couple of weeks of this year, just given the move-in rates.
Jeffrey Mezger: Now they are very similar to what we saw last year. And frankly, the last several years of spending in the studio has been very consistent. It’s moved to more what I’ll call value items, more permanent things that’s not necessarily finished, but room layouts and optional islands and things like that, less jacuzzis, and sort of those stuff, but the spend has been very consistent.
Susan McCleary: Okay. And then I guess any thoughts just as we think about this year’s priorities for uses of cash and you talked about still having some availability on the buybacks in there and just how you’re thinking about that relative to perhaps land spend and some of the other larger buckets.
Jeffrey Mezger: Well, as you can tell from our balance sheet, Susan, we are in a very strong position right now. And first and foremost, we’re always going to be growing the company and that’s where our first dollars would go, but what we saw as 2023 evolved there was a lot of idle cash, I’ll call it a nice problem to have, with the cash that was needed to fuel our growth and position us and we were opportunistic and bought back a lot of, lot of our stock and we then somewhat programmatic about it for a few years now. We intend to continue to be active and the level will be determined based on all the factors Jeff rattled off in the prepared comments and how are we doing on land spend and how is our liquidity position, how do we look what’s the stock price and that will influence our behavior, but we do intend to stay in the market and continue to buy stock.
Operator: And the next question comes from the line of Alex Barron with Housing Research Center. Please proceed with your question.
Alex Barron: Thanks, guys. In the last couple of years with the rising rates. Lot of builders look more towards offering spec homes and I guess it was understandable, but now that rates are going down, are you guys seeing more demand for build-to-order, is there any way you can gauge or measure that?
Jeffrey Mezger: Well, Alex, we always felt heavily to build-to-order, and it was certainly the case in our deliveries in the fourth quarter as well. It’s kind of interesting to me the debate rages on build-to-order versus spec. If you look at our delivery cadence and our revenue. One of the values of build-to-order with a backlog is consistency in your results. And if you look back over the last two years to three years, our deliveries quarter-after-quarter-after-quarter are in a very narrow range we’ve been 2,800 to 3,400. No, broader than that from Q1 to Q4 from 2021 to Q1 2023, so it speaks to the consistency that we’ve been able to produce. Irrespective of what people say about once a better selling approach and we still maintain that we get better margins, we have predictability, we can align our land development with our pace of sales and starts.
And it’s just a far better rhythm and a better way to run the business. My expectation as you look forward in 2024, we have some inventory to sell and we always will but we will tell heavily 70% built to order.
Alex Barron: Great. Best of luck.
Operator: Thank you. And the next question comes from the line of Joe Ahlersmeyer with Deutsche Bank. Please proceed with your question.
