LENNAR CORP NEW
For the period ended May 31, 2024. Filed Jun 28, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
May 31, 2024 · Filed Jun 28, 2024
LEN$88.74-3.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-02-29; filed 2024-03-29.
0001628280-24-013820
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-05-31; filed 2024-06-28.
0001628280-24-030508
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 117 previous paragraphs and 133 current paragraphs.
62 unchanged; 45 reworded; 19 added; 10 removed; 0 previous and 7 current paragraphs rearranged.
Tables are not compared: 22 previous and 28 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
Current report
In the third quarter, we expect to start, sell and deliver homes with a similar consistency, as we continue to drive for an even-flow manufacturing model that we believe will enhance our cash flow and our bottom line. We have continued to target a consistent production and growth rate in order to maintain volume, minimize production costs, and maintain an even flow of production and sales, all in order to drive cash flow, effective capital allocation and higher returns.
Current report
Our primary goal is to migrate to a pure-play, asset-light manufacturing model that will be supported by a durable, just-in-time, homesite delivery program that will enable growth, shareholder returns, higher returns on assets and, ultimately, higher returns on equity. Margin is the flexible mechanism that we expect will enable this to happen. We expect margin in our third quarter to be higher than in the second quarter, and we remain focused on driving margin for this year to be approximately the same as the 23.3% in fiscal 2023. Part of the anticipated increase in margin is embedded in our backlog, but achieving it will also depend on market conditions, interest rates and consumer confidence through the remainder of the year.
Current report
With regard to manufacturing, we have continued to refine our manufacturing platform to maintain production and sales pace while continuing to engineer our homes for increased production efficiency and volume. Driving volume enables us to offer more attainable products. In doing so, we have enhanced our inventory turn and grown volume as we generate substantial cash flow.
Current report
Also, with regard to pure play, we will continue to reduce exposure to non-core assets and to intensify our focus on producing affordable and attainable products across our platform. Concurrently, we are repatriating capital that has been deployed in prior multifamily investments. Additionally, our LMV I fund sold some of its assets in June 2024, and we may decide to monetize additional assets in the second half of 2024. Combined, these transactions could result in cash proceeds of approximately $250 million in the second half of fiscal 2024.
Current report
We also expect to continue our investments in companies that are developing technologies that we can use in our homebuilding operations. Technology is an important component of our homebuilding business. Every element of our business is being modified, re-engineered and rethought around technology. Technology, imagination and innovation keeps us modern and relevant.
Current report
Perhaps most importantly, our very strong balance sheet affords us the ability to consider and execute upon thoughtful innovation for the future. We currently have a 7.7% debt-to-capital ratio, with $3.6 billion of cash on hand and no borrowings under our $2.2 billion revolving credit arrangement. This gives us the flexibility to allocate capital strategically: first, to growth, but also toward retiring debt, paying dividends and repurchasing shares of our stock.
Current report
(1)During both the three and six months ended May 31, 2024, Multifamily revenues decreased primarily due to less general contractor and management fees income as a result of the completion of Multifamily properties.
Current report
In the second quarter of 2024 and 2023, we had tax provisions of $300.5 million and $280.9 million, respectively, which resulted in an overall effective income tax rate of 23.9% and 24.4%, respectively. For both periods, our effective income tax rate included state income tax expense and non-deductible executive compensation, partially offset by energy efficient home and solar tax credits.
Current report
Six Months Ended May 31, 2024 versus Six Months Ended May 31, 2023
Current report
Revenues from home sales were $15.3 billion and $13.7 billion in the six months ended May 31, 2024 and 2023, respectively. Revenues were higher primarily due to a 19% increase in the number of home deliveries, which was offset by a 6% decrease in average sales price of homes delivered. New home deliveries increased to 36,488 homes in the six months ended May 31, 2024 from 30,733 homes in the six months ended May 31, 2023. The average sales price of homes delivered was $420,000 in the six months ended May 31, 2024, compared to $449,000 in the six months ended May 31, 2023. The decrease in average sales price of homes delivered in the six months ended May 31, 2024 compared to the same period last year was primarily due to pricing to market through an increased use of incentives and product mix.
Current report
Operating loss for the Multifamily segment was $35.9 million in the six months ended May 31, 2024, compared to operating loss of $29.7 million in the six months ended May 31, 2023. Operating loss for the Lennar Other segment was $67.4 million in the six months ended May 31, 2024, compared to operating loss of $59.6 million in the six months ended May 31, 2023. The Lennar Other operating loss for the six months ended May 31, 2024 included $26.7 million of mark-to-market losses on our publicly traded technology investments and a $46.5 million one-time gain on the sale of a technology investment. Lennar Other operating loss in the six months ended May 31, 2023 was primarily related to operating losses from certain strategic investments.
Current report
Of the total homes delivered listed above, 147 homes with a dollar value of $78.1 million and an average sales price of $532,000 represent home deliveries from unconsolidated entities for the six months ended May 31, 2024, compared to 135 home deliveries with a dollar value of $62.6 million and an average sales price of $464,000 for the six months ended May 31, 2023.
Current report
Of the total new orders listed above, 120 homes with a dollar value of $65.2 million and an average sales price of $543,000 represent new orders from unconsolidated entities for the six months ended May 31, 2024, compared to 170 new orders with a dollar value of $75.2 million and an average sales price of $443,000 for the six months ended May 31, 2023.
Current report
Homebuilding West: Revenues from home sales increased in the second quarter of 2024 compared to the second quarter of 2023, primarily due to an increase in the number of home deliveries in all the states in the segment except in Arizona, which was partially offset by a decrease in the average sales price of homes delivered in all the states in the segment except in Idaho, Nevada, Oregon and Utah. The increase in the number of home deliveries in California, Colorado, Idaho, Nevada, Oregon, Utah and Washington was primarily due to an increase in the number of deliveries per active community. The decrease in the number of home deliveries in Arizona was primarily due to a decrease in the number of deliveries per active community due to the timing of opening and closing of communities. The decrease in the average sales price of homes delivered in Arizona, California, Colorado and Washington was primarily due to pricing to market through an increased use of incentives and product mix. The increase in the average sales price of homes delivered in Idaho, Nevada, Oregon and Utah was primarily due to product mix. In the second quarter of 2024, an increase in revenues per square foot was more than offset by a decrease in costs per square foot. In addition, land costs increased year over year. Overall, the gross margin percentage of home deliveries increased year over year.
Current report
Six Months Ended May 31, 2024 versus Six Months Ended May 31, 2023
Current report
Homebuilding Texas: Revenues from home sales increased in the six months ended May 31, 2024, compared to the six months ended May 31, 2023, primarily due to an increase in the number of home deliveries, which was partially offset by a decrease in the average sales price of homes delivered. The increase in the number of home deliveries was primarily due to an increase in the number of active communities and deliveries per active community. The decrease in the average sales price of homes delivered was primarily due to pricing to market. In the six months ended May 31, 2024, an increase in revenues per square foot was more than offset by a decrease in costs per square foot. In addition, land costs increased year over year. Overall, gross margin percentage of home deliveries increased year over year.
Current report
Lennar Multifamily Venture Fund I (“LMV I") is a long-term multifamily development investment vehicle involved in the development, construction and property management of class-A multifamily assets. Currently, the LMV I partners have decided to liquidate and sell substantially all of its individual project rental operations of LMV I in the second half of fiscal 2024. Some of those assets were sold in June 2024. As of May 31, 2024, our net investment in LMV I was $162.9 million.
Current report
Subject to market conditions, we are planning a strategic taxable spin-off of a new public company to which we will have contributed land assets with a value of approximately $6 billion to $8 billion. We have confidentially submitted to the Securities and Exchange Commission a draft registration statement relating to the spin-off. We are still early in the process of this project and there is no specific timeline to completion or guarantee that the transaction will be completed. We expect the new company to be a permanent capital vehicle that will develop homesites and give us options to acquire them on a “just-in-time” basis. The goal of the spin-off is to accelerate our land light strategy by removing much of the land assets from our balance sheet.
Current report
In April 2024, $350 million of our unsecured revolving credit facility matured.
Removed paragraphs (10)
Previous report
Along with supply shortage, the additional limiting factor remains affordability. With higher interest rates and stubborn inflation, affordability continues to be tested as higher monthly payments make qualifying for a loan increasingly difficult. Inflation-driven higher cost-of-living expenses have made saving for a down payment increasingly difficult, and higher prices have begun to lead to increased personal and credit card debt. We have started to see early evidence of possible debt delinquency derailing some mortgage applications.
Previous report
Homebuilders have been uniquely able to capture demand by using incentives, including interest rate buy-downs, closing cost pickups and price reductions, to unlock affordability restraints and enable purchasers to buy homes.
Previous report
Against this backdrop, during our first quarter, we focused on, and were consistent in executing, our core operating strategy. We continued to migrate to a pure play manufacturing model across each of our 40 homebuilding divisions in order to reduce production costs while generating consistent cash flow. We are re-engineering our products for efficiency and volume in order to enhance our inventory turn and grow volume. We have also continued to migrate to a land light balance sheet in order to drive total shareholder return, return on inventory and return on equity.
Previous report
We are operating under a model where we are starting homes at a pace designed to generate growth while we maximize logistics and efficiencies in order to benefit from reduced construction costs. Our trade partners are given visibility on our timing so they can be more efficient, and we pass their efficiencies on to our customers through more affordable products. Our trade partners find that they have consistent work with our production strategy, which leads to higher productivity and, therefore, to cost savings. We gain by driving volume when others pull back.
Previous report
Our goal is even flow deliveries whereby starts continue to increase gradually quarter over quarter until we ultimately provide a consistent rate of deliveries throughout the year. A consistent level of starts maximizes the efficiencies for our trade partners. That in turn attracts a larger trade base and, together with a normalized supply chain, has reduced the cycle time for us to build a home. Our average cycle time decreased in the first quarter by seven days from the fourth quarter of fiscal 2023 and was down 30% from the first quarter of fiscal 2023.
Previous report
Driving our confidence to start homes at a pace that achieves maximum efficiency in the field is the Lennar machine. This is a combined program of digital marketing, sales consultant engagement and dynamic pricing. If we build a home, we sell that home. We sell by digitally acquiring leads and referring the best of the leads to our sales professionals. They nurture those leads while our dynamic pricing model helps tailor pricing in real time to meet the market in response to consumer desires, and market and competitive conditions. The dynamically adjusted pricing, using incentives or price alterations, automatically adjusts our margins up or down while we maintain production and sales pace.
Previous report
We recognize that the chronic housing shortage is a critical issue. Working-class housing is essential to the effective working of our cities across the country. We are working on using our strategies for production and cost efficiencies to build housing that is accessible to everyone. Land and impact fees are getting more expensive and labor costs have been rising. We can only reduce our costs by increasing productivity due to the efficiencies of our operations. We are building more consistent core products that are carefully value-engineered, and we are using our start pace to engineer our production cycle, which enables us to reduce our cycle time and, working with our trade partners, to build efficiencies in logistics and in the way we run our community production.
Previous report
We have intensified our focus on build-to-rent, both at community scale and in single-family-for-rent scattered home sale markets. We believe we can, and should, build additional production for professionally owned housing, but professional owners need cost efficiencies in today’s interest rate environment to make their rents attainable for families who aspire to a single-family lifestyle, but can’t yet afford a down payment or qualify for a mortgage. We don’t believe that professional investors compete with primary homeowners when they purchase homes for rental. Rather, we think those investors are filling a critical need for underserved families who seek to bridge their lifestyle while they build a down payment and credit score to ultimately achieve home ownership. We are also building our multifamily product through off-balance sheet entities.
Previous report
We view the first quarter of fiscal 2024 as a strategic and operational success for our company. While market conditions remain challenging, demand is strong and there is a chronic housing supply shortage that needs to be filled. We will continue to drive production to meet that shortage. Also, if the Federal Reserve begins to cut interest rates, we believe that pent-up demand will be activated, and we will be well-positioned and well-prepared to take advantage of it.
Previous report
Perhaps most importantly, our very strong balance sheet affords us the ability to consider and execute upon thoughtful innovation for the future. We have the luxury of being able to continue to execute our strategic operating plan while we return capital to our stockholders through dividends and stock buybacks and also pursue a strategic distribution to our stockholders.
Reworded paragraphs (45)
Previous wording
During the first quarter of fiscal 2024, we continued to execute our operating plan effectively, driving excellent operating results. We have never been better positioned, from balance sheet to execution to operating strategy, to address market conditions as they unfold for the remainder of 2024 and beyond.
Current wording
During the first half of fiscal 2024, we continued to execute our operating plan effectively, driving our production pace and sales pace in a synchronized manner, while using our gross margin as a point of adjustment to enable consistent production, even as market conditions evolved. This program has driven excellent operating results to date, and we are in an excellent position, from balance sheet to operating strategy to execution, to be able to adjust to the changing market as it unfolds for the remainder of 2024 and beyond.
Previous wording
Overall, the macroeconomic environment remains relatively strong for new homebuilders. There continues to be strong demand for housing, limited by the chronic housing shortage, which is particularly problematic for working-class families. Demand from that group remains robust if homes can be built at an attainable price point. Generally speaking, consumers are employed and are confident that they will remain employed and that their compensation is likely to rise. This is most often the foundation of a strong housing market.
Current wording
The macroeconomic environment remains relatively constructive for homebuilders. The demand for housing remains strong, but is limited by affordability, interest rates and, sometimes, wavering consumer confidence. The chronic housing shortage driven by over a decade of underproduction of housing stock is particularly problematic for families seeking affordable or attainable supply. At this time, consumers are generally employed and are confident that they will remain employed and that their compensation is likely to rise. This is most often the foundation of a strong housing market, but the chronic supply shortage, the impact of interest rates on affordability and persistent and stubborn inflation have moderated housing market strength. In response, we and other homebuilders have worked out sales incentives to meet the purchasers at the intersection of need and affordability to enable purchasers to buy homes. With our ready access to capital, we have been able to adjust and capture demand by using incentives to reduce the affordability constraint.
Previous wording
We are refining our land strategy to dovetail with our production orientation. We are focusing on a just-in-time delivery program for land, just as we do for lumber, appliances and other products that are part of a home. We accomplish this both by negotiating option deals with landowners and developers and by using structured land bank strategies, often with entities that deploy private equity capital. Our land light strategy has generated consistent cash flow through the ups and downs of interest rate changes and has enhanced our balance sheet and our liquidity, even after we redeemed several billion dollars of debt, and repurchased a substantial amount of our stock, over the past years. In the first quarter of fiscal 2024, we increased our dividend to $2.00 per share per year and our Board authorized an increase to our stock repurchase program to enable us to repurchase up to an additional $5 billion in value of our outstanding Class A or Class B common stock.
Current wording
We are focusing on a just-in-time delivery program for land, just as we do for lumber, appliances and other products that are part of a home. We accomplish this both by negotiating option deals with landowners and developers and by using structured land bank strategies, often with entities that deploy private equity capital. These transactions are a key part of our land-light strategy, which has enhanced our ability to generate consistent cash flow through the ups and downs of interest rate changes.
Previous wording
Our land light strategy has benefitted strongly from land banking arrangements. We have concerns about the durability of these arrangements. Availability of private equity participation in our land banking arrangements depends upon market conditions and can change significantly and quickly. Accordingly, we are considering a strategic spinoff that would provide a durable land strategy. By spinning off our own excess land in a taxable spinoff, we can create a permanent capital vehicle that will develop homesites and give us options to acquire them. Such a spinoff would distribute capital to our stockholders, reduce the inventory on our books, and provide permanent dependable capital for future land acquisitions.
Current wording
While our land-light strategy has benefited strongly from land banking arrangements, we have concerns about the durability of these arrangements. Availability of private equity participation in our land banking arrangements depends upon market conditions and can change significantly and quickly. Therefore, we are proposing to contribute $6 to $8 billion of land to a new entity, which we will spin-off to our stockholders and which will be a permanent source of land acquisition and development capital for us and other homebuilders. Such a spin-off would distribute capital to our stockholders, reduce the inventory on our books, and provide permanent dependable capital for future land acquisitions. We are still early in the process and there is no specific timeline to completion or guarantee that the transaction will be completed.
Previous wording
We are anticipating 19,000 to 19,500 closings in the second quarter of 2024 with a margin of approximately 22.5%. We expect to deliver 80,000 homes this year with a little over a 23% margin. We also expect to repurchase in excess of $2 billion of our stock in fiscal 2024.
Current wording
We expect to have between 20,500 and 21,000 home sales during our third quarter with an approximately 23% gross margin. We expect to deliver approximately 80,000 homes this year, with a little over 23% gross margin. We also expect to repurchase in excess of $2 billion of our stock for the full year 2024.
Previous wording
We historically have experienced, and expect to continue to experience, variability in quarterly results. Our results of operations for the three months ended February 29, 2024 are not necessarily indicative of the results to be expected for the full year. Our homebuilding business is seasonal in nature and generally reflects higher levels of new home order activity in our second and third fiscal quarters and increased deliveries in the second half of our fiscal year. However, a variety of factors can alter seasonal patterns.
Current wording
We historically have experienced, and expect to continue to experience, variability in quarterly results. Our results of operations for the three and six months ended May 31, 2024 are not necessarily indicative of the results to be expected for the full year. Our homebuilding business is seasonal in nature and generally reflects higher levels of new home order activity in our second and third fiscal quarters and increased deliveries in the second half of our fiscal year. However, a variety of factors can alter seasonal patterns.
Previous wording
Our net earnings attributable to Lennar were $719.3 million, or $2.57 per diluted share, in the first quarter of 2024, compared to net earnings attributable to Lennar of $596.5 million, or $2.06 per diluted share, in the first quarter of 2023.
Current wording
Our net earnings attributable to Lennar were $954.3 million, or $3.45 per diluted share, in the second quarter of 2024, compared to net earnings attributable to Lennar of $871.7 million, or $3.01 per diluted share, in the second quarter of 2023. Excluding $21.5 million of mark-to-market losses on technology investments and a $46.5 million one-time gain on the sale of a technology investment, second quarter net earnings attributable to Lennar in 2024 were $935.3 million, or $3.38 per diluted share. Excluding $25.5 million of mark-to-market gains on technology investments, second quarter net earnings attributable to Lennar in 2023 were $852.4 million or $2.94 per diluted share.
Previous wording
Revenues from home sales increased 13% in the first quarter of 2024 to $6.9 billion from $6.1 billion in the first quarter of 2023. Revenues were higher primarily due to a 23% increase in the number of home deliveries, partially offset by an 8% decrease in the average sales price of homes delivered. New home deliveries increased to 16,798 homes in the first quarter of 2024 from 13,659 homes in the first quarter of 2023. The average sales price of homes delivered was $413,000 in the first quarter of 2024, compared to $448,000 in the first quarter of 2023. The decrease in average sales price of homes delivered in the first quarter of 2024 compared to the same period last year was primarily due to pricing to market through an increased use of incentives and product mix.
Current wording
Revenues from home sales increased 9% in the second quarter of 2024 to $8.4 billion from $7.6 billion in the second quarter of 2023. Revenues were higher primarily due to a 15% increase in the number of home deliveries, partially offset by a 5% decrease in the average sales price of homes delivered. New home deliveries increased to 19,690 homes in the second quarter of 2024 from 17,074 homes in the second quarter of 2023. The average sales price of homes delivered was $426,000 in the second quarter of 2024, compared to $449,000 in the second quarter of 2023. The decrease in average sales price of homes delivered in the second quarter of 2024 compared to the same period last year was primarily due to pricing to market through an increased use of incentives and product mix.
Previous wording
Gross margins on home sales were $1.5 billion, or 21.8%, in the first quarter of 2024, compared to $1.3 billion, or 21.2%, in the first quarter of 2023. During the first quarter of 2024, gross margins increased because of a decrease in costs per square foot as we continued to focus on construction cost savings, which was partially offset by a decrease in average sales price and an increase in land costs.
Current wording
Gross margins on home sales were $1.9 billion, or 22.6%, in the second quarter of 2024, compared to $1.7 billion, or 22.5%, in the second quarter of 2023. During the second quarter of 2024, gross margins increased because of a decrease in costs per square foot as we continued to focus on construction cost savings, which was partially offset by a decrease in average sales price and an increase in land costs.
Previous wording
During the three months ended February 29, 2024, our homebuilding operating earnings included $58 million of interest income due to an increase in cash balances and higher interest rates.
Current wording
During the three months ended May 31, 2024, our homebuilding operating earnings included $43.2 million of interest income due to an increase in cash balances and higher interest rates.
Previous wording
Operating earnings for the Financial Services segment were $130.6 million in the first quarter of 2024, compared to $78.2 million in the first quarter of 2023. The increase in operating earnings was primarily due to a higher profit per locked loan in our mortgage business as a result of higher margins, and higher lock volume because of increased capture rate and Lennar deliveries. There was also an increase in profitability from our title business due to higher volume and productivity as a result of continued implementation of technology initiatives.
Current wording
Operating earnings for the Financial Services segment were $146.3 million in the second quarter of 2024, compared to $112.1 million in the second quarter of 2023. The increase in operating earnings was primarily due to higher volume from increased capture rate and Lennar deliveries.
Previous wording
Operating loss for the Multifamily segment was $15.5 million in the first quarter of 2024, compared to operating loss of $21.6 million in the first quarter of 2023. Operating loss for the Lennar Other segment was $39.5 million in the first quarter of 2024, compared to an operating loss of $41.2 million in the first quarter of 2023.
Current wording
Operating loss for the Multifamily segment was $20.4 million in the second quarter of 2024, compared to operating loss of $8.1 million in the second quarter of 2023. Operating loss for the Lennar Other segment was $27.9 million in the second quarter of 2024, compared to an operating loss of $18.4 million in the second quarter of 2023. The Lennar Other operating loss for the second quarter of 2024 included $21.5 million of mark-to-market losses on our publicly traded technology investments and a $46.5 million one-time gain on the sale of a technology investment.
Previous wording
Selling, general and administrative expenses were $568.0 million in the first quarter of 2024, compared to $449.8 million in the first quarter of 2023. As a percentage of revenues from home sales, selling, general and administrative expenses increased to 8.2% in the first quarter of 2024, from 7.4% in the first quarter of 2023, primarily due to an increase in the use of brokers due to current market conditions and an increase in digital marketing and advertising costs to generate more direct sales.
Current wording
Selling, general and administrative expenses were $1.2 billion in the six months ended May 31, 2024, compared to $1.0 billion in the six months ended May 31, 2023. As a percentage of revenues from home sales, selling, general and administrative expenses increased to 7.8% in the six months ended May 31, 2024, from 7.0% in the six months ended May 31, 2023, primarily due to an increase in digital marketing and advertising costs to generate more direct sales, professional expenses, insurance costs and an increase in the use of brokers due to current market conditions.
Previous wording
In the first quarter of 2024 and 2023, we had tax provisions of $210.9 million and $185.1 million, respectively, which resulted in an overall effective income tax rate of 22.7% and 23.7%, respectively. In the first quarter of 2024, our overall effective income tax rate was lower than last year, primarily due to excess tax benefits from share-based compensation.
Current wording
For the six months ended May 31, 2024 and 2023, we had tax provisions of $511.3 million and $466.0 million, respectively, which resulted in overall effective income tax rates of 23.4% and 24.1%, respectively. In the six months ended May 31, 2024, our overall effective income tax rate was lower than last year, primarily due to excess tax benefits from share-based compensation. For both periods, our effective income tax rate included state income tax expense and non-deductible executive compensation, partially offset by excess tax benefits from share-based compensation and energy efficient home and solar tax credits.
Previous wording
Of the total homes delivered listed above, 77 homes with a dollar value of $43.0 million and an average sales price of $558,000 represent home deliveries from unconsolidated entities for the three months ended February 29, 2024, compared to 63 home deliveries with a dollar value of $31.7 million and an average sales price of $503,000 for the three months ended February 28, 2023.
Current wording
Of the total homes delivered listed above, 70 homes with a dollar value of $35.2 million and an average sales price of $503,000 represent home deliveries from unconsolidated entities for the three months ended May 31, 2024, compared to 72 home deliveries with a dollar value of $30.9 million and an average sales price of $429,000 for the three months ended May 31, 2023.
Previous wording
Of the total homes listed above, 46 homes with a dollar value of $25.2 million and an average sales price of $548,000 represent homes in six active communities from unconsolidated entities for the three months ended February 29, 2024, compared to 97 homes with a dollar value of $38.3 million and an average sales price of $394,000 in seven active communities for the three months ended February 28, 2023.
Current wording
Of the total homes listed above, 74 homes with a dollar value of $40.0 million and an average sales price of $540,000 represent homes in eight active communities from unconsolidated entities for the three months ended May 31, 2024, compared to 73 homes with a dollar value of $37.0 million and an average sales price of $507,000 in seven active communities for the three months ended May 31, 2023.
Previous wording
(2)Homes represent the number of new sales contracts executed with homebuyers, net of cancellations, during the three months ended February 29, 2024 and February 28, 2023.
Current wording
(2)Homes represent the number of new sales contracts executed with homebuyers, net of cancellations, during the three and six months ended May 31, 2024 and 2023.
Previous wording
Of the total homes in backlog listed above, 116 homes with a backlog dollar value of $57.5 million and an average sales price of $495,000 represent the backlog from unconsolidated entities at February 29, 2024, compared to 200 homes with a backlog dollar value of $84.4 million and an average sales price of $422,000 at February 28, 2023.
Current wording
Of the total homes in backlog listed above, 120 homes with a backlog dollar value of $61.5 million and an average sales price of $513,000 represent the backlog from unconsolidated entities at May 31, 2024, compared to 201 homes with a backlog dollar value of $90.4 million and an average sales price of $450,000 at May 31, 2023.
Previous wording
Homebuilding East: Revenues from home sales increased in the first quarter of 2024 compared to the first quarter of 2023, primarily due to an increase in the number of home deliveries in all the states in the segment, which was partially offset by a decrease in the average sales price of homes delivered in all the states in the segment except in New Jersey. The increase in the number of home deliveries in Alabama, Florida, New Jersey and Pennsylvania was primarily due to an increase in the number of deliveries per active community. The decrease in the average sales price of homes delivered in Alabama, Florida and Pennsylvania was primarily due to pricing to market through an increased use of incentives and product mix. The increase in the average sales price of homes delivered in New Jersey was primarily due to product mix. In the first quarter of 2024, a decrease in revenues per square foot was partially offset by a decrease in costs per square foot, which resulted in a decrease in gross margin percentage of home deliveries. In addition, land costs increased year over year.
Current wording
Homebuilding East: Revenues from home sales increased in the second quarter of 2024 compared to the second quarter of 2023, primarily due to an increase in the number of home deliveries in all the states in the segment, which was partially offset by a decrease in the average sales price of homes delivered in all the states in the segment except in Pennsylvania. The increase in the number of home deliveries in Alabama, Florida, New Jersey and Pennsylvania was primarily due to an increase in the number of deliveries per active community. The decrease in the average sales price of homes delivered in Alabama, Florida and New Jersey was primarily due to pricing to market through an increased use of incentives and product mix. The increase in the average sales price of homes delivered in Pennsylvania was primarily due to product mix. In the second quarter of 2024, a decrease in revenues per square foot was partially offset by a decrease in costs per square foot. In addition, land costs increased year over year. Overall, this resulted in a decrease in gross margin percentage of home deliveries.
Previous wording
Homebuilding Central: Revenues from home sales increased in the first quarter of 2024 compared to the first quarter of 2023, primarily due to an increase in the number of home deliveries in all the states in the segment except in Georgia and Virginia, which was partially offset by a decrease in the average sales price of homes delivered in all the states in the segment except in Illinois. The increase in the number of home deliveries in Illinois, Indiana, Maryland, Minnesota, North Carolina, South Carolina and Tennessee was primarily due to an increase in the number of deliveries per active community. The decrease in the number of home deliveries in Georgia and Virginia was primarily due to a decrease in the number of deliveries per active community due to the timing of opening and closing of communities. The decrease in the average sales price of homes delivered in Georgia, Indiana, Maryland, Minnesota, North Carolina, South Carolina, Tennessee and Virginia was primarily due to pricing to market through an increased use of incentives and product mix. The increase in the average sales price of homes delivered in Illinois was primarily due to product mix. In the first quarter of 2024, a decrease in revenues per square foot was partially offset by a decrease in costs per square foot. Overall, gross margin percentage of home deliveries remained flat while land costs increased year over year.
Current wording
Homebuilding Central: Revenues from home sales increased in the second quarter of 2024 compared to the second quarter of 2023, primarily due to an increase in the number of home deliveries in all the states in the segment except in Maryland, which was partially offset by a decrease in the average sales price of homes delivered in all the states in the segment except in Illinois and Maryland. The increase in the number of home deliveries in Georgia, Illinois, Indiana, Minnesota, North Carolina, South Carolina, Tennessee and Virginia was primarily due to an increase in the number of deliveries per active community. The decrease in the number of home deliveries in Maryland was primarily due to a decrease in the number of deliveries per active community due to the timing of opening and closing of communities. The decrease in the average sales price of homes delivered in Georgia, Indiana, Minnesota, North Carolina, South Carolina, Tennessee and Virginia was primarily due to pricing to market through an increased use of incentives and product mix. The increase in the average sales price of homes delivered in Illinois and Maryland was primarily due to product mix. In the second quarter of 2024, a decrease in revenues per square foot was more than offset by a decrease in costs per square foot. In addition, land costs increased year over year. Overall, the gross margin percentage of home deliveries remained flat year over year.
Previous wording
Homebuilding Texas: Revenues from home sales increased in the first quarter of 2024 compared to the first quarter of 2023, primarily due to an increase in the number of home deliveries, which was partially offset by a decrease in the average sales price of homes delivered. The increase in the number of home deliveries was primarily due to an increase in the number of active communities. The decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of incentives. In the first quarter of 2024, a decrease in revenues per square foot was more than offset by a decrease in costs per square foot. Overall, gross margin percentage of home deliveries increased while land costs increased year over year.
Current wording
Homebuilding Texas: Revenues from home sales increased in the second quarter of 2024 compared to the second quarter of 2023, primarily due to an increase in the number of home deliveries, which was partially offset by a decrease in the average sales price of homes delivered. The increase in the number of home deliveries was primarily due to an increase in the number of active communities and deliveries per active community. The decrease in the average sales price of homes delivered was primarily due to pricing to market through an increased use of incentives and product mix. In the second quarter of 2024, a decrease in revenues per square foot was more than offset by a decrease in costs per square foot. In addition, land costs increased year over year. Overall, the gross margin percentage of home deliveries increased year over year.
Previous wording
Homebuilding West: Revenues from home sales increased in the first quarter of 2024 compared to the first quarter of 2023, primarily due to an increase in the number of home deliveries in all the states in the segment, which was partially offset by a decrease in the average sales price of homes delivered in all the states in the segment except in California, Nevada and Oregon. The increase in the number of home deliveries in Arizona, California, Colorado, Idaho, Nevada, Oregon, Utah and Washington was primarily due to an increase in the number of active communities and deliveries per active community. The decrease in the average sales price of homes delivered in Arizona, Colorado, Idaho, Utah and Washington was primarily due to pricing to market through an increased use of incentives and product mix. The increase in the average sales price of homes delivered in California, Nevada and Oregon was primarily due to product mix. In the first quarter of 2024, revenues per square foot increased and costs per square foot decreased. Overall, gross margin percentage of home deliveries increased while land costs increased year over year.
Current wording
Homebuilding West: Revenues from home sales increased in the six months ended May 31, 2024 compared to the six months ended May 31, 2023, primarily due to an increase in the number of home deliveries in all the states in the segment, which was partially offset by a decrease in the average sales price of homes delivered inall the states in the segment except in California, Nevada, Oregon and Utah. The increase in the number of home deliveries in Arizona, California, Colorado, Idaho, Nevada, Oregon, Utah and Washington was primarily due to an increase in the number of deliveries per active community. The decrease in the average sales price of homes delivered in Arizona, Colorado, Idaho and Washington was primarily due to pricing to market through an increased use of incentives and product mix. The increase in the average sales price of homes delivered in California, Nevada, Oregon and Utah was primarily due to product mix. In the six months ended May 31, 2024, an increase in revenues per square foot was more than offset by a decrease in costs per square foot. In addition, land costs increased year over year. Overall, the gross margin percentage of home deliveries increased year over year.
Previous wording
At February 29, 2024 and November 30, 2023, the carrying value of Financial Services' commercial mortgage-backed securities was $139.7 million and $140.7 million, respectively. Details of these securities and related debt are within Note 2 of the Notes to Condensed Consolidated Financial Statements.
Current wording
At May 31, 2024 and November 30, 2023, the carrying value of Financial Services' commercial mortgage-backed securities was $138.4 million and $140.7 million, respectively. Details of these securities and related debt are disclosed in Note 2 of the Notes to Condensed Consolidated Financial Statements.
Previous wording
Our Lennar Other segment includes fund investments we retained subsequent to our sale of the Rialto investment and asset management platform, as well as strategic investments in technology companies that are looking to improve the homebuilding and financial services industries to better serve homebuyers and homeowners and increase efficiencies. At February 29, 2024 and November 30, 2023, we had $749.9 million and $657.9 million, respectively, of assets in our Lennar Other segment, which included investments in unconsolidated entities of $289.7 million and $276.2 million, respectively. The investments in equity securities of Blend Labs, Inc. (“Blend Labs”), Hippo Holdings, Inc. (“Hippo”), Opendoor Technologies, Inc. (“Opendoor”), SmartRent, Inc. (“SmartRent”), Sonder Holdings, Inc. (“Sonder”), and Sunnova Energy International, Inc. (“Sunnova”) are carried at market and will therefore change depending on the market value of our shareholdings in those entities on the last day of each quarter. All the investments are accounted for as investments in equity securities which are held at fair value and the changes in fair values are recognized through earnings. Details of these investments are included within Note 2 of the Notes to Condensed Consolidated Financial Statements. The following is a detail of Lennar Other unrealized losses from mark-to-market adjustments on our technology investments:
Current wording
Our Lennar Other segment includes fund investments we retained subsequent to our sale of the Rialto investment and asset management platform, as well as strategic investments in technology companies that are looking to improve the homebuilding and financial services industries to better serve homebuyers and homeowners and increase efficiencies. At May 31, 2024 and November 30, 2023, we had $836.0 million and $657.9 million, respectively, of assets in our Lennar Other segment, which included investments in unconsolidated entities of $350.6 million and $276.2 million, respectively. The investments in equity securities of Blend Labs, Inc. (“Blend Labs”), Hippo Holdings, Inc. (“Hippo”), Opendoor Technologies, Inc. (“Opendoor”), SmartRent, Inc. (“SmartRent”), Sonder Holdings, Inc. (“Sonder”), and Sunnova Energy International, Inc. (“Sunnova”) are carried at market and will therefore change depending on the market value of our shareholdings in those entities on the last day of each quarter. All of the investments are accounted for as investments in equity securities which are held at fair value and the changes in fair values are recognized through earnings. Details of these investments are included within Note 2 of the Notes to Condensed Consolidated Financial Statements. The following is a detail of Lennar Other unrealized gains (losses) from mark-to-market adjustments on our publicly traded technology investments:
Previous wording
At February 29, 2024, we had cash and cash equivalents and restricted cash related to our homebuilding, financial services, multifamily and other operations of $5.3 billion, compared to $6.6 billion at November 30, 2023 and $4.3 billion at February 28, 2023.
Current wording
At May 31, 2024, we had cash and cash equivalents and restricted cash related to our homebuilding, financial services, multifamily and other operations of $3.9 billion, compared to $6.6 billion at November 30, 2023 and $4.3 billion at May 31, 2023.
Previous wording
We finance all of our activities, including homebuilding, financial services, multifamily, other and general operating needs, primarily with cash generated from our operations, debt issuances and cash borrowed under our warehouse lines of credit and our unsecured revolving credit facility (the “Credit Facility”). At February 29, 2024, we had $5.0 billion of homebuilding cash and cash equivalents and no outstanding borrowings under our $2.6 billion revolving credit facility, thereby providing approximately $7.6 billion of available capacity.
Current wording
We finance all of our activities, including homebuilding, financial services, multifamily, other and general operating needs, primarily with cash generated from our operations, debt issuances and cash borrowed under our warehouse lines of credit and our unsecured revolving credit facility (the “Credit Facility”). At May 31, 2024, we had $3.6 billion of homebuilding cash and cash equivalents and no outstanding borrowings under our $2.2 billion revolving credit facility, thereby providing approximately $5.8 billion of available capacity.
Previous wording
During the three months ended February 29, 2024 and 2023, cash provided by operating activities totaled $367.9 million and $978 million, respectively. During the three months ended February 29, 2024, cash provided by operating activities was impacted primarily by our net earnings, a decrease in loans held-for-sale of $54 million primarily related to the sale of loans originated by our Financial Services segment and a decrease in receivables of $379 million primarily related to a decrease in Financial Services receivables, net, which are loans sold to investors for which we have not yet been paid. This was partially offset by an increase in inventories due to strategic land purchases, land development and construction costs of $285 million, an increase in deposits and pre-acquisition costs on real estate of $411 million as we increased the percentage of controlled homesites, and a decrease in accounts payable and other liabilities of $326 million.
Current wording
During the six months ended May 31, 2024 and 2023, cash provided by operating activities totaled $610 million and $1.6 billion, respectively. During the six months ended May 31, 2024, cash provided by operating activities was impacted primarily by our net earnings and a decrease in loans held-for-sale of $336 million primarily related to the sale of loans originated by our Financial Services segment. This was partially offset by an increase in inventories due to strategic land purchases, land development and construction costs of $631 million, an increase in deposits and pre-acquisition costs on real estate of $755 million as we increased the percentage of controlled homesites, and a decrease in accounts payable and other liabilities of $381 million.
Previous wording
During the three months ended February 28, 2023, cash provided by operating activities was impacted primarily by our net earnings, a decrease in loans held-for-sale of $512 million primarily related to the sale of loans originated by our Financial Services segment and a decrease in receivables of $603 million primarily related to a decrease in Financial Services receivables, net, which are loans sold to investors for which we have not yet been paid. This was partially offset by an increase in inventories due to strategic land purchases, land development and construction costs of $156 million and a decrease in accounts payable and other liabilities of $691 million.
Current wording
During the six months ended May 31, 2023, cash provided by operating activities was impacted primarily by our net earnings, a decrease in loans held-for-sale of $578 million primarily related to the sale of loans originated by our Financial Services segment and a decrease in receivables of $436 million primarily related to a decrease in Financial Services receivables, net, which are loans sold to investors for which we have not yet been paid. This was partially offset by a decrease in accounts payable and other liabilities of $991 million, primarily due to the payment of income taxes.
Previous wording
During the three months ended February 29, 2024 and 2023, cash used in investing activities totaled $148 million and $36 million, respectively. During the three months ended February 29, 2024, our cash used in investing activities was primarily due to cash contributions of $118 million to unconsolidated entities, which included (1) $56 million to Homebuilding unconsolidated entities, (2) $54 million to Lennar other unconsolidated entities and (3) $7 million to Multifamily unconsolidated entities. This was partially offset by distributions of capital from unconsolidated entities of $35 million, which primarily included (1) $23 million from Homebuilding unconsolidated entities, (2) $8 million from our Lennar Other unconsolidated entities and (3) $4 million from Multifamily entities.
Current wording
During the six months ended May 31, 2024 and 2023, cash used in investing activities totaled $275 million and $81 million, respectively. During the six months ended May 31, 2024, our cash used in investing activities was primarily due to cash contributions of $248 million to unconsolidated entities, which included (1) $118 million to Homebuilding unconsolidated entities, (2) $117 million to Lennar other unconsolidated entities and (3) $13 million to Multifamily unconsolidated entities and $112 million of net additions of operating properties and equipment. This was partially offset by distributions of capital from unconsolidated entities of $62 million, which primarily included (1) $40 million from Homebuilding unconsolidated entities, (2) $16 million from our Lennar Other unconsolidated entities and (3) $6 million from Multifamily entities.
Previous wording
During the three months ended February 28, 2023, our cash used in investing activities was primarily due to cash contributions of $57 million to unconsolidated entities, which included (1) $25 million to Homebuilding unconsolidated entities, (2) $25 million to Lennar Other unconsolidated entities, and (3) $7 million to Multifamily unconsolidated entities. This was partially offset by distributions of capital from unconsolidated entities of $24 million, which primarily included (1) $17 million from Homebuilding unconsolidated entities, and (2) $7 million from our Lennar Other unconsolidated entities.
Current wording
During the six months ended May 31, 2023, our cash used in investing activities was primarily due to cash contributions of $108 million to unconsolidated entities, which included (1) $54 million to Homebuilding unconsolidated entities, (2) $40 million to Lennar Other unconsolidated entities, and (3) $14 million to Multifamily unconsolidated entities. This was partially offset by distributions of capital from unconsolidated entities of $46 million, which primarily included (1) $33 million from Homebuilding unconsolidated entities, and (2) $13 million from our Lennar Other unconsolidated entities.
Previous wording
During both the three months ended February 29, 2024 and three months ended February 28, 2023, cash used in financing activities totaled $1.5 billion, respectively. During the three months ended February 29, 2024, cash used in financing activities was primarily due to (1) $600 million of net repayments under our Financial Services' warehouse facilities; (2) $595 million in repurchases of our common stock, which included $512 million of repurchases under our repurchase program and $84 million of repurchases related to our equity compensation plan; (3) $139 million of dividend payments; and (4) $185 million of net payments from liabilities related to consolidated inventory not owned due to activity with land banks.
Current wording
During the six months ended May 31, 2024 and 2023, cash used in financing activities totaled $3.0 billion and $2.1 billion, respectively. During the six months ended May 31, 2024, cash used in financing activities was primarily due to (1) $754 million of net repayments under our Financial Services' warehouse facilities; (2) redemption of $454 million aggregate principal amount of our 4.50% senior notes due April 2024; (3) $100 million of partial repurchase of our 4.75% senior notes due 2027; (4) $1.2 billion of repurchases of our common stock, which included $1.1 billion of repurchases under our repurchase program and $86 million of repurchases related to our equity compensation plan; (5) $278 million of dividend payments; and (6) $145 million of net payments from liabilities related to consolidated inventory not owned due to activity with land banks.
Previous wording
During the three months ended February 28, 2023, cash used in financing activities was primarily due to (1) $963 million of net repayments under our Financial Services' warehouse facilities; (2) $258 million of repurchases of our common stock, which included $191 million of repurchases under our repurchase program and $67 million of repurchases related to our equity compensation plan; (3) $108 million of dividend payments; and (4) $108 million of net payments from liabilities related to consolidated inventory not owned due to activity with land banks.
Current wording
During the six months ended May 31, 2023, cash used in financing activities was primarily due to (1) $978 million of net repayments under our Financial Services' warehouse facilities; (2) $465 million of repurchases of our common stock, which included $401 million of repurchases under our repurchase program and $64 million of repurchases related to our equity compensation plan; (3) $158 million of repurchases of senior notes due in fiscal year 2024 (4) $218 million of dividend payments; and (5) $186 million of net payments from liabilities related to consolidated inventory not owned due to activity with land banks.
Previous wording
At February 29, 2024, Homebuilding debt to total capital was consistent with November 30, 2023, and was lower compared to February 28, 2023, primarily as a result of an increase in stockholders' equity due to net earnings and a decrease in Homebuilding debt due to debt paydowns, partially offset by share repurchases.
Current wording
At May 31, 2024, Homebuilding debt to total capital was lower compared to both November 30, 2023 and May 31, 2023, primarily as a result of an increase in stockholders' equity due to net earnings and a decrease in Homebuilding debt due to debt paydowns, partially offset by share repurchases.
Previous wording
Our Homebuilding senior notes and other debts payable as well as letters of credit and surety bonds are summarized within Note 7 of the Notes to Condensed Consolidated Financial Statements. Our Homebuilding average debt outstanding and the average rates of interest was as follows:
Current wording
Our Homebuilding senior notes and other debt payable as well as letters of credit and surety bonds are summarized within Note 7 of the Notes to Condensed Consolidated Financial Statements. Our Homebuilding average debt outstanding and the average rates of interest was as follows:
Previous wording
Our Financial Services segment uses residential mortgage loan warehouse facilities to finance its residential lending activities until the mortgage loans are sold to investors and the proceeds are collected. The facilities are non-recourse to us and are expected to be renewed or replaced with other facilities when they mature. The LMF Commercial warehouse facilities finance LMF Commercial loan origination and securitization activities and were secured by up to 80% interests in the originated commercial loans financed. These facilities and the related borrowings and collateral are detailed in Note 2 of the Notes to Condensed Consolidated Financial Statements.
Current wording
Our Financial Services segment uses residential mortgage loan warehouse facilities to finance its residential lending activities until the mortgage loans are sold to investors and the proceeds are collected. The facilities are non-recourse to us and are expected to be renewed or replaced with other facilities when they mature. The LMF Commercial warehouse facilities finance LMF Commercial loan origination and securitization activities and are secured by up to 80% interests in the originated commercial loans financed. These facilities and the related borrowings and collateral are detailed in Note 2 of the Notes to Condensed Consolidated Financial Statements.
Previous wording
In March 2022, our Board of Directors approved an authorization for us to repurchase up to the lesser of $2 billion in value, or 30 million in shares, of our outstanding Class A or Class B common stock. The repurchase authorization has no expiration date. This authorization was in addition to what was remaining of our October 2021 stock repurchase program. In January 2024, our Board of Directors authorized an increase to our stock repurchase program to enable us to repurchase up to an additional $5 billion in value of our outstanding Class A or Class B common stock. Repurchases are authorized to be made in open-market or private transactions. The repurchase authorization has no expiration date. The details of our Class A and Class B common stock repurchases under the authorized repurchase program for the three months ended February 29, 2024 and February 28, 2023 are included in Note 4 of the Notes to Condensed Consolidated Financial Statements.
Current wording
In January 2024, our Board of Directors authorized an increase to our stock repurchase program to enable us to repurchase up to an additional $5 billion in value of our outstanding Class A or Class B common stock. Repurchases are authorized to be made in open-market or private transactions. The repurchase authorization has no expiration date. The details of our Class A and Class B common stock repurchases under the authorized repurchase program for the six months ended May 31, 2024 and 2023 are included in Note 4 of the Notes to Condensed Consolidated Financial Statements.
Previous wording
During the three months ended February 29, 2024, treasury shares increased by 3.6 million shares primarily due to our repurchase of 3.4 million shares of Class A and Class B common stock through our stock repurchase program.
Current wording
During the six months ended May 31, 2024, treasury shares increased by 7.8 million shares primarily due to our repurchase of 7.2 million shares of Class A and Class B common stock through our stock repurchase program.
Previous wording
On February 7, 2024, we paid a quarterly cash dividend of $0.50 per share on both of our Class A and Class B common stock to holders of record at the close of business on January 24, 2024, as declared by our Board of Directors on January 9, 2024. We approved and paid cash dividends of $0.375 per share for each of the four quarters of 2023 on both our Class A and Class B common stock.
Current wording
On June 20, 2024, our Board of Directors declared a quarterly cash dividend of $0.50 per share on both our Class A and Class B common stock, payable on July 19, 2024 to holders of record at the close of business on July 5, 2024. On May 8, 2024, the Company paid a quarterly cash dividend of $0.50 per share for both of its Class A and Class B common stock to holders of record at the close of business on April 24, 2024, as declared by its Board of Directors on April 10, 2024. We approved and paid cash dividends of $0.375 per share for each of the four quarters of 2023 on both our Class A and Class B common stock.
Previous wording
As of February 29, 2024, we had equity investments in 47 active Homebuilding and land unconsolidated entities (of which 5 had recourse debt, 15 had non-recourse debt and 27 had no debt) and 48 active Homebuilding and land unconsolidated entities at November 30, 2023. Historically, we have invested in unconsolidated entities that acquired and developed land (1) for our homebuilding operations or for sale to third parties or (2) for the construction of homes for sale to third-party homebuyers. Through these entities, we have primarily sought to reduce and share our risk by limiting the amount of our capital invested in land, while obtaining access to potential future homesites and allowing us to participate in strategic ventures. The use of these entities also, in some instances, has enabled us to acquire land to which we could not otherwise obtain access, or could not obtain access on as favorable terms, without the participation of a strategic partner. Participants in these joint ventures have been land owners/developers, other homebuilders and financial or strategic partners. Joint ventures with land owners/developers have given us access to homesites owned or controlled by our partners. Joint ventures with other homebuilders have provided us with the ability to bid jointly with our partners for large land parcels. Joint ventures with financial partners have allowed us to combine our homebuilding expertise with access to our partners’ capital. Joint ventures with strategic partners have allowed us to combine our homebuilding expertise with the specific expertise (e.g. commercial or infill experience) of our partners. Each joint venture is governed by an executive committee consisting of members from the partners. Details regarding these investments, balances and debt are included in Note 3 of the Notes to Condensed Consolidated Financial Statements.
Current wording
As of May 31, 2024, we had equity investments in 47 active Homebuilding and land unconsolidated entities (of which 5 had recourse debt, 14 had non-recourse debt and 28 had no debt) and 48 active Homebuilding and land unconsolidated entities at November 30, 2023. Historically, we have invested in unconsolidated entities that acquired and developed land (1) for our homebuilding operations or for sale to third parties or (2) for the construction of homes for sale to third-party homebuyers. Through these entities, we have primarily sought to reduce and share our risk by limiting the amount of our capital invested in land, while obtaining access to potential future homesites and allowing us to participate in strategic ventures. The use of these entities also, in some instances, has enabled us to acquire land to which we could not otherwise obtain access, or could not obtain access on as favorable terms, without the participation of a strategic partner. Participants in these joint ventures have been land owners/developers, other homebuilders and financial or strategic partners. Joint ventures with land owners/developers have given us access to homesites owned or controlled by our partners. Joint ventures with other homebuilders have provided us with the ability to bid jointly with our partners for large land parcels. Joint ventures with financial partners have allowed us to combine our homebuilding expertise with access to our partners’ capital. Joint ventures with strategic partners have allowed us to combine our homebuilding expertise with the specific expertise (e.g. commercial or infill experience) of our partners. Each joint venture is governed by an executive committee consisting of members from the partners. Details regarding these investments, balances and debt are included in Note 3 of the Notes to Condensed Consolidated Financial Statements.
Previous wording
At February 29, 2024, Multifamily had equity investments in 21 active unconsolidated entities that are engaged in multifamily residential developments (of which 18 had non-recourse debt and 3 had no debt) and 22 active unconsolidated entities at November 30, 2023. We invest in unconsolidated entities that acquire and develop land to construct multifamily rental properties. Through these entities, we are focusing on developing a geographically diversified portfolio of institutional quality multifamily rental properties in select U.S. markets. Initially, we participated in building multifamily developments and selling them soon after they were completed. Participants in these joint ventures have been financial partners. Joint ventures with financial partners have allowed us to combine our development and construction expertise with access to our partners’ capital. Each joint venture is governed by an operating agreement that provides significant substantive participating voting rights on major decisions to our partners.
Current wording
At May 31, 2024, Multifamily had equity investments in 21 active unconsolidated entities that are engaged in multifamily residential developments (of which 18 had non-recourse debt and 3 had no debt) and 22 active unconsolidated entities at November 30, 2023. We invest in unconsolidated entities that acquire and develop land to construct multifamily rental properties. Through these entities, we are focusing on developing a geographically diversified portfolio of institutional quality multifamily rental properties in select U.S. markets. Initially, we participated in building multifamily developments and selling them soon after they were completed. Participants in these joint ventures have been financial partners. Joint ventures with financial partners have allowed us to combine our development and construction expertise with access to our partners’ capital.
Showing the first 40 of 45 pairs. Open the source sections for the rest.
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
Selling, general and administrative expenses were $629.6 million in the second quarter of 2024, compared to $510.7 million in the second quarter of 2023. As a percentage of revenues from home sales, selling, general and administrative expenses increased to 7.5% in the second quarter of 2024, from 6.7% in the second quarter of 2023, primarily due to an increase in digital marketing costs, professional expenses and insurance costs.
Current report — wording carried from elsewhere
Gross margins on home sales were $3.4 billion, or 22.2%, in the six months ended May 31, 2024, compared to $3.0 billion, or 21.9%, in the six months ended May 31, 2023. During the six months ended May 31, 2024, gross margins increased because of a decrease in costs per square foot as we continued to focus on construction cost savings, which was partially offset by a decrease in average sales price and an increase in land costs.
Current report — wording carried from elsewhere
During the six months ended May 31, 2024, our homebuilding operating earnings included $100.8 million of interest income due to an increase in cash balances and higher interest rates.
Current report — wording carried from elsewhere
Operating earnings for the Financial Services segment were $276.9 million in the six months ended May 31, 2024, compared to $190.3 million in the six months ended May 31, 2023. The increase in operating earnings was primarily due to higher volume from increased capture rate and Lennar deliveries.
Current report — wording carried from elsewhere
Homebuilding East: Revenues from home sales increased in the six months ended May 31, 2024 compared to the six months ended May 31, 2023, primarily due to an increase in the number of home deliveries in all the states in the segment, which was partially offset by a decrease in the average sales price of homes delivered in all the states in the segment except in New Jersey and Pennsylvania. The increase in the number of home deliveries in Alabama, Florida, New Jersey and Pennsylvania was primarily due to an increasein the number of deliveries per active community. The decrease in the average sales price of homes delivered in Alabama and Florida was primarily due to pricing to market and product mix. The increase in the average sales price of homes delivered in New Jersey and Pennsylvania was primarily due to product mix. In the six months ended May 31, 2024, a decrease in revenues per square foot was partially offset by a decrease in costs per square foot. In addition, land costs increased year over year. Overall, this resulted in a decrease in gross margin percentage of home deliveries.
Current report — wording carried from elsewhere
Homebuilding Central: Revenues from home sales increased in the six months ended May 31, 2024 compared to the six months ended May 31, 2023, primarily due to an increase in the number of home deliveries in all the states in the segment except in Maryland and Virginia, which was partially offset by a decrease in the average sales price of homes delivered in all the states in the segment except in Illinois and Maryland. The increase in the number of home deliveries in Georgia, Illinois, Indiana, Minnesota, North Carolina, South Carolina and Tennessee was primarily due to an increase in the number of deliveries per active community. The decrease in the number of home deliveries in Maryland and Virginia was primarily due to a decrease in the number of deliveries per active community due to the timing of opening and closing of communities. The decrease in the average sales price of homes delivered in Georgia, Indiana, Minnesota, North Carolina, South Carolina, Tennessee and Virginia was primarily due to pricing to market through an increased use of incentives and product mix. The increase in the average sales price of homes delivered in Illinois and Maryland was primarily due to product mix. In the six months ended May 31, 2024, a decrease in revenues per square foot was more than offset by a decrease in costs per square foot. In addition, land costs increased year over year. Overall, the gross margin percentage of home deliveries remained flat year over year.
Current report — wording carried from elsewhere
Each joint venture is governed by an operating agreement that provides significant substantive participating voting rights on major decisions to our partners.