2014

Lennar Reports Fourth Quarter and Fiscal Year Results

MIAMI, Jan. 7 /PRNewswire-FirstCall/ --

2009 Fourth Quarter

  • Revenues of $913.7 million - down 29%
  • Earnings per share of $0.19 (includes $1.34 earnings per share related to the reduction of the deferred tax asset valuation allowance primarily due to a NOL carryback, offset by a $0.58 per share charge related to valuation adjustments and other write-offs and a $0.31 per share charge related to valuation adjustments to land the Company intends to sell or has sold to third parties)
  • Gross margin on home sales of 17.8% (excluding valuation adjustments of $55.5 million)
    • Improved 80 basis points from Q4 2008
    • Improved 220 basis points from Q3 2009
  • Gross margin on home sales of 11.1% (including valuation adjustments)
    • Decreased 50 basis points from Q4 2008
    • Improved 330 basis points from Q3 2009
  • S,G&A expenses decreased $32.2 million, or 19%
  • S,G&A expenses as a % of revenues from home sales of 16.2% - up 210 basis points
  • Homebuilding cash of $1.3 billion and no outstanding borrowings under the Company's credit facility
  • Homebuilding debt to total capital, net of homebuilding cash, of 36.9%
  • Maximum recourse indebtedness related to the Company's unconsolidated entities of $287.7 million - reduced $92.6 million since Q3 2009
  • Deliveries of 3,496 homes - down 23% from Q4 2008; up 30% from Q3 2009
  • New orders of 2,652 homes - up 3%
  • Cancellation rate of 20% - compared to 32%
  • Backlog dollar value of $479.6 million - improved 5%

2009 Fiscal Year

  • Revenues of $3.1 billion - down 32%
  • Loss per share of $2.45 (includes a $1.73 per share charge related to valuation adjustments and other write-offs and a $0.35 per share charge related to valuation adjustments to land the Company intends to sell or has sold to third parties, offset by $0.48 earnings per share related to the reduction of the deferred tax asset valuation allowance primarily due to a NOL carryback)
  • Deliveries of 11,478 homes - down 27%
  • New orders of 11,510 homes - down 14%
  • Cancellation rate of 18% - compared to 26%

Lennar Corporation (NYSE: LEN and LEN.B), one of the nation's largest homebuilders, today reported results for its fourth quarter and fiscal year ended November 30, 2009. Fourth quarter net earnings in 2009 were $35.6 million, or $0.19 per diluted share, compared to a net loss of $811.0 million, or $5.12 per diluted share, in 2008. The net loss for the year ended November 30, 2009 was $417.1 million, or $2.45 per diluted share, compared to a net loss of $1,109.1 million, or $7.00 per diluted share, in 2008.

Stuart Miller, President and Chief Executive Officer of Lennar Corporation, said, "During the fourth quarter, the overall housing market continued to move towards stabilization as more confident homebuyers took advantage of increased affordability and the $8,000 federal tax credit. While we continue to adapt our business in light of the current economic landscape and its challenges, we are optimistic that homebuyers have recognized that the residential housing market is improving and will continue to take advantage of the extended housing stimulus."

Mr. Miller continued, "We continued to focus on the basics of our homebuilding operations, as we strategically position our company to return to profitability in 2010. We experienced the first year-over-year increase in new orders since our first quarter of 2006. Additionally, our fourth quarter results reflected a sequential improvement of 190 basis points in pre-impairment operating margin. This improvement was primarily driven by reduced sales incentives, lower construction costs and the successful rollout of our new value-engineered products."

Mr. Miller concluded, "We ended the year with $1.3 billion in cash and a responsible homebuilding debt-to-total capital ratio, net of homebuilding cash, of 36.9%. Additionally, as a result of tax legislation that was enacted in our fourth quarter, we will receive a tax refund of approximately $320 million in early 2010. Our improved balance sheet enables us to continue to capitalize on distressed land-buying opportunities, which will improve our operating results in 2010 and beyond."

RESULTS OF OPERATIONS

THREE MONTHS ENDED NOVEMBER 30, 2009 COMPARED TO

THREE MONTHS ENDED NOVEMBER 30, 2008

Homebuilding

Revenues from home sales decreased 30% in the fourth quarter of 2009 to $830.2 million from $1,183.1 million in 2008. Revenues were lower primarily due to a 22% decrease in the number of home deliveries, excluding unconsolidated entities, and a 9% decrease in the average sales price of homes delivered in the fourth quarter of 2009. New home deliveries, excluding unconsolidated entities, decreased to 3,488 homes in the fourth quarter of 2009 from 4,484 homes last year. In the fourth quarter of 2009, new home deliveries were lower in each of the Company's homebuilding segments and Homebuilding Other, compared to 2008. The average sales price of homes delivered decreased to $238,000 in the fourth quarter of 2009 from $262,000 in the same period last year. Sales incentives offered to homebuyers were $36,300 per home delivered in the fourth quarter of 2009, compared to $51,400 per home delivered in the same period last year, and declined sequentially from $42,200 per home delivered in the third quarter of 2009.

Gross margins on home sales excluding valuation adjustments were $147.7 million, or 17.8%, in the fourth quarter of 2009, compared to $200.8 million, or 17.0%, in the fourth quarter of 2008. Gross margin percentage on home sales, excluding valuation adjustments, improved compared to last year, due primarily to reduced sales incentives as a percentage of revenues from home sales, decreasing to 13.2% in the fourth quarter of 2009, from 16.4% in the fourth quarter of 2008. Gross margins on home sales were $92.2 million, or 11.1%, in the fourth quarter of 2009, which included $55.5 million of valuation adjustments, compared to gross margins on home sales of $137.4 million, or 11.6%, in the fourth quarter of 2008, which included $63.4 million of valuation adjustments. Gross margins on home sales excluding valuation adjustments is a non-GAAP financial measure (please refer to the Non-GAAP Financial Measure section within this release).

Homebuilding interest expense was $47.9 million in the fourth quarter of 2009 ($21.9 million was included in cost of homes sold, $4.1 million in cost of land sold and $21.9 million in interest expense), compared to $32.4 million in the fourth quarter of 2008 ($25.8 million was included in cost of homes sold, $1.1 million in cost of land sold and $5.5 million in interest expense). Despite a decrease in deliveries during the fourth quarter of 2009, compared to the fourth quarter of 2008, interest expense increased primarily due to the interest related to the $400 million 12.25% senior notes due 2017 issued during the second quarter of 2009, as well as a reduction in qualifying assets eligible for interest capitalization as a result of a decrease in inventories from prior year.

Selling, general and administrative expenses were reduced by $32.2 million, or 19%, in the fourth quarter of 2009, compared to the same period last year, primarily due to reductions in associate headcount, variable selling expenses and fixed costs. As a percentage of revenues from home sales, selling, general and administrative expenses increased to 16.2% in the fourth quarter of 2009, from 14.1% in the fourth quarter of 2008, due to lower revenues and non recurring lease termination charges and legal expenses.

Losses on land sales totaled $161.3 million in the fourth quarter of 2009, which included $102.4 million of valuation adjustments (of which $71.6 million related to actual land sales completed during the quarter) and $63.6 million of write-offs of deposits and pre-acquisition costs related to homesites under option that the Company does not intend to purchase. In the fourth quarter of 2008, losses on land sales totaled $72.5 million, which included $16.7 million of valuation adjustments and $62.9 million of write-offs of deposits and pre-acquisition costs related to homesites that were under option.

Equity in loss from unconsolidated entities was $25.8 million in the fourth quarter of 2009, which included $20.9 million of valuation adjustments related to assets of unconsolidated entities in which the Company has investments, compared to equity in loss from unconsolidated entities of $6.3 million in the fourth quarter of 2008, which included $2.4 million of valuation adjustments related to assets of unconsolidated entities in which the Company has investments.

Other expense, net, totaled $25.3 million in the fourth quarter of 2009, which included $17.2 million of valuation adjustments to the Company's investments in unconsolidated entities and $9.1 million of write-offs of notes and other receivables, compared to other expense, net, of $72.6 million in the fourth quarter of 2008, which included $56.3 million of valuation adjustments to the Company's investments in unconsolidated entities and $19.4 million of write-offs of notes and other receivables.

Minority interest income (expense), net was $17.9 million in the fourth quarter of 2009, which included $13.6 million of minority interest income as a result of a $27.2 million valuation adjustment to inventories of 50%-owned consolidated joint ventures, compared to minority interest income (expense), net of ($4.9) million in the fourth quarter of 2008.

Sales of land, equity in loss from unconsolidated entities, other expense, net and minority interest income (expense), net may vary significantly from period to period depending on the timing of land sales and other transactions entered into by the Company and unconsolidated entities in which it has investments.

Financial Services

Operating earnings for the Financial Services segment was $7.8 million in the fourth quarter of 2009, compared to an operating loss of $5.4 million in the same period last year. The increase in profitability in the Financial Services segment was primarily due to lower fixed costs as a result of successful cost reduction initiatives implemented throughout the downturn.

Corporate General and Administrative Expenses

Corporate general and administrative expenses increased by $2.5 million, or 8%, in the fourth quarter of 2009, compared to the same period last year. As a percentage of total revenues, corporate general and administrative expenses increased to 3.7% in the fourth quarter of 2009, from 2.4% in the fourth quarter of 2008, primarily due to lower revenues and non recurring lease termination charges.

Deferred Tax Asset Valuation Allowance

Generally Accepted Accounting Principles ("GAAP") requires a reduction of the carrying amounts of deferred tax assets by a valuation allowance, if based on available evidence, it is more likely than not that such assets will not be realized. As a result of its net operating loss during the fourth quarter of 2009, the Company generated deferred tax assets of $106.5 million and recorded a non-cash valuation allowance against the entire amount of the deferred tax assets. In addition, the Company recorded a reversal of its deferred tax asset valuation allowance of $351.8 million during the fourth quarter of 2009, primarily due to a change in tax legislation, which allowed the Company to carry back its fiscal year 2009 tax loss to recover previously paid income taxes.

YEAR ENDED NOVEMBER 30, 2009 COMPARED TO YEAR ENDED NOVEMBER 30, 2008

Homebuilding

Revenues from home sales decreased 33% in the year ended November 30, 2009 to $2.8 billion from $4.2 billion in 2008. Revenues were lower primarily due to a 26% decrease in the number of home deliveries, excluding unconsolidated entities, and a 10% decrease in the average sales price of homes delivered in 2009. New home deliveries, excluding unconsolidated entities, decreased to 11,422 homes in the year ended November 30, 2009 from 15,344 homes last year. In the year ended November 30, 2009, new home deliveries were lower in each of the Company's homebuilding segments and Homebuilding Other, compared to 2008. The average sales price of homes delivered decreased to $243,000 in the year ended November 30, 2009 from $270,000 in 2008. Sales incentives offered to homebuyers were $44,800 per home delivered in the year ended November 30, 2009, compared to $48,700 per home delivered last year.

Gross margins on home sales excluding valuation adjustments were $432.2 million, or 15.6%, in the year ended November 30, 2009, compared to $705.1 million, or 17.0%, in 2008. Gross margin percentage on home sales, excluding valuation adjustments, decreased compared to last year, due primarily to reduced pricing. Gross margins on home sales were $252.0 million, or 9.1%, in the year ended November 30, 2009, which included $180.2 million of valuation adjustments, compared to gross margins on home sales of $509.6 million, or 12.3%, in the year ended November 30, 2008, which included $195.5 million of valuation adjustments. Gross margins on home sales excluding valuation adjustments is a Non-GAAP financial measure (please refer to the Non-GAAP Financial Measure section within this release).

Homebuilding interest expense was $147.4 million in the year ended November 30, 2009 ($67.4 million was included in cost of homes sold, $9.2 million in cost of land sold and $70.9 million in interest expense), compared to $130.4 million in the year ended November 30, 2008 ($99.3 million was included in cost of homes sold, $3.4 million in cost of land sold and $27.6 million in interest expense). Despite a decrease in deliveries during the year ended November 30, 2009, compared to last year, interest expense increased primarily due to the interest related to the $400 million 12.25% senior notes due 2017 issued during the second quarter of 2009, as well as a reduction in qualifying assets eligible for interest capitalization as a result of a decrease in inventories from prior year.

Selling, general and administrative expenses were reduced by $206.0 million, or 31%, in the year ended November 30, 2009, compared to last year, primarily due to reductions in associate headcount, variable selling expenses and fixed costs. As a percentage of revenues from home sales, selling, general and administrative expenses increased to 16.2% in the year ended November 30, 2009, from 15.8% in 2008, due to lower revenues.

Losses on land sales totaled $178.8 million in the year ended November 30, 2009, which included $108.9 million of valuation adjustments and $84.4 million of write-offs of deposits and pre-acquisition costs related to homesites under option that the Company does not intend to purchase. In the year ended November 30, 2008, losses on land sales totaled $133.2 million, which included $47.8 million of valuation adjustments and $97.2 million of write-offs of deposits and pre-acquisition costs related to homesites that were under option.

Equity in loss from unconsolidated entities was $130.9 million in the year ended November 30, 2009, which included $101.9 million of valuation adjustments related to assets of unconsolidated entities in which the Company has investments, compared to equity in loss from unconsolidated entities of $59.2 million in the year ended November 30, 2008, which included $32.2 million of valuation adjustments related to assets of unconsolidated entities in which the Company has investments.

Other expense, net totaled $98.4 million in the year ended November 30, 2009, which included $89.0 million of valuation adjustments to the Company's investments in unconsolidated entities and $9.7 million of write-offs of notes and other receivables, compared to other expense, net of $172.4 million in the year ended November 30, 2008, which included $172.8 million of valuation adjustments to the Company's investments in unconsolidated entities and $25.0 million of write-offs of notes and other receivables.

Minority interest income, net was $28.9 million in the year ended November 30, 2009, which included $13.6 million of minority interest income as a result of a $27.2 million valuation adjustment to inventories of 50%-owned consolidated joint ventures, compared to minority interest income, net of $4.1 million in the year ended November 30, 2008.

Sales of land, equity in loss from unconsolidated entities, other expense, net and minority interest income, net may vary significantly from period to period depending on the timing of land sales and other transactions entered into by the Company and unconsolidated entities in which it has investments.

Financial Services

Operating earnings for the Financial Services segment was $36.0 million in the year ended November 30, 2009, compared to an operating loss of $31.0 million last year. The increase in profitability in the Financial Services segment was primarily due to lower fixed costs as a result of successful cost reduction initiatives implemented throughout the downturn. In addition, in the year ended November 30, 2008, there was a $27.2 million write-off of goodwill related to the segment's mortgage operations, compared to no write-off in the year ended November 30, 2009.

Corporate General and Administrative Expenses

Corporate general and administrative expenses were reduced by $9.7 million, or 7%, for the year ended November 30, 2009, compared to 2008. As a percentage of total revenues, corporate general and administrative expenses increased to 3.8% in the year ended November 30, 2009, from 2.8% last year, due to lower revenues.

Deferred Tax Asset Valuation Allowance

GAAP requires a reduction of the carrying amounts of deferred tax assets by a valuation allowance, if based on available evidence, it is more likely than not that such assets will not be realized. As a result of its net operating loss during the year ended November 30, 2009, the Company generated deferred tax assets of $269.6 million and recorded a non-cash valuation allowance against the entire amount of the deferred tax assets. In addition, the Company recorded a reversal of its deferred tax asset valuation allowance of $351.8 million during the fourth quarter of 2009, primarily due to a change in tax legislation, which allowed the Company to carry back its fiscal year 2009 tax loss to recover previously paid income taxes.

Debt Repurchase/Debt Issuance

In March 2009, the Company retired its $281 million 7 5/8% senior notes due March 2009 for 100% of the outstanding principal amount, plus accrued interest as of the maturity date.

In April 2009, the Company issued $400 million of 12.25% senior notes due 2017 in a private placement under SEC Rule 144A.

During 2009, the Company redeemed $50 million of its 5.125% senior notes due 2010 and $5 million of its 5.95% senior notes due 2011.

Equity Draw-down Program

As of November 30, 2009, the Company had issued 21.0 million shares of its Class A common stock under an equity draw-down program for gross proceeds of $225.5 million. The Company is authorized to sell shares for up to $275 million under the equity draw-down program.

LandSource/Newhall

In July 2009, the United States Bankruptcy Court for the District of Delaware confirmed the plan of reorganization for LandSource. As a result of the bankruptcy proceedings, LandSource was reorganized into a new company called Newhall Land Development, LLC, ("Newhall"). The reorganized company emerged from Chapter 11 with more than $90 million in cash and free of debt. In addition, as part of the reorganization plan, the Company invested approximately $140 million in exchange for a 15% equity interest in the reorganized Newhall, ownership in several communities that were formerly owned by LandSource and the settlement and release of any claims that might have been asserted against the Company.

Non-GAAP Financial Measure

Gross margins on home sales excluding valuation adjustments is a non-GAAP financial measure, and is defined by the Company as sales of homes revenue less costs of homes sold excluding valuation adjustments recorded during the period. Management finds this to be an important and useful measure in evaluating the Company's performance because it discloses the profit the Company generates on homes it actually delivered during the period, as the Company's valuation adjustments relate to inventory that it did not deliver during the period. Gross margins on home sales excluding valuation adjustments also is important to management, because it assists management in making strategic decisions regarding the Company's construction pace, product mix and product pricing based upon the profitability the Company generated on homes it actually delivered during previous periods. The Company believes investors also find gross margins on home sales excluding valuation adjustments to be important and useful because it discloses a profitability measure on homes the Company actually delivered in a period that can be compared to the profitability on homes the Company delivered in a prior period without regard to the variability of valuation adjustments recorded from period to period. In addition, to the extent that the Company's competitors provide similar information, disclosure of the Company's gross margins on home sales excluding valuation adjustments helps readers of the Company's financial statements compare the Company's ability to generate profits with regard to the homes it delivers in a period to its competitors' ability to generate profits with regard to the homes they deliver in the same period.

Although management finds gross margins on home sales excluding valuation adjustments to be an important measure in conducting and evaluating the Company's operations, this measure has limitations as an analytical tool as it is not reflective of the actual profitability generated by the Company during the period. This is because it excludes charges the Company recorded, in accordance with GAAP, relating to inventory that was impaired during the period. In addition, because gross margins on home sales excluding valuation adjustments is a financial measure that is not calculated in accordance with GAAP, it may not be completely comparable to similarly titled measures of the Company's competitors due to differences in methods of calculation and charges being excluded.

Management compensates for the limitations of using gross margins on home sales excluding valuation adjustments by using this non-GAAP measure only to supplement the Company's GAAP results in order to provide a more complete understanding of the factors and trends affecting the Company's operations. In order to analyze the Company's overall performance and actual profitability relative to its homebuilding operations, the Company also compares its gross margins on home sales during the period, inclusive of valuation adjustments, with the same measure during prior comparable periods. Due to the limitations discussed above, gross margins on home sales excluding valuation adjustments should not be viewed in isolation as it is not a substitute for GAAP measures of gross margins.

Lennar Corporation, founded in 1954, is one of the nation's leading builders of quality homes for all generations. The Company builds affordable, move-up and retirement homes primarily under the Lennar brand name. Lennar's Financial Services segment provides primarily mortgage financing, title insurance and closing services for both buyers of the Company's homes and others. Previous press releases and further information about the Company may be obtained at the "Investor Relations" section of the Company's website, www.lennar.com.

Some of the statements in this press release are "forward-looking statements," as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding our business, financial condition, results of operations, cash flows, strategies and prospects. You can identify forward-looking statements by the fact that these statements do not relate strictly to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends or 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 cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements. These factors include those described under the caption "Risk Factors" in Item 1A of our Annual Report on Form 10-K for our fiscal year ended November 30, 2008. We do not undertake any obligation to update forward-looking statements, except as required by Federal securities laws.

A conference call to discuss the Company's fourth quarter earnings will be held at 11:00 a.m. Eastern time on Thursday, January 7, 2010. The call will be broadcast live on the Internet and can be accessed through the Company's website at www.lennar.com. If you are unable to participate in the conference call, the call will be archived at www.lennar.com for 90 days. A replay of the conference call will also be available later that day by calling 402-220-3897 and entering 5723593 as the confirmation number.




                     LENNAR CORPORATION AND SUBSIDIARIES

                  Selected Revenues and Operational Information
                   (In thousands, except per share amounts)
                                  (unaudited)

                                    Three Months Ended       Years Ended
                                       November 30,          November 30,
                                       ------------          ------------
                                     2009       2008       2009        2008
                                     ----       ----       ----        ----

    Revenues:
      Homebuilding                 $856,409  1,206,562  2,834,285   4,263,038
      Financial services             57,332     71,486    285,102     312,379
                                     ------     ------    -------     -------
          Total revenues           $913,741  1,278,048  3,119,387   4,575,417
                                   --------  ---------  ---------   ---------

    Homebuilding operating loss   $(258,933)   (58,228)  (647,381)   (400,786)
    Financial services operating
     earnings (loss)                  7,795     (5,423)    35,982     (30,990)
    Corporate general and
     administrative expenses        (33,770)   (31,299)  (120,093)   (129,752)
                                    -------    -------   --------    --------
    Loss before benefit (provision)
     for income taxes              (284,908)   (94,950)  (731,492)   (561,528)
    Benefit (provision) for income
     taxes                          320,480   (716,039)   314,345    (547,557)
                                    -------   --------    -------    --------
    Net earnings (loss)             $35,572   (810,989)  (417,147) (1,109,085)
                                    =======   ========   ========  ==========
    Average shares outstanding:
      Basic                         182,175    158,529    170,537     158,395
                                    =======    =======    =======     =======
      Diluted                       182,885    158,529    170,537     158,395
                                    =======    =======    =======     =======

    Earnings (loss) per share:
      Basic                           $0.20      (5.12)     (2.45)      (7.00)
                                      =====      =====      =====       =====
      Diluted                         $0.19      (5.12)     (2.45)      (7.00)
                                      =====      =====      =====       =====

    Supplemental information:
      Interest incurred (1)         $49,124     37,576    172,115     148,293
                                    =======     ======    =======     =======
      EBIT before valuation
       adjustments and write-offs
       of option deposits and
       pre-acquisition costs,
       notes and other receivables
       and goodwill (2):
        Loss before benefit
         (provision) for
         income taxes             $(284,908)   (94,950)  (731,492)   (561,528)
        Interest expense             47,930     32,371    147,449     130,357
        Valuation adjustments and
         write-s offs of option
         deposits and pre-acquisition
         costs, notes and other
         receivables and goodwill   255,201    221,099    560,449     597,710
                                    -------    -------    -------     -------
          EBIT before valuation
           adjustments and write-offs
           of option deposits and
           pre-acquisition costs, notes
           and other receivables and
           goodwill                 $18,223    158,520    (23,594)    166,539
                                    =======    =======    =======     =======

    (1)  Amount represents interest incurred related to homebuilding debt.
    (2)  EBIT before valuation adjustments and write-offs of option
    deposits and pre-acquisition costs, notes and other receivables and
    goodwill is a non-GAAP financial measure derived by adding back interest
    expense, valuation adjustments and write-offs of option deposits
    and pre-acquisition costs, notes and other receivables and goodwill
    reflected in loss before benefit (provision) for income taxes.  This
    financial measure has been presented because the Company finds it useful
    and important in evaluating its performance and believes that it helps
    readers of the Company's financial statements compare its operations
    with those of its competitors.




                      LENNAR CORPORATION AND SUBSIDIARIES

                            Homebuilding Information
                                 (In thousands)
                                  (unaudited)


                                   Three Months Ended        Years Ended
                                       November 30,          November 30,
                                       ------------          ------------
                                     2009       2008       2009        2008
                                     ----       ----       ----        ----
    Revenues:
      Sales of homes               $830,226  1,183,066  2,776,850   4,150,717
      Sales of land                  26,183     23,496     57,435     112,321
                                     ------     ------     ------     -------
        Total revenues              856,409  1,206,562  2,834,285   4,263,038
                                    -------  ---------  ---------   ---------
    Costs and expenses:
      Cost of homes sold            737,996  1,045,622  2,524,850   3,641,090
      Cost of land sold             187,438     96,010    236,277     245,536
      Selling, general and
       administrative               134,758    166,967    449,259     655,255
                                    -------    -------    -------     -------
        Total costs and expenses  1,060,192  1,308,599  3,210,386   4,541,881
                                  ---------  ---------  ---------   ---------
    Homebuilding operating margins (203,783)  (102,037)  (376,101)   (278,843)
    Gain on recapitalization of
     unconsolidated entity                -    133,097          -     133,097
    Equity in loss from
     unconsolidated entities        (25,807)    (6,299)  (130,917)    (59,156)
    Other expense, net              (25,322)   (72,612)   (98,425)   (172,387)
    Interest expense                (21,900)    (5,474)   (70,850)    (27,594)
    Minority interest income
     (expense), net                  17,879     (4,903)    28,912       4,097
                                     ------     ------     ------       -----
    Homebuilding operating loss   $(258,933)   (58,228)  (647,381)   (400,786)
                                  =========    =======   ========    ========

    Reconciliation of gross margins
     on home sales excluding valuation
     adjustments to gross
     margins on home sales:
      Sales of homes               $830,226  1,183,066  2,776,850   4,150,717
      Cost of homes sold            737,996  1,045,622  2,524,850   3,641,090
                                    -------  ---------  ---------   ---------
        Gross margins on home sales  92,230    137,444    252,000     509,627
      Valuation adjustments to
       finished homes, CIP and
       land on which the Company
       intends to build homes        55,503     63,385    180,239     195,518
                                     ------     ------    -------     -------
          Gross margins on home
           sales excluding
           valuation adjustments   $147,733    200,829    432,239     705,145
                                   ========    =======    =======     =======




                         LENNAR CORPORATION AND SUBSIDIARIES

                         Valuation Adjustments and Write-offs
                                    (In thousands)
                                      (unaudited)

                                        Three Months Ended   Years Ended
                                           November 30,      November 30,
                                           ------------     -------------
                                           2009    2008     2009     2008
                                           ----    ----     ----     ----
    Valuation adjustments to
     finished homes, CIP and land on
     which the Company intends
     to build homes:
      East                               $12,698  25,824   73,670   76,791
      Central                              2,140   7,035   13,603   28,142
      West                                23,192  26,654   64,095   75,614
      Houston                                356   1,468    1,116    2,262
      Other                               17,117   2,404   27,755   12,709
                                          ------   -----   ------   ------
         Total                            55,503  63,385  180,239  195,518
                                          ------  ------  -------  -------
    Valuation adjustments to land the
     Company intends to sell or
     has sold to third parties:
      East (1)                            21,350   9,411   23,467   23,251
      Central                                124   1,598    1,309   12,369
      West                                36,146   5,657   38,679   11,094
      Houston                                 46      29      674      137
      Other                               31,185      47   31,185      940
                                          ------     ---   ------      ---
         Total                            88,851  16,742   95,314   47,791
                                          ------  ------   ------   ------
    Write-offs of option deposits
     and pre-acquisition costs:
      East                                52,388   7,979   64,131   18,989
      Central                                  -     188       82    6,024
      West                                 9,420  52,374   13,902   62,447
      Houston                              1,750       -    2,471      745
      Other                                    -   2,331    3,786    8,967
                                             ---   -----    -----    -----
         Total                            63,558  62,872   84,372   97,172
                                          ------  ------   ------   ------
    Company's share of valuation
     adjustments related to assets
     of unconsolidated entities:
      East                                   253       -      504    7,241
      Central                              4,730   1,574    6,184    1,732
      West                                15,369     805   94,665   22,675
      Houston                                540       -      540        -
      Other                                    -       -        -      597
                                             ---     ---      ---      ---
         Total                            20,892   2,379  101,893   32,245
                                          ------   -----  -------   ------
    Valuation adjustments to
     investments in unconsolidated
     entities included in other
     expense, net:
      East                                 2,415  34,169    4,981   54,340
      Central                                  -  10,776   13,179   11,197
      West                                11,200   7,600   65,607   90,193
      Houston                              1,317       -    1,317        -
      Other                                2,317   3,754    3,888   17,060
                                          -----   -----     -----   ------
         Total                            17,249  56,299   88,972  172,790
                                          ------  ------   ------  -------
    Write-offs of notes and
     other receivables:
      East                                 2,148  10,200    2,148   10,200
      Central                                105       -      105        -
      West                                 6,876   9,222    7,387   10,222
      Houston                                  -       -        -        -
      Other                                   19       -       19    4,596
                                             ---     ---      ---    -----
         Total                             9,148  19,422    9,659   25,018
                                           -----  ------    -----   ------
    Financial services
     goodwill impairment                       -       -        -   27,176
                                             ---     ---      ---   ------
             Total valuation adjustments
              and write-offs of option
              deposits and pre-acquisitions
              costs, notes and other
              receivables and goodwill  $255,201 221,099  560,449  597,710
                                        ======== =======  =======  =======

    (1)  For the three months and year ended November 30, 2009, valuation
    adjustments to land the Company intends to sell or has sold to third
    parties has been reduced by $13.6 million of minority interest
    income recorded as a result of $27.2 million of valuation
    adjustments to inventories of 50%-owned consolidated joint
    ventures.



                         LENNAR CORPORATION AND SUBSIDIARIES

                        Summary of Deliveries and New Orders
                               (Dollars in thousands)
                                     (unaudited)

                                 Three Months Ended           Years Ended
                                    November 30,              November 30,
                                    ------------              ------------
                                 2009         2008         2009         2008
                                 ----         ----         ----         ----

    Deliveries - Homes:
      East                      1,163        1,517        3,817        4,957
      Central                     553          605        1,796        2,442
      West                        722        1,157        2,480        4,031
      Houston                     671          791        2,150        2,736
      Other                       387          448        1,235        1,569
                                  ---          ---        -----        -----
        Total                   3,496        4,518       11,478       15,735
                                =====        =====       ======       ======

    Of the total home deliveries listed above, 8 and 56, respectively,
    represent deliveries from unconsolidated entities for the three months
    and year ended November 30, 2009, compared with 34 and 391 deliveries from
    unconsolidated entities in the same periods last year.

    Deliveries - Dollar Value:
      East                   $261,059      373,869      844,689    1,276,454
      Central                 113,450      123,802      361,273      512,957
      West                    228,561      412,765      856,285    1,519,219
      Houston                 133,531      156,513      429,127      542,288
      Other                    99,697      130,558      331,852      504,336
                               ------      -------      -------      -------
        Total                $836,298    1,197,507    2,823,226    4,355,254
                             ========    =========    =========    =========

    Of the total dollar value of home deliveries listed above,
    $6,072 and $46,376, respectively, represent dollar value of
    deliveries from unconsolidated entities for the three months
    and year ended November 30, 2009, compared with $14,441 and
    $204,537 dollar value of deliveries from unconsolidated
    entities in the same periods last year.

    New Orders - Homes:
      East                        841          763        3,710        3,953
      Central                     419          469        1,840        2,280
      West                        537          634        2,569        3,396
      Houston                     529          449        2,130        2,416
      Other                       326          248        1,261        1,346
                                  ---          ---        -----        -----
        Total                   2,652        2,563       11,510       13,391
                                =====        =====       ======       ======

    Of the total new orders listed above, 10 and 58, respectively,
    represent new orders from unconsolidated entities for the
    three months and year ended November 30, 2009, compared to 38
    net cancellations from unconsolidated entities for the three
    months ended November 30, 2008 and 174 net new orders from
    unconsolidated entities for the year ended November 30, 2008.


    New Orders - Dollar Value:
      East                   $188,343      158,548      820,209      910,749
      Central                  88,359       92,099      373,084      470,721
      West                    192,117      212,071      892,002    1,249,733
      Houston                 109,264       79,474      432,380      471,733
      Other                    91,713       55,418      328,858      357,718
                               ------       ------      -------      -------
        Total                $669,796      597,610    2,846,533    3,460,654
                             ========      =======    =========    =========

    Of the total dollar value of new orders listed above,
    $7,500 and $41,543, respectively, represent dollar value
    of new orders from unconsolidated entities for the three
    months and year ended November 30, 2009, compared to the
    value of net cancellations from unconsolidated entities of
    ($13,345) for the three months ended November 30, 2008 and
    $97,525 dollar value of new orders from unconsolidated
    entities for the year ended November 30, 2008.



                      LENNAR CORPORATION AND SUBSIDIARIES

                               Summary of Backlog
                             (Dollars in thousands)
                                  (unaudited)

                                                          November 30,
                                                          ------------
                                                     2009            2008
                                                     ----            ----

    Backlog - Homes:
      East                                            682             787
      Central                                         167             123
      West                                            336             247
      Houston                                         249             269
      Other                                           197             173
                                                      ---             ---
        Total                                       1,631           1,599
                                                    =====           =====

    Of the total homes in backlog listed above, 9 represents homes in
    backlog from unconsolidated entities at November 30, 2009,
    compared to 8 homes in backlog from unconsolidated entities at
    November 30, 2008.

    Backlog - Dollar Value:
      East                                       $179,175         202,791
      Central                                      36,158          23,736
      West                                        143,868         108,779
      Houston                                      60,876          57,785
      Other                                        59,494          63,179
                                                   ------          ------
        Total                                    $479,571         456,270
                                                 ========         =======

    Of the total dollar value of homes in backlog listed above, $7,233
    represents the backlog dollar value from unconsolidated entities
    at November 30, 2009, compared to $12,460 of backlog dollar value
    from unconsolidated entities at November 30, 2008.



    Lennar's reportable homebuilding segments and homebuilding other
    consist of homebuilding divisions located in:

      East:       Florida, Maryland, New Jersey and Virginia
      Central:    Arizona, Colorado and Texas (1)
      West:       California and Nevada
      Houston:    Houston, Texas
      Other:      Illinois, Minnesota, New York, North Carolina and
                  South Carolina

    (1) Texas in the Central reportable segment excludes Houston, Texas,
    which is its own reportable segment.




                                     Supplemental Data
                                   (Dollars in thousands)
                                        (unaudited)

                                                      November 30,
                                                      ------------
                                                  2009            2008
                                                  ----            ----
    Homebuilding debt                          $2,761,352       2,544,935
    Stockholders' equity                        2,443,479       2,623,007
                                                ---------       ---------
      Total capital                            $5,204,831       5,167,942
                                               ----------       ---------
    Homebuilding debt to total
     capital                                         53.1%           49.2%
                                                     ====            ====

    Homebuilding debt                          $2,761,352       2,544,935
    Less: Homebuilding cash and
     cash equivalents                           1,330,603       1,091,468
                                                ---------       ---------
      Net homebuilding debt                    $1,430,749       1,453,467
                                               ----------       ---------
    Net homebuilding debt to total
     capital (1)                                     36.9%           35.7%
                                                     ====            ====

    (1)  Net homebuilding debt to total capital consists of net homebuilding
    debt (homebuilding debt less homebuilding cash and cash equivalents)
    divided by total capital (net homebuilding debt plus stockholders'
    equity).

SOURCE Lennar Corporation



RELATED LINKS
http://www.lennar.com

More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.