Good morning. My name is Jack and I will be your conference operator today. At this time, I’d like to welcome everyone to the Q1 2019 PulteGroup Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Jim Zeumer, you may begin your conference.

Great. Thank you, Jack. We appreciate everyone joining this morning’s call to discuss PulteGroup’s first quarter financial results for the period ended March 31, 2019. Joining me for the call today are Ryan Marshall, President and CEO; Bob O’Shaughnessy, Executive Vice President and CFO; and Jim Ossowski, Senior Vice President, Finance. A copy of this morning’s earnings release and the presentation slides that accompanies today’s call have been posted to our corporate website at pultegroup.com. We’ll also post an audio replay of today’s call a little later on today. Before we begin the discussion, I want to alert all participants that today’s presentation includes forward-looking statements about PulteGroup’s future performance. Actual results could differ materially from those suggested by our comments made today. The most significant risk factors that could affect future results are summarized as part of today’s earnings release and within the accompanying presentation slides. These risk factors and other key information are detailed in our SEC filings, including our annual and quarterly reports. Now let me turn the call over to Ryan Marshall. Ryan?

Thanks Jim and good morning. It has been discussed extensively that market conditions in the back half of 2018 and particularly in the fourth quarter were challenging across the housing industry. We believe that affordability issues driven in part by sustain housing price increases over the last few years along with increasing mortgage rates last year cause homebuyers to become more cautious as 2018 progressed. The consensus was that buyer interest as measured by traffic to communities remain high, but the conversion of that traffic to sign purchase contract slowed. Given these conditions exiting 2018 there’s been a lot of interest in how homebuyers have been behaving in this spring selling season of 2019. Before parsing a variety of data points at a high level, here’s what I can tell you about the start of 2019 inclusive of the first few weeks in April. We are experiencing a very typical seasonal upswing and are generally encouraged by the level of buyer activity that we’re seeing. Further with the strong economic backdrop and the recent decline in mortgage rates, there’s every reason to believe that 2019 can be another good year for the housing industry. Overall, our first quarter results are consistent with an improving demand environment, reflective of the typical spring selling season, traffic increased on a sequential basis throughout the quarter with more consumers visiting our communities each month as the quarter progressed. More importantly, traffic into our communities, was also up each month over the same month last year both in absolute numbers and on a per community basis when adjusted for our higher community count. Absorption pace has also improved during the quarter, although they remain below last year’s level. With that said, it is worth noting that we experienced a very strong start to 2018. So…

Thanks, Bob. At the risk of repeating comments that I made at the outset of our prepared remarks, I will provide some regional color, before we open the call to Q&A. Across the eastern third of the country, demand conditions were generally challenging in the quarter for a number of our markets. On a relative basis, Florida continues to be among the stronger areas of the country. In the middle third of the country, demand conditions actually held up pretty well where Texas showing the best year-over-year growth of our reporting areas. And in our western operations, we continue to see meaningful variation in market performance with the ongoing strength in Arizona, helping to offset slower demand in California. Again at a high level, I would say that the overall operating environment feels much better than what we experienced in the back half of 2018. We are optimistic the 2019 can turnout to be a good year for the housing industry with demand supported by strong jobs and historic lows and unemployment, which is allowing for some wage inflation and continued high consumer confidence. With mortgage rates, expected to stay low, the overall operating environment remains favorable. Let me close by saying thank you to our employees and our trade partners, who continue to do an outstanding job building great homes and delivering a superior experience to our customers. Jim.

Great, thank you, Ryan. I apologize for any back ground noise, maybe picking up as they decided today would be a good day to do some work on the adjacent elevators, I apologize for that. With that said, we will open the call for questions so that we can speak with as many participants as possible during the remaining time of the call. We ask that you limit yourself to one question and one follow up. Jack will explain the process and we’ll get started.

[Operator Instructions] Your first question comes from the line of Mike Dahl with RBC Capital Markets. Your line is open.

Good morning, thanks for taking my questions. Ryan, I wanted to follow-up just with a question about the improvement that you’re talking about and just curious, you’ve given the comments around absorption remaining lower but improving through the quarter, can you give us any sense of quantification from a monthly standpoint? And any color on April so far?

Yes, Mike, really not a whole bunch more than I can add other than what I think we shared with you in our prepared remarks. But we’re seeing the typical spring selling season where things have continued to get better as we move from January to February, February into March. Traffic has been strong, both year-over-year but also on a sequential basis. So we’re very pleased with that. I think some of the stability that we’ve seen and really the decline in mortgage rates, I highlighted in my prepared remarks that it’s been 70 basis points over the last five or so months. I think all those things are helping to create an environment where we’re optimistic about what we see for 2019. As I mentioned, we had a tough comp relative to the first quarter of 2018. It was really a spectacular time for the company and the industry. So as we look at how we’re positioned, we like where our communities are out. We like the investments that we’ve made. I think our team is operating very well. We’re competing favorably in the eyes of the consumer. So that’s part of the reason that we’re optimistic about what we have in the coming year.

Okay, encouraging to hear. And then my second question relates to gross margins it’s clearly some real strength there even with respect to your prior guidance, could you give us a sense of – I know from a regional standpoint, the West was stronger on deliveries and that typically carries a higher margin, can you give us a sense of kind of what was mix related versus what was kind of core strength and West discounting than you previously assumed in terms of breaking down that bridge versus the guide? Bob O’Shaughnessy: Yes, Mike, it’s Bob. And as always with margin mix matters and you’ve highlighted, we tried to touch on it in the prepared remarks, certainly we were able to close more homes in California than we were expecting in the first quarter, which benefited the margin relative to our guide. Also if you look at the mix of business, it was a little bit richer with Del Webb than it had been in the prior year, which also benefits the margin on a relative basis. Yes. The other thing I think that that happened is, we came into the year a little bit heavier on spec. We’ve talked about that in the fourth quarter and we sold those out, you can see, we’re down to 31% and we did a little bit better on those outcomes, then we were forecasting. So we didn’t discount quite as much. We highlighted that the discount rate was up about 80 basis points, which is just under $4,000. But at the same time, our lot premium and option revenue was up almost that equivalent amount. And so I would tell you, we did little better on the spec sales than we thought which also benefited our margin relative to the guide at beginning of the quarter.

You’re next question comes from the line of Stephen Kim with Evercore ISI. Your line is open.

Yes. Thanks very much guys. So it’s just taking on that comment about how you did better on your temporary spec program then you may be expected. That is something that we were kind of looking for and I was curious as to whether or not there, there’s any lessons learned from that in – if you were to experience another period in the future of rate volatility, let’s say, would you be inclined to pursue a more aggressive spec posture then you historically or normally would. In light of the success, you’ve had in the past in this most recent quarter. Bob O’Shaughnessy: Yes, Stephen. I think it’s important to remember, we didn’t see that the margins were higher on those specs sales, just higher than we expected, coming into the quarter. And so we continue to believe that there is value in having some inventory on the ground. We’ve got less than one finished spec though and we’ve highlighted that over time. And so we don’t want a bunch of standing inventory around. So I think at the end of it, we are opportunistic because we want to keep the production line running at the back half of the year relative to the sales environment than – but I think you can and should expect to see us drive that spec percentage back down into that high 20s or leave it where it is today, it depends on the sales environment over the next four to eight weeks. But again, I think the – we focus on return and getting those homes sold before they finish is important to us.

Got it. Okay, that’s fine. And then secondly, I was curious if you could talk a little bit about the absorptions, obviously all communities are not created equal and just base, when you look at the mix of communities that you’re likely to have in 2Q, would it be reasonable for us to expect that absorptions on a year-over-year basis, in the comp also get a little bit easier, might be able to be flat to up on a year-over-year basis. Is that kind of what you’re expecting with the absorptions are? Are you anticipating that absorption will continue to be negative trending until you get to the back half of the year? Bob O’Shaughnessy: Yes, it’s a challenge for us to guide to absorption. We haven’t done it Stephen candidly. And so I think, we’ll see how the selling environment goes. Yes, we saw a tapering in sales after April of last year. And so sales remain strong on a relative basis, you can see it flat. Again, it’s going to depend on how the sales season goes.

Okay, great.

Your next question comes from the line of Alan Ratner with Zelman & Associates. Your line is open.

Hi, good morning, nice quarter. So on the gross margin very strong result this quarter, the guidance seems like you’re expecting maybe a little bit of sequential pressure in 2Q. But obviously still well above what you – thought you were going to hit this quarter. You know just kind of moving the moving pieces around here on the mix and cost and price. Can you just talk a little bit about what goes into your 2Q guide, is that any unwind from that mix benefit you saw this quarter? Or is this kind of where you see the price versus cost dynamic currently meaning costs that are still going up at a low single-digit rate and pricing power? Is pretty tepid, which results in that type of sequential pressure?

Go ahead. Bob O’Shaughnessy: Yes, Alan, important to remember we’re still near 23%. So the margin profile is pretty strong, but the market is challenging right now. Price is a little bit harder to come by, we have a lot of companies that have much more inventory on the ground that they’re trying to work through. And so we are working – we’ve highlighted in the prepared remarks, we are interested in selling homes. And so we’re willing to toggle price to do that to a degree, also mix does matter, you highlighted that we – and we highlighted that we pulled some closings are we’re able to close homes in California. So on a relative basis, we’ll have less of those higher margin closings in Q2 than we did in Q1, which will matter. And then the relative percentage between the active adult and the traditional business made moderate a little bit. And so we’re candidly pretty pleased with the margins that we’re expecting for the second quarter. And again, it is reflective of the fact that the market is a little challenging right now for price.

Got it. That’s helpful. Yes, on that certainly the absolute margins are very strong. I just wanted to better understand kind of what went into your thought process there. Second, just a couple of housekeeping questions on the American West deal if I could, it sounds like there is no active communities or backlog that’s coming over. I just wanted to confirm that. That’s correct, because you’re not anticipating deliveries until 2020. And then I guess the follow-up there is why was this the right deal, why Las Vegas? Is there something specific about that lot position or their price point positioning there that’s attractive to you guys. And should we expect more of this type of deal going forward?

Yes. Alan, it’s Ryan. Good morning. A couple of things there. First, with American West, we did acquire active communities. We did not acquire backlog. And so that’s why we highlighted that will start closing homes in early 2020. Second – secondarily, to your second question, we like Las Vegas. We’ve got a nice operation there. We’ve – they have had a historic success in Vegas, we like the positioning of where these communities are located, they are in a very favorable part of town relative to the job core, the transportation network and so we like that. We like frankly, the value that these communities offered to consumers on a price per foot and what you get for the price, you’re paying. We think American West is done a very nice job positioning these communities. And so that was attractive to us as well, maybe the third and fourth items that I’d highlight we like what it does to our relative market share in Las Vegas, which is something that we’ve highlighted is key to our success. And finally, we like the nature of how this transaction was constructed in that we get a little less than two years worth of owned lots, and we have a great pipeline of future lots that are under option. So kind of all things considered, we think it was a very good transaction, and we’re excited to have the American West brand part of our family.

Your next question comes from the line of Ken Zener with KeyBanc. Your line is open.

Ken, good morning.

Hello, yes, can you hear me now?

Yes.

Excellent. So Ryan, Bob, I know you guys talked about orders – order pace being down year-over-year. We do look at it model it sequentially, you have a long history of pace going up about 40% sequentially in 1Q, you did about 50%, so higher than a standard deviation basically. Why don’t -- when you talk about April, and I don’t want to focus on a couple of weeks, but when did you really start to feel comfortable that these orders were coming through, was it really just March, A? And then B, how did that play out in the pricing dynamic you might have seen within the spec units that ended up coming better? And why did you deliver more in California? That’s my only question here. Thank you.

Yes, Ken, in fairness, I think there were three embedded in there, but I’ll answer all of them. First off, let me maybe speak to the California question, we’ve got a great team in California that has done a nice job getting some complicated buildings built in a complicated and entitlement market and so some of that was just our own internal planning and assessing associated risks with getting those homes closed. So I think we did a nice job with that. The other two pieces – yes, in terms of kind of pricing and when we saw things start to really accelerate, we’ve long said and maybe the industry has long said that Super Bowl tends to be kind of the time of the year when you start to see the spring selling season started to kick in. And I think that held true this year and then we continue to see things strengthen as we move throughout the quarter. So we’re pleased with that, as far as kind of pricing power, I think I’d point back to some of the things that Bob touched on, its competitive and there are some competitors out there that have put a lot of inventory on the ground and so consumers have choices. And within that environment, we’re making sure that we’re toggling associated discounts and incentives, such that we’re getting our share of the buyers that are out there willing to buy. And I think we’re as demonstrated by the absorptions in Q1, I think we struck the right balance between pace and price, where we’ve got a healthy and attractive margin profile. But we also we are able to sell homes.

Your next question comes from the line of Nishu Sood with Deutsche Bank. Your line is open.

Thank you. Your balance sheet looks in great shape now with the cash flow generation of last year. Your net debt to cap sub 30, thinking about cash flow deployment this year, obviously the American West acquisition will consume some of it. How do you expect that kind of remainder of kind of cash flow to be allocated? Do you expect to keep up the pace of cash returns to shareholders through buybacks and dividends or with the American West acquisition either prevent that or maybe indicate additional acquisitions to come? Bob O’Shaughnessy: Yes, Nishu, it’s Bob. Thank you, great question. I point you back to what we’ve been saying for years now, which is no change to our capital allocation strategy or processes expect us first to invest in the business, we had guided to a $1 billion, $2 billion of land acquisition spend this year, which is about the same as we did last year. Obviously, that excludes American West so that, American West spend would be on top of that. And after that, we will certainly look at our capital in the same way we always have, we’ll pay our dividend, we’ll buy back stock, if we have excess, we’ll look at our leverage and it makes sense. So nothing new to report there and nothing really -- we’ve also told folks, as we’ll tell you, when we’ve done it as opposed to what we think we’re going to do, so no guidance in terms of dollars spent on anything other than the land.

Got it, got it. Okay, and on SG&A, the 11% to 11.5%, I believe you mentioned for 2Q, there were some modest deleveraging in 1Q, and I know that closings will be down a little more year-over-year, but it seems like more significant deleveraging than what we saw in 1Q. Are there any one-off factors that are driving that? Or how should we think about the kind of acceleration in the SG&A deleveraging in 2Q 2019? Bob O’Shaughnessy: Well, I think it’s really -- there are no kind of unique aspects to that other than our expense structure typically comes pretty ratably whereas the closings can be a little lumpy, for lack of a better word and so relative to our guide in the first quarter, we closed warehouses that we thought would close in the second quarter. And so really it was a little bit of a pull forward of revenue into Q1. So Q2, the spend is still there, but some of the revenue dollars came in Q1.

And your next question comes from the line of John Lovallo with Bank of America. Your line is open.

Hey, guys. Thank you for taking my questions as well. The first one on Texas was a bright spot versus our expectations. Can you give us an idea of what kind of areas, you saw the most strength, perhaps the receptivity to send tax and may be opportunities for Centex to rollout into other markets?

Yes, John, it’s Ryan. Texas was a bright spot for us, we’re in all four major cities in Texas, Austin, Dallas, Houston, San Antonio. I would tell you that all four cities performed well of the four, Austin is arguably the strongest and I think that’s really being driven by the continued job creation and high quality jobs that are being created in Austin, which is feeling further housing need. Second to Austin, I’d highlight Houston, our senior team Bob and I, we were just in the Texas markets a couple of weeks ago. So we saw at first hand there is some nice things going on economically in Houston as well. And I think you’re continuing to see that city really get back on its feet following the flooding and the hurricanes that they experienced a year and a half ago. And then Dallas also very strong, but it has seen a run-up in pricing, affordability has been certainly the affordability equation there is not as attractive as what it used to be. But lots of people there, good economy, jobs are being created. And then finally San Antonio is a stable kind of a steady as she goes market and we really like the business that we’re seeing there. So, on the whole, Texas was a favorable bright spot for us as you highlighted.

Okay, that’s helpful. And then on the cost side, did you guys benefit from number in the quarter? And then is there any update on just kind of trade labor in general, if you’re seeing any loosening there or about the same? Bob O’Shaughnessy: Yes, certainly lumber was a little bit of benefit in Q1 as we had highlighted on our fourth quarter call that will be more of a Q2 and Q3 issue for us. Important to remember that lumber is only 3% to 5% of the total vertical construction costs, so it’s – well, it will benefit us. It’s not a – an overly significant element of the house construction cost, labor is obviously one of the larger ones. And we had highlighted coming into the year roughly a 2% increase or expectation for increase in our material and labor input costs. And we still see that is the case for the balance of the year. So, yes, that’s with the relative save on lumber later in the year. So not really aggressive pricing environment, and obviously we’ve got our teams working to try and drive those costs down, labor being one of the areas we’re looking at.

Your next question comes from the line of Michael Rehaut with JPMorgan. Your line is open.

Hi. Thanks, good morning, everyone. The first question I had was on trends during the quarter, because appreciate you giving the 2Q guidance, but at the same time you held off on the full-year guidance, I guess, wanting to see more of how the spring came together or it will continue to come together. And so it kind of implied a little bit of a question mark as we close things out. I was just curious if that was the result of any type of continued volatility, let’s say, month to month during the quarter, because you’ve obviously indicated that it seems like things kind of progressed in somewhat more of an orderly pace with traffic improving every month even up year-over-year. And it seems like you had some amount of – I don’t know stability is the right word. But you know kind of a decent cadence, so I’d love to get color on your sales pace, I believe, was down 8% on average for the quarter itself. Was there volatility on a year-over-year basis as we progressed January, February, March? If there be any color around that sales pace metric in particular or any other areas of volatility that you might want to highlight, that would be helpful.

Yes, Mike. It’s Ryan. I think I’ll point back to some of the comments or reiterate some of the comments I made in the prepared remarks. We saw the quarter really play out where each month got stronger, both sequentially and on a year-over-year basis. As we highlighted the absorption rates were still down relative to Q1, but that was as much reflective of a very strong 2018. No intra-quarter volatility that I would point to. We’ve given our guide for Q2, we’ve highlighted that we’ll give you our full-year guide at the end of Q2. The one thing that I would probably highlight note for you is that last year, it was kind of the 3rd quarter of April, 4th quarter of April when we started to see a slowdown. And we talked about that on our Q2 call last year. So that’s probably the one thing that we’re continuing to kind of watch and pay attention to. In addition to that, as both Bob and I have mentioned, it’s still competitive out there. So we like how the market is performing. But there is some inventory, there is some discounting going on. And so for those reasons, we’ve elected to wait until the end of Q2.

Okay. I appreciate that. And I guess just to clarify, when you see improvement throughout the quarter. If that applies to the sales pace improving on a year-over-year basis as well. If I can just get that clarification. And then just going back to American West for a second, I believe there are currently operating around a dozen communities. Just wanted to get that right. And the closings number, at least from 2017 as Builder Magazine has it was a little over 600, if we’re talking about that type of scale in terms of how you think about, what they could contribute on an annualized basis.

Yes, 11 active communities, Mike is what we plan to have there. And as we mentioned, we will see closings in 2020 is when we’ll start to see things from that business. In terms of kind of your question on what do we see as we move through the quarter, we were down in absorption rates year-over-year. So there was a decline, but things got stronger as we move through the quarter.

Your next question comes from the line of Carl Reichardt with BTIG. Your line is open.

Thanks. Good morning, guys. I wanted to ask about pricing power or what there is or lack of incentive just among the different product types. So I think we have a sense of it from a geographic standpoint. But if you compare active adult move up and first-time in the mix. Ryan, where are you seeing the best performance in terms of lack of incentives or perhaps pricing power.

Well, Carl, I think we’d continue to highlight that the best performer for us is in active adult, that’s a buyer group. A, that I think is as generally fared well economically in the current environment, they are not nearly as sensitive on interest rates as what the other two buyer groups are typically got an accumulation of wealth. And then we’ve got a very compelling offering and unique offering with our Del Webb communities that we think is differentiated in the marketplace. And I think that gives us some pricing power. With the other two groups, I’d probably characterize them as equal in terms of discounting but for different reasons. The move-up buyer that has got choice and there’s generally speaking more inventory on the ground for that buyer to choose from. So I think that’s a driver for added incentives. And with the first time entry level buyer there is more of an affordability pinch there, that is creating the need for incentives. So best active adult, the other two probably being equal.

Great. Thanks, Ryan. That’s all I got. Thanks guys.

Your next question comes from the line of Matthew Bouley with Barclays. Your line is open.

Hi, thanks for taking my questions. I wanted to follow-up on the comments you made around spec margins. Specifically, to what degree would you say that the higher spec you carried into the quarter played into that 4% sales discount you disclose the up 80 basis points year-over-year. And so as you started to now normalize the spec position what would be the implication to incentives, I guess going forward. Thank you. Bob O’Shaughnessy: Yes, I don’t think we have that level of granularity for you today. The thing I’d highlight for you is over time what we have seen is the margins that we realized on homes and I think discount as being part of this, if we sell it as 3rd or if we sell it before, basically frame are roughly the same. Even if it was started a spec, where we start to see degradation in margin is when we get them final. And so as you can tell, we don’t have a ton of final inventory on the ground, it was 662 I think finished back at the end of the quarter, which is up maybe 50 or 60 over last year. So we didn’t let a lot of it get to that. And so I would tell you it’s probably not a significant driver in answering your question, it’s is not a significant driver, the discount differential on spec versus non-spec production.

Okay. That’s helpful. And then secondly just bigger picture on the land spend comments. You grew your land spend in the quarter, but it sounds like you’re keeping the 2019 guidance around $1.2 billion before American West. So just given the market has improved since that initial guidance. I mean would there be any kind of rethinking or perhaps upside to that land spend target? What are your thoughts around I guess ongoing unit growth targets at this stage in the cycle? Thank you.

Yes. At this point in time, we’re not given any kind of additional guide beyond the $1.2 billion that we’ve highlighted. But I would note that essentially, the American West transaction is an investment in land, 1,200 or so finished lots that will get today and another 2,400 plus or minus option lots. So, those are incremental lots beyond the guy that we had initially given and will also be incremental spend. So I think I would read into that we are optimistic and bullish on the future.

Your next question comes from the line of Susan Maklari with Credit Suisse. Your line is open.

Thank you. Good morning.

Hi, Susan.

My first question is around Del Webb. You definitely saw some more strength in that part of the business this quarter and it’s an area where you’ve done a lot of work over the last call it year or two. And sort of repositioning or redesigning those communities to some extent. So how much of the strength this quarter, would you attribute to the company’s specific efforts versus just the broader market and the shift in demand?

Yes. Susan, I think it’s probably broader than just say in the last year and a half. This is an effort that really goes back to when we rolled out our very first commonly manage plans, which happened to be specifically designed for our Del Webb communities. That work goes back to kind of end of 2013, 2014 timeframe. We’ve highlighted that we are now five years after that initial roll-out. We’re in the process of rolling out our next generation Del Webb plans. So we think we’ve done a really nice job with the product meeting the needs of this particular buyer, I think some of the things that you were alluding to are reflective of smaller communities. And when I say smaller, these are on the order of 750 to 1,200 units, relative to some of the larger size Del Webb communities that we had from a prior timeframe where they could be as large as 3,000, 4,000, 5,000 homes in size and scale. So I think it’s a combination of how the brand has continued to evolve to keep up with how that buyer has evolved. The communities are a little smaller and that’s really being driven by a desire for these buyers to work longer, have access to the amenities, the country clubs, the churches, the entertainment that they’re used to and their current market as opposed to selling their family home and moving out of state to an entirely different destinations. So hard to pinpoint it down to a timeframe of the last six, 12 or 18 months, but it’s really been an evolution over the last six to seven years.

Okay. Thank you. And then my next question is just, you talked a little bit to the strength that you did see in terms of some of the options in the lot premiums in the quarter. Is there any sort of change you would say that you’ve seen there in terms of what people are choosing or any preference over one thing versus another that you could share with us?

Nothing that I would highlight other than we think the way that we are running our pricing model. We’re doing a nice job of giving consumers choice and allowing them to spend money on the things that they value. Lot premiums continue to be something that we get great benefit out of and we think the consumer does as well. Unique lot premiums there are typically only a small number of those in a given community. And so, if a buyer has an opportunity to buy those, there are certainly value for the consumer and for us as we sell those. Option spend, we continue to see probably some of the most popular things be the personal choice items around flooring, around cabinets, counter-tops some structural options as consumers kind of customize or personalize the things that they want in their home. Those are the things where we’re seeing buyer spend money.

Your next question comes from the line of Jack Micenko with SIG. Your line is open.

Good morning. Ryan and Bob, I think you said that in terms of you are up about 80 basis points year-over-year. I’m more curious if you could give us a sense of what incentives maybe get through the quarter. I know you said pricing, the pricing environment is still tough. But is there any directional sense or color you could give us on incentive trends and even maybe into April.

Jack nothing meaningful in terms of differential during the quarter candidly.

Okay. And then on the land side, I think in the slide, call it a 54% option components and I think it’s been in the ‘40s in prior years. So just can you give us an update around mix. I know you’re still to three year number of working that down, but with 61% owned, but doing more option. Where do we see that number getting to inclusive of America West over the next year or two as you say? Bob O’Shaughnessy: So I don’t want to give a target, but the America West obviously 67% of the lots are controlled via option and the 1,200 that we bought, Ryan highlighted two years of supply their finished. Looking at the book, we have highlighted that were at 3.9 years, 39% controlled in total via option. But if you take out some of those legacy Del Webb positions you’re closer to 3.3 years of owned and almost 50:50 owned versus option. So I think there are opportunities. But not significant movement from here. I think if you look back the last four or five years, we’ve been operating at close to that three years owned and three years options, I think you continued – you will continue to see that from us going forward. Obviously American West is an opportunity that was allowed us to do little bit better than that. And we’ll seek other opportunities as we go forward.

Your next question comes from the line of Paul Przybylski with Wells Fargo. Your line is open.

Thank you. Going back to Del Webb, did you see normal seasonality and orders this quarter? Or was there a later start to the selling season maybe some carry through into March and April, given the 4Q loss that buyer had?

Yes. Nothing that I would highlight Paul, it’s unique or abnormal.

Okay. And then what percent of your communities had price increases versus peak? Bob O’Shaughnessy: I don’t know that Paul. We can try to do a little work for you.

Okay. All right. Thank you. I appreciate it.

There are no further questions at this time. I’d like to turn the call back over to our presenters for closing remarks.

Great. Thank you, Jack. Appreciate everybody’s time this morning. We’re certainly available as the day goes along. For any additional questions and we will look forward to speaking with you on our next conference call.

This concludes the Q1 2019 PulteGroup, Inc. earnings conference call. We thank you for your participation. You may now disconnect.