September 20, 2024
(press release)
–
Third Quarter 2024 Highlights - comparisons to the prior year quarter
Stuart Miller, Executive Chairman and Co-Chief Executive Officer of Lennar, said, "We are pleased to report another solid quarter backed by an economic environment that remains very constructive for homebuilders. Employment was strong, housing supply remained chronically short due to production deficits of over a decade, and demand was solid driven by strong household formation. Although affordability continued to be tested during the quarter, purchasers remained responsive to increased sales incentives, resulting in a 16% increase in our deliveries and a 5% increase in our new orders year over year." "This week, the Fed decreased interest rates which should start to enhance affordability and accelerate the already strong demand for both new and existing homes. While strong demand, enabled by incentives and mortgage rate buydowns, has driven the new home market over the past two years, we fully expect an even stronger, and more broad-based demand cycle, as rates move lower. Lower rates and controlled inflation will likely boost confidence." "Against this backdrop, earnings were
"Driven by this quarter's strong operating performance, we constructively allocated capital while we continued to strengthen and fortify our balance sheet. During the quarter, we repurchased
Jon Jaffe, Co-Chief Executive Officer and President of Lennar, said, "Operationally, our starts pace and sales pace were 5.4 homes and 5.5 homes per community in the third quarter, respectively, as we continue to move closer to an even flow operating model. Our cycle time was down to 140 days, or 23% lower year over year, as our production first focus has positively impacted our production times, while our inventory turn improved to 1.6 times reflecting broader efficiencies. Concurrently, the Lennar Machine continued to carefully match our sales pace to our production pace using our digital marketing and dynamic pricing models." "During the quarter, we continued the migration to our land light strategy. This was evidenced by our years supply of owned homesites improving to 1.1 years from 1.5 years last year and our controlled homesite percentage increasing to 81% from 73% year over year. These results drove our return on inventory to 31.3%, a year-over-year improvement of 320 basis points." Mr. Miller concluded, "We continue to remain enthusiastic about our current execution and our future. We have remained focused on our operating strategies, while at the same time being observant of current economic and market trends. As we look ahead to our fourth quarter, we expect to deliver between 22,500 and 23,000 homes with a gross margin flat with our third quarter. We will continue to fortify our balance sheet with significant liquidity and operate from a position of strength, thus enabling us to continue to execute on our core strategies to drive strong cash flow and higher returns." RESULTS OF OPERATIONS Homebuilding Revenues from home sales increased 9% in the third quarter of 2024 to
Gross margins on home sales were
Selling, general and administrative expenses were
Financial Services Operating earnings for the Financial Services segment were
Ancillary Businesses Operating earnings for the Multifamily segment were
Tax Rate In the third quarter of 2024 and 2023, the Company had tax provisions of
Share Repurchases In the third quarter of 2024, the Company repurchased 3.4 million shares of its common stock for
Liquidity At August 31, 2024, the Company had
Guidance The following are the Company's expected results of its homebuilding and financial services activities for the fourth quarter of 2024: New Orders 19,000 - 19,300 Deliveries 22,500 - 23,000 Average Sales Price About
Gross Margin % on Home Sales Flat with Q3 S,G&A as a % of Home Sales 6.7% - 6.8% Financial Services Operating Earnings
About Lennar Lennar Corporation, founded in 1954, is one of the nation's leading builders of quality homes for all generations. Lennar builds affordable, move-up and active adult homes primarily under the Lennar brand name. Lennar's Financial Services segment provides mortgage financing, title and closing services primarily for buyers of Lennar's homes and, through LMF Commercial, originates mortgage loans secured primarily by commercial real estate properties throughout
Note Regarding Forward-Looking Statements: Some of the statements in this press release are "forward-looking statements," as that term is defined in the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements relating to the homebuilding market and other markets in which we participate, as well as our expected results and guidance. You can identify forward-looking statements by the fact that these statements do not relate strictly to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends or results. Accordingly, these forward-looking statements should be evaluated with consideration given to the many risks and uncertainties inherent in our business that could cause actual results and events to differ materially from those anticipated by the forward-looking statements. We wish to caution readers not to place undue reliance on any forward-looking statements, which are expressly qualified in their entirety by this cautionary statement and speak only as of the date made. Important factors that could cause differences between anticipated and actual results include slowdowns in real estate markets in regions where we have significant Homebuilding or Multifamily development activities or own a substantial number of single-family homes for rent; decreased demand for our homes, either for sale or for rent, or Multifamily rental apartments; the potential impact of inflation; the impact of increased cost of mortgage financing for homebuyers, increased interest rates or increased competition in the mortgage industry; supply shortages and increased costs related to construction materials, including lumber, and labor; cost increases related to real estate taxes and insurance; the effect of increased interest rates with regard to our funds' borrowings on the willingness of the funds to invest in new projects; reductions in the market value of our investments in public companies; natural disasters or catastrophic events for which our insurance may not provide adequate coverage; our inability to successfully execute our strategies, including our land light strategy, and our planned spin-off; a decline in the value of the land and home inventories we maintain and resulting possible future writedowns of the carrying value of our real estate assets; the forfeiture of deposits related to land purchase options we decide not to exercise; the effects of public health issues such as a major epidemic or pandemic that could have a negative impact on the economy and on our businesses; possible unfavorable results in legal proceedings; conditions in the capital, credit and financial markets; changes in laws, regulations or the regulatory environment affecting our business, and the other risks and uncertainties described in our filings from time to time with the Securities and Exchange Commission, including those included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our most recent Annual Report on Form 10-K filed on January 26, 2024, as amended by our Annual Report on Form 10-K/A filed on April 25, 2024 and Quarterly Reports on Form 10-Q. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. A conference call to discuss the Company's third quarter earnings will be held at 11:00 a.m. Eastern Time on Friday, September 20, 2024. The call will be broadcast live on the Internet and can be accessed through the Company's website at investors.lennar.com. If you are unable to participate in the conference call, the call will be archived at investors.lennar.com for 90 days. A replay of the conference call will also be available later that day by calling 203-369-3829 and entering 5723593 as the confirmation number. LENNAR CORPORATION AND SUBSIDIARIES Selected Revenues and Operating Information (In thousands, except per share amounts) (unaudited) Three Months Ended Nine Months Ended August 31, August 31, 2024 2023 2024 2023 Revenues: Homebuilding $ 9,045,692 8,318,615 24,357,742 22,144,937 Financial Services 273,270 266,206 804,713 672,166 Multifamily 93,443 137,394 322,620 432,661 Lennar Other 3,637 7,388 9,489 15,419 Total revenues $ 9,416,042 8,729,603 25,494,564 23,265,183 Homebuilding operating earnings $ 1,477,918 1,493,820 3,846,869 3,615,068 Financial Services operating earnings 144,400 148,995 422,708 340,331 Multifamily operating earnings (loss) 78,908 (8,733) 42,795 (38,496) Lennar Other operating earnings (loss) 20,095 (26,218) (48,417) (84,374) Corporate general and administrative expenses (164,672) (114,144) (478,975) (365,002) Charitable foundation contribution (21,516) (18,559) (58,004) (49,292) Earnings before income taxes 1,535,133 1,475,161 3,726,976 3,418,235 Provision for income taxes (347,859) (358,209) (859,195) (824,233) Net earnings (including net earnings attributable to noncontrolling interests) 1,187,274 1,116,952 2,867,781 2,594,002 Less: Net earnings attributable to noncontrolling interests 24,600 7,956 31,462 16,778 Net earnings attributable to Lennar $ 1,162,674 1,108,996 2,836,319 2,577,224 Basic and diluted average shares outstanding 270,164 282,854 273,604 284,612 Basic and diluted earnings per share $ 4.26 3.87 10.26 8.94 Supplemental information: Interest incurred (1) $ 29,781 46,924 100,056 146,206 EBIT (2): Net earnings attributable to Lennar $ 1,162,674 1,108,996 2,836,319 2,577,224 Provision for income taxes 347,859 358,209 859,195 824,233 Interest expense included in: Costs of homes sold 39,021 60,415 121,335 171,012 Costs of land sold 59 386 345 1,433 Homebuilding other income (expense), net 4,704 3,576 14,298 10,908 Total interest expense 43,784 64,377 135,978 183,353 EBIT $ 1,554,317 1,531,582 3,831,492 3,584,810 (1) Amount represents interest incurred related to homebuilding debt. (2) EBIT is a non-GAAP financial measure defined as earnings before interest and taxes. This financial measure has been presented because the Company finds it important and useful in evaluating its performance and believes that it helps readers of the Company's financial statements compare its operations with those of its competitors. Although management finds EBIT to be an important measure in conducting and evaluating the Company's operations, this measure has limitations as an analytical tool as it is not reflective of the actual profitability generated by the Company during the period. Management compensates for the limitations of using EBIT by using this non-GAAP measure only to supplement the Company's GAAP results. Due to the limitations discussed, EBIT should not be viewed in isolation, as it is not a substitute for GAAP measures. LENNAR CORPORATION AND SUBSIDIARIES Segment Information (In thousands) (unaudited) Three Months Ended Nine Months Ended August 31, August 31, 2024 2023 2024 2023 Homebuilding revenues: Sales of homes $ 9,017,627 8,285,873 24,277,158 22,016,279 Sales of land 19,466 20,430 53,816 46,462 Other homebuilding 8,599 12,312 26,768 82,196 Total homebuilding revenues 9,045,692 8,318,615 24,357,742 22,144,937 Homebuilding costs and expenses: Costs of homes sold 6,989,603 6,261,578 18,855,087 16,980,746 Costs of land sold 22,720 18,720 43,640 52,729 Selling, general and administrative 600,719 582,765 1,798,306 1,543,259 Total homebuilding costs and expenses 7,613,042 6,863,063 20,697,033 18,576,734 Homebuilding net margins 1,432,650 1,455,552 3,660,709 3,568,203 Homebuilding equity in earnings (loss) from unconsolidated entities 25,220 (4,016) 54,038 (13,109) Homebuilding other income, net 20,048 42,284 132,122 59,974 Homebuilding operating earnings $ 1,477,918 1,493,820 3,846,869 3,615,068 Financial Services revenues $ 273,270 266,206 804,713 672,166 Financial Services costs and expenses 128,870 117,211 382,005 331,835 Financial Services operating earnings $ 144,400 148,995 422,708 340,331 Multifamily revenues $ 93,443 137,394 322,620 432,661 Multifamily costs and expenses 184,708 139,759 419,580 443,069 Multifamily equity in earnings (loss) from unconsolidated entities and other income (expense), net 170,173 (6,368) 139,755 (28,088) Multifamily operating earnings (loss) $ 78,908 (8,733) 42,795 (38,496) Lennar Other revenues $ 3,637 7,388 9,489 15,419 Lennar Other costs and expenses 17,176 6,155 53,105 19,426 Lennar Other equity in earnings (loss) from unconsolidated entities and other (5,489) (11,738) (17,273) (66,197) Lennar Other unrealized gains (losses) from technology investments (1) 39,123 (15,713) 12,472 (14,170) Lennar Other operating earnings (loss) $ 20,095 (26,218) (48,417) (84,374) (1) The following is a detail of Lennar Other unrealized gains (losses) from mark-to-market adjustments on technology investments: Three Months Ended Nine Months Ended August 31, August 31, 2024 2023 2024 2023 Blend Labs (BLND) $ 2,270 386 5,921 (360) Hippo (HIPO) 6,609 (17,166) 33,795 (14,933) Opendoor (OPEN) (564) 23,638 (16,156) 38,459 SmartRent (SMRT) (5,634) (1,707) (12,206) 8,219 Sonder (SOND) 71 (91) 82 (549) Sunnova (NOVA) 36,371 (20,773) 1,036 (45,006) $ 39,123 (15,713) 12,472 (14,170) LENNAR CORPORATION AND SUBSIDIARIES Lennar's reportable homebuilding segments and all other homebuilding operations not required to be reported separately have divisions located in: East:
Three Months Ended August 31, 2024 2023 2024 2023 2024 2023 Deliveries: Homes Dollar Value Average Sales Price East 5,479 5,072 $ 2,171,425 2,211,629 $ 396,000 436,000 Central 5,301 4,340 2,138,813 1,816,970 403,000 419,000
5,067 4,102 1,283,781 1,174,859 253,000 286,000 West 5,663 5,036 3,470,255 3,108,783 613,000 617,000 Other 6 9 3,225 6,258 538,000 695,000 Total 21,516 18,559 $ 9,067,499 8,318,499 $ 422,000 448,000 Of the total homes delivered listed above, 124 homes with a dollar value of
At August 31, Three Months Ended August 31, 2024 2023 2024 2023 2024 2023 2024 2023 New Orders: Active Communities Homes Dollar Value Average Sales Price East 315 327 4,888 5,132 $ 1,966,782 2,158,921 $ 402,000 421,000 Central 343 312 5,158 4,650 2,030,572 1,909,196 394,000 411,000
245 235 5,217 4,730 1,307,688 1,302,268 251,000 275,000 West 378 375 5,317 5,140 3,254,573 3,261,380 612,000 635,000 Other 2 4 7 14 2,444 7,877 349,000 563,000 Total 1,283 1,253 20,587 19,666 $ 8,562,059 8,639,642 $ 416,000 439,000 Of the total homes listed above, 114 homes with a dollar value of
For the Nine Months Ended August 31, 2024 2023 2024 2023 2024 2023 Deliveries: Homes Dollar Value Average Sales Price East 15,732 13,820 $ 6,344,164 6,069,961 $ 403,000 439,000 Central 13,049 10,779 5,240,508 4,621,552 402,000 429,000
13,999 11,431 3,548,464 3,329,349 253,000 291,000 West 15,193 13,243 9,255,650 8,075,810 609,000 610,000 Other 31 19 16,385 14,824 529,000 780,000 Total 58,004 49,292
22,111,496 $ 421,000 448,000 Of the total homes delivered listed above, 271 homes with a dollar value of
For the Nine Months Ended August 31, 2024 2023 2024 2023 2024 2023 New Orders: Homes Dollar Value Average Sales Price East 14,414 13,995 $ 5,898,262 5,999,802 $ 409,000 429,000 Central 14,764 11,471 5,893,358 4,786,293 399,000 417,000
14,861 11,604 3,760,078 3,261,481 253,000 281,000 West 15,979 14,650 9,929,956 9,159,865 621,000 625,000 Other 38 25 17,663 17,106 465,000 684,000 Total 60,056 51,745 $ 25,499,317 23,224,547 $ 425,000 449,000 Of the total new orders listed above, 234 homes with a dollar value of
At August 31, 2024 2023 2024 2023 2024 2023 Backlog: Homes Dollar Value Average Sales Price East 5,262 8,336 $ 2,268,969 3,512,548 $ 431,000 421,000 Central 4,878 5,261 2,028,466 2,257,788 416,000 429,000
2,757 2,870 694,104 769,216 252,000 268,000 West 4,037 4,847 2,753,198 3,310,533 682,000 683,000 Other 10 7 2,805 3,446 280,000 492,000 Total 16,944 21,321 $ 7,747,542 9,853,531 $ 457,000 462,000 Of the total homes in backlog listed above, 110 homes with a backlog dollar value of
LENNAR CORPORATION AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except per share amounts) (unaudited) August 31, 2024 November 30, 2023 ASSETS Homebuilding: Cash and cash equivalents $ 4,037,405 6,273,724 Restricted cash 12,600 13,481 Receivables, net 995,417 887,992 Inventories: Finished homes and construction in progress 11,373,606 10,455,666 Land and land under development 4,872,341 4,904,541 Inventory owned 16,245,947 15,360,207 Consolidated inventory not owned 3,842,592 2,992,528 Inventory owned and consolidated inventory not owned 20,088,539 18,352,735 Deposits and pre-acquisition costs on real estate 2,980,035 2,002,154 Investments in unconsolidated entities 1,309,622 1,143,909 Goodwill 3,442,359 3,442,359 Other assets 1,616,314 1,512,038 34,482,291 33,628,392 Financial Services 3,093,873 3,566,546 Multifamily 1,310,555 1,381,513 Lennar Other 854,263 657,852 Total assets $ 39,740,982 39,234,303 LIABILITIES AND EQUITY Homebuilding: Accounts payable $ 1,788,117 1,631,401 Liabilities related to consolidated inventory not owned 3,343,871 2,540,894 Senior notes and other debts payable, net 2,263,256 2,816,482 Other liabilities 2,727,342 2,739,217 10,122,586 9,727,994 Financial Services 1,759,821 2,447,039 Multifamily 195,327 278,177 Lennar Other 105,540 79,127 Total liabilities 12,183,274 12,532,337 Stockholders' equity: Preferred stock — — Class A common stock of
25,998 25,848 Class B common stock of
3,660 3,660 Additional paid-in capital 5,706,711 5,570,009 Retained earnings 24,791,519 22,369,368 Treasury stock (3,122,408) (1,393,100) Accumulated other comprehensive income 7,040 4,879 Total stockholders' equity 27,412,520 26,580,664 Noncontrolling interests 145,188 121,302 Total equity 27,557,708 26,701,966 Total liabilities and equity $ 39,740,982 39,234,303 LENNAR CORPORATION AND SUBSIDIARIES Supplemental Data (Dollars in thousands) (unaudited) August 31, 2024 November 30, 2023 August 31, 2023 Homebuilding debt $ 2,263,256 2,816,482 3,320,119 Stockholders' equity 27,412,520 26,580,664 25,656,619 Total capital $ 29,675,776 29,397,146 28,976,738 Homebuilding debt to total capital 7.6 % 9.6 % 11.5 % Homebuilding debt $ 2,263,256 2,816,482 3,320,119 Less: Homebuilding cash and cash equivalents 4,037,405 6,273,724 3,887,809 Net homebuilding debt $ (1,774,149) (3,457,242) (567,690) Net homebuilding debt to total capital (1) (6.9) % (15.0) % (2.3) % (1) Net homebuilding debt to total capital is a non-GAAP financial measure defined as net homebuilding debt (homebuilding debt less homebuilding cash and cash equivalents) divided by total capital (net homebuilding debt plus stockholders' equity). The Company believes the ratio of net homebuilding debt to total capital is a relevant and a useful financial measure to investors in understanding the leverage employed in homebuilding operations. However, because net homebuilding debt to total capital is not calculated in accordance with GAAP, this financial measure should not be considered in isolation or as an alternative to financial measures prescribed by GAAP. Rather, this non-GAAP financial measure should be used to supplement the Company's GAAP results. Contact: SOURCE Lennar Corporation
THREE MONTHS ENDED AUGUST 31, 2024 COMPARED TO
THREE MONTHS ENDED AUGUST 31, 2023
Summary of Deliveries, New Orders and Backlog
(Dollars in thousands, except average sales price)
(unaudited)
Central:
West:
Other: Urban divisions
Ian Frazer
Investor Relations
Lennar Corporation
(305) 485-4129
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