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Lennar(LEN_B) - 2024 Q2 - Quarterly Report
LEN_BLennar(LEN_B)2024-06-28 21:05

Financial Performance - Total revenues for the first half of fiscal 2024 reached 8,765,592,000,withhomebuildingsalescontributing8,765,592,000, with homebuilding sales contributing 8,357,750,000[188]. - The company generated operating earnings of 1,437,729,000forthefirsthalfoffiscal2024,comparedto1,437,729,000 for the first half of fiscal 2024, compared to 1,300,447,000 for the same period in 2023[188][189]. - The average sales price of homes delivered in the second quarter of 2024 was 507,000,withtotalrevenuesfromhomesalesreaching507,000, with total revenues from home sales reaching 16.94 billion, up from 14.58billioninthesameperiodof2023[199].−Thetotalnumberofhomesdeliveredinthesecondquarterof2024was39,469,anincreasefrom32,079inthesamequarterof2023[199].HomebuildingOperations−Homedeliveriesincreasedto19,690unitsinthethreemonthsendedMay31,2024,comparedto17,074unitsinthesameperiodof2023[196].−Homebuildingrevenuesincreasedacrossallsegmentsinthesecondquarterof2024,withEastsegmentrevenuesrisingby1714.58 billion in the same period of 2023[199]. - The total number of homes delivered in the second quarter of 2024 was 39,469, an increase from 32,079 in the same quarter of 2023[199]. Homebuilding Operations - Home deliveries increased to 19,690 units in the three months ended May 31, 2024, compared to 17,074 units in the same period of 2023[196]. - Homebuilding revenues increased across all segments in the second quarter of 2024, with East segment revenues rising by 17%, Central by 9%, Texas by 16%, and West by 11% compared to the same quarter in 2023[201]. - The backlog included 120 homes valued at 61.5 million, with an average sales price of 513,000asofMay31,2024,comparedto201homesvaluedat513,000 as of May 31, 2024, compared to 201 homes valued at 90.4 million and an average sales price of 450,000ayearearlier[200].MarginsandIncentives−Thecompanyexpectsthird−quartermarginstobehigherthanthesecondquarter,aimingforapproximately23.3450,000 a year earlier[200]. Margins and Incentives - The company expects third-quarter margins to be higher than the second quarter, aiming for approximately 23.3% margin for the year, consistent with fiscal 2023[187]. - Average sales price per home decreased to 426,000 in the three months ended May 31, 2024, from 449,000inthesameperiodof2023[196].−Salesincentivesasapercentageofrevenueincreasedto9.4449,000 in the same period of 2023[196]. - Sales incentives as a percentage of revenue increased to 9.4% in the three months ended May 31, 2024, compared to 8.4% in the same period of 2023[197]. - The gross margin percentage of home deliveries decreased year over year in the East segment, while it remained flat in the Central segment and increased in the Texas and West segments[202]. Debt and Financial Leverage - Homebuilding debt as of May 31, 2024, was 2.24 billion, with a debt-to-total capital ratio of 7.7%, down from 9.6% a year earlier[208]. - The net homebuilding debt was (1.36)billionasofMay31,2024,comparedto(1.36) billion as of May 31, 2024, compared to (3.46) billion a year earlier, indicating improved financial leverage[208]. - The company believes it is in compliance with its debt covenants as of May 31, 2024[210]. Strategic Initiatives - The company plans to spin off 6to6 to 8 billion of land to create a new entity, providing a permanent source of land acquisition capital[187]. - The company plans a strategic taxable spin-off of a new public company with land assets valued between 6billionand6 billion and 8 billion[209]. - The company plans to liquidate and sell substantially all of its individual project rental operations of Lennar Multifamily Venture Fund I in the second half of fiscal 2024[205]. Market Environment - The macroeconomic environment remains supportive for homebuilders, with strong housing demand tempered by affordability and interest rate challenges[187]. - The company is focusing on a just-in-time delivery program for land, enhancing cash flow stability amid fluctuating interest rates[187]. Investments and Dividends - The company’s investment in strategic technology entities increased from 127.5millionto127.5 million to 203.7 million from November 30, 2023, to May 31, 2024[218]. - The company reported unrealized losses from technology investments amounting to (21.5)millioninthesecondquarterof2024[206].−Aquarterlycashdividendof(21.5) million in the second quarter of 2024[206]. - A quarterly cash dividend of 0.50 per share was declared on June 20, 2024, consistent with previous dividends of 0.50pershare[211].−ThestockrepurchaseprogramwasincreasedbytheBoardofDirectorstoallowforanadditional0.50 per share[211]. - The stock repurchase program was increased by the Board of Directors to allow for an additional 5 billion in repurchases, with 7.2 million shares repurchased in the last six months[211]. Joint Ventures and Securities - The Financial Services segment's carrying value of commercial mortgage-backed securities was 138.4millionasofMay31,2024[203].−Totaljointventuredebtforhomebuildingisreportedat138.4 million as of May 31, 2024[203]. - Total joint venture debt for homebuilding is reported at 1,295,017, with significant maturities in 2024 and 2025[215].