Welcome to Lennar's first quarter earnings conference call. [Operator Instructions] Today's conference is being recorded. [Operator Instructions] I will now turn the call over to David Collins for the reading of the forward-looking statement.

Thank you, and good morning, everyone. Today's conference call may include forward-looking statements, including statements regarding Lennar's business, financial condition, results of operations, cash flows, strategies and prospects. Forward-looking statements represent only Lennar's estimates on the date of this conference call and are not intended to give any assurance as to actual future results. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties. Many factors could affect future results and may cause Lennar's actual activities or results to differ materially from the activities and results anticipated in forward-looking statements. These factors include those described in our earnings release and our SEC filings, including those under the caption Risk Factors contained in Lennar's annual report on Form 10-K most recently filed with the SEC. Please note that Lennar assumes no obligation to update any forward-looking statements.

Now I'd like to introduce your host, Mr. Stuart Miller, Executive Chairman and Co-CEO. Sir, you may begin.

Very good. Good morning, everybody, and thanks for joining us today. I'm in Miami today, together with Jon Jaffe, our Co-CEO and President; Diane Bessette, our Chief Financial Officer; David Collins, who you just heard from, our Controller and Vice President; and Fred Rothman, our Chief Operating Officer. As usual, today, I'm going to give a brief macro and strategic overview of the company. After my introductory remarks, Jon is going to give an operational overview, updating construction cost, cycle time some of our other operating positions. As usual, Diane is going to give a detailed financial highlight, along with some limited guidance for the second quarter of 2025. And then, of course, we'll have our question-and-answer period. And as usual, I'd like to ask you to please limit to 1 question and 1 follow-up so we can accommodate as many as possible. So let me begin. As we noted in our press release last night, we're very pleased to review our 2025 first quarter results against the backdrop of a challenging economic environment for the housing market. We adhere to our strategy and focus on driving consistent volume and growth by matching sales and production base and using our margin as a circuit breaker. We completed our Moro spin-off, distributing shares to our shareholders and supporting our transition to an asset-light land-light model, and we completed our Rausch Coleman acquisition using our asset-light model as we expand into new markets. While margin and earnings have been adjusting to movements in the overall housing market, we are confident that our focus on volume and even flow will position us very well for resilience, durability and growth in the future. Let me briefly discuss the overall housing market. Consistent with last quarter's earnings call, the macro economy remains challenging as mortgage…

Thank you, and good morning, everyone. Stuart has highlighted for you our strategy of being a consistent high-volume homebuilding manufacturer. I'll further review this as I discuss our performance on sales pace, cost reduction and cycle time reduction along with the execution of our asset-light demand strategy for the first quarter. As noted, our overall first quarter sales pace of 4.1 homes per community per month was wide in line with our stock case of 4.0. This was accomplished with consistent starts and accurate cycle time, which determine the sales pace leaders at each community. Knowing the output of this production, our marketing and sales teams engaged Lennar machine to turn digital needs into appointments and they convert appointments into sales. Throughout each week, we evaluate leads, appointments and sales activity to measure if we are on track to achieve the needed pace. We continuously adjust to ensure we end the week not only with a targeted number of sales but the sales of the right home. If the community falls short on pace in any given week, there's a clear focus on taking action to course correct and get back on pace. To drive the needed level of quality appointments, we focus on improving the experience for our customers to achieve higher conversion rates versus the alternative of chasing more top of funnel needs, which increases marketing spend. We believe our approach produces more qualified and motivated customer appointments, which we can convert into sales at higher conversion rates. During the quarter, as we move past the beginning of February, we do not see the seasonal pickup typically associated with the beginning of the spring selling season. So we continue to lean into our machine, focusing on converting leads and appointments and adjusting incentives as needed to maintain sales…

Thank you, Jon, and good morning, everyone. So Stuart and John have provided a great deal of color regarding our operating performance. So therefore, I am going to spend a few minutes summarizing balance sheet highlights and then provide estimates for the second quarter. So starting with the balance sheet. This quarter, once again, we were highly focused on turning our inventory and generating cash by pricing homes to market conditions. The result of these actions was that we ended the quarter with $2.3 billion of cash and no borrowings on our $3 billion revolving credit facility. This provided total liquidity of approximately $5.3 billion. As noted, during our first quarter, we completed the distribution of shares of Millrose properties to our shareholders. As a result, we spun off from our balance sheet, $5.6 billion of land, representing 87,000 homesites and $1 billion of cash. With this strategic transaction, we completed the next milestone in our journey of becoming a land-light just-in-time manufacturer of home and established a provider of recyclable cash for the future. In addition, we also completed the acquisition of the homebuilding operations of Rausch Coleman home, which extended our footprint into both new and existing markets. As a result of the Millrose and Rausch transaction, we ended the quarter owning 13,000 homesites and controlling 533,000 homesites for a total of 546,000 homesites. As Jon noted, this translated into our years owned supply improving to 0.2 years and our homesites controlled increasing to 98%, our lowest years owned and highest controlled percentage in our history. We believe this portfolio of home sites provides us with a strong competitive position to continue to grow market share and scale in a capital-efficient way. As we look at ratios, our inventory churn was 1.7x, and our return on inventory was…

[Operator Instructions] Our first question comes from Stephen Kim from Evercore ISI.

Appreciate all the color. And I guess my first question relates the long term, whatever the normalized margin that you referred to. I think you -- Stuart, you're referring to the gross margin of kind of the mid-20s. And I was wondering if you could give us a sense for what the operating margin might be after corporate expense. I assume corporate expense, you're thinking maybe longer term like 1.5% or something like that, but it would be helpful to understand what you think the normalized operating margin would be? And what do you think the path looks like to get your SG&A and corporate combined down from its current elevated level?

I think that across the board, Steve, you're really looking at efficiencies that are being brought to all elements of the business. especially in the wake of having spun Millrose and some of the activity that just had to take place as we went through what was a time-intensive program I think that all parts of our business are being relooked at and rerationalized. The simple math that I did was basically around the abnormally high level of incentives that are out there in the market right now to get to the volumes that enable us to realize on the efficiencies that we think we'll ultimately get. So figured out what I think that normalized bottom line operating margin is going to be, but it's significantly higher than where we are right now, where we're basically having to incentivize affordability at a very elevated level.

Okay. But it's fair to say though, you don't think that a 10% to 11% combined SG&A and corporate rate is sort of the normalized level going forward, right?

No, we do not. We actually think that as we get more and more focused on the new version of the way that we're configured, every part of our business will come under efficiency focus. And it starts with elements of the land side of our business, the land acquisition side of our business, the operating side that we've talked about the corporate side, everything becomes simpler as we move forward. It's just going to take some time to embed that.

Yes, Stephen, I guess I would just say, if you go back to kind of No, our SG&A was probably around 7% versus 8% now. So I think that gives you a little bit of a framework. And our corporate G&A was about 1.5% versus 2%. The only thing I'd say there is that we do continue to invest in technology. We see that being a very important component. So that one is a little tougher to call, but agree with Stuart. I think that we're in a more elevated mode now than we will be in the future.

Yes. No, that's encouraging. I guess my second question is a broader one. And it relates to how you've determined what the sales pace is that you wanted to -- you want to build your platform to deliver Obviously, demand has been running below that pace, hence, the incentives and all. But you've expressed the view that demand is ultimately going to normalize higher and that your margins will normalize once that happens. But an alternative you might be that this is the normal level of demand. it's been kind of a while now that the demand has been a little disappointing. And so I'm curious as how long is Lennar going to tolerate subpar margins before you begin to question if maybe the machine is built to maybe it ought to be built to a lower level of volume than what you chose to build it, let's say, a year or 2 ago?

Well, interesting question. I think that we clearly live in a dynamic world in the housing world the question of what normalized demand is, is something that we're going to reassess as we move forward. as we're looking at things right now, it's really very much at the community level. And for the communities that we have, we think we're looking -- or we know we're looking at an absorption rate that we think over time is a normalized absorption rate. Will that change? We'll have to wait and see. But if we think through the math of where the housing market is we keep going back to the fact that we've been underproducing any notion of normalized production for the past 10 to 15 years. And so we think that the underline demand relative to the population and relative to where production has been leaves us in a supply shortage -- and so it's our belief that right now with interest rates where they are with affordability and inflation having affected affordability. We think that the market is undersupplied and that the demand levels and the embedded demand levels are much higher than what is actionable right now. And so that's what we're solving to. Might we change our mind as we go forward as the market evolves, as immigration questions come up and other questions come up. We'll have to wait and see.

I would just add to Stuart's comments that as each new normal presents itself in the future, our machine is very clear, and we have the ability to focus on adjusting it rather quickly throughout the platform.

Okay. So you actually -- if you do change your mind, it's something you're saying you could do relatively quickly, Jon, okay? So that's encouraging. Would you put that in like within a few quarters that you could adjust? Or is it something that you could do even quicker than that, just to clarify?

I think how quickly we'll move will depend on how what's happening relative to a new normal and how severe it might be. And most cycles, it's a much more gradual process and the adjustment is over several quarters. if we find ourselves in a place where we need to move faster, I feel comfortable we can do so.

I think the bottom line answer to the question is we can adjust our production levels and therefore, our sales pace pretty quickly. That would probably take a quarter or 2. So we can make those adjustments pretty nimbly. And I think that we're getting better and better at being able to tweak up or tweak down.

Next, we'll go to the line of Alan Ratner from Zelman & Associates.

Thanks for all the details so far. And congrats on all the exciting moves during the quarter. I know it was a busy time for you guys. So nice job getting all of it to the finish line. So Stuart, I think you walked through the normalized margin conversation well. I'd like to drill in a little bit more there. So obviously, if incentives go back to normal tomorrow, yes, your margins are going back to the mid-20s. But I think one of the advantages of your strategy and your model today is you are turning through your inventory a lot quicker than other builders and a lot of that inventory was underwritten in a different environment when incentives were much lower. So I guess my question is, you guys are out there buying land every day, you're buying a lot of land or tying up a lot of land the land you're tying up today, is it being underwritten to an incentive level closer to today's level? And if so, can you get back to a gross margin north of 20%, even if incentives don't necessarily get back down to that 5%, 6% level over the next few years? Or is it really going to require that type of return to normal to get that margin lift back up?

Alan, we probably haven't told that part of the story well enough yet. The way we've looked at our land reconfiguration is we're focused on turning that land inventory for exactly that reason. As we run through production levels where they are, we are basically selling the land that was underwritten at a different level, and we are redeploying at current levels. So just a second, I'm going to ask Fred to weigh in on this because Fred is kind of front and center in a lot of it. But the whole focus is let's run through the land and the inventory that was bought yesterday and constantly, it is a constantly refreshing a group of assets. both the home inventory and the land inventory and particularly in the difficult market as we're in yesterday's land acquisition isn't going to get better with time. So let's replace it with the next one. Fred, why don't you weigh in?

Sure. So we're very strategic right now in how we're approaching land acquisition. We're being patient, but we're also underwriting the current information and incentives and gearing to higher margins. But we're going to watch to see land tends to be traveling some of the other aspects of our business and moving down. And we're now finally starting to see land sellers site development contractors realize what's happening in the market and we can take advantage of that over time.

Got it. Okay. That's encouraging to hear because it's obviously a big part of the strategy to be able to constantly refresh that cost basis. So I appreciate the thoughts there. Second question, also on margin, but more near term. I know you're not guiding for the remainder of the year. But if you -- it looks like you're closing guidance, which you're maintaining, implies a pretty solid ramp in revenue in the back half of the year. Typically, there is decent seasonality in your gross margin. You have about 150 basis point lift in margins over time in the back half of the year just on a higher revenue number, recognizing all the moving pieces here, you've got purchase accounting you've got mill rose, the cost -- the higher costs going through there, although that's probably more a '26 and beyond story. You've got the Rausch Coleman just mix issue. Should we expect all else equal, a similar seasonal trend in your margin this year? Or are those headwinds going to offset the typical seasonality.

Well, that is definitely a backdoor to asking for some guidance on margin, we're decidedly staying away from that. And I think that the market is still defining itself as we look ahead. There are all kinds of movements in the market that are political and social and economic. I think that we're going to just lead things where they are. We're going to wait and see how the market evolves. I think that going back to your first question, though, Alan, is this is a time where turning assets to cash and then redeploying with a new view of market conditions is a real strategic advantage. It's what we're doing every day. Right now, we're going through our ops reviews. We've been in a number of our divisions, we're midway through. And the focus is on exactly that spending of land continuing to keep the sales pace up and we might take a lower margin, but we're generating cash, and we're redeploying a new understanding of where the market is and potentially where it's going. I think it's going to work to our benefit.

Next, we'll go to the line of John Lovallo from UBS.

Maybe just to parse out the second quarter gross margin or the walk from the 18.7% to the 18%. It sounds like that's excluding the purchase accounting. So Diane, I guess I'm curious what is the expected purchase accounting agreement. And then maybe to Alan's question, I mean, Millrose impact from that seems like it might be more longer dated, but there's probably some impact, maybe 10 to 30 bps from that. And then along the same lines, are you guys currently selling homes at sub-18% margins right now?

To the purchase accounting, yes, it was about 10 basis points in Q1. And I think it will probably be in the range of about 20 basis points in Q2 as we have a full quarter of activity from Rausch. Second part, what was that again, what are we selling at?

The second part was Mill Rose and sorry, then what are you currently selling at now, yes?

Yes. I mean what we're selling the margin guidance that we gave for Q2 was in part because there will be a lot of sell and close activity, and we're probably in that zone. -- with our current sales open closings in the current quarter.

Okay. Understood. And then curious to get just how you guys would respond to sort of the bear argument that we hear quite often. Look, I mean I personally understand the benefits of the even flow strategy over time. But I think there is a perception out there that you've sort of increased the cyclicality in the results, most prominently the margin. And that there's been -- this is sort of a divergence in the discipline that the industry has worked so hard to get credit for over the past decade. How do you guys kind of respond to that?

I'm not sure that I'm fully following the question. But look, we've been through these times before -- and if we have a -- if we're building homes and as we're building homes, we're quite sure that whether it's the land underneath it or whether it's the home itself, in a market that is defining itself to the negative side. The home doesn't get more valuable nor does the land get more valuable with time. We've kept our land assets far more short term. and therefore, to be able to move through the land assets and ultimately to develop the build homes. Tomorrow's pricing is not likely to be a lot better than today. So that's how we're thinking about it. And that's certainly how we've been executing. If we need to tap back on production, that's a decision we'll make as market conditions present themselves.

Next, we'll go to the line of Michael Rehaut from JPMorgan.

Thanks. Good morning, everyone. Thanks for all the details always First, I wanted to 0 in a little bit on some of the mechanics and how to think about the interactivity with Millrose going forward from 2 aspects. One, Obviously, you've already had a significant portion of your land under option to begin with, but now you're taking it up by about another 20 points or so. So I was just wondering, relative to perhaps let's say, fiscal '24, what the full or annualized gross margin impact might be from pushing that additional 20% of your land base through options where theoretically, it might be a little bit of a lower gross margin all else equal. And secondly, on the Millrose side, with tougher sales backdrop, I was wondering if there's any element of walk you away from some options that I'm sure with the 18% average, there's something at one of the tail ends of that curve. And if there would be any kind of option walkaways or things that we should anticipate over the next couple of quarters?

Relative to the margin and the impact of Millrose and to the land banking approach, the migration that we've made to an asset-light program, we've generally seen over time, where it's a little bit -- a little less mixed in with some of the other movements of market conditions, but the impact is generally about 100 basis points. That's what we've kind of calculated as we've gone through the migration over the past years. Of course, if we look at the current situation, it's a little bit more difficult to kind of ferret out exactly what the impact is -- but it does represent about 20% of our business. So you can kind of extrapolate from there in what is kind of a messy calculation right now. In terms of deposit walkaways, we're not thinking about very many, if any, deposit walk away, the cost of walking away is probably higher than just working through the assets at a lower margin. We've been inclined to work through assets at lower margins. And so we're not injecting any deposit walk away in our numbers. We actually think, as we've looked back at current -- at past downturns, including the Great Recession, that the best execution with shorter-term fully developed positions is almost invariably to work through the assets and turn the land asset to cash and redeploy the cash rather than a position of walking through, taking a hit relative to deposit money and ending up not covering your overhead and moving forward. So we think that the way we've configured our program actually incentivizes us and others for that matter, to do the better economic, execute, the better economic solution, take a lower margin work through the asset, redeploy the cash.

Great. secondly, I'd love to just shift the second to the balance sheet and cash flows and now with obviously the Millrose transaction, still pretty close in the rearview mirror, but nonetheless, if you have any updated thoughts around leverage free cash flow. And I believe earlier, there had been talk perhaps of trying to use just net income being more or less equivalent to free cash flow and presumably a significant, if not large portion of that would be towards share repurchase. So any updated thoughts around there? And maybe even what any guardrails around share repurchase for 2025?

Well, look, we've daylighted this repeatedly on prior earnings calls where we expressed explained that the cash flow reconciliation over the next year or so is going to be a complicated business. There are a lot of inflows and outflows Millrose was anomalous in that we were actually spending a large number of assets that ultimately would kind of flip back around into a cash flow negative kind of configuration as we're taking assets off book and then bringing them back on book over time. That rotation, we're going to have to let that work through a little bit. But we do have as kind of a north star and where we're headed a distinct focus on the fact that as this cash flow not only kind of works its way through, we think that we will be generating cash approximately equal to earnings. And we do expect to reignite stock buyback, cash stock buyback program that will be rather robust as that cycling kind of works its way through over the next year.

As I said, the way I think about it is 2025 is a little bit of a year in transition. There's a lot that changed with Millrose just the whole reconfiguration of our balance sheet. But I think as you know, we're always long-term focused, and we strongly believe that the asset-light capital light model that we've developed is going to be really advantageous in the future, and we'll meet all of the goals that we've established, which is generate cash and really make sure that we're increasing total shareholder returns.

Next, we'll go to the line of Susan Maklari from Goldman Sachs.

My first question is just sticking with thoughts on the cash generation of the business. One of the things that you mentioned is that now that then is done, you can accelerate the progress in terms of the even flow production side and standardizing your product and those efforts in there. Can you talk about where you are within that? And how we should think about the progress that can come through over the next quarters and what that will mean to your ability to sustain cash generation even in a more volatile or weaker demand environment?

So I would say that we're pretty early stage in terms of some of the cost rationalization and efficiencies that we know are going to come from the way that we're configured. These last few quarters have really been juggling a number of items to get to the completion of the Millrose spend and the combination with Rausch, which I'd say parenthetically is just -- it's working out to be exactly as expected. And I think that the asset-light approach has worked out very well also. But the more we're now able to focus on a simplified business model, and we're seeing this in our current ops meetings, the ability to focus attention on the component parts that make this a simpler model is, I think, going to generate a lot of benefits as we go forward. As it relates to cash generation, I think that the relationships that we now have established and that we are continuing to create on the land side of the business, where we have a very carefully crafted dance -- it's a lot like appliances or other materials that we put into the home. We have a just-in-time delivery system that's getting more and more efficient and effective. And I think that not only will that kind of rotation or dance of buying land, developing land, providing just-in-time delivered home sites on time as expected. It will look a lot more like the production cycle that we see in the building of a home. And I think the efficiency is embedded in that will be strong.

I would just add, just really enthusiastic, as Stuart said, of early turning land into more of a production commodity to allow us we think to achieve the kind of efficiencies that we've achieved on the production vertical side of our business with land and land development. And we think that there's a lot of opportunity to become more efficient which will translate into our cash flow and into our bottom line.

Yes. But just on the land side, we're being pretty religious right now about making sure that -- we're not pulling land back on our books. We're not accumulating developed homesites as additional inventory. And those efficiencies are going to define your question on cash flow. How do we get cash flow to equal actual earnings, we think that's going to be kind of exactly where we end up.

Okay. That's helpful color. And then thinking about the forward growth of the business, post the spin, does that change how you consider acquisitions. And can you talk about the kinds of deals that you might be interested? And what you're seeing in terms of the M&A pipeline and perhaps the health of some of these smaller private builders given what's going on in the market?

So we've had a -- over the past years, we've actually had a component of our growth that has been defined by combinations with smaller builders, either fortifying physicians in communities that we're already operating in less so relative to growth into new markets. I think that the Rausch Coleman transaction is a more sizable transaction with a strategic operating team that is able to, and I think is looking forward to working within the Lennar systems. I think the coordination that happens there is facilitated by our land programming that I think is going to work very well with the Rausch Coleman program. And that does define the opportunity to think a little bit differently about how we grow. The more standard kind of M&A deals that we've done in the past have been more along the lines of finding land assets and new community count, I think that we'll be able to enter actually new markets in a more strategic way and using an asset-light approach really facilitates the ability to do it in a capital-efficient way. Fred, would you add to that?

Yes. I think the use of Millrose in the Rausch Coleman acquisition was a prime example of where M&A could become available -- but we're very selective, and we're out there looking, but we're going to be very strategic in this as well and continue to use our mills and potentially others to be the source of the capital for the land and us find the operational side. So it's a nice fit, but we're continuing to look at other opportunities.

Okay. Thank you, Susan. And why don't we take 1 more question?

Our final question comes from Ken Zener from Seaport Research Partners.

If you could expand because I think this -- I know you guys are saying again, but it's being missed by investors. Could you expand on your decision to start a home -- on an incremental cash flow basis, where land is increasingly, if not a variable cost. And what you think that means for your cash flow per unit -- because I think that's what is the disconnect between where your model is going and the kind of the focus on a more margin-centric response because that's how the industry traditionally looks at it.

Yes. I guess, Ken, just be repeating what we've said. I mean, I think that we think there's a lot of efficiencies by maintaining the production that offset that, that you might be thinking about. I think as you listen to John, for example, talk about the cost reductions in an inflationary environment, I think those cost reductions that we've seen on the direct construction side are pretty incredible and the ability to have third-party capital available -- so the land component is pretty important as well as covering overhead and those types of things. So you're right, land is definitely increasing. But in our view, when you look at it from a much higher lens, the efficiency is really supersede that.

I'm not sure we [indiscernible].

I want to clarify...

Are you talking about -- are you asking about the decision to build each home?

Yes. Because what people think, if you have a 10% -- let's call it a 10% EBIT margin, right? People think could that be a 10% cash flow? No, it's not because traditional model each unit you sell, you need to go out and right, acquire a raw lot that you need to develop where that's turned into a variable cost, i.e., cash flow is your earnings? I think people are still kind of missing that because it seems to me that's how you're making your choices absent the need to buy land, which outside the margin side is your cash flow drag historically.

Well, listen, I don't think it's quite that linear. The fact is that we're going out and we're looking for a piece of land. And the reality is that land might have to be developed. And it might take 1 year, 1.5 years for the land to actually mature to a developed home site. And while it isn't situated on our books, we have we have been a participant in making the decision on that piece of land, which we basically assign and absorption rate too. It might be 3 homes per month or homes per month, but we are making that decision. The real benefit of where we are is that we're constantly refreshing. We're keeping those land obligations is much shorter. And as they mature to develop home sites, we're taking them down. We're committing to a an absorption rate and that commitment is limited in its scope or in its risk by the amount of deposits and commitment that we have but we are looking at building a model that says where we make a commitment to a takedown schedule, we're going to do our very best to execute on that in order to work through that land. And that's how the land bank becomes a lot more efficient over time, the dependability of that absorption rate will enable them to bring the cost of capital down and rerationalize the actual cost of our inputs relative to the home. So I wouldn't think of it as a home site by homesite optionality that just flows through. But on the other hand, you are running through land on a more cash flow basis and redeploying that cash into better land over a shorter period of time.

I think very much to your point, Stuart. Ken, as that -- as Stuart described for underwriting of land and determine an absorption pace of, say, 4 a month, we're at that time laying out a time line for development to get to that finished home site as Stuart described, and then a time line of start sequences at that 4-month that's going to match. So it's really at the time of underwriting, we're almost making the decision of starting -- when we're going to start homes and the pace and sequence that we're going to stick to.

Right. Very good. I guess my second question would simply be, if you guys can quantify the spread between what you saw in backlog and what became intra-quarter order closings in 1Q comment on the 2Q spread, if it exists or not. And if you're share count guidance, Diane for 2Q, what that effect would be if your exchange was fully executed.

Well, if I look at the second quarter, just from a high level, what's in backlog and it's pretty close to that 18% and what we expect to sell close to that as well on what we've experienced so far. So that's why -- as Stuart mentioned, the margin will really be dependent on that selling close as we go forward. We don't have a lot of data behind us, right, much for just a couple of weeks to the extent that the increases or decreases our margin will be impacted because there is always a lot of selling close in the same quarter. But right now, everything is hovering around the margin guidance that we gave.

Okay. Thanks, Ken. And let's end it there. I want to thank everyone for joining us. These are tricky times as we look at the housing industry. You can always count on getting a straight shot from Bernard, we're going to tell you where the market is and how we're addressing it and look forward to keeping you updated as we go forward through 2025. Thank you, everyone.

That concludes Lennar's first quarter earnings conference call. Thank you all for participating. You may disconnect at this time, and please enjoy the rest of your day.