Financial Performance - Net earnings attributable to Lennar for Q1 2023 were $596.5 million, or $2.06 per diluted share, compared to $503.6 million, or $1.69 per diluted share in Q1 2022[130]. - Total revenues for the three months ended February 28, 2023, were $6.49 billion, with home sales contributing $6.09 billion[131]. - Lennar's operating earnings for Q1 2023 were $924.2 million, with total costs and expenses amounting to $5.53 billion[131]. - Revenues from home sales increased by 7% in Q1 2023 to $6.1 billion from $5.7 billion in Q1 2022, driven by a 9% increase in home deliveries to 13,659 homes[134]. - The overall effective income tax rate improved to 23.7% in Q1 2023 from 25.0% in Q1 2022, mainly due to the reinstatement of the new energy efficient home credit[139]. Sales and Deliveries - The company expects new orders for Q2 2023 to be between 16,000 and 17,000 homes, with deliveries projected between 15,000 and 16,000 homes[128]. - Total homes delivered in Q1 2023 were 13,659, with a dollar value of $6.1 billion, compared to 12,538 homes valued at $5.7 billion in Q1 2022[142]. - New orders decreased to 14,194 homes in Q1 2023 from 15,747 homes in Q1 2022, with a total dollar value of $6.4 billion[144]. Pricing and Margins - The average sales price for homes in Q2 2023 is projected to be between $435,000 and $445,000[128]. - The average sales price of homes delivered decreased to $448,000 in Q1 2023 from $457,000 in Q1 2022, attributed to market pricing and product mix[134]. - Gross margins on home sales were $1.3 billion, or 21.2%, in Q1 2023, down from $1.5 billion, or 26.9%, in Q1 2022, due to flat revenues per square foot and increased costs[135]. - Selling, general and administrative expenses as a percentage of home sale revenues are expected to be between 7.2% and 7.4%[128]. - Selling, general and administrative expenses rose to $449.8 million in Q1 2023 from $428.5 million in Q1 2022, but improved as a percentage of revenues from home sales to 7.4%[136]. Inventory and Backlog - The company plans to maintain tight inventory control, expecting to reduce cycle time and free up cash tied in increased inventory[127]. - Total backlog of homes decreased to 19,403 units with a dollar value of $9.03 billion in Q1 2023, down from 27,335 units valued at $13.56 billion in Q1 2022[148]. - The average sales price of homes in backlog decreased to $465,000 in Q1 2023 from $496,000 in Q1 2022[148]. - Cancellation rates in the Homebuilding segments increased to 22% in Q1 2023 from 10% in Q1 2022, with the East region experiencing a rise to 23% from 7%[147]. Financial Services - Operating earnings for the Financial Services segment decreased to $78.7 million in Q1 2023 from $90.5 million in Q1 2022, primarily due to lower profit per loan[137]. - The Financial Services segment originated $3.15 billion in mortgages in Q1 2023, up from $2.76 billion in Q1 2022, with a mortgage capture rate of 78%[156]. Cash Flow and Debt - Cash provided by operating activities was $978 million in Q1 2023, compared to cash used of $72 million in Q1 2022[162]. - Cash used in financing activities totaled $1.5 billion in Q1 2023, primarily due to $963 million in net repayments under warehouse facilities and $258 million in stock repurchases[167]. - The company had cash and cash equivalents of $4.3 billion as of February 28, 2023, down from $4.8 billion at November 30, 2022[160]. - Homebuilding debt to total capital ratio decreased to 14.2% as of February 28, 2023, down from 14.4% in November 2022 and 18.3% in February 2022, primarily due to an increase in stockholders' equity and a decrease in homebuilding debt[169][170]. - Net homebuilding debt was $(24,621) thousand as of February 28, 2023, compared to $(568,830) thousand in November 2022 and $3,272,625 thousand in February 2022, indicating a significant improvement in liquidity[169]. Strategic Initiatives - The company has added a core strategy focused on continuous improvement, linking performance metrics to bonus structures[127]. - Despite a challenging market, Lennar aims to enhance its balance sheet and cash position, allowing for opportunistic actions as market conditions stabilize[127]. - The company is exploring various transactions to manage leverage and liquidity, including potential acquisitions and stock repurchases, while considering a spin-off of its Multifamily and single-family home for rent asset management businesses[171][172]. Investments and Assets - The company recorded investments in the Rialto funds totaling $177.7 million as of February 28, 2023, down from $185.1 million as of November 30, 2022[193]. - Strategic technology investments in unconsolidated entities increased to $137.9 million as of February 28, 2023, up from $131.5 million as of November 30, 2022[194]. - Total homesites controlled by the company as of February 28, 2023, are 263,711, representing 68% of total homesites, while owned homesites total 124,960, representing 32%[195]. - The company had no outstanding borrowings under its Credit Facility as of February 28, 2023, and total borrowings under Financial Services' warehouse repurchase facilities amounted to $1.0 billion[200][201].
Lennar(LEN_B) - 2023 Q1 - Quarterly Report