Matthew Bouley: So, I just wanted to ask about sort of the, I guess, the downside scenarios. The balance between price, margins and pace, clearly, your price taker model is successfully keeping that sales pace elevated and you’re getting the cash generation out of that. And I know you mentioned the 21% gross margin is going to be — or potentially the low point for the year. But my question is if market conditions were to deteriorate, kind of where the limit is to your willingness to trade margin further? Is there somewhere where you would draw the line? Basically, how does the model kind of change when you get to these levels on gross margin? Thank you.
Stuart Miller: Well, let me just say that as I noted just a minute ago, we’ve been preparing for this for quite a long time. We have been focused on building efficiencies, sticky efficiencies into our SG&A, especially at the division level over the past years, quarter-by-quarter, basis points by basis points, we have been refining, reducing the cost of doing business. I think that if market conditions were to continue to deteriorate, we’re going to continue to lean into the consistent program going forward. We have a lot of room to be able to make those adjustments. I think that there’s been some concern about notions of impairment. There might be some modest impairments that flow through with further deterioration, but it’s not going to be the significant kind of programming that you’ve seen in the past.
I think we’ve got really terrific shock absorbers within our operating platform to be able to continue the program even as — even if you look at a downside scenario, we’ll continue to be building and volume focused through alterations of the market.
Rick Beckwitt: And you really can’t underestimate the leverage that we get in working with our trade partners as things slow down across the board. People are looking for work. If we’re going to be the ones out there to do — starting homes, we’re going to get cost concessions, bringing cost concessions from our trade partners, from our land partners, and we’re just going to continue, as Jon said, value engineer and re-specify product in order to make it more affordable, so we can have more higher margins.
Matthew Bouley: And second one, Stuart, you just alluded to it, but I wanted to ask about the impairment side. You did take the small write-downs in the quarter. It sounds like you’re — as you just mentioned, that you might expect some smaller ones going forward. But just kind of I guess, number one, given what you did write down this quarter, did that kind of clear the deck, so to speak, or as you think about potential market deterioration, what would be that kind of next decile of communities where there is risk? Just kind of any elaboration on owned land impairments and then further option walkaways?
Stuart Miller: Okay. Look, I understand the concern and the black box of impairments that naturally people feel. If you look historically, we’ve been very quick to get ahead of the curve. And so, when you ask the question, did we clear the decks, we’re always clearing the decks and that’s how we think about it. The answer is as if the market is going to continue to deteriorate, and we can’t put a boundary on what that might mean. We’re going to always be straightforward and give as much visibility as possible. And I don’t think there’s additional visibility to give right now. I think that the size and scale of what we took as an impairment is about all there is. We really — especially given cash and balance sheet and everything else, we really shook the tree this time and — as we always do, and the — cleared the decks, as you say. I think you’re going to consistently see that with Lennar. It’s always been the case with Lennar. Diane, do you want to add to it?
Diane Bessette: Yes. I was going to say, Matt, if you think about what you’re looking for an impairment, it’s where you’re finding negative net margins. And so if you look at where our gross margins are, it’s not a surprise that our impairment split between backlog and active communities. On the active communities side, it was 8 communities, and we have 1,200. So, there’s always going to be some communities that have negative net margins. But given where we are as a company on average, I don’t think that the concern for net margin should be as great as some people are articulating. There’s always going to be some backlog adjustments. There’s always going to be some communities that are below the norm, but I don’t think we’re anywhere near the widespread impairments that people are voicing concern over.
Operator: Next, we’ll go to the line of Truman Patterson from Wolfe Research.
Truman Patterson: Diane, congratulations on the cash balance. So first question is kind of three part with your dynamic pricing model. One, could you just elaborate on it a bit more with perhaps not giving away too much competitively, if you will. But second, I understand every market is different, but could you just discuss generally what level of pricing maybe below nearby competing communities is generally needed to move the inventory. And then three, you all, Stuart, I believe, said that incentives kind of accelerated through the quarter, discounts. Any way in orders, you could just kind of give us an understanding where you sat in November, December versus maybe a year ago?
Stuart Miller: So, was the first part that he was asking about the pricing model?
Diane Bessette: Dynamic, yes.
Truman Patterson: Yes, yes, the dynamic pricing.
Diane Bessette: And the one of the questions…
