Lennar (LEN) 15 Dec 232023 Q4 Earnings call transcript

Welcome to Lennar's Fourth Quarter Earnings Conference Call. [Operator Instructions] Today's conference is being recorded.

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

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

morning, good and you, everyone. Thank may Today's regarding strategies statements, statements forward-looking business, conference and financial flow, call Lennar's cash condition, including operations, include results prospects. of

conference on statements any give to date Forward-looking Lennar's results. as are estimates future only of intended represent assurance this call actual to and not the

subject matters uncertainties. and relate Because not occurred, risks forward-looking to statements these to yet have that statements are inherently

XX-K may activities cause differ Many recently results with Lennar's filings, activities and caption factors results Factors, in the most could statements. to the affect our of under or those our contained forward-looking filed materially in Lennar's and from include described and Form SEC. future anticipated results the SEC factors report earnings annual those Risk actual These including in release on

to Lennar Please note that no assumes any statements. forward-looking update obligation

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

thank good. well. I'm and Very Lennar our joining together Controller of who Diane Officer; President; Co-CEO Chief morning, and Bruce Miami, Services; you few Jon Bessette, a Financial today. President; from, our David Gross, in Good Jaffe, and our as heard and Financial CEO Collins, our everybody, you just others for Vice with

of overview As construction of a introductory operational usual, to cost, I'm my macro going cycle to overview land company. updating some the position. going and an give our and give After and strategic remarks, is time strategy Jon

have and then, the limited year XXXX As a course, financial quarter guidance we'll usual, detailed some along for highlight is fourth our full Diane with and give period. going of question-and-answer of to

we and so ask please yourself As limit usual, many to that one as you one question that accommodate possible. as would to I follow-up can like

let's begin. So

balance macro new been effectively sheet affordability strong year ability and from on never been XXXX. very of have accordingly, We qualify. has to strategy i.e., address Throughout impact our plan simply the results XXXX, to in operating We've and market by the the another year-end the purchase higher very pleased to better the the been operating over past for been conditions report Lennar. quarter rates positioned as executed are tested has operating the of theme to ability consumer and the affordability homebuilding to level has at and demand constrained dominant interest year

market a has interest price their at the existing and quiet The need coveted home products buy very to out short worked remained sidelines. been the tenant demand strong of affordability. have rate purchaser chronic to Overall, employed very intersection to homebuilders and they are consumers and reasonably country will their been There's materially held general generally that strong been Underlying this affordable has transact speaking, as transacted. homes, is that and buyers Generally been rise. a that remain have confident across a consumer is housing are has compensation environment back pickups reductions low and buyer, product. interest will shortage existing supply for as mortgages a structures employed homes confidence and generally can as and the higher the interest growing affordable by a especially demand of range of on as supply from that pent-up well for new rates. have that cost homeowners the affordable of closing meet downs The variety rate

the demand enable that Homebuilders using constraint by to unlock to affordability purchasers incentives activate able have been uniquely and transact.

X through quarter, November. the as interest the this first rates narrative began spiked quarter particularly Over been and then the in of has to months difficult past ease

inflection hitting softened to feel market X%, and towards conditions like it to materially. mortgage a real began rates overall the As migrate point began was X.X% the from market

to Fed the new year. the have of might the XXXX recently, Jerome tightening into and course, see get lower be cycle, the enter as closer and end and rates that of we might Powell Most signaled we we

Against affordability our using to pricing strategy drive provide demand market. past consistent to see. appropriate meet by backdrop, to find We and will dynamic throughout this Lennar's incentives model to the year using to been and supply volume the has continue

the Over year, on increasing liquid focusing while construction on inventory Number land the past return our our one, by operating enhance strategy cash. we and reduce while line churn consistent allocation consistently detailed two, the have earnings, assets three, our four, of do equity Number bottom flow. number cycle reduce and i.e., that quality our our of generating while assets, ultimately and number business. our cash the strong as on we net would concurrently drive times with assets returns expectation follows: consistent growing

of execution XXXX on for rate extremely strong year and XXXX. a year. the a we sets and execution up successful in was environment year and us interest another for of a throughout operating strategy execution Lennar higher strategy focus statement began with of We year the well strong in

the macroeconomic adjust to with though environment to volume strong, rates, by and limited. affordability constrained we strategy We adhered was higher and to demand as Even and inflation very was shift supply our drove continued production. we and interest believe that

further and operating reduction strategy scale back, and production leaned supply, and production incentives price, efficiencies Rather sales to used using driving pace. margin enable pace and drive pulled than others operating drove cost to affordability. affordability. we defined our in As constraining as and we formidable enable to while We maintained and size our

driving As achieved while you've higher press also release, operating seen volume, we strong results. in our

We billion strong volume $X.XX increase We delivered XXXX. a of or share. XXXX, which in over XX,XXX $X.X XX% homes a bottom line a represents delivered year-over-year over

flow land of in in expect XX% generated generated billion well homes that we what XXXX. the to Again, deliver excess positioned another we We well increase relative of And to also are and homebuilding $X.X to we count generated 'XX. community cash in year-over-year. XX,XXX with

the lower at flow through least the consistent quickly lower with as margins be will first the embedded margins will signal over also interest from Given although quarter will current And us pricing and rates will clear enable using rate levels. those margins incentives. efficiently we dynamic the expect our that next would and our interest reduced XXXX to we recover reduce tool, have we quarter, Fed, margin that

benefits advantages come I'd immediately briefly to of some those that are came driving strategic of as to The like future. continue as with for both will company's volume low valuable and durable the detail advantages.

markets our others by First, most that some share we core gained when driving we in volume, leaned in market back. pulled of as

better saw Our additional with trade consistent participants trade that traditional relationships side that our we manage and will became partner designation We costs in with share this side And operation, and Through strategy. in additionally, that of with enhance partner ability turn. found had cycle found dependable worked our the the our discuss more growth dependable work by reduce trade enhanced inventory efficiency times we of enhance efficient detail worthy Don choice. builder markets, our of shortly. market with they production and partners a consistent local our templates partners. to

maybe most for positioned strong land are important, and our we all driving volume, by volume of Next, markets. with in operating and communities

the land homes, we volume next we deliveries. and for communities new delivered and drove year's purchased As

and positioned continue to as as We rates. to sell lower recover are interest well incentives prices pace subside alongside extremely on

market and line stronger even drive bottom as to positioned are flow cash results normalize. conditions We

remain became up conditions work as this we land and that communities, driving put, home and homes and Simply land when replace sell and we up more pricing by then and or market continue by selling tenuous tool land land to to values as Additionally, given participant others experiment falter we enables volume, variable recover. have assets. of down Noteworthy site even acquisition. land a percentage markets then move choice of market found critical that price of to down. the with walked gained saw our dependable purchase developers position constructively us as regard market were of stronger the to especially land able the land as advances owners an share consistent the structures share They home we is buyer be a sales and innovative in that away. Market to markets critical to move

the repurchasing at even consistent redeeming repurchasing cash capital through over of a year sheet drawn of repurchasing and while to the matures of debt-to-total million least billion year. notes we the $X volume homebuilding with balance Next, which the the next our cash year, generated and minus over have revolver $X.X on $X.X margins, stock net on billion shares or X.X% by plus through stock, grow and challenging as Situated at more of Lennar $X.X today XX of lower and enhanced we after through year. retiring invest it hand cap driving billion our and we strategically flow or senior Lennar even cash liquidity and cash times ratio expected and expect to flexibility $X flow consistent an our billion with with of stock debt repurchase next shares

Fourth, by machine. we been insights that current our have counterparty into the flow gained to workings and capital acquisition The of with through strategic was banks. invaluable. driving the that durability our make up land define volume the banking volume, answered Questions of homebuilding the partners approach of refined the relationships land advantaged the land as now relationship to

conditions volume both of helped as define tested level consistent making another market neither in taking party as dependability to boundaries Our relationships and those and relationship. those trust flinched the

more and were learned, and structures durable. lessons and made were adjustments became stronger the relationships While

Fifth, use volume, to in enhance, rate especially environment year, the develop, of improve driving we Lennar by and interest difficult were more the able last machine.

and into and partner Lennar's data the has digital difficult. as its and the drive at XX through by our market reviewed and divisions same dynamic becoming limits. and and on the result what that pushed made market materially that operating quickly focused is of sales is digital at pricing this conditions from becoming and marketing driving engine as market was is adjustments invaluable machine while sales, We learned. Today use to it we while an required and aggressive was stressed finding an production. engagement pace engagement we pricing XX machine often component feedback most affordability. of the benefited tool points challenged volume volume We affordable by Our parts drive We focused as refinements advanced

and production downs us to become through positioned the a Overall, volume driving of has housing durable both enabled sales more ups become and in stronger strategic has that cycles. company our and on better focus

been has has balance and better operating operation platform -- never our Our aligned. been never sheet our stronger,

of been our and strategic Our another company. for operational fourth quarter success year-end and has XXXX

we to have market filled. While is that needs challenging, We is there and needs. be know to shortage a demand and strong have supply found ways chronic been housing consistently conditions learned market that address

to our markets. across drive persist we will production the We to meet know shortage that continue housing

rates, cut we interest that that will With constructive the overall date, our Fed and be as will prepared. said, market pent-up rates conditions to demand going believe we normalize and remain actually well seen if begin to activated, industry. generally subside have is be To for we to

demand As rates a access market. movements interest found Most has subsided, better strong road pent-up has the in ahead. ways housing higher interest suggest rates recent to

strategy economic on the against most core we Accordingly, our difficult backdrop. industry executed and

Given greater are continues as consistent demand we offerings positioned extremely supply. to for seek affordable success even well for short execution, strong

-- with first margin We first a guided starts, to deliveries move sales quarter. sales expect strong margin as the the XX,XXX we through quarter, to in have as and XX,XXX XX.XX% start sales to closings the lower new to year and XX% strong

execution consistent throughout the of engaged enabled with year our past a has the changing of strategy We certainty tides company. that

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

quarter's ensures plan to for have sheet and liquidity and consistent for flexibility. in has strength balance this this to success per our foreseeable success year's and future. what driven fortify we Knowing do the the executing Finally,

As of we are XXXX, look positioned we ahead same. for successful more and well to see much expect the a to

confident of new are perform to we to performance. design, by will and Lennar We continue that levels drive grow,

So turn with it to that, over Jon. me let

learn provide machine Lennar teams they quarter. our executing Lennar of Stuart operational in divisions feedback focusing enhancements our continuously the execution operating our our at As engagement strategies for on with in fourth discussed, our their continued strategies. and Other from improve machine,

starts in flow evenly even respectively. and the XX,XXX, throughout the year You of our for the in evolution were at this half sales improvement can XXXX operating see of as strategy XX,XXX matched second

community production X pace an quarter, per stars community fourth by pace of average sales an of average month. month, the per sales per was defined X.X our In per

pace is strategy selling the it's not but pace. this right Importantly, the just right about importantly homes of about the at sales,

completion Our machine model community-by-community pricing homes progress matches basis. with our as up pricing and dynamic information towards unsold production home-by-home on from a

year in the of in. from XX% growth of of build seen In builders we process offer us This back. needed starts share as all killed Board much consistent buy our as informed in markets our are sales how other rates rates down starts have quarter, we peaked, and/or increased our incentives the almost maintain market last and other fourth to We is pulled overall to the pace. desired maintained who as consistent this interest paces, generating interest to

where have are with and as in South XX%, from a markets leading share a Here in XXXX County and market market a XX%. over of builder as are the from XX% examples Florida, Broward we XX% increased up [indiscernible] we County, XXXX of in follows: Some #X share ranked up

double Florida, share state shares builder we an XX.X%, market and of Charleston the are points. builder. XX% the Carolinas, and XX.X%, In the in Southwest #X about XX% market with the with we a rank representing Raleigh basis in that Across #X have Charlotte, respectively XXX average increase of in share,

XXX market basis with we market, share in Indianapolis Midwest, increase points over are over in an each. the of and In each in #X XX% Minnesota

Texas, In to and of basis Antonio points and to San market In to Dallas-Fort basis have Worth XXX the there. by Austin by respectively. In and XX.X% points share we each by in XX.X%. markets XXX XX.X% basis XXX increased an XX%, points Houston

has share, the the Colorado, which market of ranked perennial #X #X been double that XX% where who almost market leader. we In with is builder

the XX%, a significant Moving Empire Inland in #X share to we're all share San there out Diego the XX% the and XX% Las Phoenix with in the West, in builder in and than grown California, state #X Central more and we In markets the have Vegas, XX% and have of respectively. market from Valley and across Sacramento.

The the strength against of in about are XX% Northwest, the in Portland with respectively, individual lastly, increase of XX% pricing production is level by based that XXX And each our and of an basis and we largest the share, Seattle points. Pacific match both the community of execution strategy in market on market.

chronic conditions saw a As our by Stuart in in shortage and as in fourth noted, across interest the quarter quarters. the our variations that market greater in strength to volatile market supply defined compared markets we environment more housing were rate prior

demand environment, all market similar current the and supply. from markets benefiting greater are In to degrees

that QX XXXX. demonstrating was of it X.X ] homes was [ improvement further pace to QX pace fiscal community a X.X from of and sales as our is patients for the QX in overall XXXX of same strategy Our per in pace up executing compared the

higher rates find mortgage Lennar worked the homebuyer. during teams coordination with rapidly right mortgage the quarter, our moved to As with homebuilding homebuyer solution, interest close by

the just of described led than completing inventory per execution community. with I to unsold the Focused quarter less home one process

volume for of Our a high to construction, to homes of our market under the pace of a construction, our volume partners. match of both which strategy consistent Choice sales program finding to us is maintain pricing allows and the homes under trade with foundation clearing Builder

times. from and have us with significant trade and/or starts in our consistently continuously the These lower together cooperative deepened larger changing we By reduced our during the quarter with with rate year XX% base. As increased consistently to we this in starts manner chain that prevented prior efficiencies constraints from homes, together flat costs Working the partners, improve the and led despite trade our supply a normalized improvement and partnerships in to plan, execute chain benefit our trade quarter, a our other we to the partners cycle sequentially another way starting supply in eliminated enable increase cycle we with construction have starts environment, interest game our trade base fourth the attracts a environment trades. This by Lennar time. QX. we

quarter, XX average fourth to on the days XXX decreased sequentially days for from time cycle homes. For down by QX single-family

In most markets, close our at cycle of this to or represents being times. pre-pandemic

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

a last from year-over-year This down In about in is we were of guidance construction our direction on addition, XX% our quarter. the costs costs basis. expect the QX

on over where side-by-side forward, our partners the efficiencies costs quarters. next with further they we bill plan to greater now and In the value be series sequencing trade production and of improve Moving a engineering, the with delivering time consistent working quote to are expect we to customer. to to reduce are few the order cost goal our with markets production across buying value home

continue Next, land-light the the described. on then behalf our fourth In strategy. land and homebuilding with purchase quarter, and homesites our to they we as machine work land of where partners discuss to bank strategic our just-in-time our deliver land effectively Stuart execution finished I'll

our various third $X.X sites from the quarter XX% with purchased in home land with Consistent land billion our finished acquisition structures. the of about quarter, of

as from We site from home XX% our XX% years have significant our owned X.X homesites year to made progress year-over-year. supply increased controlled and quarter the years in percentage fourth improved X.X of to

churn XX% inventory in increase. reduction increased time improve in flow X.X operating has, last articulated, on as cash land a at focusing line help now well cycle stands a bottom year, results versus as which as a owned our The X.X our to strategies which our and is reduction in

was period. ago fourth year up X,XXX, at X% is the Our end from the community of which count quarter the

increase required We and community delivering digits needed Diane. to in for XXXX. hard of on single expect it the to their these now fiscal also strategies work for the while the and quarter end the over like management the our all thank for our of strategies change I the by very high and in mid- in to XXXX. our I'd fiscal fourth associates our of want focusing dedication to changes implementing time accomplishing count execution a recognize strong importantly, to process turn at machine, same of and

Thank you, Jon, good morning.

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

few of our to some on quarter. operations services and So spend provide comments first balance financial a the therefore, results I'm our minutes sheet going then on and the

looking financial at So services.

as loan For compared per higher lot quarter, by a capture team million Mortgage Financial result year. result driven Services and as the The the earnings earnings the had and to higher of per margins higher million. as to of in loan secondary operating in volume fourth team operating earnings higher million efficiencies. $XX lot rate $XXX profit on to focus was continues were lower $XXX a cost prior the and of orders increase

our the more team. were business. banner $XX of in result Lennar. operating X to to earnings were financial services accomplished volumes higher prior result as compared to a million increased under primarily embrace great synergies productivity million earnings between as technology efficient Title the a Total results team as the homebuilding a run year. $XX of operate truly They and of greater continues following and These

balance our turning sheet. to Now

we cash were and total production cash billion in goal our that This no quarter, on of credit to revolving liquidity. facility. delivering billion to the as pricing once these of $X.X market to steadfast as meet of demand. by generate provided The was This homes of billion homes determination possible inventory a quarter borrowings with our and the $X.X results maintaining $X.X homebuilding we of and with our housing many again, ended churn actions

percent sheet As years once asset-light. XX% in goal our in balance a increased owned from highest years on our of to history. improved as prior our made result lowest becoming end, owned in controlled homesite At XX% X.X progress from our continued year efficiency, and our of significant the Jon to again, focus on we quarter prior year, years mentioned, X.X and the control our years

we with provides less manufacturing market end, owned with We soon This XXX,XXX XXX,XXX purchases will XX% billion this control XXX,XXX vertical a portfolio land quarter finished grow capital-efficient to intensive. model homesites. a under At is construction with believe homesites capital way. just share in spent and where us continue $X.X on homesites our We to land is total being position for basis, just-in-time of quarter a consistent strong begin. homesites on of competitive this buying which a

our on return the inventory churn And X.Xx, was finally, at and inventory was looking XX%. churns, our

Let about me comment make one inventory balance. our

at reclassed most our was align from deposits on we to and was and line year-end, ourselves on This separate less industry analyst greater to inventory quarter, made confusion purchases $X a request, thus with future our in sheet. land This which and participants brings balance about communities. to better billion comparability investor the

our inventory inventory. During our XX,XXX focus, about as ended one includes we models in finished also and successfully were X,XXX homes is we home homes with includes per which less XX,XXX levels. about total about quarter, started homes number production with that and the community sold, inventory slightly quarter the This than consistent manage completed and X,XXX and approximately

reducing fiscal sheet strengthen mentioned December XXXX of to or fourth senior and $XXX as in further we effort $XXX our XXXX of debt notes the remaining redeemed continued and and balance total for a during during by [indiscernible] of $XXX derisk par our at we've the quarter, balance million our XXXX million million. our all In below quarterly balances, repurchased

reduced For repaid notes. billion year, we senior or of $X.X the full

strong of $X prior about billion. which allocation, Combined April. end, XX commitment total repurchased our was with is was fourth XXXX, our outstanding debt of quarter one at with the a quarter. million year, we a homebuilding due which $XXX senior in totaling result lowest to only the the year. strategic million capital to note note repurchased And we Consistent $X.X There due is ever million X.X% XX.X% earnings, $XXX reduction for these the with our As is from of million debt billion. initiatives, in ended we total capital quarter balance $X.X shares shares improvement our in an in

we million year. $XXX $XXX during million paid for Additionally, dividends and the of the quarter

the almost in quarter our So total, $X for returned billion full and and billion fourth the in fiscal $X.X we about equity to holders debt year.

Another $XX few balance regarding equity final book per points our our share stockholders' to increased to sheet, billion, and almost our increased value $XX.XX.

strength and In our strong position, liquidity provides we summary, the as balance flexibility with us sheet of enter significant confidence financial and XXXX.

please So turn to like QX. to I'd with that overview,

Given be again we anticipate to closely pace to the our XX,XXX some churning homes homes cash. production inventory in We orders, we pace interest with assist efficiently the aligned. evolving range we'd your deliveries sales of new XX,XXX into as XX,XXX continued for the XX,XXX and with and QX expect guidelines focus be rate to new Starting like keep of on to QX environment, once a to provide range modeling. in with orders QX

some be sales rates price about be indicating we average to margins from to $XXX,XXX QX and higher the range Our XX% XX.XX%, should QX. in interest expect in impact of gross

also period expensing Additionally, impacted of always that QX current the our are fuel by costs. negatively remember margins

lowest QX homes working revenues towards slow an are consistent the starting in year seasonality. a of because constructing process of on we basis, While are the fairly and of quarterly even

of low the XXXX. XXX points year, you consistent on approximately margins during last first note, from Also quarter QX, this margin of point look for basis current period gross have with when the a of So will QX. impact sequentially be will expensing a negative

loss in prices categories, their Turning a mark-to-market million. combined a for Lennar for the joint X% and to venture earnings Lennar the will about the any earnings quarter. end anticipate services at technology adjustments loss to not We expect million through about $XX potential for range other X.X% that The range of to QX in adjustment and have $XX $XX $XX business the for include estimate expect million, since does SG&A, we land other million determined our homebuilding be to the of for of public sales we be of of of be we the QX and financial other to investments to and about by $XX category. our our million stock multifamily expect

be as corporate expect and to and We future our to turned growth and likely is we charitable $X,XXX about robust development QX expenses our of cybersecurity in durable bit that be are home will continue to technology revenues. X.X% to up G&A per based foundation on total support These our a invest delivered. contribution

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

should basis, these quarter. EPS [ first In somewhat $X.XX the ] combined approximately estimates produce per an range of for share to $X.XX

few fiscal And then XXXX. finally, notes a just to reiterate on

we expect And produced maintain of will XX% margin, Stuart indicated, for confident we as to affirm growth XXXX, year. our As approximately Whilst also our in generation. levels the cash in mentioned, target delivery we the we which in result remain in XX,XXX XXXX. gross for flow deliveries

allotted such, repurchases. million maturity that at targeting be total our our a stakeholders. April billion We're to and least continue we to balance committed to share roughly to be debt to for XXXX remembering will capital $X.X billion the of of XXXX As $XXX allocating allocation capital $X

Lennar I'd with like that, after to end weeks us thanking team, to host year-end, that for And amazing. let our great IR by X turn sincerely allow financial over accounting, their it call operator. combined guys you earnings year-end the the me and are to efforts planning

first Instructions] session question question-and-answer come begin ISI. the from conference. line Our will Kim from [Operator of the today's We now Evercore of Stephen will

you about a bit Great. the more Yes, so much be on imagine little great will information I folks you detail gross margin. provided. asking

about was normal on actually homebuilding very to on you what level particular, once how year with level was What that? focus dust cash, $X your you curious a feel over and of appropriate long-term. And to sort over the think I get billion, ended roughly wanted that in I we sheet. sort all would level of cash the what settles I think, the sustain So balance be, and of a of heavy cash. the you should to level you sustainable feel where And

given something that, that that. couple billion billion I probably assume or is to like number, guessing that related And I'm of by $X maybe than a more

Your $X seems sort billion generate guys and flow cash we're little year. so this the you in to share frankly forth that given a repurchases level at expecting of you baseline that low, set

of help us So And should about cash balance hold thinking I this I wondering it to we specified be you need would you than have apply should you're And you guess for cash if going could more time? willing your was articulate that curious I to more what how take to that. if at I'm you could why forward? understand repurchases.

you let me you cash, operate of in start that to configured. of at that I the business. some just you there, would to by know the it's look evolution good Steve, rich grow have or we're developing right? way of is you've how as way version nuance And the really we say new starting kind the and So general, into the rolling approach adage Well, saying case the poor kind our with in starts, a with old into stops by-design

of We're range. in at kind look the year-over-year to baseline flow cash billion a billion, starting We're kind starting this. in say our a see cash $X generation. consistency would I numbers, of flow So $X.X the to

is XXXX, You'll cash over of annual probably higher or K that our develop for that number will be something amount time. see that the in in flow we're our but watching consistent that, Q

of we ask context that programming do how fits in into the of think question that about So this have certainties place. we the the when you

providers the year as interesting relationships, durability our execution I become noted in and looking my past things the banks the the in comments, one land around land this banking at and markets stressed. As was capital of of of

learning There's that around of been amount a tremendous evolution. and

billion to state that is see is steady answer much holding the that $X -- So How is kind something we the or $X developing question year. we're feel of we our cash billion recognize maybe flow $X around we $X.X $X billion or a billion. comfortable billion, cash

other We're machine. of that, the shareholders going start return into much through increasing developing as to buybacks design amount at as we gain the Some might approaches that's say too component and stock looking parts be confidence to to Lennar mechanisms. what's we that we buying

a bit where slower becoming etched we rather develop so we that than stone our perceive as confidence. people we're And faster right that new developing might going in strategy components behind the core we're and curve are be now, to

So in might be, buying little a again, think deployment be comfort assets. we of and might our than but back zone some slower it are hitting it with about the stride thinking liquid should stock

lot very cash because that you're I hindrance in hope something because, company a you're a I'm laying what some it of land hearing in around lot investors that's like which with to that transformation, of obviously, or hearing state. a on deploy a really we that would think is predictability what asset-light could critically that in i.e., obviously, a maybe holding I'm your of sort may seems It when think with effectively is. traditional to cash had we And it off you to you important is of That's helpful some an steady good revaluation isn't comments, being way, revaluation, undergoing seems said too when out. I lot but something of you you're rhetoric line the speak a started much revaluation. when cash, for that, it's a just arguing initially they be the think -- actually significant like argue holding and to the the with eventual like have

sort you time period where you helpful. So developing your the the predictability, of guess it's gradually I commentary that point where about to this is of have systems a were

your I'm satisfaction, if to a what established to comments a once those lower to paraphrasing level, Is more have right, -- of proper down to systems basically come saying? level that should you cash expect of a your but there you're maybe the we way not So interpreting you're yet.

the you Thank for commentary.

program bit helps decidedly or execute think holding large-scale that M&A growth out-of-the-box that to And me let to better. a cash program. the me answer say some I we not next are little on

in of the read incredible is It durable terms are much that of year liquid we and cash. stride It's and I been year simply is too would and of It been very the that we holding actually So don't say, a well. an working -- confidence that in assets. development into of has terms the proving the company [indiscernible] for this developing way so confidence ground our deploy process. are systems thought simply past around

expecting really helpful. around infusion a for to That's that normal marketing got some the we recently some regarding operations generate. should put and whether we portfolio. I rental very even Okay. news is would us context I was appreciate above lot There that you was it. from the beyond this of your a because wondering provide if cash around be folks could something questions of

was where sale, think go, partners. to base quickly. of limited to look, timing portfolio So interest could And it's The is is, driven knows that by rates see. a where be thinking one answer although that question kind time change a determination I suboptimal to we'll market the the about who that

company. any episodic program I'm So to us either happens. material of it and won't the There it more not or to discounted. the there's infusion, won't, where might statement position be. even the in be we'll what or sure an if of And do profit kind additive might to sheet might This would happen the be see is or simply will it our balance it stock inspire be would buyback. terms income cash cash but

at guidance point. just have given think So we'll I on could there's that. be to this additional and see don't that wait any

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

last inventory the a move the tight had weeks performance and of all commentary you I this course to guys and great obviously year for congrats of the your these Yes, this interest that impact because Stuart, detail, what home far year. unknowns has and far move. up some on expectation lot inventory higher 'XX. settle obviously, to levels of resale kind there's assuming in market current And people as and to have is might to resale the But puts your rates I'd some what and great out in new react I that few over think love business. do thanks levels inventory getting about the the there tailwinds freeing market and the the as does to the that striking. as been the on or days as market rate one But how thoughts heard what potentially takes could is to your get on related that near uncertainty

over if down attractive be to question, resale test Alan. mortgages about because me buyers it to that traditional interest interesting held this the I added and are it lot down supply which as is in think therefore, traditional not appropriately have Really activated growing fashion, first-time be zero-sum rates the the very the the that But just second interest and move-up, I Yes. has the a year move-up a they the my to might market. find about thinking, game resale market a past family thought market -- defines to it more by to rates, tick position. to move-up a is that in resale seems and

additional product resale the because do decided additional that been move-up does missing along available. market traditional the with looking rates what hasn't It that supply very first-time on that seem buyer for the been because and market interest and supply has market the activate comes traditional is for product been the demand resale extent the simply to home home market the that thirsty have new to from resale me thumbs

that. activated supply both down, additional migration a well. the interest as they the buyer. think that down, home very I trend demand been So for a as in And prepared do is existing additional we've and we're I result first-time buyer should move-up about for for it if thinking suspect well lot that And trend market will rates that

thoughts your Appreciate Great. on that topic.

Second, on the margin, interesting.

guess expect margins certainly but by can together to guidance, year full full pretty formal you your giving that you similar piece not to year we I 'XX. saying be you're expectations So

would ramp that P&L. I imagine are year. what a up on give terms you specifics fairly healthy would through imply what's in the does I maybe costs be was that incentives can on of trajectory trending just to So flowing the hoping type going through us imply? land of

the incentive course just down we that where of interpret they as your should should over the that XXX, So from XXX-plus points sit year basis expectation today. come

through in seasonality So lower and That's if and you days in accelerated was Diane the I has comments. to was margin of the always That year. go started And period been the all case. her case. went on hiatus the our a the of first The norm, that time. seasonality back the for when -- trajectory we think the detailed quarter that

quarter especially through in months. quarter, quarter, pretty as that was went our think as interest specifically, I fourth of the went the through couple rate the rugged case, we a we fourth first

you our think have And I an that in margin anomalous push so down of first quarter. kind

as you're that we margin to think the normal going see I through year. of go a flow improvement

November come do and then the we did good that? back look that want pretty ease. Jon, fourth December as of buyers rates think as maintain quarter kind I I to we is because it likely extreme margin ease interest the more to past market in and up looks through go, -- thing today a to where of we the visibility went at incentivization really our you at have the was in think pace the to early and level. And seeing start the to market it's as weigh

Stuart. would with what said, you I agree

effective buyer of homes both effective fact bring the need of still did moved to which and is of real sort we're due addition, sort focus In end expect holiday of into of just in think cost at rates down lower, normal. order but a buydowns. adjustable that more qualify quarter, I see on that down a we the of as the came holiday at seasonality, we mortgage today's interest less as the to rebound use to we a of rates season in also interest the should is rate lower not rates the afford The are that prices.

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

as of everybody. flow even structuring Good is part land cost. key A cadence a variable morning,

your you I you very percent XX% that guys. for innovation homesites these this been your XX% from can think, quantify a have closings meaningful to what of finished coming purchases year. But of average

point the us in quarter? would earlier finished percent this homesites came closings context, these the -- last how you year be from If that versus or could some year. of useful what So give question, key I is misunderstood. Because achieving? asset that the question. the you're is quantify That's latter making versus this impact the my that then the And margin first efficiency think you're

Well, I in. jump can just

continue think to and So were on in third laying we that know control. as to deliveries up we the even it I was balance more should become just of I'm having quarter, what trending year, sure see of up it templates and purchased we more I sheet parties. our XXXX in we about that every the in the lighter, but seem fourth expect beginning that land our XX% don't the turns quarter, from it at

second a to. was part There

The versus the margin asset efficiency. impact

Yes.

if we basis think So picture, points. as but look is say or probably increase I XX for number, about good you growing points I basis analysis big it's XX . But percentage. a or it's probably incremental a grow XX would probably that that XX

we've as share spoken you think I is but think your you you thumb land as inform go of generally realize the Excellent. your And this And that of more then heuristic, of you're for buybacks. could that highlighting company to repurchases is Stuart, Is income you clarity I I a past, to the messaging, I your think, this that were second exposure, Diane, are flow deals. statement, item, is the debt looking guiding company? will reduce a net and but just land in think and investors cash and have simple said evolving on about payments. about this, actually, that cash might kind I rule absent large balance the not seeking flow

have with think of would people application cash your confidence flow. that heuristic more I the simple in So

holding characterization land deals. thinking not not articulate think want for our a back what We're now. evolving to say large But are I this holding and M&A and we're back regard. is that right trying to I looking in for that we for I'm transactions. that's looking for Yes, for emphatically good

conservatively say stock let's So generated between remainder the to for debt -- we're that flow going cash direction as right not now, retirement buyback. debt that the now. both comes And the right that allocation that's and

we in quarters I it prior relates redemption future might Ken, you the total senior notes. I've And early -- referring want that, important. be think, to a to said is I really would always fact just on that ratio that capital And to did our the prior of and because we amount fair as add while also years, obviously, debt to

think on be I in there's a nominal dollars what's little your balance mind, my sheet. perhaps more important

billion take as it so feels balance need debt of pay of forward. an $X.X and normally fashion And We can we nominal to it just quite really wanted kind becomes dollars pulling note to orderly due. it there senior down were in the keep at like the isn't down

So it that's the at what I thinking was about moment.

Michael Next, of we'll go line the Rehaut to from JPMorgan.

Good And very everyone, that morning, year-end fast also, congrats the after almost or far. on the so all comments I turnaround guess, impressive. is afternoon. for Thanks good

margin to the But first would quarter. like wanted growth given corporate agree driven a earlier. guess, -- looks decent the you're predominantly growth higher It I on revenue for on I negative the revenue Diane's and metrics outlook. G&A both in first I by by comments pretty a little SG&A zero with expectations So double-digit alongside leverage, having closings. bit the

drivers want I the the understand know on of more investments. So just I to that. you there's corporate G&A, said

And of? year SG&A. more we talking on a little and of bit quarter should G&A just higher commissions outside on should this full corporate So dynamic? that there's If leverage aware we factors maybe first just or other SG&A expect basis, be a

Yes.

judiciously, broker I certain have been challenging we times, like been So programs are using participation seeing at we've capturing little to more we've a sales, articulating, the dollars and sure bit as utilizing brokers I'm little but Mike, that [indiscernible] tiered judiciously. a think, certainly spending been we

into lead heard that generation leads Additionally, we of funnel we part talk very machine, a higher the get about, do have conversion as the us how that side, digital rates. the so you big is the on more

the because that less brokers other spending it's And things. really net or end, so margin spend dollars a in that for us we will higher again, on because that produce believe we've been, judiciously than costly

impacting been are think X that those our really last I the quarters. few So the have in areas SG&A

learning certainly have to we that gone was operational to has with while interest the costs of this, curve incur that's don't engagement has digital have and articulation with of great fact challenged incur. platform we really And side, to community, Yes. our been as the don't realtor our for year through and But good us better that the a that past Well, better is great downs use that get Diane. want a and affection the we've rates, of ups and and was better. but the we

managing our SG&A. and And between seen some necessary can engagement to platform, spend the sales up is accomplish so we We've make digital pace. of realtor been maintain spend and the working have our balance the with organically tick actually carefully marketing we're as we we through sure the have driven rippling through what that and realtors to

So go that. Jon? we're seeing through of story you a as evolution that, to It's some going add to want to XXXX. be we of Anything

execution funnel said our articulation I your remarks as or to think of dials, to about incentives and digital better those and you that of it's how at the through we pull continuing we brokers. buydown flow learn we we're whether experimenting more the rate that's use in stage as the turn here, the opening or in this trying, learning, our the selective drive And interest machine. sales pace. right to efficient the production providing consistent of that feedback or we We're where levers are each and get

a I a done down kind on it's just understanding 'XX. certainly. half in low of gross of more guess situation, and XX% But against the margins you've secondly, margins pretty a Great. back little the bit drilling fluid where gross backdrop

rate as of low to being did door coming be to type the first do, recent extraordinary, the upcoming have took steps something needed maybe this to and stress period. you you a to that those coming ensure quarter what ensure this summer, kind appear full seem year you But to volumes to want Now a say where volume orders a I to Is obviously, you did in kind the did on you you're let's of of deviation coming say, would and XXX but don't but of talking to points around don't basis XX% basis in the point about backdrop think late a XX%. little full or bit quarter back basis getting -- about perhaps like to through first it it year quarter, to closer first in and what a fair you as want I perhaps margin back event. more more XXX onetime maybe to a that say gross interest XXX 'XX,

any short-term? very to to right XX% of the see quarter. that are that that outside there some to and from and moving about kind that relatively that short as you think you of more tangible first that perhaps type you'll incentive order quantifiable again, of not back Is more of, reason of this took gross measures the getting be margin XX%, Is kind an of affecting in just kind the past period way think aggressive

our we're case. question, that is So it's to is is lot instinct that a very that I it a Mike, about. much think we'll one it's answer and great thinking but And that the that, see, the

the rates in noted you X.X% towards I X%. saw interest As migrate quarter, fourth to and really as started above

increase you we've confidence. I said higher some on a The you able buyer the in felt it incentives their the is the buyers field affordability, to losing hit remarks, where the felt at they were help interest tipping about in really interest sharp gone like saw and we point a point for the of hitting my way were through need able point inflection incentives The of that time maybe were see starting this rates really to housing. rates, to get even work. of think we I to As as inception, transacted an it as were a in

question went moderation on, to got that fourth Time into the started even off. that do. to that the market time. going actually the to get is took new what -- couple edge rates did of kind activate the as to not to they the we in were not days, they aggressive a question side work. it inventory. your But And took little needed point know normal. what maybe quarter, answer or of be. just that the what don't moderate going where interest to starting sure past get We build kind a to I but incentives we market in did at going just on bit, was moment had is the to were to did we the we to of to weren't As We're the

the now. as severe snap through We are of where did it. market kind strategy, right to not seasonality a the we this to driving margin going you're And first of that of and market impact because and the time see the that pull fourth of and on the might flow. We're there the drive to well quarter are have overriding we're back going we're be right meet through a through quarter reflect and cash we our going that's could we'll back bit going the more to be wait what year we through exactly some is,

it's to see the could that any or us in have of way time you crystal as think to you moving. been quarters the buyer rates Stuart, now, enthusiasm reflection moment process which for a and machine none if is I at really describing about a the add, reality we've ball of that

we versus were with the rate they speculation for So a as what quarter, the they fourth where we sat just might in of dealt go.

just going. buydowns to used pace we keep articulated, mortgage rate a Stuart as appropriately so And

going, where the by sit consistent that don't we maintain which to drive know we here we look use positioned pace, As to rates buydowns, lower-cost would just pace. again, continue means But well they're mortgage today, but we're better. definition

as So environments, use and absorber up move should moves as the rate as see and a given our articulated, it market conditions, and interest sharp you we'll up down. market Stuart margin down

rates, say greater and through which system. amount through the fixed being and was small noted of incentive especially to fourth there tick and prospect an as an anomaly of I'll -- our expensive. was a ARM of of is [ thing This, more happened past of last the over would a product just was days, normalization buydown, that the buyers really reduces one through first we -- an normally rate much the our more place focus flowing that's interest what's interest And attention or ARM a migrating interesting ] quarter product more that reluctance And go we cycle XX-year course, is the through on take acceptable. use an

it's basis, so to Again, And we're question? to going don't see we ] wait see. on on. Why we're and working more and day-by-day what touch take [ and have that's a one

Maklari Our Susan comes Goldman final question Sachs. from from

Good less price relative that afternoon. which peers you sort question, is per Lennar in in than your think think one the about flex coming market to of My building business product XX,XXX the to community, perhaps your especially similar some with you've response is comments last as you first to the down is that flex depending comes low year. just relative which to improvements the do finished to how and question of on into flex year How the back to are in machine even together about this or the on up maybe number that or to guided get leverage market. the ability points to closing

by detailed number focused the Look, much is that the about communities And we managed the by we of to program pace this the and a through to migration pace, becoming and community of communities. doing those on handled design. number that pace, call, have is even day, our larger that dovetailing being deliveries and is laser-focused production at our is other are don't extent, daily everything that very Jon pace cycle the actually active division starts on with why is hands-on This basis. group level. times it sales a we very every with what you... operating call Jon, It's

we Just come deliveries is goal XX,XXX it of and don't our machine, as which design consistently for by or will need up through production not you drive flex will towards have said, about have to inventory this to approach our moving year. which completed down, through the consistently inventory, new

So that but the have. delivering flow very market be likely, by consistent conditions most design machine that will we ebb and our target will through

detailed some think then you market you share those comments, your these think drive year, you really forward largely the gains to in further impressive the share as of course the then about you some talk And Okay. that came outgrow to can from? initiatives? year, company-specific ability over realized market the the bit who a as you've maybe gains you of And

work the from. specific platform. we're every names, it's certainly would not naming And market capital. different, constrained able a be across Remember in identify some came been strategy So that that I you numbers to landscape have that to been access just are by for has to markets be have a others there I would strategy. every and the various don't been going There even competitive very say different. think different different is have

focus market help pace, into costs been help it's to in sales has been one we've other sales new land whether builders. and group it's leaned picked board market consistent whether partners or able accelerating on lean of been whether voids in, Our or trade that clear share. been where and acquisition, built we've or and strategy the it's there in by a process, another cycle a back been drive in the focus We've has in and bring share pulled up certain been time of to acquisition across and

and I the of Lennar effective most byproduct the think share buyer as the building position the consistent both strategy a in efficient builders trade of effective becoming sellers market consistent partners. to of back you're volumes from produces, choice of the provide choice it hearing, it's and most as our strategy what maybe other or really efficient, accelerate sellers Lennar partners. trade our drives for and pull our us growth, will That's

of thanks to joining Okay. curve on company for Thanks terms it for execution exciting Thank joining. look our of to you want for I progress everybody and forward reporting in terms been really very a much. to say year evolution, of through We're going end in It's learning terms and XXXX. in there. us.

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

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