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Lennar Corporation, founded in 1954, is one of the nation's largest builders of quality homes for all generations. The company builds affordable, move-up and retirement homes primarily under the Lennar brand name. Lennar entities include Financial Services, Rialto Investments, Multifamily and Commercial segments.

Lennar's core principles of Quality, Value and Integrity is the underlying foundation upon which we were built. When we care for our company, our customers and our associates, we know that our shareholders receive the best results.

Lennar Corporation (LEN)

$43.67  -0.01 (0.02%)

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Allison Bober

700 N.W. 107th Avenue
Miami, Florida 33172
305-559-4000 - Phone
305-229-6452 - Fax

Allison.Bober@lennar.com

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    Lennar Reports First Quarter Results

    MIAMI, March 27 /PRNewswire-FirstCall/ --

    - Revenues of $1.1 billion - down 62%

    - Loss per share of $0.56 (includes a $0.38 per share charge related to valuation adjustments and write-offs of option deposits and pre- acquisition costs)

    - Homebuilding operating loss of $109.8 million (includes $107.1 million of valuation adjustments and write-offs noted above)

    - Gross margin on home sales of 14.3% - up 50 basis points

    - Homebuilding cash of $1.1 billion as of February 29, 2008

    - No outstanding balance under the Company's credit facility as of February 29, 2008

    - Homebuilding debt to total capital of 38.2% (net homebuilding debt to total capital of 24.5%)

    - Deliveries of 3,596 homes - down 60%

    - New orders of 3,045 homes - down 57%; cancellation rate of 26%

    - Backlog dollar value of $1.2 billion - down 67%

    Lennar Corporation (NYSE: LEN and LEN.B), one of the nation's largest homebuilders, today reported results for its first quarter ended February 29, 2008. First quarter net loss in 2008 was $88.2 million, or $0.56 per diluted share, compared to first quarter net earnings of $68.6 million, or $0.43 per diluted share, in 2007.

    Stuart Miller, President and Chief Executive Officer of Lennar Corporation, said, "Market conditions have remained challenged and continued to deteriorate throughout our first quarter of 2008. The housing industry continues to be impacted by an unfavorable supply and demand relationship, which restricts the volume of new home sales and, concurrently, depresses home prices in most markets across the country."

    "Home inventories have been expanding due to the high number of foreclosures, negotiated 'short sales,' and stretched homeowners looking to sell homes they can no longer afford. While sales are occurring and clearing prices are being reached, the pace of overall housing inventory growth is exceeding absorption at the current time."

    "Concurrently, lower consumer confidence has quieted demand among prospective homebuyers and deterred them from a buying decision, while contraction in the lending markets has reduced the availability of credit for those prospective homebuyers that do wish to buy a home."

    "On a more optimistic note, numerous initiatives, both private and public, have been designed and proposed to move towards stabilization and resolution. There is a growing consensus that the deterioration of the housing market has likely led us into recession, and the stabilization and recovery of the housing market will likely lead us out. Accordingly, we expect that some of these initiatives and the many that are being discussed will lead to a bottom and recovery."

    Mr. Miller continued, "Our first quarter results reflect the fact that our balance sheet has been and continues to be our top priority. With most of the significant work on asset impairment behind us, throughout our first quarter we have remained focused on the delivery of our backlog, curtailing land purchases where possible, restructuring our joint ventures where necessary, and right-sizing our operations in order to protect cash, preserve value and fortify our balance sheet."

    "To that end, we are very pleased that we ended our first quarter with over $1 billion in cash and no outstanding balance under our credit facility. In addition, we have reduced the number of our joint venture partnerships by approximately one-third to 180 and our maximum joint venture recourse debt by approximately one-half to $917 million, from their peak levels in 2006."

    Mr. Miller concluded, "As we look ahead to the remainder of 2008, we recognize that market conditions are likely to remain challenging in the near term. Accordingly, we will continue to work diligently on rebuilding margins and ultimately, profitability as well. With a longer-term perspective, we believe that government action and normal market clearing will work together to lead the housing market to stabilization and ultimately recovery."

                                RESULTS OF OPERATIONS
    
                   THREE MONTHS ENDED FEBRUARY 29, 2008 COMPARED TO
                         THREE MONTHS ENDED FEBRUARY 28, 2007
    
        Homebuilding

    Revenues from home sales decreased 64% in the first quarter of 2008 to $953.1 million from $2.6 billion in 2007. Revenues were lower primarily due to a 60% decrease in the number of home deliveries and an 8% decrease in the average sales price of homes delivered in 2008. New home deliveries, excluding unconsolidated entities, decreased to 3,437 homes in the first quarter of 2008 from 8,566 homes last year. In the first quarter of 2008, new home deliveries were lower in each of the Company's homebuilding segments and Homebuilding Other, compared to 2007. The average sales price of homes delivered decreased to $278,000 in the first quarter of 2008 from $303,000 in the same period last year, due to reduced pricing and higher sales incentives offered to homebuyers ($48,000 per home delivered in the first quarter of 2008, compared to $45,500 per home delivered in the same period last year).

    Gross margins on home sales excluding SFAS 144 valuation adjustments were $162.9 million, or 17.1%, in the first quarter of 2008, compared to $409.2 million, or 15.6%, in 2007. Gross margin percentage on home sales excluding SFAS 144 valuation adjustments increased compared to last year in the Company's Homebuilding East and West segments and Homebuilding Other primarily due to the Company's lower inventory basis and continued focus on reducing construction costs. Gross margins on home sales were $136.7 million, or 14.3%, in the first quarter of 2008, which included $26.2 million of SFAS 144 valuation adjustments, compared to gross margins on home sales of $360.9 million, or 13.8%, in the first quarter of 2007, which included $48.3 million of SFAS 144 valuation adjustments. Gross margins on home sales excluding SFAS 144 valuation adjustments is a non-GAAP financial measure disclosed by certain of the Company's competitors and has been presented because the Company finds it useful in evaluating its performance and believes that it helps readers of the Company's financial statements compare its operations with those of its competitors.

    Selling, general and administrative expenses were reduced by $194.4 million, or 53%, in the first quarter of 2008, compared to the same period last year, primarily due to reductions in associate headcount and variable selling expense. As a percentage of revenues from home sales, selling, general and administrative expenses increased to 18.4% in the first quarter of 2008, from 14.1% in 2007, which was primarily due to lower revenues.

    Loss on land sales totaled $26.5 million in the first quarter of 2008, which included $15.5 million of SFAS 144 valuation adjustments and $16.9 million of write-offs of deposits and pre-acquisition costs related to 2,600 homesites under option that the Company does not intend to purchase. In the first quarter of 2007, loss on land sales totaled $26.5 million, which included $13.2 million of SFAS 144 valuation adjustments and $21.0 million of write-offs of deposits and pre-acquisition costs related to 4,000 homesites that were under option.

    Equity in loss from unconsolidated entities was $23.0 million in the first quarter of 2008, which included $18.9 million of SFAS 144 valuation adjustments related to assets of unconsolidated entities in which the Company has investments, compared to equity in loss from unconsolidated entities of $14.2 million in the first quarter of 2007, which included $6.5 million of SFAS 144 valuation adjustments related to assets of unconsolidated entities in which the Company has investments.

    Management fees and other income (expense), net, totaled ($21.8) million in the first quarter of 2008, which included $29.6 million of APB 18 valuation adjustments to the Company's investments in unconsolidated entities, compared to management fees and other income (expense), net, of $13.8 million in the first quarter of 2007, net of $2.6 million of APB 18 valuation adjustments to the Company's investments in unconsolidated entities.

    Minority interest expense, net was $0.2 million and $0.5 million, respectively, in the first quarter of 2008 and 2007.

    Sales of land, equity in loss from unconsolidated entities, management fees and other income (expense), net and minority interest 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 loss for the Financial Services segment was $9.7 million in the first quarter of 2008, compared to operating earnings of $15.9 million last year. The decline in profitability was primarily due to lower transactions in the segment's title operations, compared to last year as a result of the overall weakness in the housing market.

    Corporate General and Administrative Expenses

    Corporate general and administrative expenses were reduced by $12.1 million, or 26%, in the first quarter of 2008, compared to the same period last year. As a percentage of total revenues, corporate general and administrative expenses increased to 3.3% in the first quarter of 2008, compared to 1.7% in the same period last year, primarily due to lower revenues.

    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, 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, 2007. 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 first quarter earnings will be held at 11:00 a.m. Eastern Time on Thursday, March 27, 2008. 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 402-998-1673 and entering 5932669 as the confirmation number.

    
                           LENNAR CORPORATION AND SUBSIDIARIES
    
                    Selected Revenues and Earnings (Loss) Information
                         (In thousands, except per share amounts)
                                       (unaudited)
    
    
                                                          Three Months Ended
                                                     February 29,     February 28,
                                                        2008              2007
    
        Revenues:
          Homebuilding                                  $993,776        2,663,170
          Financial services                              69,137          128,910
             Total revenues                           $1,062,913        2,792,080
    
        Homebuilding operating earnings (loss)         $(109,780)         139,975
        Financial services operating earnings (loss)      (9,692)          15,869
        Corporate general and administrative expenses     34,822           46,919
        Earnings (loss) before provision
         (benefit) for income taxes                     (154,294)         108,925
        Provision (benefit) for income taxes             (66,078)          40,302
    
        Net earnings (loss)                             $(88,216)          68,623
    
        Average shares outstanding:
          Basic                                          158,204          157,130
          Diluted                                        158,204          158,866
    
        Earnings (loss) per share:
          Basic                                           $(0.56)            0.44
          Diluted                                         $(0.56)            0.43
    
        Supplemental information:
          Interest incurred (1)                          $38,095           55,721
          EBIT before valuation adjustments
           and write-offs of option deposits and
           pre-acquisition costs and financial
           services notes receivable (2):
           Earnings (loss) before provision
            (benefit) for income taxes                 $(154,294)         108,925
           Interest expense                               32,443           47,362
           Valuation adjustments and write-offs
            of option deposits and pre-acquisition
            costs and financial services notes
            receivable                                   107,111           95,876
           EBIT before valuation adjustments and
            write-offs of option deposits and pre-
            acquisition costs and financial services
            notes receivable                            $(14,740)          252,163
    
    
        (1) Amount represents interest incurred related to homebuilding debt,
            which is primarily capitalized to inventories and relieved as cost of
            sales when homes are delivered or land is sold.
        (2) EBIT before valuation adjustments and write-offs of option deposits
            and pre-acquisition costs and financial services notes receivable is a
            non-GAAP financial measure derived by adding back interest expense,
            valuation adjustments and write-offs of option deposits and pre-
            acquisition costs and financial services notes receivable reflected in
            earnings (loss) before provision (benefit) for income taxes. This
            financial measure has been presented because the Company finds it
            useful 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
                                                    February 29,      February 28,
                                                       2008              2007
    
        Revenues:
           Sales of homes                            $953,066         2,622,491
           Sales of land                               40,710            40,679
             Total revenues                           993,776         2,663,170
    
        Costs and expenses:
           Cost of homes sold                         816,371         2,261,595
           Cost of land sold                           67,160            67,145
           Selling, general and administrative        175,018           369,426
             Total costs and expenses               1,058,549         2,698,166
    
        Gain on recapitalization of
         unconsolidated entity                              -           175,879
        Equity in loss from unconsolidated
         entities                                      22,980            14,205
        Management fees and other income
         (expense), net                               (21,793)           13,841
        Minority interest expense, net                    234               544
        Operating earnings (loss)                   $(109,780)          139,975
    
    
    
                           LENNAR CORPORATION AND SUBSIDIARIES
    
                           Valuation Adjustments and Write-offs
                                      (In thousands)
                                       (unaudited)
    
                                                        Three Months Ended
                                                    February 29,      February 28,
                                                      2008               2007
        SFAS 144 valuation adjustments to
         finished homes, CIP and land on which
         the Company intends to build homes:
         East                                          $8,106            19,115
         Central                                        1,779            11,253
         West                                           9,920            17,067
         Other                                          6,424               832
            Total                                      26,229            48,267
        SFAS 144 valuation adjustments to
         land the Company intends to sell to
         third parties:
         East                                           1,372             9,520
         Central                                        9,297                57
         West                                           4,192             3,500
         Other                                            594               161
            Total                                      15,455            13,238
        Write-offs of option deposits and
         pre-acquisition costs:
         East                                           7,054            13,741
         Central                                        4,344             1,300
         West                                           3,364             3,071
         Other                                          2,090             2,838
            Total                                      16,852            20,950
        Company's share of SFAS 144 valuation
         adjustments related to assets of
         unconsolidated entities:
         East                                           4,157             3,832
         Central                                          158                 -
         West                                          14,025             2,704
         Other                                            597                 -
            Total                                      18,937             6,536
        APB 18 valuation adjustments to investments
         in unconsolidated entities:
         East                                             937             2,641
         Central                                          228                 -
         West                                          28,439                 -
         Other                                             34                 -
            Total                                      29,638             2,641
        Financial services write-offs of
         notes receivable                                   -             4,244
              Total valuation adjustments and
               write-offs of option deposits and
               pre-acquisitions costs and financial
               services notes receivable             $107,111            95,876
    
    
    
                           LENNAR CORPORATION AND SUBSIDIARIES
    
                      Summary of Deliveries, New Orders and Backlog
                                  (Dollars in thousands)
                                       (unaudited)
    
                                                           At or for the
                                                        Three Months Ended
                                                   February 29,       February 28,
                                                      2008               2007
    
        Deliveries:
          East                                        1,165              2,599
          Central                                     1,179              3,131
          West                                          924              2,406
          Other                                         328                899
            Total                                     3,596              9,035
    

    Of the total deliveries listed above, 159 represents deliveries from unconsolidated entities for the three months ended February 29, 2008, compared to 469 deliveries in the same period last year.

        New Orders:
          East                                          942              2,075
          Central                                     1,061              2,373
          West                                          747              1,865
          Other                                         295                819
            Total                                     3,045              7,132
    

    Of the total new orders listed above, 62 represents new orders from unconsolidated entities for the three months ended February 29, 2008, compared to 354 new orders in the same period last year.

        Backlog - Homes:
          East                                        1,568              3,615
          Central                                       756              2,840
          West                                          711              2,450
          Other                                         363                800
            Total                                     3,398              9,705
    

    Of the total homes in backlog listed above, 204 represents homes in backlog from unconsolidated entities at February 29, 2008, compared to 974 homes in backlog at February 28, 2007.

        Backlog - Dollar Value:
          East                                     $492,862          1,277,842
          Central                                   174,361            673,062
          West                                      307,071          1,168,050
          Other                                     178,045            330,801
            Total                                $1,152,339          3,449,755
    

    Of the total dollar value of homes in backlog listed above, $113,865 represents the backlog dollar value from unconsolidated entities at February 29, 2008, compared to $450,701 of backlog dollar value at February 28, 2007.

    
        Lennar's reportable homebuilding segments and homebuilding other consist
        of homebuilding divisions located in the following states:
    
            East:     Florida, Maryland, New Jersey and Virginia
            Central:  Arizona, Colorado and Texas
            West:     California and Nevada
            Other:    Illinois, Minnesota, New York, North Carolina and South
                      Carolina
    
    
    
                           LENNAR CORPORATION AND SUBSIDIARIES
    
                                    Supplemental Data
                                 (Dollars in thousands)
                                       (unaudited)
    
                                                   February 29,      February 28,
                                                      2008              2007
    
           Homebuilding debt                        $2,279,497         2,581,494
           Stockholders' equity                      3,680,898         5,774,981
              Total capital                         $5,960,395         8,356,475
           Homebuilding debt to total
            capital                                      38.2%             30.9%
    
           Homebuilding debt                        $2,279,497         2,581,494
           Less: Homebuilding cash                   1,088,141           263,746
              Net homebuilding debt                 $1,191,356         2,317,748
           Net homebuilding debt to total
            capital (1)                                  24.5%             28.6%
    
          (1) Net homebuilding debt to total capital consists of net homebuilding
              debt (homebuilding debt less homebuilding cash) divided by total
              capital (net homebuilding debt plus stockholders' equity).
    
    

    SOURCE Lennar Corporation

    CONTACT:
    Scott Shipley
    Investor Relations of Lennar Corporation
    +1-305-485-2054

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Marshall Ames

700 N.W. 107th Avenue
Miami, Florida 33172
800-741-4663 - Phone
305-228-8383 - Fax

Marshall.Ames@lennar.com

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