Lennar (LEN) 20 Sep 242024 Q3 Earnings call transcript

Thank you for standing by, and welcome to Lennar's Third 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.

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

Lennar's are the any not to future only conference of assurance represent actual and call intended results. statements estimates date on this as Forward-looking to give occurred, matters and risks have to subject uncertainties. relate statements are inherently forward-looking not Because yet these statements to that results filings, results described could or SEC anticipated recently and those statements. These include future those in SEC. our caption contained actual affect from earnings Risk our materially factors with filed report in and may forward-looking differ Many Lennar's under the Lennar's the in the release, most cause on including results activities to activities and Factors XX-K Form factors annual that note any assumes update to forward-looking Please statements. no Lennar obligation

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

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

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

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

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

existing will for growing very further and and very to strong interest access while many the Demand demand. will rates Overall, both homes, space. More move So demand level, enhance homeownership. will the up let is access begin. remains for lower homes from affordability, ahead accelerate will which me the and enable economic homes more families more entry homes value unlock homebuilders. bedrooms to supply The move-up for more enabling that while of while more will interest homeownership to dynamic provide be rates entry-level to to demand to able families likely environment existing living new attain lower interest Lower rates and migration at existing of for expanding product. remains activate them go listings driving constructive and to

accumulate Of hindered households need natural course, rates locked to demand to also space. factor a rate mortgages have families rates been interest access and to in more affordability has to interest down expand as for a up mortgage. qualify Higher date. homeownership and incentives and have to of the buydowns lower market or demand Rate limiting Inflation interest the enabled and have the move to and for payment ability families access average date. curtailed

inflation will as that Additionally, that remain housing across generally Lower the lower rates do either inflation households enabling generally lower tempered and often foundation prioritize and more while flow, will first-time confidence to of ebb the This employed, market, we to affordability, stabilize or are around and the that a consumer purchase. shelter controlled firmly confident business they believe will and Consumers confidence access confidence. so. We employed, compensation build remain narratives that, is will confidence strong calls. earnings ownership believe rates rise. boost landscape, that will challenged likely and purchase will they they enables have home their believe and rates move-up affordability consumer will very and controlled them most

cycle market as past and even home fully broad-based has the lower. expect more incentives new by X stronger enabled years, mortgage While an buydowns and driven strong demand rate we over the rates demand move

remain their in in and by focus enables hand, building seems has of their wealth This should begun Many more way been immigrant will of the strong a shortfalls shortage and of and for about and, begin the the greater factor labor the therefore, further has in The we at to and narratives of homes of long a been immigration years mobility note, been is the to fees to workforce supply been increases. ownership. It on been cost of on On middle programs housing additional underproduction. production signs give the up need intensified to at chronic immigration, way that in acutely permitting as solutions, population to has pounding even influx final remains housing current home pool exacerbated pave have will with result first aware shortage associated national have to shortfall week's demand activate action need an the X.XX production. On housing, generational offset for supply the housing This the print the the well-documented has attainable governors construction across is and affordable is Greater catching the that one and, continuation construction the levels needed continuing of activate upward ownership acknowledge across million the through recently, the higher the shortage expanded restrictive alone shortfall has and that for country begun landscape. building illuminate need local the pressure respective and and that and the While costs access supply Awareness housing and constrained. greater the demand need home the has impact geographies. higher narrative a class become strong production supply. interesting let housing markets. in strong, on has table for housing, by starts and population housing land driven landscape. shortage. mayors

sensitive along marathon business. Against very quarter adjustments control time, hand, ahead. Overall, for we focused on add a way, while, homesite model house operating be will operating an for X-year optimistic the backdrop, we delivery we the configuration overall rather are to as land-light, On this you appears to This the migrating that the new time, more results, towards model. that third homebuilding to are seasonality, our will an very requires see our positive demand positive asset-light, our supply adds from completion ahead that incentives, costs. at the growing is dwellings our immigrant road same just-in-time some issue and our new the strategy population this there can population of politicizing in asset-heavy volume, help as adhering at other production from the are and population. Without perhaps sprinting increase while homebuilders to the while we it of platform of finished optimism our to to look

breaking migration the bottom line profitability that consistent that conditions of closings, stride executed growing the sales have and and enable. delivering starts, and while market We flow and without cash driving

the the company we our We exactly day-to-day and reorganized results. I delivering quarter-to-quarter on literally growing this to focus has results volume volume has line have and cash business focus: asset-light model. with This emphasize will consistent while and North operated on been that with consistent line an our Star flow have want bottom and growth model. to recasting key be to while been bottom predictable migrating

costs, and time, improving operating consumer acquisition has and SG&A. customer -- cycle costs construction efficiencies it enabled First,

to delivered and the transformation flow date. Since it worthy we that the just-in-time Second, owned homesites has have bottom line reduced rather X-year are and results. Since banking supply enabled has and XXXX an and partnerships our And billion when began X.X-year XXXX of results of and been consistent cash financial driven reflection. third, it of has have some enabled from transactions the to operating and our expected has land-light takedown supply to began when journey, driven we capital dramatic transformation, consistent our that of the fully-developed the nearly this year structured this predictable dependable $XX year. land that at attracted end comparisons have land we of

We turn homesites have turn of year. controlled XX% XX% our And Xx increased the under to our increased at a have to we end approximately controlled from from inventory X.Xx turn. the expected controlled

a XX,XXX remained XX,XXX from approximately growth to gone has for have inventory owned total XX,XXX deliveries actually our our XX% a to While flat. rate, projected

stock XXXX. on less And $X.X XX% billion we return X.X%, at of for in have from of But down we $X.X lot to shares forecasted of plus perhaps And that, all are down million a By capital a we XXXX. in we after XX book. from of debt-to-total distributed since year-end, have XXXX We cash have approximately grown a And clearly billion XX% even $X.X approximately by XX% our of with year. currently, in approximately will $X this ratio lot dividends doing on approximately year-end, paid more billion billion. year-end a approximately has inventory have repurchased more as debt. have we importantly, will

first, the third land quarter, volume homesites of started built starts now, we strategy develops -- other And will our sites. Millrose. we our our for with that consistently of basis Well, needs X/X our to fully-developed focused and And complete growth capital with and capital with needed land have did purchases how spin-off, that X/X transaction about delivers and just-in-time we volume. we So attracted operating on consistent and our adhere do produces and like infrastructure the second, that? results that enhance a on what this and home and for we our third,

this break down. me Let

another represent pleased and third strong new quarter very quarter remained consistent results First execution with consistent of of with challenged all, homes and strategic The are by affordability. for as they we operating results market for Lennar. our demand

year-over-year our rates to our -- starts, of as incentivized resulting enable we increased quarter, increased remained just know that to year-over-year over with third XX,XXX. the be through added sales continue asset-light X% we attract starts will increased affordability to will mortgage while deliveries XX,XXX. quarter, capital XX,XXX. almost efficiencies rates by new higher interest and orders XX,XXX half volume which first consistent by by to strategy, to we year-over-year X% As And XX% we strength decline. In almost we as greatest We operating around volume X% our to our

some and on we out delays focused facing others and expected we dates. entitlement to than bump hit communities closing As and start the however, have selling expected volume, faster development out have of

a XX,XXX existing and increase absorption margin. than our expect levels As communities, still XXXX. community XX% in and over which We XX,XXX XXXX, between count volume naturally impacted fell, with deliver to we more adjusted pushed in homes greater

be to growth third in by continue expect we expect quarter to also communities, XX% count community year-end into X,XXX rate and with communities to an increased XXXX as We we X,XXX somewhat 'XX. above the expected

We impact the correct couple to the of over lag of next expect community count the quarters.

incentives count high as addressed and affordability the lag. During over XX% community just interest we rose quarter, and rates remained sales to the

costs acquisition to X.X% in our were will and shortly. time, construction reduce we we efficiencies as operating our we able our offset, that costs in cycle Jon X.X% our detail expected an leveraged customer to And an SG&A volume increase As versus reduced platform. and to

in at ended gross expected of lower driven efficiencies. than expected $X.XX. margin our excluding And net with quarter came earnings share, higher XX.X%, items, our was While by per we margins we operating at than onetime XX.X%, the

to we build changing confidence to economic given the the in the margin changing As interest our and expect rate flat we gross look ahead fourth interest landscape. adjusting and customers seasonality to a remain environment, rate customers quarter, as

We to improvement further operating in also our efficiencies. expect see

our driven adjustment have to conditions pace market enable adjust. margin to sales with used as pace, have continued we production of production as point in a consistent have we As sync

quarter $XXX enabled on capital and X.X% us the of strategy to million debt-to-total shares Our stock for ratio. another and $X cash end book has X,XXX,XXX of a with repurchase billion

able We operating results and to sheet to adjust the address continue we operating unfolds of and the XXXX to strategy, as a to positioned be have and from company driven it execution, date, as beyond. be to to balance for remainder excellent market excellently

program So with production embarked growth needed. durable core strategy with as structured model to and growing purchase our and systemically fully-developed we with a homesites -- a to develop business, just-in-time the an purchase land option develop strategies and the driving and on land to program

were always not and could capital. also always we do, deals that and become capital and negotiating land with markets. contract executed structured or durably and by still had there option developers, private we of simply asset-light We deals those many land we equity both our permanent only option deals with and developers, structurally creating no While third-party with in developers available, land-light were landowners option knew and

required the the a to drive homesites. been the by to capital to asset-light steady build an concept, attraction of has and X-year of model operational has manufacturing a an supported but plumbing Our that system marathon delivery flow capital slow of support

generation the manufacturer, risk-adjusted a that would be that to at while needed fiduciary the also there for capital competitive, profitability attractive for allowing returns us. namely of market appropriate oversee capital Additionally, for to returns

Not time, orchestration management homes ready has manufacturer nature actually to part driving mostly of advantage of less risk our to needed profiles the driven price land land, be defines Additionally, cost volume these we historically Short-term unentitled structures homes risky always series same all with value reconsidered. the And have of homebuilder the effectiveness division notion appliances. and the the of as risk. assets. and visible to developed, homesite with in these process of these assets for controlled Mixed bringing management and profile second started. Over the the greater programs, and create is option developed gained These company. risk their of to private risk become of management land a is by has as be and the are of for to increasingly than is the on would the land of of farmland. limited now to delivery risk overall unique and capital. Accordingly, assets. through most our pool. becoming a through delivery entitled have and and worked profile automated which as efficiency assignment purchase The is we equity land lumber efficiency. But the professionally has risky The to that just-in-time are risk becomes The profile risk ultimately delivered platform The Hopper. call and Hopper are held critical acquired, is a basis, have relationships we land and contractually partners which land insights homogeneous into managed priced just-in-time are where the rolling

Aside come financial insights additional outlined from to the mind. improvements earlier, immediately X

that term-based of land. the that comfortable risk, that to markets capital understood a expands available terms types capital comes First, as and for become these capital is with familiar and more rent, of

particular cost markets capital with down with the can go risk get a of Second, is capital comfortable and matched capital risks. profile as associated

for strategies. with no land transactions And with absorbed be this limited transactions ramped fewer developers. strategic impact and be home availability into corporate is capital promotes while does new capital markets sheet up, where Fourth, the smaller implications. existing there's complicated organic of fifth, tie M&A markets balance facilitated and Third, M&A can up not growth production in growth existing can accounting

biggest grow is and to better to our forward much growing all growing. getting be benefits. call, I are learnings learned They want land continue together We more Bottom very As partner, of the I future. bumps they important having come highlight back the our Gordon in unique we mentioned the and to at and single look as we we that to in for relationship -- specifically our we Angelo and learning last Ryan bruises into TPG do with have we're significantly our and and Mollett. strategy better land-light together understanding and and journey began XXXX, endured asset-light, this line, evolving,

the lot near questions announced call can the We're about have process, spin-off, the SEC in almost model. planned received quarter I'm earnings second generally X-year spin-off. the now what the going limited through during about I confidential still spin-off in call. of which will surprisingly, complete an operating review we say Not so we very the Millrose asset-light to we this future, migration Finally, a

what will affect can I little tell However, about how it a it you bit Lennar. will and entail

development We to option and Properties, under in and contract. of as Millrose acquisition, trust, I've have be and will as it which home other unique -- and will earlier. investment registration when S-XX other develop sites described just partners a SEC similar public a company will qualify and or REIT, Lennar real we land estate will expect a is detailed little fully-developed that is The however, The partnerships structure, a Millrose deliver -- delivery the statement homesites acquire homebuilders soon. to be land made REIT formed for Inc. called

Millrose as it stock stock essentially in Millrose distributed Millrose The our cash. for contracts all the Lennar S-XX partially-developed going land of inventory contractor dividend will the its to land advancing it available for within them further statement from be capital Lennar fully-developed -- to with will public. Millrose exchange responsible our contribute Lennar. repurchase Lennar's for some a contributed, will Lennar are developing options for for stock to needs land will finished in capital transactions Proceeds shareholders, as using homebuilding development it have finished undeveloped, stock as needs of along books. We by when registration option of future on Lennar land it is as permanent, consistent made for to accordingly as execution. and will dependable be will Millrose described reduce cycles homesites basis entitling just-in-time And new be a on it continue to to capital reinvested as in and homesites repurchased and the a for be That the and activities.

after would another that additive and the bucket and will capital consistent spin-off, compatible Additionally, continue relationships the Lennar. existed other have with new be company thrive to of alongside

Of will are both inventory and assets amount returns stock. completion exchange and of drive for our significantly contributed equity, in to course, reduced as by of the Millrose equity higher the inventory spin on

Lennar's have $X Given transactions down flow as billion. with Millrose sheet cash to we seek will debt independent $X that company. Since earnings into Millrose, will cash is will And how as of a Lennar's builders very stock. Because balance inventory book and land we with pay well an sheet balance exactly land Millrose contractual a a we completely repurchase or its changing, land land in to be basis. Unlike other Lennar's and spin-off credit but enter appreciation on debt-to-total with, these will independent and and rely pay back-finished after continue sources company Lennar know and to land with constantly strength companies we options debt consistent use as distributions and ratio maintaining land and stockholders. believe, will will to strong that arrangements X.X%, it just-in-time the be with regular contribute Lennar to will to that wants will homesites remain or of any will needs will capital Millrose expect purchase be for much be billion cash its Millrose contributed of to to Lennar expect don't other facilities between value the receive It responsible it for ownership, option to activities. to for financing a option and effect. expenses fees debt-free, equity X support own returns, on fees purchase make arranging

In addition equity-based invested future traditional investors. Instead, capital and of in to a repeatedly probably capital will to self-renewing land permanent receive Unlike the land Millrose it return Therefore, capital. Lennar, other with and option source or development fees, land Millrose exercises. also invested banking the will Millrose funds, not option associated Millrose to be private will will capital of required essentially, return reinvest distribute homebuilders returned acquisitions transactions. for the is as be invested

I'd is Now go very SEC public, our soon. the about statement available say S-XX while planned more made detail noted spin-off, publicly still I in what we earlier, more limited become registration can we're like should so into information to as until

we operating for platform as production exciting that say Lennar continuing Lennar. and consistent sales. we're financial conclusion, upgrade to drive and me time very Lennar, is this a So in At let the

Our operational been strategic and company's community adjust for and third and consistent volume growth, success another operational and complete count our that restructure. growth, driving we on has focus as company for financial quarter our strong XXXX

a and restructured for in X-year and the entire that platform nearing returns marathon operating are, equity. We have our success greater will capital long-term of on fact, end

across market have persists the and and continued cut to drive that housing count pent-up and we the to meet access activated, We shortage higher boldly that Fed at begun the With has found demand said, be the to will demand market. pent-up now believe to production that growing subside we interest rates has know as and normalize, that prepared rates. community interest well housing volume. we rates, are Strong ways growing with

thoughtful high to importantly, continues execution, flexibility As interest focus consistent equity. affords drift in our for even will more for growth and regard, seek for partnerships extremely down, rate short and affordable on are rates use grow on we given strong and returns supply and well environment. Perhaps our that affordable opportunity demand capital we to sheet In continue success positioned our future. strong manufacturing consider a with to most execute model on to greater our upon offerings land us focus balance as a

balance growth, We continue will to pure-play our to allocate debt also homesite an asset-light to we'll non-core continue on stock just-in-time repurchases business to We'll model reduce and delivery as continue and focus capital assets. and appropriate. drive and repayment exposure to sheet,

to asset-light term our we pursue growth. dividend while we through the to complete we we also will continue shareholders in while execute As short our capital strategic buyback, transformation, return stock and

look the successful see completing ahead of to more positioned much a we XXXX, the years ahead. As expect for in and well same we're to

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

we XX,XXX this next to year. that guiding to now, we approximately third deliver For XX,XXX to quarter. margin And closings quarter with homes to is flat with expect a XX,XXX are the XX,XXX

the expect this associates strong Lennar drive that, also flow. We cash continue turn finish as $X talent. And extraordinary look to let effort to repurchase that, And of year We I Jon. of and want me stock a in we to for to to tremendous excess forward XXXX. focus, it their thank to billion strong for very over of with

Good morning.

to refinement turn will improved cost these strategies. time time reduction, and operational reduction discuss a you creates quarter. Stuart, fluctuations from quarter improves strategies performance our focus to and continuous our of heard This responding continuously operating I learning which land our at executing loop, and intense cycle in execution teams while the Lennar market throughout focus As asset-light continue third in real on position. the

with machine improving their engagement needed Lennar the adjusting acquisition us by begins We [indiscernible] in by-design affordability volume pace. achieve efficiency needed to we against in business. interest testing a incentives side on tactics. the the consumer for in of sales areas also approach produce confidence other leads. the pace. This Our creates experience. and Lennar buydowns of starts enable to pace. costs We process, from can informed the challenges confidence rate these work needed learned address sales improving This at new and to design to sales production high-quality machine customer on focus while as with rates on order produce constantly customer we This drives improvement payment utilize incentives to top interest Knowing and and/or from messaging of the and of consumer with result or to the a as and all testing desired purchase achieve effectiveness backdrop the sources, the or various divisions such of lifestyle, buydown of such inflation, the rate ultimate interest as sale to SEM the and agreement. Every through social as impact through desired day, of media the rates funnel targeting where the way us higher our and to

our sales consistently X.X confidence sales an the pace than start producing home X more planning per desired unsold just flow of sales resulting enables resulted from per even start for an average pace in and community. The of related production the pace levels. noted, quarter X.X. per ending pace quarter matched the month third pace community also Achieving our of As homes with completed

to effectiveness which operations, the will and direct along of This goal this partners our cycle participants construction cost and approach, cycle process quarter, cost improvements by strategy product demonstrate the of and in down trade X% XXXX. In derived This days a construction a third on us of XXX along continued cycle benefits resulted contributor during partners combination Choice from past time. by the basis the over decrease into XX% high approach. predictability, by third Builder is from down cycle our to year-over-year quarter, over strategy volume. environment year-over-year a in sequentially QX average our the QX cost time to to gains manufacturing time. single-family of homes, time X%. from year allow in strategy for X% continue of of drives In sequentially chain supply and in from core inventory this benefit a decreased our inflationary the with and our calendar which decreased our churn Our significant our improvement. predictability and Accomplishing XX a of with efficiencies the our days manufacturing manufacturing maximized material drive affirms cost reduction on All

homesites of machine. approximately homesites various to the XX% billion, just-in-time were third $X I'll of land structures. our to on effectively delivered finished acquired they the our from our continue these about quarter, In strategy. and finished our quarter, land third In we Next, our and execution purchased behalf homebuilding the with or purchased XX,XXX discuss land-light land homesites in strategic quarter, work the bank developers land partners where then

development. With increase. percentage land controlled acquired X.X enable years, These $XXX stands around owned strategies X.X reduced supply and decreased During our of our about years, time X.X commitment from homesites from improved of increased being the XX% in cycle last $XXX year-over-year. improvements of a land owned, banks million which million acquisition on a land XX,XXX asset-light, our XX% X.X behalf quarter, XX% of inventory and focus operating now this land homesite churn on year, at execution for about resulting our and versus down the homesites less in in

focus associates to strategies continued technology-driven machines, like we dashboards. my connecting for reviewed. on We with nimbly these execution. and rates for on Stuart fluctuated leading review driving new even a of even and manufacturing felt to the improved of quick and production progress their of strategies. third of these real-time execution have executing the data the flow managed interest each strategies. tools these quarter and thanks action I consumers in the As and I together, with showed digestion more data to implementing improvement. In in pressure form of and as focus want third land quarters, and critical started allows and to quarter, We sales that of inflation, asset-light improving commitment add our the the prior strategies consistent and consistency Lennar marketing aid The and

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

Jon, you, good Thank and everyone. morning,

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

I'm the few and again pull our QX. results a balance minutes together guidance therefore, to Other segment, So for our spend highlights, provide on business going then sheet of

Financial starting Services. with So

third the our of were team with earnings had the prior For Services These million. quarter, operating consistent earnings fairly year. Financial $XXX

in was volume While higher secondary we our in and partially Title had lower this lower business, mortgage lock offset costs delivery volume business. margins and by our net

Services great dedicated Financial homebuilding created a results. experience accomplish customer partnerships to intensely in Our for and That with is true has solid our reflected to homebuyer each partnership goal. that is providing their team teams

Multifamily. into Moving

For of operating sale driver Multifamily of segment $XX our of was LMV earnings million. the The Fund quarter, earnings had I. assets the on in our primary gain

a As received of contract multiple We we million of quarter, the last the about sales. noted closed $XXX buyers. million to under about we recorded we sell $XXX net and XX% are cash. third anticipated gain quarter, assets the to In of

focus with non-core This a quarter. goal the assets most $XX book pure-play second A the ultimate of our asset-light immediately meet increasing with on expect that million for component and of sold assets we quarter are remaining assets. monetizing fourth returns. the to of strategy write-down held as the in was consistent be We these is on

sheet. balance the to Turning

facility. turning was again, our appropriate on cash inventory the $X once maximizing to with and of of results flow margin. billion borrowings ended credit adhere $X.X return market on revolving quarter strategy we This and our that at total $X.X of quarter, The actions our billion. by inventory liquidity provided of cash the no drove we these billion This

investment, and of focus made light. efficiency of a As balance on reducing our land continued sheet once significant on our again result our capital becoming progress we goal

homesites a As Jon XX% with We our years way. We and on strong we for and owned grow year, purchases believe and in a homesites At to competitive X.X position quarter-end, XXX,XXX X.X prior in owned our XXX,XXX prior land years $X mentioned, in this provides lowest continue the in share controlled this portfolio history. at to increased years quarter-end, billion our highest XX,XXX improved years spent owned to market total controlled percentage from us XX% from capital-efficient to of our controlled year, homesites. quarter. the a homesites,

vertical which with finished will the basis. approximately over buying intensive. manufacturing consistent homesites on land quarter, repurchase on were during were XX% our XX% a is finished begin. of land a those just-in-time construction structures capital basis, where will our third-party homes the closed This from However, model Plus soon less homesites is

our ownership homesites a continue our approximate more capital flow. be As it over time, to earnings to in reduce basis, and we our goal purchase cash should land And consistently just-in-time on basis to align up XX.X%, And inventory shareholders XXX up was cash X.Xx, with year. X.Xx return year. inventory our from flow. return last turn was more points last that And from closely finally, our on would

were slightly levels. that During X,XXX our home approximately our the more X is and consistent homes quarter, the inventory. homes completed we as XX,XXX number which about inventory homes inventory per includes finished with ended focus, with quarter about and community This successfully production managed unsold, XX,XXX in than started we

debt or our had redemption Looking senior of we repurchases no notes quarter. profile, maturity this at

until debt next not Our is maturity of May XXXX.

Fitch year. The that our is us in one the of significant factors XX.X% generation, BBB+. strong leverage at benefit paydowns brought the end, and in in to a continue debt-to-total BBB allowed decrease down to quarter strong upgrade our earnings lowest which previous senior of prior capital from improvement our from receive and debt ratings an to to notes We ever from from X.X% our

We operating are to $XXX shareholder million. of our our returns, shares outstanding that our the pleased with strength sheet commitment X.X recognize our to we for repurchased platform. increasing and million of achieve this balance Consistent accomplishment

dividends total $XXX of million. quarter this paid we Additionally,

value equity through strong increased and beyond. billion, over with leverage low just over liquidity financial and $XX significant summary, per our to we and share book our XXXX Finally, stockholders' the us balance sheet, increased move provides of of flexibility the our strength as confidence to $X.XX. In and remainder

to turn orders. provide estimates, starting So QX guidance that to with some I'd overview, and with new brief like

homes, We year-over-year a new XX% orders XX,XXX in range to XX,XXX to growth. which expect of QX the be approximates

our to cash. XX,XXX of with expect count homes, than deliveries QX our in turning be We into range manufacturing to on a about greater XX,XXX XX% also continued year. community to We be the inventory to focus year-end anticipate last XX%

to those on affordability. price sales deliveries to average $XXX,XXX QX price reach about Our be should market continue to as we

SG&A both to X.X% the with of on QX be dependent margins We market with our flat range estimates expect gross X.X%, be and to in to conditions.

For to approximately the earnings And be sales about Multifamily million. $XXX combined other we anticipate in to homebuilding business. venture, and of about earnings million. We Financial our be land joint expect breakeven categories, expect we generate $XX our Services to

a to Lennar mark-to-market Other, any loss expect investments. the million, $X about impact adjustments technology we excluding to potential public of our of Turning

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

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

also, approximately remain should on per share so these our a with to an And combined range generation. the we $X.XX for basis, of produce estimates also confident $X.XX quarter. And cash flow EPS

we $X fiscal are for let still that, such, operator. XXXX. And the targeting me to of of turn share as mentioned, with billion As Stuart a it minimum repurchases over

[Operator first Associates. from question & Ratner Alan Instructions] with Zelman comes Our

thank you detail. and... you Wow, guys Still it sounds definitely of all like for been Stuart, everything, have busy digesting but that

It's take questions. a in, no lot to

Yes.

might you the start I'll on could through you curious or come process maybe little the be So process be Is banking have? like is them, expect Millrose earn just on but business the that. your and to sounds of you different? guess, fees at there, it of contrasting because with currently going I the to to recognizing materially say impact over will the beneficial structures this that margin various of like side land I Millrose, structures and the you the a think going that one some to company of least going more from bit predictable on the and front. things misinterpreting what went through on sounds that comparing or what deals. And that builder, manufacturer kind to relative are the curious might It gave the up I'm you kind on or would forward, will, how land envision current you as I you be have had it perspective as limited you option I'm more just mentioned if the different might as you be kind years you've these Millrose color and

I can't within this way, good me boundaries Alan. and question. the So what say, can say it It's let a of

tried structures. in one image comments repeatedly. that our capital capital single be what biggest a Millrose So about being mirror think structure other differential raised capital of my to The the is detail as is where which is the I to permanent versus a component, has

where from have that as structured -- with small that we've that company I exist similar. -- impact that have have REIT, we come And say, absorbed years, less with and public from past basically or way that, way And through structured it's this a as we've expect land we from we're as our in benefited it's being first So half, will capital half, get or as as our that efficiencies aside homesites have developed we business. relationships. capital returned. But we've it's those managing as of the which impact the not done the the our does costs, of managed used itself we and be a been that does the option over included a relatively it permanent migrated been said, margin all on have in overall look our at let's we what more production the

I It's can small. the happen? the going quite that linear, offsets point as to we not is but impact how specifics relatively think to be actually Now that

that, Got appreciate and I helpful. it. that's

seeing unfold. it to forward looking all So

But were of you're ago, a as ramp ago, through gross just months months X this. of the flattish this to margin, kind more expecting gross year Second, questions of kind now of you relative year on X margin. on I'm more sure opposed lots the on expecting to where

have Just curious, anything, since about maybe have Because -- you to what ago? was June. commentary It expected articulated QX would what, data ago. points than you like decent I XXX Yet guess, based you X expecting seem surprised rates X it basis you doesn't seems other month a from down the on if relative macro months in and pretty lower months come margin of August a some are builders.

So what was driver that outlook? the main revised for

rates Well, first say down until coming our start recognizing quarter. start by into not let's that of later let's did -- all, really

of cast in And the kind the confidence what rates to second tough happening half in quarter. affordability over part have of For as a sticky pretty quarter, consumer rates fallen kick X% first cloud market. were that the up or been more And a has kind of of the the at was kind range. slow on of

a that differentiating that's market been factor, has think I So driven. stickiness and

are our our community within coming our and rates. and managing I the and drive to increasing when community need and think in kind that as really falloff is absorption time there had on a cycle the times interest and in count keep at volume environment rates relationship the reduced our of count, up confluence of high, to we world volume of driving the not kicked that and between need, our desire hoped. And as some falls, our our consumer growth, a given communities confidence community quickly hasn't

community has dropped waning a that's and in future. think we to are to We our keeping bit. when focused a as we continued time much self-correcting good. better think to of it's so on over what's a greater rates program a us headed volume and fact us interest going driven little what's next that's that's towards as have drive come restructuring. a facilitate we we're And consumer confidence between at we're high, stead that's is solving been others, bit, us And count quarters, maybe and to our kind can that think that forward So different is that the up, differentiating little to we where and a migrate put for the that volume

Stephen question next with comes Evercore Kim from ISI. The

this It's obvious summer. busy been you've

smooth is piggyback in a you're you this some year, I information on I or of So in next bit volume Alan. restructuring effort can. to sort to you wanted towards make an little volume far. growth, helpful respect to given sure indicated your a the answer appreciate progress you as that just manner manner so as a think as I in but you've to that of your all With I most guiding XX% growth know recent to

volume, past by maybe in REIT, and down this way maintaining quarter near fact progressing you're when REIT. be in that towards Millrose their tweak explained of that the So others this volume launching term can a the

have be. you is? rate the of that? -- is curious, say, industry to let's you a So Millrose, longer goals or a certain the long-term think And level that longer you've range. more you where to give or something term. relates should rates below of term to of volume growth national mortgage that And term, term growth staying been the like If my proper Lennar, others a longer talk accomplished beyond of when upon what about can I'm for in X% you a long-term growth Just is seemingly dependent their move us think your targets sense question we volume XX% housing moderating starts kind rate for certain long with

market that, XX% view now, asset-light our operations Steve, growth relates on growth the our by has to are strategic become. And forward. go that new more the we model, we focused configured of solving are structure a we way can that organic combination that of steady-state the seeing is what rate. our to more The will we're of part be of we right and strategy dovetail our as kind a of land So growth facilitated

So of steady of a looking kind we're XX%. more at state

a and the dovetails as right interest And constrained. At now. is the population to supply that in as homes, local supply we need market. going to terms we're building focuses supply national particularly think market housing accommodate at what of on drift has and the greater the Now there's kind it this world nationally, sits rates to of local constraint. markets, Remember additional with happen as, the particularly at volume greater level, of down, supply healthier

be catching normal light X.XX and know level. And narrative pretty million. what don't that even we're production has seems at dovetail was up across that I we're think Now doesn't to side. what recently on new with in levels. the supply to seem is. national and seeing loudly it And The we a like That hearing we're growth the print positioned more come

to means up a is we're a facilitates housing model healthier think by accommodating ability and pent in growing which building greater So the that affordability. participate market, that our supply limited demand we

Okay. Yes, that's fair enough. that. Appreciate

margins. my of half relates operating question to Second

little I quarter trade-off between think some maybe volume you this the for you story relief. investors bit that the was that a a and -- margin into brought made more sharper

your think coming year, And which corporate think and the so it with Yes, will if of north expense, in is operating peers. be to that and going case, you somewhere the margin of is where respect guess I line I'm seems about why this talking going over to And this with is the to share after you could operating little operating bigger bit I'm guidance stop is long based you're in margin, on XX% level some your quite term? be there. this a your curious you your whether below profitability a cap

fact, drive as to we we're that In actual more migrate a part been business but the I margin summer. importantly, that in the it operating we sounds of volume, volume we you starts focused we like busy the by has grow grow So had started think execute a operating our build into an busy model. inject to efficiencies asset-light, summer biggest as we as saying way where to margin, an on headed net efficiencies and operations that using the that and

in more building as rather of get go But the to can't I as approach I more that I enable lay operating asset-light settle normalized margins to are that becomes a and going us into will pathway forward. we where think our what we So it believe, believe, executing actually we're the efficient. we And know grow we full-body going than approach, out specificity. the that to

Goldman Sachs. next Our Susan comes Maklari question with from

as you operational moved around cash talk comments through the a shift question inventory that think generation and given that turns, the for Stuart, to means what on, bit of the My coming strategic commentary really that's nicely this first on the you gave is, about year? we business as the which obviously about can those improvements you're the the already, next well Jon's focused as upside that

that Well, this efficient past kick that way flow to in over we enables improve more is far these just we've cash accelerates as us it seen our few business. the be years. in we our run our turn, And inventory and

trend time, significantly it exactly Part a time through across only them now. of is Now division, is point. turn get on approach the in proficient affected now, inventory approach, we higher going XX to creating bit we're it little it we've at takes these in it to divisions. and these things over system that to think, get right But of will that is that a think a inventory consistent efficiencies right full-bodied doing, about delivery country And the takes asset-light an focusing divisions to get there our of continue And half operating all than all division what turn. that's time of flow embedding to we more by the with we this that as climb.

that cash refinancing. think think of just generation to been cash, to you would our our definitely have just net as -- and our the that as ladder, flow add the And really about usage earnings. Susan, maturity paydown with And our it we've equal simplistically, I goal not about said, reducing debt is

amount leaves into cash fair to So that be deployed shareholders. a back of

Yes.

how of you amount operating to billion the thinking on you the you'll uses you strategy extra perhaps, going that need the that you on balance cash? building about forward of given And cash the had that Okay. cash be did the are $X quarter, end and that, hold under sheet, of

So and little as I what been we've or this. it of you know a to the like. that bit more going carrying of Millrose is we've business calls, evolve are of might big think the cash as lot we been, analysts this hard has program said like aren't taking a cash said carrying our This one some you maybe of from work is more look is. configuration our time think seems I've need. on than actually exactly and harder materially many questions configuration than getting about in right past and investors we And even that

future holding what it So is as is defining is actually I goes the that cash what a what well. conversations. exactly stock And we're and Millrose the as relative that spinning matter a that further have we moving terms public off target, into cash we'll cash spinning of of we're our safety to would as we're because further of a format off, strategy in component in file call what S-XX near we and in exactly discuss

have for to kind of just me as right now. we It's say, forward. needed the is but operations safety the now of it's cash stock. needed right consideration move I So it trust holding to business, not how We're the as for

comes Michael from question next with JPMorgan. Our Rehaut

I on land you details know spin. the more gauge. little a a will be I I think But So say. a there's little fully to what devil delve of the remain we trying in on obviously, bit wanted you that to in interested lot in limited here can

quarter land. $X $X talked You billion I of about, to billion think, last

about? the this would in cash received would any if exchange, of language the might represent. lastly, I off all structure any rough $X was magnitude corporate to of spinning of, we at kind kind of degree Also think get that And to all range stock billion it G&A also portion associated sense much or I would know cash. your cost if again, SG&A? that assets, reduction was of the there's quarter these any personnel portion and the hoping cash or billion think that a $X by should -- don't of of if land in result of how affect there's roughly of I your

Okay.

the that we quarter-to-quarter. the we're billion where of of The changed. that spend saying is, always what changed it's by land versus has billion really end, a cash we in, know configuring Remember I rotating foot moving are be cash exactly also $X of assets that from into said, talked that a would falls $X on won't get that a notion component, strategic until there billion But might going kind start part. of I fault words been constantly billion we and have $X not out some It moving to and Millrose that's we're what to It a exactly would me land as let $X that hasn't basis. was that contributing So are. There's on set of component the to some a how of around. Millrose. to numbers about. coming the what can't category again, And my

You been Lennar has our almost too noticed might discussion on exclusively much than configuration to have on that impacts of the information rather Millrose.

yet, I to soon. but market So is to quite pretty can't going there go this come

be patient of question on limited There So I rest falls Millrose. will that as I just that. And lot think would a relative say personnel to category into of be the well. very your that movement

in SG&A business, in the efficiencies personnel the Lennar of we how of impact migrating on environment. terms the run in context to our So only Lennar of outside be not will

confusion. clarification, Mike, there one And a like it might sounded little be just

will that Lennar Millrose, shareholders. to assets stock. exchange holding be will is But As that dividend to be in for Millrose our stock, we be Millrose stock that contribute distributed our not that will

to bit that, like little clarify. wanted sounds might on confusion of just it there so I a So little

I very No, Okay. helpful. that. that's appreciate

fully, Secondly, last quarter, maybe again, question I wasn't the so. gross earlier around, closer pointing arrows appreciate margin XX% guess, the to the were just answer I on or

-- you on the different how more different Now put view appreciate, I think around factors words And changed days. to, of this last pretty just magnitude to at in of want is wanted of you're what's that alluded degree to some perhaps should relative here. XX seemingly again, given your we But couple closer is temporary a in initially at shift something a to fiscal ongoing the don't better business. factors. mouth. looking And about the you least, 'XX Millrose also And to XX.X%. if

Yes.

staying of this all is through one into Consumer one, kind I've of bit of this from: confidence as quarter. a derives story lot think margin calls. little melts I this number We've conference our higher in for that said, a waning. heard longer rates articulation, interest and

has consumer margin. And back interest housing changes been as a count community come at the Even the sticky demand of time terms in down, little driving into rates market. their And have jumping the our a in when pushed clearly said and earnings to has we're look, kind in we communities rates been going limited within focus last of by affordability, pushing on call volume that, increasing absorption by our has consistent the a of approach confluence shock generating with that our growth these the the we together And the as And then and trajectory. to projecting has volume going that taken And margin using been and we volume, we've absorber. long-term that the our margin use spin-off we're think way. where maintaining the volume company. reflected is are asset-light irreverent to sure exactly and make to for about we've that pieces benefit

Allinson Trevor from Wolfe Research. comes with question next Our

follow I want on SG&A. to up

results. It some in are of like You your driving had internal efficiencies the SG&A sounds quarter. control good tangible really

technology out called You benefits. the

lower release went press your NAR The ago. SG&A. long driving the not in mentioned just also You effect broker costs into settlement

was the fee, And usage. a to changes whether flat So the you paying, rate views some if brokers, net adjusting perhaps with maybe your of making talk from on maybe more hoping moving any, I could you're impact that's about any those. more you're generally then broker

this to A heading our healthier us have market. a asked relative realtors. strategy under of building of number about housing put I Yes. people the

But just because the isn't it we're housing realtor that the really a work And focused for that where Our business. the necessary us on realtors. involved, building extent to down transaction as market. And and not take They we of been respect from bring bringing we costs a adds been to we've customers. build the on affordability cooperate better our Realtors, a down order for realtor where focus unnecessary trying great home with is cost think home. we realtors. repurpose for out cost the housing to in we the cost the have bring time, it the of conceptually, same to has at many can that customers, to

our you digital volume, program. a program, production, our robust at we are marketing with If look able more marketing

We are home our lower-priced a to volumes our maintain customer. for able and accommodate

and work the to maintain up come plans same for working that with to of customer. been we've with cost their the bring actually down trying for are So realtors and home they engaged, the clients, where time, at the

think views a there's Okay. where cycle, gotten just Stuart, of on That down recently, are key alluded get to lot given Are as for I the of demand in what in proposals to to politically attention are makes a thoughts if just lot of a housing we your place? potential has assistance sense. election the supply you to of down-payment And assistance. was on into is clearly then primarily terms that down still or I DTIs? hoping ownership were impact it proposal then But the headwind home eventually a some your payments also buyers proposal. side. go the you on And seeing

to Inflation enabling that housing, a difficult definitely whether payment. base payment to down down first has a down the for in attainable be component is affordable a customers it's a our is or question. customer and question home, no hurdle and there's been has specifically acquire a hurdle a housing hurdle. looking continues Great accumulate the payment to been And Yes.

programs where out. there. are We'll a out the think thoughts and of -- that lot they there see I shake

tightrope payment one, back the a period that Number short but walked. want to we've certainly might market. don't It be remember a we durable programming. to Great want there's has think to that kind down to a time, I housing Recession, for good we no got feel to get of of

to a demand to so is we've what for is to programs national going to to fact also balance talking that's is to and long through. What inflationary a build housing how and now fact benefit pressures, the business. time, going I additional the we to mayors think and has in activate is governors the the something supply reflect get nuanced invigorated walked enure be about starting and narrative. governors, have And starting better healthier that hearing is our to market yet, of have as between me the housing that discussion additional the from think we not thinking and very mayors the do but perfected most been to are

with And from our last Lovallo comes John question UBS.

below of on to use wanted about outlook, basis expectations, XX revenue that that taking costs to are you points the pullback putting you the one to some slight looking broker your another, brokers bucket of coming question guess, your off was the was? relative dovetail because to incremental? fewer on of put use Is sales your it incentives need competitors, And on way driver does communities? drive back to the lack beat say I brokers. that But a SG&A as mean folks of of broker talked I Trevor's for, it that to is into keep? are is volume the of you're pulling out what your lack a midpoint that of percentage versus more And of start. through that, simple and you of actually mean was it. that one I way

we've a So reduction and something doing And is of we're first counterintuitive about we the not we seen not -- is marketing that for that relative executing what digital that basically good us to all, is long in machine, have in had and way what sales think the to programming, and program new. call that's question lot. This a one place our a that the time traffic. our a program. marketing we're we It very

the housing realtor we It be our realtor that, And adding participate in about becoming actively been a bringing a have a appropriately us, we us realtor and probably a not to to healthier pricing a and community. procuring in building we offices. It's counterintuitive adding that think coming cost, not the has them downward. extent costs migrating with a power. it's our customer would pay also involved by finding and want through way or market. To people traffic just to a the cause So been that is reduction

of say it's that a out better realtor We've think to engagement cost. Are to that if reduce to lower costs engagement guess other still to I'd more it it engagement. ancillary produce into is I think bleed outsized trying I the price the like awful from out, is kind tried we're the system sell putting we an hand, On there's actually are I'd of cost to to to the that and because margin. taking lot relative incentives? realtor that the greater a active able And we I active we're incentives answer but at -- like I hope taking realtor don't and saving. kind a of yes, that we're of think

still that. on, complicated that something definitely, we a that it's I It's to most balance, And balance, very tough focus is something a and we're we're watch operations as working close every with out Jon regularly. So and it's go and reviews, day. our frankly, to

last helpful color. to as That's mentioned, And have Okay. distribute their then majority is, of REITs income you shareholders. the to the vast one

distribute structure the is grow why earnings? the cons for to ask be. structure REIT pros Lennar it don't going a mean, limit spin to this and is, REITs? with the to I of I'm land ability like if I the curious of would So has sort themselves bank And the reason what private

structure noted, we've impacts to will We're to discussion around rather as to S-XX. the to of -- one going Millrose on that have than work. the discussion Lennar Well, focus our explicit as it the wait on the on I had filing relates how of Millrose for actually the

it appreciate a think the book I good chapter, is so I the next waiting worth you're And the question. chapter. until And unique every just to have to structure. wait next is going for

we we describe, Okay. you And everyone's Thanks for to attention. of as joining move Thanks We'll at our the continuing progress detail look much. year. we and as see the call, to forward. very appreciate our end forward earnings always,

Thank conference. that you. And today's concludes

this You time. may all at disconnect