LEN - Earnings call transcript Q1 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to Lennar's First 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, please disconnect at this time.

the the to forward-looking turn the Lumpkin now of reading statements. 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 inherently statements that to results. and Because estimates conference any assurance have date to matters occurred, are not forward-looking subject intended Lennar's and give this these not as call uncertainties. statements Forward-looking of are risks to statements yet actual to relate

under Many cause statements. factors activities results materially and release those could Lennar's and contained those affect any to future most this Risk SEC factors forward-looking note SEC. the XX-K These Lennar's to Form obligation filings, Annual on results filed Lennar may in from forward-looking the in or actual with recently press described activities in include the update statements. results that Please including Factors caption no anticipated morning's differ Report and assumes our

Operator

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

Stuart Miller

Irvine, Good Chief in our course, of is as is can Officer Executive in Officer of with morning, with our I’m and with Alex, our us scaled-down Dallas, This the you. Beckwitt, President line Chief a our Diane and Lennar who Jon morning. Controller. Collins, Rick you here just they're are me. this and you Bruce crew. Services Jaffe, Bessette, on Gross, heard California, and imagine, Financial Miami in David everyone, Financial thank here and and morning, CEO

faced. socially all are properly We

is Diane an time stretching to then evolve, we'll going call, traditional consider you economy alter And order to and questions, flatten format. answer some in curve. the to that way to I'm questions continues of landscape highlights, and as to financial to as complicated give to your But a possible. and framing an as have pause earnings national as many will all your brief we're to as much COVID-XX the is attempt this our remember please going overview the find give a

have across searching exist. models guide are has for and hands-on day-by-day and making for memories adjustments, and evolves. to Those the considered are the views imperfect way help simply institutional studied is There and to making looking reconsidered the not the This and There been Businesses and in not will to soggy no management, to environment unexpected immediate, corners has Change decisions different. forward. working is no only like signals it country, playbooks do around an landscape populate and as the ours, that be and time management, continues. illuminate. financial subsided, dark changing

player Pete and customers he focused as he a happy only one to So, grief in outreach made to the hearts successful third the many our partners like Anderson Seattle, shock in this COVID-XX his as charitable the of all fourth because many care turned of losing casualty despair as know, the of community all trade and representative. and known was you that as associates, and an coronavirus as impact of our experienced is Seattle quickly of in team, our of to Pete divisions’ was Lennar's big delighted minds company caring positively Xnd, customers well. or of our our customer was March country. of tickle, Seattle of acts of deal the his and our Seattle of affected associates ended. just A quarter after participated while on our program, many quarter

him, new his Lennar management's on to unfolding, I simply as brave associate. well business. of the Seattle properly proudly action the to respect our call of and as an Pete’s story to gone I've attention family had far loss supported the focused day future sad the the Perhaps too as legacy, This mourned even but team our tell very that we

began first, immediately our for action as number take team and we leadership trade remained hygiene priority, became of not make health safety to from problem away the and partners to flew one while to associates, Our We business. our open customers it. the

of lead. immediately there a our with that the by to order And firsthand and that team call have management camaraderie understanding meet daily seen this than like and turmoil. strength and senior is The shared durability population. Our of been of John. and firsthand to must up issues a experience, leadership With the I that there and say has we John flew partnership partnership concerns in now simply Seattle, an team Rick affected the I've evident set respect, more to in engagement defined ever never this and of time no parenthetically one Rick by

for keep addresses a procedures, in and this and manage presidents, corporate Officer. while this Lennar business protocols with along the leadership who business. Services, people reviews Medical the release our issues our fluid from the and On Goldschmidt regional Financial Lennar Their implements our Dr. concerns mentioned I our time management our to in team setting, team and very now we Multifamily, daily environment. our around Chief our leaders, meeting call, press In real includes plan, staying open is safe

our management daily to new adjusting closing and daily from pausing where implement checking purchases, pace and from of XXX% everything land programs wellness to protocols, procedures. is creating start meeting associates This for and we quarantine

safest making on adjustments a best daily possible. Our management and and that the of every aspect course evaluating team is we're business course as rigorously necessary to ensure the of the on basis

homes. still an business still are People And essential to run. are Lennar safety With People still closing we homes. buying building still on first, have homes. is

detail. selling in are the Even Let me you environment, current give some homes. we

the while attracted limited. home a interest of customers rates their inventory security safety are and low Our and is of are to own,

slowdown, of economic may come general signals the stock market to concerns, unemployment of course fears Although, and bear. well

first since new far have the so to that orders of seen quarter strong. have end be continued is the we What

in Welcome For and have regions traffic new exceeding to of XX%, in our has two started several past more we see orders over rate weeks, a operating higher the relatively the traffic sales were buyers. the time seen Home days, serious out slowdown have Nevertheless, our plan remained conversion first at Centers as while strong. of traffic now each up to same we a coming are in those

see one tour at the expected family slows, to and associates of our of Home the only in economy our decline environment we Centers We've As slowdown safety our in of the time to corresponding customers. our and an Welcome prioritize will moved of all a will sales. in most traffic we only our communities we appointment and

homes. we Just as are are homes, also delivering or we selling closing

new want home home, to-date our customers ever, and wanted more an now need to to comfortably to customers whether proceed during to than live economic pause have Our comfortably from their closing. work or

have cancellation We increase an not end seen nor yet the on quarter. impact an in the closing of since

make We closely that close local continue COs municipalities and attain can to are very we sure working with to homes.

both can on thru the have car. With their focus increased an we closing created digital of close express increased and of and our program customers, drive associates and our customers number where our home an closing their health from safety

accelerating via desires contact. implementing orientation to new environment, without close and customers' also FaceTime. but we so a are digital home, walk on a accommodate homebuyers our changing our risk home completed process In review our their to can virtual or platform are home close to We their

While we're selling also and build continuing homes, to we're closing homes.

be Our to-date. fully functional to construction and sites active continue

safety our trades impact on have have yet focused not our with of very in established We're chain. or protocols health an and seen the clear We this our and supply trades on mind. on

own and help the we understand been with communication have standard are trade constant their implement safety partners in We taking. to steps our them

from appropriate partners. FaceTime in air that construction our the facilitate most our customers of benefit other and also customer associates, trade all help to to activities using our inspections non-emergency spacing. and We technology and suspended with We’ve protect our fact environments we open care are begun

can we quickly. business Although, has not aware landscape keenly our down, that very shut change this are

and in coming support money money focusing initiatives we've liquidity. mandate safety to various functions, troubling while is the our technology critical accommodate door out the To door, confidence environment construction times. to We limiting these in and operations this first on Maintaining are sales accelerated closing going cash focused on and bring our in. innovating bringing and in to

working spend of date all home our in position. cash pausing us critical land a to regard, strong paused, uncertain well. overall developers controlling all. times and are starts, sellers by areas are local since relationships are the economy we with regional land activate understand to of Likewise, to national, and biggest with maximizing that our land collaboratively our breaker, In This development we purchases. circuit working the has need extending as is closing acquisition, acquisition, three land to focus. we with benefits On that our pause our Land

also the We've cash we reduce amount land are to development, of rephasing developments slowed home one and our time. number in developed down the investing at sites of

adjusting new inventory closely sales. further and match order amount start our also production we're in pace the Finally, spec limiting of starts to new with

this need in with show seek I'm Association great plan eye do homes are to find doing in we partners contribute right yesterday to in industry used cash providers of well of that and our first to and flow, have entire a that are proud competitors to than America also closing care, with and we hospitals building While be and time The great managing never countries that of I protection supplies. got can the industry when we in and leading support our our and work my news. be homebuilders we been in masks of health am very and selling, proud are an as wide are the to to prouder to jumped order supporting safety industry homebuilder all surgical by community. builders good. initiated

in of business day-to-day team to that hands bottom expectations business say, quarter been has on excellent Lennar's way and begun So calls the our management alter guidance and our change our the talented importantly, were the team But beyond work results in management and first Most let nutshell. quarter, economic on first to broader operates. basis. top as on very a managers result first daily first conclusion, me connected and foundation, a metrics. results on the our all carefully quarter those That is to have reflect quarter adjust a crisis exceeded

before week, people step of been we we've within right while passed, associates, distancing, focused keep expectations our our one to to example, this evolved different, adjusted heard our time have possible. business. that week, health it we the environment hope focus you for a associates although we each a have continue the match have to is and be priority, will and adopted what developed matter. that This home of we've and program With the With to everyone as with on and number on from We absolute safety learned is associates. day open next we is many and partners passing meet moment I work and the safe, have faced to customers social the adversity for trade and execute. every to remain work of work our allow as to way our is

our confident While the focus, is aspects this just are of boundaries we evolve of all and within we and beginning, learn, can manage that this adjust, with feel we program. daily new business

want through these efforts, that and business proud taken of manage their thank difficult dedication. quick in for focus to the we've conclusion, their associates actions very tireless of to We're We all their our times. our carefully

the to of we quality only ensure many to a not that safe home. us procedures worked want customers with healthy we're a but hard finally, our working for home want adjust safely trade protocols collaboratively their deliver to have who also thank to dreams. our thank We to and And partners, home understanding new

So turn let over to me with that, Diane.

Diane Bessette

Stuart, you, and everyone. good Thank morning to

few So the spend I'd a our from reviewing to highlights just like minutes quarter. first

good very So strong sheet liquidity. uncertain a environments, focus to given is philosophy and decades, balance first a on we And many with have place this operated start. for a today's

our release, of with and million in noted cash the of billion on the availability under sheet we our $X.X credit $XXX additional revolving As facility. ended quarter balance

to total year. X.X to on We of was XX.X%, owned in our billion equity from continued our our increased quarter-end, flow XX At prior stockholders’ a to generation. focus debt ratio homebuilding reduced our and inventory result year XX.X% the down capital supply of cash as

As we level million the maturity and year, look have at very million the due balance in only we debt with manageable of due in of $XXX only a November. May, $XXX

homebuilding. with me let now balance performance, operating highlights, our So briefly sheet with review those starting

XX% quarter orders New X,XXX from active the increased the increased same prior We with deliveries XX% the communities. from period. year and ended

$X year basis These the our from gross a operating quarter percent in million, are ever business, of SG&A our earnings SG&A $X we of results to high the the prior our XX.X%, extremely LMF and homebuilding are first million operating earnings net core to valuable margin Rialto were in first year. $XX Our to we the of produced have business interest that be for up quarter we tax Commercial, to the evidence $XX is prior our points And manage home quarter was And from executed was lowest benefits technology also which X.X%, XX year. spend credit achieved. million focus, tax team operating prior the rate, the a breakeven million million about Congress the prior our from was levels. well. formerly $XX just forward. Finance in to our new Mortgage continue with obtain non-controlling at as compared earnings Mortgage as compared result extension financial by to year XXXX. effort Title increased X.X% tax in December our energy will which on rate passed efficient minute tremendous managing team’s the services

results results So in demonstrate a focuses execution, that on we and first management quarter in team summary, our which high quality strategy expectations. exceeding have that

turbulent find and we back And come so do do. we where always started, to ourselves to will today, I we what in waters

position with the preserve maintain of strength inflows and We liquidity we balance our strong outflows our sheet. great will manage ensure and our to focus cash cash

over those we can so me with the operator questions. to respond brief And it comments, so turn let that your to

Operator

is Associates. question Instructions] And Zelman [Operator Zelman & our first today from Ivy from

Ivy Zelman

keeping best for thank and just Stuart, you're and this I rational to you guys your you, team everything commend want want but you your that protocols obviously say. hear it's are steps you've steady seeking all and the all employees the really crisis, say management rough all to the First, calming implemented. for voice the I safe for there, out know sailing to have to and in we

massive the just about there me we've the question because values book, book. start of and let worse in So equity a your if the traded and of it are People not companies which of to trading don't complete the was at close seen a they it crisis. traded collapse what with and markets half where during the is expecting below where impairments, believe stock

quarter behind So make, by the help to let's maybe And by you That case. will difficult question us you know more first say can of through, back and was the thing say, second get walking the the to ground just in willing, God is even put and but making a me. you, a end this normal. us, we're going it I stake for

part are a were a let that's you. If others two I lot. And question. you allowed down ask, jobs so answer sites mandated the construction had I’ll impairment because to Thank to you know shut Boston, completely, using like that to continue, questions, no then

Stuart Miller

to was we up So as and say, that a Ivy, Speakers]. that's question so Well, want the the counts first, question serious that important that [Multiple an know follow compound question. and I

from financial not inventory mortgages or doesn’t it relates different. I've is or a This to this in opening it Black is the as very It derived is build financially, emphasized world. of from part down, a derived comments comes First from a slow not this different time driven it true is it sector overproduction Swan. up, my impairment, excesses, that

forward. going we're resolves see how to have to moves wait this So to and

impact and of to the what broad to duration have extent we or we see overall what the see economy what really and to kinds extent question to snapbacks. is But impairment we real relates

you there's or You to assets, our start absorber, that in a remember have built in kind look that impairment reduction a market the when between margin. to at is and shock impairing and gross buffer of

strong. been has and our robust As margin gross you remained know,

at the that looking also have defined You're supply short production industry deficit. and by levels been inventory across

said, going time of before And with possible. question we it's to that impairment called some on the but to so it's were be raise

keep shorter cycles. soft shorter the in that other not years is impairments lighter the kind in prior number started to pivot we position. that and And duration land positions we've thought counterbalancing of But a ago, those certainly suffer will mind land a to of seen duration

sheet affection in home a for a strong and Our by balance a safety has land is with the great of family. defined excellent position, that's supply short stead products a shorter that in margin for for the and security having population market

So there premature forward seen question, we’ve in impairments to impairment. start anything look that think sheet be and as to it's thinking think I be I balance think and we But I muted past. terms that going of it's asset to in could the relative think

number So one… that's

Ivy Zelman

mentioned The have could how shock XX% you you quantify. gross did it, an gross I be is fall? absorber, to impairment before helpful margins far though, on you that'd test? think have margin Is it if

Stuart Miller

margin greater have in impairment. to to even start see thinking probably XX% or gross You reduction about

as we So gave generally and long impairment as as primer really cash Diane magnificent generally the downturn. flow positive last are positive, we went rather and through

to So, you'd like perhaps Diane, talk…

Diane Bessette

gross it about and think I higher marketing say, impairment and where selling think the mean, let's expenses. you level, about that's process I considers margins our XX% about are, if again

it's X%. So around

as So you're your already with margin a starting point. XX% net

give had So that's reasonably net the margin take. around healthy, that than higher that timeframe, XXXX or we

no that that to ball, early. bar it's But there's think helpful us. crystal very do very higher So is I

Stuart Miller

two a possibilities period, look question no the right the the in we as and part of for your was way around we discount So second a month now. shutdown month, corner

hope in quick stops cash we out. people on focusing starts, I are all regulating be will approach. laying-off first, relative we well we very outflow been people other safety the about we opening of to that me thing our capital levers or I've highlighted and remarks, noted absolutely cash while and we that shutdown labor and development side we on And the a relative reducing have means acquisition, be be considering that very coming let fingers of are If new in, to equation that land land to well, will immediately going that would react. would regulate thinking the as but And we've the So the last our say force. as

made the We've people. our through supporting to dedicated are this clear very We organization.

And so balance and think valuable and our the of can development organization carefully constructive now. asset maintain we land, we that's by inflows land our outflows a think right I that But most capital production managing in and way. healthy and

Operator

Our Kim, Evercore next Stephen question is ISI. from

Stephen Kim

you ask Stuart, hear I the that's you to picture. to the right. definitely bigger first, emphasis and I agree people is I want on think say glad absolutely about

we As environment for homes downturn, your sounds saw production and even landholding. now as price” on credit time you this keep looking different you're and too communities as you that downturns. builders with seems back But land and past discounted moderate to quickly to in bit much built in out a line we're your work with we -- worse the it later. order to into market your to your heading at But this can't possible it but in ultimately look line some they demand. down left as in said, that like were to, the they “toe downturns, as chose help as previous an think to And suffered

Would the the home's question or how left near-term, two this long then exactly posture? to be of up the be elastic is, price you one, the would be would of more a willing in corporate to president, your of does so, you kind won't past division And do being still that that? and DPs would the And past? discretion kind involved? that a sharply would as you part mean in than of think And maintain flows secondarily, it if be as it to how so if therefore, demand in discount you that slower my question,

Stuart Miller

it in your for able is economy price production, is really I times, and to a of statement question, it even period very like driven made number because accelerating to The mechanism. sites of slow be a So and there construction markets I time slowdown, down, question different be to the that traditional going this discovery is here And a extent keep what very, a paused moving our economic time. that highlights are forward. Stephen, we'll

is shifting on basis. landscape changing and the daily So, a

to your on is statement unfolds. to in answer adjusting question The management, as management it day-by-day it's hands all it's and about the landscape that embedded about my all

going answer So your be see. is the we'll to question to direct

what price, let’s issue, now, sales, price, that slow pricing a they down, out that ability with really have buy the low, if rates if see the at payment. Let's And customers defines don't reduction we they their is see to Right isn't all big are appetite. components buyers the pricing are buy purchase in monthly there interest know our a because good.

The to waters to John, It's And what exactly day-by-day be doing. just process, with have to they unemployment question do in feel Rick, it the will the going and going is like rebuilding. economy have everyday that's the We're to is Navigating ask, an is where wait on we're they possibilities, uncomfortable see. I going, is this? you chime would do and how focus. capacity, a

Jon Jaffe

markets than a is seeing actually is rents, monthly price for What described the in but exactly most of we're that PITI out what new is you are our not home. those right very is shopping attractive now. issue for less there

to it's things we're see we have I a already as and think different fluctuations. And you'll react really market, what So market to by within we're daily on that, going change is basis. even see seeing

So go. we're as adjust going to we

Rick Beckwitt

continuing own We're and that of set. And coming your that's with you inventory And the want a environments of opportunity combined rate place the much they I that low home. stay. in they seeing where customers don't comment can Stuart's think the safety drive about limited having underestimate to can the

Stephen Kim

I slowdown in seen was shorter in meaningful that say in or traffic question you in marketing for not basically the had, using and presence. changes obviously. second an encouraging, you, also or which increase rate. Stuart, that question one strong it The haven't is And online any opportunity very your should is, a the making the you're changes that cancellations, actually I slowdown you any with marketing increase that's really indicated met make was conversion that Well, traffic, to if encouraging, I have see

If unintended that from And as let's or you've just go anticipating you're be actually willing maybe finding say, reduction more online? benefits, to in some further other customers shopping in that been online. maybe benefits will such customers result a commissions, the your experience or in if some the might to investments pick one, doing co-broker

Stuart Miller

So, focused be three counting at oriented a and approach technology But we now on unintended initiatives our looking answer I talking the them We to together. hate is, at have right benefits. digital customer have focused that are this about basically strands team time and facing.

consultants past a leads, platform lead, it is in on them a as less market into about where a opportunity One through bringing to because format customers a lead, as point a we digital course, exists our entire attributing of and been of has just today. of digital our earnings home. process lead frictional new of time generating digital accommodate our course, home focal in today, the an is the the are And accelerating. The might it process We of engaging been entire frictional something of the customers production scoring engaging is This contracting, and digital that leaning internet, we're prior that management through company. know it's in of is change spoken you a I've calls, that. have the representation

yes. answer defined, a So the is

platform. tap focused, second mentioned appraisal, We've the all from application we've of The platforms tirelessly that engaging process. the digital from even the closing the to is getting or components signed our of been and to on someone's approval, the the making. insurance, through been on nuts then to we've need And mortgage we've have more attention contract been an papers services all even the of is This having mortgage digital by a just versus come office digital on our that that soup comfort the one closing and progress right warranty. the in closing drive focuses fly on the not that, be working been financial process way that, been closing, which into course even accommodation market an And interim, strand before, title, to to working in Bruce relative to the solution, the working innovation exists a car, around of is to innovation today. notarization on a from that group the the to and

our a we manage We very business are are today. working to on think differently engaging our warranty how closing, are enabling our have relationship of program. But start more less and through and points not to desired zero-defect a rethink which environment. these strands with in is our Touch digital some robust about quickly platform not necessitating given much warranty digital us our partners engagement, changing head a us desired

Operator

Raymond is Horne James. Our Buck next from from question

Buck Horne

field to you of that while And family. I and last of thinking pass your to Pete’s week, I all, let team all you And stay first me with safe the along. all want condolences on so had loss just heard and and about and start hope we're well. Lennar

of First that shutdown in shelter thing. any operational you let place or all, ordinances due down clarify under there to that me are out Are to one communities close shutting there operationally? and just anything

Jon Jaffe

ordinances and out in small viewed here just in the ones place couple construction been Newark this as area, a Philadelphia even most that has California. continues. Gilroy at essential or part, are impacted been four small business There's in for point three shelter But and municipalities when there's

Buck Horne

point? kind a of from this developments influx still be back of budget turning thinking flow. you to spending or situation this? you I Have cash guess it much like cash or on Or the we're this build kind back how when at quickly year, development taken much could, how is in just about very drags as any the initial trimmed all outflow land And the land acquisition for trimmed purchases

Stuart Miller

that? you're leading Rick,

Rick Beckwitt

door. up. situation Well, focused land cash approval, I'll whole each immediately course, And out and started tell the of wire Jon's approval. going transaction, the a we when you, on out this process my on it's really came very are going We focus approval Stuart's weekly

the several And our so engaged all And our deposits of at development deals, we've come of in out going some pass. timeline all with closing dialog this we've hand We're said, opportunities, the got looking with to postpone that we're hand community. really look the in from a not taken at we've these point, the walking several, we're close and relationships to Stuart as will a of away and months. working

Stuart Miller

because to say, Let the legitimate Rick about shifted breaker. is, abruptly. has talked add is a Right circuit now, me what this we've rather that, and market

land going all might take I and is to about talking the that's But how circuit are to market This now, the we ourselves, a recalibrate and that partners think that. be forward. them. how adverse little all the negotiating we're we to migrate world, it's bit we how just and a and a to enables we breaker recognize our might right selling They be view at table. breath that's

have to stabilized reset most the for and navigate capital put think so about materially but prepare as of is place sheet and land To to and of it to it be But balance pause them. the forward. it way to right most alters The to do and them take outflow won't with pause a and we now. the foundation market a pause, economy enable that's all in of we're deals of taking them, a working the

Diane Bessette

in clear. I other And same dollars the add I Buck, those it would is, wasn't equally large. thing is Land category, if are that think, the development only

community at single every level every rigor. with in dollar had And that be of community so single looked the spent same we

Operator

from our Rehaut Michael question JPMorgan. is And next from

Michael Rehaut

health, point. a demand, the to excess supplies, surgical some I'm before because inventory your here buildings to of prices I of started I other Seattle, also the in bit terms standpoint, your your want other that harkens around, being a that talked safety talked an efforts to just pretty hear the approach in are coming of pause XX reasonable to comments and team to you've association point, rash this for or backdrop and had of how the crunch standpoint described, of from some of the either industry next affordability are on fact off the you you amid that perhaps any everyone relative kind associate, fact financial economic quarter homebuilding But the little the making the it or of backdrop that months perhaps and you and extend all of public the the back mortgage think other that peers, holding relates, two, not of particularly before but point, the my had the and very if a to have the particularly time market also quarter what pause if decisions, question different what's current since condolences Lennar I'm market to as around and by around. alluded thoughtful I standpoint. of drivers you've of curious had crisis, from Obviously, that or you home commend flows of cash sad a not and about effect home type but different first the how the to because safety kind the a particularly given again, that, just have around recognizing question any of Pete, very at that extent come a current ago. factors. drivers different destruction and with two curious earlier in over don't market great same line demand, you've the to this and to

Stuart Miller

coordinated other to with the eye services. We action me to Mike, the or a about painting how the both parts want we our business, the any compete participate as to think supplies, can operational head-to-head of we’re our competitors of But and protection partner is, to competitors. know, we relative say, ever of am health our across efforts you let have masks, I side. fortifying one as help that and do you've say jump to pricing in things in industry, light in been don't as that well surgical I So proud do

to discussions not that. holding the pricing have appropriate do even I that the around we're be it line, say while emphatically not or would that to having So I'm sure most

at definitely competitors the our care. good really homebuilders are our partners and as serving We coordinated community with greater in serving

Michael Rehaut

I informal was, me, price I of of to an your my And any question guess, mean coordination didn't guess just, response. I understand imply I for type more approach but

Stuart Miller

running Let to day And businesses me decisions the by builders. same capable, professional going say the that independently. quite day very that our competitive points They're each, seeing market. all each to we're make field in going smart, we're is a our home group and data of

be made intelligent I think industry. the across decisions that will

Michael Rehaut

to spend obviously off comments the what monitoring parts it those I into the combines was the are But pulled normalize. standpoint XX%. is before right isn't What terms guess, you line development, around of be go of land, critical now dollars again to the next perhaps the I land and that of community-by-community extent that period which there does business light or SG&A on are of of stop. go much to out into hopefully were around talked get things what, of hard your And half of How separately, secondly, corporate in this we to extent necessary from two remind that pulled halt year, plans back? as guidance. if be maybe to items management, elements of of started development and this a for cetera. the in quarter hopefully, here that expecting time? about back back you your spend if as get G&A of And sense a things the et in former span cash you've your land land us in and a this hopeful also a could also part the line could a could cash coming that line as door,

Stuart Miller

been, a land. We and lower relates So of option, that. land higher our land, had that to to to strategy spend were percentage materially of remember continues cash owned as a starting to has been, demonstrate to migrating to percentage flows base you'll relative smaller be, it had our migrating been

lines. continuing Of course, we're along those

on trajectory. lighter continue we a so before to that change materially expect land to circumstance, position were path And in these and

we're to not course people because the let's and monitoring. now, side I as But of said, people its of so SG&A, the costs SG&A relates us. costs people are are here right other and we on that side, marketing they've managing the it about supporting and our business, As there support been to even first think out there

our SG&A defining fingers organic themselves, that anyway management a model our its I on levers. you we in on. concert be SG&A, downward will be defined to to the as watching an been something continue team You've liquidity conditions. of business say spend, And has the part focus as we was that focus migrate and markets to that all basically fact that with and and managing this both hands will market on

Operator

Thank you.

is Our Carl next from Reichardt from question BTIG.

Carl Reichardt

a a all looking of you're locations. wanted and your you're safe I if hope real there sort in broad scattered market. And question of sketch in just there. at mortgage to healthy Bruce, I the have how he's for get

with have market are and under to I about see view refi your right functioning just rates? Bruce, over demand. your customers the is obviously how mortgage worried around and Now the bounce to MBS place, now, the been banks prepayments, reacting are snowed in want all rates the investors how

Bruce Gross

backing thus stepping bit has So of a not market offered in respect the MBS to with far. have The fed disruption mortgage support. seen and this quite week, market, we

we about about the GSEs. If to, sold of to them you where loans are XX% our sell think

to the the could to extent in weaker, GSE. any that investors become we So subset to of increase the percentage the were

really well. functioning it's So

of been the On get And been a this where verifications. as at well. about. you would as great wise of to they’re verbal looking verbal that typically top in accepting be this. GSE's such instead approval, at at looking have verifications employment, that, they're asking of desktops through drive things, partners e-mails helpful have have Appraisals, They're looking which environment, people and

to So friction eliminate they're working points.

that far. full Stuart one it's pleased with are as they at we're mentioned to are the what with to to as anticipatory, helping. respect normal and thus us, a So People far are digital dealing time. With trying points closings be be fact friction really those somewhat operating

really So the fact technology focused help. that we early, on

So we already through banks to digital us, allows for our for banking which that's notes got to a we went approval for system, closing the be sold approved. full and electronic

the remote the the have system digitally, notary ahead with human have work this transferred, online somebody could that's comfort remotely documents, go with home, we when of they our through working there's So from their sign so contact. a electronically notary, go remote e-mails no and

focused start Stuart service good us that team is all at the and us partners. hard on fact early financial and technology working been position GSE the head the gave think I So a has of these take in this advantage puts and a to technologies, us at

normal So we more than this people feel like point. at this are expecting is certainly working

Carl Reichardt

Bay that you of conversations construction, is sense that And Stuart, and on in Do place the you, entities? model, to couple been out in this with it’s exempted be that deemed and residential as the going your service at forward NAHB, point? shelter some with then, with sense residential Are just essential governmental of BIAs rolls Are a being questions, getting a construction a up orders. follow about this shutdown the of in builders, have model? Area with any you or go which the other

Stuart Miller

defining too The tell. itself early to landscape and still it's is

have to maybe that weigh on like We is that. general a the that Jon, case. sense in more you'd

Jon Jaffe

transfers we tell a is It's through municipalities independently. associations opportunity at off each have municipalities the point, city the one to-date are industry with clarifying working that marquee there's is is that discussion, somewhat the of actually, what clarity. found title, a can construction you this building coordinated there found each all now, when I the But continue. get we effort have basis. in a that is the continue to for We this audience is you to right between question, your offices have All effort landscape reporting and noted acting can on cities can as coordinated no

just we're to to So monitor. have going

Stuart Miller

you Rick, any perspective? different have

Rick Beckwitt

No, spot just that's on.

and inspections and use doing very how utilized open. the have technologies to that keeping by municipalities doing but They're the morphs some not you're newer their I going think several this appraisals focused increasing that is down see and of weeks… seeing what's housing an on the shutting businesses next to happening we're of over

Jon Jaffe

out is real Nevada in add morning, time. that they put exempt. just just was that me there construction clarified an order let So, confusion about on this

a Nevada. offices order construction continue will construction a but for building that and statewide up the of in this just Las in that's the was good will being, the one with how Vegas which continue industry in and goes time just So Reno, office, resolution the because the off case obviously, this with and ended meets governor's affects Nevada, example with, we

Operator

Our from is Fargo. Wells question from Truman Patterson next

Truman Patterson

Hi, good everyone. morning,

healthy and I safe. Sorry about and hope you are of Pete, to rest the hear

question Ivy's up First just a following on clarification, Diane, question.

X% You were gross about costs. and selling talking margins, the impairment said XX% you process

you believe margin in I clear, of a necessary XX% decline gross really that are for that impairments. So or is that implying Is correct? kind really is

Diane Bessette

we’re only now, associated the so and and division right. the land, that's Directionally, that's are are directly the so bar starting directionally costs correct. always marketing, It's the with right the the Those components is point, not selling where that's the that because G&A. that's considering

Stuart Miller

say other just points me Diane is. raises also to me the that let and because day, But

ever as model, land than saw biggest is through your we think big impact dated the land. that the the that's to impairment you And, and where so we place, The you our of impacts impairments that of to getting later are have go less sitting duration on as Even books before. is. much

So be got you've impact if point, the even less. to significantly would that

Diane Bessette

as Yes, that I was going punctuate to That's right. well.

is even got lower. too far So numbers so be there, amount the you're of applying you that land less, if will your that

Truman Patterson

how any my recession? in in your potential clarification. versus off all has your Stuart, maybe material also, very question, a aggressive for more, great to impairments, bit impairments. seen you are your changed the the years and the model then Clearly, write already touched company's period investors business land the thank that more again been crash, ’XX I believe this, Okay, one you crash. you you structure, main XX discuss, land land of history kind recession. of you've this land of a were XXXX your actually And but around touched outside worried But JVs, on Stuart, of on could for housing about thinking Actually, because the on one more, where you

Stuart Miller

last at that we we me prices ‘XX start way the dissect of downturn, those market if saw what home financial years, adjusted say the we ’XX, ’XX, that quickly we is to the in X’X, our of think deteriorate. end first turn, the you So let approach homes down was a ’XX, prices very coming as our time, starting of because lower the And migrate which at market land continued of course, to down later started selling for date impairments, downwards we discovery at translated and And looking price an was point. that extended so the pricing period into quickly.

have dwelling of up need of downturn, hasn't about market, production environment, supply of supply dwelling. still it shortage There's To-date, on is made still we're a that of way. it this still the not been a up. shortage since a the a that being made In thinking we for homes deficit current

housing issues not affordable the country, and lack we oversupplied If were the to an local shortage affordable raised you the were was across a We of concerns housing, at that about current before go communities situation. more? in the local of discourse the discourse do get at being were arrived, levels how

sell economic going don't It's to question. How the up be think this. financial at -- an build pause. with said, to heart environment there inventory an we're this. at Right This and program. is will There's In we're to not we be today's a at an There's feel be beginning. be to to But going we instigators recover going it recalibration. environment, to that we're now, end a looking price from at of discovery. where going more very don't the beginning. build into going a and are that is be going that a I different looking There's and to price

highlight to management looking and switches very do, what We're staying the I don't the prior day, And very define the market-by-market highlighted see specific. we why very and already can the to be forward. downturn every case-by-case meeting what's look way that on we've think market. we're at It's we is that. close not one of that's different to history, that's available, backwards happening any to last team looks our of hands-on to at market-by-market landscape. I go the in What off it's We've to value very, ones. that seen either like what's or going can

to draw to as we're uniquely we to to and that do isn't history to be create playbook really specific So think We're that. from. positioned go have going able I there this

Truman Patterson

spec May repurchase. remain going you managing pretty November. plan $XXX this you you all mentioned that dividend? $XXX flow. What that million down? with you debt and that work have whatever And extremely on have on situation then just does that coming also million all for cash currently you focused and mean unique your off are Given on in share the What in you is adjusting you term rational paying hand? doing all another level. do on imply plan Does with pricing and a in specs mentioned Do And due you that are to near

Stuart Miller

basis. on because happens day-by-day that to is company clearly company there enough being is today's relates in look repurchase, on environment, is stock considered nothing Everything in as this pausing stock our Nothing where ahead autopilot. uncertainty it we a on we're autopilot. is repurchase As in

right million to that we then it repay coming it bonds. debt As now those will our $XXX relates and next the $XXX due is million, our outstanding down, pay expectation the

sheet position the we our those enviable for strong And already already has some are debt, to that to which meet one ability to an recast meet we liquidity comfortably. pay time down highlight with where in and is that the been I that and the would of focus things quite opportunities primary balance have

is the on basis. the engaged, that debt. day-by-day pay way stock on Yes, manage thinking manually right Everything market. now. down that our Not the business And That's the a being So autopilot. we're buybacks. liquidity approaching and is nothing

Operator

from Bank final from John of Our question America. today Lovallo is

John Lovallo

the during or many companies. things caution? accessing lines challenging of and as from cases, is pulled banks lines considered I an guess lines the financial as abundance in when tough know, preemptively Have pretty these you question on you drawing crisis lines got bank first your credit just

Diane Bessette

really No, direction. been their hasn't John, that

I think answer. generating our is real just focus better the That's cash.

throughout And market. flows. draw down the managing say desire it's as us talk goal heard it or the this our been call, you've in is as cash to our lines not has really So today's on

Stuart Miller

caught I and are unfolds, off it the again, don't that, enviable look look So day-by-day and the want we With as be we strong we in to think through world guard. said, the now, that support position that ahead at as liquidity strong spot. and a consider sheet we of But very liquidity. support it focused on what migrate businesses government in the on soft we the government as getting focusing environment right of national and the is to doing is very, seems look individuals balance order

not right we pull our don't So now have lines. knee to reaction on is and down jerk to those

John Lovallo

can zero with rates fed and near here, interest for question doing that another would be? all if you out stops into a depression. to pull here one feeds government government help potentially the industry, you recession a even Stuart, the seemingly ask and think the actually what that willing then And could action that avoid the or lot to a homebuilding

Stuart Miller

How in the put focus security Across we a landscape, what's fire how ran we really conclude. and I our place what's and keeps a I be and one how tragedy and government and and social on and hygiene how foremost address connected action, it's way and and happening and operate do health first socially health, foremost, and environment great we it we we that our focused demonstrate do to in do the it? we think all putting landscape, on could landscape, hygiene that a for and across pro safety leadership with first health people were would and us do we safety, faced to probably is if ask a to the safe.

our in of same and navigate shows our circumstances, think our our guess voice. I issues keep It's the the the with has them I is safe that our think Goldschmidt, people the helped leadership of appropriate the we way. deal day. confront Medical and these while I us the it operate that an with And Pascal now circumstances tone operate would way think Chief It's Dr. the government very Officer, critically work that in I we leadership. business, ask much I that important.

home. on Just you're saying, sick, if stay focus

If you're let's elbow not and together, six apart stay bump. even let's feet shortchange, don't

the waters Let's safety, while finding of cure navigate promoting focus on ultimately we vaccine. and a a

rest what that's would so strong, ask world I heal help I would for the of smart, the economy And And just think perhaps the appropriately. homebuilding and focused good, leadership.

do as inside best So let's we’ll for run our in let how say of landscape thanks forward joining. there. quarter our conference for call. is can with me end we that, times. progress changing joining and the look out apprised our company to as Thank we changing we And figure that and it for And you the you us keeping business the first

Operator

does conference. conclude this And today's you. Thank

this at disconnect time. may You

Lennar (LEN) 19 Mar 202020 Q1 Earnings call transcript