Lennar (LEN) 15 Sep 232023 Q3 Earnings call transcript

Welcome to Lennar's Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the presentation, we will conduct a question-and-answer session. Today's conference is being recorded.

If you have any objections, you may disconnect at this time.

the the to forward-looking turn the Collins now of reading statement. will call David over for I

Thank you, and good morning, everyone.

Today's results flows, forward-looking business, conference statements, including statements include call regarding financial of and strategies condition, cash operations, prospects. may Lennar's

subject have on statements Because Forward-looking date risks conference to forward-looking to intended give statements of not are to as that the any statements relate are Lennar's assurance and not actual uncertainties. this these only to represent inherently yet estimates occurred, call future and matters results.

in Many with report affect recently activities earnings obligation our XX-K, most anticipated our SEC. include Lennar's the to Form could statements. activities materially future SEC factors factors Lennar including cause Factors annual update results in results Lennar's or from under release and and filings, on assumes filed those actual in note the and differ Please that caption forward-looking These described no may forward-looking statements. results to any contained Risk those the

I would may to Stuart Mr. begin. Sir, host, Executive your Chairman. Miller, you now introduce like

I hear and in you, a of everyone, Pardon you'll good cold, morning, me, joining a cough bit for good. Thank so this Very I've us voice. and got my little. thanks a morning. that

our Lennar CEO Jon Miami in and I'm in our Financial from, We're Miami, you Vice our So, Gross, Chief today, President; Services. President; Bruce of together Jaffe, Controller Bessette, who all and heard together. just our with and Diane Co-CEO Officer; Financial Collins, here David

going and to assist is is quarter updating question conditions. on going and as supply on overview, please can, my limited in time answer and introductory comment some the our is macro many to to strategic we'll we give operational detailed is of XXXX After give and And usual. going limit to modeling. the and guidance to highlight, land company fourth for our and a construction and usual, And give usual, a an Jon yourself to color He then, as performance. follow-up along year-end he costs. cycle position overall as going give as one chain, Diane some financial going then to and I'm with questions forward-thinking As market remarks, one overview

began you as since as call, Lennar know, prepared higher that Rick in his in XX retired He quarter. that of earnings that began of Now, the it's operating environment at was Beckwitt heights. top reach for the rejoined XXXX. economic all in and end at what treated we positioned the last our with found Lennar in he called, anew beginning Great the for industry the even Rick Recession, with future himself, the we Rick as its years his achieved devolving with very Jon to side-by-side effective changing and of an difficult aspirations. was to and problems over He righting own part expectations the the at navigated best was team Rick the me rest altered what and and jumped was with became for next team. times. We worked fixing and and together, of broken success years, Jaffe, upside-down. heights, And Lennar new and was however, a caught game of industry reach partners extraordinary. as third an the and

timing This from of as inevitable well when is but Lennar his we all We moment all moment. company industry, in with all Rick's benefited is experience is to uncommon natural appreciate the camaraderie and that real at his All service reach shared. for retirement, intellect well. that prepared the and the of coincide it We that us partnership. that moment the

leaders Lennar President. and completed operating Co-CEO efficient structure and a with smaller partners financially to and organization of and together Rick, both forward the team retired with the positioned Rick organized the as three, overhead. XX I worked and and as years more Lennar move for and leadership position today is of lift service a rest to industry. Lennar in Jon As of

you're cabinet on know can't I here I out and stable, Rick, I are yourself. there. your well executing just and all sharpen Rest or hope at as expected to the and Lennar. Maine. assured building game call preparing help you're you some know know because listening, is that I you're we golf wood in

let of well positioned to as as the are the talk business turn for business about me we our at future. hand how we and now, performing, So Lennar are and how

maintaining the me pleased that on have time let cycle excuse has and cash the reducing inventory flow, pace, focused improving -- driving for quarter. we balancing And increasing again saying has produced production begin and Lennar we're and strong and So, turn that result by to me, consistent strong bottom sales team and remained line. report a

to the prior strategies operating that of in a adherence we against backdrop consistent detailed have reflect environment the evolving an macroeconomic configured quarters results quarter landscape. housing core third and Our constructively

mechanisms billion have the market, certainly our stabilized inflation, to the in engages relative its macroeconomic per phase to we curtail the it constructive the $XXX aggressive adjustments interest and last year. It order reduce and noted seems in relative sheet defined environment entered housing shrinks while climb environment has by approximately press release, is I the balance rate to As in of month that the -- to market. other homebuilding a capital that Fed measured more

Over steps bring hopefully these time desired to will these time, levels. -- inflation over

rate aggressive access levels, moderated a have for And moves while overall to is elimination orderly adjust of sharp housing constructive given fashion. remains persistent consumers capital in is capital and to and is and turns to rate the market the inflation necessities, Fed While in more aggressive working their a the enough the reduce finding necessity. system, measured movements, allowing hikes generally to to way

consumers very is to will consumer adjusted is by "higher afford. and willing are a supply, short rent or and generally and that supply remain affordable Higher higher. driving and demand of that products housing rates, defined products. the can of now a understands new market accepted they current wage. interest affordable with employed and strong rates for what be continue likely the is and Against need short consumer in purchase backdrop, they have higher The the longer" cost to is the confident housing housing with normal, demand to and employed likely The for will

and on returned needed have shelter, price has Generally in the demand The customers adjusting prices net home market responded. and and to stabilized. XX% housing in attracted moderated, The increasing have order the buy-downs, that limits to strong down that sales production expect $XXX,XXX and homes our consumers fairly from seen afford has prices, to net speaking, pricing have for has XX% costs rate of consumers average affordability. approximately constant. or the of average driving approximately enable XXXX of now, dropped to net closings We've remain including approximately incentives, by within we peak in sales numbers $XXX,XXX prices

supply, rental rates multi-family and creating rates. also apartment Concurrently, supply Two now are starts moderating delivered geographies, have some are rental moderated. increases, per excess which being years in XXX,XXX year and of

this year, a future. significant calculation. Rentals they the make CPI significantly, expect we new much too we not of up rent don't but rents either to are and equivalents in will drop-off foreseeable likely part very While drop a starts expect the that grow sharp in

price believe the while market an sales have provide that normalizing lower, Overall, stabilized, cost reductions. average engineering and net has prices value we housing cancellations to offset have the leveled, and as been are margins and reductions

increasingly Additionally, more we supply-demand imbalance. believe homes will that be developed the continue to new scarce expensive This develop. as limited available to and limit is supply of and inventory will land maintain

is limited, continue has affordable Bottom to offerings, and to will the need to the returned line, produce void. short is builders housing economy constructive, to homes more demand fill and supply

core So focused team against forward. that driving the remained company our our Lennar has are strategies that backdrop, on

we to carefully pace to on First, margins, a we pace, and volume flow and strong matched. time, same digital driving maintain our driving sales and sales remain machine keep higher dynamic production focused efficiency, At production focusing continue cash on with while and closely pricing primary and the a pace matched focus assets. inventory marketing on turn, return driving higher using production

we over homes, In homes, year. XX,XXX our or started last increase XX,XXX third delivered homes, the XX,XXX an we X% sold and while quarter, we

while Our starts pace sales for pace per per month, X.X homes our was month. homes the per community per quarter community was X.X

quarter, While every these numbers ever getting don't by our fit perfectly than together, and and we're they more design. careful tightly platform are closer operating

pricing a continue helps which we home efficiency. one and a rate. pace dynamic at sales consistent is our This enables controlled has that driven our level available a machine pace drive over last marketing backfill very digital confidence maintain cancellations, result, us enabling And the to that net inventory X.X% a to quarter and per starts, to ran Our community. start operating as exceed just

have expecting at sell XX.X% to continued now XX.X% bottomed the and market quarter, of margins at XX.X%. homes has current XX.X%. to flat a our quarter we've improved, margins prices, when this first With next recovered margins focus, to market reducing the conditions of And and Accordingly, improvement as quarter we're as year improve in necessary. margins this this modest with to improving range

to in improving. phases through gained very increased for volume elements consistently margins flow. to almost And are strong working the strong the and These of are cash now we market all of execution ability Of our almost we've of XX,XXX with guide and course, deliveries well XX,XXX strong confidence flow. cycle, producing year extremely cash to accordingly,

have the margin shortly, this the with we construction-ready across And cost we that sales to costs price now pre-supply were and time of to stabilized. to cover Jon platform. strategy, have considerable in construct in the homes number levels. continued down success been team We to is work Next production this -- cost to configured to and our detail the reflected and quick our improvement in chain our as has we and maintain will purchasing in our the delivery for relative market components environment, structure Jon more these held will partners market were area current drive we've reduce laser-focused cycle while corrected, well trade crisis properly but available as as as quarter. continue

our has attention on acquisitions, been to and well bank and as land strategy third land sharpen land land as strategy. Our

across focus a concentrated on land, to reducing increasingly the While Jon refine approach division will platform additional every asset-light. continuing give our to been and land in exposure has this become specific to detail

just some on now balance XX% progress land controlled. land in and held sheet significant made We've with X.X years owned reducing our of

more have in costs. rationalize to manufacturing and exceptional Accordingly, have We land a increasing programs maintaining creating in while become strategic and platform. helping made partners volume efficient partners materially share, progress our market

margins, gross we been core our continue a or fourth strategy margin. to SG&A, focus to costs and drive so will operating net lower Our our even that strong has manage at

numbers. grown net have to nevertheless SG&A are is permanent result had are to been respectable challenging. sometimes in last did third rate movements -- were quarter, up in years which over interest as have acquisition to we've able this lows but past X% those conditions. is from engagement last of is of driving hardwired to in which more While margin down quarter and not have it this very had customer me, a some address which XX.X% X.X%. achieve are we've quarter's these in and quarter, we've quarter. difficult efficiencies costs But our had become higher -- as and operation, Nevertheless, changes, areas interest we there into the realtor SG&A many rate expand of saw quarter-by-quarter strong it than Both all, a expenses, new and excuse address movements that increases sometimes to XX.X%, components have Examples seen as although and more our market record marketing we

that past streamline years. business to as now replace as with place that And ways have if retired. the we we we've to as Rick our not operate more accomplish we'll in that continued less. today enable have built example, systems are us worked an that even is, answer now need would in simply to no, in because he's many And so asked grow We've can

sales Our fifth on on underperforming improved focused the on management maintain bringing tight future attention returns Clearing The day. and than that product homes closable are complete control we're inventory playbook higher in and and as plans that strategy attention are selling business and not turns has enabling expected. maximum inventory homes Lennar and pricing inventory, this base. control was selling the on assets, a drives digital are is quarters dynamic what control cash homes marketing, every in and many in that part exactly to by communities, materially focusing higher flow, rather machine the of selling inventory to focus our asset to order of

And Both land year down third quarter control down now in our and improvement capitalization, quarter this can control our the mission our and debt-to-total home business. continuing of is you in overall time. inventory from last from see quarterly numbers, XX% last XX.X% XX.X%

the Additionally, balance These provide every $X.X our result sheet capital the and by and where controlled, and of volume the managed cash team. divisional closings other entire to the extraordinary are are day our levels is liquidity maintained of elements management our and meetings with Sales, defined billion with balanced regional end the management expectations. and reviewed carefully net-debt at numbers an starts [indiscernible] actually be to continue to negative, with position, through flexibility. is being business managed total

and focus sixth our balance results, The cash also we already we order reflect million senior $X.X to protect of $XXX used excellent and and bottom-line and third cash we cash share, in to stock repaid million we repurchase on to bottom-line accomplish sheet. strategy $XXX per did results approximately extraordinary or on flow quarter debt. flow but not $X.XX continue enhance only of playbook to our If was earning billion over

to cash opportunistically. retire continue debt we'll and to expect flow, accordingly, continue considerable and to and earnings stock purchase We generate

new-normal-defined as another Let market in We subsided has our moves XXXX me Lennar. third that quarter aggressive quarter overall interest and remain say the for expectations. constructive conclusion for our rate been industry, conditions saw excellent

prepared market continued housing has generally defined to transact. that be shortage by is and strong housing demand to the Additionally,

Accordingly, we against the our and economic executed strategies on backdrop. core industry

affordable positioned the [indiscernible] short Given continued continues we for are consistent execution, extremely for demand to well offering current as success, supply. strong

achieve also XXXX growth We to out initial expect to level. with enter a very strong, we're and to XX% well and finish that this expect year expectation, we positioned

company. our land-light model and focus of flow to We match of well-known to we costs price have our to certainty we market. base. drive of efficiencies the execution We engaged trade and while focus and our is tides work the and our changing on our returns land that volume, model and year consistent enabled throughout with simple maintaining homes a understood throughout We offices, past the consistent strategy strategy The a pace. offering base adjust production both to division balance efficiency, with meet manage We We sheet and our inventories and product manage drive cash our drive order on asset efficiency. to on execution. in

strength Finally, have our for fortify flexibility. we balance to liquidity sheet and

executing what Knowing future. do for success foreseeable the has plan success to driven this quarter's consistent and ensures per and

fourth go to we As year-end see same positioned ahead XXXX, of and to much we look successful expect are we quarter as into and XXXX for forward. and the a

of we'll continue drive and We grow, new performance. to that confident are to perform levels Lennar

Thank to you. Jon. turn let And with over that, me

everyone. morning, Good Stuart. Thanks,

become continued mortgage pricing rate more rates. combination In a capture demand. buyers remains Stuart As third housing we remains the as healthy to with noted, attractive to comfortable of quarter, offer demand mortgage have our is and and that compelling tight, supply market strong programs overall, higher

we starts have focus, the strategy is the can community-by-community price-to-market increase we market basis. in keep our machine is share, our on market cash strategy level production done reflects going. sales, so Our The our flow and [indiscernible] of on against execution sheet-first a based generate pricing balance of matched homebuilding strength market that maintain and

compared than supply. desired of are were able In markets pace in with others, marketing benefiting in our of a the had quarter, to while broker Carolinas greater higher are higher third used achieve also current all markets pace in our or demand our the environment, our sales QX, in QX and increase QX the in sales like Florida incentives an we our all In from markets along And to majority some markets. than stronger spend. and

their to desire our closely help find In Lennar each the buyer fulfill solution worked Mortgage teams all markets, homebuilding with purchase. for to to right

starts. strategy us a pace match which start of maintain consistent pace under to in This foundation finding the confidence gives designed pace pricing of homes construction, for of production-first is Our clearing strategy. to our consistent is sales turn the market

As base, prior have third maintained enabled we from we increase to improvements this improved grown starts execute time. our construction game year. the way These trade the we lower costs and reduced continuously plan, XX% quarter cycle our

Continued on focus our choice strategy enhanced position production-first Lennar's builder for has as trades. of the

trade, new improvement Our Lennar, with existing also increase is our trade attracting to are our in led trades. approach third to access a increasing partners significant with quarter their normalized business a supply in cycle chain, while time. combined This

from decreased cycle changes, quarter back by measure to sequentially the we in into a mix Progress cycle pre-pandemic on product to QX. and quarter, the getting but time improvement as are see path difficult to days clearly times, continue XX precisely to For expect is fourth to XXXX.

third quarter, as about sequentially fell costs from Looking at our QX expected, X%. construction by our

our about we X% significantly reduction to last addition, this costs the QX QX. saw down from X% was basis. is were This increase In of guided in on a year-over-year the year-over-year quarter. we down cost Again, trajectory

you housing can costs, Lennar to markets reduce introducing expect to in be across our workforce value many engineering platform. forward, plan SKU further focused Looking on reductions, communities and additional and

strategic quarter, our to XX% count. land finished finished homebuilding our would from $X.X land was third they about of community homesites In and our the behalf acquisition third land effectively structures. our land-light and land where machine. strategy then on like conclude In purchased just-in-time to homesites our land we to with deliver partners billion quarter, I various and bank with purchase continued our work

increase from owned increased well inventory of to have an as owned flow, XX% versus and time reduction XX% last help controlled homesites in will again year, years respectively. significant progress quarter, cycle from now our to made stands supply XX% as improved as land in third our percentage years at X.X year-over-year, X.X and cash turn, which reduction years' We X.X the homesite The in X.X improve increase.

returns count our production at balance by the the construction our lower from the end to leads the times with owned the from to year-ago combined the costs, expect leads and reducing community in risk, community XXXX cycle X% we high-single are to pace period, third end which pace, The strategies XXXX. asset-light focus, increase fiscal which sales and was Lennar. X,XXX, up Our of matching improving land, the strengthening of of the of digits is reduction sheet quarter for and count which

to our of want thank dedication I and in and quarter. and all recognize focusing on solid these work delivering for third for associates hard a their strategies

it to I'd now turn Diane. over like to

Thank everyone. you, good Jon, and morning,

So, Homebuilding great of our have Jon and Stuart deal provided performance. a regarding color

to I'm therefore, Financial balance of spend results XXXX. our going operations then Services QX our sheet the minutes and guidance So on a for provide and few

with starting So Services. Financial

team had quarter, $XXX the For of earnings third operating Services Financial our million.

details, higher to the mortgage increase million the a at volume and cost lower locked additionally, in secondary compared a in by $XX as and per margins. prior loan, $XXX Looking as higher loan focus earnings million result capture was The of orders earnings result driven on team higher higher locked operating to were of and profit per rates as continues efficiencies, the year.

They on to Title compared as result earnings higher to a increase our team prior Financial the and continues cost decrease year. to banner which Title between $XX truly the $XX in operate a of using accomplished operating earnings volume $XX of one-time Services per productivity. as great technology a were million million, synergies increased solid and to One result of Homebuilding primarily transaction, under results teams. excludes in of a charge These the Lennar. focus accrual as due litigation million were earnings a

sheet. the to balance turning now So,

determination inventory generate This determination drumbeat increase in production and our The cash homes quarter, we many and homes once cash as to housing meet steadfast also asset were to our liquidity by to revolving maintaining the future. deliver efficiency. The preserve market we continued ended as to demand. cash -- our sorry, these financial and possible provided with great pricing of of with This again, our credit turn billion a total facility. was no quarter end $X.X $X.X million had great result $X.X actions and borrowings and that flexibility and of on the to for billion

our X.X XX% of approximately we our our goal As continued increased the we our from X.X prior from were years construction our progress balance result in a about our sheet in years lowest and finished mentioned, will XX% of the owned XX% however, quarter-end, made significant homesites improved purchases this where vertical begin. on year, becoming years $X.X on year, homesites highest efficiency, controlled At percentage land-lighter. prior our history. focus soon to controlled on in and land Jon owned years billion quarter, spent to

believe portfolio homesites to of XXX,XXX owned we for in this grow position homesites us capital-efficient to strong share competitive with quarter-end, XXX,XXX homesites. total continue At and a market controlled a provides a XXX,XXX We way.

homes X,XXX we quarter, total homes finished also about managed unsold started inventory level. about the and that This as the During XX,XXX completed homes about were successfully number inventory. our includes ended in X,XXX approximately we includes models XX,XXX quarter inventory with and

in our XXXX, further and and November of our our par. million notes million sheet debt interest to repaid two more due by reducing about We senior over effort below In continued fiscal about we savings. of retired which equates years, also senior to annual our the of repurchased $XXX all million de-risk at or billion in X.XXX% notes principal notes senior than $XX XXXX balances, last due aggregate of balance $XXX $X.X strengthen

XX% less result quarter a senior of just XXXX. was December improvement As billion. our an XX.X% senior the $X which to from our ever, in capital which lowest strong Combined balance was quarter-end, year. maturity balance almost of we The cash of under earnings, note ended our note at is reduction total debt $X than total with Homebuilding prior initiatives, the our net million a debt in billion, $XXX due with is

shares million. X we million allocation, million Year-to-date, $XXX capital our shares we've repurchased strategic to totaling totaling commitment our $XXX with X million. Consistent repurchased of

dividends totaling quarter. million paid $XXX the during we Additionally,

returned $X holders quarter, almost all So, billion debt we our equity to our this investors and our holders. in total,

sheet. points And just a balance few our final on

almost Our stockholders' equity $XX billion. increased to

per value over book $XX. Our share increased just to

and our on on return equity return inventory was XX%. was Our XX%,

In to summary, flexibility provides and of the into financial XXXX. confidence strength strong and with end low our the we as XXXX us head sheet, liquidity of balance leverage significant come and

overview, orders. starting that to with let's brief turn new guidance, with So

year-over-year. We expect of new mid-single with orders digit count as We the to anticipate range in range QX of we annual our in Jon an XX,XXX expect XX,XXX in our inventory This bring QX to be to in increase is be to XX,XXX QX sales year-over-year. deliveries And to of X% our production. the would which delivery to match we range ending to be mentioned, as homes. of homes the increase XX,XXX XX,XXX percentage X% range to the XX,XXX,

average be we market price match flat affordability. to with and approximately continue QX, price incentives Our offer as will sales to QX to

stock million of for of $XX the approximately And a the in the million. expect and not million. We quarter. combined X.X%, expect Multifamily paces. our to We their our production be we $XX in QX any $XXX to range and $XXX of earnings and other maintaining of expect at gross be does XX.X%, the a by technology million Financial prices we we adjustment we range SG&A range $XX earnings land potential include the about on sales margins be our of in estimate will to and that to Other loss about X.X% Homebuilding expect XX.X% end as Services loss anticipate to our million have sales to public since to focus for categories, mark-to-market be business the determined category. of to for to of Lennar continue investments And for The joint our adjustment Other Lennar venture,

We delivery. total expect our per be charitable our will on to $X,XXX foundation about be X.X% based of QX corporate home contribution G&A revenues, and

We about be weighted be approximately rate and million the XX.X% count average our XXX tax should expect to shares. share

the per So, quarter. these all to range estimates when together, for $X.XX share an of fourth $X.XX you pull should approximately that EPS produce

as finally, initial mentioned, XXXX, think currently And we our is as growth Stuart about expectation XX%.

year. to another therefore, so, And look we successful forward very

that, with it over the to turn operator. And let me

you. Thank

now Truman of [Operator We today's will from Patterson first the Research. call. from Please go ahead. comes question conference session begin question-and-answer Our Instructions] Wolfe

everyone. Hey. question. Good morning, taking for my Thanks

target So, the at very strong 'XX you for that end, quarter quarter fourth thanks guide, orders. at growth about your of third But Diane, the clarifying looking XX%. had

inventory quarter really where Just fiscal that kind third sequentially. guide internal selling, your to the due Was of order about you XX% trying to fourth down quarter spec reduced understand healthy that and availability into just help fourth recent quarter? the Is the modest consumer, a it imply you unpack Just hoping Does move? the positioning rate it us going in that. deceleration given can seasonality? normal

some interest quieter in extent. up Thanks, to We the as have quarter fact very seasonality seen that of we've And rates more seasonally again. But strong we Sure. returned to those is is time Truman. fourth strength Yes, which additionally, fourth quarter. tie see the has you're third a together. sales. We to right the do The enter quarter, expect year. pick did

what as goes the we fourth So, where of said. fourth we exactly quarter that we're view well to just we're quarter, and the our moderating making achieve come sure positioned into

And line a all process that matches it's of I'll our add, the production sales coming design part out Truman, of out to have communities. that so just in our pace our assembly

Perfect. Stuart, of Okay. of just retirement? defend picture, but two dividing Jon, can't given this kind just be grievances retirement, thought how was we maybe Rick's since just are look, him. going him he the And to congratulate responsibilities himself, on to Rick our you, I air big against then, But on call should

what this streamlined he has across our now. time created is, driven years of has stepped just and become we regional platform. listen, that far past comfortably point, we've country very been the doing operations support Well, have And really the technology the have up that by business. more Jon and is across for some happened and the at the have over some our operators self-sufficient, overseeing presidents

now. every we beginning There's platform. some. other in and involved present, daily shared call Jon which just are combination go middle in forward of I right what engaged, comfortably for I each at Jon day, operations basis we responsibility are on focus is a We kind of some. review additionally, to the and go quarter. begin very orderly program And our the regular across in divisional guided we But of we're meetings, of we our actually call, between level goes XX a Jon our operations have the we years. that it's setting about of by are to kind as

be able tune I in think been to we've stepping with that. We'll doing comfortably right kind that now. of do

the which and be of because can't starting large become company standpoint. that on together think managing today. much country. efficiencies a business is we're driving that key across we've XX for the simpler, are the the we're particularly underestimated, land acquisition working in the different at I familiarity The part point, think I Yes, But years

remember, joint the used more to land. machine on that complex a lot and a strategic very We some homesites world to And finished from that have of focused Lennar. efficient You land really very we ventures. land in today's and is banks. Today, of a orderly buyer we're fuels used of front-end partnerships speculate very strategic for

you, Perfect. Thank all.

Truman. you, Thank Okay.

Sachs. Goldman go next from Maklari Please from question ahead. Our comes Susan

add strides you My question in though, expect last When meaningful Thank several from you. capacity Good about thoughts you XXXX constraints there. the to think made year even in think Stuart, this an in to about think to you any talk to continue can production everyone. environment? growth morning, the the how on kind you a you've how you is, the perspective? see mentioned industry -- And with first you can of quarters next volume that construction the that over

this it's at as point. about much adding look, So not XXXX, looked production we've so at

for very a now. strong XXXX positioned are We right

We have land. the

have XXXX at or our overall It pipeline. is is It in point, in development. for sales identified. our We under the under is it contract environment, this much except pretty system. embedded

So, this point. we have good pretty visibility at

produce good planning fact, And to process, about kind keep XXXX. overall great have land visibility and programming our in by of talking able just even schedules, We and we're production selling for have what five-year you if visibility and we into we at building pretty process. by look beyond. And

the to is market going react? market are to what's to continue conditions. and to market is, question Now, the do going the to price going We how

you're manufacturing an I if a to be, see before, to market. market absorber. our the the are platform said price shock We that going is as bit, to -- moves operating little going margins And

talk in it's wait see of market we Fed But out how performs. system, uncertain it we XXXX, that XXXX. And now where of target see achieve our certainty take how liquidity times pretty digit how trying a these moving, for We'll the growth we're unfolds right level market actually can know growth -- good the we And to of is low-double going is that to and it's of the think are rates for evolves. clearly about have we kinds when in we So, projection accomplish interest that. the achievable.

our partners And Stuart Susan, is you asked production what in future trade our about quarters. clearly about speaks we visibility with capacity. communicate today to, That that the coming

will able system, our as to that that production, So they're in manage volume. and we're as already be online be to coming prepared prepared

And how that Susan, least you low-double the level. We'll margin at kind from just XX%, I'd items but it volume and to have on I volume see guess a perspective. gives digits, other perspective add play of a out, that's

target. The

yeah. Target,

helpful. maybe cash a of very about that flows. you've net on thinking That's Okay. business converting of and bit, obviously cash And talked income to lot a generation the building the

thoughts what Any the there? for agility think go-forward environment As in we're generation you the next mean increased and that cash the about could in the year? and that business,

we done we business coming consistent profitability into a in. is cash a or to sure up cash that as forward. our generating go, reconfigure rates flow to might of margin that for Everything where right And everything that turning interest is very very, we cash have extent we're to level down underwriting making if on going are and even moderator sales some moves our go or flow as now, strong be still focused

Thank you good Okay. color, and Great. for luck. the

Okay. you. Thank

Next, we'll Kim Evercore ahead. from ISI. go to Please the line Stephen of go

comments. all and Appreciate congrats to some the your guys. Yeah, on the the thanks on of much, touch want did results. color, very longer-term I --

take you was orders that been you look So as close units than it could reasonable the in Diane, closings deliver into have improved, think curious as granular, more all, you've close or get to for? I XXXX, too as first orders as more observed but cycle to you for. of taken that you've is number, likely many units units able not times to XXXX, we've

target Stuart, think you you secondarily, as on then return the And give a I longer look an going being talked talked think, important metric about -- business you term, for ROA could you about about assets sense -- your Curious where as for you. forward? you if us

Okay.

sell, the we fact pace. schedule do tied we to and closely really to the -- delivery pretty that selling pretty selling it's way much in sales current given we that how think not our front, are So, as out tied we're is

our proximity that so see working another. operating And and Sales all really today close and starts closings to working. are machine and at look you in can one

return cash, difficulty great asset Steve, and because hurdle. of it earnings a we In which assets, the on tougher just an that and terms is question, of strong base tougher of have a strong becomes

XX%. on return closer to on assets Our is focus

achieve So, it gets asset keep program. harder to base we and the adding to earnings as

at could argue attractive. to opportunistically. about that a like little we one and we I time. even back look I'd be buying is all more And say this Looks stock talk this And need stock aggressively. today's more Diane that getting price the bit

return it's So we program, are in targeting of part of the assets. on a but excess XX%

that's I right, think Yes, Steve.

may granular, on all Those we right, focus that program, of well our kind owned. time as consistent quarter-to-quarter, our buyback return as been components, inventory, something more have on years assets. think we bit And I over goes turning make which consistent the a bodes if little as to are achieving we a reducing And us pretty course, consistent, in all amounts of with You a but that on. vary XX% pair program. have have on we it focus helpful of to we

to really that's where of go and was kind helpful, going I next. that's Yes,

appreciate you So anticipating I that.

We saw coming. you

yeah, I have question exactly. -- Next

level sort of the entry Next particular, of in conditions the light to relates and, market increase. question I have of the market rate in

buying -- are making using buy-down increasing you forward continuing And you a Or rate at that So move-up rate the of buy-downs, we that when percent of spread? question buy-down? rate are right than in And what relative going is, the rate degree performing now entry buy would sales purchase say say general, little you And level, by commitments? to a same are the are like my I of the your segment into think level? to about market would the is entry the rate? stronger -- down you prevailing

as had tapping pace. move to rates moves are in as we've said, either currently. dramatically moved But around, So, we as demand down, fact or move listen, around, rates incentives up maintaining we direction as have the we're is that haven't

doing we move-up demand it's there's whether is right. a kind entry-level platform. strong the exists demand are market and affordability where the trick the better, meeting just there. buyer asked that kind across buyer and getting You of Affordability strong all out of And the frankly, seeing or the the of is buyer in question, the segments, is it

to determinant we're has working that given. depending go down. our much tweaks to pricing. doesn't up be are of given on way or you rates course, where be going and these how as right now incentive right is And the that's now of have And an to of be what kind of interest so, through go, And through

to add that? you could Jon,

but and even very as started. fluctuate, our you used month-to-month, very completed Yeah. steady interest effective those primarily homes because we the with model, rates quarter-to-quarter. it's see as they're We our And the sell the for asked homes do do participation we Steve, you And selling production versus question. buy from forward stays before first-time closer commitments to know, buyers. it's being commitments,

they're buyers suddenly those on them. risk buyers, move rates if at which aren't is able our So, to to qualifying lock-in locked-in we're not really important, once because

keep our an see our the from pace, have on do it segments. first-time between don't consistent spread We pretty to quarter-over-quarter, average, levels we buyers. and to but in of buyers a obviously, those that But closely we more demand manage move-up month-to-month buyer difference than because of our the help ability to production really our really

helpful. much, That's guys. Thanks really very

Okay. Thanks, Steve.

to line the Next, from Carl go we'll ahead. Reichardt go BTIG. of Please

better. on I I you Stuart, feel dynamic everybody. morning, have pricing. question a hope Good Thanks.

last prices quickly. I think you ran -- across allowed year, that homes say, dynamic market really make platform at make it's fair the find elasticity, and to -- using find pricing the quickly if we tape to clearing

where pricing still of markets more effectively say where a more down? are you Where making stable things up of look if a at your the power? lot adjustments And we're sort look at and histogram do you across model we So, today see than geographies and you or weak? markets, markets are have do

as say, rate immigration, parts in Jon. where closing Texas, markets using California, in you've Carl, we of hit to managing there's But little around with each buy-downs, shift, to a those earlier to individual of use it's by at Carolinas, parts able I to buyer, each our Hey, In we desired we achieve more. other bit them some pace job mortgage the the said levers Florida, are comments, in In Boise, costs, that pace. production much find my community, our right home basis, markets, them and hit qualification country to loan, every to mortgage locked the have have levels. desired their into don't for growth. use issues, monthly get home where a market a them payment strong Clearly, it seen with by Austin, pricing as to deal in, we're

been again, And Market back. Jon. brokers brokers' come aggressively company got cover. I the thanks, have more lower commissions, any on long-term Okay, buyers' least probably other than then, that for SG&A, buyers' builder, weaker, strategy has to at

to them to in reliance your on does disintermediate strategy desire them? terms effectively all. Thanks, those on less or now where sit brokers that or continue rely of So, your

sales that is process Lennar. customers our same friend time, community the industry trying said community. consistently and the And work to of and eliminate a basically at bringing But actually comes pretty center that do realtor that and supports We tried to away. giving just to always the the engages realtor of does the the family we're what in that is the we've friends with component work is and

not while and broker is community creating job done overspending. it as constructive and pretty of relationship migrates And represented a So, by the traffic down we've realtors. with more more a up good

community getting has more the that a our was you'll lot and up market, on new market a the course, have of constrained, been more normalized. that we're little with more And realtor been down SG&A. Now, spend bit, getting existing as traffic which than focused the go existing we that realtors more our the and from the brokerage said, means see were when home market affects

the that we where But that it's at about have homes we community levels it's completed the so maintain what norms. disciplined that we way use focus is highlighted, our We're compared make And move. just SG&A. and we to community all control broker historical broker our inventory available to to very really low very the of

And funnel let digital me with talked about sales our just say lastly, together awful and our pricing engagement. we've sales an dynamic level lot

That's us, to and we our meet drive where of really engage engagement them digital want think our world them where more customers. very can find have striving and very are we customers, the customer through access directly. We best with our where to more engagement they we

creating part process our program it and And the important is about a sales around sales future, the It's of that our for way talked machine. evolving. digital we're so, an we've

I Thanks, appreciate guys. that.

Okay.

to Zelman go of Alan from Ratner ahead. go we'll & Associates. Please the Next, line

the definitely resale to spread XX%. and other a kind of level a of results. XX%, market. show the of the Hey, seeing compare that's like I'm XX% versus it resale, believe, is would feels haven't thesis new I it's strengths we're as me market, the on in the there, there's a between of that driven, price but home Good spread the guys. net about declines range, it home out kind when seen job. which morning. have talked has aggressive been historical market, today question. year in new around we you When like to clearly you I in that price kind it of And historically, resale but not this Nice builders see been you all what pricing Really and inventory sure narrowed feels that think you data market first roughly. that way, some typical strong the Stuart, declines more

some about probably cost with So, and this land rise, costs, from when that point to progress forward. -- stable while is other your probably you your there's it's there, been comments you think of continue to construction going made about think

see see this resale Or don't rising, far as do maintain made time? costs you that resale? that you've higher you you as year closing prices just can If spread as function returning over now that progress spread versus a of

with a existing has that left rate in It's you, rising have They very equity. low have that valuable rates inventory home interest tell have two very, great market is and homeowners as kind very they a been is as strange that assets. and value. constrained. They at have a mortgage also they sitting resale housing Alan, very is also a I'll right that now. of much Well, of you're configuration well market the documented The that interest

at incentives So, a enabled used they're see. actually existing just new homes the robust rate meet that of traditionally as the of that affordability in supply to existing exists. more little has much or the as And pricing part market you not has the as would to where market to that stay home short bit market bringing market homes

So, and is configuration that creating priced. the homes way are in an that anomaly new homes existing

terms they in existing out and I that a somebody of the said to kind because that home. an game home, another past time of they have supply buy the still think go I've in every existing and is sells market home demand, zero-sum the

how kind subtract So, that's you I that's add inventory. And inventory, configured. of you think

existing the of environment, supply. continue we surprised bit more we trajectory can yes, can see remains and I interest a parity down, trajectory the And this homes But I where is not market And because little macro new on depending continue environment. overall existing existing point. pricing home the at our rate I'm affordability standpoint, to between short our as relatively from think think on strong that on even a

there. Got it. hear That's your helpful thoughts to

you've of which time have recognizing assets SpinCo being, now overall circling to about guess impacting few I seemingly is I quarters and calculation. a XX% for ROA I publicly talked right been generating has it plans still the since think that's think, the the your clearly, back on Second, conversation, about returns, you hold not the return

So, most recognizing markets the just thoughts curious to ways updated more not be capital monetize care may any now. that right if on to advantageous provide quickly, you

I we Yeah, will not laid of background, because mind. does some a and in you've it's It's differently it how executing there I the that be that with we're the that something the we've It another think a moment come is and right those constructive well, our that been light out at We front and ring, at that don't thinking has come sit will positioned think markets It about about configure to we now. can in plan. something about. in much some assets stopped for be be point when back program the to something forward time. are very think a very the markets It's just in capital into time, for constructive that continue going a it talking time not capital we've plan. of stopped that think

update, lot. Thanks the Understood. Appreciate guys. a

next. Okay,

you. Thank

go we'll go from line to Ken of Research the ahead. Next, Please Partners. Seaport Zener

everybody. Good afternoon,

afternoon. Good

broadly balance returns of because even is questions. speaking, And question a basically might two me. versus margins. subparts They have you're I with have that flow and growth. to between first striking ask, them, is, bear the So, some this so I But gross prioritization

in this or in minus would less it range. So, seasonality. XX,XXX suggest flow plus first variance even item like seems is, word even The is

let's normal XX% seasonality. is obviously start So do variance is, how not larger of think number? Or about mean, set machine your say, it's you the sequentially quarterly, that variance Because I in working? to

to affecting And margins, on that that, pace we're then, focus gross at related right, doesn't XX%. appear seeing it your

you to and the I basis? much, your a about really haven't maybe margins talk the could kind variance heard relative start you gross to that? can what So, of pace be pace think the but margins of talk dynamics on you

going to whether even enable SG&A to or So, it's before, you production production even we're whether efficiencies, saying Ken, us consistent we've flow. unapologetic our that drumbeat we've in going to focus. core is it's We're drive costs, prevail flow using pace. fairly shock can construction of in that, is to use to looking expect, We're moderator been that at about margin pace and maintain or said as as absorber

numbers will is be which are Your There anticipated. for and by seasonality, some large adjustments correct.

You that see the constant that projections to that production can with production focus that adjust market really recognize But said, or pace. you're within way that pace, boundaries, to moves dramatically quarter even or one boundaries, this see our you're going an guidance. see constant in defining another, if expect we'll flow those sales production a model levels. we But us within you going on fourth

peers land year, intensities, in to doesn't Homesites in buying it position. but less to thinking third program, the just which an a acquired almost some a return from most one-and-a-half seems gotten of affects capital quarter, EPS billion, you're Thank are didn't hear it your I'm comment of then, going that leverage finished. whatever necessarily positive requirement gross hypothetical, of margin, to one negative will issue of smoother, in crazy, your as thinking down tied also, of earnings decapitalization. as light, I question, investors XX% to flow cash Lennar. I equivalent cashflow you're get question, billion something metric, okay land. problem. capital. $X nearly position land into to a through $X so going on a But WIP, is it flow If I this be or if XX% which the versus forced systematic one generating to fall one-and-a-half think be overlooking you buyback be in to that less and is lots, billion Is on that is And ask Okay. and comes owned year, decline keep your a and EPS, about the that right, avoiding valuation, it's seems years second you to land? second you. implied be if though but the Even increasingly were land for a would $X important you which on plus capital finished seem into the which base have as the be this that nearly right, deeply

you to did Jon, want add something?

efficiency big is we're the costs everything gross bring margin and doing, Yeah, is for question, the construction as driving how efficiencies. really we mentioned, aimed A down of margins. of all around for Stuart just affordability part that on to benefit do

look as even are falling managing to at so, that pace. And they we we support though if margins direct the percent try are is of construction and helping aggressively our costs revenues,

Okay. And continuing on the to think more of your flow. drive to focused recent we stock We're about question, buyback. size very our cash

You are correct.

Our land area owned relationship an and focus. is of focus. year of controlled very an much The supply area is

we recognize the now to that. to probably a fully now. these there that comes higher we're total additional it a point the right in to puts into negative at We an and think we'll don't level And to recognize bad of We net cap that position net much We in than us total numbers that negative generative. up not be cash seen -- cash position better we to We they're year-end, You've end migrate company. be debt will cap. will from expect at with that are continue be finished. we that think

for future. our way as stock our center on of present to liquidity the the But very the me buyback so, using that opportunities is for strategically markets and projecting, at are position buyback to program might of and that stock us let kind have themselves front we're And that same about well, company capital have our without adjust. time, the flexibility, focused we say, thinking to

income it guess that cash I'd that Not capital on goal. have -- a I equate. focus. but to is for it's but [indiscernible] what those not net flow. is I the to but just is there where And then, And we it equals add, do are there a real operationally flow point cash a We're focused we goal think two getting yet, answer, with us yet, Ken,

Thank you much. so

don't one we now Why take question. last

final Please ahead. Thank UBS. question Lovallo comes you. from go from our And John

about Thank maybe XX%. me guys. of community for in absorptions? high-single going just count community the curious fitting digits, growth? more in year, thinking you're driven this low-double be expecting by that first target to Maybe here. digits context for Hi, the Are XX% back you the growth really Is next you going one, to how count

part is the probably number this to projection of community let get by saying most right. the that in difficult a me count So, preface

is this saying I So, now, going whatever answering guidance, is community Jon this not is to Jon about just your say right is this count a am not projection, question.

on low-double that growth. that that affordable communities makes us platform. to housing more some in very come have the bring it caveat. across it's comfortable high-single to is from a That count digit place, target digit Stuart said that a land you probably as will our XX%, and community like it's Thank But increased absorption workforce municipalities, we said, true, the very timeline. on hit as most pipeline earlier, right that litigation, whether But aspect for with challenging we

our expect sales. our can are grow. store that So, same will grow somewhere you where will not But generally. community It it's expectations all count growth around about

that I'm business, business new it home the not doesn't way. business, work Lennar's doesn't I'm work that talking talking about Our about perfectly perfectly way.

we expect to So, grow. our count community

Understood.

market. Quarterra? Maybe improving. there? any Okay. going markets back I I at I Quarterra. get incremental near And have the if the on thoughts in dusted in on least question, back off something there guys to then, mean, here that Is the term? could in you plans clearly mean, seem out IPO can, here the to even a homebuilder motion there's just be out this there, maybe uncertainty quickly but capital do There's Alan's economic

is the on the We've way Quarterra. background in that really it been reality might the on or not shelf. the we put we might never working Well, configure

And so, like we make to something works we're company missing We configured. the time, to But It's want and to because feel is the that it's right going off. don't quarter-by-quarter stop expectations. not right just don't want our will something we have we about talking how it, be dovetails with dusted to and where we're sheet at recognize put of happen move right that calculations, assets, that we assets balance time. there we or some spin will something or to One is that thing opportunity. It'll return out right just the of right. feel off constructive our isn't say doesn't to other some I opportunity the think for that on the and is move, at

you, Thank Understood. guys.

you. Thank

forward. to And continued everybody so, us. there. leave let's we execution it quarter. as for look We third thank very go our happy with I to forward want really joining I'm

Thank Looking forward and into We'll year-end XXXX. time. look to talk reporting next you.

for That today's Thank concludes participating. conference. all you

You may rest the disconnect of day. enjoy your your please and line