Lennar(LEN_B) - 2024 Q3 - Quarterly Report

Financial Performance - Net earnings attributable to the company for Q3 2024 were $1.2 billion, or$ 4.26 per diluted share, compared to $1.1 billion, or$ 3.87 per diluted share in Q3 2023, reflecting a year-over-year increase of approximately 9.1% in net earnings [83]. - Total revenues for Q3 2024 reached $9.42 billion, up from$ 8.73 billion in Q3 2023, representing a growth of about 8% [84]. - Home sales revenue for Q3 2024 was $9.02 billion, compared to$ 8.29 billion in Q3 2023, marking an increase of approximately 8.8% [84]. - The company reported total costs and expenses of $7.94 billion in Q3 2024, up from$ 7.13 billion in Q3 2023, reflecting an increase of about 11.4% [84]. - Total revenues for the nine months ended August 31, 2024, were $24.3 billion, up from$ 22.0 billion in the same period of 2023 [91]. - Cash provided by operating activities for the nine months ended August 31, 2024, totaled $1.4 billion, down from$ 2.6 billion for the same period in 2023 [118]. - Total revenues for the nine months ended August 31, 2024, were reported at $24,188,851 [132]. - Net earnings attributable to the company for the same period were$ 2,470,852 [132]. Home Deliveries and Sales - The company expects to deliver approximately 80,500 to 81,000 homes for the full fiscal year 2024, which is more than a 10% increase over 2023 [81]. - Home sales revenue increased by 9% to $9.0 billion in Q3 2024, driven by a 16% increase in home deliveries to 21,516 homes [90]. - New home deliveries increased to 58,004 homes in the nine months ended August 31, 2024, from 49,292 homes in the same period of 2023 [91]. - The company reported a total of 21,516 home deliveries in the three months ended August 31, 2024, with a dollar value of$ 9,067,499 [98]. - The total backlog as of August 31, 2024, was 16,944 homes with a dollar value of $7.75 billion, down from 21,321 homes valued at$ 9.85 billion in 2023 [105]. Margins and Costs - Gross margins on home sales were $2.0 billion, or 22.5%, in Q3 2024, down from 24.4% in Q3 2023 [90]. - Gross margins on home sales for the nine months ended August 31, 2024, were$ 5.4 billion, or 22.3%, compared to $5.0 billion, or 22.9%, in the same period of 2023 [91]. - The company reported a decrease in gross margin percentage of home deliveries across all segments due to increased land costs and pricing adjustments to market [108]. - Average sales price of homes delivered decreased by 6% to$ 422,000 in Q3 2024, compared to $448,000 in Q3 2023 [90]. - Average sales price for homes in the total market decreased to$ 422,000 in 2024 from $448,000 in 2023 [99]. Strategic Initiatives - The planned spin-off of Millrose Properties Inc. is expected to involve contributing land assets with a book value between$ 6.0 billion and $8.0 billion, transitioning to a land-light operating model [81]. - The company plans to repurchase over$ 2 billion of stock in fiscal year 2024, focusing on capital allocation towards growth and debt retirement [81]. - The company plans a strategic taxable spin-off of a new public company with a value of approximately $6 billion to$ 8 billion, aimed at accelerating its land light strategy [123]. Financial Services Performance - Operating earnings for the Financial Services segment increased to $422.7 million in the nine months ended August 31, 2024, from$ 340.3 million in the same period of 2023 [91]. - The Financial Services segment originated $5.14 billion in mortgages during the three months ended August 31, 2024, compared to$ 4.44 billion in the same period in 2023, reflecting an increase in the number of mortgages originated from 11,900 to 14,300 [111]. - The total dollar value of mortgages originated in the nine months ended August 31, 2024, was $14.25 billion, up from$ 11.53 billion in the same period of 2023 [111]. Regional Performance - The East region generated $6,216,150 in home sales revenue for the nine months ended August 31, 2023, with a gross margin of 26.5% [95]. - The West region had a gross margin of 19.6% on home sales revenue of$ 9,255,650 for the nine months ended August 31, 2023 [95]. - The Central region reported a gross margin of 22.0% on home sales revenue of $5,240,508 for the nine months ended August 31, 2023 [95]. - The Texas region had a gross margin of 22.8% on home sales revenue of$ 3,548,464 for the nine months ended August 31, 2023 [95]. Debt and Liquidity - As of August 31, 2024, Lennar's homebuilding debt to total capital ratio was 7.6%, down from 9.6% on November 30, 2023, indicating improved leverage [120]. - Average debt outstanding for homebuilding was $2,512,139 thousand for the nine months ended August 31, 2024, compared to$ 3,890,590 thousand for the same period in 2023 [124]. - The company had no outstanding borrowings under its Credit Facility as of August 31, 2024, indicating a strong liquidity position [146]. - The maximum leverage ratio was reported at 4.9%, significantly below the covenant limit of 65.0% [128]. - Liquidity test showed a ratio of (134.00), indicating strong liquidity management [128]. Market Conditions - Cancellation rates in the Homebuilding segment for the three months ended August 31, 2024, were 14% overall, compared to 13% in the same period of 2023 [104]. - The years of supply owned decreased from 1.5 years in 2023 to 1.1 years in 2024, indicating a tighter supply situation [144]. - The company is utilizing forward commitments and option contracts to mitigate interest rate risks associated with its mortgage loan portfolio [146].