Lennar (LEN)

Alexandra Lumpkin Deputy General Counsel
Stuart Miller Executive Chairman
Rick Beckwitt Co-Chief Executive Officer & President
Jon Jaffe Co-Chief Executive Officer & President
Diane Bessette CFO
Stephen Kim Evercore ISI
Buck Horne Raymond James
Truman Patterson Wolfe Research
Alan Ratner Zelman & Associates
Mike Rehaut JPMorgan
Susan Maklari Goldman Sachs
Call transcript
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Welcome to Lennar’s Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the presentation, we will conduct a question-and-answer session. Today’s conference is being recorded.

If you have any objections, you may disconnect at this time. the the to forward-looking turn the Lumpkin now of reading statement. will call Alexandra over for I

Alexandra Lumpkin

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

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

the Many relate occurred, to those results forward-looking These SEC. the statements in actual release to this could contained uncertainties. these no risks in our Form anticipated caption Lennar’s are forward-looking (ph) described have Lennar’s Annual yet and statements. press update matters activities Report results under As not that to most note future morning’s obligation subject the statements Risk in inherently with factors to and recently cause from and filed any on Factors SEC factors include assumes affect that results forward-looking and Lennar differ may XX-K Please materially or activities those filings, including statements.


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

Stuart Miller

Very you us. morning, I'm and you for here and everyone, This Bruce and who and good. Jaffe, Bessette, joined in our Beckwitt, joining Miami our Jon Alex, our of Co-CEO CEO morning, Gross, our and I'm heard Controller by our Co-CEO Good Rick of thank President; Lennar President; course, Diane President; Services; Vice Chief Financial Collins, from. Officer; and Financial and David just

question country. please costs. of and will give as many is one our and limited can, modeling. Rick and and questions as will then our After I some introductory a in we overview. markets Jon going give And remarks, detailed construction land to update talk press usual, go-forward in and highlight. noted boundaries And chain a limit we'll program to very thinking answer course, Diane macro assist about supply And release, will usual, one strategic our As to give follow-up. as financial around the as my

saying Throughout to So quarterly another homes to quarter, Lennar. land, by fought start let me our hard higher begin and we're well still and continue the second and and announce of executed we sell labor, very material offset performance associates that by pleased costs.

as to drawn nothing have with and million we're to ratio, year. balance cash XX.X% reported our point and drive on this business margin $X.X Accordingly, fortify strengthen debt-to-total very flow With we compared a cap flow, billion our very balance of to net and a gross efficient improvement we Our line as a XX.X%. X.X%, performance continue third as is with rate durability last results, our pay last debt was They continued for XX.X% strong strong it over due sheet sheet. for year this a comes basis well-positioned further which was very of $XXX cash SG&A XXX XX.X%, to to and bottom and continue margin another refine year, revolver as our quarter. model cash, down later of record

cooled quarter. and to began market. pace as though even in weakening reducing effect the very rapid the appreciation see affordability. costs monthly quarter of The third signs months rate response mortgage to almost reaction payment managed weakening X% and by housing our aggressive moderating of rate by overall resulting through continued XX-year had The price orders market We rapid the year-over-year, desired inflation. expected in has and second demand price slowing has Fed's in also increasing the to new six doubling increased we and the fixed into sales of and the This has

down have minutes, Demand adjusted some has remains has dwellings those can homes. rapid prior have with numbers rise price buyers to in as market catch payments and we the scores appreciation decades what qualify. although, market it interest increase has cooling Household prices we credit review as the stopped. many to has few not clearly formation as comprehensive and strong limited lagged overview at attractive remain workforce Rick the least continued need give cooled, have rates in lagged of markets, on rentals that prices seeking higher. continues While Clearly, still are created reasonably have is pressures by must the scarce and structural crisis production sticker more housing give million a as past up In inflationary higher to snapshot as the remains more demand. growing a across over be -- to Nevertheless, to-date. household will seen Supply rents as country drive and the and a Buyers for going levels. at shelter a from year-over-year affordable to basis. production has detailed a decade by many together shock perhaps market have of X more

until these these began, Although, been statements the Fed reflections market, continues the recently. conditions conviction to expressed the Fed's building and will of have the inflation positive subsides. given as as the made state the by inflation not to since combat of market of seems preliminary trends definitive indicators tighten It are Fed's harden that tightening

trend, the been adjustments. the can has against is we market and all fight ahead we changing choose the that necessary by it of to are making reality While getting

adjusting pricing to reasonable volume. it the We're to is price going what strategies. going playbook begin, core going forward? market to our and keep -- maintaining sell are to and adhere going we're we To conditions simple So to homes

had discussed years the have housing past shortage country. a that have we across over the We

fill housing prices that as and adjust in provide needed build shortfall to to order continue moderate will markets. We workforce and much across

whether pricing pricing product while level. we and we declining, dynamic week week conditions many the As our we market in in maintain order maximize limited to past, market carefully to by improving noted to margin, inventory is the have deploy times model or price current a

will country cost our selling be Synchronoss our (ph) of to team moves, leverage doing In responsive. business. the we improve we continue As continue and will homes, across to extraordinary management market the

We have the improvement to process over seen we drive offset years and wherever past improvements efficiencies in expect market and possible. our to through adjustments SG&A technology quarter-over-quarter

cash and will focus continue and to balance bottom line we enhance to flow on protect Next, our extraordinary sheet.

million improvement repurchase drive over shareholder Our to equity us year. we great the million enables basis over X.X our drove to In repurchased approximately successes years rise reduce a quarter, inventory careful XXX last stock, shares and second past point on management shares cash our from of success driven the controls returns. for stock another and have $XXX and land flows, which return the to debt, of XX.X%, around

will conclude by we year-end. spin-off planned Finally, our long

of The new business limited assets we will three the final spin mature company, noted a stock (ph) on trade we books. under we we before, continued asset call As and which that the another refine By estimated of billion, material finalizing by will Q, that reduce result spin will of balance billions as either on light our or the will our returns Lennar's our asset a and spin, have spin reduction of management company will we a our management drive will not into be under dollars base higher which its have with will symbol asset management we have line equity We're sheet. asset bottom $X.X Quarterra further for will assets in an along to company, per previously markets of the Lennar's the verticals public in base the very our -- earnings Quarterra second and great our future. future future about this spun as the in share. prospects we the will for excited in have prospects company be history and confidence held

and to environment, saying might we prepared. a new be by the Lennar shifting conclude me at adjusting rate higher while let So are market that interest

threat. evolving Fed will. we the rates know but and the the and in housing time, will we positioned some and as are We market inflation We legitimate that be to continues succeed changes to inflation know thrive are We technologically curtail take to extremely well is organizationally this to we also market. and interest and rising recognize a determined financially, adjust can that that this

know the in and and remain supply matters cash sheet We a we us to strength. that know the balance chain position we flow labor that and continue And strong land difficulties also supply. enables in of operate that a know short to persist from

to remainder to future. the carefully adjust regard an that will look that With and to there maximize Lennar and in to me turn over the will better XXXX, drive we we we challenges challenges ever are opportunity continue we that of we meet the As Rick. into let that, recognize expect must market that

Rick Beckwitt

Stuart. Thanks,

to my comments this the May in and inflation current a market. accelerated marking impacts. pronounced today focus our tell prices, most mortgage the environment can you declining quarter, as been quarter comments, a has company. like and strategic in rates, increased during of our significant on monthly and sales our the from Stuart's the to market I These changes focus the with operating in continued sales As markets housing reacting impact changes a during With stock mind, increase opening would

community community quarter, During Sales our per from month. per increased X% pace the from to prior the on flat year X.X second sales sales X count. year-over-year new orders increased

We potential prices construction to cost our offset in the maximize sell continue to and increases. homes later cycle

sales with of orders During each between orders in a quarter, monthly new quarter, we XXX sales saw a of the month year-over-year than variance increases in less each total. the

on sales Our basis down year-over-year. the second were points during orders new incentives quarter XX

sales sequentially the quarter incentive totaling gross the new percentage home. sales price month X.X% However, did increase of of the the order during May each with

point was relatively May percentage a high marked low While from during the it historical in sales the the perspective. quarter, still

lower latest new in order sales for fact incentives XX months. average In slightly sales the ordering incentive than were the May

XX.X%, homes We new during only were footprint, was national in below sales installed totaled approximately in soft position quarter putting XXX environment. us the great increased the that historical our a ended quarter, sequentially completed during but long-term significantly our average. across rate cancellation a Our quarter which the with

of a we've into worsened year. due rapid significant reflecting markets markets They really [indiscernible] spike entered impacts; have in of economic So some far Many to in orders, from a markets, seasonably you our markets color impacts. slower rates three, one part traffic, to I'd impacts; in have more June, incentives markets slowed two, like sales give markets our headwinds reflecting headlines. negative many and categories: modest minimal now and as also mortgage three the across reflecting cancellations the fall and new on country.

to second Chicago, we continue had our San and in New markets, so Indianapolis, Jersey, County Orange include Inland June, XX quarter Houston, Phoenix, Charlotte, Dallas, the During San Antonio, markets the Empire. perform well. Diego, Maryland, These and far Florida six

these economy, migration. the from and markets benefiting benefiting many are local of and low in strong inventory growth are All from extremely employment

power pricing markets. and markets started or sales these pace each momentum, has While and continued our to -- of be strong, market in The buydown these incentives. programs offered flattened to we have have main normalized sales flatten sales has mortgage maintain

softening Bay rates. two Area, and markets, Charleston, slowdown and of In markets, markets. category seen pricing includes which Lake reflects Virginia, Middle a traffic Philadelphia, Beach, the we've modest in in an these These Nashville, uptick had and the Our included Colorado, City. markets, each slowed cancellation Atlanta, XX Reno Salt a in

price higher sales for limited these pace we remains of our buyers our in increases, has in well to in mortgage is payment the to reduce reducing production our sales Selectively schedule. for price our had reductions markets. targeted inventory that and more While financing ago solve offer net with periods. sales markets, pricing year aggressive these works these pace than to line worked a programs to Notwithstanding price each keep

Raleigh Our extremely the and significant The concerns and we're softening These minutes offering second quarter, category years, mortgage markets. Central mortgage programs. Angeles, doing beginning the of seven includes spend job and in Raleigh, the three discussing market market believe and markets Sacramento these a more an significantly This what Seattle. the we've sales Texas. combination resets two but market from and markets, from standpoint. strong a which of include reflect stems (ph) Minnesota, pricing aggressive I'd to the a in like pressure Austin, reducing strategically pricing Valley, Los correction, rates, until over few softened higher been continue and sub last at will We steep a June. increases price was buydown

is a On to still Our is note, pricing net year-over-year a new has started a activity pricing to adjustments our and hold been positive sales not limited have rates stabilize. have begun inventory and on cancellation basis. problem, take up order

current as we market As room against have of there makes and because which we has Minnesota always limited have a migration more pricing a pushback rates local only There have been much very needed adjustment. Minnesota this in any been a pricing. strong buyers. for result, challenging. very been pool in conservative is Buyers increased, little market challenging future have have in The pricing

price and of starting We which in to June programs who economy on competitive the XX% a have back works, bidding Texas, rebuild mortgage is distressed that years Higher the for more have following plus sidelined through are waiting has reductions, appreciation impacted and with market stock inventory. to many market Austin in reset payment home back in most sales. strong reacted available we're national and mortgage on headlines been solving buyers and rates a the values. decline

Fundamentally, are term basis activity. to apartment in and is have on long have we've block offered occupancy, home and with reduced strong inventory rates Austin unemployment, and programs. home pricing starting many mortgage adjustments and job (ph) While low is prices growth inventory, limited, increased competitive for projected growth. increased generate by cancellation extremely loan sales communities home positioned a These high

Our Angeles, Valley a and June. and communities Sacramento into have in Central experienced significant May with in dropping considerably Los off late traffic slowdown

strong systems have challenged are Net using have completed the the solar higher in cases been rates year remained not sales. markets job sales pricing for markets part extremely credit growth incentives in and problem. solid the We've markets. home the in years. of what of solve with Stuart new a in The prices that grew With non-lease is these prices said these payment reset as remarks. to each of interest and in to have approximately been issue The saw years. two annually opening and and our financing water period than the country inventory strongest in ago mortgage rates, most a increased. in over rebuild the spike the for adjusted have cancellation consistent be his part last the works in one last to package few XX% buyers integration, prices markets that some continues was This Seattle included

this QX to and and activity doing better land period. markets and decisions values the plans. direct our and of I and impact market hope priced strategic with June. pricing. remain is significantly a were sales the day. very over adjustments every after with this and picture sought stock than Seattle seen year sales markets had gives this early supply in extremely being low to have a we market, communities some overpriced in locations pullback market we're pushed pricing in prices fundamentals the limited what prices ago sales The seen a in underlying of and have around the in stock a which across quarter, result higher for higher country buyers pullback to inventory keep and While back May demonstrates has the highly reset significant in again at strong, both continued compensation going. correction, which of price you The We've concern still are corrections, This strength employee Once home fluid first uptick a a market. have appreciation making remain adjusted causing on we

to As going like maintain we've over to price said turn the keep machine in to to homebuilding start pace our our past, I'd it our dwelling, homes Jon. market. we're now and

Jon Jaffe

the on supply know status our dominate I rates I Rick. and our an be land sales of chain. brief will as give the of Thanks, and discuss update interest investors. morning, I'll interest position This the that

light by increasing XX% are of percentage the on XX% the progress to last controlled our strategy year. with second end our pleased make evidenced at quarter to continue as from the excellent land We we homesite

$XX have billion supply years the to homebuilding to reducing owned at years land by end to continue of sites X.X strategies to land to refined years cycled will the controlled of owned progress X.X supply machine. Quarterra of and even quarter, land with from make as some we to owned of strategy, our have we this down continue our Using time in from group, we vertical reduce home just of a lower. worked second of development become To-date, homesites also which the years the year. land of our We last

amount saved cash, We focus during spend billion significant revolver with the Our on model a XX.X%. the noted extreme homebuilding on capital to no us ended borrowings the in of debt acquisitions quarter as land quarter. lighter $X.X land under billion $X.X cash and

position As environment with Stuart and sheet noted, light excellent we to positioned are balance foundation asset very for rate that strong very position. manage as land the changing through the interest well our

challenges chain documented supply well the its to Turning for industry. the and

disruptions news. flattening construction first second in There intermittent the in since we favorable began, still for an were time Our started some the saw presenting cycle time. increase disruptions but and costs, quarter a

Over the we cycle signals believe past months, has only expanded at five which peak. days, by four time

of Additionally, quarter quarter. this above There challenges guidance for first being reductions of markets of second end occur, quarter but cycle closings. time only evidence experienced by by managing our cycle the about are flattening are not them XX% that high in the effectively time, second our we but still compared the also to

lower labor second due for direct increase second for in the Our the of year. costs X.X% last construction cost of quarter. Material of all first same XXXX. second the were in sequentially lower half year-over-year, in than XX% quarter increases the in the both the accounted from to priced lumber period quarter in comparable costs fourth Rise the and lower and the quarter were starts up

the start would the Thank of costs we're this year closings. that's you. and back drop over back that those related will near Diane. the the current in QX increases turn in now lumber our We end quarter as lumber half will it of the flow again deliveries in And The first through in will prices experiencing starts expect rise lower XXXX second our XXXX. of I'll in half in of half cost to second of

Diane Bessette

everyone. and Jon, Thank you, good morning,

and other balance So of Jon results minutes regarding so the therefore, our great sheet I'm thoughts QX. have going on spend to color our deal a provided review of few Stuart, for then and Rick segments a performance, business homebuilding and our our

So starting services. with financial

services you compared operating mortgage $XX quarter, above And earnings million million high produced earnings between operating prior $XX details when of guidance. the million $XXX mortgage our For then, the year. slightly second title, end of our the look and to at financial the were team in

for media, the greatly has purchase we've has market for quarters, the and mortgage been extraordinarily refinance have documented As as several but and have inventories in business halted as resale indicated declined. become competitive all, volumes

per As a the result, a margins quarter in $XX by in second then lower million earnings earnings Title our increased primary decreased. Other premiums prior Lennar increase for the our to earnings. operating as of higher sales result primarily This to price secondary was $XX Title segment. turning transaction. year. have been million And driver average were an compared driven

second For non-cash segment. was investments, million. The this the the primarily in our which loss The remaining technology primarily Other operating $XX an of on Lennar other quarter, mark-to-market result totaled related to loss investments public company of our segment $XXX losses had million. strategic loss was

publicly of will required As we that valuation mark-to-market have that investments are are mentioned to our traded before, technology quarter-to-quarter. from fluctuate we and many

homebuyers and And believe we provide financial efficiencies to turning greatly continue for the and technology both then operational balance our partnerships that to experience. our services homebuilding platform However, improve significant these sheet.

facility, now of $X.X our no and $X.X we mentioned, borrowing our for And homebuilding of million investment $X.X this revolving enhanced billion matures facility. regarding our which note $XXX a execution, we one We and ratings. commitment, successfully the the total XXXX on of liquidity. credit quarter month, with were greatly by have of with billion last matures ended and cash in pleased in credit was grade billion we've facility XXXX. As extended almost amended We $X.X billion

continue During becoming mentioned, land the lighter. to quarter, we on as Jon focus

expansion. owned end homesites provides for total a market XXX,XXX homesites result, of a homesites share strong controlled and As This XXX,XXX a portfolio continued for competitive quarter, us the the we of at homesites. XXX,XXX with of position

our controlled to from years in years made homesites increased fluctuate improved is the year in Land XX% prior X.X the from may progress XX% and transactions year-over-year. owned X.X to Our year. prior quarter-to-quarter, years but

reach owned on of home to remain shareholder increasing committed track goal and end. on controlled still we years to our sites year focus X.XX returns. are by our And We XX%

we repurchased X.X $XXX As we million mentioned during million. totaling shares, the quarter,

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

senior balance fiscal is in points capital Our And is of on of debt improved from few which due result debt we the maturity next then sheet transactions XXXX. our million, year and note year. XX.X%, November in The no in return. all which homebuilding total prior XX.X these have with in $XXX the more this a due to just maturities

increased to Our stockholders' equity $XX billion.

per Our (ph). increased to book value share XX.XX

was on In inventory sheet and future. and on us for is the well return positions our Our return was equity XX.X% balance our strong XX.X%. summary,

So overview, thoughts with brief I'd to QX. our for like that to turn

As mentioned the our typically to market in that we we given more guidance press is offer targeted release, provide difficult conditions. uncertainty it the in

very broad So thought more to third of provide our it we give some boundaries be each components to quarter. of alternatively, to appropriate ranges the would

So XX,XXX of new new the to XX,XXX. range homes. expect be to We to the of our XX,XXX to orders XX,XXX range we with anticipate QX orders, in deliveries starting be QX in

should slightly average XXX,XXX. price, price which sales QX be Our sales was higher than our a average QX reminder as

of expect XX.X% we the gross expect to to and XX.X% range X% be X.X%. margins in and SG&A between to We our be

loss and of the a $XX about we For financial combined million. million million anticipate categories, for And range will we as continues to expect in land to of the earnings $XX be homebuilding, as sale services $XX market purchase our increase. for venture, then, business QX competition other joint

determined end mark-to-market multi-family those our our any include of to does will we potential million. guidance since adjustments a of investments This for business loss $XX technology We at be expect the Lennar the about about prices category, expect and Other our of quarter. million adjustments earnings $XX their by not stock

be revenues. expect about our corporate QX to X.X% of total G&A We

delivered. will based home on be $X,XXX contribution foundation per charitable Our

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

together, produce when $X.XX previous our the So of to guidance guidance pull deliveries the maintaining year, you EPS approximately XX,XXX homes quarter. turning range all And year. third this approximately we full share mentioned, for should of an for per this as to then the we're $X.XX

conditions will time, providing With fluid, this updated to not call. of do we market next components that, forward for that be guidance on it at the back recognizing QX are for me look let We our other However, turn updating our earnings thoughts earnings. to the operator.


Thank you.

now today's ISI. begin go session our the [Operator will from comes Instructions] at We question-and-answer Kim question of first conference ahead. And call. Stephen Please Evercore

Stephen Kim

about Yeah. XQ Thanks and for on couple There very much gross margins. all and color range gave guys. call. was comments made Appreciated guests Exciting a you gave the also lumber, a of times. of you you the incentives

And XQ you going so also May, incentives that. gross it I queueing is was that the incentives much kind I in curious, a so strong Jon number. curious, of sequential pretty that? think And was be think guidance? that lumber, margin headwind how X.X% then said in because I some was I were at a there of of was envisioned running in how increase And of I'm of much to off mentioned from

in in XQ? sequentially both talking from you I'm So cases, experienced what

Jon Jaffe

XX:XX Hey, Stephen. It's Jon.

to So relatively incentives, low. relative they're still

get which little a that's -- about markets more. square in of X.X% continue In our mentioned, bit over It what gross through today's those might increase backlog, in -- seeing we're us our flowing is is and to a year. foot guide on of start margins we're from market our $X our our Rick calling the comfort as what's lumber, adjust. gives some As they numbers a about already

is. to what good So we exactly have that visibility

Stuart Miller


third what add through our you're most me already Let quarter flowing is in to just of that Steve, seeing backlog.

it's backlog, in be just So also and some it's cancellations lumber the incentives. rotation that's There through. not some many will of

There's going some the see to round out what as the changing to hard be it’s the And be numbers going to some say be. averaging. to we given noted, And to actually movement we'll so through are going environment quarter.

third Just a our pretty remember focused have third of the is on on visibility that a of the good quarter, we that the sense fact given lot quarter. backlog

Stephen Kim

fair Yeah. point. That's a

because you didn't other question my interesting much of documents, going part you when exposure It single-family about you obviously the regards are to relates your builders, markets. as through really, rental guess sort cancellations, was talk so to whether business part but really of well, current disappear the a they but of collect builders the about bids the from guys were you -- acquire and all that's Rick I customers as important And to look the are to equation. the that curious, people how providing really rental, that that in much rents, appetite if the to was I curious I we that single-family a going of could been percentage talking earnest lot was the know all units talk has their ASP. at except as I money of and strong, to about deposits in the percentage an your that, environment. a

of could rising of rates actually of was just sort talk rental business And if the ability I cycles from the wondering into arena? unlike in benefit your you so, company the some to pushing past about

Rick Beckwitt

address So backlog the let question me on first deposits. and

mortgage has done comes concentrated to sure One company very people that the go. attack QX closing have to We've when good and effort that so they're our things is of QX really place and mortgages in make our had lock that backlog. a up,

Jon Jaffe

dropped. Just mortgages place, in interest but rate

Rick Beckwitt

The interest dropped. rate

Jon Jaffe

part Yes. was back And that the question, Steve? of what

Stephen Kim

built family single to for homes. newly rental the appetite It referring was

Stuart Miller

even right towards will the these the covered rates market is rental you've formation single talked that more Steve, rental multi-family, over strong. from all the know I people as a and still multi-family family need And rental, we're the market some fact dynamic move lot SFR to dynamics. remains push end in moves we interesting that these going rental home The interest go for as areas of as that's We've homeownership supply of to towards say, me live increases a up, And quarters that around place that already to traditional going and to probably well constrained more the is it household mean extent lot a of rent. an let day, entire of traditional people So shortage. shifting now. that rentals. for about both think housing market, the the demand be the there's people of ownership component out at I

look of moving rental rental single-family where rates, traditional and past in you rent, been the growing limited you've both function rates. demand. aggressive supply and pretty on rentals at have If movements That for year, seen and upward the they a the is over

play this are So and are new model rates interest are have some shifting out rates from of we what in sit to environment, SFR a higher and confusion rental their market like. of as next rate quarters that customers. reconciles is higher some as buyers marks that or to to getting the going the out, even their interest the have the to also over question the how capital going what but rates of to there stack, as rethink moving point they part looks They their rental

to have see that to out. going plays how we're So

Rick Beckwitt

investment on those to maintain are Jon, And adjustments communities sure make and to as single-family rents making incorporate we that going Stuart with the them I in said in I what's the daily and pricing and my comments, adjustments buyer.

Stephen Kim

Thanks. Great.

Stuart Miller

Next question?


you. Thank

Our comes from from next Please ahead. James. Raymond question Buck Horne go

Buck Horne

quarter. their bit as pace starts terms that consistently well were buyers of through pace you that absorption the the seeing starts rising It's about mortgage front ahead in of Good Thanks larger door for that that second starts talk pace I the ability even time. Hey. the interesting the a still some was quarter, function saw were run pace purchase? through to of the of to quality wanted morning. was of maintained in you rates terms in little rate? there the maintaining Was the of the that the you coming a traffic that thinking or elevated at the

Stuart Miller

homes our delivering I function a program think building we've basis. primarily is and of orderly a of on an pace noted before start recurring

constrained home. been the permits and that has entitlements the to pace order generate start a of permits start people Our and required by are actually more in availability

permits look the we as just variability in see And difficulty we ahead out. starts because some pullback third modest to some getting in so quarter, actually our you'll our see

and I'll orderly and in system goes through going in to markets. get moves order of of a years the As of as continue up of demand into exist supply the we're at and work And interest I've major limited kind the supply appropriate to rebalancing, sales looking start a efficiencies been some over and said to housing or the price make -- deliveries the reconciliation the while force past adjust that down, amount program my in say across we'll again, rate even pricing we've country comments the most country. up

Rick Beckwitt

way And control past that us to we've machine that much efficient. orderly feel to said very over that the pace of inputs better then years sales match maintain cost our We described. other versus keeps that gives around the and our start we Stuart our our discipline

Stuart Miller

quarters done the to the sold thing very in the that works numbers be have lock closer the last their other which this buyers loan because that in construction homes our to as on our we home. several going we've they're is in behind the time The we've to -- want effectively closing cycle, market that strategically later is been

which than or little the early result, sales the we've higher limited a sales pace presales pace. bit As start a makes

Buck Horne

the all we adjustment pricing potential land It concern helpful. that way following Got bit that. impairment up with the sounds talk it. that. about little investors, of the Very kind there's on process managing through And still lot of Thanks you're works all from like for as a risks the base below already looking higher at as with still where your on backlog prices reducing pricing But you the work it falling like basis. adjustments might are that instances paid? you're a year-over-year prices is customers Are have pricing what there sounds this, here. a through

Stuart Miller

I in our backlog. recognize, important have think it's risk virtually to no land we impairment

market have have and for we to us our once move to customers. our of to and we Our But remain the crisis prices efficiencies throwback healthy. is lot are I that around margins going acquisition and about room for fall continue don't the bit the awful we -- last solid talking going land way model just margin. on create again. been financial in That's a rock has our an to acquisition We a focused program that think recognizing little value and build remain land to a to we'll in impairments lot start

of before lot a have impairments. program our adaptability in long about we way thinking We start

Rick Beckwitt

which my the different further from us is Also strategy of very structures can mentioned a insulation on been our last in really positioning land as impairments. position changing to gives and comments, cycle potential focused adjust from really a market has land on environment, controlled that

Stuart Miller

in thing the regard out, the backlog to close that have is seen with a we that that's because inventory there's limited ready someone And other to on. many buyer available markets extent cancels replacement such to we've

Buck Horne

Thanks That's answered, all color. perfect. the very guys. additional helpful. Perfectly for That's

Stuart Miller

bet. You


Thank you.

Please Patterson next Research. go question from Wolfe ahead. Our from Truman comes

Truman Patterson

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

Stuart Miller

Good morning.

Truman Patterson

Just X% I were (ph) third I to the in of healthy quarter kind year-over-year believe pretty think main right your orders I'm gas through wanted now. X% thinking the to incentives when market up follow-up, of X.X%, midpoint

Just in quarter tier? upcoming what move the to sequentially bucket the items the or no are when kind of that buckets across that also you are three markets reasons hit thinking then sort of impact that might you incentives or structural or any not pricing closer of needed think you're to third second there do metric? adjustments mentioned, the And

Jon Jaffe

Of daily spoke analysis. say still Rick community community that a that going let's as on we're course, analysis about in that, to focus the by

from very it's you that each understand got to varied first community. So

communities Within and said, very as was price And mortgage why were still needed very between when analysis. with some rate that buydowns hard So incentive rates interest market look overview. is as assistance that are regular need it this incentives say, of forward focus performing even and the some I that's there when very will speak that a to market, exactly it's well a or described. community we'll a of broad that's that have and be we by rebalancing community on

Stuart Miller

said level. X.X% higher have much than still the I our historically in As run remarks, opening incentives my

probably look there's in another markets higher into we that to regard in And others. forward, a could look As with factored Jon our some point forward X% little bit incentives. said, and that be go been as X% has

Jon Jaffe

let or say I'd look, limitation. X% But Yeah. the boundary even a be don't

a it Rick that confidence within it's a Tier and you're to is, and sign looking market anticipate see a the a get fact the Tier these you to of market now Tier from supply hearing it numbers a in right from X to a and is that's point think of by level is it. as that don't a very real in X a variety market at matter evolving market tipping embedded and timing a properly group basis I described is and warning them, of changing you matter market, hard really time on that X markets. before The

really sheet, of where you're or bit or could picture way hearing a snapshot we today. are little move the seeing the of So you're a -- other. Tomorrow kind like balance the a one

Truman Patterson

to in is months developers past cap pretty that your XX% to Yes, and shifts past Understood. quarter. market, end your been cycle? I'm et next maintaining shift years kind all I the in or either there's that are bank your kind option dramatic old of change up has this understand on by now over any lots of terms know. clearly, been this the XX% cetera., are you And option land from deals, competition willingness control couple maybe land of drive elevated the to land absorptions or trying to But several year returns. land partners whether in question bank metric

Rick Beckwitt

to Well, that acquire like think time that to relationships. of hit is the same properly deal this to for with everything that target, like, but And know get evolve we But we happening underwritten. to. we assets we in that proceed now willingness been are to-date, it's all have what sit market we -- here our in evaluation, just how XX% real happens goes we'll us as knowing with that things have a I see there's where confidence good

Stuart Miller

embedded a have strategies couple land in We our program. of

we developers. some relationships with have First of all, of comprehensive some the really land

money I in all everybody think sometimes markets move that up. sync understands move we together. and make We

move to market all Sometimes adjust shift down, markets we and conditions.

that way world. that's not our development land a the think It's exactly I in constructed world. the we've difference development land

of important in to Additionally, programming go land is as downs our a the for one act important land to business Jon Quarterra We've pointed that for that ups in will built changes shock think the able really asset properly market structural be through structural out absorber provide and we as conditions. I really as change the ultimately company. management through strategies program we of go that more years. our component a it's the And elasticity of our stability

in for is gyrations anticipating that world and the this something so And just flexible strategies building movements times focusing land like on, that and we've been homebuilding are these.

Truman Patterson

time. you Thank Perfect. for your


you. Thank

question next Ratner Zelman from Please Alan and Our ahead. from comes Associates. go

Alan Ratner

for Thanks morning. Good Appreciate it. the guys. Hey, all detail.

figure seeing been margin you Are those more I you guess, the versus all impact from is the to were more kind to all of curious the of in maybe there seven taken were trying of you're where but what others. placed buckets able in markets pulling, mentioned on I'm in or really margin in helpful I'm out, prices. you've exactly year? point? of the ones tools First the this actions quantify impact deliveries reducing impact that be question, the you've earlier kind hard aggressive to the an have bucket what orders various you, what June incentivizing vis-a-vis just orders various in bucketing with maybe it's at might you're those of those and terms tell on you

Stuart Miller

We obvious broad prices that, of They're to and instead variety lot like ones a going also ASP is there ways guidance, lot go lumber want that we and costs can't know put It’s and don't aim moving anticipate. of on, because in leverage guess our that why them. things. of for to finger and target to trying moving that that where is we're we boundaries always realtor then are operating and target and but parts, the of moving we've things given variety of a we a there's can a

up brings coming looks we question see address boundaries we that going is, any quarter of like, as what and in be see guesses to granular something series to landscape would some quarter what Alan. that's us sure think tried and but to than get To So we're closer the the closer give the We've third get don't to more it quite not answer of fourth yet. actionable. as we're to to a I that your

Alan Ratner

know appreciate it's I certainly that Stuart. I Okay. target moving here.

market about congrats years your shrunk as a you and two from the entirely just own standpoint, and you think land land portfolio, a your option getting over the strategy last Second, XX% about lot piece higher. the count has and guess think the bigger bit. there has execution deals land is the that share growth come on about I picture through shift up option when the

that going make that Your your amount why would seem sheet if you on you're presumably wanting to up when forward through more to me balance be closings fair which there's need you There's lot is reason capital of and time XX% And a start this to assume pace tying move sheet. lots real land, so you're about of talking have control on year of that period deciding still are to you're take decision. doesn't balance able and over XX% going whether that these even off maintain up period. down to kind to volume. here, recognizing we of about under to is a two that’s that kind a this year the It at least maintain choppier deals,

term? pace are make standpoint near thinking market those is how land So acquisitions? maybe you at or maybe at point some about And slowed today? of up to best for it if term from does from incremental a flattish walk the away intermediate the you the volume deals tying of this Have more sense

Stuart Miller

more of and at And we composition have time. Land Well, look the spent of is to relates tie do ways us ability where homebuilder. think for we the spent we and more business if say, we're enthusiastic difficult can in changes we been of I around fashion, a dated the long going as back Alan, shorter strategic be be market in have a we'll the you've pull through. as complicated have or -- most know, Lennar you years. longer strategies greater these risk it about flexibility. hours or that to, create in migrated about strategies we've balance over visibility, been Quarterra, future balance ability the renegotiate dramatic land to some durable strategies. The sheet most dated able just we can it It's the tremendous (ph) give to without much to land how our do very to us has up reposition six we our The what visibility -- to the vertical how greater and but to thinking you land, and and more have are part strategies to our maximum build that

So buckets can and risk done that what our what so the reduce crafted And we that's carefully balance our with programs we've medium term doing have to long I visibility in is short, our think and company. you're evolve so. And flexible we've we enhance trifurcated enhance seeing into flexibility sheet around land and thinking

it's than our ever ever land visibility it at today, as stronger strong it's look You to is only future. sheet benefits our it's the been balance and -- as

Alan Ratner

a Thanks lot. right. All Great.


you. Thank

Rehaut Mike go from Please from comes ahead. JPMorgan. question next Our

Mike Rehaut

just third the detail, morning sense perhaps percent second appreciate Good would And to a to the you the thanks through those different it wanted I And all inclusive buckets, extremely of it's and anticipate back a adjustments adjustments the of helpful. have as fair is fourth pricing bucketing or net basis into flow get that sales talk my in circle been? taking Thanks. that markets what to questions. could quarter? and to a for just about also it on of if Wanted of and price those perhaps, incentives.

Stuart Miller

markets, Well, the many ago in in on period. XX% basis. pricing net gross by my a we're up as over And I home is pricing said these adjusting home year and to XX% remarks, of pricing

really is and in in increase market at people adjustments in on right focused are the markets. headwinds, relatively in are some So price an this it needle very just sticker to these the inventory. activity order just that all move these buyers There's takes making point been shock. are spur Reality We're economic What to the modest that now the growth rent mortgage seeing is time. markets. they concerned decision right in has of limited combined with rates

that really talk as to that are folks So the that they make don't trying they're feel neighbor their sure when [indiscernible]. to they just

the values They changes people margin company small -- us mix a guidance. of So our overall these the very seen forward are those process. are adjusted. you've on basis, what factoring a in of working percentage go And understand global through the the into composition have and that as

Jon Jaffe

point rate form combined of has of earlier, some systems combination arms, mentioned Just for as and clarification price it's with one Rick of mortgage adjustments. a buydowns commitments,

buy is component important a with. component monthly payments. you mentioned mortgage people very deal earlier, the So as Stuart

really we buckets markets adjustments see the of smaller versus So way price with of in two help most -- the much in a rate don't second mortgage price combination the of a adjustment.

Stuart Miller

say, Rick And a was I direct severe. [indiscernible] just want to my partner little and just

I Speakers]. little think a was greater Mike. pool bit ahead, the [Multiple Go

Mike Rehaut

for also, some those health. And of adjustments rate clarity mortgage Appreciate that. just areas of either or

I of as that the the line. to or sure, understand goods impact opposed Just be sold gross flow of would cost margin through financial to services also

of of Lennar's you second But year. sheet. billion we by that to my the just Just I kind that. end to the said make you expect Quarterra question $X.X to guess sure understood of And assets is balance off come also wanted the would shifts spin

any what review businesses, different helpful you management, around have Quarterra you If would itself detail any sense or and could total either the any update us be assets additional of total type obviously, the terms amount under give in of of of there?

Rick Beckwitt

quite say over balance come yet updates giving some land relative of verticals our a I seen the and our that program. it what in our but our I don't a assets land Jon of I Quarterra management Quarterra want past time, think way calls get assets at developed in Quarterra. But lot we're you to now. don't fingertips. under is locked want of right already migration to we've to to off they years. our give relative So have have an bucket, as additional past strategies But sheet the $X.X not some boundaries I really just of we've billion don't number regular over think assets of through on given some I it couple the did and highlighted to my

I benefit Lennar to highlighted $X.X that develop to equity balance as that strategies benefit we the It that we're land Quarterra. think already and program been to continue to going billion will forward, move but from continue that the also I've components. -- have the private to really Lennar, Quarterra migrated the our is have will see already additional sheet dollars

Stuart Miller

was part second your what first the of Mike, question? And

Mike Rehaut

Yes. it's my No, if or on the regular Speakers] flows buydowns here, gross or the question follow-up through that profit? just to where on component, it's answer the or financial statement first income mortgage the clarification the services [Multiple adjustments.

Stuart Miller

Plus the line. sales

Mike Rehaut

Okay, perfect. Thank you so much.

Stuart Miller


take question? we don't Why more bet. You one


Thank you.

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

Stuart Miller

Good morning.

Susan Maklari

guess. I afternoon, or good Thank you. Good everyone morning,

Stuart Miller

afternoon. Good

Susan Maklari

that does how obviously bit, in what through coming moderate commented improvement are bit Can on or relative in the question there. you of of some you terms more is, maybe seen supply thinking have first the And further side? chains as can and you're and a like there? color at that we My improvement give a the shift seeing off that peak of it come the you you're feels demand

Rick Beckwitt

backlog between trades but construction. very and of what are supply the of the under and Well, better and two through where take disruption, has as part learned the Everyone able disruptions, a lot what's terms suppliers going to relative to shift of problems earlier it question, today. seeing, are volume chain the still in we we're in years over as and a there's through always, to pandemic shift your the a could solve comments, the there's the months to last my quickly sometimes problems. at respond in our positioned to and both I much parts as construction a markets construction in second that's said lag build Relative solving

where resolved with for really partners, in in trade is the We of our shortages very in two needs they've those duct. coming quarters. there flex what now are in close that visibility days. close working equipment. that terms even were electrical But being our in the ongoing all communication got areas are It's supply And and relationship.

Stuart Miller

chain we've better. issues gotten in so it worked resolution much the and it figured It's Is supply the supply that manage of easier. is out to has Right. and chain not hard

version We remains fact of time have kind sticky the residual of the impact cycle of itself. larger our still a that

So longer it is still a takes derivative which to management. and of inefficient a home, chain produce us supply

Susan Maklari

color. is, general, think balance sheet My when helpful about do you question the That's in some Okay. stock and in follow-up did cash uses you quarter. buyback that you of second noted

uses things housing As more and that been you do think do other cash maybe you moderate to but strategy continue all these land especially your you've moderate, and spin Quarterra shareholder returns on. working How environment? of around in of and pursue the of a efforts

Stuart Miller

built that enabled cash years, but used and on laurels, we've prosperity Well, here's a focus back of sheet We've generate and exposure limit past moments not to at generation. our refined land over limit operation. We've about models We positive enhancing model. sit those we've and to the focused thing instead amount cash. what's the terrific the the on on really inventory balance our to business cost tremendous is Lennar happened on had us of our

that continue to to company enables fashion. continue visibility the as think to go positioning to much that to an we orderly very build land in us expect our business forward with same our we're going We be way

continue We pay to debt. expect down to

able and do to spending capital have additional sheet of we expect while Quarterra. be opportunistically so in to with to buyback $X.X billion the Quarterra stock balance to continue capital even -- -- that, we're We from the

position strength. this is that enviable are strength so and in end our with condition. to at comments a think We press I of that release positioned deal So of way and market position an my we times be at said in like great and of to the the

up. to that's off a road, good time think I good wrap

And the that group, last was a our third manned with to say as a week. belt are fold me full able company a days, COVID in operate Let the we group, down more we was for few Rick Thank losing but to have you, hopefully He strength. but end now management back happy partner after to certainty. reporting without as step, a his at with at the a forward still look quarter, we're of everyone. bit back


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

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