Lennar Corporation (NYSE:LEN) Q3 2020 Earnings Conference Call - Final Transcript

Sep 15, 2020 • 11:00 am ET


Lennar Corporation (NYSE:LEN) Q3 2020 Earnings Conference Call - Final Transcript


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Stuart Miller

options versus owned land strategy and we will continue to manage towards a 50-50 target. At the end of the third quarter, we had expanded our options percentage to 35% from 30% earlier in the year. We also continue to focus on cash flow and returns on equity and capital, as we ended the quarter with almost $2 billion of cash on hand, zero drawn on our revolver, and a healthy debt to total cap of 29.5%.

Needless to say, our well-known technology initiatives have contributed meaningfully to our readiness for current economic and structural shifts, while helping to improve our core business and drive SG&A to an historical low of 8%. Concurrently, our meaningful investments in technology disrupter companies have not only informed change within Lennar, but are proving to be successful investments in their own right.

Today's announcement by Opendoor and early Lennar investment is a case in point. Opendoor pioneered the eye buyer space, an Opendoor and Lennar jointly develop the seamless move up program that today is becoming an industry standard. By coordinating and redefining the move-up buyer sale of their first home, while moving up to a larger home, the customer experience is becoming a frictionless, coordinated and joyful engagement, less friction means more transactions, and more transactions at a lower cost to all parties engaged.

I'd like to take a quick moment to congratulate our friends at Opendoor and their leader Eric Wu, as they take their vision and their dreams to the next level for us at Lennar, it has been an honor to be part of their journey thus far. As we have learned and adjusted together to build a leader and innovator in the iBuyer space. In advance of the completion of Opendoor's transaction with Social Capital, we would like to welcome you Opendoor to the public markets, as you continue to define the path forward in this industry transforming space.

In conclusion, let me say that our third quarter results were solid in all respects, and they reflect our focused execution on our strategy to balance between growth, margin, cash flow and returns. In just a minute. Diane, will give some additional color on our third quarter numbers and our expectations for the fourth quarter. But before turning over to Diane, let me say the third quarter has been a clear point of pivot for the housing market in general from the slowdown created by COVID to the expansion ignited by COVID.

Today, the home is becoming more and more essential to the way we live and the quality of our lives. The home, which used to be just shelter is now becoming the hub of your life. It is our shelter and our multiple generations shelter. It is our office, our gym, our recreation center and our school. It is WiFi connected and it is automated, it is sustainable and environmentally sensitive, it is both a healthy home and a health system. While some of these elements will change